EXHIBIT 99.1
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
OLYMPUS SERVICING, L.P.,
Servicer and Special Servicer
OCWEN FEDERAL BANK FSB,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2002
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CSFB ABS Trust Series 2002-HE1
CSFB MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-HE1
Table of Contents
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions......................................................................... 7
SECTION 1.02 Interest Calculations............................................................... 38
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans........................................................ 40
SECTION 2.02 Acceptance by the Trustee of the Mortgage Loans..................................... 44
SECTION 2.03 Representations and Warranties of the Seller and Servicers.......................... 47
SECTION 2.04 Representations and Warranties of the Depositor as to the Mortgage Loans............ 49
SECTION 2.05 Delivery of Opinion of Counsel in Connection with Substitutions..................... 49
SECTION 2.06 Execution and Delivery of Certificates.............................................. 49
SECTION 2.07 REMIC Matters....................................................................... 50
SECTION 2.08 Covenants of the Servicers.......................................................... 50
SECTION 2.09 Conveyance of Subsidiary REMIC Regular Interests and Acceptance of
Master REMIC, Respectively, by the Trustee; Issuance of Certificates................ 50
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans................................................. 52
SECTION 3.02 Subservicing; Enforcement of the Obligations of Subservicers........................ 53
SECTION 3.03 Special Serviced Mortgage Loans..................................................... 54
SECTION 3.04 Notification of Adjustments......................................................... 55
SECTION 3.05 Trustee to Act as Servicer.......................................................... 55
SECTION 3.06 Collection of Mortgage Loans; Collection Account; Certificate Account;
Prefunding Account; Capitalized Interest Account ................................... 56
SECTION 3.07 Establishment of and Deposits to Escrow Accounts; Permitted Withdrawals
from Escrow Accounts; Payments of Taxes, Insurance and Other Charges; Simple
Interest Excess Sub-Accounts; Deposits in Simple Interest Excess Sub-Accounts...... 60
SECTION 3.08 Access to Certain Documentation and Information Regarding the Mortgage Loans;
Inspections......................................................................... 62
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and Certificate Account.......... 62
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage Impairment Insurance and Primary
Insurance Policy; Claims; Restoration of Mortgaged Property......................... 64
i
SECTION 3.11 Enforcement of Due-on-Sale Clauses; Assumption Agreements........................... 68
SECTION 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans..... 69
SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files..................................... 73
SECTION 3.14 Documents, Records and Funds in Possession of a Servicer to be Held for the
Trustee............................................................................. 73
SECTION 3.15 Servicing Fee....................................................................... 74
SECTION 3.16 Access to Certain Documentation..................................................... 74
SECTION 3.17 Annual Statement as to Compliance................................................... 75
SECTION 3.18 Annual Independent Public Accountants' Servicing Statement; Financial Statements.... 75
SECTION 3.19 Maintenance of Fidelity Bond and Errors and Omissions Insurance..................... 75
SECTION 3.20 Prepayment Premiums................................................................. 76
SECTION 3.21 Duties of the Credit Risk Manager................................................... 76
SECTION 3.22 Advance Facility.................................................................... 76
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers........................................................... 80
SECTION 4.02 Priorities of Distribution.......................................................... 81
SECTION 4.03 Allocation of Losses................................................................ 85
SECTION 4.04 Monthly Statements to Certificateholders............................................ 85
SECTION 4.05 Servicers to Cooperate.............................................................. 88
SECTION 4.06 Basis Risk Reserve Fund............................................................. 88
SECTION 4.07 Policy Matters...................................................................... 89
SECTION 4.08 Premium Fund........................................................................ 89
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.................................................................... 93
SECTION 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates......... 93
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates................................... 98
SECTION 5.04 Persons Deemed Owners............................................................... 98
SECTION 5.05 Access to List of Certificateholders' Names and Addresses........................... 98
SECTION 5.06 Maintenance of Office or Agency..................................................... 99
ARTICLE VI
THE DEPOSITOR, THE SELLER, THE SERVICERS AND THE SPECIAL SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Seller, the Servicers and the
Special Servicer.................................................................... 100
ii
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller or a Servicer.................. 100
SECTION 6.03 Limitation on Liability of the Depositor, the Seller, the Servicers, the
Special Servicer and Others......................................................... 100
SECTION 6.04 Limitation on Resignation of a Servicer............................................. 101
SECTION 6.05 Limitation Upon Liability of the Credit Risk Manager................................ 102
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default................................................................... 103
SECTION 7.02 Trustee to Act; Appointment of Successor............................................ 105
SECTION 7.03 Notification to Certificateholders.................................................. 106
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee............................................................... 107
SECTION 8.02 Certain Matters Affecting the Trustee............................................... 108
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans............................... 109
SECTION 8.04 Trustee May Own Certificates........................................................ 110
SECTION 8.05 Trustee's Fees and Expenses......................................................... 110
SECTION 8.06 Eligibility Requirements for the Trustee............................................ 110
SECTION 8.07 Resignation and Removal of the Trustee.............................................. 111
SECTION 8.08 Successor Trustee................................................................... 112
SECTION 8.09 Merger or Consolidation of the Trustee.............................................. 112
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee....................................... 112
SECTION 8.11 Tax Matters......................................................................... 114
SECTION 8.12 Periodic Filings.................................................................... 117
SECTION 8.13 Trust Obligations................................................................... 117
SECTION 8.14 Determination of Certificate Index.................................................. 117
SECTION 8.15 Indemnification with Respect to Certain Taxes and Loss of REMIC Status.............. 117
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans...................... 118
SECTION 9.02 Final Distribution on the Certificates.............................................. 118
SECTION 9.03 Additional Termination Requirements................................................. 119
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment........................................................................... 121
SECTION 10.02 Recordation of Agreement; Counterparts.............................................. 122
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SECTION 10.03 Governing Law....................................................................... 123
SECTION 10.04 Intention of Parties................................................................ 123
SECTION 10.05 Notices............................................................................. 123
SECTION 10.06 Severability of Provisions.......................................................... 124
SECTION 10.07 Assignment.......................................................................... 124
SECTION 10.08 Limitation on Rights of Certificateholders.......................................... 124
SECTION 10.09 Certificates Nonassessable and Fully Paid........................................... 125
SECTION 10.10 Protection of Assets................................................................ 125
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EXHIBITS
EXHIBIT A Form of Class A Certificates
EXHIBIT B Form of Class M Certificates
EXHIBIT C Form of Class B Certificate
EXHIBIT D Form of Residual Certificate
EXHIBIT E Form of Class X Certificate
EXHIBIT F Form of Interest Only Certificate
EXHIBIT G Form of Initial Certification (and Subsequent Certification)
of Trustee
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer of Affidavit
EXHIBIT J Form of Transferor Certificate
EXHIBIT K Form of Investment Letter (Non-rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release
EXHIBIT N Officer's Certificate with Respect to Principal Prepayments
EXHIBIT O Form of Servicer Report
EXHIBIT P FSA Policy
EXHIBIT Q Form of Subsequent Transfer Agreement
EXHIBIT R Form of Special Request for Release
SCHEDULE I Mortgage Loan Schedule for Mortgage Loans
SCHEDULE IIA Representations and Warranties of Seller - DLJMC
SCHEDULE IIB Representations and Warranties of Servicer and Special
Servicer - Olympus
SCHEDULE IIC Representations and Warranties of Servicer - Ocwen
SCHEDULE III Representations and Warranties - Mortgage Loans
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THIS POOLING AND SERVICING AGREEMENT, dated as of January 1, 2002, among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware corporation, as
the depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware
corporation, as the Seller (the "Seller"), OLYMPUS SERVICING, L.P., a Delaware
limited partnership, as a servicer (in such capacity, a "Servicer") and as the
special servicer (in such capacity, the "Special Servicer"), OCWEN FEDERAL BANK
FSB, a federally chartered savings bank, as a servicer (in such capacity, a
"Servicer") and U.S. Bank National Association, a national banking association,
as the trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
For federal income tax purposes, the Trust Fund (exclusive of the
Prefunding Account, the Capitalized Interest Account and the Basis Risk Reserve
Fund) will consist of three REMICs: REMIC I, REMIC II and REMIC III.
REMIC I (which will also be referred to as the "Subsidiary REMIC") will
consist of all of the assets constituting the Mortgage Loans (exclusive of the
Prefunding Account, the Capitalized Interest Account and the Basis Risk Reserve
Fund) and will be evidenced by the REMIC I regular interests which will be
uncertificated and will represent the "regular interests" in REMIC I (the
"Subsidiary REMIC Regular Interests") and REMIC I residual interest as the
single "residual interest" in the REMIC I (the "Subsidiary REMIC Residual
Interest"). REMIC II (which will also be referred to as the "Middle REMIC") will
consist of the Subsidiary REMIC Regular Interests and will be evidenced by the
REMIC II regular interests which will be uncertificated and will represent the
"regular interests" in REMIC II (the "Middle REMIC Regular Interests") and REMIC
II residual interest as the single "residual interest" in REMIC II (the "Middle
REMIC Residual Interest"). The Trustee will hold the Subsidiary REMIC Regular
Interests and Middle REMIC Regular Interests on behalf of the REMIC II and REMIC
III, respectively.
The following table irrevocably sets forth the class designation, the
Pass-Through Rate, and the original class principal balance for each of the
Subsidiary REMIC Regular Interests. None of the Subsidiary REMIC Regular
Interests or Middle REMIC Regular Interests will be certificated.
1
Corresponding
REMIC Initial Principal Pass-Through Class of Master
Interests Balance Rate REMIC Interest
--------- ------- ---- --------------
ST-A-1a(1) 42.75% Corresponding Master Class A-1 A-1
REMIC Class balance Net Funds Cap(2)
ST-A-1b(1) 7.25% Corresponding Master Class A-1 A-1
REMIC Class balance Net Funds Cap(2)
ST-A-2a(1) 42.75% Corresponding Master Class A-2 A-2
REMIC Class balance Net Funds Cap(2)
ST-A-2b(1) 7.25% Corresponding Master Class A-2 A-2
REMIC Class balance Net Funds Cap(2)
ST-M-1(1) 1/2 Corresponding Master Subordinate M-1
REMIC Class balance Net Funds Cap(2)
ST-M-2(1) 1/2 Corresponding Master Subordinate M-2
REMIC Class balance Net Funds Cap(2)
ST-B(1) 1/2 Corresponding Master Subordinate B
REMIC Class balance Net Funds Cap(2)
ST-Accrual 1/2 Aggregate Collateral Balance Net WAC Rate N/A
Plus1/2of the initial
Overcollateralization Amount
(1) The Subsidiary REMIC Accretion Directed Classes.
(2) Determined without adjustment for the actual number of days in the
accrual period.
On each Distribution Date, 50% of the increase in the Overcollateralization
Amount will be payable as a reduction of the principal balances of the
Subsidiary REMIC Accretion Directed Classes (to each such class in an amount
equal to 1/2 of the interest paid in reduction of the principal balance of the
Corresponding Class of Master REMIC Interest) and will be accrued and added to
the principal balance of the ST-Accrual REMIC Interest. On each Distribution
Date, the increase in the principal balance of the ST-Accrual REMIC Interest may
not exceed interest accruals for such Distribution Date for the ST-Accrual REMIC
Interest. In the event that: (i) 50% of the increase in the
Overcollateralization Amount exceeds (ii) interest accruals on the ST-Accrual
REMIC Interest for such Distribution Date, the excess for such Distribution Date
(accumulated with all such excesses for all prior Distribution Dates) will be
added to any increase in the Overcollateralization Amount for purposes of
determining the amount of interest accrual on the ST-Accrual REMIC Interest
payable as principal on the Subsidiary REMIC Accretion Directed Classes on the
next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans shall be allocated 50% to the ST-Accrual Interest, and 50% to the
Subsidiary REMIC Accretion Directed Classes to each such Class in an amount
equal to 1/2 of the principal allocated to the Corresponding Class of Master
REMIC Interest, until paid in full. Notwithstanding the above, principal
payments allocated to the Class X Certificates that result in the reduction in
the Overcollateralization Amount shall be allocated to the ST-Accrual Interest
2
(until paid in full). Realized losses shall be applied so that after all
distributions have been made on each Distribution Date (i) the principal
balances of each of the Subsidiary REMIC Accretion Directed Classes is equal to
50% of the principal balance of their Corresponding Class, and (ii) the
ST-Accrual Interest is equal to 50% of the Aggregate Collateral Balance plus 50%
of the Overcollateralization Amount.
For purposes of performing the allocations required under the immediately
preceding paragraph, allocations of principal payments, of interest paid as
principal and of losses to: (i) the ST-A-1a and ST-A-1b REMIC Interests in the
aggregate and (ii) to the ST-A-1a and ST-A-1b REMIC Interests in the aggregate,
will equal 1/2 of the interest and principal, respectively, allocated to their
Corresponding Class of Master REMIC Interest. Such allocations shall be made
between the ST-A-1a and ST-A-1b REMIC Interests in such a manner as to maintain
the principal balance of the ST-A-1a REMIC Interest and ST-A-1b REMIC Interest
at 42.75% and 7.25%, respectively, of their Corresponding Class of Master REMIC
Interest. Such allocations shall be made between the ST-A-2a and ST-A-2b REMIC
Interests in such a manner as to maintain the principal balance of the ST-A-2a
REMIC Interest and ST-A-2b REMIC Interest at 42.75% and 7.25%, respectively, of
their Corresponding Class of Master REMIC Interest.
The following table irrevocably sets forth the class designation, the
Pass-Through Rate, and the original class principal balance for each of the
Middle REMIC Regular Interests. None of the Middle REMIC Regular Interests will
be certificated.
Corresponding
REMIC Initial Principal Pass-Through Class of Subsidiary
Interests Balance Rate REMIC Interest
--------- ------- ---- --------------
MT-A-1a 2x Corresponding Subsidiary (1) ST-A-1a
REMIC Class balance
MT-A-1b 2x Corresponding Subsidiary Class X-0 Xxxx XX-X-0x
REMIC Class balance Through Rate
MT-A-2a 2x Corresponding Subsidiary (1) ST-A-2a
REMIC Class balance
MT-A-2b 2x Corresponding Subsidiary Class X-0 Xxxx XX-X-0x
REMIC Class balance Through Rate
MT-M-1 2x Corresponding Subsidiary Class M-1 Pass ST-M-1
REMIC Class balance Through Rate
MT-M-2 2x Corresponding Subsidiary Class M-2 Pass ST-M-2
REMIC Class balance Through Rate
MT-B 2x Corresponding Subsidiary Class B Pass ST-B
REMIC Class balance Through Rate
MT-X Corresponding Subsidiary (2) N/A
REMIC Class balance
(1) For each Distribution Date through and including the Distribution Date
in January 2005, the Pass-Through Rates of the Class MT-A-1a and MT-A-2a REMIC
Interests will be equal to LIBOR plus the Certificate Margin of each such
Classes' Corresponding Class of Master REMIC Interest and (i) with the Class
MT-A-1a subject to (A) a cap equal to the Class A-1 Net Funds Cap and (B) a
floor equal to the lesser of (x) 8.00% plus the Class A-1 Certificate
3
Margin and (y) the Class A-1 Net Funds Cap and (ii) with the Class MT-A-2a
subject to (A) a cap equal to the Class A-2 Net Funds Cap and (B) a floor equal
to the lesser of (x) 8.00% plus the Certificate Margin of the Class A-2
Certificates, respectively, and (y) the Class A-2 Net Funds Cap. For each
subsequent Distribution Date, the Pass Through Rates of the MT-A-1a and MT-A-2a
will be the Pass Through Rates in respect of the Class A-1 and Class A-2
Certificates, respectively.
(2) The MT-X REMIC Interest will have a notional balance equal to the
Aggregate Collateral Balance, and a pass through rate equal to the excess of the
Pass-Through Rates of the Subsidiary REMIC Regular Interests over the product of
(i) 2 and (ii) the weighted average of the rates of the Subsidiary REMIC Regular
Interests with each Subsidiary REMIC Accretion Directed Class subject to a cap
equal to the pass through rate in respect of the Corresponding Class of Middle
REMIC Certificate Class and the ST-Accrual Class subject to a cap equal to zero.
Interest accrued on the Class MT-X REMIC Interest shall not itself accrue
interest.
MASTER REMIC
------------
REMIC III (which will also be referred to as the "Master REMIC") will consist of
all of the assets constituting the Middle REMIC Regular Interests and will be
evidenced by the Certificates which will be uncertificated and will represent
the "regular interests" in the Master REMIC and the Master REMIC residual
interest as the single "residual interest" in the Master REMIC (the "Master
REMIC Residual Interest").
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates which, except for the Class R Certificates, represents one or more
of the "regular interests" in the Master REMIC created hereunder:
Initial Integral
Certificate Initial Multiples in
Class Principal Pass-Through Assumed Final Minimum Excess of
Designation Balance Rate Maturity Date(l) Denominations Minimum
----------- ------- ---- ---------------- ------------- -------
Class A-1 $200,000,000 2.1725%(2) August 2032 $25,000 $1
Class A-2 $140,000,000 2.1975%(2) August 2032 $25,000 $1
Class A-IO (3) 6.1725%(3) August 2032 $25,000 $1
Class M-1 $26,000,000 2.9775%(2) August 2032 $25,000 $1
Class M-2 $19,000,000 3.6775%(2) August 2032 $25,000 $1
Class B $15,000,000 4.6775%(2) August 2032 $25,000 $1
Class X $0(4) (4) August 2032 (5) N/A
Class R $50 2.1975%(3) August 2032 (6) N/A
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of the
maturity date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in the
Master REMIC.
(2) Pass-Through Rate for the February 2002 Distribution Date. The Pass-Through
Rate applicable to any other Distribution Date (as defined in the
Pass-Through Rate definition), equals the Certificate Index plus the
related Certificate Margin for such Distribution Date subject to a cap
equal to the applicable Net Funds Cap.
4
(3) The Class A-IO Certificates are interest only certificates, will have no
principal balance and will accrue interest at its Pass-Through Rate on the
Class A-IO Notional Amount which is initially $290,700,000. The
Pass-Through Rate listed is the Pass-Through Rate for the February 2002
Distribution Date.
(4) The Class A-IO Certificates will be treated for federal income tax purposes
as two separate REMIC Regular Interests, each a Class A-IO Component. The
Class A-IO-1 and Class A-IO-2 Components will have Class A-IO Notional
Amounts equal to the MT-A-1a and the MT-A-2a Class Principal Balances
(which will be equal to 85.50% of the Class Principal Balances of each of
the Class A-1 and Class A-2 Certificates, respectively). Interest will
accrue on each of the Class A-IO Components at a per annum Pass-Through
Rate equal to the excess of the Pass-Through Rates of the MT-A-1a and
MT-A-2a over the Pass-Through Rates on the Class A-1 and Class A-2
Certificates respectively. The Class A-IO Certificateholders also will be
treated as entering into a notional principal contract with the Class X
Certificateholder described in Section 8.11 whereby the Class A-IO
Certificateholder will pay to the Class X Certificateholder the excess of
the Class A-IO Pass Through Rate computed on basis of the actual number of
days in the immediately preceding Accrual Period and a 360 day year (the
"Actual/360 Convention") over such Rate computed on the basis of twelve 30
day months (the "30/360 Convention") and will receive payments from the
Class X Certificateholder equal to the excess of such Rate computed under
the 30/360 Convention over such Rate computed under the Actual/360
Convention.
(5) The Class X Certificates will have a notional balance equal to the
Aggregate Collateral Balance, and a Pass-Through Rate equal to the pass
through rate in respect of the Class MT-X Interest. Interest accrued on the
Class X Certificate shall not itself accrue interest.
(6) The Class X Certificates will be issued as three certificates in minimum
Percentage Interests of 5%.
(7) The Class R Certificates are issued in minimum Percentage Interests of 20%.
For federal income tax purposes, the Trustee will treat each reference in
the preceding Preliminary Statement to the "Subordinate Net Funds Cap" as "the
lesser of the Subordinate Net Funds Cap and the Adjusted Subordinate Net Funds
Cap". The Trustee will treat any entitlement of the Class M-1 Certificates,
Class M-2 Certificates or Class B Certificates to interest on any Distribution
Date in excess of the Adjusted Subordinate Net Funds Cap pursuant to Section
4.02(a)(F), (G) and (H) herein as amounts paid to the Class X Certificates,
deposited by the Class X Certificates to the Basis Risk Reserve Fund and then
paid to each of the Class M-1 Certificates, Class M-2 Certificates or Class B
Certificates, as applicable, pursuant to a limited recourse notional principal
contract described in Section 8.11 herein.
5
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates..................... All Classes of Certificates
other than the Physical
Certificates.
Class A Certificates........................ The Class A-1 and Class A-2
Certificates.
Class B Certificates........................ The Class B Certificates.
Class M Certificates........................ The Class M-1 and Class M-2
Certificates.
Class X Certificates........................ The Class X Certificates.
ERISA-Restricted Certificates............... Residual Certificates, Private
Certificates, and Certificates
of any Class that no longer
satisfy the applicable rating
requirements of the
Underwriters' Exemption.
LIBOR Certificates.......................... Class X-0, Xxxxx X-0, Class
M-1, Class M-2, Class B and
Class R Certificates.
Notional Amount Certificates................ Class A-IO and Class X
Certificates.
Offered Certificates........................ All Classes of Certificates
other than the Private
Certificates.
Private Certificates........................ Class X Certificates.
Physical Certificates....................... Class R and Class X
Certificates.
Rating Agencies............................. Xxxxx'x and S&P.
Regular Certificates........................ All Classes of Certificates
other than the Class R
Certificates.
Residual Certificates....................... Class R Certificates.
Senior Certificates......................... Class A-1, Class A-2, Class
A-IO and Class R Certificates.
Subordinate Certificates.................... Class M-1, Class M-2, Class B
and Class X Certificates.
6
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
-----------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Accrual Period: For any class of Offered Certificates, other than the Class
A-IO Certificates, and any Distribution Date, the period commencing on the
immediately preceding Distribution Date (or, in the case of the first Accrual
Period, the closing date) and ending on the day immediately preceding the
related Distribution Date. For the Class A-IO Certificates, the period
commencing on the 25th day of the month preceding the related Distribution Date
and ending on the 24th day of the month of such Distribution Date.
Adjusted Subordinate Group 1 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 1 Mortgage Loans as of
the last day of the related Collection Period less the Class Principal Balance
of the Class A-1 Certificates less the product of (I) the Overcollateralization
Amount and (II)(A) the Aggregate Loan Group Collateral Balance over (B) the
Aggregate Collateral Balance.
Adjusted Subordinate Group 2 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 2 Mortgage Loans as of
the last day of the related Collection Period less the Class Principal Balance
of the Class A-2 Certificates less the product of (I) the Overcollateralization
Amount and (II)(A) the Aggregate Loan Group Collateral Balance over (B) the
Aggregate Collateral Balance.
Adjusted Subordinate Net Funds Cap: For any Distribution Date and the Class
M-1, Class M-2 and Class B Certificates, will be a per annum rate equal to a
weighted average of (i) the Class A-1 Net Funds Cap and (ii) the Class A-2 Net
Funds Cap for such Distribution Date, weighted on the basis of the Adjusted
Subordinate Group 1 Balance and Adjusted Subordinate Group 2 Balance.
Advance: The payment required to be made by a Servicer with respect to any
Distribution Date pursuant to Section 4.01.
Advance Facility: As defined in Section 3.22(a) herein.
Advance Facility Notice: As defined in Section 3.22(b) herein.
Advance Facility Trustee: As defined in Section 3.22(b) herein.
7
Advance Reimbursement Amounts: As defined in Section 3.22(a) herein.
Advancing Person: As defined in Section 3.22(a) herein.
Adjustment Date: With respect to each adjustable-rate Mortgage Loan each
adjustment date on which the Mortgage Rate thereon changes pursuant to the
related Mortgage Note. The first Adjustment Date following the Cut-off Date as
to each such adjustable-rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.
Aggregate Collateral Balance: As of any date of determination will be equal
to the Aggregate Loan Balance plus the amount, if any, then on deposit in the
Prefunding Account; provided that the Aggregate Collateral Balance as of the
Cut-off Date will include the Prefunded Amount.
Aggregate Loan Balance: As of any date of determination, will be equal to
the aggregate of the Stated Principal Balances of the Mortgage Loans as of the
last day of the related Collection Period.
Aggregate Loan Group Balance: As to any Loan Group and as of any date of
determination will be equal to the aggregate of the Stated Principal Balances of
the Mortgage Loans in that Loan Group as of the last day of the related
Collection Period.
Aggregate Loan Group Collateral Balance: As of any date of determination
and Loan Group, will be equal to applicable Aggregate Loan Group Balance plus
the amount, if any, then on deposit in the Prefunding Account, with respect to
Loan Group 1.
Aggregate Subsequent Transfer Amount: With respect to any Subsequent
Transfer Date, the aggregate Stated Principal Balances as of the applicable
Cut-off Date of the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date, as listed on the revised Mortgage Loan Schedule delivered
pursuant to Section 2.01(e); provided, however, that such amount shall not
exceed the amount on deposit in the Prefunding Account.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other than
Servicing Fees, including but not limited to, late charges, fees received with
respect to checks or bank drafts returned by the related bank for non-sufficient
funds, assumption fees, optional insurance administrative fees and all other
incidental fees and charges, including investment income on the applicable
Collection Account and any interest due and actually received from the related
Mortgagor that accrued during the portion of the Prepayment Period that is in
the same calendar month as the Distribution Date with respect to such Mortgage
Loan in connection with such Principal Prepayments in full. Ancillary Income
does not include any Prepayment Premiums.
Applicable Rate: With respect to any Subsequent Transfer Date in February
2002, 4.49% per annum, with respect to any Subsequent Transfer Date in March
2002, 4.24% per annum and with respect to any Subsequent Transfer Date in April
2002, 3.99% per annum.
8
Applied Loss Amount: As to any Distribution Date, an amount equal to the
excess, if any of (i) the aggregate Class Principal Balance of the Certificates,
after giving effect to all Realized Losses incurred with respect to Mortgage
Loans during the Collection Period for such Distribution Date and payments of
principal on such Distribution Date over (ii) the Aggregate Collateral Balance
for such Distribution Date.
Appraised Value: The amount set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.
Assignment and Assumption Agreement: That certain assignment and assumption
agreement dated as of January 1, 2002, by and between DLJMC, as assignor and the
Depositor, as assignee, relating to the Mortgage Loans.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage.
B Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balances of the Senior Certificates and the
aggregate Class Principal Balances of the Class M-1 Certificates and Class M-2
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Class Principal Balance of the Class B Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 95.50% and (ii) the Aggregate Collateral Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Collateral Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Collateral Balance as of the Cut-off Date (including amounts in the
Prefunding Account, as of the Closing Date).
Balloon Loan: Any Mortgage Loan which, by its terms, does not fully
amortize the principal balance thereof by its stated maturity and thus requires
a payment at the stated maturity larger than the monthly payments due
thereunder.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Basis Risk Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.06 in the name of the
Trustee for the benefit of the Certificateholders and designated "U.S. Bank
National Association in trust for registered holders of Credit Suisse First
Boston Mortgage Securities Corp., Mortgage Pass-Through Certificates, Series
2002-HE1." The Basis Risk Reserve Fund shall not be part of any REMIC. Funds in
the Basis Risk Reserve Fund shall be held in trust for the Certificateholders
for the uses and purposes set forth in this Agreement.
Basis Risk Shortfall: For any Class of LIBOR Certificates and any
Distribution Date, the sum of (i) the excess, if any, of the related Current
Interest calculated on the basis of the lesser of (x) the Certificate Index plus
the applicable Certificate Margin and (y) the Maximum Interest Rate over the
related Current Interest for the applicable Distribution Date; (ii) any Basis
Risk Shortfall remaining unpaid from prior Distribution Dates; and (iii) 30 days
interest on the amount
9
in clause (ii) calculated at a per annum rate equal to the lesser of (x) the
Certificate Index plus the applicable Certificate Margin and (y) the Maximum
Interest Rate.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of New York, New York, or the city in
which the Corporate Trust Office of the Trustee is located, or savings and loan
institutions in the States of California, Florida, Illinois, Minnesota, New
Jersey or Texas are authorized or obligated by law or executive order to be
closed.
Capitalized Interest Account: The separate Eligible Account designated as
such and created and maintained by the Trustee pursuant to Section 3.06(h)
hereof. The Capitalized Interest Account shall be treated as an "outside reserve
fund" under applicable Treasury regulations and shall not be part of any REMIC.
Except as provided in Section 3.06(h) hereof, any investment earnings on the
Capitalized Interest Account shall be treated as owned by the Depositor and will
be taxable to the Depositor.
Capitalized Interest Deposit: $848,500.
Capitalized Interest Requirement: With respect to the February 2002
Distribution Date, an amount equal to 27 days of interest accruing at a per
annum rate equal to the sum of (a) the weighted average Pass-Through Rate of the
Offered Certificates and (b) 4.49% on the Prefunded Amount outstanding at the
end of the related Collection Period. With respect to the March 2002
Distribution Date, an amount equal to interest accruing during the related
Accrual Period at a per annum rate equal to the sum of (a) the weighted average
Pass-Through Rate of the Offered Certificates for such Distribution Date and (b)
4.24% on the sum of the Prefunded Amount at the end of the related Collection
Period and the aggregate Stated Principal Balance of the Subsequent Mortgage
Loans that do not have a first Due Date prior to March 1, 2002 transferred to
the Trust during the related Collection Period. With respect to the April 2002
Distribution Date, an amount equal to interest accruing during the related
Accrual Period at a per annum rate equal to the sum of (a) the weighted average
Pass-Through Rate of the Offered Certificates for such Distribution Date and (b)
3.99% on the sum of the Prefunded Amount at the end of the related Collection
Period and the aggregate Stated Principal Balance of the Subsequent Mortgage
Loans that do not have a first Due Date prior to April 1, 2002 transferred to
the Trust during the related Collection Period. If the Capitalized Interest
Requirement is insufficient to enable the Subsidiary REMIC to pay the Subsidiary
REMIC Regular Interests their stated pass-through rates, the Class X
Certificates will contribute any amounts necessary to pay the Subsidiary REMIC
Regular Interests their stated pass-through rates. Any amounts contributed to
the Subsidiary REMIC by the Class X Certificates will not be eligible to fund
overcollateralization.
Carryforward Interest: For any Class of Offered Certificates and
Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such Class for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest from the immediately preceding
Distribution Date exceeds (y) the amount paid in respect of interest on such
Class on such immediately preceding Distribution Date, and (2) with respect to
the Offered
10
Certificates (other than the Class A-IO Certificates), interest on such amount
for the related Accrual Period at the applicable Pass-Through Rate for such
Distribution Date.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account created and maintained
with the Trustee, or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or any state
thereof pursuant to Section 3.05, which account shall bear a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustee on behalf of the Certificateholders or any other account serving a
similar function acceptable to the Rating Agencies.
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and, in the case
of any Subordinate Certificates, reduced by any Applied Loss Amounts allocated
to such Class on prior Distribution Dates pursuant to Section 4.03. Exclusively
for the purpose of determining any subrogation rights of FSA arising under
Section 4.07 hereof, "Certificate Balance" of the Class A-1 and A-2 Certificates
shall not be reduced by the amount of any payments made by FSA in respect of
principal on such Certificates under the FSA Policy, except to the extent such
payment shall have been reimbursed to FSA pursuant to the provisions of this
Agreement.
Certificate Index: With respect to each Distribution Date, the rate for one
month United States dollar deposits quoted on Telerate Page 3750 as of 11:00
a.m., London time, on the related Interest Determination Date relating to each
Class of LIBOR Certificates. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no
longer offered, such other service for displaying LIBOR or comparable rates as
may be reasonably selected by Olympus ), the rate will be the Reference Bank
Rate. If no such quotations can be obtained and no Reference Bank Rate is
available, the Certificate Index will be the Certificate Index applicable to the
preceding Distribution Date. On the Interest Determination Date immediately
preceding each Distribution Date, the Trustee shall determine the Certificate
Index for the Accrual Period commencing on such Distribution Date and inform the
Servicers of such rate.
Certificate Margin: As to each Class of LIBOR Certificates, the applicable
amount set forth below:
Class Certificate Margin
(1) (2)
A-1 0.345% 0.690%
A-2 0.370% 0.740%
M-1 1.150% 1.650%
M-2 1.850% 2.350%
B 2.850% 3.350%
R 0.370% (3)
11
_______________________
(1) Prior to and on the Optional Termination Date.
(2) After the Optional Termination Date.
(3) It is expected that the Class Principal Balance of the Class R Certificate
will be reduced to zero prior to the first optional termination date.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, and, with respect to the Class A-1 and
Class A-2 Certificates, FSA to the extent of any amount paid under the FSA
Policy in respect of principal, except that, solely for the purpose of giving
any consent pursuant to this Agreement, any Certificate registered in the name
of the Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.
Class A-IO Net Funds Cap: For any Distribution Date and the Class A-IO
Certificates, a per annum rate equal to the weighted average of (1)(A) the Class
A-1 Net Funds Cap (without adjustment for the actual number of days in the
Accrual Period) over (B) the rate obtained by multiplying (i) 12 and (ii) the
percentage obtained by dividing the Current Interest due the Class A-1
Certificates on that Distribution Date by the Class Principal Balance of the
Class A-1 Certificates immediately prior to that Distribution Date; and (2)(X)
the Class A-2 Net Funds Cap (without adjustment for the actual number of days in
the Accrual Period) over (Y) the rate obtained by multiplying (i) 12 and (ii)
the percentage obtained by dividing the Current Interest due the Class A-2
Certificates on that Distribution Date by the Class Principal Balance of the
Class A-2 Certificates immediately prior to that Distribution Date; weighted
according to the respective Class Principal Balances of the Class A-1 and Class
A-2 Certificates.
Class A-1 Net Funds Cap: For any Distribution Date and the Class A-1
Certificates, will be a per annum rate equal to (a) a fraction, expressed as a
percentage, the numerator of which is the product of (1) the Optimal Interest
Remittance Amount for Loan Group 1 and such date and (2) 12, and the denominator
of which is the Aggregate Loan Group Collateral Balance of Loan Group 1 for the
immediately preceding Distribution Date, multiplied by (b) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the
12
immediately preceding Accrual Period.
Class A-2 Net Funds Cap: For any Distribution Date and the Class A-2 and
Class R Certificates will be a per annum rate equal to (a) a fraction, expressed
as a percentage, the numerator of which is the product of (1) the Optimal
Interest Remittance Amount for Loan Group 2 and such date and (2) 12, and the
denominator of which is the Aggregate Loan Group Collateral Balance of Loan
Group 2 for the immediately preceding Distribution Date, multiplied by (b) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the immediately preceding Accrual Period.
Class A-IO Notional Amount: For any Distribution Date on or prior to the
January 2005 Distribution Date, will equal 85.50% of the aggregate of the Class
Principal Balances of the Class A-1 and Class A-2 Certificates immediately prior
to that Distribution Date. After the Distribution Date in January 2005, the
Class A-IO Notional Amount will equal zero.
Class Principal Balance: With respect to any Class and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates of
such Class as of such date.
Class R Certificate: A Certificate representing the Subsidiary REMIC
Residual Interest and the Master REMIC Residual Interest.
Class X Distributable Amount: With respect to any Distribution Date, the
excess of (i) the sum of (a) the interest accrued during the related Accrual
Period on the Class X notional balance at the Pass-Through Rate for the Class X
Certificates, as described in the Preliminary Statement, and (b) the amounts so
accrued in all prior Accrual Periods, over (ii) all amounts distributed with
respect to the Class X Certificate on prior Distribution Dates pursuant to
Section 4.02(d)K. and any amounts deposited into the Basis Risk Reserve Fund on
such Distribution Date or on any prior Distribution Date pursuant to Section
4.02(d)J.
Closing Date: January 29, 2002.
Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time (or any successor statute thereto).
Collection Account: The accounts established and maintained by a Servicer
in accordance with Section 3.06.
Collection Period: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
Compensating Interest Payment: For any Distribution Date and the Mortgage
Loans serviced by a Servicer, the lesser of (i) the aggregate Servicing Fee
payable to that Servicer on such Distribution Date and (ii) the aggregate
Prepayment Interest Shortfall allocable to Payoffs for the Mortgage Loans for
that Distribution Date.
Corporate Trust Office: The designated office of the Trustee in the State
of Minnesota at which at any particular time its corporate trust business with
respect to this Agreement shall be
13
administered, which office at the date of the execution of this Agreement is
located at 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, XX 00000, Attn: Corporate Trust
Structured Finance, Ref: CSFB 2002-HE1.
Credit Risk Manager: The Murrayhill Company, a Colorado corporation, and
any successor.
Credit Risk Management Agreements: The respective agreements between each
Servicer and the Credit Risk Manager dated as of January 29, 2002.
Credit Risk Manager Fee: The fee payable to the Credit Risk Manager on each
Distribution Date for its services as Credit Risk Manager, in an amount equal to
one-twelfth of the Credit Risk Manager Fee Rate multiplied by the Stated
Principal Balance of the Mortgage Loans immediately prior to such Distribution
Date.
Credit Risk Manager Fee Rate: 0.0175% per annum.
Current Interest: For any interest bearing Class of Offered Certificates
and Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Class Principal Balance or Class A-IO Notional
Amount, as applicable, of such Class during the related Accrual Period;
provided, that if and to the extent that on any Distribution Date the Interest
Remittance Amount is less than the aggregate distributions required pursuant to
Section 4.02(a) without regard to this proviso as a result of Interest
Shortfalls, then the Current Interest on each Class will be reduced, on a pro
rata basis in proportion to the amount of Current Interest for each Class
without regard to this proviso, by such Interest Shortfalls for such
Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan, made by or on
behalf of the related Mortgagor, other than a Scheduled Payment, a prepaid
Scheduled Payment or a Payoff, which is applied to reduce the outstanding Stated
Principal Balance of the Mortgage Loan.
Custodians: Bank One Trust Company, N.A., a national banking association,
or its successor in interest and LaSalle Bank National Association, or its
successor in interest.
Custodial Agreements: Either the Custodial Agreements dated as of the date
hereof between Bank One Trust Company, N.A., as custodian and the Trustee or the
Custodial Agreement dated as of the date hereof between LaSalle Bank National
Association, as custodian and the Trustee.
Cut-off Date: For any Initial Mortgage Loan, January 1, 2002. For any
Subsequent Mortgage Loan, the applicable Subsequent Cut-Off Date.
Cut-off Date Pool Principal Balance: Approximately $350,724,884 plus
approximately $49,275,166, deposited to the Prefunding Account on the Closing
Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
14
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deferred Amount: For any Class of Subordinate Certificates (other than the
Class X Certificates) and Distribution Date, will equal the amount by which (x)
the aggregate of the Applied Loss Amounts previously applied in reduction of the
Class Principal Balance thereof exceeds (y) the aggregate of amounts previously
paid in reimbursement thereof. Any payment of Deferred Amount pursuant to
Section 4.02(d) shall not result in a reduction to the Class Principal Balance
of the Class of Certificate to which it is distributed.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(d) herein.
Delinquency Rate: For any month will be, generally, the fraction, expressed
as a percentage, the numerator of which is the aggregate outstanding principal
balance of all Mortgage Loans 60 or more days delinquent (including all
foreclosures, bankruptcies and REO Properties) as of the close of business on
the last day of such month, and the denominator of which is the Aggregate
Collateral Balance as of the close of business on the last day of such month.
Denomination: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
Depositor: Credit Suisse First Boston Mortgage Securities Corp., a Delaware
corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date and any Mortgage Loan, the
Business Day immediately preceding the 18th day of each month.
Distribution Date: The 25th day of each month or if such day is not a
Business Day, the first Business Day thereafter, in each case commencing in
February 2002.
Disqualified Organization: A "disqualified organization" under Section 860E
of the Code, which as of the Closing Date is any of: (i) the United States, any
State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described
15
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code, (iv) an "electing large partnership" within the meaning of Section 775 of
the Code or (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided by nationally recognized counsel to the Trustee that
the holding of an ownership interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in the Class R Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or of
any state or political subdivision thereof, if all of its activities are subject
to tax and, a majority of its board of directors is not selected by a
governmental unit. The term "United States", "State" and "international
organizations" shall have the meanings set forth in Section 7701 of the Code.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and its
successors and assigns.
Due Date: With respect to each Mortgage Loan and any Distribution Date, the
date on which Scheduled Payments on such Mortgage Loan are due, which is either
the first day of the month of such Distribution Date, or if Scheduled Payments
on such Mortgage Loan are due on a day other than the first day of the month,
the day in such calendar month on which such Scheduled Payments are due,
exclusive of any days of grace.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by 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 Moody's;
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated
16
or organized under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal and/or state
banking authorities, so long as at the time of such investment or
contractual commitment providing for such investment the commercial paper
or other short-term debt obligations of such depository institution or
trust company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated in the highest ratings by each Rating Agency, and the long-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated in one of two of the highest ratings, by each
Rating Agency;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with
a depository institution or trust company (acting as a principal) the
short-term debt obligations of which are rated A-1 or higher by S&P rated
A-2 or higher by Moody's; 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 Moody's, 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
Moody's, 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 Moody's and either "AAAm" or "AAAm-G" of S&P at the time
of such investment (any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity requirements
for Eligible Investments set forth herein) including money market funds of
the applicable Servicer or the Trustee and any such funds that are managed
by the applicable Servicer or the Trustee or their respective Affiliates or
for the applicable Servicer or the Trustee or any Affiliate of either
17
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: As specified in the Preliminary Statement.
ERISA-Qualifying Underwriting: With respect to any ERISA-Restricted
Certificate, a best efforts or firm commitment underwriting or private placement
that meets the requirements of the Underwriters' Exemption.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by each Servicer pursuant to Section 3.19.
Escrow Account: The separate account or accounts created and maintained by
the applicable Servicer pursuant to Section 3.07.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, mortgage insurance premiums, fire and hazard
insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or any
other related document.
Event of Default: As defined in Section 7.01 herein.
Expense Fee: As to each Mortgage Loan, the sum of the related Servicing
Fee, the Trustee Fee, the Credit Risk Manager Fee and any lender paid Primary
Insurance Policy premium, if applicable.
Expense Fee Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate, the Trustee Fee Rate, the Credit Risk Manager Fee Rate and
the rate at which any lender paid Primary Insurance Policy premium is
calculated, if applicable.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by each Servicer pursuant
to Section 3.19.
18
Final Scheduled Distribution Date: The Distribution Date in August 2032.
FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act of
1989.
FNMA: The Federal National Mortgage Association, a federally chartered and
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
FNMA Guides: The FNMA Sellers' Guide and the FNMA Servicers' Guide and all
amendments or additions thereto.
FSA: Financial Security Assurance Inc., a monoline insurance company
incorporated in 1984 under the laws of the State of New York. FSA is licensed to
engage in financial guaranty insurance business in all 50 states, the District
of Columbia, Puerto Rico and the U.S. Virgin Islands.
FSA Account: The account established pursuant to Section 4.07(c) hereof.
FSA Contact Persons: Collectively, the officers designated by each Servicer
to provide information to FSA pursuant to Section 4.07(l).
FSA Default: As defined in Section 4.07(o) herein.
FSA Policy: The irrevocable Certificate Guaranty Insurance Policy, No.
51247-N including any endorsements thereto, issued by FSA with respect to the
Class A Certificates, in the form attached hereto as Exhibit P.
FSA Premium: With respect to any Distribution Date, an amount equal to
1/12th of the product of (a) the aggregate Class Principal Balance of the Class
A Certificates as of such Distribution Date (prior to giving effect to any
distributions thereon on such Distribution Date) and (b) the FSA Premium Rate.
FSA Premium Rate: 0.06% per annum.
FSA Reimbursement Amount: The sum of (i) all amounts paid by FSA under the
FSA Policy which have not been previously reimbursed, (ii) all unpaid FSA
Premiums, (iii) all amounts due to FSA under this Agreement and (iv) interest on
the foregoing at the Late Payment Rate.
Gross Margin: With respect to each adjustable-rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note that is added to the Index on
each Adjustment Date in accordance with the terms of the Mortgage Note used to
determine the Mortgage Rate for such Mortgage Loan.
Group 1 Allocation Amount: For any Distribution Date, the product of the
Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is the Principal Remittance Amount derived for Loan Group 1
and the denominator of which is the Principal Remittance Amount, in each case
for that Distribution Date.
Group 2 Allocation Amount: For any Distribution Date, the product of the
Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is the Principal Remittance Amount derived from Loan Group 2
and the denominator of which is the Principal Remittance Amount, in each case
for that Distribution Date.
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Group 1 Excess Interest Amount: For any Distribution Date, the product of
the amount of Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to subclause (1)(A) of the Monthly Excess Cashflow
waterfall and a fraction the numerator of which is the Principal Remittance
Amount derived from Loan Group 1 and the denominator of which is the Principal
Remittance Amount, in each case for that Distribution Date.
Guaranteed Distributions: As defined in the FSA Policy.
Index: With respect to each adjustable-rate Mortgage Loan and with respect
to each related Adjustment Date, the index as specified in the related Mortgage
Note.
Indirect Participant: A broker, dealer, bank or other financial institution
or other Person that clears through or maintains a custodial relationship with a
Depository Participant.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust Fund on the
Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Insolvency Proceeding: As defined in Section 4.07(k) herein.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any Primary Insurance Policy, any standard hazard insurance policy, flood
insurance policy or title insurance policy, including all riders and
endorsements thereto in effect, including any replacement policy or policies for
any Insurance Policies.
Insurance Proceeds: Proceeds of any Primary Insurance Policies and any
other Insurance Policies with respect to the Mortgage Loans, to the extent such
proceeds are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures.
Insured Payments: As to any Distribution Date, amounts actually paid under
the FSA Policy.
Interest Determination Date: With respect to the LIBOR Certificates and for
each Accrual Period, the second LIBOR Business Day preceding the commencement of
such Accrual Period.
Interest Remittance Amount: For any Distribution Date and Loan Group, an
amount equal to the sum of (1) all interest collected (other than related
Payaheads and Simple Interest Excess, if applicable) or advanced in respect of
Scheduled Payments on the Mortgage Loans in such Loan Group during the related
Collection Period, the interest portion of Payaheads previously received and
intended for application in the related Collection Period and the interest
portion of all Payoffs and Curtailments received on the Mortgage Loans in such
Loan Group
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during the related Prepayment Period (other than interest on Principal
Prepayments that occur during the portion of the Prepayment Period that is in
the same calendar month as the related Distribution Date), less (x) the
Servicing Fees, the Credit Risk Manager Fee and any lender paid Primary
Insurance Policy premiums with respect to such Mortgage Loans and (y)
unreimbursed Advances and other amounts due to a Servicer or Trustee with
respect to such Mortgage Loans, to the extent allocable to interest, (2) all
Compensating Interest Payments paid by a Servicer with respect to the related
Mortgage Loans with respect to such Distribution Date, (3) the portion of any
Substitution Adjustment Amount or Repurchase Price paid with respect to such
Mortgage Loans during the calendar month immediately preceding the Distribution
Date allocable to interest, (4) all Net Liquidation Proceeds, and any Insurance
Proceeds and other recoveries (net of unreimbursed Advances, Servicing Advances
and expenses, to the extent allocable to interest, and unpaid Servicing Fees)
collected with respect to such Mortgage Loans during the prior calendar month,
to the extent allocable to interest, and (5) any amounts withdrawn from the
Simple Interest Excess Sub-Account and, with respect to Loan Group 1, the
Capitalized Interest Account, in either case to pay interest on the related
Certificates with respect to such Distribution Date. If on any Determination
Date the amount deposited into the Collection Account with respect to
Compensating Interest paid by a Servicer of a Simple Interest Mortgage Loan is
the amount calculated in clause (ii) of the definition of Compensating Interest
Payment for such Distribution Date, any remaining Servicing Fee of the Servicer
of such Simple Interest Mortgage Loan shall be available to cover any Net Simple
Interest Shortfalls remaining on such Distribution Date, after giving effect to
the withdrawal from the Simple Interest Excess Sub-Account pursuant to Section
3.07(g) on such Determination Date.
Interest Shortfall: For any Distribution Date, an amount equal to the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rate) on Mortgage Loans resulting from (a) Prepayment Interest
Shortfalls to the extent not covered by a Compensating Interest Payment and (b)
interest payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Soldiers' and Sailors' Civil Relief Act of 1940.
Late Payment Rate: means the lesser of (a) the greater of (i) the per annum
rate of interest, publicly announced from time to time by JPMorgan Chase Bank at
its principal office in New York, New York, as its prime or base lending rate
(any change in such rate of interest to be effective on the date such change is
announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable highest
rate of interest on the Class A Certificates and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of New York or Minnesota or in
the city of London, England are required or authorized by law to be closed.
LIBOR Certificates: As defined in the Preliminary Statement.
Liquidation Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has determined (in accordance with this Agreement)
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that it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of the
related REO Property (exclusive of any possibility of a deficiency judgment).
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage Loans,
whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property.
Loan Group: Any of Loan Group 1 or Loan Group 2, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage Loans
on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage Loans
on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the sum of the principal balance of the related Mortgage Loan at such
date of determination, and the denominator of which is (a) in the case of a
purchase, the lesser of the selling price of the related Mortgaged Property and
the Appraised Value of the related Mortgaged Property, or (b) in the case of a
refinance, the amount set forth in an appraisal made in connection with the
refinancing of the related Mortgaged Loan as the value of the related Mortgaged
Property.
Lost Mortgage Note: Any Mortgage Note the original of which was permanently
lost or destroyed and has not been replaced.
M-1 Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balance of the Senior Certificates after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 78.50% and (ii) the
Aggregate Collateral Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Collateral Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Collateral Balance as of the Cut-off Date
(including amounts in the Prefunding Account as of the Closing Date).
M-2 Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balances of the Senior Certificates and the Class
Principal Balance of the Class M-1 Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-2 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 88.00% and (ii) the
Aggregate Collateral Balance for such Distribution Date and (B) the amount, if
any, by which (i) the Aggregate Collateral Balance for such
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Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Cut-off Date (including amounts in the Prefunding Account as of the Closing
Date).
Majority in Interest: As to any Class of Regular Certificates, the Holders
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Master REMIC: As specified in the Preliminary Statement.
Maximum Interest Rate: For the Class A-1, Class A-2 and Class R
Certificates and any distribution date, an annual rate equal to the weighted
average of (i) the weighted average Maximum Mortgage Rates minus the weighted
average Expense Fee Rate of the adjustable-rate mortgage loans in the related
Loan Group and (ii) the weighted average Net Mortgage Rates of the fixed-rate
mortgage loans in the related Loan Group. For the Class M-1, Class M-2 and Class
B Certificates and any distribution date, an annual rate equal to the weighted
average of (x) the weighted average Maximum Mortgage Rates minus the weighted
average Expense Fee Rate of the adjustable-rate mortgage loans in both Loan
Groups and the (y) Net Mortgage Rates of the fixed-rate mortgage loans in both
Loan Groups. All weighted averages calculated hereunder shall be based on Stated
Principal Balance of the applicable Mortgage Loans as of the first day of the
related Due Period.
Maximum Mortgage Rate: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Rate thereunder.
Minimum Mortgage Rate: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Rate thereunder.
Monthly Excess Cashflow: For any Distribution Date, an amount equal to the
sum of the Monthly Excess Interest and Overcollateralization Release Amount, if
any, for such date.
Monthly Excess Interest: As to any Distribution Date, the Interest
Remittance Amount remaining after the application of payments pursuant to
clauses A. through H. of Section 4.02(a) and the Principal Payment Amount
remaining after the application of payments pursuant to clauses A. through E. of
Section 4.02(b) or 4.02(c), as applicable.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on an estate in fee simple or leasehold interest in real property securing
a Mortgage Note.
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Mortgage File: The Mortgage documents listed in Section 2.01(b) hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee or the applicable Custodian to be added to the Mortgage File
pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Such mortgage
loans include conventional, adjustable-rate and fixed-rate, fully amortizing and
balloon, first lien residential mortgage loans, all of which have original terms
to stated maturity of up to 30 years.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Seller to reflect the addition of Qualified Substitute Mortgage
Loans and the purchase of Mortgage Loans pursuant to Section 2.02 or 2.03)
transferred to the Trustee as part of the Trust Fund and from time to time
subject to this Agreement, attached hereto as Schedule I, setting forth the
following information with respect to each Mortgage Loan by Loan Group:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the state
and zip code;
(iv) a code indicating the type of Mortgaged Property and the
occupancy status;
(v) a code indicating the servicer;
(vi) the original months to maturity;
(vii) a code indicating the Loan-to-Value Ratio at origination;
(viii) the Mortgage Rate as of the Cut-off Date;
(ix) the stated maturity date;
(x) the amount of the Scheduled Payment as of the Cut-off Date;
(xi) the original principal amount of the Mortgage Loan;
(xii) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due
on or before the Cut-off Date whether or not collected;
(xiii) the purpose of the Mortgage Loan (i.e., purchase, rate and term
refinance, equity take-out refinance);
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(xiv) a code indicating whether a Prepayment Premium is required to be
paid in connection with a prepayment of the Mortgage Loan and the amount of
the Prepayment Premium;
(xv) an indication whether the Mortgage Loan accrues interest at an
adjustable Mortgage Rate or a fixed Mortgage Rate and whether such Mortgage
Loan is a Simple Interest Mortgage Loan;
(xvi) the Index that is associated with such Mortgage Loan, if
applicable;
(xvii) the Gross Margin, if applicable;
(xviii) the Periodic Rate Cap, if applicable;
(xix) the Minimum Mortgage Rate, if applicable;
(xx) the Maximum Mortgage Rate, if applicable;
(xxi) the first Adjustment Date after the Cut-off Date, if applicable;
and
(xxii) the rate at which any lender paid Primary Insurance Policy
premium is calculated, if applicable.
With respect to the Mortgage Loans in the aggregate, each Mortgage Loan
Schedule shall set forth the following information, as of the Cut-off Date:
(xxiii) the number of Mortgage Loans;
(xxiv) the current aggregate principal balance of the Mortgage Loans
as of the close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date whether or not
collected;
(xxv) the weighted average Mortgage Rate of the Mortgage Loans; and
(xxvi) a field indicating the applicable Custodian as of the Closing
Date.
Mortgage Note: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note.
Mortgaged Property: The underlying real property securing a Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date, a fraction,
expressed as a percentage, the numerator of which is equal to the excess of (i)
the aggregate Stated Principal
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Balance for such Distribution Date of the Mortgage Loans, multiplied by the
product of (a) the Net WAC Rate and (b) the actual number of days elapsed in the
related Accrual Period divided by 360, over (ii) the aggregate Current Interest
for such Distribution Date, and the denominator of which is an amount equal to
the Aggregate Collateral Balance for such Distribution Date of the Mortgage
Loans, multiplied by the actual number of days elapsed in the related Accrual
Period divided by 360.
Net Funds Cap: Any of the Class A-1 Net Funds Cap, the Class A-2 Net Funds
Cap, the Class A-IO Net Funds Cap, or the Subordinate Net Funds Cap, as
applicable.
Net Liquidation Proceeds: Liquidation Proceeds, net of (1) unreimbursed,
reasonable out-of-pocket expenses and (2) unreimbursed Servicing Fees, Servicing
Advances and Advances.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per annum
rate equal to the Mortgage Rate less the related Expense Fee Rate.
Net Simple Interest Excess: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Excess over the amount of Simple
Interest Shortfall.
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.
Net WAC Rate: As to any Distribution Date, a rate equal to the weighted
average of the Net Mortgage Rates on the Mortgage Loans for the related
Collection Period, weighted on the basis of the Stated Principal Balances as of
the first day of the related Collection Period.
Nonrecoverable Advance: With respect to any Mortgage Loan, any portion of
an Advance or a Servicing Advance previously made or proposed to be made by the
Servicers that, in the good faith judgment of the Servicers, will not be
ultimately recoverable by the Servicers from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notional Amount Certificates: As specified in the Preliminary Statement.
Ocwen: Ocwen Federal Bank FSB, a federally chartered savings bank, and its
successors and assigns.
Ocwen Serviced Loans: The Mortgage Loans identified as such on the Mortgage
Loan Schedule.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of a 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.
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Olympus: Olympus Servicing, L.P., a Delaware limited partnership, and its
successors and assigns.
Olympus Serviced Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or a Servicer, including in-house counsel, reasonably acceptable
to the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and the Servicers, (ii) not have any material
direct financial interest in the Depositor or the Servicers or in any affiliate
of either, and (iii) not be connected with the Depositor or the Servicers as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions. The cost of any Opinion of Counsel, except as
otherwise specifically provided herein, shall not be at the expense of the
Trustee.
Optimal Interest Remittance Amount: For any Distribution Date and Loan
Group, will be equal to the excess of (i) the product of (1) (x) the weighted
average Net Mortgage Rate of the Mortgage Loans in such Loan Group as of the
first day of the related Collection Period less the product of (a) the FSA
Premium Rate multiplied by (b) the aggregate Class Principal Balance of either
the Class A-1 or Class A-2 Certificates, as applicable for such Loan Group,
divided by the applicable Aggregate Loan Group Collateral Balance as of the
first day of the related Collection Period, divided by (y) 12 and (2) the
applicable Aggregate Loan Group Collateral Balance for the immediately preceding
Distribution Date, over (ii) any expenses that reduce the Interest Remittance
Amount for that Loan Group which did not arise as a result of a default or
delinquency of the related Mortgage Loans.
Optional Termination Date: The first Distribution Date on which Olympus may
exercise its right to terminate the Trust Fund pursuant to Section 9.01.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02 herein.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a Payoff
prior to such Due Date and which did not become a Liquidation Mortgage Loan
prior to such Due Date.
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Overcollateralization Amount: For any Distribution Date, an amount equal to
the amount, if any, by which (x) the applicable Aggregate Collateral Balance for
such Distribution Date exceeds (y) the aggregate Class Principal Balance of the
Offered Certificates after giving effect to payments on such Distribution Date.
Overcollateralization Deficiency: For any Distribution Date will be equal
to the amount, if any, by which (x) the Targeted Overcollateralization Amount
for such Distribution Date exceeds (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the aggregate Class Principal Balance of
the Certificates resulting from the payment of the Principal Payment Amount on
such Distribution Date, but prior to allocation of any Applied Loss Amount on
such Distribution Date.
Overcollateralization Release Amount: For any Distribution Date, an amount
equal to the lesser of (x) the related Principal Remittance Amount for such
Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate Principal Remittance Amount
for such date is applied on such date in reduction of the aggregate of the Class
Principal Balances of the Certificates, exceeds (2) the Targeted
Overcollateralization Amount for such date.
Overfunded Interest Amount: With respect to any Subsequent Transfer Date,
the excess of (A) the amount on deposit in the Capitalized Interest Account on
such date over (B) the excess of (i) the amount of interest accruing at the sum
of the (a) assumed weighted average Pass-Through Rate of the Offered
Certificates and (b) the Applicable Rate on the Prefunded Amount outstanding at
the end of the related Collection Period for the total number of days remaining
through the end of the Accrual Periods ending February 24, 2002, March 24, 2002
and April 24, 2002 over (ii) one month of investment earnings on the amount on
deposit in the Capitalized Interest Account on such date at an annual rate of
1.25%. The assumed weighted average Pass-Through Rate will be calculated
assuming the Certificate Index is 1.83% for any Subsequent Transfer Date prior
to the February 2002 Distribution Date, 2.08% for any Subsequent Transfer Date
prior to the March 2002 Distribution Date and 2.33% for any Subsequent Transfer
Date prior to the April 2002 Distribution Date.
Ownership Interest: As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such Certificate
as the Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
Pass-Through Rate: With respect to the any Class of LIBOR Certificates and
any Distribution Date, a per annum rate equal to the lesser of (x) the related
Certificate Index for such Distribution Date, plus the related Certificate
Margin and (y) the applicable Net Funds Cap for such Distribution Date. With
respect to the Class A-IO Certificates and any Distribution Date, a per annum
rate equal to the lesser of (a) the excess, if any, of 8.00% over the
Certificate Index for such Distribution Date and (b) the Class A-IO Net Funds
Cap. With respect to the Class X Certificates, the rate set forth in the
Preliminary Statement.
Payahead: Any Scheduled Payment intended by the related Mortgagor to be
applied in a Collection Period subsequent to the Collection Period in which such
payment was received.
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Payoff: Any payment of principal on a Mortgage Loan equal to the entire
outstanding principal balance of such Mortgage Loan, if received in advance of
the last scheduled Due Date for such Mortgage Loan and accompanied by an amount
of interest equal to accrued unpaid interest on the Mortgage Loan to the date of
such payment-in-full.
Percentage Interest: As to any Certificate, either the percentage set forth
on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
Permitted Transferee: Any person other than a Disqualified Organization or
a Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, or an estate whose
income from sources without the United States is includible in gross income for
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have the authority to control
all substantial decisions of the trust unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI. The terms "United States" and "State" shall have the meanings set forth
in section 7701 of the Code or successor provisions.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Preference Claim: As defined in Section 4.07(k) herein.
Prefunded Amount: The amount deposited in the Prefunding Account on the
Closing Date, which shall equal $49,275,166.
Prefunding Account: The separate Eligible Account created and maintained by
the Trustee pursuant to Section 3.06 in the name of the Trustee for the benefit
of the Certificateholders and designated "U.S. Bank National Association, in
trust for registered holders of CSFB Mortgage Pass-Through Certificates, CSFB
ABS Trust Series 2002-HE1" Funds in the Prefunding Account shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement and shall not be a part of any REMIC created hereunder; provided,
however, that any investment income earned from Permitted Investments made with
funds in the Prefunding Account shall be for the account of the Depositor.
Prefunding Period: The period from the Closing Date until the earlier of
(i) the date on which the amount on deposit in the Prefunding Account is reduced
to zero, or (ii) an Event of Default occurs or (iii) April 24, 2002.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment, other than Principal Prepayments in full that occur
during the portion of the
29
Prepayment Period that is in the same calendar month as the Distribution Date,
the difference between (i) one full month's interest at the applicable Mortgage
Rate, as reduced by the Servicing Fee Rate on the outstanding principal balance
of such Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest due and actually received from the related Mortgagor that accrued
during the month immediately preceding such Distribution Date with respect to
such Mortgage Loan in connection with such Principal Prepayment, as reduced by
the Servicing Fee.
Prepayment Premium: With respect to each Mortgage Loan, the prepayment
charge or penalty interest required to be paid by the Mortgagor in connection
with a prepayment of the related Mortgage Loan, as provided in the related
Mortgage Note or Mortgage, and as specified on the Mortgage Loan Schedule.
Prepayment Period: With respect to any Distribution Date and any Payoff,
the period from the fifteenth day of the calendar month preceding the month in
which such Distribution Date occurs (or in the case of the first Distribution
Date, from the Cut-Off Date) through the fourteenth day of the month in which
such Distribution Date occurs. With respect to any Distribution Date and any
Curtailment, the calendar month preceding such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.
Principal Payment Amount: For any Distribution Date, an amount equal to the
related Principal Remittance Amount for such date minus the related
Overcollateralization Release Amount, if any, for such date.
Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or Curtailment.
Principal Remittance Amount: For any Distribution Date, an amount equal to
the sum of (1) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the Mortgage Loans during the related
Collection Period (less unreimbursed Advances, Servicing Advances and other
amounts due to a Servicer and the Trustee with respect to such Mortgage Loans,
to the extent allocable to principal) and the principal portion of Payaheads
previously received and intended for application in the related Collection
Period, (2) all Principal Prepayments on the Mortgage Loans received during the
related Prepayment Period, (3) the outstanding principal balance of each
Mortgage Loan that was repurchased by the Seller or a Servicer during the
calendar month immediately preceding such Distribution Date, (4) the portion of
any Substitution Adjustment Amount paid with respect to any Deleted Mortgage
Loans during the calendar month immediately preceding such Distribution Date
allocable to principal, (5) all Net Liquidation Proceeds and other recoveries
(net of unreimbursed Advances, Servicing Advances and other expenses, to the
extent allocable to principal) collected with respect to the Mortgage Loans
during the prior calendar month, to the extent allocable to principal, and (6)
with respect to the April 2002 Distribution Date and Loan Group 1, any amounts
remaining in the Prefunding Account (other than investment earnings thereon).
Private Certificates: As specified in the Preliminary Statement.
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Prospectus Supplement: The Prospectus Supplement dated January 25, 2002
relating to the Offered Certificates.
PUD: Planned Unit Development.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in a Request for Release, substantially in the form of Exhibit M
(i) have a Stated Principal Balance, after deduction of the principal portion of
the Scheduled Payment due in the month of substitution (or, in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate Stated Principal Balance), not in excess of, and not more than 10%
less than the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; (v) if the Deleted Mortgage Loan is an adjustable-rate
Mortgage Loan have a Maximum Mortgage Rate and Minimum Mortgage Rate not less
than the respective rates for the Deleted Mortgage Loan, have a Gross Margin
equal to or greater than the Deleted Mortgage Loan and have the same Index as
the Deleted Mortgage Loan and (vi) comply with each representation and warranty
set forth in Section 2.03(b).
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee and the Servicer.
References herein to a given rating or rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
Ratings: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidation Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidation Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Net Mortgage Rate from the related Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the related Due Date in the month in which Liquidation
Proceeds are required to be distributed on
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the Stated Principal Balance of such Liquidation Mortgage Loan from time to
time, minus (iii) the Net Liquidation Proceeds, if any, received during the
month in which such liquidation occurred, to the extent applied as recoveries of
interest at the Net Mortgage Rate and to principal of the Liquidation Mortgage
Loan.
Record Date: With respect to any Class of Physical Certificates and any
Distribution Date, the last day of the calendar month preceding the month in
which such Distribution Date occurs. With respect to any Class of Certificates
that is not a Physical Certificate and any Distribution Date, the Business Day
immediately preceding such Distribution Date; provided, however, that following
the date on which Definitive Certificates for such Certificates are available
pursuant to Section 5.02, the Record Date shall be the last day of the calendar
month preceding the month in which such Distribution Date occurs.
Reference Bank Rate: As to any Accrual Period relating to the LIBOR
Certificates as follows: the arithmetic mean (rounded upwards, if necessary, to
the nearest one sixteenth of a percent) of the offered rates for United States
dollar deposits for one month which are offered by the Reference Banks as of
11:00 a.m., London time, on the Interest Determination Date prior to the first
day of such Accrual Period to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates; provided that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by Olympus , as of 11:00 a.m., New
York City time, on such date for loans in U.S. Dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates. If no such quotations can be
obtained, the Reference Bank Rate shall be the Reference Bank Rate applicable to
the preceding Accrual Period.
Reference Banks: Three major banks that are engaged in the London interbank
market, selected by Olympus , as identified in writing to the Trustee.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amounts: As defined in Section 3.22(a) herein.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC 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 Mortgage Loans
as from time to time are subject to this Agreement (other than any Prepayment
Premiums), together with the Mortgage Files relating thereto, and
together with all collections thereon and proceeds thereof, (ii) any REO
Property, together with all collections thereon and proceeds thereof, (iii) the
Trustee's rights with respect to the Mortgage Loans under all insurance
policies, including the Primary Insurance Policy, required to be maintained
pursuant to this Agreement and any proceeds thereof and, (iv) the Collection
Account and the Certificate Account (subject to the last sentence of this
definition)
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and such assets that are deposited therein from time to time and any investments
thereof. Notwithstanding the foregoing, however, a REMIC election will not be
made with respect to the Basis Risk Reserve Fund, the Capitalized Interest
Account or the Prefunding Account.
REMIC II: The segregated pool of assets consisting of all of the Subsidiary
REMIC Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Master REMIC Residual Interests,
pursuant to Article II hereunder, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
REMIC III: The segregated pool of assets consisting of all of the Middle
REMIC Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Master REMIC Residual Interests,
pursuant to Article II hereunder, and all amounts deposited therein, with
respect to which a separate REMIC election is to be made.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to this Agreement or purchased at the option of
the Special Servicer pursuant to Section 3.12(g) of this Agreement, an amount
equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage
Loan on the date of such purchase, (ii) accrued and unpaid interest thereon at
the applicable Mortgage Rate (reduced by the Servicing Fee Rate if the purchaser
of the Mortgage Loan is also the Servicer thereof) from the date through which
interest was last paid by the Mortgagor to the Due Date in the month in which
the Repurchase Price is to be distributed to Certificateholders and (iii) in the
case of a Mortgage Loan purchased by the Seller, any unreimbursed Servicing
Advances.
Request for Release: The Request for Release submitted by a Servicer to the
applicable Custodian substantially in the form of Exhibit M.
Required Basis Risk Reserve Fund Amount: With respect to any Distribution
Date on which the Net Excess Spread is less than 0.25%, the lesser of (a)
$15,000 and (b) the product of 0.50% and the Aggregate Collateral Balance. With
respect to any Distribution Date on which the Net Excess Spread is equal to or
greater than 0.25%, $5,000.
Required Basis Risk Reserve Fund Deposit: With respect to any Distribution
Date, the excess, if any, of the Required Basis Risk Reserve Fund Amount for
such Distribution Date over the amount on deposit in the Basis Risk Reserve Fund
at the close of business on the Business Day immediately preceding such
Distribution Date.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy that is required to be maintained from time to time under this Agreement.
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Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer or employee of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's or employee's knowledge of and familiarity with the
particular subject and in each case who shall have direct responsibility for the
administration of this Agreement.
Rolling Three Month Delinquency Rate: For any Distribution Date will be the
fraction, expressed as a percentage, equal to the average of the related
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding months.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. For purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Surveillance Monitoring, or such other address as S&P
may hereafter furnish to the Depositor, the Servicer and the Trustee.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan
pursuant to the terms of the related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJMC.
Senior Certificates: As specified in the Preliminary Statement.
Senior Enhancement Percentage: For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the sum of the aggregate
Class Principal Balance of the Subordinate Certificates and the
Overcollateralization Amount (which, for purposes of this definition only, shall
not be less than zero), in each case prior to giving effect to payments on such
Distribution Date (assuming no Trigger Event has occurred), and the denominator
of which is the Aggregate Collateral Balance for such Distribution Date.
Senior Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the Class
Principal Balance of the Senior Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 65.50% and
(ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Cut-off Date (including amounts in the Prefunding Account as of the Closing
Date).
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Servicer: Olympus or Ocwen, or its successors in interest, as applicable.
Servicer Employee: As defined in Section 3.19 herein.
Servicer Remittance Date: With respect to any Mortgage Loan and
Distribution Date, the second Business Day prior to such Distribution Date.
Servicing Advance: All reasonable and customary "out of pocket" costs and
expenses incurred in the performance by a Servicer of its servicing obligations,
including, but not limited to, the cost (including reasonable attorneys' fees
and disbursements) of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures and any litigation related to a Mortgage Loan, (iii) the management
and liquidation of any REO Property including reasonable fees paid to any
independent contractor in connection therewith, (iv) compliance with the
obligations under Section 3.10 or 3.12 and (v) in connection with the
liquidation of a Mortgage Loan, expenditures relating to the purchase or
maintenance of a first lien Mortgage Loan, all of which reasonable and customary
out-of-pocket costs and expenses are reimbursable to a Servicer to the extent
provided in Sections 3.07(d)(ii) and 3.09(a)(ii), (iii), (iv) and (vi).
Servicing Advance Reimbursement Amounts: As defined in Section 3.22(a)
herein.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on such
Mortgage Loan on such Due Date), subject to reduction as provided in Section
3.15.
Servicing Fee Rate: With respect to any Mortgage Loan, 0.50% per annum.
Servicing Officer: With respect to a Servicer, any officer of that Servicer
involved in, or responsible for, the administration and servicing of the related
Mortgage Loans whose name and specimen signature appear on a list of servicing
officers furnished to the Trustee by such Servicer on the Closing Date pursuant
to this Agreement, as such list may from time to time be amended and delivered
to the Trustee.
Simple Interest Excess: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) the portion of the monthly
payment received from the Mortgagor for such Mortgage Loan allocable to interest
with respect to the related Collection Period, over (ii) 30 days' interest on
the Stated Principal Balance of such Mortgage Loan at the Mortgage Rate.
Simple Interest Excess Sub-Account: The sub-account of the Collection
Account established by Olympus, as Servicer, pursuant to Section 3.07(f). The
Simple Interest Excess Sub-Account shall be an Eligible Account.
Simple Interest Mortgage Loan: Any Mortgage Loan for which the interest due
thereon is calculated based on the actual number of days elapsed between the
date on which interest was last paid through the date on which the most current
payment is received.
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Simple Interest Qualifying Loan: As of any Determination Date, any Simple
Interest Mortgage Loan that was neither prepaid in full during the related
Collection Period, nor delinquent with respect to a payment that became due
during the related Collection Period as of the close of business on the
Determination Date following such Collection Period.
Simple Interest Shortfall: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) 30 days' interest on the
Stated Principal Balance of all such Mortgage Loans at the Mortgage Rate, over
(ii) the portion of the monthly payment received from the Mortgagor for such
Mortgage Loan allocable to interest with respect to the related Collection
Period.
Special Servicer: Olympus Servicing, L.P. or any successor in interest.
Special Serviced Mortgage Loans: Mortgage Loans for which the Special
Servicer acts as Servicer pursuant to Section 3.03.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous Curtailments and Liquidation
Proceeds allocable to principal (other than with respect to any Liquidation
Mortgage Loan) and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related Mortgagor.
Stepdown Date: The date occurring on the later of (x) the Distribution Date
in February 2005 and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose after giving effect to
payments or other recoveries in respect of the Mortgage Loans during the related
Collection Period but before giving effect to payments on the Certificates on
such Distribution Date) is greater than or equal to 34.50%.
Subordinate Certificates: As specified in the Preliminary Statement.
Subordinate Group 1 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 1 Mortgage Loans as of
the last day of the related Collection Period less the Class Principal Balance
of the Class A-1 Certificates.
Subordinate Group 2 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 2 Mortgage Loans as of
the last day of the related Collection Period less the Class Principal Balance
of the Class A-2 Certificates.
Subordinate Net Funds Cap: For any Distribution Date and the Class M-1,
Class M-2 and Class B Certificates, will be a per annum rate equal to a weighted
average of (i) the Class A-1 Net Funds Cap and (ii) the Class A-2 Net Funds Cap
for such Distribution Date, weighted on the basis of the Subordinate Group 1
Balance and Subordinate Group 2 Balance.
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Subsequent Cut-off Date: With respect to any Subsequent Mortgage Loan, the
first day of the month in which such Mortgage Loan is transferred to the Trust.
Subsequent Mortgage Loan: Any Loan Group 1 Mortgage Loan other than an
Initial Mortgage Loan conveyed to the Trust Fund pursuant to Section 2.01 hereof
and to a Subsequent Transfer Agreement, which Mortgage Loan shall be listed on
the revised Mortgage Loan Schedule delivered pursuant to this Agreement and on
Schedule A to such Subsequent Transfer Agreement. When used with respect to a
single Subsequent Transfer Date, Subsequent Mortgage Loan shall mean a
Subsequent Mortgage Loan conveyed to the Trust on that Subsequent Transfer Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit N hereto, executed and delivered by the
Depositor, DLJMC, the Servicers and the Trustee as provided in Section 2.01
hereof.
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the date
the related Subsequent Mortgage Loans are transferred to the Trust pursuant to
the related Subsequent Transfer Agreement.
Subservicer: Any Subservicer which is subservicing any of the Mortgage
Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 3.02.
Subservicing Agreement: An agreement between a Servicer and a Subservicer
for the servicing of the related Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03 herein.
Targeted Overcollateralization Amount: For any Distribution Date prior to
the Stepdown Date, 2.25% of the Aggregate Collateral Balance as of the Cut-off
Date; with respect to any Distribution Date on or after the Stepdown Date and
with respect to which a Trigger Event has not occurred, the greater of (a) 4.50%
of the Aggregate Collateral Balance for such Distribution Date, or (b) 0.50% of
the Aggregate Collateral Balance as of the Cut-off Date; with respect to any
Distribution Date on or after the Stepdown Date with respect to which a Trigger
Event has occurred and is continuing, the Targeted Overcollateralization Amount
for the Distribution Date immediately preceding such Distribution Date.
Telerate Page 3750: The display designated as page 3750 on Bridge Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rates of major banks).
Transfer: Any direct or indirect transfer or sale of any Ownership Interest
in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Residual Certificate.
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Trigger Event: A Trigger Event will occur for any Distribution Date if the
Rolling Three Month Delinquency Rate as of the last day of the related
Collection Period equals or exceeds 44.00% of the Senior Enhancement
Percentage for such Distribution Date.
Trust: CSFB ABS Trust Series 2002-HE1 established pursuant to this
Agreement.
Trust Fund: The corpus of the trust created hereunder consisting of (i) the
Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date, other than such amounts which were due on the
Mortgage Loans on or before the Cut-off Date; (ii) the Collection Accounts
(including any Simple-Interest Excess Sub-Account), the Certificate Account, the
Prefunding Account, Capitalized Interest Account and the Basis Risk Reserve Fund
and all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property which secured a Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure after the applicable
Cut-off Date; (iv) the Depositor's rights under the Assignment and Assumption
Agreement; (v) the FSA Policy, and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trustee: U.S. Bank National Association, in its capacity as trustee under
this agreement and assigns in such capacity.
Trustee Fee: The fee payable to the Trustee on each Distribution Date for
its services as Trustee hereunder, in an amount equal to one-twelfth of the
Trustee Fee Rate multiplied by the Stated Principal Balance of the Mortgage
Loans immediately prior to such Distribution Date.
Trustee Fee Rate: 0.005% per annum.
Underwriters' Exemption: Prohibited Transaction Exemption 2000-58, 65 Fed.
Reg. 67765 (2000), as amended (or any successor thereto), or any substantially
similar administrative exemption granted by the U.S. Department of Labor.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 98% of all
Voting Rights shall be allocated among the Class X-0, Xxxxx X-0, Class M-1,
Class M-2 and Class B Certificates. The portion of such 98% Voting Interests
allocated to the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class B
Certificates shall be based on the fraction, expressed as a percentage, the
numerator of which is the aggregate Class Principal Balance then outstanding and
the denominator of which is the Class Principal Balance of all such Classes then
outstanding. The Class A-IO and the Class X Certificates shall each be allocated
1% of the Voting Rights. Voting Rights shall be allocated among the Certificates
within each such Class in accordance with their respective Percentage Interests.
The Class R shall have no voting rights.
SECTION 1.02 Interest Calculations.
---------------------
Interest on the LIBOR Certificates shall be calculated on the basis of a
360-day year and the actual number of days elapsed. The calculation of all fees
and interest on the Class A-IO Certificates and the Class X Certificate shall be
made on the basis of a 360-day year consisting
38
of twelve 30-day months. All dollar amounts calculated hereunder shall be
rounded to the nearest xxxxx with one-half of one xxxxx being rounded down.
39
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
----------------------------
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
in trust for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to (i) subject to Section
6.04(b), each Initial Mortgage Loan, including all interest and principal
received or receivable on or with respect to such Initial Mortgage Loans after
the Initial Cut-off Date and all interest and principal payments on the Initial
Mortgage Loans received prior to the Initial Cut-off Date in respect of
installments of interest and principal due thereafter, but not including
payments of principal and interest due and payable on the Initial Mortgage Loans
on or before the Initial Cut-off Date; (ii) any insurance policies in respect of
the Initial Mortgage Loans; (iii) the Depositor's rights under the Assignment
and Assumption Agreement, (iv) any such amounts as may be deposited into and
held by the Trustee in the Prefunding Account and Capitalized Interest Account
and (v) all proceeds of any of the foregoing. In addition, on or prior to the
Closing Date, the Depositor shall cause FSA to deliver the FSA Policy to the
Trustee.
(b) In connection with the transfer and assignment set forth in clause (a)
above, the Depositor has delivered or caused to be delivered to the applicable
Custodian for the benefit of the Certificateholders, the documents and
instruments with respect to each Mortgage Loan as assigned:
(i) the electronic Mortgage Loan Schedule;
(ii) (A) the original Mortgage Note bearing all intervening
endorsements and including any riders to the Mortgage Note, endorsed "Pay
to the order of __________, without recourse" and signed in the name of the
last named endorsee by an authorized officer, or
(B) with respect to any Lost Mortgage Note, a lost note affidavit
stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(iii) the original of any guarantee executed in connection with the
Mortgage Note (if any);
(iv) the original Mortgage, with evidence of recording thereon, or
copies certified by the related recording office or if the original
Mortgage has not yet been returned from the recording office, a copy
certified by or on behalf of the Seller indicating that such Mortgage has
been delivered for recording. The return directions for the original
Mortgage should indicate, when recorded, mail to the Seller;
(v) the originals of all assumption, modification, consolidation or
extension agreements (or, if an original of any of these documents has not
been returned from the
40
recording office, a copy thereof certified by or on behalf of the Seller,
the original to be delivered to the Seller forthwith after return from such
recording office) with evidence of recording thereon, if any;
(vi) the original Assignment of Mortgage as appropriate, in recordable
form, for the Mortgage Loan assigned in blank;
(vii) the originals of any intervening recorded assignments of
mortgage, showing a complete chain of assignment from origination to the
last named assignee, including warehousing assignments, with evidence of
recording thereon (or, if an original intervening Assignment of Mortgage
has not been returned from the recording office, a copy thereof certified
by or on behalf of the Seller, the original to be delivered to the Trustee
forthwith after return from such recording office); and
(viii) the original mortgage title insurance policy, or if the policy
has not yet been issued, an original or copy of a marked-up written
commitment or a pro forma title insurance policy marked as binding and
countersigned by the title insurance company or its authorized agent either
on its face or by an acknowledged closing instruction or escrow letter.
If the Seller delivers certified copies of any document or instrument set
forth in Section 2.01(b) to the applicable Custodian because of a delay caused
by the public recording office in returning any recorded document, the Seller
shall deliver to the applicable Custodian, within 60 days of the Closing Date,
an Officer's Certificate which shall (i) identify the recorded document, (ii)
state that the recorded document has not been delivered to the applicable
Custodian due solely to a delay caused by the public recording office, and (iii)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for recordation.
In the event that in connection with any Mortgage Loan the Depositor cannot
deliver (a) the original recorded Mortgage, (b) all interim recorded assignments
or (c) the lender's title policy (together with all riders thereto) satisfying
the requirements set forth above, concurrently with the execution and delivery
hereof because such document or documents have not been returned from the
applicable public recording office in the case of clause (a) or (b) above, or
because the title policy has not been delivered to the Seller or the Depositor
by the applicable title insurer in the case of clause (c) above, the Depositor
shall promptly deliver to the applicable Custodian, in the case of clause (a) or
(b) above, such original Mortgage or such interim assignment, as the case may
be, with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office and in the case of (c) above, such original title
policy (together with all riders thereto), upon receipt from the applicable
title insurer.
As promptly as practicable subsequent to such transfer and assignment and
delivery to it of each Assignment of Mortgage pursuant to clause (vii) above,
and in any event, within thirty (30) days thereafter, the Trustee shall (at the
Seller's expense) (i) affix the Trustee's name to each Assignment of Mortgage,
as the assignee thereof, (ii) cause such Assignment of Mortgage to be completed
in proper form for recording in the appropriate public office for real property
41
records within thirty (30) days after receipt thereof and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the Assignments of Mortgages to the Trustee, except that, with respect
to any Assignment of Mortgage as to which the Trustee has not received the
information required to prepare such Assignment of Mortgage in recordable form,
the Trustee's obligation to do so and to deliver the same for such recording
shall be as soon as practicable after receipt of such information and in any
event within thirty (30) days after the receipt thereof, and the Trustee need
not cause to be recorded any Assignment of Mortgage which relates to a Mortgage
Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of
Counsel delivered by the Seller (at the Seller's expense) to the Trustee within
twenty (20) days of the Closing Date, acceptable to the Rating Agencies, the
recordation of such Assignment of Mortgage is not necessary to protect the
Trustee's and the Certificateholders' interest in the related Mortgage Loan.
(c) The Depositor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee in trust for the benefit of the Certificateholders,
without recourse, all right, title and interest in such Subsequent Mortgage
Loans, including all interest and principal due on or with respect to such
Subsequent Mortgage Loans on or after the related Subsequent Cut-off Date and
all interest and principal payments on such Subsequent Mortgage Loans received
prior to the Subsequent Cut-off Date in respect of installments of interest and
principal due thereafter, but not including principal and interest due on such
Subsequent Mortgage Loans prior to the related Subsequent Cut-off Date, any
insurance policies in respect of such Subsequent Mortgage Loans and all proceeds
of any of the foregoing.
(d) Upon one Business Day's prior written notice to the Trustee, the
Servicers and the Rating Agencies, on any Business Day during the Prefunding
Period designated by the Depositor, the Depositor, the applicable Servicers and
the Trustee shall complete, execute and deliver a Subsequent Transfer Agreement
so long as no Rating Agency has provided notice that the execution and delivery
of such Subsequent Transfer Agreement will result in a reduction or withdrawal
of the ratings assigned to the Certificates (without regard to the FSA Policy).
The transfer of Subsequent Mortgage Loans and the other property and rights
relating to them on a Subsequent Transfer Date is subject to the satisfaction of
each of the following conditions:
(i) each Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date satisfies the representations and warranties applicable to it under
this Agreement as of the applicable Subsequent Transfer Date; provided,
however, that with respect to a breach of a representation and warranty
with respect to a Subsequent Mortgage Loan, the obligation under Section
2.03(d) of this Agreement of the Seller to cure, repurchase or replace such
Subsequent Mortgage Loan shall constitute the sole remedy against the
Seller respecting such breach available to Certificateholders, the
Depositor or the Trustee;
(ii) the Trustee and the Rating Agencies are provided with an Opinion
of Counsel or Opinions of Counsel, at the expense of the Depositor, with
respect to the qualification of the Trust Fund as a REMIC, to be delivered
as provided pursuant to Section 2.01(e);
42
(iii) the Rating Agencies and the Trustee are provided with an Opinion
of Counsel or Opinions of Counsel, at the expense of the Depositor, with
respect to the characterization of the transfer of the Subsequent Mortgage
Loans conveyed on such Subsequent Transfer Date as a sale, to be delivered
as provided pursuant to Section 2.01(e); and
(iv) the execution and delivery of such Subsequent Transfer Agreement
or conveyance of the related Subsequent Mortgage Loans does not result in a
reduction or withdrawal of any ratings assigned to the Certificates by the
Rating Agencies (without regard to the FSA Policy);
(v) no Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date was 30 or more days contractually delinquent as of such date;
(vi) the remaining term to stated maturity of such Subsequent Mortgage
Loan will not exceed 30 years for fully amortizing loans or 15 years for
balloon loans;
(vii) such Subsequent Mortgage Loan will not have a current Mortgage
Rate less than 6.00% per annum;
(viii) the Depositor shall have deposited in the Collection Account
all principal and interest collected with respect to the related Subsequent
Mortgage Loans on or after the related Subsequent Cut-off Date;
(ix) such Subsequent Mortgage Loan will not have a Loan-to-Value Ratio
greater than 100.00%;
(x) such Subsequent Mortgage Loan will have a principal balance not
greater than $750,000;
(xi) no Subsequent Mortgage Loan shall have a maturity date after May
2032;
(xii) such Subsequent Mortgage Loan will not have an original
Loan-to-Value Ratio greater than 100.00%;
(xiii) such Subsequent Mortgage Loan will be otherwise acceptable to
the Rating Agencies;
(xiv) following the conveyance of the Subsequent Mortgage Loans on
such Subsequent Transfer Date the characteristics of the Mortgage Loans in
the Mortgage Pool will be as follows:
(A) weighted average Mortgage Rate of at least 9.50% per annum;
(B) a weighted average remaining term to stated maturity of less
than 355 months;
43
(C) a weighted average Loan-to-Value Ratio of not more than
81.00%;
(D) no more than 5.5% of the Mortgage Loans by aggregate Cut-off
Date Principal Balance will be balloon loans;
(E) no more than 30.0% of the Mortgage Loans by aggregate Cut-off
Date Principal Balance will be concentrated in one state; and
(F) no more than 6.5% of the Mortgage Loans by aggregate Cut-off
Date Principal Balance will relate to non-owner occupied properties;
(xv) neither the applicable Seller nor the Depositor shall be insolvent or
shall be rendered insolvent as a result of such transfer;
(xvi) no Event of Default has occurred hereunder;
(xvii) the Depositor shall have delivered to the Trustee an Officer's
Certificate confirming the satisfaction of each of these conditions precedent;
and
(xviii) each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code.
(e) Upon (1) delivery to the Trustee by the Depositor of the Opinions of
Counsel referred to in Sections 2.01(d)(ii) and (iii), (2) delivery to the
Trustee by the Depositor of a revised Mortgage Loan Schedule reflecting the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and the
related Subsequent Mortgage Loans and (3) delivery to the Trustee by the
Depositor of an Officer's Certificate confirming the satisfaction of each of the
conditions precedent set forth in Section 2.01(d), the Trustee shall remit to
the Depositor the Aggregate Subsequent Transfer Amount related to the Subsequent
Mortgage Loans transferred by the Depositor on such Subsequent Transfer Date
from funds in the Prefunding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except for
its own receipt of documents specified above, and shall be entitled to rely on
the required Officer's Certificate.
SECTION 2.02 Acceptance by the Trustee of the Mortgage Loans.
-----------------------------------------------
(a) The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares that
it holds and will hold or will cause its agent to hold such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold or will cause its agent to hold such other assets as are
included in the Trust Fund, in trust for the exclusive use and benefit of all
present and future Certificateholders. The Trustee acknowledges that it or the
applicable Custodian will maintain possession of the Mortgage Notes in the State
of Texas, State of California, State of Illinois or State of Minnesota, as
directed by the Seller, unless otherwise permitted by the Rating Agencies.
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The Trustee agrees to deliver as of 10:00am (New York time) on the Closing
Date to the Depositor, FSA and the Servicers an Initial Certification from each
Custodian in the form annexed hereto as Exhibit G. Based on its review and
examination, and only as to the documents identified in each such Initial
Certification, each Custodian acknowledges that such documents appear regular on
their face and relate to such Mortgage Loan. The Trustee shall be under no duty
or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee shall deliver to
the Depositor, the Seller, FSA and the Servicers a Final Certification in the
form annexed hereto as Exhibit H, with any applicable exceptions noted thereon.
If, in the course of such review, the Trustee is notified by a Custodian
that any document constituting a part of a Mortgage File does not meet the
requirements of Section 2.01, the Trustee shall cause the applicable Custodian
to list such as an exception in the Final Certification; provided, however, that
the Trustee shall not make any determination as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates.
The Seller shall promptly correct or cure such defect within 90 days from
the date it is so notified of such defect and, if the Seller does not correct or
cure such defect within such period, the Seller shall either (i) substitute for
the related Mortgage Loan a Qualified Substitute Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, or (ii) purchase such Mortgage Loan from the Trustee
within 90 days from the date the Seller was notified of such defect in writing
at the Repurchase Price of such Mortgage Loan; provided, however, that if the
cure, substitution or repurchase of a Mortgage Loan pursuant to this provision
is required by reason of a delay in delivery of any documents by the appropriate
recording office, then the Seller shall be given 720 days from the Closing Date
to cure such defect or substitute for, or repurchase such Mortgage Loan; and
further provided, that the Seller shall have no liability for recording any
Assignment of Mortgage in favor of the Trustee or for the Trustee's failure to
record such Assignment of Mortgage, and the Seller shall not be obligated to
repurchase or cure any Mortgage Loan as to which such Assignment of Mortgage is
not recorded. The Trustee shall deliver written notice to each Rating Agency
within 270 days from the Closing Date indicating each Mortgage (a) which has not
been returned by the appropriate recording office or (b) as to which there is a
dispute as to location or status of such Mortgage. Such notice shall be
delivered every 90 days thereafter until the related Mortgage is returned to the
Trustee or applicable Custodian. Any such substitution effected more than 90
days after the Closing Date shall not be effected prior to the delivery to the
Trustee of the Opinion of Counsel required by Section 2.05 hereof and any
substitution shall not be effected prior to the additional delivery to the
Trustee, or the applicable Custodian on its behalf, of a Request for Release
substantially in the form of Exhibit M and the Mortgage File for any such
Qualified Substitute Mortgage Loan. The Repurchase Price for any such Mortgage
Loan shall be deposited by the Seller in the applicable Collection Account on or
prior to the Business Day
45
immediately preceding the Distribution Date in the month following the month of
repurchase and, upon receipt of such deposit and certification with respect
thereto in the form of Exhibit M hereto, the Trustee, or the applicable
Custodian on its behalf, shall release the related Mortgage File to the Seller
and shall execute and deliver at such entity's request such instruments of
transfer or assignment prepared by such entity, in each case without recourse,
as shall be necessary to vest in such entity, or a designee, the Trustee's
interest in any Mortgage Loan released pursuant hereto.
The Trustee agrees to cause each Custodian to execute and deliver prior to
10:00am (New York time) on each Subsequent Transfer Date to the Depositor, FSA
and the Servicers a Subsequent Certification in the form annexed hereto as
Exhibit G. Based on its review and examination, and only as to the documents
identified in such Subsequent Certification, each Custodian shall acknowledge
that such documents appear regular on their face and relate to such Subsequent
Mortgage Loan. The Trustee shall be under no duty or obligation to inspect,
review or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real estate
records or that they are other than what they purport to be on their face.
Not later than 90 days after the end of the Prefunding Period, the Trustee
shall cause each Custodian to deliver to the Depositor, the Seller, FSA and the
Servicers a Final Certification with respect to the Subsequent Mortgage Loans in
the form annexed hereto as Exhibit H with any applicable exceptions noted
thereon.
If, in the course of such review of the Mortgage Files relating to the
Subsequent Mortgage Loans, a Custodian finds any document constituting a part of
a Mortgage File which does not meet the requirements of Section 2.01, the
Trustee shall cause such Custodian to list such as an exception in the Final
Certification; provided, however that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
cure any such defect or repurchase or substitute for any such Mortgage Loan in
accordance with this Section 2.02(a).
(b) It is understood and agreed that the obligation of the Seller to cure,
substitute for or to repurchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder against
the Seller.
(c) All of the Mortgage Files are being held pursuant to the Custodial
Agreements. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files pursuant to
Sections 2.01, 2.02, 2.05, 3.12 shall be performed by the applicable Custodian.
At the expense of DLJMC, the Trustee, from time to time, shall instruct or cause
the instruction of each Custodian to deliver the Mortgage Files to the Trustee
for completion and recordation of the Assignments of Mortgage.
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SECTION 2.03 Representations and Warranties of the Seller and Servicers.
----------------------------------------------------------
(a) Each of DLJMC, Olympus and Ocwen in its capacity as Seller or Servicer,
as applicable, hereby makes on behalf of themselves the representations and
warranties set forth in Schedule IIA, Schedule IIB and Schedule IIC hereto,
respectively, and by this reference incorporated herein, to the Depositor and
the Trustee, as of the Closing Date, or if so specified therein, as of the
applicable Cut-off Date.
(b) DLJMC, in its capacity as Seller, hereby makes the representations and
warranties set forth in Schedule III to the Depositor and the Trustee, as of the
Closing Date, or the date specified therein, with respect to the Initial
Mortgage Loans identified on Schedule I hereto and as of the Subsequent Transfer
Date with respect to any Subsequent Mortgage Loan identified on Schedule I
hereto.
(c) [Reserved.]
(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties. The Seller hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made by it pursuant to Section 2.03(b) which
materially and adversely affects the value of the related Mortgage Loan or the
interests of the Certificateholders, it shall cure such breach in all material
respects, and if such breach is not so cured, shall, (i) if such 90-day period
expires prior to the second anniversary of the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute in
its place a Qualified Substitute Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at the Repurchase Price in the manner
set forth below; provided, however, that any such substitution pursuant to (i)
above shall not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05 hereof, if any, and any such substitution
pursuant to (i) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit M and
the Mortgage File for any such Qualified Substitute Mortgage Loan. The Seller
shall promptly reimburse the related Servicer and the Trustee for any actual
out-of-pocket expenses reasonably incurred by the related Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect to
any representation and warranty described in this Section which are made to the
best of the Seller's knowledge, if it is discovered by either the Depositor, the
Seller or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interests of the Certificateholders therein,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Qualified Substitute Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01(b), with the
Mortgage Note endorsed and the Mortgage assigned as required by
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Section 2.01. Scheduled Payments due with respect to Qualified Substitute
Mortgage Loans in the Collection Period related to the Distribution Date in the
month of substitution shall not be part of the Trust Fund and will be retained
by the Seller. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Collection Period and thereafter the Seller shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Seller shall amend the related Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Qualified Substitute Mortgage Loan or Loans and the
Seller shall deliver the amended Mortgage Loan Schedule to the Trustee and the
Depositor. Upon such substitution, the Qualified Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Seller shall be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Section 2.03(b) with respect to such Mortgage Loan.
Upon any such substitution and the deposit to the applicable Collection Account
of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall or shall
cause the applicable Custodian to release the Mortgage File held for the benefit
of the Certificateholders relating to such Deleted Mortgage Loan to the Seller
and shall execute and deliver at the Seller's direction such instruments of
transfer or assignment prepared by the Seller, in each case without recourse, as
shall be necessary to vest title in the Seller, or its designee, the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the related
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be deposited in the applicable Collection Account by the Seller on
or before the Business Day immediately preceding the related Servicer Remittance
Date in the month succeeding the calendar month during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the related Collection Account
pursuant to Section 3.06 on or before the Business Day immediately preceding the
related Servicer Remittance Date in the month following the month during which
the Seller became obligated hereunder to repurchase or replace such Mortgage
Loan and upon such deposit of the Repurchase Price and receipt of a Request for
Release in the form of Exhibit M hereto, the Trustee shall release or cause the
applicable Custodian to release the related Mortgage File held for the benefit
of the Certificateholders to such Person, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, as shall be necessary to
transfer title from the Trustee. It is understood and agreed that the obligation
under this Agreement of any Person to cure, repurchase or substitute any
Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole
48
remedy against such Persons respecting such breach available to
Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03 shall
survive delivery of the respective Mortgage Files to the Trustee, or to the
applicable Custodian on the Trustee's behalf, for the benefit of the
Certificateholders.
SECTION 2.04 Representations and Warranties of the Depositor as to the
Mortgage Loans.
---------------------------------------------------------
The Depositor hereby represents and warrants to the Trustee with respect to
each Mortgage Loan that, as of the Closing Date, assuming good title has been
conveyed to the Depositor, the Depositor had good title to the Mortgage Loans
and Mortgage Notes, and did not encumber the Mortgage Loans during its period of
ownership thereof, other than as contemplated by the Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee, or to the applicable Custodian on the Trustee's behalf.
SECTION 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions.
-------------------------------------------------
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 90 days after the
Closing Date unless the Seller delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on "prohibited transactions" on
the Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
(b) Upon discovery by the Depositor, the Seller, a Servicer, or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within five (5) Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(d) with respect to substitutions
are satisfied, a Qualified Substitute Mortgage Loan for the affected Mortgage
Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of such
discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
SECTION 2.06 Execution and Delivery of Certificates.
--------------------------------------
The Trustee acknowledges receipt by each Custodian on its behalf of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit G and the amounts
49
required to be deposited into the Prefunding Account, the Capitalized Interest
Account and the Basis Risk Reserve Fund and, concurrently with such receipt, has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates and to perform the duties set forth in this
Agreement according to its terms.
SECTION 2.07 REMIC Matters.
-------------
The Preliminary Statement sets forth the designations and "latest possible
maturity date" for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "tax matters person" with respect to each REMIC hereunder shall be the
holder of the Class R Certificate. The Trustee on behalf of the holders of the
Class R Certificates shall act as agent for the "tax matters person". By its
acceptance of a Class R Certificate, each holder thereof shall have agreed to
such appointment and shall have consented to the appointment of the Trustee as
its agent to act on behalf of each REMIC pursuant to the specific duties
outlined herein. Each REMIC's fiscal year shall be the calendar year.
SECTION 2.08 Covenants of the Servicers.
--------------------------
Each Servicer hereby covenants to the Depositor and the Trustee for itself
only as follows:
(a) such Servicer shall comply in the performance of its obligations under
this Agreement in all material respects with all reasonable rules and
requirements of the insurer under each Primary Insurance Policy; and
(b) no written information, certificate of an officer, statement furnished
in writing or written report delivered to the Depositor, any affiliate of the
Depositor or the Trustee and prepared by such Servicer pursuant to this
Agreement will contain any untrue statement of a material fact.
SECTION 2.09 Conveyance of Subsidiary REMIC Regular Interests and Middle
REMIC Regular Interests and Acceptance of Master REMIC,
Respectively, by the Trustee; Issuance of Certificates.
-----------------------------------------------------------
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Subsidiary REMIC Regular Interests and Middle REMIC Regular Interests
for the benefit of the holders of the Certificates. The Trustee acknowledges
receipt of the Subsidiary REMIC Regular Interests and Middle REMIC Regular
Interests (both of which are uncertificated) and declares that it holds and will
hold the same in trust for the exclusive use and ultimate benefit of the holders
of the Certificates. The interests evidenced by the Master REMIC Residual
Interest, together with the Regular Certificates, constitute the entire
beneficial ownership interest in the Master REMIC.
50
(b) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC I and REMIC II (including the Residual Interests therein represented by
the Subsidiary REMIC Residual Interest and Middle REMIC Residual Interest,
respectively) and the acceptance by the Trustee thereof, pursuant to Section
2.01, Section 2.02 and Section 2.09(a) and (ii) the assignment and delivery to
the Trustee of the Master REMIC (including the Residual Interest therein
represented by the Master REMIC Residual Interest) and the acceptance by the
Trustee thereof, pursuant to Section 2.09(b), the Trustee, pursuant to the
written request of the Depositor executed by an officer of the Depositor, has
executed, authenticated and delivered to or upon the order of the Depositor, the
Class R Certificates in authorized denominations evidencing the Subsidiary REMIC
Residual Interest and Middle REMIC Residual Interest and the Master REMIC
Residual Interest.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans.
-----------------------------------
For and on behalf of the Certificateholders, each Servicer shall service
and administer the related Mortgage Loans in accordance with the terms of this
Agreement and with Accepted Servicing Practices. The obligations of each of
Olympus and Ocwen hereunder to service and administer the Mortgage Loans shall
be limited to the Olympus Serviced Loans and the Ocwen Serviced Loans
respectively; and with respect to the duties and obligations of each Servicer,
references herein to "Mortgage Loans" or related "Mortgage Loans" shall be
limited to the Olympus Serviced Loans, including the Special Serviced Mortgage
Loans at any time Olympus is the Special Servicer (and the related proceeds
thereof and related REO Properties), in the case of Olympus and the Ocwen
Serviced Loans (and the related proceeds thereof and related REO Properties), in
the case of Ocwen, and in no event shall any Servicer have any responsibility or
liability with respect to any of the other Mortgage Loans. In connection with
such servicing and administration, each Servicer shall have full power and
authority, acting alone and/or through Subservicers as provided in Section 3.02
hereof, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including but
not limited to, the power and authority, subject to the terms hereof (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages (but only in the manner provided in this Agreement),
(iii) to collect any Insurance Proceeds and other Liquidation Proceeds and (iv)
to effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan, provided that a Servicer shall not take any
action that is inconsistent with or prejudices the interests of the Trust Fund
or the Certificateholders in any Mortgage Loan or the rights and interests of
the Depositor, the Trustee or the Certificateholders under this Agreement. Each
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests in mortgage loans in its own portfolio
in any claim, proceeding or litigation regarding a Mortgage Loan, and shall not
make or permit any modification, waiver or amendment of any Mortgage Loan which
would cause any REMIC hereunder to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, each Servicer, in its own name
or in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when such Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. Each Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by either or
both of them as are necessary or appropriate to enable such Servicer to service
and administer the Mortgage Loans to the extent that such Servicer is not
permitted to execute and deliver such documents pursuant to the
52
preceding sentence. Upon receipt of such documents, the Depositor and/or the
Trustee shall execute such documents and deliver them to such Servicer.
In accordance with the standards of the preceding paragraph, the Servicers
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall constitute Servicing Advances and shall be reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.06, and further as provided in Section 3.09. The costs incurred by a
Servicer, if any, in effecting the timely payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
With respect to the Mortgage Loans, the Servicer of such Mortgage Loans
agrees that, with respect to the Mortgagors of such Mortgage Loans, such
Servicer shall accurately and fully report its borrower credit files to Equifax,
Transunion & Experian in a timely manner.
Each Servicer hereby acknowledges that, to the extent such Servicer has
previously serviced some or all of the Mortgage Loans pursuant to another
servicing agreement, the provisions contained in this Agreement shall supersede
the provisions contained in such other servicing agreement.
SECTION 3.02 Subservicing; Enforcement of the Obligations of Subservicers.
------------------------------------------------------------
(a) The Mortgage Loans may be subserviced by a Subservicer on behalf of the
related Servicer in accordance with the servicing provisions of this Agreement,
provided that the Subservicer is a FNMA-approved lender or a FHLMC
seller/servicer in good standing, and no event has occurred, including but not
limited to a change in insurance coverage, which would make it unable to comply
with the eligibility requirements for lenders imposed by FNMA or for
seller/servicer imposed by FHLMC, or which would require notification to FNMA or
FHLMC. A Servicer may perform any of its servicing responsibilities hereunder or
may cause the Subservicer to perform any such servicing responsibilities on its
behalf, but the use by a Servicer of a Subservicer shall not release such
Servicer from any of its obligations hereunder and such Servicer shall remain
responsible hereunder for all acts and omissions of a Subservicer as fully as if
such acts and omissions were those of a Servicer. The related Servicer shall pay
all fees and expenses of any Subservicer engaged by such Servicer from its own
funds.
Notwithstanding the foregoing, each Servicer shall be entitled to outsource
one or more separate servicing functions to a Person (each, an "Outsourcer")
that does not meet the eligibility requirements for a Subservicer, so long as
such outsourcing does not constitute the delegation of such Servicer's
obligation to perform all or substantially all of the servicing of the related
Mortgage Loans to such Outsourcer. In such event, the use by a Servicer of any
such Outsourcer shall not release the related Servicer from any of its
obligations hereunder and such Servicer shall remain responsible hereunder for
all acts and omissions of such Outsourcer as fully as if such acts and omissions
were those of the related Servicer, and the related Servicer shall pay all fees
and expenses of the Outsourcer from such Servicer's own funds.
53
(b) At the cost and expense of the related Servicer, without any right of
reimbursement from the Depositor, Trustee, or the applicable Collection Account,
the related Servicer shall be entitled to terminate the rights and
responsibilities of its Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements set forth in Section 3.02(a); provided, however, that nothing
contained herein shall be deemed to prevent or prohibit a Servicer, at the
related Servicer's option, from electing to service the related Mortgage Loans
itself. In the event that a Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 7.01, and if requested to do so by
the Trustee, the related Servicer shall at its own cost and expense terminate
the rights and responsibilities of its Subservicer as soon as is reasonably
possible. The related Servicer shall pay all fees, expenses or penalties
necessary in order to terminate the rights and responsibilities of its
Subservicer from such Servicer's own funds without any right of reimbursement
from the Depositor, Trustee, or the applicable Collection Account.
(c) Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and its Subservicer, a Servicer
and its Outsourcer, or any reference herein to actions taken through the
Subservicer, the Outsourcer, or otherwise, no Servicer shall be relieved of its
obligations to the Depositor, Trustee or Certificateholders and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the related Mortgage Loans. A Servicer
shall be entitled to enter into an agreement with its Subservicer and Outsourcer
for indemnification of such Servicer by such Subservicer or Outsourcer, as
applicable, and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
For purposes of this Agreement, a Servicer shall be deemed to have received
any collections, recoveries or payments with respect to the related Mortgage
Loans that are received by a related Subservicer or Outsourcer regardless of
whether such payments are remitted by the Subservicer or Outsourcer to the
related Servicer.
Any Subservicing Agreement and any other transactions or services relating
to the Mortgage Loans involving a Subservicer shall be deemed to be between the
Subservicer, and the related Servicer alone, and the Depositor, the Trustee, the
Special Servicer and the other Servicer shall have no obligations, duties or
liabilities with respect to a Subservicer including no obligation, duty or
liability to pay a Subservicer's fees and expenses.
SECTION 3.03 Special Serviced Mortgage Loans.
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If directed by the Special Servicer and solely at the Special Servicer's
option, a Servicer shall transfer the servicing of any Mortgage Loan 91 days or
more delinquent to the Special Servicer. The Special Servicer shall thereupon
assume all of the rights and obligations of such Servicer hereunder arising
thereafter and the related predecessor Servicer shall have no further
responsibility with respect to such Mortgage Loan (except that the Special
Servicer shall not be (i) liable for losses of such Servicer pursuant to Section
3.10 hereof or for any acts or omissions of the related predecessor Servicer
hereunder prior to the servicing transfer date, (ii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder including, but not
limited to, repurchases or substitutions of Mortgage Loans pursuant to Section
2.02 or 2.03 hereof or (iii) deemed to have made any representations and
warranties of such predecessor Servicer
54
hereunder). Upon the transfer of the servicing of any such Mortgage Loan to the
Special Servicer, the Special Servicer shall be entitled to the Servicing Fee
and other compensation accruing after the servicing transfer date with respect
to such Mortgage Loans pursuant to Section 3.15.
In connection with the transfer of the servicing of any Mortgage Loan to
the Special Servicer, each Servicer shall, at the Special Servicer's expense,
deliver to the Special Servicer all documents and records relating to such
Mortgage Loans and an accounting of amounts collected or held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the servicing to the Special Servicer. On the servicing transfer date, the
Special Servicer shall reimburse the related predecessor Servicer for all
unreimbursed Advances, Servicing Advances and Servicing Fees relating to the
Mortgage Loans for which the servicing is being transferred. The Special
Servicer shall be entitled to be reimbursed pursuant to Section 3.09(a) or
otherwise pursuant to this Agreement for all such Advances, Servicing Advances
and Servicing Fees paid by the Special Servicer to the predecessor servicer
pursuant to this Section 3.03. In addition, the Special Servicer shall amend the
Mortgage Loan Schedule to reflect that such Mortgage Loans are Special Serviced
Mortgage Loans.
With respect to any Special Serviced Mortgage Loan, all references herein
to Servicer shall be deemed to include the Special Servicer, as servicer, of
such Special Serviced Mortgage Loan.
The Special Servicer may be replaced as special servicer by holders of the
Class X Certificates representing a majority of the Percentage Interests of such
Class.
SECTION 3.04 Notification of Adjustments.
---------------------------
With respect to each Mortgage Loan with an adjustable Mortgage Rate, the
related Servicer shall adjust the Mortgage Rate on the related Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The related Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Rate adjustments. Upon the
discovery by the related Servicer or the receipt of notice from the Trustee that
such Servicer has failed to adjust a Mortgage Rate in accordance with the terms
of the related Mortgage Note, that Servicer shall immediately deposit in the
Certificate Account from its own funds the amount of any interest loss or
deferral caused the Trustee thereby.
SECTION 3.05 Trustee to Act as Servicer.
In the event that a Servicer shall for any reason no longer be a Servicer
hereunder (including by reason of an Event of Default, as defined in Section
7.01 herein), the Trustee or its successor shall thereupon assume all of the
rights and obligations of such Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of such Servicer pursuant to
Section 3.10 hereof or any acts or omissions of the related predecessor Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including, but not limited to, repurchases or
substitutions of Mortgage Loans pursuant to Section 2.02 or
55
2.03 hereof or (iv) deemed to have made any representations and warranties of
such Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof.
A Servicer shall, upon request of the Trustee, but at the expense of such
Servicer, deliver to the assuming party all documents and records relating to
each Subservicing Agreement or substitute Subservicing Agreement and the
Mortgage Loans then being serviced thereunder and hereunder by such Servicer and
an accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
Subservicing Agreement to the assuming party at the expense of such outgoing
Servicer.
SECTION 3.06 Collection of Mortgage Loans; Collection Account; Certificate
Account; Prefunding Account; Capitalized Interest Account
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(a) Continuously from the date hereof until the principal and interest on
all Mortgage Loans have been paid in full or such Mortgage Loans have become
Liquidation Mortgage Loans, a Servicer shall proceed in accordance with the
customary and usual standards of practice of prudent mortgage loan servicers to
collect all payments due under each of the related Mortgage Loans when the same
shall become due and payable to the extent consistent with this Agreement and
any related Primary Insurance Policy and shall take special care with respect to
Mortgage Loans for which a Servicer collects escrow payments in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and the Mortgaged Properties, to the
end that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable. Consistent with the
foregoing, the related Servicer may in its discretion (i) waive any late payment
charge and (ii) extend the due dates for payments due on a Mortgage Note for a
period not greater than 180 days; provided, however, that the related Servicer
cannot extend the maturity of any such Mortgage Loan past the date on which the
final payment is due on the latest maturing Mortgage Loan as of the Initial
Cut-off Date. In the event of any such arrangement, the related Servicer shall
make Advances on the related Mortgage Loan in accordance with the provisions of
Section 4.01 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. The related Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such payment
is required is prohibited by applicable law.
(b) Each Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Collection Accounts,
in the form of time deposit or demand accounts, titled (depending upon the
related Servicer) "Olympus Servicing, L.P., as servicer for U.S. Bank National
Association, as trustee, in trust for the Holders of Credit Suisse First Boston
Mortgage Securities Corp., CSFB ABS Trust Series 2002-HE1, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE1" or "Ocwen Federal Bank FSB, as
servicer for U.S. Bank National Association, as trustee, in trust for the
Holders of Credit Suisse First Boston Mortgage Securities Corp., CSFB ABS Trust
Series 2002-HE1, CSFB Mortgage Pass-Through Certificates, Series 2002-HE1",
wherein the related Servicer will have access to such Collection Accounts. Each
56
Collection Account shall be an Eligible Account. Any funds deposited in a
Collection Account shall at all times be either invested in Eligible Investments
or shall be fully insured to the full extent permitted under applicable law.
Funds deposited in a Collection Account may be drawn on by the related Servicer
in accordance with Section 3.09.
(c) Each Servicer shall deposit in the applicable Collection Account on a
daily basis, and, in each case, retain therein, the following collections
remitted by Subservicers or payments received by such Servicer and payments made
by such Servicer subsequent to the Cut-off Date, other than payments of
principal and interest due on or before the Cut-off Date:
(i) all payments on account of principal on the related Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the related Mortgage Loans
adjusted to the per annum rate equal to the Mortgage Rate reduced by the
Servicing Fee Rate;
(iii) all Liquidation Proceeds on the related Mortgage Loans;
(iv) all Insurance Proceeds on the related Mortgage Loans including
amounts required to be deposited pursuant to Section 3.10 (other than
proceeds to be held in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in accordance
with Section 3.10);
(v) all Advances made by such Servicer pursuant to Section 4.01;
(vi) all Substitution Adjustment Amounts and Repurchase Prices on the
related Mortgage Loans;
(vii) with respect to each Principal Prepayment on the related
Mortgage Loans, the Prepayment Interest Shortfall, if any, for the
Prepayment Period. The aggregate of such deposits shall be made from the
applicable Servicer's own funds, without reimbursement therefor, up to a
maximum amount per month equal to the Compensating Interest Payment, if
any, for the Mortgage Loans serviced by that Servicer and Distribution
Date;
(viii) any amounts required to be deposited by such Servicer in
respect of net monthly income from REO Property pursuant to Section 3.12;
and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposit into each Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, Ancillary Income need not be deposited by a
Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.06, a Servicer may deduct from amounts received by
it, prior to deposit to the applicable Collection Account, any portion of any
Scheduled Payment representing the Servicing Fee. In the event that a Servicer
shall remit any amount not required to be remitted, it may at any time withdraw
or direct the institution
57
maintaining the related Collection Account to withdraw such amount from such
Collection Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice thereof
to the Trustee or such other institution maintaining such Collection Account
which describes the amounts deposited in error in such Collection Account. The
Trustee may conclusively rely on such notice and shall have no liability in
connection with the withdrawal of such funds at the direction of a Servicer.
Each Servicer shall maintain adequate records with respect to all withdrawals
made by it pursuant to this Section. All funds deposited in a Collection Account
shall be held in trust for the Certificateholders until withdrawn in accordance
with Section 3.09(a).
(d) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Certificate Account. The
Trustee shall, promptly upon receipt, deposit in the Certificate Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Trustee
pursuant to Section 3.09(a)(viii); and
(ii) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
In the event that a Servicer shall remit to the Trustee any amount not
required to be remitted, it may at any time in writing direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
written notice to the Trustee (upon which the Trustee may conclusively rely)
which describes the amounts deposited in error in the Certificate Account. All
funds deposited in the Certificate Account shall be held by the Trustee in trust
for the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.09(b). In no event shall the Trustee
incur liability for withdrawals from the Certificate Account at the direction of
a Servicer.
(e) Each institution at which a Collection Account or the Prefunding
Account is maintained shall either hold such funds on deposit uninvested or
shall invest the funds therein in Eligible Investments as directed in writing by
the related Servicer (in the case of a Collection Account) and the Depositor (in
the case of the Prefunding Account) which shall mature not later than (i) in the
case of a Collection Account, the Servicer Remittance Date and (ii) in the case
of the Prefunding Account, the Business Day immediately preceding a Subsequent
Transfer Date and, in each case, shall not be sold or disposed of prior to its
maturity. All such Eligible Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. All income and gain net of
any losses realized from any such balances or investment of funds on deposit in
a Collection Account shall be for the benefit of the related Servicer as
servicing compensation and shall be remitted to it monthly. The amount of any
net investment losses in a Collection Account shall promptly be deposited by the
related Servicer in such Collection Account. The Trustee in its fiduciary
capacity shall not be liable for the amount of any loss incurred in respect of
any investment or lack of investment of funds held in a Collection Account made
in accordance with this Section 3.06. All funds on deposit in the Certificate
Account shall remain uninvested or may be invested by the Trustee, in its sole
discretion in Eligible Investments selected by the Trustee. All net income and
gain realized from the investment of, and all earnings on, funds deposited in
the Certificate Account shall be for the benefit of the Trustee and shall be
available to be withdrawn pursuant to Section 3.09(b)(i). All net income and
gain realized from the investment of,
58
and all earnings on, funds deposited in the Simple Interest Excess Sub-Accounts
shall be paid in accordance with Section 3.07. All income and gain net of any
losses realized from any such balances or investment of funds on deposit in the
Prefunding Account shall be for the benefit of the Depositor and shall be
remitted to it monthly. The amount of any net investment losses in the
Prefunding Account shall promptly be deposited by the Depositor in the
Prefunding Account. The Trustee in its fiduciary capacity shall not be liable
for the amount of any loss incurred in respect of any investment or lack of
investment of funds held in a Collection Account or the Prefunding Account
(other than as provided in this Section 3.06(e)) and made in accordance with
this Section 3.06.
(f) A Servicer shall give notice to the Trustee, each Rating Agency and the
Depositor of any proposed change of the location of the related Collection
Account prior to any change thereof. The Trustee shall give notice to each
Servicer, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account or the Prefunding Account prior to any
change thereof.
(g) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Prefunding Account. On the Closing Date the Depositor
shall remit the Prefunded Amount to the Trustee for deposit in the Prefunding
Account. On each Subsequent Transfer Date, upon satisfaction of the conditions
for such Subsequent Transfer Date set forth in Sections 2.01(d) and (e), with
respect to the related Subsequent Transfer Agreement, the Trustee shall remit to
the Depositor the applicable Aggregate Subsequent Transfer Amount as payment of
the purchase price for the related Subsequent Mortgage Loans.
If any funds remain in the Prefunding Account on April 24, 2002, to the
extent that they represent earnings on the amounts originally deposited into the
Prefunding Account, the Trustee shall distribute them to the order of the
Depositor. The remaining funds shall be transferred to the Certificate Account
to be included as part of principal distributions to the Class A-1 Certificates
on the April 2002 Distribution Date.
(h) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Capitalized Interest Account. On the Closing Date the
Depositor shall remit the Capitalized Interest Deposit to the Trustee for
deposit in the Capitalized Interest Account. On the Business Day prior to each
of the February 2002, March 2002 and April 2002 Distribution Dates, the Trustee
shall transfer from the Capitalized Interest Account to the Certificate Account
an amount equal to the Capitalized Interest Requirement for such Distribution
Date. On any Subsequent Transfer Date, any Overfunded Interest Amount shall be
withdrawn from the Capitalized Interest Account and paid to the Depositor. Any
funds remaining in the Capitalized Interest Account immediately after the
termination of the Prefunding Period shall be paid to the Depositor.
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SECTION 3.07 Establishment of and Deposits to Escrow Accounts; Permitted
Withdrawals from Escrow Accounts; Payments of Taxes,
Insurance and Other Charges; Simple Interest Excess Sub-
Accounts; Deposits in Simple Interest Excess Sub-Accounts.
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(a) To the extent required by the related Mortgage Note and not violative
of current law, each Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, "[Servicer's name], in trust for various mortgagors related to
Credit Suisse First Boston Mortgage Securities Corp., Mortgage Pass-Through
Certificates, Series 2002-HE1". The Escrow Accounts shall be Eligible Accounts.
Funds deposited in the Escrow Account may be drawn on by the related Servicer in
accordance with Section 3.07(d).
(b) Each Servicer shall deposit in its Escrow Account or Accounts on a
daily basis within two Business Days of receipt and retain therein:
(i) all Escrow Payments collected on account of the related Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which are to be
applied to the restoration or repair of any related Mortgaged Property.
(c) Each Servicer shall make withdrawals from the related Escrow Account
only to effect such payments as are required under this Agreement, as set forth
in Section 3.07(d). Each Servicer shall be entitled to retain any interest paid
on funds deposited in the related Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
applicable Mortgagors. To the extent required by law, each Servicer shall pay
interest on escrowed funds to the applicable Mortgagor notwithstanding that the
related Escrow Account may be non-interest bearing or that interest paid thereon
is insufficient for such purposes.
(d) Withdrawals from the Escrow Account or Accounts may be made by the
related Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire, hazard
and flood insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse such Servicer for any Servicing Advances made by
such Servicer pursuant to Section 3.07(e) with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
60
(iv) for transfer to the related Collection Account to reduce the
principal balance of the related Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related Mortgaged
Property in accordance with the procedures outlined in Section 3.10(e);
(vi) to pay to such Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in such Escrow Account;
(vii) to remove funds inadvertently placed in the related Escrow
Account by such Servicer; and
(viii) to clear and terminate such Escrow Account on the termination
of this Agreement.
(e) With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents and taxes and any other
item or charge (including, without limitation, assessments, water rates or sewer
rents) which may become a lien senior to the lien of the related Mortgage and
the status of Primary Insurance Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect or cause to be effected
payment thereof prior to the applicable penalty or termination date. To the
extent that a Mortgage does not provide for Escrow Payments, the related
Servicer shall determine that any such payments are made by the Mortgagor prior
to the applicable penalty or termination date. Each Servicer assumes full
responsibility for, with respect to the Mortgage Loans it services, (i) the
timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments, and each such Servicer shall make
Servicing Advances from its own funds to effect such payments to the extent that
such Servicer, in accordance with Accepted Servicing Practices, deems such
Servicing Advance recoverable, and (ii) any penalties or late charges incurred
in connection with such bills; provided, however, such Servicer shall not be so
obligated with respect to any Mortgage which does not provide for Escrow
Payments; provided, further, the Special Servicer shall be entitled to
reimbursement as a Servicing Advance for any such penalties or late charges
related to a Special Serviced Mortgage Loan and such bills and charges due prior
to the transfer of the servicing of such Mortgage Loan to the Special Servicer
pursuant to Section 3.03.
(f) No later than the Closing Date, Olympus shall establish and maintain a
sub-account of the Collection Account titled "Olympus, Simple Interest Excess
Sub-Account in trust for the Holders of Credit Suisse First Boston Mortgage
Securities Corp., CSFB ABS Trust Series 2002-HE1, CSFB Mortgage Pass-Through
Certificates, Series 2002-HE1". Olympus shall, on each Determination Date
transfer from the Collection Account to the Simple Interest Excess Sub-Account
all Net Simple Interest Excess, if any, pursuant to Section 3.09(a)(x), and
shall maintain a record of all such deposits.
(g) Olympus shall withdraw amounts on deposit in the applicable Simple
Interest Excess Sub-Account on each Determination Date for deposit to the
Certificate Account in an amount
61
equal to the lesser of (i) the amount on deposit therein, and (ii) the Net
Simple Interest Shortfall for such Distribution Date.
(h) Olympus shall distribute to the Class X Certificateholder 90% of the
balance in the applicable Simple Interest Excess Sub-Account on the Distribution
Date each year occurring in February, commencing in February 2002. Such
distributions shall be deemed to be made on a first-in, first-out basis. In
addition, the Servicer shall clear and terminate the Simple Interest Excess
Sub-Account upon the termination of this Agreement and retain any funds
remaining therein.
(i) Amounts on deposit in the Simple Interest Excess Sub-Accounts may be
invested in Eligible Investments. All income and gain net of any losses realized
from any such balances or investment of funds on deposit in a Simple Interest
Excess Sub-Account shall be for the benefit of Olympus as servicing compensation
and shall be remitted to it monthly. The amount of any net investment losses in
a Simple Interest Excess Sub-Account shall promptly be deposited by Olympus in
such Simple Interest Excess Sub-Account.
SECTION 3.08 Access to Certain Documentation and Information Regarding the
Mortgage Loans; Inspections.
-------------------------------------------------------------
(a) Each Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the related Servicer.
In addition, each Servicer shall provide to the Special Servicer reasonable
access to all records and documentation regarding the Mortgage Loans serviced by
it that become Special Serviced Mortgage Loans.
(b) Upon reasonable advance notice in writing, each Servicer will provide
to each Certificateholder which is a savings and loan association, bank or
insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that each Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by each Servicer in providing
such reports and access.
(c) Each Servicer shall inspect the related Mortgaged Properties as often
as deemed necessary by the related Servicer in such Servicer's sole discretion,
to assure itself that the value of such Mortgaged Property is being preserved
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
related Servicer shall keep a written or electronic report of each such
inspection.
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and
Certificate Account.
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(a) Each Servicer may from time to time make withdrawals from a related
Collection Account for the following purposes:
62
(i) to pay to such Servicer (to the extent not previously retained by
such Servicer) the servicing compensation to which it is entitled pursuant
to Section 3.15, and to pay to such Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds in or
credited to such Collection Account and any sub-account thereof;
(ii) to reimburse such Servicer for unreimbursed Advances made by it,
such right of reimbursement pursuant to this subclause (ii) being limited
to amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made (including without limitation, late recoveries of
payments, Liquidation Proceeds and Insurance Proceeds to the extent
received by such Servicer);
(iii) to reimburse such Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse such Servicer for (A) unreimbursed Servicing
Advances, such Servicer's right to reimbursement pursuant to this clause
(iv) with respect to any Mortgage Loan being limited to amounts received on
such Mortgage Loan which represent late payments of principal and/or
interest (including, without limitation, Liquidation Proceeds and Insurance
Proceeds with respect to such Mortgage Loan) respecting which any such
advance was made and (B) for unpaid Servicing Fees as provided in Section
3.12 hereof;
(v) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03 or 3.11, all amounts received thereon after the date of
such purchase;
(vi) to reimburse the Seller, such Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section 3.10
or 6.03 hereof;
(vii) to withdraw any amount deposited in such Collection Account and
not required to be deposited therein;
(viii) on or prior to 4:00 p.m. New York time on the Servicer
Remittance Date preceding each Distribution Date, to withdraw an amount
equal to the sum of the portion of the Interest Remittance Amount, the
Principal Remittance Amount and the Credit Risk Manager Fee in such
Collection Account applicable to the Mortgage Loans serviced by such
Servicer for such Distribution Date and remit such amount to the Trustee
for deposit in the Certificate Account;
(ix) on or prior to 4:00 p.m. New York time on the Servicer Remittance
Date preceding each Distribution Date, each Servicer may withdraw an amount
equal to the sum of all Prepayment Premiums received during the related
Prepayment Period applicable to the Mortgage Loans serviced by such
Servicer, and remit such amount to the Trustee for deposit in the
Certificate Account;
(x) to deposit to the Simple Interest Excess Sub-Account any amount
required to be deposited therein pursuant to Section 3.07(f);
63
(xi) with respect to each Mortgage Loan covered by a lender paid
Primary Insurance Policy, to effect timely payment of the premiums on such
Primary Insurance Policy pursuant to Section 3.10(c); and
(xii) to clear and terminate such Collection Account upon termination
of this Agreement pursuant to Section 9.01 hereof.
Each Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account pursuant to such subclauses (i), (ii), (iv), (v)
and (xi). Prior to making any withdrawal from a Collection Account pursuant to
subclause (iii), the related Servicer shall deliver to the Trustee a certificate
of a Servicing Officer indicating the amount of any previous Advance or
Servicing Advance determined by such Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loans(s), and their respective portions of such
Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Certificate Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to withhold pursuant to the sixth paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Certificate Account for the following proposes:
(i) to pay to itself any investment income from balances in the
Certificate Account prior to distributions to Certificateholders;
(ii) on or prior to each Distribution Date, to pay the Credit Risk
Manager the Credit Risk Manager Fee for that Distribution Date;
(iii) to withdraw and return to a Servicer for deposit to the
applicable Collection Account any amount deposited in the Certificate
Account and not required to be deposited therein; and
(iv) to clear and terminate the Certificate Account upon termination
of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage Impairment Insurance
and Primary Insurance Policy; Claims; Restoration of Mortgaged
Property.
--------------------------------------------------------------
(a) Each Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are insured
by a generally acceptable insurer rated either: "V" or better in the current
Best's Key Rating Guide ("Best's") or acceptable to FNMA and/or FHLMC against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, in an amount
which is at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (A) the
outstanding principal balance of the Mortgage Loan and (B) an amount such that
the proceeds of such policy shall be sufficient to prevent the Mortgagor and/or
the mortgagee from becoming a co-insurer.
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If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), the related Servicer shall cause a flood insurance policy
to be maintained with respect to such Mortgage Loan. Such policy shall meet the
requirements of the current guidelines of the Federal Insurance Administration
and be in an amount representing coverage equal to the lesser of (i) the minimum
amount required, under the terms of coverage, to compensate for any damage or
loss on a replacement cost basis (or the unpaid principal balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the related Servicer determines in accordance with
applicable law and pursuant to the FNMA Guides that a Mortgaged Property is
located in a special flood hazard area and is not covered by flood insurance or
is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, such Servicer shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within 45
days after such notification, such Servicer shall immediately force place the
required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the related
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with the then current FNMA or FHLMC requirements, and secure from
the owner's association its agreement to notify such Servicer promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
Each Servicer shall cause to be maintained on each Mortgaged Property such
other additional special hazard insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
Primary Insurance Policy insurer, or as may be required to conform with Accepted
Servicing Practices.
All policies required hereunder shall name the related Servicer as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for prior written notice of any cancellation,
reduction in amount or material change in coverage.
A Servicer shall not interfere with the Mortgagor's freedom of choice at
the origination of such Mortgage Loan in selecting either his insurance carrier
or agent, provided, however, that a Servicer shall not accept any such insurance
policies from insurance companies unless such companies are rated V in Best's or
are acceptable to FNMA and/or FHLMC and are licensed to do business in the
jurisdiction in which the Mortgaged Property is located. A Servicer shall
determine that such policies provide sufficient risk coverage and amounts, that
they insure the property owner, and that they properly describe the property
address.
Pursuant to Section 3.06, any amounts collected by a Servicer under any
such policies (other than amounts to be deposited in the related Escrow Account
and applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage
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Loan, or to be released to the Mortgagor, in accordance with a Servicer's normal
servicing procedures) shall be deposited in the related Collection Account
(subject to withdrawal pursuant to Section 3.09(a)).
Any cost incurred by a Servicer in maintaining any such insurance shall
not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee for their benefit, be added to
the principal balance of the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. Such costs shall be recoverable by the Servicer out
of late payments by the related Mortgagor or out of Liquidation Proceeds or
otherwise pursuant to Section 3.09(a) hereof. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
or maintained on property acquired in respect of a Mortgage other than pursuant
to such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance.
(b) In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the related Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 3.10(a) and otherwise complies with all other requirements of Section
3.10(a), it shall conclusively be deemed to have satisfied its obligations as
set forth in Section 3.10(a). Any amounts collected by a Servicer under any such
policy relating to a Mortgage Loan shall be deposited in the related Collection
Account subject to withdrawal pursuant to Section 3.09(a). Such policy may
contain a deductible clause, in which case, in the event that there shall not
have been maintained on the related Mortgaged Property a policy complying with
Section 3.10(a), and there shall have been a loss which would have been covered
by such policy, a Servicer shall deposit in the related Collection Account at
the time of such loss the amount not otherwise payable under the blanket policy
because of such deductible clause, such amount to be deposited from such
Servicer's funds, without reimbursement therefor. In connection with its
activities as Servicer of the related Mortgage Loans, each Servicer agrees to
present, on behalf of itself, the Depositor, and the Trustee for the benefit of
the Certificateholders, claims under any such blanket policy.
(c) With respect to each Mortgage Loan with a Loan-to-Value Ratio in excess
of 80% which the Seller represented to be covered by a Primary Insurance Policy
as of the Cut-off Date, a Servicer shall, without any cost to the Depositor or
Trustee, maintain or cause the Mortgagor to maintain in full force and effect a
Mortgage Guaranty Insurance Policy insuring that portion of the Mortgage Loan in
excess of 75% of value, and shall pay or shall cause the related Mortgagor to
pay, the premium thereon on a timely basis, until the loan-to-value ratio of
such Mortgage Loan is reduced to 80%, based on either (i) a current appraisal of
the Mortgaged Property or (ii) the appraisal of the Mortgaged Property obtained
at the time the Mortgage Loan was originated. In the event that such Primary
Insurance Policy shall be terminated, a Servicer shall obtain from another
Qualified Insurer a comparable replacement policy, with a total coverage equal
to the remaining coverage of such terminated Primary Insurance Policy. If the
insurer shall cease to be a Qualified Insurer, a Servicer shall determine
whether recoveries under the Primary Insurance Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that a Servicer shall in no event have any responsibility or liability for any
failure to recover under the Primary Insurance Policy for such reason. If a
Servicer determines that recoveries are so jeopardized, it shall notify the
related Mortgagor, if required, and obtain from
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another Qualified Insurer a replacement insurance policy. A Servicer shall not
take any action which would result in noncoverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of such Servicer would
have been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 3.11, a
Servicer shall promptly notify the insurer under the related Primary Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such Primary Insurance Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such Primary Insurance Policy provided that such required actions are in
compliance with all applicable law. If such Primary Insurance Policy is
terminated as a result of such assumption or substitution of liability, such
Servicer shall obtain a replacement Primary Insurance Policy as provided above;
provided that under applicable law and the terms of the related Mortgage Note
and Mortgage the cost of such policy may be charged to the successor Mortgagor.
With respect to each Mortgage Loan covered by a lender paid Primary
Insurance Policy, the related Servicer agrees to effect timely payment of the
premiums on such Primary Insurance Policy from amounts on deposit in the
Collection Account with respect to such Mortgage Loan. If amounts on deposit in
the Collection Account with respect to such Mortgage Loan are not sufficient to
pay the premiums on such Primary Insurance Policy, the related Servicer agrees
to effect timely payment of such premiums, and such costs shall be recoverable
by such Servicer from the related Liquidation Proceeds or otherwise as a
Servicing Advance pursuant to Section 3.09(a). With respect to each Mortgage
Loan covered by a Primary Insurance Policy that is not lender paid, the related
Servicer agrees to effect timely payment of the premiums on such Primary
Insurance Policy, and such costs not otherwise recoverable from the Mortgagor
shall be recoverable by such Servicer from the related Liquidation Proceeds or
otherwise as a Servicing Advance pursuant to Section 3.09(a).
In connection with its activities as servicer, each Servicer agrees to
prepare and present, on behalf of itself, the Depositor, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policy in
a timely fashion in accordance with the terms of such Primary Insurance Policy
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting defaulted Mortgage
Loans. Pursuant to Section 3.06, any amounts collected by a Servicer under any
Primary Insurance Policy shall be deposited in the related Collection Account,
subject to withdrawal pursuant to Section 3.09.
(d) [reserved]
(e) A Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds to the related Mortgagor to be applied to the
restoration or repair of the related Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, a Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds:
(i) such Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with
respect thereto;
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(ii) such Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, such Servicer shall place the
Insurance Proceeds in the related Escrow Account.
If the Trustee is named as an additional loss payee, the related Servicer
is hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Trustee.
SECTION 3.11 Enforcement of Due-on-Sale Clauses; Assumption Agreements.
---------------------------------------------------------
(a) Each Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any related Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about to
be sold whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the related Servicer
shall, to the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that such Servicer shall not exercise
such rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Insurance Policy, if any.
(b) If a Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, such Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event a
Servicer is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, a Servicer shall not be deemed to be in default
under this Section by reason of any transfer or assumption which such Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever. In connection with any such assumption, no material term of the
Mortgage Note, including without limitation, the Mortgage Rate borne by the
related Mortgage Note, the term of the Mortgage Loan or the outstanding
principal amount of the Mortgage Loan shall be changed.
(c) To the extent that any Mortgage Loan is assumable, the related Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by FNMA with respect to underwriting mortgage loans of
the same type as the Mortgage Loans. If the credit of the proposed transferee
does not meet such underwriting criteria, the related Servicer diligently shall,
to the extent permitted by the Mortgage or the Mortgage Note and by applicable
law, accelerate the maturity of the Mortgage Loan.
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(d) Subject to a Servicer's duty to enforce any due-on-sale clause to the
extent set forth in this Section 3.11, in any case in which a Mortgaged Property
has been conveyed to a Person by a Mortgagor, and such Person is to enter into
an assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the Mortgage Loan, the related Servicer shall prepare and deliver
or cause to be prepared and delivered to the Trustee for signature and shall
direct, in writing, the Trustee to execute the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments as
are reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with any
such assumption, no material term of the Mortgage Note may be changed. Together
with each such substitution, assumption or other agreement or instrument
delivered to the Trustee for execution by it, the related Servicer shall deliver
an Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met in connection therewith. The
related Servicer shall notify the Trustee that any such substitution or
assumption agreement has been completed by forwarding to the Trustee the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by a Servicer for entering into an assumption or substitution of liability
agreement will be retained by such Servicer as additional servicing
compensation.
SECTION 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.
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(a) A Servicer shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the related
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, a Servicer shall take such
action as (i) such Servicer would take under similar circumstances with respect
to a similar mortgage loan held for its own account for investment, (ii) shall
be consistent with Accepted Servicing Practices, (iii) such Servicer shall
determine consistently with Accepted Servicing Practices to be in the best
interest of the Depositor, Trustee and Certificateholders, and (iv) is
consistent with the requirements of the insurer under any Required Insurance
Policy; provided, however, that such Servicer shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration of
any property unless it shall determine (i) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the related Mortgage
Loan after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the related Collection
Account). Such Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the Liquidation Proceeds with respect to
the related Mortgaged Property or otherwise pursuant to Section 3.09(a).
Notwithstanding anything to the contrary contained in this Agreement, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has reasonable
69
cause to believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Trustee otherwise requests, an environmental
inspection or review of such Mortgaged Property conducted by a qualified
inspector shall be arranged for by such Servicer. Upon completion of the
inspection, such Servicer shall promptly provide the Trustee with a written
report of environmental inspection.
In the event the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
such Servicer shall not proceed with foreclosure or acceptance of a deed in lieu
of foreclosure if the estimated costs of the environmental clean up, as
estimated in the environmental inspection report, together with the Servicing
Advances made by such Servicer and the estimated costs of foreclosure or
acceptance of a deed in lieu of foreclosure exceeds the estimated value of the
Mortgaged Property. If however, the aggregate of such clean up and foreclosure
costs and Servicing Advances as estimated in the environmental inspection report
are less than or equal to the estimated value of the Mortgaged Property, then
such Servicer may, in its reasonable judgment and in accordance with Accepted
Servicing Practices, choose to proceed with foreclosure or acceptance of a deed
in lieu of foreclosure and such Servicer shall be reimbursed for all reasonable
costs associated with such foreclosure or acceptance of a deed in lieu of
foreclosure and any related environmental clean up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse such Servicer, such Servicer shall be entitled
to be reimbursed from amounts in the related Collection Account pursuant to
Section 3.09(a) hereof. In the event the Servicer does not proceed with
foreclosure or acceptance of a deed in lieu of foreclosure pursuant to the first
sentence of this paragraph, such Servicer shall be reimbursed for all Servicing
Advances made with respect to the related Mortgaged Property from the related
Collection Account pursuant to Section 3.09(a) hereof, and such Servicer shall
have no further obligation to service such Mortgage Loan under the provisions of
this Agreement.
(b) With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The related Servicer shall ensure that the title to
such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the related
Servicer shall, in accordance with Accepted Servicing Practices, manage,
conserve, protect and operate each REO Property for the purpose of its prompt
disposition and sale. Such Servicer, either itself or through an agent selected
by such Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. Such Servicer
shall furnish to the Trustee on or before each Distribution Date a statement
with respect to any REO Property covering the operation of such REO Property for
the previous calendar month and such other information as the Trustee shall
reasonably request and which is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the related
Collection Account no later than the close of business on each Determination
Date. Such Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest
70
from individuals and any tax reporting required by Section 6050P of the Code
with respect to the cancellation of indebtedness by certain financial entities,
by preparing such tax and information returns as may be required for filing.
To the extent consistent with Accepted Servicing Practices, the related
Servicer shall also maintain on each REO Property fire and hazard insurance with
extended coverage in amount which is equal to the outstanding principal balance
of the related Mortgage Loan (as reduced by any amount applied as a reduction of
principal at the time of acquisition of the REO Property), liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above.
(c) In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the related Servicer shall dispose of such Mortgaged Property
prior to three years after the end of the calendar year of its acquisition by
the Trust Fund unless (i) the Trustee shall have been supplied with an Opinion
of Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of any REMIC hereunder as defined in
Section 860F of the Code or cause any REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel) or (ii) the related Servicer shall have
applied for, prior to the expiration of such three-year period, an extension of
such three-year period in the manner contemplated by Section 856(e)(3) of the
Code, in which case the three-year period shall be extended by the applicable
extension period. Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC
hereunder to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under Section 860G(c) of the Code or
otherwise, unless the related Servicer has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose obligor
is not a United States Person, as that term is defined in Section 7701(a)(30) of
the Code, in connection with any foreclosure or acquisition of a deed in lieu of
foreclosure (together, "foreclosure") in respect of such Mortgage Loan, the
related Servicer will cause compliance with the provisions of Treasury
Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure
that no withholding tax obligation arises with respect to the proceeds of such
foreclosure except to the extent, if any, that proceeds of such foreclosure are
required to be remitted to the obligors on such Mortgage Loan.
(d) The decision of a Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by such Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any REO Properties, net of
reimbursement to such Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of applicable accrued
and
71
unpaid Servicing Fees, and unreimbursed Advances and Servicing Advances, shall
be applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the related Collection Account. To
the extent the net income received during any calendar month is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
shall be considered to be a partial prepayment of principal of the related
Mortgage Loan.
(e) The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the related Servicer for any related unreimbursed Servicing
Advances and Servicing Fees; second, to reimburse the related Servicer for any
unreimbursed Advances; third, to reimburse the related Collection Account for
any Nonrecoverable Advances (or portions thereof) that were previously withdrawn
by the related Servicer pursuant to Section 3.09(a)(iii) that related to such
Mortgage Loan; fourth, to accrued and unpaid interest (to the extent no Advance
has been made for such amount or any such Advance has been reimbursed) on the
Mortgage Loan or related REO Property, at the per annum rate equal to the
related Mortgage Rate reduced by the Servicing Fee Rate to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fifth, as a recovery of principal of the Mortgage Loan. Excess Proceeds, if any,
from the liquidation of a Liquidation Mortgage Loan will be retained by the
related Servicer as additional servicing compensation pursuant to Section 3.15.
(f) The Special Servicer may, at its option, enter into a special servicing
agreement with an unaffiliated Holder of the Class X Certificate, subject to
each Rating Agency's acknowledgment that the Ratings of the Certificates in
effect immediately prior to the entering into of such agreement would not be
qualified, downgraded or withdrawn and the Certificates would not be placed on
credit review status (except for possible upgrading) as a result of such
agreement. Any such agreement may contain provisions whereby such Holder may (i)
instruct the Special Servicer to commence or delay foreclosure proceedings with
respect to delinquent Special Serviced Mortgage Loans serviced by it and will
contain provisions for the deposit of cash with the Special Servicer by the
Holder that would be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Special
Servicer acted in accordance with its normal procedures, (ii) purchase
delinquent Special Serviced Mortgage Loans serviced by the Special Servicer from
the Trust Fund immediately prior to the commencement of foreclosure proceedings
at a price equal to the Repurchase Price, and/or (iii) assume all of the
servicing rights and obligations with respect to delinquent Special Serviced
Mortgage Loans serviced by the Special Servicer so long as such Holder (A) meets
the requirements for a Subservicer set forth in Section 3.02(a), and (B) will
service such Special Serviced Mortgage Loans in accordance with this Agreement.
(g) The Special Servicer, at its option, may (but is not obligated to)
purchase from the Trust Fund any Mortgage Loan which is 90 or more days
delinquent or which is in foreclosure. If it elects to make any such purchase,
the Special Servicer shall purchase such Mortgage Loan with its own funds at a
price equal to the Repurchase Price.
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SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt by the
related Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, such Servicer will immediately notify the
applicable Custodian by delivering, or causing to be delivered a "Request for
Release" substantially in the form of Exhibit M. Upon receipt of such request,
the applicable Custodian shall within four Business Days release the related
Mortgage File to such Servicer, and the Trustee shall within four Business Days
of the Servicer's direction execute and deliver to such Servicer the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Mortgage in each case provided by such
Servicer, together with the Mortgage Note with written evidence of cancellation
thereon. Such Servicer shall execute lien releases under Power of Attorney from
the Trustee. Expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to the related Mortgagor. From time
to time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee shall,
within three Business Days of delivery to the Trustee of a Request for Release
in the form of Exhibit M signed by a Servicing Officer, release or cause the
applicable Custodian to release the Mortgage File to the related Servicer.
Subject to the further limitations set forth below, such Servicer shall cause
the Mortgage File or documents so released to be returned to the Trustee or such
Custodian, as applicable, when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the related Collection Account, in which case such Servicer shall
deliver to the Trustee a Request for Release in the form of Exhibit M, signed by
a Servicing Officer.
If a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, such Servicer
shall deliver or cause to be delivered to the Trustee, for signature, as
appropriate, any court pleadings, requests for trustee's sale or other documents
necessary to effectuate such foreclosure or any legal action brought to obtain
judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
SECTION 3.14 Documents, Records and Funds in Possession of a Servicer to be
Held for the Trustee.
--------------------------------------------------------------
Notwithstanding any other provisions of this Agreement, each Servicer shall
transmit to the applicable Custodian on behalf of the Trustee as required by
this Agreement all documents and instruments in respect of a Mortgage Loan
coming into the possession of such Servicer from time to time required to be
delivered to the Trustee pursuant to the terms hereof and shall account fully to
the Trustee for any funds received by such Servicer or which otherwise are
collected by such Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. All Mortgage Files and funds collected or held by,
or under the control of, such Servicer in respect of any Mortgage Loans, whether
from the collection of principal and interest
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payments or from Liquidation Proceeds, including but not limited to, any funds
on deposit in a related Collection Account, shall be held by such Servicer for
and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
Each Servicer also agrees that it shall not create, incur or subject any
Mortgage File or any funds that are deposited in the related Collection Account,
Certificate Account or any related Escrow Account, or any funds that otherwise
are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that each Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to each Servicer under this Agreement.
SECTION 3.15 Servicing Fee.
-------------
As compensation for its services hereunder, each Servicer shall be entitled
to withdraw from the applicable Collection Account in accordance with Section
3.09(a) or to retain from interest payments on the related Mortgage Loans the
amount of the Servicing Fee for each Mortgage Loan, less any amounts in respect
of its Servicing Fee payable by such Servicer pursuant to Section 3.06(c)(vii).
In connection with the servicing of any Special Serviced Mortgage Loan, the
Special Servicer shall receive the Servicing Fee for each such Special Serviced
Mortgage Loan as its compensation and Ancillary Income with respect to Special
Serviced Mortgage Loans.
Additional servicing compensation in the form of Ancillary Income shall be
retained by the related Servicer. Each Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02 and the payment of
any premiums for hazard insurance and any Primary Insurance Policy, and
maintenance of the other forms of insurance coverage required by this Agreement)
and shall not be entitled to reimbursement thereof except as specifically
provided for in this Agreement.
SECTION 3.16 Access to Certain Documentation.
-------------------------------
Each Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request and
during normal business hours at the offices designated by the applicable
Servicer. Nothing in this Section shall limit the obligation of each Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of each Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
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SECTION 3.17 Annual Statement as to Compliance.
---------------------------------
Each Servicer shall deliver to the Depositor, the Rating Agencies and the
Trustee on or before 120 days after the end of the related Servicer's fiscal
year, commencing in its 2002 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of such Servicer
during the preceding calendar year and of the performance of the Servicer under
this Agreement has been made under such officer's supervision, and (ii) to the
best of such officer's knowledge, based on such review, such Servicer has
fulfilled all its obligations under 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 such Servicer to cure such default.
SECTION 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
-----------------------------------------------------------
On or before 120 days after the end of each Servicer's fiscal year,
commencing in its 2002 fiscal year, the related Servicer, at its expense, shall
cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to such Servicer, the Seller or
any affiliate thereof) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and the Depositor to
the effect that with respect to such Servicer, such firm has examined certain
documents and records relating to the servicing of mortgage loans which such
Servicer is servicing, including the related Mortgage Loans, and that, on the
basis of such examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Guide for
HUD Approved Title II Approved Mortgagees and Loan Correspondent Programs,
nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance with Accepted Servicing Practices, except for
(a) such exceptions as such firm shall believe to be immaterial, and (b) such
other exceptions as shall be set forth in such statement. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Guide for HUD Approved Title II
Approved Mortgagees and Loan Correspondent Programs (rendered within one year of
such statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the related Servicer's expense, provided such
statement is delivered by the Servicer to the Trustee.
SECTION 3.19 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
-----------------------------------------------------
Each Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Except with
respect to Ocwen Federal Bank FSB, any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Financial Institution
Bond Form 22 - Fidelity Bond American International Specialty Lines Insurance
Policy Form ("5713 5/93")
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Mortgage Banker Broker E&O and shall protect and insure the Servicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of the Servicer Employees. With respect to Ocwen Federal Bank
FSB, such Fidelity Bond and Errors and Omissions Insurance Policy shall be in
the form of the Financial Institution Bond Form 24 Fidelity Bond American
International Specialty Lines Insurance Policy form ("43350 12/90" ) or
otherwise in a form acceptable to FNMA or FHMLC, and shall protect and insure
the Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of the Servicer Employees. Each Fidelity
Bond and Errors and Omissions Insurance Policy also shall protect and insure the
related Servicer against losses in connection with the release or satisfaction
of a related Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.19 requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve a Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by FNMA.
SECTION 3.20 Prepayment Premiums.
-------------------
Notwithstanding anything in this Agreement to the contrary, in the event of
a Principal Prepayment, a Servicer may not waive any Prepayment Premium or
portion thereof required by the terms of the related Mortgage Note unless (i)(A)
with regard to Olympus Serviced Loans, Olympus determines that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into
account the value of such Prepayment Premium, or (B) with regard to Ocwen
Serviced Loans, the related Mortgage Loan is in default or foreseeable default
and such waiver (a) is standard and customary in servicing mortgage loans
similar to the Mortgage Loans and (b) would, in the reasonable judgment of the
related Servicer, maximize recovery of total proceeds taking into account the
value of such Prepayment Premium and the related Mortgage Loan, or (ii) (A) the
enforceability thereof is limited (1) by bankruptcy, insolvency, moratorium,
receivership, or other similar law relating to creditors' rights generally or
(2) due to acceleration in connection with a foreclosure or other involuntary
payment, or (B) the enforceability is otherwise limited or prohibited by
applicable law. For the avoidance of doubt, a Servicer may waive a Prepayment
Premium in connection with a short sale or short payoff on a defaulted Mortgage
Loan. If a Servicer has waived all or a portion of a Prepayment Premium relating
to a Principal Prepayment, other than as provided above, such Servicer shall
deliver to the Trustee no later than the next succeeding Servicer Remittance
Date, for deposit into the Certificate Account the amount of such Prepayment
Premium (or such portion thereof as had been waived) for distribution in
accordance with the terms of this Agreement. If a Servicer has waived all or a
portion of a Prepayment Premium for any reason, it shall promptly notify the
Trustee thereof and shall include such information in any monthly reports it
provides the Trustee.
SECTION 3.21 Duties of the Credit Risk Manager.
---------------------------------
For and on behalf of the Depositor, the Credit Risk Manager shall provide
reports and recommendations as to loss mitigation activities concerning Mortgage
Loans that are past due, as to which there has been commencement of foreclosure,
as to which there has been forbearance in exercise of remedies which are in
default, as to which any obligor is the subject of bankruptcy, receivership, or
an arrangement of creditors, or which have become REO Properties. Such reports
and recommendations will be based upon information provided pursuant to the
Credit
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Risk Management Agreements. The Credit Risk Manager shall look solely to the
Servicers for all information and data (including loss and delinquency
information and data) and loan level information and data relating to the
servicing of the Mortgage Loans.
SECTION 3.22 Advance Facility.
----------------
(a) With the prior written consent of FSA, each Servicer is hereby
authorized to enter into a financing or other facility (any such arrangement, an
"Advance Facility") under which (1) each such Servicer assigns or pledges to
another Person (an "Advancing Person") such Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances and/or (2) an
Advancing Person agrees to fund some or all Advances and/or Servicing Advances
required to be made by such Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party (other than FSA) is required
before such Servicer may enter into an Advance Facility; provided, however, that
the consent of the Trustee shall be required before such Servicer may cause to
be outstanding at one time more than one Advance Facility with respect to
Advances or more than one Advance Facility with respect to Servicing Advances.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund Advances and/or Servicing Advances on a Servicer's behalf,
each such Servicer shall remain obligated pursuant to this Agreement to make
Advances and Servicing Advances pursuant to and as required by this Agreement,
and shall not be relieved of such obligations by virtue of such Advance
Facility. If each such Servicer enters into an Advance Facility, and for so long
as an Advancing Person remains entitled to receive reimbursement for any
Advances or Servicing Advances outstanding and previously unreimbursed pursuant
to this Agreement, then such Servicer shall not be permitted to reimburse itself
for Advances and/or Servicing Advances, as applicable, pursuant to Section
3.09(a) of this Agreement, but instead such Servicer shall be required to
include amounts collected that would otherwise be retained by such Servicer to
reimburse it for previously unreimbursed Advances ("Advance Reimbursement
Amounts") and/or previously unreimbursed Servicing Advances ("Servicing Advance
Reimbursement Amounts" and together with Advance Reimbursement Amounts,
"Reimbursement Amounts") (in each case to the extent such type of Reimbursement
Amount is included in the Advance Facility) to the extent of amounts on deposit
in the Collection Account on the related Servicer Remittance Date.
Notwithstanding anything to the contrary herein, in no event shall Advance
Reimbursement Amounts or Servicing Advance Reimbursement Amounts be included in
"Available Funds" or distributed to Certificateholders. Each Servicer shall
report to the Trustee the portions of the Reimbursement Amounts that consist of
Advance Reimbursement Amounts and Servicing Advance Reimbursement Amounts,
respectively.
(b) If a Servicer enters into an Advance Facility, such Servicer and the
related Advancing Person shall deliver to the Trustee a written notice and
payment instruction (an "Advance Facility Notice"), providing the Trustee with
written payment instructions as to where to remit Advance Reimbursement Amounts
and/or Servicing Advance Reimbursement Amounts (each to the extent such type of
Reimbursement Amount is included within the Advance Facility) on subsequent
Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to a trustee
or custodian (an "Advance Facility Trustee") designated in the Advance Facility
Notice. An Advance Facility Notice may only be terminated by the joint written
direction of the related Servicer and the related Advancing Person (and any
related Advance Facility Trustee); provided, however, that
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the provisions of this Section 3.22 shall cease to be applicable when all
Advances and Servicing Advances funded by an Advancing Person, and when all
Advances and Servicing Advances (the rights to be reimbursed for which have been
assigned or pledged to an Advancing Person), have been repaid to the related
Advancing Person in full.
(c) Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the related Servicer would be permitted to reimburse itself in accordance
with Section 3.09(ii), (iii) and (iv) hereof, assuming such Servicer had made
the related Advance(s) and/or Servicing Advance(s). Notwithstanding the
foregoing, no Person shall be entitled to reimbursement from funds held in the
Collection Account for future distribution to Certificateholders pursuant to the
provisions of Section 4.01. Neither the Trustee nor FSA shall have any duty or
liability with respect to the calculation of any Reimbursement Amount and shall
be entitled to rely without independent investigation on the Advance Facility
Notice and on such Servicer's report of the amount of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts that were included in the
remittance from such Servicer to the Trustee pursuant to Section 3.09(a)(viii)
or (ix). Such Servicer shall maintain and provide to any successor Servicer and
(upon request) to FSA a detailed accounting on a loan-by-loan basis as to
amounts advanced by, pledged or assigned to, and reimbursed to any Advancing
Person. The successor Servicer shall be entitled to rely on any such information
provided by the predecessor Servicer, and the successor Servicer shall not be
liable for any errors in such information.
(d) An Advancing Person who receives an assignment or pledge of the rights
to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Sub-Servicer set forth in Section 3.02 hereof.
(e) The documentation establishing any Advance Facility shall require that
Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first-out"
(FIFO) basis. Such documentation shall also require each Servicer to provide to
the related Advancing Person or Advance Facility Trustee loan-by-loan
information with respect to each Reimbursement Amount distributed by the Trustee
to such Advancing Person or Advance Facility Trustee on each Distribution Date,
to enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan. Each
Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility Trustee for all Advances and Servicing Advances funded by such
Servicer to the extent the related rights to be reimbursed therefor have not
been assigned or pledged to an Advancing Person.
(f) Notwithstanding anything to the contrary in this Agreement, FSA is not
and shall not be responsible to track or monitor Reimbursement Amounts or any
Advance Facility, and is not and shall not be obligated to make any payment with
respect to any Reimbursement Amount. Each Servicer who enters into an Advance
Facility shall indemnify FSA, the Trustee, the Trust and any successor Servicer,
as applicable, from and against any claims, losses, liabilities or damages
resulting from any claim by the related Advancing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or
78
willful misconduct on the part of the FSA, the Trustee or the successor
Servicer, or failure by the successor Servicer or the Trustee to remit funds as
required by this Agreement or the commission of an act or omission to act by the
successor Servicer or the Trustee, and the passage of any applicable cure or
grace period, such that an Event of Default under this Agreement occurs or such
entity is subject to termination for cause under this Agreement.
(g) Notwithstanding anything to the contrary in this Section 3.22, a
Servicer shall consult with FSA in determining the manner in which any Advance
Facility shall affect a successor Servicer before such Servicer shall enter into
an Advance Facility. Any amendment to this Section 3.22 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.22,
including amendments to add provisions relating to a successor Servicer, may be
entered into by the Trustee, the Seller and such Servicer without the consent of
any Certificateholder, but only with the consent of FSA, notwithstanding
anything to the contrary in Section 11.01 of or elsewhere in this Agreement.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers.
-------------------------
Each Servicer shall deposit in the related Collection Account at the time
described below an amount equal to (i) with respect to the Mortgage Loans other
than the Simple Interest Mortgage Loans, all Scheduled Payments (with interest
at the Mortgage Rate less the Servicing Fee Rate and Credit Risk Manager Fee
Rate) which were due on the related Mortgage Loans during the applicable
Collection Period and (ii) with respect to the Simple Interest Mortgage Loans,
30 days' interest on each such Mortgage Loan, less the Servicing Fee, which were
delinquent at the close of business on the immediately preceding Determination
Date; provided however, that with respect to any Balloon Loan that is delinquent
on its maturity date, a Servicer will not be required to advance the related
balloon payment but will be required to continue to make advances in accordance
with this Section 4.01 with respect to such Balloon Loan in an amount equal to
an assumed scheduled payment that would otherwise be due based on the original
amortization schedule for that Mortgage Loan (with interest at the Mortgage Rate
less the Servicing Fee Rate). Each Servicer's obligation to make such Advances
as to any related Mortgage Loan will continue through the last Scheduled Payment
due prior to the payment in full of such Mortgage Loan, or the related Mortgaged
Property or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
the terms of this Agreement. The Servicers shall not be required to advance
shortfalls of principal or interest resulting from the application of the Relief
Act.
To the extent required by Accepted Servicing Practices, each Servicer shall
be obligated to make Advances with respect to those Mortgage Loans serviced by
it in accordance with the provisions of this Agreement; provided however, that
such obligation with respect to any related Mortgage Loan shall cease if the
related Servicer determines, in its sole discretion, that Advances with respect
to such Mortgage Loan are Nonrecoverable Advances. In the event that the related
Servicer determines that any such advances are Nonrecoverable Advances, such
Servicer shall provide the Trustee with a certificate signed by a Servicing
Officer evidencing such determination.
If an Advance is required to be made hereunder, the related Servicer shall
on the applicable Servicer Remittance Date immediately following the
Determination Date either (i) deposit in the related Collection Account from its
own funds an amount equal to such Advance, (ii) cause to be made an appropriate
entry in the records of such Collection Account that funds in such account being
held for future distribution or withdrawal have been, as permitted by this
Section 4.01, used by such Servicer to make such Advance or (iii) make Advances
in the form of any combination of clauses (i) and (ii) aggregating the amount of
such Advance. Any such funds being held in a Collection Account for future
distribution and so used shall be replaced by the related Servicer from its own
funds by deposit in such Collection Account on or before the next Distribution
Date in which such funds would be due.
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SECTION 4.02 Priorities of Distribution.
--------------------------
(a) On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount for both Loan Groups for such date in the following order of
priority:
A. from the Interest Remittance Amount for Loan Group 2 to the Trustee,
the Trustee Fee for such Distribution Date;
B. from the Interest Remittance Amount for Loan Group 2, to FSA, the FSA
Premium for such Distribution Date;
C. from the Interest Remittance Amount for Loan Group 2, to the Credit
Risk Manager, the Credit Risk Manager Fee for such Distribution Date;
D. from the Interest Remittance Amount for Loan Group 1, first to the
Trustee and then to FSA, any Trustee Fee, FSA Premium and Credit Risk
Manager Fee respectively, remaining unpaid after giving effect to
clauses (A), (B) and (C);
E. from the Interest Remittance Amount for Loan Group 1 and Loan Group 2,
to the Senior Certificates, pro rata based on amounts due, Current
Interest and any Carryforward Interest for such Class and such
Distribution Date, applied in accordance with the allocation rules set
forth below;1
F. first, from the Interest Remittance Amount for Loan Group 2 and then
from the Interest Remittance Amount for Loan Group 1, to FSA, any FSA
Reimbursement Amount;
G. first, from the Interest Remittance Amount for Loan Group 2 and then
from the from the Interest Remittance Amount for Loan Group 1, to the
Class M-1 Certificates, Current Interest and any Carryforward Interest
for such Class and such Distribution Date;
H. first, from the Interest Remittance Amount for Loan Group 2 and then
from the Interest Remittance Amount for Loan Group 1, to the Class M-2
Certificates, Current Interest and any Carryforward Interest for such
Class and such Distribution Date;
I. first, from the Interest Remittance Amount for Loan Group 2 and then
from the Interest Remittance Amount for Loan Group 1, to the Class B
Certificates, Current Interest and any Carryforward Interest for such
Class and such Distribution Date; and
_____________________
1 Includes any amounts distributable to the Class X Certificates and
payable to the Class A-IO Certificates equal to the excess, if any, of the
Class A-IO Pass-Through Rate on its Notional Amount calculated under the
30/360 Convention over such amounts calculated under the actual/360
Convention.
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J. for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(d), any such Interest
Remittance Amount remaining after application pursuant to clauses (A)
through (H) above for such Distribution Date.
The Interest Remittance Amount for Loan Group 1 and Loan Group 2
distributed pursuant to clause (E) above will be applied to the Senior
Certificates as follows:
(i) amounts distributed to the Class A-1 Certificates will reduce the
Interest Remittance Amount for Loan Group 1 before any reduction to
the Interest Remittance Amount for Loan Group 2 in respect of such
distribution; and
(ii) amounts distributed to the Class R, Class A-2 and Class A-IO
Certificates shall reduce the Interest Remittance Amount for Loan
Group 2 before any reduction to the Interest Remittance Amount for
Loan Group 1 in respect of such distributions.
(b) On each Distribution Date (1) prior to the Stepdown Date or (2) with
respect to which a Trigger Event has occurred, the Trustee shall distribute the
Principal Payment Amount for such date in the following order of priority:
A.
from the Principal Remittance Amount derived from Loan Group 1,
sequentially to the Class A-1 Certificates and the Class A-2
Certificates, in that order, until the respective Class Principal
Balance is reduced to zero;
from the Principal Remittance Amount derived from Loan Group 2,
sequentially to the Class R Certificates, the Class A-2
Certificates and the Class A-1 Certificates, in that order, until
the respective Class Principal Balance of such classes has been
reduced to zero;
B. to FSA, any FSA Reimbursement Amounts, to the extent not otherwise
paid pursuant to Section 4.02(a);
C. to the Class M-1 Certificates, until the Class Principal Balance of
such Class has been reduced to zero;
D. to the Class M-2 Certificates, until the Class Principal Balance of
such Class has been reduced to zero;
E. to the Class B Certificates, until the Class Principal Balance of such
Class has been reduced to zero; and
F. for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(d), any such Principal
Payment Amount remaining after application pursuant to clauses (A)
through (E) above, for such Distribution Date.
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(c) On each Distribution Date (1) on or after the Stepdown Date and (2)
with respect to which a Trigger Event has not occurred, the Principal Payment
Amount for such date will be paid in the following order of priority:
A.
1. from the Principal Remittance Amount derived from Loan Group 1,
first to the Class A-1 Certificates and then to the Class A-2
Certificates, the Group 1 Allocation Amount, until the respective
Class Principal Balance is reduced to zero; and
2. from the Principal Remittance Amount derived from Loan Group 2,
first to the Class A-2 Certificates and then to the Class A-1
Certificates, the Group 2 Allocation Amount, until the Class
Principal Balance has been reduced to zero.
B. to FSA, any FSA Reimbursement Amounts, to the extent not otherwise
paid pursuant to Section 4.02(a) and Section 4.02(b);
C. to the Class M-1 Certificates, the M-1 Principal Payment Amount for
such Distribution Date, until the Class Principal Balance of such
Class has been reduced to zero;
D. to the Class M-2 Certificates, the M-2 Principal Payment Amount for
such Distribution Date, until the Class Principal Balance of such
Class has been reduced to zero;
E. to the Class B Certificates, the B Principal Payment Amount for such
Distribution Date, until the Class Principal Balance of such Class has
been reduced to zero; and
F. for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(d), any such Principal
Payment Amount remaining after application pursuant to clauses (A)
through (E) above, for such Distribution Date.
(d) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow for such date in the following order of priority:
A.
1. except for the first Distribution Date, until the aggregate Class
Principal Balance of the Offered Certificates equals the
Aggregate Collateral Balance for such Distribution Date minus the
Targeted Overcollateralization Amount for such date, on each
Distribution Date (a) prior to the Stepdown Date or (b) with
respect to which a Trigger Event has occurred, to the extent of
Monthly Excess Interest for such Distribution Date, to the
Offered Certificates, in the following order of priority:
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(aa) (i) to the extent of the Monthly Excess Interest derived
from Loan Group 1, sequentially to the Class A-1
Certificates and the Class A-2 Certificates, in that order,
the Group 1 Excess Interest Amount, until the respective
Class Principal has been reduced to zero; and
(ii) sequentially to the Class A-2 Certificates and the Class A-1
Certificates, in that order, until the respective Class Principal
Balance has been reduced to zero;
(bb) to the Class M-1 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
(cc) to the Class M-2 Certificates, until the Class Principal
Balance of such Class has been reduced to zero; and
(dd) to the Class B Certificates, until the Class Principal
Balance of such Class has been reduced to zero; and
2. on each Distribution Date on or after the Stepdown Date and with
respect to which a Trigger Event has not occurred, to fund any
principal distributions required to be made on such Distribution
Date pursuant to Section 4.02(c), after giving effect to the
distribution of the Principal Payment Amount for such
Distribution Date, in accordance with the priorities set forth
therein;
B. to FSA, any FSA Reimbursement Amounts, to the extent not otherwise
paid pursuant to Sections 4.02(a), 4.02(b) or 4.02(c);
C. to the Class M-1 Certificates, any Deferred Amount for such Class,
with interest thereon at the Pass-Through Rate;
D. to the Class M-2 Certificates, any Deferred Amount for such Class,
with interest thereon at the Pass-Through Rate;
E. to the Class B Certificates, any Deferred Amount for such Class, with
interest thereon at the Pass-Through Rate;
F. to the Class A-1 and Class A-2 Certificates, pro rata, any applicable
Basis Risk Shortfall for each such Class;
G. to the Class M-1 Certificates, any applicable Basis Risk Shortfall for
such Class;
H. to the Class M-2 Certificates, any applicable Basis Risk Shortfall for
such Class;
I. to the Class B Certificates, any applicable Basis Risk Shortfall for
such class;
J. to the Basis Risk Reserve Fund, the Required Basis Risk Reserve Fund
Deposit;
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K. to the Class X Certificates, the Class X Distributable Amount for such
Distribution Date together with amounts withdrawn from the Basis Risk
Reserve Fund for distribution to the Class X Certificates pursuant to
Section 4.06(b), (c) and (d); and
L. to the Class R Certificate, any remaining amount.
(e) On each Distribution Date, the Trustee shall distribute to the Holder
of the Class A-IO Certificates, the aggregate of all Prepayment Premiums for
Mortgage Loans collected or paid by each Servicer with respect to the preceding
Prepayment Period.
SECTION 4.03 Allocation of Losses.
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(a) On each Distribution Date, the Trustee shall determine the total of the
Applied Loss Amount, if any, for such Distribution Date. The Applied Loss Amount
for any Distribution Date shall be applied by reducing the Class Principal
Balance of each Class of Subordinate Certificates beginning with the Class of
Subordinate Certificates then outstanding with the lowest relative payment
priority, in each case until the respective Class Principal Balance thereof is
reduced to zero. Any Applied Loss Amount allocated to a Class of Subordinate
Certificates shall be allocated among the Subordinate Certificates of such Class
in proportion to their respective Percentage Interests.
SECTION 4.04 Monthly Statements to Certificateholders.
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(a) Not later than each Distribution Date, the Trustee shall prepare and
cause to be forwarded by first class mail to each Certificateholder, each
Servicer, the Depositor and each Rating Agency, a statement based on the
information provided by each Servicer setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, indicating the portion
thereof attributable to Scheduled Payments and Principal Prepayments;
(ii) the amount thereof allocable to interest or any Carryforward
Interest included in such distribution;
(iii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the shortfall
and the allocation thereof as between principal and interest;
(iv) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution Date;
(v) the Aggregate Collateral Balance and the Aggregate Loan Group
Collateral Balance for such Distribution Date;
(vi) the Overcollateralization Amount for such Distribution Date;
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(vii) the amount of the Servicing Fees, the Trustee Fee, the Credit
Risk Manager Fee and the FSA Premium and any other mortgage insurance fees,
if applicable, with respect to such Distribution Date;
(viii) the Pass-Through Rate for each Class of LIBOR Certificates with
respect to such Distribution Date and the Pass-Through Rate for the Class
A-IO Certificates;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances outstanding as of
the last day of the calendar month preceding such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans which
are delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days
(to include such delinquent loans which are also in bankruptcy or
foreclosure), for each Loan Group and for the Mortgage Loans in the
aggregate, as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(xi) the number and aggregate principal amounts of Mortgage Loans that
were in foreclosure, for each Loan Group and for the Mortgage Loans in the
aggregate, as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(xii) the number and aggregate principal amounts of Mortgage Loans
that were in bankruptcy, for each Loan Group and for the Mortgage Loans in
the aggregate, as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(xiii) the number and aggregate principal amounts of Mortgage Loans
with respect to which Prepayment Premiums were collected and the aggregate
amount of such Prepayment Premiums;
(xiv) the Rolling Three Month Delinquency Rate for such Distribution
Date;
(xv) the total number and principal balance of any REO Properties (and
market value, if available), for each Loan Group and for the Mortgage Loans
in the aggregate, as of the last day of the calendar month preceding such
Distribution Date;
(xvi) the total number and principal balance of any Mortgage Loans
that were repurchased during the calendar month preceding such Distribution
Date;
(xvii) the aggregate amount of Realized Losses incurred during the
preceding calendar month and aggregate Realized Losses included in such
distribution;
(xviii) the amount on deposit in the Prefunding Account (including a
breakdown of amounts released during the prior calendar month in respect of
Aggregate Subsequent Transfer Amounts or amounts included in the Principal
Remittance Amount on the April 2002 Distribution Date);
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(xix) the weighted average term to maturity of the Mortgage Loans as
of the close of business on the last day of the calendar month preceding
such Distribution Date;
(xx) the portion of any distribution to the Class A Certificateholders
constituting an Insured Payment for such Distribution Date;
(xxi) the amount on deposit in the Capitalized Interest Account
(including a breakdown of amounts released for the calendar month preceding
such Distribution Date);
(xxii) the gross weighted average coupon of the Mortgage Loans as of
the first date of the applicable period for such Distribution Date;
(xxiii) the aggregate number of Mortgage Loans in the pool;
(xxiv) the Net WAC Rate;
(xxv) the Senior Enhancement Percentage;
(xxvi) the Net Excess Spread; and
(xxvii) any amounts deposited in the Basis Risk Reserve Fund on such
Distribution Date pursuant to Section 4.02(d)J, and the balance of the
Basis Risk Reserve Fund after all distributions have been made on such
Distribution Date.
The Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from each Servicer.
On each Distribution Date, the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP Level Factors for each Class of Offered
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg. In connection with providing the
information specified in this Section 4.04 to Bloomberg, the Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified and
held harmless by DLJMC, to the extent, in the manner and subject to the
limitations provided in Section 8.05. The Trustee will also make the monthly
statements to Certificateholders available each month to each party referred to
in this Section 4.04(a) via the Trustee's website. The Trustee's website can be
accessed at xxxx://xxx.xxxxxx.xxx/xxx or at such other site as the Trustee may
designate from time to time. The Trustee may fully rely upon and shall have no
liability with respect to information provided by each Servicer.
(b) Upon request, within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.04 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
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SECTION 4.05 Servicers to Cooperate.
----------------------
Each Servicer shall provide to the Trustee information which is mutually
agreeable to the Trustee and the related Servicer with respect to each Mortgage
Loan serviced by a Servicer no later than the second Business Day following the
Determination Date necessary to enable the Trustee to perform its distribution,
accounting and reporting requirements hereunder.
SECTION 4.06 Basis Risk Reserve Fund.
-----------------------
(a) On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the Holders of the Certificates, the Basis
Risk Reserve Fund. The Basis Risk Reserve Fund shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement.
(b) On the Closing Date, $5,000.00 will be deposited by the Depositor into
the Basis Risk Reserve Fund. On each Distribution Date, the Trustee shall
transfer from the Certificate Account to the Basis Risk Reserve Fund pursuant to
Section 4.02(d)J. the Required Basis Risk Reserve Fund Deposit. Amounts on
deposit in the Basis Risk Reserve Fund can be withdrawn by the Trustee in
connection with any Distribution Date to fund the amounts required to be
distributed to holders of the Offered Certificates pursuant to Sections 4.02(d)
F. through I. to the extent Monthly Excess Cashflow on such date is insufficient
to make such payments. In addition, any distributions of Monthly Excess Cashflow
to the holders of the Offered Certificates pursuant to Sections 4.02(d) F.
through I shall be deemed to have been deposited in the Basis Risk Reserve Fund
and paid to such holders. On any Distribution Date, any amounts on deposit in
the Basis Risk Reserve Fund in excess of the Required Basis Risk Reserve Fund
Amount shall be distributed to the Class X Certificateholder pursuant to Section
4.02(d)K.
(c) Funds in the Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trustee at the direction of the holders of the Class X
Certificates maturing on or prior to the next succeeding Distribution Date. Any
net investment earnings on such amounts shall be payable to the holders of the
Class X Certificates. The Trustee shall account for the Basis Risk Reserve Fund
as an outside reserve fund within the meaning of Treasury regulation 1.860G-2(h)
and not an asset of any REMIC created pursuant to this Agreement. The Class X
Certificates shall evidence ownership of the Basis Risk Reserve Fund for federal
tax purposes and the Holders thereof shall direct the Trustee in writing as to
the investment of amounts therein. The Trustee shall treat amounts transferred
by the Master REMIC to the Basis Risk Reserve Fund as distributions to the Class
X Certificateholder for all Federal tax purposes. In the absence of such written
direction, all funds in the Basis Risk Reserve Fund shall remain uninvested. The
Trustee shall have no liability for losses on investments in Eligible
Investments made pursuant to this Section 4.06(c) (other than as obligor on any
such investments). Upon termination of the Trust Fund, any amounts remaining in
the Basis Risk Reserve Fund shall be distributed to the Holders of the Class X
Certificates in the same manner as if distributed pursuant to Section 4.02(d)K.
hereof.
(d) On the Distribution Date immediately after the Distribution Date on
which the aggregate Class Principal Balance of the LIBOR Certificates equals
zero, any amounts on
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deposit in the Basis Risk Reserve Fund not payable on the LIBOR Certificates
shall be deposited into the Certificate Account and distributed to the Holders
of the Class X Certificates in the same manner as if distributed pursuant to
Section 4.02(d)K. hereof.
SECTION 4.07 Policy Matters.
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(a) As soon as possible, and in no event later than 11:00 a.m., New York
time, on the second Business Day immediately preceding each Distribution Date,
the Trustee shall determine the amount of funds available for such Distribution
Date minus the amount of any FSA Premium and any fee to paid to the Trustee on
such Distribution Date
(b) If for any Distribution Date, the Trustee determines that the funds
that will be available for such Distribution Date distributable to the Holders
of the Class A-1 or Class A-2 Certificates pursuant to Section 4.01 will be
insufficient to pay the related Guaranteed Distributions on such Distribution
Date, the Trustee shall determine the amount of any such deficiency and shall
give notice to FSA and the Fiscal Agent (as defined in the FSA Policy), if any,
by telephone or telecopy of the amount of such deficiency, confirmed in writing
by notice substantially in the form of Exhibit A to the FSA Policy by 12:00
noon, New York City time, on such second Business Day. The Trustee's
responsibility for delivering the notice to FSA, as provided in the preceding
sentence is limited to the availability, timeliness and accuracy of the
information provided by each Servicer. The Notice shall constitute a claim for
payment pursuant to the FSA Policy.
(c) The Trustee shall receive as attorney-in-fact of each Holder of a Class
A-1 or Class A-2 Certificate, any Guaranteed Distributions from FSA and disburse
the same to each Holder of a Class A-1 or Class A-2 Certificate in accordance
with the provisions of this Article IV. Guaranteed Distributions disbursed by
the Trustee from proceeds of the FSA Policy shall not be considered payment by
the Trust nor shall such payments discharge the obligation of the Trust with
respect to such Class A-1 or Class A-2 Certificate, and FSA shall become the
owner of such unpaid amounts due from the Trust in respect of such Guaranteed
Distributions as the deemed assignee of such Holder and shall be entitled to
receive the FSA Reimbursement Amount pursuant to Section 4.01. The Trustee
hereby agrees on behalf of each Holder of a Class A-1 or Class A-2 Certificate
for the benefit of FSA that it and they recognize that to the extent that FSA
makes Guaranteed Distributions, either directly or indirectly (as by paying
through the Trustee), to the Class A-1 or Class A-2 Certificateholders, FSA will
be entitled to receive the FSA Reimbursement Amount pursuant to Section 4.01.
(d) It is understood and agreed that the intention of the parties is that
FSA shall not be entitled to reimbursement on any Distribution Date for amounts
previously paid by it unless on such Distribution Date the Holders of the Class
A-1 and Class A-2 Certificates shall also have received the full amount of the
Guaranteed Distributions for such Distribution Date.
(e) In the event the Trustee receives a certified copy of an order of the
appropriate court that any payment of principal or interest on a Class A-1 or
Class A-2 Certificate has been voided in whole or in part as a preference
payment under applicable bankruptcy law, the Trustee shall (i) promptly notify
FSA and the Fiscal Agent, if any, and (ii) comply with the provisions of the FSA
Policy to obtain payment by FSA of such voided payment. In addition, the Trustee
shall mail notice to all Holders of the Class A-1 and Class A-2 Certificates so
affected that, in the event that any such Holder's scheduled payment is so
recovered, such Holder will be entitled to payment pursuant to the terms of the
FSA Policy a copy of which shall be made available to such Holders by the
Trustee. The Trustee shall furnish to FSA and the Fiscal Agent, if any, its
records listing the payments on the affected Class A-1 and Class A-2
Certificates, if any, that have been made by the Trustee and subsequently
recovered from the affected Holders, and the dates on which such payments were
made by the Trustee.
(f) At the time of the execution hereof, and for the purposes hereof, the
Trustee shall establish a separate special purpose trust account in the name of
the Trustee for the benefit of Holders of the Class A-1 and Class A-2
Certificates (the "FSA Account") over which the Trustee shall have exclusive
control and sole right of withdrawal. The FSA Account shall be an Eligible
Account. The Trustee shall deposit any amount paid under the FSA Policy into the
FSA Account and distribute such amount only for the purposes of making the
payments to Holders of the Class A-1 and Class A-2 Certificates in respect of
the Guaranteed Distributions for which the related claim was made under the FSA
Policy. Such amounts shall be allocated by the Trustee to Holders of Class A-1
and Class A-2 Certificates affected by such shortfalls in the same manner as
principal and interest payments are to be allocated with respect to such
Certificates pursuant to Section 4.01. It shall not be necessary for such
payments to be made by checks or wire transfers separated from the checks or
wire transfers used to make regular payments hereunder with funds withdrawn from
the Certificate Account. However, any payments made on the Class A-1 and Class
A-2 Certificates from funds in the FSA Account shall be noted as provided in
subsection (h) below. Funds held in the FSA Account shall not be invested by the
Trustee.
(g) Any funds received from FSA for deposit into the FSA Account pursuant
to the FSA Policy in respect of a Distribution Date or otherwise as a result of
any claim under the FSA Policy shall be applied by the Trustee directly to the
payment in full (i) of the Guaranteed Distributions due on such Distribution
Date on the Class A-1 and Class A-2 Certificates, or (ii) of other amounts
payable under the FSA Policy. Funds received by the Trustee as a result of any
claim under the FSA Policy shall be used solely for payment to the Holders of
the Class A-1 and Class A-2 Certificates and may not be applied for any other
purpose, including, without limitation, satisfaction of any costs, expenses or
liabilities of the Trustee, any Servicer or the Trust Fund. Any funds (other
than funds deposited therein in respect of a Preference Amount payable under the
FSA Policy) remaining in the FSA Account on the first Business Day after each
Distribution Date shall be remitted promptly to FSA pursuant to the written
instruction of FSA.
(h) The Trustee shall keep complete and accurate records in respect of (i)
all funds remitted to it by FSA and deposited into the FSA Account and (ii) the
allocation of such funds to payments of interest on and principal in respect of
any Class A-1 or Class A-2 Certificates. FSA shall have the right to inspect
such records at reasonable times during normal business hours upon three
Business Days' prior notice to the Trustee.
(i) The Trustee acknowledges, and each Holder of a Class A-1 or Class A-2
Certificate by its acceptance of the Class A-1 or Class A-2 Certificate agrees,
that, without the need for any further action on the part of FSA or the Trustee,
to the extent FSA makes payments, directly or
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indirectly, on account of principal of or interest on any Class A-1 or Class A-2
Certificates, FSA will be fully subrogated to the rights of the Holders of such
Class A-1 or Class A-2 Certificates to receive such principal and interest from
the Trust Fund. The Holders of the Class A-1 or Class A-2 Certificates, by
acceptance of the Class A-1 or Class A-2 Certificates, assign their rights as
Holders of the Class A-1 or Class A-2 Certificates to the extent of FSA's
interest with respect to amounts paid under the Certificate Insurance Policy.
Anything herein to the contrary notwithstanding, solely for purposes of
determining FSA's rights, as applicable, as subrogee for payments distributable
pursuant to Section 4.01, any payment with respect to distributions to the Class
A-1 or Class A-2 Certificates which is made with funds received pursuant to the
terms of the FSA Policy, shall not be considered payment of the Class A-1 or
Class A-2 Certificates from the Trust Fund and shall not result in the
distribution or the provision for the distribution in reduction of the Class
Principal Balance of the Class A-1 or Class A-2 Certificates except to the
extent such payment has been reimbursed to FSA pursuant to the terms hereof.
(j) Upon a Responsible Officer of the Trustee becoming aware of the
occurrence of an Event of Default, the Trustee shall promptly notify FSA of such
Event of Default.
(k) The Trustee shall promptly notify FSA of either of the following as to
which a Responsible Officer of the Trustee has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and (B)
the making of any claim in connection with any Insolvency Proceeding seeking the
avoidance as a preferential transfer (a "Preference Claim") of any distribution
made with respect to the Class A-1 or Class A-2 Certificates as to which it has
actual knowledge. Each Holder of a Class A-1 or Class A-2 Certificate, by its
purchase of Class A-1 or Class A-2 Certificates, and the Trustee hereby agrees
that FSA (so long as no FSA Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to any Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, FSA shall be
subrogated to the rights of the Trustee and each Holder of a Class A-1 or Class
A-2 Certificate in the conduct of any Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.
(l) Each Servicer shall designate at least one FSA Contact Person who shall
be available to FSA to provide reasonable access to information regarding the
Mortgage Loans. The initial FSA Contact Persons are the Servicing Officers.
(m) The Trustee shall surrender the FSA Policy to FSA for cancellation upon
the reduction of the Class Principal Balance of the Class A-1 and Class A-2
Certificates to zero.
(n) The Trustee shall send to FSA the reports prepared pursuant to Sections
3.17 and 3.18 and the statements prepared pursuant to Section 4.04, as well as
any other statements or communications sent to Holders of the Class A-1 or Class
A-2 Certificates, in each case at the same time such reports, statements and
communications are otherwise sent.
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(o) For so long as there is no continuing default by FSA under its
obligations under the FSA Policy (an "FSA Default"), each Holder of a Class A-1
or Class A-2 Certificate agrees that FSA shall be treated by the Depositor, each
Seller, each Servicer and the Trustee as if FSA were the Holder of all of the
Class A-1 and Class A-2 Certificates for the purpose (and solely for the
purpose) of the giving of any consent, the making of any direction or the
exercise of any voting or other control rights otherwise given to the Holders of
the Class A-1 and Class A-2 Certificates hereunder and the holders of the Class
A-1 and Class A-2 Certificates shall only exercise such rights with the prior
written consent of FSA.
(p) With respect to this Section 4.07, (i) the terms "Receipt" and
"Received" shall mean actual delivery to FSA and its Fiscal Agent, if any, prior
to 12:00 noon, New York City time, on a Business Day; delivery either on a day
that is not a Business Day or after 12:00 noon, New York City time, shall be
deemed to be Receipt on the next succeeding Business Day and (ii) "Business Day"
means any day other than (A) a Saturday or Sunday or (B) a day on which FSA or
banking institutions in the City of New York, New York, or the city in which the
Corporate Trust Office of the Trustee is located, are authorized or obligated by
law or executive order to be closed. If any notice or certificate given under
the FSA Policy by the Trustee is not in proper form or is not properly
completed, executed or delivered, it shall be deemed not to have been Received.
FSA or its Fiscal Agent, if any, shall promptly so advise the Trustee and the
Trustee may submit an amended notice.
(q) All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to the Trustee, the Rating Agencies or the Class A-1
and Class A-2 Certificateholders shall also be sent at such time to FSA at
Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(r) FSA shall be an express third party beneficiary of this Agreement for
the purpose of enforcing the provisions hereof to the extent of FSA's rights
explicitly specified herein as if a party hereto.
(s) All references herein to the ratings assigned to the Certificates and
to the interests of any Certificateholders shall be without regard to the FSA
Policy.
(t) The Trustee and each Servicer shall cooperate with any reasonable
request by FSA to preserve or enforce the rights granted to FSA hereunder.
(u) Any amendment to this Agreement shall require the prior written consent
of FSA if such amendment adversely affects in any respect the rights or
interests of FSA or of the Class A-1 and Class A-2 Certificateholders (without
regard to the FSA Policy).
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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 either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) a Notional Amount Certificate, (B) 100%
of the Class Principal Balance of any Class of Certificates or (C) Certificates
of any Class with aggregate principal Denominations of not less than $1,000,000
or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by a Responsible Officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there appears
on such certificate a Certificate of Authentication in the form provided herein,
executed by the Trustee by manual signature, and such authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly executed and delivered hereunder. All Certificates
shall be dated the date of their countersignature. On the Closing Date, the
Trustee shall authenticate the Certificates to be issued at the written
direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate transfers.
SECTION 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.
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(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of transfer of any
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Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange shall
be cancelled and subsequently disposed of by the Trustee in accordance with the
Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such transfer
is made pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such state securities laws. Except in connection
with any transfer of a Private Certificate by the Depositor to any affiliate, in
the event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer in substantially the form
set forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter
in substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably request
to meet its obligation under the preceding sentence. Each Holder of a Private
Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Depositor, the Seller, each Servicer and the Special
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
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No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee substantially in the form of Exhibit K or L, in the case of a Private
Certificate, or Exhibit I, in the case of a Residual Certificate, to the effect
that (a) such transferee is not an employee benefit plan or arrangement subject
to Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a
person acting on behalf of any such plan or arrangement or using the assets of
any such plan or arrangement to effect such transfer or (b) if the
ERISA-Restricted Certificate has been the subject of an ERISA-Qualifying
Underwriting, it is being purchased by an "insurance company general account"
(as defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60), and the acquisition and holding of the ERISA-Restricted Certificate
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60; or (ii) in the case of any such ERISA-Restricted Certificate presented
for registration in the name of an employee benefit plan subject to ERISA, or a
plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of either the Trustee
or the Trust Fund, addressed to the Trustee, to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee, the Servicers or the Special Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
The transferee of an ERISA-Restricted Certificate that is a Book-Entry
Certificate, by its acceptance of the Book-Entry Certificate, will be deemed to
make the representation in clauses (a) or (b) above. In the event that a
representation is violated, or any transfer to a plan or person acting on behalf
of a plan or using a plan's assets is attempted without the delivery to the
Trustee of the Opinion of Counsel described above, the attempted transfer or
acquisition shall be void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact not
permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of
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any Residual Certificate unless, in addition to the certificates required
to be delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto as
Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit from
any Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Residual Certificate and (C) not to
Transfer its Ownership Interest in a Residual Certificate or to cause the
Transfer of an Ownership Interest in a Residual Certificate to any other
Person if it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest in
a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of a Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under
the provisions of this Agreement so long as the Transfer was registered
after receipt of the related Transfer Affidavit, Transferor Certificate and
either the Rule 144A Letter or the Investment Letter. The Trustee shall be
entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Residual Certificate at and
after either such time. Any such payments so recovered by the Trustee shall
be paid and delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
shall not be an expense of the Trust Fund, the Trustee, the Seller, the
Servicers or the Special Servicer to the effect that the elimination of such
restrictions will not cause the REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an
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Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions referred
to above in this Section 5.02 in connection with transfer shall be at the
expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
to locate a qualified successor, (y) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system through the
Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. None of the Seller, the Servicers, the Special Servicer, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in
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relying on, such instructions. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue of
its assumption of such obligations become liable to any party for any act or
failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
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If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Trustee such security or
indemnity as may be required by it to hold it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 5.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
---------------------
The Servicers and the Trustee and any agent of the Servicers or the Trustee
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and none of the Servicers or
the Trustee or any agent of the Servicers or the Trustee shall be affected by
any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and Addresses.
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If three or more Certificateholders (a) request such information in writing
from the Trustee, (b) state that such Certificateholders desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates, and (c) provide a copy of the communication which
such Certificateholders propose to transmit, or if the Depositor or a Servicer
shall request such information in writing from the Trustee, then the Trustee
shall, within ten Business Days after the receipt of such request, provide the
Depositor, such Servicer or such Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such Trust Fund held by the
Trustee, if any. The Depositor and every Certificateholder, by receiving and
holding a Certificate, agree that the Trustee shall not be held accountable by
reason of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
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SECTION 5.06 Maintenance of Office or Agency.
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The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in St. Xxxx, Minnesota where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any change
in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER, THE SERVICERS AND THE SPECIAL SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Seller, the
Servicers and the Special Servicer.
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The Depositor, the Seller, each Servicer and the Special Servicer shall
each be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller or a
Servicer.
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The Depositor, the Seller and each Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Seller or a Servicer may be merged
or consolidated, or any Person resulting from any merger or consolidation to
which the Depositor, the Seller or a Servicer shall be a party, or any person
succeeding to the business of the Depositor, the Seller or a Servicer, shall be
the successor of the Depositor, the Seller or the related Servicer, as the case
may be, hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided, however, that the successor or surviving Person with
respect to a merger or consolidation of a Servicer shall be an institution
either (i) having a net worth of not less than $10,000,000 or whose deposits are
insured by the FDIC through the BIF or the SAIF, and (ii) which is a FNMA or
FHLMC approved servicer in good standing.
SECTION 6.03 Limitation on Liability of the Depositor, the Seller, the
Servicers and Others.
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(a) None of the Depositor, the Seller, a Servicer or the Special Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Seller, a Servicer or the Special Servicer shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Seller, a Servicer, the Special Servicer or any such Person against any breach
of representations or warranties made by it herein or protect the Depositor, the
Seller, the Servicer, the Special Servicer or any such Person from any liability
which would otherwise be imposed by reasons of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Depositor, the Seller, a Servicer, the
Special Servicer and any director, officer, employee or agent of the Depositor,
the Seller, a Servicer or the Special Servicer may rely in good faith on any
document of any kind prima facie
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properly executed and submitted by any Person respecting any matters arising
hereunder. None of the Depositor, the Seller, a Servicer or the Special Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and which in its
opinion may involve it in any expense or liability; provided, however, that any
of the Depositor, the Seller, a Servicer or the Special Servicer may in its
discretion undertake any such action that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor, the Seller, the Servicers and the Special Servicers shall be entitled
to be reimbursed therefor from the Trust Fund.
(b) Each Servicer shall indemnify the Trustee and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee may sustain in any way related to the failure of
such Servicer to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The related Servicer immediately
shall notify the Trustee if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans, assume (with the prior written consent of
the Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Trustee in respect of
such claim. The related Servicer shall follow any written instructions received
from the Trustee in connection with such claim. Except as otherwise provided
herein, the Trustee promptly shall reimburse the Servicer for all amounts
advanced by it pursuant to the preceding sentence except when the claim is in
any way related to the failure of such Servicer to service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement.
SECTION 6.04 Limitation on Resignation of a Servicer.
---------------------------------------
(a) Subject to Section 6.04(b) below, a Servicer shall not resign from the
obligations and duties hereby imposed on it except (i)(a) upon appointment of a
successor servicer (which may be with respect to all or a portion of the
Mortgage Loans), (b) receipt by the Trustee of a letter from each Rating Agency
that such a resignation and appointment will not result in a downgrading of the
rating of any of the Certificates related to the applicable Mortgage Loans and
(c) receipt by FSA of oral confirmation from each Rating Agency that the rating
assigned to any of the Certificates related to the applicable Mortgage Loans is
given without regard to the FSA Policy, or (ii) upon determination that its
duties hereunder are no longer permissible under applicable law. Any such
determination under clause (ii) permitting the resignation of a Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No such resignation shall become effective until the Trustee or a successor
servicer shall have assumed such Servicer's responsibilities, duties,
liabilities and obligations hereunder.
(b) Notwithstanding the foregoing, DLJ Mortgage Capital, Inc. shall be
entitled to request that Olympus resign as Servicer and appoint a successor
servicer; provided that such entity delivers to the Trustee the letter required
by 6.04(a)(i) above.
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SECTION 6.05 Limitation Upon Liability of the Credit Risk Manager.
----------------------------------------------------
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Trustee, the Certificateholders or the Depositor for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by the applicable Servicer
under the applicable Credit Risk Management Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Credit Risk Manager
or any such person against liability that would otherwise be imposed by reason
of willful malfeasance, bad faith or gross negligence in its performance of its
duties or by reason of reckless disregard for its obligations and duties under
this Agreement or the applicable Credit Risk Management Agreement. The Credit
Risk Manager and any director, officer, employee or agent of the Credit Risk
Manager may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder,
and may rely in good faith upon the accuracy of information furnished by the
applicable Servicer pursuant to the applicable Credit Risk Management Agreement
in the performance of its duties thereunder and hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by a Servicer to make any deposit or payment
required pursuant to this Agreement (including but not limited to
Advances to the extent required under Section 4.01) which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to such Servicer by the Trustee or the
Depositor, or to such Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced
by the Certificates; or
(ii) any failure by a Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part
of such Servicer set forth in this Agreement, or if any of the
representations and warranties of such Servicer in Section 2.03(a)
proves to be untrue in any material respect, which failure or breach
continues unremedied for a period of 60 days after the date on which
written notice of such failure or breach, requiring the same to be
remedied, shall have been given to such Servicer by the Trustee or the
Depositor, or to such Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced
by the Certificates, provided, however, that in the case of a failure
that cannot be cured within 60 days, the cure period may be extended
if such Servicer can demonstrate to the reasonable satisfaction of the
Trustee and FSA that such Servicer is diligently pursuing remedial
action; or
(iii) failure by a Servicer to maintain, if required, its license
to do business in any jurisdiction where the related Mortgaged
Property is located; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against a Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of
60 consecutive days; or
(v) a Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to such Servicer or of or relating to all or substantially
all of its property; or
(vi) a Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage
of or commence a voluntary case
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under, any applicable insolvency, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations; or
(vii) a Servicer ceases to meet the qualifications of a FNMA or
FHLMC approved servicer.
Other than an Event of Default resulting from a failure of a Servicer to
make any required Advance, if an Event of Default shall occur and a Responsible
Officer of the Trustee has knowledge thereof, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
51% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to such Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. If an Event of Default
results from the failure of a Servicer to make a required Advance, the Trustee
shall, by notice in writing to such Servicer and the Depositor (with a copy to
each Rating Agency), terminate all of the rights and obligations of such
Servicer under this Agreement and in and to the related Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder.
Upon receipt by a Servicer of such written notice of termination, all
authority and power of such Servicer under this Agreement, whether with respect
to the related Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee or its nominee, subject to Section 7.02. Upon written request from the
Trustee, such Servicer shall prepare, execute and deliver to the successor
entity designated by the Trustee any and all documents and other instruments,
place in such successor's possession all related Mortgage Files, and do or cause
to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including but not limited to the
transfer and endorsement or assignment of the related Mortgage Loans and related
documents, at the Servicer's sole expense. Such Servicer shall cooperate with
the Trustee and such successor in effecting the termination of such Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by such Servicer to a related Collection Account
or Escrow Account or thereafter received with respect to the related Mortgage
Loans. The Trustee shall thereupon make any Advance unless prohibited by
applicable law. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of such Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the related Mortgage Loans and related documents, or otherwise.
All reasonable out of pocket costs and expenses (including attorney's fees)
incurred in connection with transferring servicing to a successor Servicer shall
be paid by the predecessor Servicer (or if the predecessor Servicer is the
Trustee, the initial Servicer) upon presentation of reasonable documentation of
such costs and expenses.
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SECTION 7.02 Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time a Servicer receives a notice of termination pursuant
to Section 7.01 of this Agreement, the Trustee shall, subject to and to the
extent provided herein, be the successor to a Servicer, but only in its capacity
as servicer under this Agreement, and not in any other, and the transactions set
forth herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on a Servicer by the terms and provisions
hereof and applicable law including the obligation to make Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the related Mortgage Loans that the Servicer would have been
entitled to charge to a Collection Account, provided that the terminated
Servicer shall nonetheless be entitled to payment or reimbursement as provided
in Section 3.09(a) to the extent that such payment or reimbursement relates to
the period prior to termination of the Servicer. Notwithstanding the foregoing,
if the Trustee has become the successor to a Servicer in accordance with Section
7.01, the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to 4.01 hereof, or if
it is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to such Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor to a Servicer shall be an
institution which is a FNMA or FHLMC approved seller/servicer in good standing,
which has a net worth of at least $10,000,000, which is willing to service the
related Mortgage Loans and which executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the Servicer
under Section 7.01 hereunder), with like effect as if originally named as a
party to this Agreement; provided that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. Pending appointment of a successor to a Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to the limitations described herein, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
the related Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of the Servicing Fee. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default by
reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by
the failure of the Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to a Servicer shall give notice to the Mortgagors of such
change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to this Agreement.
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SECTION 7.03 Notification to Certificateholders.
----------------------------------
(a) Upon any termination of or appointment of a successor to a Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually known to a Responsible Officer the Trustee,
unless such Event of Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.
---------------------
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured and not waived, the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents. orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:
(i) unless an Event of Default actually known to the Trustee shall
have occurred and be continuing, the duties and obligations of the Trustee
shall be determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities respecting
any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be finally proven that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates evidencing not less than
25% of the Voting Rights of Certificates relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this
Agreement;
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(iv) no provision of this Agreement shall require the Trustee to act
as Servicer or be responsible in any way for the acts or omissions of the
Servicer until such time as it acts as successor servicer pursuant to the
terms of this Agreement; and
(v) the Trustee shall have no duty (A) (other than in its capacity as
successor servicer) to see to any recording, filing or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing of any thereof,
(B) (other than in its capacity as successor servicer) to see to any
insurance, (C) (other than with respect to Section 8.11 hereof) to see to
the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to ,
assessed or levied against, any part of the Trust Fund, (D) to confirm or
verify the contents of any certificates of the Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee to be genuine
and to have been signed or presented by the appropriate party.
SECTION 8.02 Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties and the
Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
affiliates, accountants or attorneys and the Trustee shall not be
responsible for any negligence or willful
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misconduct on the part of such agents, affiliates, accountants or attorneys
appointed by it with due care;
(vi) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security);
(viii) the Trustee shall not be deemed to have actual knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which may be incurred
therein or thereby;
(x) the rights of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(xi) anything to the contrary in this Agreement notwithstanding, in no
event shall the Trustee be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including, but not limited to, lost
profits) even if the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action; and
(xii) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers
granted hereunder.
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor, a Servicer or the Seller, as the case may be, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and authentication of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Servicer of any funds paid to the Depositor or a Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or a Servicer.
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SECTION 8.04 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates and may transact business with the Depositor, the
Seller, the Servicers and their affiliates, with the same rights as it would
have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
---------------------------
(a) The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Certificate Account on each Distribution Date
prior to making distributions pursuant to Section 4.02 any investment income or
other benefit derived from balances in the Certificate Account for such
Distribution Date pursuant to Section 3.09(b). Subject to the limitations set
forth in Section 8.05(b), the Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Depositor and held harmless
against any loss, liability or expense (including reasonable attorney's fees and
expenses) incurred in connection with any claim or legal action relating to (a)
this Agreement or the Custodial Agreements, (b) the Certificates, or (c) the
performance of any of the Trustee's duties hereunder or under the Custodial
Agreements, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Depositor covenants and agrees,
subject to the limitation set forth in Section 8.05(b), and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence, bad
faith or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to: (A) the
reasonable compensation and the expenses and disbursements of its counsel not
associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant, engineer
or appraiser that is not regularly employed by the Trustee, to the extent that
the Trustee must engage such persons to perform acts or services hereunder, (C)
printing and engraving expenses in connection with preparing any Definitive
Certificates and (D) any other reasonable expenses incurred other than in the
ordinary course of its business by the Trustee in connection with its duties
hereunder. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee or Paying Agent
hereunder or for any other expenses.
(b) Notwithstanding anything to the contrary in this Agreement, the
Depositor shall not be obligated to pay to the Trustee more than, in the
aggregate, $150,000 pursuant to Section 8.05(a) hereof. Other than as set forth
in this Section 8.05, the Trustee shall not be entitled to any other
compensation or reimbursement for loss or expenses.
SECTION 8.06 Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least
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$50,000,000, subject to supervision or examination by federal or state authority
and with a credit rating which would not cause either of the Rating Agencies to
reduce their respective then current Ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction), as evidenced in writing by each Rating Agency. If such corporation
or association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the proposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor, the
Seller or the Servicers and their affiliates; provided, however, that such
entity cannot be an affiliate of the Seller, the Depositor or the Servicers
other than the Trustee in its role as successor to the related Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
--------------------------------------
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice of resignation to the Depositor, the Seller,
the Servicers, the Special Servicer and each Rating Agency not less than 60 days
before the date specified in such notice, when, subject to Section 8.08, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.08 meeting the qualifications set forth in Section
8.06. If the Trustee gives notice of such resignation, the Depositor shall
promptly appoint a successor trustee. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation or removal (as provided
below), the resigning or removed Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, or a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to the Servicer and the Seller and one
copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which shall be delivered
by the successor Trustee to the Depositor, the Servicers and the Seller, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the successor trustee.
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Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
SECTION 8.08 Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee, the
Servicers and the Seller an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Servicers, the Seller and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of
the Depositor.
SECTION 8.09 Merger or Consolidation of the Trustee.
--------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 8.06 without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of
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this Section 8.10, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable. If the Depositor
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, or in the case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon
the Trustee, except for the obligation of the Trustee in its capacity as
successor servicer under this Agreement to advance funds on behalf of a
Servicer, shall be conferred or imposed upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular set
or acts are to be performed (whether as Trustee hereunder or as successor
to a Servicer hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the applicable Trust Fund or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of
any act or omission of any other trustee hereunder and such appointment
shall not, and shall not be deemed to, constitute any such separate trustee
or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicers and the Depositor.
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Any separate trustee or co-trustee may, at any time, constitute the Trustee
its agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.11 Tax Matters.
-----------
It is intended that the assets with respect to which any REMIC election is
to be made, as set forth in the Preliminary Statement, shall constitute, and
that the conduct of matters relating to such assets shall be such as to qualify
such assets as, multiple "real estate mortgage investment conduits" as defined
in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and the
Trustee is hereby appointed to act as agent) on behalf of the REMICs and that in
such capacity it shall: (a) prepare, sign and file, or cause to be prepared and
filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income
Tax Return (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each REMIC,
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
within thirty days of the Closing Date, furnish or cause to be furnished to the
Internal Revenue Service, on Forms 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such form, and
update such information at the time or times in the manner required by the Code;
(c) make or cause to be made elections that each group of segregated assets be
treated as a REMIC on the federal tax return for its first taxable year (and, if
necessary, under applicable state law) and apply for an employee identification
number from the IRS via a Form SS-4 or any other acceptable method for all tax
entities; (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption; (e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax); (f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of any REMIC as a REMIC under the REMIC Provisions; (g)
not knowingly or intentionally take any action or omit to take any action that
would cause the termination of the REMIC status of any REMIC hereunder; (h) pay,
from the sources specified in the sixth paragraph of this Section 8.11, the
amount of any federal or state tax, including prohibited transaction taxes as
described below, imposed on any REMIC hereunder prior to its termination
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when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such tax
in appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) ensure that federal, state or local income tax or information
returns shall be signed by the Trustee or such other person as may be required
to sign such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to the REMICs, including but not limited to the
income, expenses, assets and liabilities thereof and the fair market value and
adjusted basis of the assets determined on the accrual method or at such
internals as may be required by the Code, as may be necessary to prepare the
foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent any such REMIC in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year of
any REMIC, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any such REMIC,
and otherwise act on behalf of the REMICs in relation to any tax matter or
controversy involving it.
In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within ten
(10) days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. DLJMC
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of any REMIC as defined in Section 860G(c) of the Code, on
any contribution to the REMICs after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, including, without limitation, any
minimum tax imposed upon any REMICs pursuant to Sections 23153 and 24874 of the
California Revenue and Taxation Code, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the Seller, in the case of any such minimum tax, if such
tax arises out of or results from a breach by the Seller of any of its
obligations under this Agreement or (iii) the Seller, if any such tax arises out
of or results from the Seller's obligation to repurchase a related Mortgage Loan
pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or in the event
that the Trustee or the Seller fails to honor its obligations under the
preceding clauses (i), (ii) or (iii) or the Servicer fails to honor its
obligations pursuant to Section 8.15, any such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
3.09(b).
The Trustee shall treat the Basis Risk Reserve Fund as outside reserve
funds within the meaning of Treasury Regulation 1.860G-2(h) that are owned by
the Class X Certificateholder
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and the Class R Certificateholder, respectively, and that are not assets of any
REMIC. The Trustee shall treat the rights of the Class X-0, Xxxxx X-0, Class
A-IO, Class M-1, Class M-2, and Class B Certificateholders to receive payments
from the Basis Risk Reserve Fund as rights in an interest rate cap contract
written by the Class X Certificateholder in favor of the Class A, Class M-1,
Class M-2, and Class B Certificateholders. The Class A-IO Certificateholders
will also be treated as holders of rights in an interest rate cap contract
written by the Class X Certificateholder whereby the Class A-IO
Certificateholder will pay to the Class X Certificateholder the excess of the
Class A-IO Pass-Through Rate computed under the actual/360 Convention and such
Pass-Through Rate computed under the 30/360 Convention and will receive payments
from the Class X Certificateholder equal to the excess of such Pass-Through Rate
computed under the 30/360 Convention over such Pass-Through Rate computed under
the actual/360 Convention, in each case multiplied by the notional balance of
the Class A-IO Certificates. The Class M-1, Class M-2 and Class B
Certificateholders will also be treated as holders of rights in an limited
recourse interest rate cap contract written by the Class X Certificateholder
whereby the Class M-1, Class M-2 and Class B Certificateholders will receive any
excess of the Subordinate Net Funds Cap over the Adjusted Subordinate Net Funds
Cap on their respective principal balances for such Distribution Date. Thus,
each REMIC Regular Interest shall be treated as representing ownership of not
only REMIC Regular Interests, but also ownership of an interest in interest rate
cap contracts or a separate contractual right. For purposes of determining the
issue price of the REMIC Regular interests, the Trustee shall assume that the
Basis Risk Reserve Fund has a de minimis value.
The Trustee, the Servicer and the Holders of Certificates shall take any
action or cause any REMIC to take any action necessary to create or maintain the
status of each REMIC as a REMIC under the REMIC Provisions and shall assist each
other as necessary to create or maintain such status. Neither the Trustee, the
Servicers nor the Holder of any Residual Certificate shall take any action,
cause any REMIC created hereunder to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of any REMIC as a REMIC
or (ii) result in the imposition of a tax upon any REMIC (including but not
limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the Servicers have received an Opinion of Counsel (at the expense of the
party seeking to take such action) to the effect that the contemplated action
will not endanger such status or result in the imposition of such a tax.
Each Holder of a Residual Certificate shall pay when due any and all taxes
imposed on each REMIC created hereunder by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in the REMICs or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of regular interests in the related REMIC.
The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each REMIC created hereunder on a calendar year and on
an accrual basis.
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The Trustee will apply for an Employee Identification Number from the
Internal Revenue Service via a Form SS-4 or other acceptable method for all tax
entities.
SECTION 8.12 Periodic Filings.
----------------
The Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder. In
connection with the preparation and filing of such periodic reports, the
Depositor and the Servicers shall, upon the written request of the Trustee,
timely provide to the Trustee all material information reasonably available to
them which is requested by the Trustee for the purpose of being included in such
reports. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
SECTION 8.13 Trust Obligations.
-----------------
For all purposes herein, any and all rights, duties and obligations of the
Trustee on behalf of the Trust shall be the rights, duties and obligations of
the Trust itself.
SECTION 8.14 Determination of Certificate Index.
----------------------------------
On each Interest Determination Date, the Trustee shall determine the
Certificate Index for the Accrual Period and inform the Servicers of such rate.
SECTION 8.15 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.
---------------------------------------------------------
In the event that any REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by a Servicer of its duties and obligations set forth
herein, that Servicer shall indemnify the Trustee and the Trust Fund against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; provided, however, that neither Servicers shall be liable
for any such Losses attributable to the negligence of the Trustee, the Depositor
or the Holder of such Class R Certificate, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of such Class R
Certificate on which such Servicer has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall either Servicer have any liability (1) for
any action or omission that is taken in accordance with and in compliance with
the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by such Servicer of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.
--------------------------------------------------------
(a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Seller, the Servicers, the Special Servicer and the Trustee
created hereunder with respect to the Trust Fund shall terminate upon the
earlier of (a) the purchase by Olympus of all Mortgage Loans (and REO
Properties) remaining at the price equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan (other than in respect of REO Property)
plus one month's accrued interest thereon at the applicable Mortgage Rate and
(ii) with respect to any REO Property, the lesser of (x) the appraised value of
any REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Depositor at the expense of the Depositor
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
Property, in each case and related to any REO Property, in each case plus
accrued and unpaid interest thereon at the applicable Mortgage Rate and (iii)
any unreimbursed Advances, Servicing Advances and Servicing Fees payable to any
Servicer other than Olympus which shall be entitled to withdraw such amounts
from the applicable Collection Account pursuant to Section 3.09(a) and (b) the
later of (i) the maturity or other liquidation (or any Advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof. The right to repurchase all Mortgage Loans and REO Properties
pursuant to clause (a) above shall be conditioned upon the aggregate Stated
Principal Balance of the Mortgage Loans, at the time of any such repurchase,
aggregating less than ten percent of the Aggregate Collateral Balance as of the
Cut-off Date.
SECTION 9.02 Final Distribution on the Certificates.
--------------------------------------
If on any Determination Date, the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Accounts and Certificate Account, the Trustee
shall promptly send a final distribution notice to each Certificateholder. If
Olympus elects to terminate the Trust Fund pursuant to Section 9.01, at least 20
days prior to the date notice is to be mailed to the affected
Certificateholders, Olympus shall notify any other Servicer and the Trustee of
the date it intends to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of Certificates
118
at the office therein designated, (b) the amount of such final distribution,
(c) the location of the office or agency at which such presentation and
surrender must be made, and (d) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Trustee shall give such notice to each Rating Agency at the time such
notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case on
the final Distribution Date in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, an amount equal
to (i) as to each Class of Offered Certificates, (A) an amount equal to the
Class Principal Balance thereof plus Current Interest and any Carryforward
Interest in accordance with the priority of distributions set forth in Section
4.02 and (B) to the extent of available funds (other than funds described in
clause (ii) below) after the distributions in clause (i)(A) above, the amounts
referred to and in the order described in Section 4.02(d) B. through I. and (ii)
as to the Class X Certificates, the amount due to the Class X Certificate under
this agreement, not paid (but in no way exceeding the amount in the Collection
Account).
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take reasonable and
appropriate steps, or may appoint an agent to take reasonable and appropriate
steps, to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto and the Trustee shall
be discharged from all further liability with respect to the Certificates and
this Agreement.
SECTION 9.03 Additional Termination Requirements.
-----------------------------------
(a) In the event Olympus exercises its purchase option with respect to the
Mortgage Loans as provided in Section 9.01, at such time as the Mortgage Loans
are so purchased, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been provided with an
Opinion of Counsel, at the expense of Olympus, to the effect that the failure to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on "prohibited transactions" on any REMIC as defined in
Section 860E of the Code, or (ii) cause any REMIC to fail to qualify as a REMIC
at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set forth
in the notice given by the Trustee under Section 9.02, the Depositor
shall prepare and the Trustee shall adopt a plan of complete
liquidation within the meaning of Section 860F(a)(4) of the Code
which, as evidenced by an Opinion of Counsel
119
(which opinion shall not be an expense of the Trustee or the Trust
Fund), meets the requirements of a qualified liquidation;
(2) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of the
Trust Fund to the Depositor for cash in accordance with Section 9.01;
and
(3) On the date specified for final payment of the Certificates,
the Trustee shall, after payment of any unreimbursed Advances,
Servicing Advances, Servicing Fees or other fee compensation payable
to the Servicer pursuant to this Agreement, make final distributions
of principal and interest on the Certificates in accordance with
Section 4.02 and distribute or credit, or cause to be distributed or
credited, to the Holders of the Residual Certificates all cash on hand
after such final payment (other than the cash retained to meet
claims), and the Trust Fund (and each REMIC) shall terminate at that
time.
(b) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Depositor,
and the receipt of the Opinion of Counsel referred to in Section 9.03(a)(1) and
to take such other action in connection therewith as may be reasonably requested
by the Depositor.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to prepare and the Trustee to adopt and sign a plan of
complete liquidation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
---------
This Agreement may be amended from time to time by the Depositor, the
Servicers, the Seller and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or the Servicers, (iv) in connection with the appointment
of a successor Servicer, to modify, eliminate or add to any of the servicing
provisions contained in this Agreement, providing the Rating Agencies confirm
the then current rating of the Certificates giving effect to such amendment, (v)
to add any other provisions with respect to matters or questions arising
hereunder or (vi) to modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement; and, provided, further, that any action
pursuant to clauses (v) or (vi) above shall not, as evidenced by an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee or the
Trust Fund, but shall be at the expense of the party proposing such amendment),
adversely affect in any material respect the interests of any Certificateholder;
provided, however, that no such Opinion of Counsel shall be required if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates (without regard to the FSA
Policy). The Trustee, the Depositor, the Seller and the Servicers also may at
any time and from time to time amend this Agreement without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of any
REMIC as a REMIC under the Code, (ii) avoid or minimize the risk of the
imposition of any tax on any REMIC pursuant to the Code that would be a claim at
any time prior to the final redemption of the Certificates or (iii) comply with
any other requirements of the Code; provided, that the Trustee has been provided
an Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the Trust
Fund, to the effect that such action is necessary or helpful to, as applicable,
(i) maintain such qualification, (ii) avoid or minimize the risk of the
imposition of such a tax or (iii) comply with any such requirements of the Code.
Notwithstanding the foregoing, FSA's written consent shall be required for
any amendment that adversely affects in any respect the rights and interest
hereunder of FSA or of the Class A-1 and Class A-2 Certificateholders (without
regard to the FSA Policy).
This Agreement may also be amended from time to time by the Depositor, the
Servicers, the Seller and the Trustee with the consent of the Holders of each
Class of Certificates affected thereby evidencing 66% of the aggregate Class
Principal Balance of such Class for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, or (ii) reduce the
aforesaid percentages of Certificates the Holders of
121
which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, but shall be at the expense of the party requesting
such amendment, to the effect that such amendment will not cause the imposition
of any tax on any REMIC or the Certificateholders or cause any REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section 10.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01. The Trustee shall have no obligation to consent to any amendment
that it reasonably believes will materially and adversely affect its rights or
immunities under this Agreement.
Notwithstanding anything in this Section 10.01 to the contrary, the rights
and obligations of the Special Servicer contained in this Agreement (including,
without limitation, as set forth in Section 3.03 hereof) may not be amended,
modified or supplemented in any manner without the prior written consent of the
Special Servicer.
SECTION 10.02 Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Depositor at its expense, but only upon direction by the
Trustee (acting at the direction of holders of Certificates evidencing a
majority of the aggregate Class Principal Balance) accompanied by an Opinion of
Counsel (at the Depositor's expense) to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders.
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
122
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
SECTION 10.03 Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 10.04 Intention of Parties.
--------------------
It is the express intent of the parties hereto that the conveyance of the
Trust Fund, including the Mortgage Loans, by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof. It is, further, not the intention
of the parties that such conveyance be deemed a pledge thereof. However, in the
event that, notwithstanding the intent of the parties, such assets are held to
be the property of the Depositor, or if for any other reason this Agreement is
held or deemed to create a security interest in either such assets, then (i)
this Agreement shall be deemed to be a security agreement within the meaning of
the Uniform Commercial Code of the State of New York and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets transferred, whether now owned or
hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Trust Fund, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Agreement. The Depositor shall arrange for filing any
Uniform Commercial Code continuation statements in connection with any security
interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
SECTION 10.05 Notices.
-------
The Trustee shall use its best efforts to promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and the
appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to Sections
2.02 and 2.03; and
123
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
1. Each report to Certificateholders described in Section 4.05 and 3.21;
2. Each annual statement as to compliance described in Section 3.17;
3. Each annual independent public accountants' servicing report described
in Section 3.18; and
4. Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02,
2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing and shall
be deemed to have been duly given when delivered to (a) in the case of the
Depositor, 1l Madison Avenue, 4th Floor, New York, New York 10010, Attention:
Xxxxxxx X. Xxxxxx (with a copy to Credit Suisse First Boston Mortgage Securities
Corp., 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Office
of the General Counsel), (b) in the case of the Trustee, at the Corporate Trust
Office or such other address as the Trustee may hereafter furnish to the
Depositor and the Servicer, (c) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency, (d) in the case of Ocwen, Ocwen Federal Bank FSB, 0000 Xxxx Xxxxx
Xxxxx Xxxx., Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000, Attention: Secretary, (e) in
the case of Olympus, Olympus Servicing, L.P., 0000 Xxxxx Xxxxx Xxxxx, Xxxxx
000-X Xxxxxx, Xxxxx 00000, Attention: Xxxx Xxxx. Notices to Certificateholders
shall be deemed given when mailed, first class postage prepaid, to their
respective addresses appearing in the Certificate Register.
SECTION 10.06 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.02 and 6.04, this Agreement may not be assigned by a
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
124
petition or winding up of the trust created hereby, or otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as herein provided, and unless the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09 Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
SECTION 10.10 Protection of Assets.
--------------------
(a) Except for transactions and activities entered into in connection with
the securitization that is the subject of this agreement, the trust created by
this agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
125
(iii) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file an
involuntary bankruptcy petition against the Trust Fund or initiate any other
form of insolvency proceeding until after the Certificates have been paid.
126
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller, the Servicers
and the Special Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By: ______________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: ______________________________________
Name:
Title:
DLJ MORTGAGE CAPITAL, INC.,
as Seller
By: ______________________________________
Name:
Title:
OLYMPUS SERVICING, L.P.,
as a Servicer and as the Special
Servicer
By: ______________________________________
Name:
Title:
OCWEN FEDERAL BANK FSB,
as a Servicer
By: ______________________________________
Name:
Title:
000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK)
On this ___ day of January, 2002, before me, personally appeared
____________, known to me to be a _______ of Credit Suisse First Boston Mortgage
Securities Corp., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the ___ day of January, 2002, before me, personally appeared __________,
known to me to be a _________________ of DLJ Mortgage Capital, Inc., one of the
corporations that executed the within instrument and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA)
: ss.:
COUNTY OF XXXXXX )
On the ____ of January, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
U.S. Bank National Association, the national banking association that executed
the within instrument and also known to me to be the person who executed it on
behalf of said national banking association, and acknowledged to me that such
national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
STATE OF TEXAS )
: ss.:
COUNTY OF XXXXXX)
On the ____ of January, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
Olympus Servicing, L.P., the Delaware limited partnership that executed the
within instrument and also known to me to be the person who executed it on
behalf of said Delaware limited partnership, and acknowledged to me that such
Delaware limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
STATE OF FLORIDA )
: ss.:
COUNTY OF PALM BEACH)
On the ____ of January, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
Ocwen Federal Bank FSB, one of the parties that executed the within instrument
and also known to me to be the person who executed it on behalf of said
federally chartered savings bank, and acknowledged to me that such federally
chartered savings bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[NOTARIAL SEAL]
EXHIBIT A
[FORM OF CLASS A-[o] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Pass-Through Rate :
Maturity Date : August 2032
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class A-[o]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust
Fund consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers, the Trustee or the
Special Servicer referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc., as seller (in such capacity,
"Seller"), Olympus Servicing, L.P., as a servicer (in such capacity, a
"Servicer") and as the special servicer (in such capacity, the "Special
Servicer"), Ocwen Federal Bank FSB, as a servicer (in such capacity, a
"Servicer) and U.S. Bank National Association as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ______________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class A-[o]
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage Pass-Through
Certificates, Series 2002-HE1, of the Series specified on the face hereof
(herein collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month, or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is (1) with respect to all Definitive Certificates, the last
business day of the month preceding the Distribution Date and (2) with respect
to all Certificates held in Book-Entry Form only, the Business Day immediately
preceding the Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or agency
maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, FSA, the Seller,
the Trustee, and any agent of the Depositor or the Trustee may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Servicers, the Special Servicer, FSA, the Seller, the
Depositor, the Trustee or any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Aggregate Loan Balance as
of the Cut-off Date and the amount on deposit in the Prefunding Account on the
Closing Date, Olympus will have the option to repurchase, in whole, from the
Trust Fund all remaining Mortgage Loans and all property acquired in respect of
the Mortgage Loans at a purchase price determined as provided in the Agreement.
In the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
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-[o] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
B-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date : August 2032
B-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class M-[o]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust
Fund consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers, or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc., as seller (in such capacity,
"Seller"), Olympus Servicing, L.P., as a servicer (in such capacity, a
"Servicer") and as the special servicer (in such capacity, the "Special
Servicer"), Ocwen Federal Bank FSB, as a servicer (in such capacity, a
"Servicer) and U.S. Bank National Association as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
B-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class M-[o]
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2002-HE1, of the Series specified on
the face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month, or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is (1) with respect to all Definitive Certificates, the last
business day of the month preceding the Distribution Date and (2) with respect
to all Certificates held in Book-Entry Form only, the Business Day immediately
preceding the Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment
B-5
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 St. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the Seller, the
Trustee and any agent of the Depositor or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and none of the Servicers, the Special Servicer, the Seller, the Depositor, the
Trustee or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Aggregate Loan Balance as
of the Cut-off Date, and the amount on deposit in the Prefunding Account on the
Closing Date, Olympus will have the option to repurchase, in whole, from the
Trust Fund all remaining Mortgage Loans and all property acquired in respect of
the Mortgage Loans at a purchase price determined as provided in the Agreement.
In the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
B-6
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
B-8
EXHIBIT C
[FORM OF CLASS B CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
C-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date : August 2032
C-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class B
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust
Fund consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time may
be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers, or the Trustee referred
to below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc., as seller (in such capacity,
"Seller"), Olympus Servicing, L.P., as a servicer (in such capacity, a
"Servicer") and as the special servicer (in such capacity, the "Special
Servicer"), Ocwen Federal Bank FSB, as a servicer (in such capacity, a
"Servicer) and U.S. Bank National Association as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust Fund,
(ii) if the purchaser is an insurance company, a representation that the
purchaser is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60 or
(iii) in the case of any such Certificate presented for registration in the name
of an employee benefit plan subject to ERISA, or Section 4975 of the Code (or
comparable provisions of any
C-3
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement, or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee to the effect that the
purchase or holding of such Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee or
the Servicer to any obligation in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Trustee or
the Trust Fund. Notwithstanding anything else to the contrary herein, any
purported transfer of a Certificate to or on behalf of an employee benefit plan
subject to ERISA or to the Code without the Opinion of Counsel satisfactory to
the Trustee as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
C-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class B
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2002-HE1, of the Series specified on
the face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by the
Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is (1) with respect to all Definitive Certificates, the last business day of the
month preceding the Distribution Date and (2) with respect to all Certificates
held in Book-Entry Form only, the Business Day immediately preceding the
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicers, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment
C-6
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 St. Xxxx, Minnesota, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the Seller, the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Servicers, the Special Servicer, the Seller, the Depositor, the Trustee or
any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Mortgage Loans is less than 10% of the Aggregate Loan Balance as of the
Cut-off Date, and the amount on deposit in the Prefunding Account on the Closing
Date, Olympus will have the option to repurchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
C-7
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-8
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to __________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
C-9
EXHIBIT D
[FORM OF CLASS R CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AND IS NOT INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, OR, IF THE PURCHASER IS AN INSURANCE COMPANY, A REPRESENTATION IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN, OR AN
OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED
TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED
TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT
TO ERISA OR TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
D-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") : $
Initial Certificate Principal Balances
of all Certificates
of this Class : $
CUSIP :
Pass-Through Rate :
Maturity Date : August 2032
D-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class R
evidencing a percentage interest in the distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily
of a pool of fixed rate and adjustable rate conventional mortgage
loans (the "Mortgage Loans") secured by first liens on one- to
four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Principal Balance at any
time may be less than the Certificate Principal Balance as set forth
herein. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Seller, the Servicers or
the Trustee referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured
by any governmental agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate
of the denominations of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a
Trust Fund consisting primarily of the Mortgage Loans deposited by Credit
Suisse First Boston Mortgage Securities Corp. (the "Depositor"). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"), Olympus
Servicing, L.P., as a servicer (in such capacity, a "Servicer") and as the
special servicer (in such capacity, the "Special Servicer"), Ocwen Federal
Bank FSB, as a servicer (in such capacity, a "Servicer) and U.S. Bank
National Association as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which
such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the Corporate Trust Office or the office or agency
maintained by the Trustee in New York, New York.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of
the Code, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement to effect such transfer,
which representation letter shall not be an expense of the Trustee or the
Trust Fund, (ii) if the purchaser is an insurance company, a representation
that the
D-3
purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such
term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60") and that the purchase and holding of such Certificates
satisfy the requirements for exemptive relief under Sections I and III of
PTCE 95-60, or (iii) in the case of any such Class R Certificate presented
for registration in the name of an employee benefit plan subject to ERISA,
or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement, or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee to
the effect that the purchase or holding of such Class R Certificate will
not result in the assets of the Trust Fund being deemed to be "plan assets"
and subject to the prohibited transaction provisions of ERISA and the Code
and will not subject the Trustee to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee or the Trust Fund. Notwithstanding anything else to
the contrary herein, any purported transfer of a Class R Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code
without the Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect.
Each Holder of this Class R Certificate will be deemed to have
agreed to be bound by the restrictions of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class R Certificate must be a Permitted
Transferee, (ii) no Ownership Interest in this Class R Certificate may be
transferred without delivery to the Trustee of a transfer affidavit of the
initial owner or the proposed transferee in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in
this Class R Certificate must agree to require a transfer affidavit from
any other person to whom such person attempts to Transfer its Ownership
Interest in this Class R Certificate as required pursuant to the Agreement,
(iv) each person holding or acquiring an Ownership Interest in this Class R
Certificate must agree not to transfer an Ownership Interest in this Class
R Certificate if it has actual knowledge that the proposed transferee is
not a Permitted Transferee and (v) any attempted or purported transfer of
any Ownership Interest in this Class R Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in
the purported transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By:________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:____________________________
Authorized Signatory
D-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class R
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE1, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to
the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which
this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date applicable to each Distribution Date is (1) with
respect to all Definitive Certificates, the last business day of the month
preceding the Distribution Date and (2) with respect to all Certificates
held in Book-Entry Form only, the Business Day immediately preceding the
Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first
class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such
Certificate at the Corporate Trust Office or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Servicers, the Seller and the Trustee with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by
D-6
the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Depositor, the Servicers, the Special Servicer, the Seller,
the Trustee and any agent of the Depositor or the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property in respect thereof and the
distribution to Certificateholders of all amounts required to be
distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
D-7
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-8
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to __________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
D-9
EXHIBIT E
[FORM OF CLASS X CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS
THE TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AND IS NOT INVESTING ON BEHALF OF OR
WITH PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR, IF THIS CERTIFICATE HAS BEEN THE
SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING AND THE PURCHASER IS AN
INSURANCE COMPANY, A REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN, OR AN OPINION OF COUNSEL IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS
CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES XXX 0000, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION
EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
E-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Percentage Interest :
CUSIP :
Maturity Date : August 2032
E-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a Trust
Fund consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed
or insured by any governmental agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate
of the denominations of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a
Trust Fund consisting primarily of the Mortgage Loans deposited by Credit
Suisse First Boston Mortgage Securities Corp. (the "Depositor"). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"), Olympus
Servicing, L.P., as a servicer (in such capacity, a "Servicer") and as the
special servicer (in such capacity, the "Special Servicer"), Ocwen Federal
Bank FSB, as a servicer (in such capacity, a "Servicer) and U.S. Bank
National Association as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder
of this Certificate by virtue of the acceptance hereof assents and by which
such Holder is bound.
No transfer of a Certificate of this Class shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of
the Code, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement to effect such transfer,
which representation letter shall not be an expense of the Trustee or the
Trust Fund, (ii) if the Certificate has been the subject of an
ERISA-Qualifying Underwriting and the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60 or (iii) in the case of any such
Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any
E-3
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement, or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee to
the effect that the purchase or holding of such Certificate will not result
in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and
will not subject the Trustee or the Servicers to any obligation in addition
to those undertaken in this Agreement, which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund. Notwithstanding anything
else to the contrary herein, any purported transfer of a Certificate to or
on behalf of an employee benefit plan subject to ERISA or to the Code
without the Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect.
No transfer of a Certificate of this Class shall be made unless
such transfer is made purusant to an effective registration statement under
the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer. In
the even tthat such a transfer is to be made within three years from the
date of the initial issuance of Certificate pursuant hereto, there shall
also be delivered (except in the case of a transfer purusant to Rule 144A
of the Securities Act) to the Trustee an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act and
such state securites laws, which Opinion of Counsel shall not be obtained
at the expense of the Trustee, the Seller, the Servicers, the Special
Servicer or the Depositor. The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor against any liability that may result if the transfer is not so
exempt or is not made inaccordance with such federal and state laws.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
E-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Name:
Title
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _______________________________
Authorized Signatory
E-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class X
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE1, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to
the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which
this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date applicable to each Distribution Date is (1) with
respect to all Definitive Certificates, the last day of the calendar month
preceding the month in which such Distribution Date occurs and (2) with
respect to all Certificates in Book-Entry Form only, the Business Day
immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first
class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such
Certificate at the Corporate Trust Office or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Servicers, the Seller and the Trustee with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by
E-6
the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Depositor, the Servicers, the Special Servicer, the Seller,
the Trustee and any agent of the Depositor or the Trustee may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property in respect thereof and the
distribution to Certificateholders of all amounts required to be
distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
E-7
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-8
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to __________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
E-9
EXHIBIT F
[FORM OF CLASS A-IO CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS
A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO
ANY DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
F-1
Certificate No. :
Cut-off Date : January 1, 2002
First Distribution Date : February 25, 2002
Initial Notional Amount of this
Certificate ("Denomination") :
Initial Class Notional Amount of
all Certificates of this Class :
Percentage Interest : 100%
CUSIP :
Pass-Through Rate :
Maturity Date : August 2032
F-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class A-IO
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed
or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of
the Mortgage Loans deposited by Credit Suisse First Boston Mortgage
Securities Corp. (the "Depositor"). The Trust Fund was created pursuant to
a Pooling and Servicing Agreement dated as of the Cut-off Date specified
above (the "Agreement") among the Depositor, DLJ Mortgage Capital, Inc., as
seller (in such capacity, "Seller"), Ocwen Federal Bank FSB ("Ocwen") as a
servicer, Olympus Servicing L.P., as a servicer ("Olympus" and, together
with Ocwen, the "Servicers") and U.S. Bank National Association as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of
the Agreement, to which Agreement the Holder of this Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
F-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: January __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: January __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
F-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE1
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class A-IO
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE1, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE1, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and
representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby,
and the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to
the Person in whose name this Certificate is registered at the close of
business on the applicable Record Date in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount
required to be distributed to Holders of Certificates of the Class to which
this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date applicable to each Distribution Date is (1) with
respect to all Definitive Certificates, the last business day of the month
preceding the Distribution Date and (2) with respect to all Certificates
held in Book-Entry Form only, the Business Day immediately preceding the
Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least
five Business Days prior to the related Record Date and such
Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first
class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be
made in like manner, but only upon presentment and surrender of such
Certificate at the Corporate Trust Office or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Servicers, the Seller and the Trustee with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by
F-5
the Holder of this Certificate shall be conclusive and binding on such
Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Depositor, the Servicers, the Seller, the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and
none of the Servicers, the Seller, the Depositor, the Trustee, or any such
agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property in respect thereof and the
distribution to Certificateholders of all amounts required to be
distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
F-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to __________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
F-7
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Servicers]
[Seller]
[Class A Certificate Insurer]
Re: Pooling and Servicing Agreement among the Depositor, DLJ Mortgage
Capital, Inc., as seller (in such capacity, "Seller"), Ocwen Federal
Bank FSB ("Ocwen") as a servicer, Olympus Servicing, L.P., as a
servicer and special servicer ("Olympus") and U.S. Bank National
Association as trustee (the "Trustee") CSFB Mortgage Pass-Through
Certificates, Series 2002- HE1
--------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as Custodian, hereby certifies that, as to each Mortgage Loan
listed in each Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed Assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and relate to such
Mortgage Loan.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each
Mortgage File of any of the Mortgage Loans identified on either Mortgage
Loan Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan.
G-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing
Agreement.
BANK ONE TRUST COMPANY, N.A.,,
as Custodian
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
G-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Servicers]
[Seller]
[Class A Certificate Insurer]
Re: Pooling and Servicing Agreement among the Depositor, DLJ Mortgage
Capital, Inc., as seller (in such capacity, "Seller"), Ocwen Federal
Bank FSB ("Ocwen") as a servicer, Olympus Servicing, L.P., as a
servicer and special servicer ("Olympus") and U.S. Bank National
Association as trustee (the "Trustee") CSFB Mortgage Pass-Through
Certificates, Series 2002- HE1
--------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as Custodian, hereby certifies that as to each Mortgage Loan
listed in each Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attached Document Exception Report) it has received:
(i) the original Mortgage Note, endorsed in the form provided in
Section 2.01(b) of the Pooling and Servicing Agreement, with all
intervening endorsements, and including any riders to the Mortgage Note,
showing a complete chain of endorsement from the originator to the last
named endorsee;
(ii) with respect to any Lost Mortgage Note, a lost note
affidavit stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(iii) the original of any guarantee executed in connection with
the Mortgage Note (if any);
(iv) the original Mortgage with evidence of recording thereon, or
copies certified by the related recording office or if the original
Mortgage has not yet been returned from the recording office, a copy
certified by or on behalf of the Seller indicating that such Mortgage has
been delivered for recording;
(v) the originals of all assumption, modification, consolidation
or extension agreements (or, if an original of any of these documents has
not been returned from the recording office, a copy thereof certified by or
on behalf of the Seller, the original to be delivered to the Seller
forthwith after return from such recording office), with evidence of
recording thereon, if any;
H-1
(vi) a duly executed assignment of the Mortgage in the form
provided in Section 2.01(b) of the Pooling and Servicing Agreement;
provided, however, that if the Depositor has certified or the Trustee
otherwise knows that the related Mortgage has not been returned from the
applicable recording office, a copy of the Assignment of the Mortgage
(excluding information to be provided by the recording office);
(vii) the original of any intervening recorded Assignments of
Mortgage, showing a complete chain of assignment from origination to the
related Seller, including warehousing assignments, with evidence of
recording thereon (or, if an original intervening Assignment of Mortgage
has not been returned from the recording office, a copy thereof certified
by or on behalf of the Seller);
(viii) the original or duplicate original lender's title
insurance policy and all riders thereto or, any one of an original title
binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company (or, in
appropriate jurisdictions, attorney's opinion of title and abstract of
title); and
(ix) the original primary mortgage insurance certificate, if any
or copy of mortgage insurance certificate.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to
such Mortgage Loan, and (b) the information set forth in items (i), (ii),
(iii), (iv), (vi), (ix) and (x) of the definition of the "Mortgage Loan
Schedule" in Article I of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each
Mortgage File of any of the Mortgage Loans identified on either Mortgage
Loan Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan. Notwithstanding anything herein to
the contrary, the Custodian has made no determination and makes no
representations as to whether (i) any endorsement is sufficient to transfer
all right, title and interest of the party so endorsing, as noteholder or
assignee thereof, in and to that Mortgage Note or (ii) any assignment is in
recordable form or sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which the assignment relates.
H-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing
Agreement.
BANK ONE TRUST COMPANY, N.A.,
as Custodian
By: _________________________________
Name: _______________________________
Title: ______________________________
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class [_______]
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ______________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among the Depositor,
DLJ Mortgage Capital, Inc., as seller (in such capacity, "Seller"), Ocwen
Federal Bank FSB ("Ocwen"), Olympus Servicing, L.P., as a servicer and
special servicer ("Olympus", together with Ocwen as the "Servicers") and
U.S. Bank National Association as trustee (the "Trustee"). Capitalized
terms used, but not defined herein or in Exhibit 1 hereto, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the
Transferee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account.
The Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent;
and (iii) the Person otherwise liable for the tax shall be relieved of
liability for the tax if the subsequent Transferee furnished to such Person
an affidavit that such subsequent Transferee is a Permitted Transferee and,
at the time of Transfer, such Person does not have actual knowledge that
the affidavit is false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at
any time during the taxable year of the pass-through entity a Person that
is not a Permitted Transferee is the record holder of an interest in such
entity. The Transferee understands that such tax will not be imposed for
any period with respect to which the record holder furnishes to the
pass-through entity an affidavit that such record holder is a Permitted
Transferee and the pass-through entity does not have actual knowledge that
such affidavit is false. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate investment trust or
common trust fund, a partnership, trust or estate, and certain cooperatives
and, except as may be provided in Treasury Regulations, persons holding
interests in pass-through entities as a nominee for another Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding
the Transfer and mandatory sales. The Transferee expressly agrees to be
bound by and to abide by the provisions of Section 5.02(c) of the Agreement
and the restrictions noted on the face of the Certificate. The Transferee
understands and agrees that any breach of any of the representations
included herein shall render the Transfer to the Transferee contemplated
hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest
in the Certificate, and in connection with any Transfer by a Person for
whom the Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause any Ownership
Interest to be Transferred to any Person that the Transferee knows is not a
Permitted Transferee. In connection with any such Transfer by the
Transferee, the Transferee agrees to deliver to the Trustee a certificate
substantially in the form set forth as EXHIBIT J to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with
respect to the Certificate.
8. The Transferee's taxpayer identification number is
[_____________].
9. The Transferee is a United States Person.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
11. In accordance with Revenue Procedure 2001-12, I.R.B. 2001-2,
(a) the consideration paid to the Transferee for accepting the
Class R Certificates is greater than the present value of the anticipated
net federal income taxes and tax benefits ("Tax Liability Present Value")
associated with owning such Certificates, with such present value computed
suing a discount rate equal to the "applicable federal rate" prescribed by
Section 1274 of the Internal Revenue Code as of the date hereof (with all
applicable computations done in accordance with Rev. Proc. 2001-12) or, to
the extent it is not, if the Transferee has asserted that it regularly
borrows, in the ordinary course of its trade or business, substantial funds
from unrelated third parties at a lower interest rate than such applicable
federal rate and the consideration paid to the Transferee is greater than
the Tax Liability Present Value using such lower interest rate as the
discount rate, the transactions with the unrelated third party lenders, the
interest rate or rates, the date or dates of such transactions, and the
maturity dates or, in the case of adjustable rate debt instruments, the
relevant adjustment dates or periods, with respect to such borrowings, are
accurately stated in Exhibit A to this letter; or
I-2
(b) the Transferee (i) is an "eligible corporation" as defined in
Section 860L(a)(2) of the Internal Revenue Code, as to which the income of
Class R Certificates will only be subject to taxation in the United States,
(ii) has, and has had in each of its two preceding fiscal years, gross
assets for financial reporting purposes (excluding any obligation of a
person related to the transferee within the meaning of Section 860L of the
Internal Revenue Code) in excess of $100 million and net assets of $10
million, and (iii) hereby agrees only to transfer the Certificate to
another corporation meeting the criteria set forth in this letter.
12. (a) The Transferee is not an employee benefit plan that is
subject to ERISA or a plan that is subject to Section 4975 of the Code, and
the Transferee is not acting on behalf of or investing plan assets of such
a plan; or
(b) The transferee is an insurance company that is acquiring the
Certificate with assets in an "insurance company general account" (as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60), and the acquisition and holding of the ERISA-Restricted Certificate
satisfy the requirements for exemptive relief under Sections I and III of
PTCE 95-60.
I-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto
affixed, duly attested, this __ day of _______, 20__ .
_____________________________________
Print Name of Transferee
By: _________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or proved
to me to be the same person who executed the foregoing instrument and to be
the of the Transferee, and acknowledged that he executed the same as his
free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day __of _________, 20__.
_____________________________________
NOTARY PUBLIC
My Commission expires the __ day of
_________, 20 .
I-4
EXHIBIT 1
to
EXHIBIT I
Certain Definitions
-------------------
"Ownership Interest": As to any Residual Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as
the Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
"Permitted Transferee": Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form 4224, and (vi) any other Person so designated by the
Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause the Trust Fund
hereunder to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality
of the United States or of any State or political subdivision thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
I-2-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
--------------------------------
(c) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except in connection with any transfer of a Private Certificate by the
Depositor to any affiliate, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts surrounding
the transfer in substantially the form set forth in Exhibit J (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee shall cooperate with
the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Seller, each Servicer and the Special Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee substantially in the form of Exhibit K or L, in the case of a
Private Certificate, or Exhibit I, in the case of a Residual Certificate, to
the effect that (a) such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement
using the assets of any such plan or arrangement to effect such transfer or
(b) if the ERISA-Restricted Certificate has been the subject of an
ERISA-Qualifying Underwriting, it is being purchased by an "insurance company
general account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the acquisition and holding of the
ERISA-Restricted Certificate satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60; or (ii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
I-2-1
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee, the Servicers or the Special Servicer to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
The transferee of an ERISA-Restricted Certificate that is a Book-Entry
Certificate, by its acceptance of the Book-Entry Certificate, will be deemed
to make the representation in clauses (a) or (b) above. In the event that a
representation is violated, or any transfer to a plan or person acting on
behalf of a plan or using a plan's assets is attempted without the delivery to
the Trustee of the Opinion of Counsel described above, the attempted transfer
or acquisition shall be void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
I-2-2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates, Series
2002-HE1, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Class R Certificate, we have no knowledge the Transferee is not a Permitted
Transferee.
Very truly yours,
___________________________
Print Name of Transferor
By: ___________________________
Authorized Officer
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates,
Series 2002-HE1, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) provided the Certificate has
been the subject of an ERISA Qualifying Underwriting, we are an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we are acquiring the Certificates for investment for our
own account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (f) we have not offered
or sold any Certificates to, or solicited offers to buy any Certificates from,
any person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of
Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose
of any Certificates unless (1) such sale, transfer or other disposition is
made pursuant to an effective registration statement under the Act or is
exempt from such registration requirements, and if requested, we will at our
expense provide an opinion of counsel satisfactory to the addressees of this
Certificate that such sale, transfer or other disposition may be made
K-1
pursuant to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling
and Servicing Agreement.
Very truly yours,
___________________________
Print Name of Transferee
By: ___________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates,
Series 2002-HE1, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement or using the assets of any such plan or
arrangement to effect such acquisition, or (ii) provided the Certificate has
been the subject of an ERISA-Qualifying Underwriting, we are an insurance
company which is purchasing the Certificates with funds contained in an
"insurance company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and our purchase and holding
of the Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Certificates, any
interest in the Certificates or any other similar security from, or otherwise
approached or negotiated with respect to the Certificates, any interest in the
Certificates or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Certificates under the Act or that would render the disposition of the
Certificates a violation of Section 5 of the Act or require registration
pursuant thereto, nor will act, nor has authorized or will authorize any
person to act, in such manner with respect to the Certificates, (f) we are a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Act ("Rule 144A") and have
L-1
completed either of the forms of certification to that effect attached hereto
as Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in
reliance on Rule 144A, and (i) we are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (A) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (B) pursuant to another exemption from registration under the
Act.
Very truly yours,
___________________________
Print Name of Transferee
By: ___________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $__________1 in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization described
in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking and
is supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $[o] as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $[o] as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the
-------------------
1 Buyer must own and/or invest on a discretionary basis at lease
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
L-1-1
insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of
this certification as of the date of such purchase. In addition, if the
L-1-2
Buyer is a bank or savings and loan is provided above, the Buyer agrees that
it will furnish to such parties updated annual financial statements promptly
after they become available.
_____________________
Print Name of Buyer
By: _____________________
Name:
Title:
Date: ___________________
X-0-0
XXXXX 0 XX XXXXXXX L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $[o] in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
___ The Buyer owned $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $_______ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
L-2-1
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
______________________________
Print Name of Buyer or Adviser
By: _____________________
Name:
Title:
IF AN ADVISER:
___________________________
Print Name of Buyer
Date: ___________________
L-2-2
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2002-HE1
Class [_______]
Loan Information
----------------
Name of Mortgagor: __________________________________
Servicer Loan No.: __________________________________
Trustee
-------
Name:
Address: __________________________________
__________________________________
__________________________________
Trustee Mortgage File No.:
The undersigned Servicers hereby acknowledge that they have received
from [Bank One, National Association] [LaSalle Bank National Association] as
Custodian for the Holders of CSFB Mortgage Pass-Through Certificates, of the
above-referenced Series, the documents referred to below (the "Documents").
All capitalized terms not otherwise defined in this Request for Release shall
have the meanings given them in the Pooling and Servicing Agreement dated as
of the Cut-off Date specified above (the "Agreement") among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"), Ocwen Federal
Bank FSB ("Ocwen"), Olympus Servicing, L.P., as a servicer and special
servicer ("Olympus", and together with Ocwen, the "Servicers") and U.S. Bank
National Association as trustee (the "Trustee").
( ) Mortgage Note dated ________, ____, in the original principal sum of
$_______, made by _________, payable to, or endorsed to the order of, the
Trustee.
( ) Mortgage recorded on __________ as instrument no. _________ in the
County Recorder's Office of the County of _________, State of _________
in book/reel/docket of official records at page/image ___________.
( ) Deed of Trust recorded on __________ as instrument no. __________ in
the County Recorder's Office of the County of __________, State of
_________ in book/reel/docket ______ of official records at page/image
______.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
______as instrument no. ______ in the County Recorder's Office of the
County of ______, State of ________ in book/reel/docket ____ of official
records at page/image ____.
M-1
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( )
( )
( )
( )
The undersigned Servicers hereby acknowledge and agree as follows:
(1) Each Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) Each Servicer shall not cause or knowingly permit the Documents
to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor
shall the Servicers, if applicable, assert or seek to assert any
claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) Each Servicer shall return each and every Document previously
requested from the Mortgage File to the Custodian when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided
in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds
of proceeds, coming into the possession or control of each Servicer
shall at all times be earmarked for the account of the Custodian,
and each Servicer shall keep the Documents and any proceeds separate
and distinct from all other property in each Servicer's possession,
custody or control.
[Servicers]
By: _________________
Its _________________
By: _________________
Its _________________
Date: ___________, 2001
M-2
EXHIBIT N
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
[Date]
Via Facsimile
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: [__________________]
Re: Pre-Payments
Dear Sir or Madam:
__________________ hereby certifies that he/she is an officer of the Servicer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Mortgage Loans, as the term is defined in the Pooling and
Servicing Agreement, set forth in the attached schedule:
1. A Principal Prepayment in full was received during the related Due
Period;
2. Any Prepayment Premium due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Collection Account; ____ Yes ____ No
3. As to each Mortgage Loan so noted on the attached schedule, all or part
of the Prepayment Premium required in connection with the Principal
Prepayment in full was waived based upon (Circle one): (i) the Servicer's
determination that such waiver would maximize recovery of Liquidation
Proceeds for such Mortgage Loan, taking into account the value of such
Prepayment Premium, or (ii)(A) the enforceability thereof be limited (1)
by bankruptcy insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
4. We certify that all amounts due in connection with the waiver of a
Prepayment Premium inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section [3.19] of the Pooling
and Servicing Agreement, have been or will be so deposited.
By: [Servicer]
---------------------------------
(Name) ______________________________
Its: Title)__________________________
N-1
EXHIBIT O
FORM OF SERVICER REPORT
The following information will be e-mailed to Trustee in accordance with
Section 4.04:
Servicer Loan Number
Trust Loan Number (if applicable)
Scheduled Net Interest
Scheduled Principal
Curtailment Applied
Curtailment Adjustment
Mortgage Rate
Servicing Fee
P&I Payment
Beginning Scheduled Balance
Ending Scheduled Balance
Ending Actual Principal Balance
Due Date
Prepayment in full Principal
Prepayment in full Net Interest
Prepayment in full Penalty
Delinquencies:
1-29
30-59
60-89
90 +
Foreclosures
Bankruptcies
REO Properties
Loss Amounts
O-1
EXHIBIT P
Financial Security Assurance, Inc. Policy
(Available Upon Request)
P-1
EXHIBIT Q
FORM OF SUBSEQUENT TRANSFER AGREEMENT
THIS SUBSEQUENT TRANSFER AGREEMENT, dated as of [_____], 2002 (this
"Subsequent Transfer Agreement"), among CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., a Delaware corporation, as depositor (the "Depositor"), DLJ
MORTGAGE CAPITAL, INC., a Delaware corporation, in its capacity as seller
under the Pooling and Servicing Agreement referred to below (the "Seller"),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee
(the "Trustee");
WHEREAS, the parties hereto are also among the parties to the
Pooling and Servicing Agreement, dated as of January 1, 2002, among the
Depositor, DLJ Mortgage Capital, Inc., as seller, U.S. Bank National
Association, as trustee, Olympus Servicing, L.P., as a servicer and special
servicer, Ocwen Federal Bank FSB ("Ocwen"), as a servicer, (the "Pooling and
Servicing Agreement"), in relation to the CSFB ABS Trust Series 2002-HE1, CSFB
Mortgage Pass-Through Certificates, Series 2002-HE1;
WHEREAS, Sections 2.01(d) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer
Agreement in accordance with the terms and conditions of the Pooling and
Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:
(i) The "Subsequent Transfer Date" and "Subsequent Cut-off Date"
with respect to this Subsequent Transfer Agreement shall be
[_______________], 2001.
(ii) The "Aggregate Subsequent Purchase Amount" with respect to
this Subsequent Transfer Agreement shall be $[_____________],
provided, however, that such amount shall not exceed the
amount on deposit in the Prefunding Account.
(iii) The Subsequent Mortgage Loans conveyed on the Subsequent
Transfer Date shall satisfy the pool characteristics for the
Trust Fund identified in Section 2.01(d) of the Pooling and
Servicing Agreement.
(iv) In case any provision of this Subsequent Transfer Agreement
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions or
obligations shall not in any way be affected or impaired
thereby.
Q-1
(v) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing
Agreement, the provisions of the Pooling and Servicing
Agreement shall prevail. Capitalized terms used herein and
not otherwise defined have the meanings in the Pooling and
Servicing Agreement.
(vi) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all
right title and interest in the Subsequent Mortgage Loans
identified in Schedule A, including all interest and
principal due on or with respect to such Subsequent Mortgage
Loans on or after the Subsequent Cut-off Date and all
interest and principal payments on such Subsequent Mortgage
Loans received prior to the Subsequent Cut-off Date in
respect of installments of interest and principal due
thereafter, but not including principal and interest due on
such Subsequent Mortgage Loans prior to the Subsequent
Cut-off Date, any insurance policies in respect of such
Subsequent Mortgage Loans and all proceeds of any of the
foregoing.
(vii) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws
of the State of New York.
(viii) The Subsequent Transfer Agreement may be executed in one or
more counterparts, each of which so executed and delivered
shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
Q-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer
Agreement have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By:_____________________________________
Name:
Title:
DLJ Mortgage Capital, Inc.,
as Seller
By:_____________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Trustee
By:_____________________________________
Name:
Title:
S-1
Acknowledged and Agreed:
OLYMPUS SERVICING, L.P.,
as a Servicer and Special Servicer
By:_____________________________________
Name:
Title:
OCWEN FEDERAL BANK FSB,
as a Servicer
By:_____________________________________
Name:
Title:
S-2
SCHEDULE I
Mortgage Loan Schedule
(Provided Upon Request)
I-1
SCHEDULE IIA
Representations and Warranties of Seller - DLJ Mortgage Capital, Inc.
(i) the Seller is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation;
(ii) the Seller has full corporate power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) the execution and delivery by the Seller of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Seller; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated hereby, nor compliance
with the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Seller or its
properties or the certificate of incorporation or by-laws of the Seller,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Seller's ability to enter
into this Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given
or made and, in connection with the recordation of the Mortgages, powers of
attorney or assignments of Mortgages not yet completed;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the Trustee,
the Servicers and the Depositor, constitutes a valid and binding obligation of
the Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(vi) to the knowledge of the Seller, there are no actions,
litigation, suits or proceedings pending or threatened against the Seller
before or by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this Agreement or
(ii) with respect to any other matter which in the judgment of the Seller if
determined adversely to the Seller would reasonably be expected to materially
and adversely affect the Seller's ability to perform its obligations under
this Agreement; and the Seller is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement.
II-1
SCHEDULE IIB
Representations and Warranties of Servicer and Special
Servicer- Olympus Servicing, L.P.
(i) Olympus Servicing, L.P. ("Olympus") is a limited partnership
duly organized, validly existing and in good standing under the laws of the
state of its formation;
(ii) Olympus has full corporate power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(iii) the execution and delivery by Olympus of this Agreement have
been duly authorized by all necessary corporate action on the part of Olympus;
and neither the execution and delivery of this Agreement, nor the consummation
of the transactions herein contemplated hereby, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on Olympus or its properties or
the certificate of incorporation or bylaws of Olympus, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on Olympus's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(iv) this Agreement has been duly executed and delivered by Olympus
and, assuming due authorization, execution and delivery by the Trustee, the
Seller and the Depositor, constitutes a valid and binding obligation of
Olympus enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(v) to the knowledge of Olympus, there are no actions, litigation,
suits or proceedings pending or threatened against Olympus before or by any
court, administrative agency, arbitrator or governmental body (a) with respect
to any of the transactions contemplated by this Agreement or (b) with respect
to any other matter which in the judgment of Olympus if determined adversely
to Olympus would reasonably be expected to materially and adversely affect
Olympus's ability to perform its obligations under this Agreement, other than
as Olympus has previously advised Seller; and Olympus is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement.
II-2
SCHEDULE IIC
Representations and Warranties of Servicer - Ocwen Federal Bank FSB
(i) Ocwen Federal Bank FSB ("Ocwen") is a federally chartered
savings bank duly organized, validly existing and in good standing under the
laws of the United States;
(ii) Ocwen has full power to own its properties, to carry on its
business as presently conducted and to enter into and perform its obligations
under this Agreement;
(iii) the execution and delivery by Ocwen of this Agreement have
been duly authorized by all necessary action on the part of Ocwen; and neither
the execution and delivery of this Agreement, nor the consummation of the
transactions herein contemplated hereby, nor compliance with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on Ocwen or its properties or the charter or
bylaws of Ocwen, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on Ocwen's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(iv) this Agreement has been duly executed and delivered by Ocwen
and, assuming due authorization, execution and delivery by the Trustee, the
Seller and the Depositor, constitutes a valid and binding obligation of Ocwen
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(v) to the knowledge of Ocwen, there are no actions, litigation,
suits or proceedings pending or threatened against Ocwen before or by any
court, administrative agency, arbitrator or governmental body (a) with respect
to any of the transactions contemplated by this Agreement or (b) with respect
to any other matter which in the judgment of Ocwen if determined adversely to
Ocwen would reasonably be expected to materially and adversely affect Ocwen's
ability to perform its obligations under this Agreement, other than as Ocwen
has previously advised Seller; and Ocwen is not in default with respect to any
order of any court, administrative agency, arbitrator or governmental body so
as to materially and adversely affect the transactions contemplated by this
Agreement.
II-3
SCHEDULE III
Representations and Warranties - Mortgage Loans
DLJMC, in its capacity as Seller, hereby makes the representations
and warranties set forth in this Schedule III to the Depositor and the
Trustee, as of the Closing Date, or the date specified herein, with respect to
the Mortgage Loans identified on Schedule I hereto.
(i) The Seller or its affiliate is the sole owner of record and
holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage
Note. Immediately prior to the transfer and assignment to the Depositor on the
Closing Date or the Subsequent Transfer Date, as applicable, the Mortgage
Loan, including the Mortgage Note and the Mortgage, were not subject to an
assignment or pledge, and the Seller had good and marketable title to and was
the sole owner thereof and had full right to transfer and sell the Mortgage
Loan to the Depositor free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest and has the full right and authority
subject to no interest or participation of, or agreement with, any other
party, to sell and assign the Mortgage Loan and following the sale of the
Mortgage Loan, the Depositor will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest.
(ii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects.
(iii) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Depositor. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof
except in connection with an assumption agreement and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule; the substance of any such waiver, alteration or
modification has been approved by the issuer of any related Primary Insurance
Policy and title insurance policy, to the extent required by the related
policies.
(iv) The Mortgage Loan complies with all the terms, conditions and
requirements of the originator's underwriting standards in effect at the time
of origination of such Mortgage Loan.
(v) The information set forth in the Mortgage Loan Schedule,
attached to the Agreement as Schedule I, is complete, true and correct in all
material respects as of the Cut-off Date.
III-1
(vi) The related Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property and, all buildings on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at anytime with respect to the
foregoing securing the Mortgage Note's original principal balance. The
Mortgage and the Mortgage Note do not contain any evidence of any security
interest or other interest or right thereto. Such lien is free and clear of
all adverse claims, liens and encumbrances having priority over the first
lien, as applicable, of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator
of the Mortgage Loan, or (B) which do not adversely affect the appraised value
of the Mortgaged Property as set forth in such appraisal, and (3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority security interest on the property described therein,
and the Seller has the full right to sell and assign the same to the
Depositor.
(vii) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the
related Mortgage.
(viii) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable.
(ix) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the terms
of the Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto.
(x) The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At origination of
the Mortgage Loan there was, and there currently is, no proceeding pending for
the total or partial condemnation of the Mortgaged Property.
III-2
(xi) All improvements subject to the Mortgage which were considered
in determining the appraised value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of the Mortgaged Property (and
wholly within the project with respect to a condominium unit) and no
improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by a title insurance policy and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances.
(xii) Seller has delivered or caused to be delivered to the Trustee
or the Custodian on behalf of the Trustee the original Mortgage bearing
evidence that such instruments have been recorded in the appropriate
jurisdiction where the Mortgaged Property is located as determined by the
Seller (or, in lieu of the original of the Mortgage or the assignment thereof,
a duplicate or conformed copy of the Mortgage or the instrument of assignment,
if any, together with a certificate of receipt from the Seller or the
settlement agent who handled the closing of the Mortgage Loan, certifying that
such copy or copies represent true and correct copy(ies) of the originals) and
that such original(s) have been or are currently submitted to be recorded in
the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located) or a certification or receipt of the recording
authority evidencing the same.
(xiii) The Mortgage File contains each of the documents specified in
Section 2.01(b) of the Agreement.
(xiv) As of the Closing Date, each Mortgage Loan shall be serviced
in all material respects in accordance with the terms of the Agreement.
(xv) All buildings or other customarily insured improvements upon
the Mortgaged Property are insured by an insurer acceptable under the FNMA
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the FNMA Guides or by FHLMC, as well as all
additional requirements set forth in this Agreement. All such standard hazard
policies are in full force and effect and on the date of origination contained
a standard mortgagee clause naming the Seller and its successors in interest
and assigns as loss payee and such clause is still in effect and all premiums
due thereon have been paid. If at the time of origination, the Mortgage Loan
was required to have flood insurance coverage in accordance with the Flood
Disaster Protection Act of 1973, as amended, such Mortgage Loan is covered by
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements, as well as all additional requirements set forth in this
Agreement. Such policy was issued by an insurer acceptable under FNMA or FHLMC
guidelines. The Mortgage obligates the Mortgagor thereunder to maintain all
such insurance at the Mortgagor's cost and expense, and upon the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(xvi) With respect to a Mortgage Loan, the Mortgage creates a first
lien or a first priority ownership interest in an estate in fee simple in real
property securing the related Mortgage Note.
III-3
(xvii) As of the Cut-off Date, no Mortgage Loan is (a) a
non-performing loan (i.e., a mortgage loan that is more than 90 days
delinquent); (b) a re-performing loan (i.e. a mortgage loan that was more than
90 days delinquent within the twelve-month period preceding the Cut-off Date
but is contractually current); or (c) a sub-performing loan (i.e. a mortgage
loan that is at least 30 days delinquent but subject to a payment plan or
agreement pursuant to which the Mortgagor is contractually current).
(xix) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles.
(xx) To the knowledge of the Seller, (i) no mortgage loan in the
mortgage pool or in either of the loan groups contemplated under the terms of
this Agreement was subject to the Home Ownership and Equity Protection Act of
1994 or any comparable state law, (ii) no proceeds from any mortgage loan in
the mortgage pool or in either of the loan groups contemplated under the terms
of this Agreement were used to finance single-premium credit insurance
policies, (iii) the Servicers for each mortgage loan in the mortgage pool or
in either of the loan groups contemplated under the terms of this Agreement
will accurately and fully report its borrower credit files to all three credit
repositories in a timely manner, and (iv) no mortgage loan in the mortgage
pool or in either of the loan groups contemplated under the terms of this
Agreement will impose a prepayment premium for a term in excess of five years.
iii-4
