Exhibit 99.1
Execution Copy
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
VESTA SERVICING, L.P.,
Servicer and Special Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
-------------------------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2001
-------------------------------------------------------------------------------
CSFB ABS Trust Series 2001-HE20
CSFB MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2001-HE20
Table of Contents
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions............................................................................5
SECTION 1.02 Interest Calculations.................................................................33
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans..........................................................34
SECTION 2.02 Acceptance by the Trustee of the Mortgage Loans.......................................38
SECTION 2.03 Representations and Warranties of the Seller and Servicer.............................40
SECTION 2.04 Representations and Warranties of the Depositor as to the Mortgage Loans..............43
SECTION 2.05 Delivery of Opinion of Counsel in Connection with Substitutions.......................43
SECTION 2.06 Execution and Delivery of Certificates................................................43
SECTION 2.07 REMIC Matters.........................................................................44
SECTION 2.08 Covenants of the Servicer.............................................................44
SECTION 2.09 Conveyance of Subsidiary REMIC Regular Interests and Acceptance of Master
REMIC, Respectively, by the Trustee; Issuance of Certificates.........................44
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans....................................................46
SECTION 3.02 Subservicing; Enforcement of the Obligations of Subservicers..........................47
SECTION 3.03 Special Serviced Mortgage Loans.......................................................48
SECTION 3.04 Notification of Adjustments...........................................................49
SECTION 3.05 Trustee to Act as Servicer............................................................49
SECTION 3.06 Collection of Mortgage Loans; Collection Account; Certificate Account;
Prefunding Account; Capitalized Interest Account......................................49
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.........53
SECTION 3.08 Access to Certain Documentation and Information Regarding the Mortgage Loans;
Inspections...........................................................................55
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and Certificate Account............56
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage Impairment Insurance and Primary
Insurance Policy; Claims; Restoration of Mortgaged Property...........................58
SECTION 3.11 Enforcement of Due-on-Sale Clauses; Assumption Agreements.............................61
i
SECTION 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans.................................................................................62
SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files.......................................66
SECTION 3.14 Documents, Records and Funds in Possession of a Servicer to be Held for the
Trustee...............................................................................66
SECTION 3.15 Servicing Fee.........................................................................67
SECTION 3.16 Access to Certain Documentation.......................................................67
SECTION 3.17 Annual Statement as to Compliance.....................................................68
SECTION 3.18 Annual Independent Public Accountants' Servicing Statement; Financial
Statements............................................................................68
SECTION 3.19 Maintenance of Fidelity Bond and Errors and Omissions Insurance.......................69
SECTION 3.20 Prepayment Premiums...................................................................69
SECTION 3.21 Duties of the Loss Mitigation Advisor.................................................69
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer..............................................................70
SECTION 4.02 Priorities of Distribution............................................................71
SECTION 4.03 Allocation of Losses..................................................................75
SECTION 4.04 Monthly Statements to Certificateholders..............................................75
SECTION 4.05 Servicer to Cooperate.................................................................77
SECTION 4.06 Basis Risk Reserve Fund...............................................................77
SECTION 4.07 Policy Matters........................................................................78
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates......................................................................82
SECTION 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...........82
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.....................................87
SECTION 5.04 Persons Deemed Owners.................................................................87
SECTION 5.05 Access to List of Certificateholders' Names and Addresses.............................87
SECTION 5.06 Maintenance of Office or Agency.......................................................88
ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Seller and the Servicer..................89
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller or a Servicer....................89
SECTION 6.03 Limitation on Liability of the Depositor, the Seller, the Servicer and Others.........89
SECTION 6.04 Limitation on Resignation of a Servicer...............................................90
SECTION 6.05 Limitation upon Liability of the Loss Mitigation Advisor..............................91
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.....................................................................92
SECTION 7.02 Trustee to Act; Appointment of Successor..............................................93
SECTION 7.03 Notification to Certificateholders....................................................94
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.................................................................95
SECTION 8.02 Certain Matters Affecting the Trustee.................................................97
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.................................98
SECTION 8.04 Trustee May Own Certificates..........................................................99
SECTION 8.05 Trustee's Fees and Expenses...........................................................99
SECTION 8.06 Eligibility Requirements for the Trustee..............................................99
SECTION 8.07 Resignation and Removal of the Trustee...............................................100
SECTION 8.08 Successor Trustee....................................................................101
SECTION 8.09 Merger or Consolidation of the Trustee...............................................101
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee........................................101
SECTION 8.11 Tax Matters..........................................................................103
SECTION 8.12 Periodic Filings.....................................................................105
SECTION 8.13 Trust Obligations....................................................................106
SECTION 8.14 Determination of Certificate Index...................................................106
SECTION 8.15 Indemnification with Respect to Certain Taxes and Loss of REMIC Status...............106
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.......................107
SECTION 9.02 Final Distribution on the Certificates...............................................107
SECTION 9.03 Additional Termination Requirements..................................................108
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment............................................................................110
SECTION 10.02 Recordation of Agreement; Counterparts...............................................111
SECTION 10.03 Governing Law........................................................................112
SECTION 10.04 Intention of Parties.................................................................112
SECTION 10.05 Notices..............................................................................112
SECTION 10.06 Severability of Provisions...........................................................113
SECTION 10.07 Assignment...........................................................................113
SECTION 10.08 Limitation on Rights of Certificateholders...........................................113
SECTION 10.09 Certificates Nonassessable and Fully Paid............................................114
SECTION 10.10 Protection of Assets.................................................................114
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
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 - Vesta
SCHEDULE III Representations and Warranties - Mortgage Loans
THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2001,
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"), VESTA SERVICING, L.P., a
Delaware limited partnership, as the servicer (in such capacity, the
"Servicer") and as the special servicer (in such capacity, the "Special
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, the Basis Risk Reserve
Fund, and the Interest Rate Cap Reserve Account) will consist of two REMICs:
REMIC I, and REMIC II.
REMIC I:
The 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, the
Basis Risk Reserve Fund, and the Interest Rate Cap Account) and will be
evidenced by the REMIC I regular interests which will be uncertificated and
will represent the "regular interests" in the 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"). The
Trustee will hold the Subsidiary REMIC Regular Interests on behalf of the
REMIC II.
The following table irrevocably sets forth the class designation, the
Pass-Through Rate, and the original class principal balance for each of the
Subsidiary REMIC Regular Interests. None of the Subsidiary REMIC Regular
Interests will be certificated.
1
---------------------------- ----------------------------- ------------------------- ----------------------------
Corresponding
REMIC Initial Principal Pass-Through Class of Master
Interests Balance Rate REMIC Interest
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-A-1(1) 1/2 Corresponding Master Net WAC Rate A
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-A-2(1) 1/2 Corresponding Master Net WAC Rate A
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-M-1(1) 1/2 Corresponding Master Net WAC Rate M-1
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-M-2(1) 1/2 Corresponding Master Net WAC Rate M-2
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-B(1) 1/2 Corresponding Master Net WAC Rate B
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-Accrual 1/2 Principal Balance plus Net WAC Rate N/A
1/2 of the initial
Overcollateralization
Amount
---------------------------- ----------------------------- ------------------------- ----------------------------
ST-P(1) 1/2 Corresponding Master Net WAC Rate P
REMIC Class balance
---------------------------- ----------------------------- ------------------------- ----------------------------
(1) the Subsidiary REMIC Accretion Directed Classes
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) 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 Subsidiary REMIC Interest may not exceed interest accruals for such
Distribution Date for the Subsidiary REMIC Interest. In the event that: (i)
50% of the increase in the Overcollateralization Amount exceeds (ii) interest
accruals on the Subsidiary 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 Subsidiary 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
interest paid in reduction of the principal balance of the Corresponding Class
of Master REMIC Interest, until paid in full of the interest paid in reduction
of the principal balance of the Corresponding Class of Master REMIC Interest).
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 Subsidiary REMIC Interest (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 Subsidiary REMIC Interest
is equal to 50% of the aggregate principal balance of the Mortgage Pool plus
50% of the Overcollateralization Amount.
2
MASTER REMIC
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 Multiples in
Class Principal Pass-Through Assumed Final Minimum Excess of
Designation Balance Rate Maturity Date(l) Denominations Minimum
----------- ------------ ------------ ---------------- ------------- ------------
Class A-1 $135,000,000 2.90% (2) April 2032 $25,000 $1
Class A-2 $102,000,000 2.92% (2) April 2032 $25,000 $1
Class A-IO (3) 5.34% (3) April 2032 $25,000 $1
Class M-1 $19,600,000 3.41%(2) April 2032 $25,000 $1
Class M-2 $11,200,000 4.01% (2) April 2032 $25,000 $1
Class B $12,200,000 5.26%(2) April 2032 $25,000 $1
Class X $0(4) (5) April 2032 (6) N/A
Class R $50 2.92% (3) April 2032 (7) N/A
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of
the maturity date for the Mortgage Loan with the latest maturity date has
been designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
the Master REMIC.
(2) Pass-Through Rate applicable for the October 2001 Distribution Date. The
Pass-Through Rate applicable to any other Distribution Date (as defined
in the Pass-Through Rate definition), equals to LIBOR plus the related
Certificate Margin for such distribution date subjec to a cap equal to
the Net Funds Cap.
(3) The Class A-IO will have a notional balance equal to the sum of the Class
A-1 Certificate and the Class A-2 Certificate, and a rate, as defined in
the Pass Through Rate, as the lesser of (a) the excess, if any, of 8.00%
over the Certificate Index for such Distribution Date and (b) the excess,
if any, of the Net Funds Cap (for purposes of this calculation, the
denominator shall not be multiplied by subclause (b) in the definition
thereof) over the weighted average of the Class A-1 and Class A-2
Certificates for such Distribution Date.
(4) The Class X will have a notional balance equal to the Aggregate Balance,
and a rate equal to the excess of the Pass-through Rate of the Subsidiary
Remic Regular Interest over the product of (i) 2 and (ii) the weighted
average rate of the Subsidiary REMIC Interests with (a) the Class ST-A-1
Interest and Class ST-A-2 Interest subject to a cap equal to the lesser
of (i) the greater of LIBOR and 8.00% plus the Corrisponding Master
Certificate's Certificate Margin, and (ii) the Net Funds Cap, (b) each
Subsidiary REMIC Accretion Directed Class (other than the Class ST-A-1
Interest and Class ST-A-2 Interest) subject to a cap equal to the pass
through rate in respect of the Corresponding Master REMIC Class and the
Subsidiary REMIC Accrual Class subject to a cap equal to zero.
(5) The Class X Certificates will be issued as a single certificate.
(6) The Class R Certificates are issued in minimum Percentage Interests of
20%.
3
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 any Certificate
that no longer satisfies 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.
4
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 interest-bearing Class of Certificates, the
period beginning on the immediately preceding Distribution Date (or the
Closing Date, in the case of the first Accrual Period) and ending on the day
immediately preceding the related Distribution Date.
Advance: The payment required to be made by the Servicer with respect
to any Distribution Date pursuant to Section 4.01.
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 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 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 Pre-Funding Account.
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 or that Loan Group as of the last day of the
related collection period.
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
5
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.
Ancillary Income does not include any Prepayment Premiums.
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 Due 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 September 1, 2001, 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 Balance 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) 96.00% and (ii) the Aggregate Collateral
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the Aggregate Collateral Balance as of the Cut-off 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 2001-HE20." 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
6
(x) the Certificate Index plus the applicable Certificate Margin and (y) the
Maximum Interest Rate over the related Current Interest for the applicable
Distribution Date; (ii) any Basis Risk Shortfall remaining unpaid from prior
Distribution Dates; and (iii) 30 days interest on the amount in clause (ii)
calculated at a per annum rate equal to the lesser of (x) the Certificate
Index plus the applicable Certificate Margin and (y) the Maximum Interest
Rate.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the City of New York, New York, or the
city in which the Corporate Trust Office of the Trustee is located, or savings
and loan institutions in the States of California, Florida, Illinois,
Minnesota 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: $400,000.00.
Capitalized Interest Requirement: With respect to the October 2001
Distribution Date, an amount equal to 29 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) 4.57% on the Pre-Funded Amount outstanding at
the end of the related Due Period. With respect to each of the November and
December Distribution Dates, 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) 4.32 or 4.07% on the sum of the Pre-Funded Amount at
the end of the related Due Period and the aggregate Stated Principal Balance
of the Subsequent Mortgage Loans that do not have a first Due Date prior to
November 1, 2001 and December 1, 2001, respectively, transferred to the Trust
during the related Due Period.
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) 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,
7
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 Vesta ), 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 Servicer 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 0.24% 0.48%
A-2 0.26% 0.52%
M-1 0.75% 1.125%
M-2 1.35% 1.85%
B 2.60% 3.10%
R 0.26% N/A
-----------------------
(1) Prior to and on the Optional Termination Date.
(2) After the Optional Termination Date.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
8
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered
in the name of the Depositor or any affiliate of the Depositor shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Depositor
or any affiliate of the Depositor in determining which Certificates are
registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A-IO Notional Amount: For any distribution date, the aggregate
of the Class Principal Balances of the Class A-1 and Class A-2 Certificates
immediately prior to that Distribution Date.
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 sum of (a) product of the Pool Balance and the Class X Pass-Through Rate
as set forth in the Preliminary Statement, plus (b) any Overcollateralization
Release Amounts, less any amounts distributed pursuant to Section 4.02(d)A.
through J. hereof on such Distribution Date.
Closing Date: September 25, 2001.
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 the
Servicer in accordance with Section 3.06.
Compensating Interest Payment: For any Distribution Date and the
Mortgage Loans, the lesser of (i) the sum of (a) 0.50% per annum of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Due Date in
the month of such Distribution Date and (ii) the aggregate Prepayment Interest
Shortfall allocable to Payoffs for the Mortgage Loans.
Corporate Trust Office: The designated office of the Trustee in the
State of Minnesota at which at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 000 Xxxx
0
Xxxxx Xxxxxx, Xx. Xxxx, XX 00000, Attn: Corporate Trust Structured Finance,
Ref: CSFB 2001-HE20.
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.
Custodian: Bank One Trust Company, N.A., a national banking
association, or its successor in interest.
Custodial Agreement: The Custodial Agreement dated as of the date
hereof, among the Custodian and the Trustee.
Cut-off Date: For any Initial Mortgage Loan, September 1, 2001. For
any Subsequent Mortgage Loan, the applicable Subsequent Transfer Date.
Cut-off Date Pool Principal Balance: $258,300,252 plus $21,699,798,
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.
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).
10
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 clay 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
October 2001.
Disqualified Organization: A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality
of any of the foregoing, (ii) any organization (other than a cooperative
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax imposed
by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, (iv) an "electing large partnership" within the
meaning of Section 775 of the Code or (v) any other Person so designated by
the Trustee based upon an Opinion of Counsel provided by nationally recognized
counsel to the Trustee that the holding of an ownership interest in a Class R
Certificate by such Person may cause the Trust Fund or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in the
Class R Certificate to such Person. A corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof, if all of its activities are subject to tax and, a majority of its
board of directors is not selected by a governmental unit. The term "United
States", "State" and "international organizations" shall have the meanings set
forth in Section 7701 of the Code.
11
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 first day of the calendar month in which such Scheduled
Payments are due, exclusive of any days of grace.
Due 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.
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 Xxxxx'x;
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized under the
laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state
banking authorities, so long as at the time of such investment or
contractual commitment providing for such investment the commercial
paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository
institution or trust company which is the
12
principal subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company) are rated
in the highest ratings by each Rating Agency, and the long-term debt
obligations of such depository institution or trust company (or, in
the case of a depository institution or trust company which is the
principal subsidiary of a holding company, the long-term debt
obligations of such holding company) are rated in one of two of the
highest ratings, by each Rating Agency;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting
as a principal) the short-term debt obligations of which are rated
A-1 or higher by S&P rated A-2 or higher by Xxxxx'x; provided,
however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and
must (A) be valued daily at current market price plus accrued
interest, (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Trustee in exchange for such
collateral, and (C) be delivered to the Trustee or, if the Trustee
is supplying the collateral, an agent for the Trustee, in such a
manner as to accomplish perfection of a security interest in the
collateral by possession of certificated securities;
(iv) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States
of America or any state thereof which has a long-term unsecured debt
rating in the highest available rating category of Xxxxx'x, and a
short-term unsecured debt rating of A-1 or higher by S&P, at the
time of such investment;
(v) commercial paper having an original maturity of less than
365 days and issued by an institution having a short-term unsecured
debt rating in the highest available rating category by each Rating
Agency, at the time of such investment;
(vi) a guaranteed investment contract approved by each of the
Rating Agencies and issued by an insurance company or other
corporation having a long-term unsecured debt rating in the highest
available rating category of Xxxxx'x, and a short-term unsecured debt
rating of A-1 or higher by S&P, at the time of such investment; and
(vii) money market funds having ratings in the highest available
rating category of Xxxxx'x and either "AAAm" or "AAAm-G" of S&P at
the time of such investment (any such money market funds which
provide for demand withdrawals being conclusively deemed to satisfy
any maturity requirements for Eligible Investments set forth herein)
including money market funds of the Servicer or the Trustee and any
such funds that are managed by the Servicer or the Trustee or their
respective Affiliates or for the Servicer or the Trustee or any
Affiliate of either acts as advisor, as long as such money market
funds satisfy the criteria of this subparagraph (vii);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
13
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 (without regard to the ratings
requirements) of the Underwriters' Exemption.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Servicer pursuant to Section 3.19.
Escrow Account: The separate account or accounts created and
maintained by the 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.
Expense Fee: As to each Mortgage Loan, the sum of the related
Servicing Fee, the Trustee Fee, the Loss Mitigation Advisor's Fee, 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 Loss Mitigation Advisor's Fee
Rate, the rate at which any Lender paid Primary Insurance Policy premium is
calculated, if applicable, and the rate at which any Mortgage Insurer Fee 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 the Servicer
pursuant to Section 3.19.
Final Scheduled Distribution Date: The Distribution Date in April
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.
14
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 Policy: The irrevocable Certificate Guaranty Insurance Policy,
No. 51166-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 Premium
Percentage.
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 first lien
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 from loan
group 1 and the denominator of which is the Principal Remittance Amount, in
each case for that distribution date.
Group 2 Allocation Amount: For any distribution date, the product of
the Senior Principal Payment Amount for that distribution date and a fraction
the numerator of which is the Principal Remittance Amount derived from loan
group 2 and the denominator of which is the Principal Remittance Amount, in
each case for that distribution date.
Group 1 Excess Interest Amount: For any distribution date, the
product of the amount of Monthly Excess Interest required to be distributed on
that distribution date pursuant to 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.
Group 2 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 2 and the denominator of which is
the Principal Remittance Amount, in each case for that distribution date.
15
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.
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 mortgage guaranty
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, 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 during the related Due Period, the interest
portion of Payaheads previously received and intended for application in the
related Due Period and the interest portion of all Payoffs and Curtailments
received on the Mortgage Loans during the related Prepayment Period, less (x)
the Servicing Fee, the Loss Mitigation Advisor Fee and Lender paid Primary
Insurance Policy premiums with respect to the Mortgage Loans and (y)
unreimbursed Advances and other amounts due to the Servicer or Trustee with
respect to such Mortgage Loans, to the extent allocable to interest, (2) all
Compensating Interest Payments paid by the Servicer with respect to the
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 the Mortgage Loans during the
prior calendar month, to the extent allocable to interest and (5) any amounts
withdrawn from the Simple Interest Excess Sub-Account and the Capitalized
Interest Account, in either case to pay interest on the Certificates with
respect to such Distribution Date. If on any Determination Date the amount
16
deposited into the Collection Account with respect to Compensating Interest is
the amount calculated in clause (ii) of the definition of Compensating
Interest Payment for such Distribution Date, any remaining Servicing Fee 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 U.S. Bank
National Association at its principal office in St. Xxxx, Minnesota, 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 U.S. Bank National
Association) 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) 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.
17
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.
Loss Mitigation Advisor: The Murrayhill Company, a Colorado
corporation, and any successor.
Loss Mitigation Advisory Agreement: The agreement between the
Servicer and the Loss Mitigation Advisor dated as of September 25, 2001.
Loss Mitigation Advisor Fee: The fee payable to the Loss Mitigation
Advisor on each Distribution Date for its services as Loss Mitigation Advisor,
in an amount equal to one-twelfth of the Loss Mitigation Advisor Fee Rate
multiplied by the Stated Principal Balance of the Mortgage Loans immediately
prior to such Distribution Date.
Loss Mitigation Advisor Fee Rate: 0.015% per annum.
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) 79.29% 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.
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) 87.29% 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.
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.
18
Maximum Interest Rate: For the LIBOR Certificates and any
Distribution Date, an annual rate equal to the weighted average of the Maximum
Mortgage Rates, minus the weighted average Expense Fee rate for such mortgage
loans.
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.
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 its 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
19
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:
(viii) the Mortgage Loan identifying number;
(ix) the Mortgagor's name;
(x) the street address of the Mortgaged Property including the
state and zip code;
(xi) a code indicating the type of Mortgaged Property and the
occupancy status;
(xii) a code indicating the servicer;
(xiii) the original months to maturity;
(xiv) a code indicating the Loan-to-Value Ratio at origination;
(xv) the Mortgage Rate as of the Cut-off Date;
(xvi) the stated maturity date;
(xvii) the amount of the Scheduled Payment as of the Cut-off
Date;
(xviii) the original principal amount of the Mortgage Loan;
(xix) 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;
(xx) the purpose of the Mortgage Loan (i.e., purchase, rate and
term refinance, equity take-out refinance);
(xxi) 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;
(xxii) 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;
(xxiii) the Index that is associated with such Mortgage Loan,
if applicable;
(xxiv) the Gross Margin, if applicable;
(xxv) the Periodic Rate Cap, if applicable;
20
(xxvi) the Minimum Mortgage Rate, if applicable;
(xxvii) the Maximum Mortgage Rate, if applicable; and
(xxviii) the first Adjustment Date after the Cut-off Date, 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:
(i) the number of Mortgage Loans;
(ii) 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;
(iii) the weighted average Mortgage Rate of the Mortgage Loans;
and
(iv) 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 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: As to any Distribution Date, 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 such date and
(2) 12, and the denominator of which is the applicable Aggregate Collateral
Balance immediately preceding such 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 related Accrual Period.
Net Liquidation Proceeds: Liquidation Proceeds, net of (1)
unreimbursed, reasonable out-of-pocket expenses and (2) unreimbursed Servicing
Fees, Servicing Advances and Advances.
21
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 Due Period, weighted on the basis of the Stated Principal Balances as
of the first day of the related Due Period.
Nonrecoverable Advance: With respect to any Mortgage Loan, any
portion of an Advance or Servicing Advance previously made or proposed to be
made by the Servicer that, in the good faith judgment of the Servicer, will
not be ultimately recoverable by the Servicer from the related Mortgagor,
related Liquidation Proceeds or otherwise.
Notional Amount Certificates: As specified in the Preliminary
Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of a Servicer or any certificate
of any Servicing Officer, and delivered to the Depositor or the Trustee, as
the case may be, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, including in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Servicer, (ii) not have any
material direct financial interest in the Depositor or the Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. The cost of any Opinion of
Counsel, except as otherwise specifically provided herein, shall not be at the
expense of the Trustee.
Optimal Interest Remittance Amount: For any Distribution Date, the
excess of (i) the product of (1) (x) the weighted average of the Net Mortgage
Rates of the Mortgage Loans as of the first day of the related Due Period less
the product of (a) the Premium Percentage multiplied by a fraction, the
numerator of which is the aggregate Class Principal Balance of the Class A
Certificates divided by the aggregate Class Principal Balance of the Offered
Certificates, divided by (y) 12 and (2) the applicable Aggregate Collateral
Balance for the immediately preceding Distribution Date, over (ii) any
expenses that reduce the Interest Remittance Amount for either Loan Group that
do not arise as a result of a default or delinquency of the Mortgage Loans.
22
Optional Termination Date: The first Distribution Date on which Vesta
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.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(v) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(vi) 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.
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 of the related 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
related 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) 4.57%, 4.32% and 4.07% per annum on the
Pre-Funded Amount outstanding at the end of the related Due Period for the
total number of days remaining through the end of the Accrual Periods ending
October 24, November 24 and December 24, 2001 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 2.50%. The assumed weighted
23
average Pass-Through Rate will be calculated assuming the Certificate Index is
2.91% for any Subsequent Transfer Date prior to the November 2001 Distribution
Date and 3.16% for any Subsequent Transfer Date prior to the December 2001
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 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 excess, if any,
of the Net Funds Cap over the weighted average of the Pass-Through Rates of
the Class A-1 and Class A-2 Certificates for such Distribution Date (adjusted
to a basis of a 360 day year of twelve 30 day months). 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 Due Period subsequent to the Due Period in which such payment
was received.
Payoff: Any payment of principal on a Mortgage Loan equal to the
entire outstanding principal balance of such Mortgage Loan, if received in
advance of the last scheduled Due Date for such Mortgage Loan and accompanied
by an amount of interest equal to accrued unpaid interest on the Mortgage Loan
to the date of such payment-in-full.
Percentage Interest: As to any Certificate, either the percentage set
forth on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
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.
24
Preference Claim: As defined in Section 4.07(h).
Pre-Funded Amount: The amount deposited in the Prefunding Account on
the Closing Date, which shall equal $21,699,798.31.
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 2001-HE20" 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) December 24,
2001.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment, other than Principal Prepayments in full that
occur during the portion of the Prepayment Period that is in the same calendar
month as the Distribution Date, the difference between (i) one full month's
interest at the applicable Mortgage Rate, as reduced by the Servicing Fee Rate
on the outstanding principal balance of such Mortgage Loan immediately prior
to such prepayment and (ii) the amount of interest due and actually received
from the related Mortgagor that accrued during the month immediately preceding
such Distribution Date with respect to such Mortgage Loan in connection with
such Principal Prepayment, as reduced by the Servicing Fee.
Prepayment Premium: With respect to each Mortgage Loan, the
prepayment charge or penalty interest required to be paid by the Mortgagor in
connection with a prepayment of the related Mortgage Loan, as provided in the
related Mortgage Note or Mortgage, and as specified on the Mortgage Loan
Schedule.
Prepayment Period: With respect to any Distribution Date and any
Payoff, the period from the fifteenth day of the calendar month preceding the
month in which such Distribution Date occurs (or in the case of the first
distribution date, from the 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.
Premium Percentage: 0.06%.
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.
25
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 Due Period (less unreimbursed Advances, Servicing Advances and other
amounts due to the 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 Due
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 the 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 December 2001 Distribution Date, any
amounts remaining in the Prefunding Account (other than investment earnings
thereon).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement dated September 21,
2001 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
26
Mortgage Loan; (v) if the Deleted Mortgage Loan is an adjustable-rate first
lien 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 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 Vesta , 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
27
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 Vesta , as identified in writing to the Trustee.
Regular Certificates: As specified in the Preliminary Statement.
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) 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
Interest Rate Cap Account, the Capitalized Interest Account or the Prefunding
Account.
REMIC II: The segregated pool of assets consisting of all of the
Intermediate REMIC Regular Interests conveyed in trust to the Trustee, for the
benefit of the Holders of the Regular Certificates and the Class R-II
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 Vesta pursuant to 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, and (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.
28
Request for Release: The Request for Release submitted by the
Servicer to the 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 Loan
Balance. With respect to any Distribution Date on which the Net Excess Spread
is equal to or greater than 0.25%, $5,000.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer or employee of the Trustee customarily performing
functions similar to those performed by any of 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 Agency, 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
29
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) 65.29%
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.
Servicer: Vesta, or its successors in interest, as applicable.
Servicer Employee: As defined in Section 3.19.
Servicer Remittance Date: With respect to any Mortgage Loan and
Distribution Date, two Business Days prior to such Distribution Date.
Servicing Advance: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost (including reasonable
attorneys' fees and disbursements) of (i) the preservation, restoration and
protection of 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
the Servicer to the extent provided in Sections 3.07(d)(ii) and 3.09(ii),
(iii), (iv) and (vi).
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 the 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 the 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 Due Period, over (ii) 30 days'
interest on the Stated Principal Balance of such Mortgage Loan at the Mortgage
Rate.
30
Simple Interest Excess Sub-Account: The sub-account of the Collection
Account established by the Servicer pursuant to Section 3.07(f). The Simple
Interest Excess Sub-Account shall be an Eligible Account.
Simple Interest Mortgage Loan: Any Mortgage Loan for which the
interest due thereon is calculated based on the actual number of days elapsed
between the date on which interest was last paid through the date on which the
most current payment is received.
Simple Interest Qualifying Loan: As of any Determination Date, any
Simple Interest Mortgage Loan that was neither prepaid in full during the
related Due Period, nor delinquent with respect to a payment that became due
during the related Due Period as of the close of business on the Determination
Date following such Due Period.
Simple Interest Shortfall: 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 Due
Period.
Special Servicer: Vesta Servicing, L.P.
Special Serviced Mortgage Loans: Mortgage Loans for which Vesta 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 October 2004 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 Due Period but before giving effect to payments on the
Certificates on such Distribution Date) is greater than or equal to 34.71%.
Subordinate Certificates: As specified in the Preliminary Statement.
Subsequent Cut-off Date: With respect to any Subsequent Mortgage
Loan, the date of which such Mortgage Loan is transferred to the Trust.
Subsequent Mortgage Loan: Any Mortgage Loan other than an Initial
Mortgage Loan conveyed to the Trust Fund pursuant to Section 2.01 hereof and
to a Subsequent Transfer Agreement, which Mortgage Loan shall be listed on the
revised Mortgage Loan Schedule
31
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 Servicer 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 the Servicer and a
Subservicer for the servicing of the related Mortgage Loans.
Substitution Adjustment Amount: As defined in Section 2.03.
Targeted Overcollateralization Amount: For any Distribution Date
prior to the Stepdown Date, 2.00% 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) 4.00% 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.
Trigger Event: A Trigger Event will occur for any Distribution Date
if the related Rolling Three Month Delinquency Rate as of the last day of the
related Due Period equals or exceeds 45.00% of the Senior Enhancement
Percentage for such Distribution Date.
Trust: CSFB ABS Trust Series 2001-HE20 established pursuant to this
Agreement.
32
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: 0.0042% 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.
Vesta: Vesta Servicing, L.P., a Delaware limited partnership, and its
successors and assigns.
Vesta Serviced Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
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,
97% of all Voting Rights shall be allocated among the Class A, Class M-1,
Class M-2 and Class B Certificates. The portion of such 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, Class P 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 (other than the Class
X Certificates, which has only one certificate) 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
33
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.
34
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
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
35
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.
If the Seller delivers certified copies of any document or instrument
set forth in Section 2.01(b) to the Custodian because of a delay caused by the
public recording office in returning any recorded document, the Seller shall
deliver to the 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 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 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 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
36
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
Servicer and the Rating Agencies, on any Business Day during the Prefunding
Period designated by the Depositor, the Depositor, DLJMC, the Servicer 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);
(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
37
(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 Mortgage Rate
less than 6.25% 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 99.75%;
(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
March 2032;
(xii) such Subsequent Mortgage Loan will not have an original
Loan-to-Value Ratio greater than 100%;
(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 9.75% per annum;
(B) a weighted average remaining term to stated maturity of
less than 358 months;
(C) a weighted average Loan-to-Value Ratio of not more than
80.00%;
(D) no more than 3.50% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance will be balloon loans;
38
(E) no more than 35.00% of the Mortgage Loans by aggregate
Cut-off Date Principal Balance will be concentrated in one state;
and
(F) no more than 7.50% 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
Custodian will maintain possession of the Mortgage Notes in the State of
Texas, State of California or State of Minnesota, as directed by the Seller,
unless otherwise permitted by the Rating Agencies.
The Trustee agrees to deliver on the Closing Date to the Depositor
and the Servicer an Initial Certification from the Custodian in the form
annexed hereto as Exhibit G. Based on its review and examination, and only as
to the documents identified in such Initial Certification, the Custodian
acknowledges that such documents appear regular on their face and relate to
such 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,
39
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 and the Seller and the Servicer 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 the
Custodian that any document constituting a part of a Mortgage File which does
not meet the requirements of Section 2.01, the Trustee shall cause the
Custodian to list such as an exception in the Final Certification; provided,
however, that 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
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 Custodian on
its behalf, of a Request for Release substantially in the form of Exhibit M
and the Mortgage File for any such Qualified Substitute Mortgage Loan. The
Repurchase Price for any such Mortgage Loan shall be deposited by the Seller
in the applicable Collection Account on or prior to the Business Day
immediately preceding such Distribution Date in the month following the month
of repurchase and, upon receipt of such deposit and certification with respect
thereto in the form of Exhibit M hereto, the Trustee, or the 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.
40
The Trustee agrees to cause the Custodian to execute and deliver on
the Subsequent Transfer Date to the Depositor and the Servicer 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, the 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 the Custodian to deliver to the Depositor and the Servicer
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, the 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 the 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 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 Agreement. Notwithstanding anything to the contrary contained
herein, the parties hereto acknowledge that the functions of the Trustee with
respect to the custody, acceptance, inspection and release of the Mortgage
Files pursuant to Sections 2.01, 2.02, 2.05, 3.12 shall be performed by the
Custodian. At the expense of DLJMC, the Trustee, from time to time, shall
instruct or cause the instruction of the Custodian to deliver the Mortgage
Files to the Trustee for completion and recordation of the Assignments of
Mortgage.
SECTION 2.03 Representations and Warranties of the Seller
and Servicer.
(a) Each of DLJMC and Vesta, in their capacities as Seller or
Servicer, hereby makes on behalf of themselves the representations and
warranties set forth in Schedule IIA and Schedule IIB 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.
41
(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 Mortgage Loans 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 Servicer and the Trustee for any actual out-of-pocket expenses reasonably
incurred by the Servicer or the Trustee in respect of enforcing the remedies
for such breach. With respect to any representation and warranty described in
this Section which are made to the best of the Seller's knowledge, if it is
discovered by either the Depositor, the Seller or the Trustee that the
substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interests of the Certificateholders therein, notwithstanding the
Seller's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Qualified Substitute Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by Section 2.01(b), with
the Mortgage Note endorsed and the Mortgage assigned as required by Section
2.01. Scheduled Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall not be part of the Trust Fund and
will be retained by the Seller. For the month of substitution, distributions
to Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such month 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
42
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
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 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 Custodian to release the related Mortgage File held
for the benefit of the Certificateholders to such Person, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or substitute any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor or the
Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee, or to
the 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
43
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 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, the 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 the Custodian on its behalf of
the documents identified in the Initial Certification in the form annexed
hereto as Exhibit G and the amounts required to be deposited into the
Prefunding Account, the Capitalized Interest Account and the Basis Risk
Reserve Fund and, concurrently with such receipt, has executed and delivered
to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement according
to its terms.
SECTION 2.07 REMIC Matters.
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date. The "tax matters person" with respect to each
44
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 Servicer.
Each Servicer hereby covenants to the Depositor and the Trustee for
itself only as follows:
(a) the 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 the Servicer
pursuant to this Agreement will contain any untrue statement of a material
fact.
SECTION 2.09 Conveyance of Subsidiary 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 for the benefit of
the holders of the Certificates. The Trustee acknowledges receipt of the
Subsidiary REMIC Regular Interests (which are uncertificated) and declares
that it holds and will hold the same in trust for the exclusive use and
ultimate benefit of the holders of the Certificates. The interests evidenced
by the Master REMIC Residual Interest, together with the Regular Certificates,
constitute the entire beneficial ownership interest in the Master REMIC.
(b) In exchange for the Subsidiary REMIC Regular Interests and,
concurrently with the assignment to the Trustee thereof, pursuant to the
written request of the Depositor executed by an officer of the Depositor, the
Trustee has executed, authenticated and delivered to or upon the order of the
Depositor, the Subsidiary REMIC Residual Interest and in exchange for the
Intermediate REMIC Regular Interests, the Regular Certificates in authorized
denominations evidencing (together with the Class R-II Interest) the entire
beneficial ownership interest in the Master REMIC.
(c) Concurrently with (i) the assignment and delivery to the Trustee
of REMIC I (including the Residual Interest therein represented by the
Subsidiary REMIC Residual Interest) 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
45
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 Class Subsidiary REMIC
Residual Interest and the Master REMIC Residual Interest.
46
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the related Mortgage Loans in accordance with the terms
of this Agreement and with Accepted Servicing Practices. In connection with
such servicing and administration, the 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
the 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. The 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, the Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Servicer believes it appropriate in its
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. The 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 the Servicer to
service and administer the Mortgage Loans to the extent that the Servicer is
not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee
shall execute such documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the 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
47
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, the
Servicer shall accurately and fully report its borrower credit files to
Equifax, Transunion & Experian in a timely manner.
The Servicer hereby acknowledges that, to the extent the 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 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 the Servicer of the Subservicer
shall not release the Servicer from any of its obligations hereunder and the
Servicer shall remain responsible hereunder for all acts and omissions of the
Subservicer as fully as if such acts and omissions were those of the Servicer.
The Servicer shall pay all fees and expenses of any Subservicer engaged by the
Servicer from its own funds.
Notwithstanding the foregoing, the 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
the 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
the Servicer of any such Outsourcer shall not release the Servicer from any of
its obligations hereunder and the Servicer shall remain responsible hereunder
for all acts and omissions of such Outsourcer as fully as if such acts and
omissions were those of the Servicer, and the Servicer shall pay all fees and
expenses of the Outsourcer from the Servicer's own funds.
(b) At the cost and expense of the Servicer, without any right of
reimbursement from the Depositor, Trustee, or the applicable Collection
Account, the 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 the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans itself.
In the event that the 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 Servicer shall at its own cost and expense terminate the
rights and responsibilities of its Subservicer as soon as is reasonably
possible. The Servicer shall pay all fees, expenses or penalties necessary in
order to
48
terminate the rights and responsibilities of its Subservicer from the
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 the Servicer and its Subservicer, the
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. The
Servicer shall be entitled to enter into an agreement with its Subservicer and
Outsourcer for indemnification of the 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, the 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 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 and the other Servicer shall have no obligations, duties or
liabilities with respect to a Subservicer including no obligation, duty or
liability to pay a Subservicer's fees and expenses.
SECTION 3.03 Special Serviced Mortgage Loans
If directed by the Special Servicer and solely at the Special
Servicer's option, the 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 the Servicer
hereunder arising thereafter and the 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 the 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 hereunder). Upon the transfer of
the servicing of any such Mortgage Loan to Vesta, Vesta 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, the 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 predecessor servicer for all unreimbursed
Advances, Servicing Advances and Servicing Fees relating to the Mortgage Loans
for which the servicing is being transferred. In
49
addition, the Special Servicer shall amend the Mortgage Loan Schedule to
reflect that such Mortgage Loans are Special Serviced Mortgage Loans.
The Special Servicer may be replaced as special servicer by holders
of the Class X Certificates representing a majority of the Percentage
Interests.
SECTION 3.04 Notification of Adjustments.
With respect to each Mortgage Loan with an adjustable Mortgage Rate,
the 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 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 Servicer or the receipt of notice from the Trustee that the
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 the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default, as defined in
Section 7.01), the Trustee or its successor shall thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of the Servicer pursuant
to Section 3.10 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
2.03 hereof or (iv) deemed to have made any representations and warranties of
the Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement or substitute Subservicing Agreement
and the Mortgage Loans then being serviced thereunder and hereunder by the
Servicer and an accounting of amounts collected or held by it and otherwise
use its best efforts to effect the orderly and efficient transfer of the
substitute Subservicing Agreement to the assuming party at the expense of the
outgoing Servicer.
SECTION 3.06 Collection of Mortgage Loans; Collection Account;
Certificate Account; Prefunding Account; Capitalized
Interest Account
(a) Continuously from the date hereof until the principal and
interest on all Mortgage Loans have been paid in full or such Mortgage Loans
have become Liquidation Mortgage Loans, the Servicer shall proceed in
accordance with the customary and usual standards of practice of prudent
mortgage loan servicers to collect all payments due under each of the related
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 the Servicer
collects escrow payments in ascertaining and estimating Escrow
50
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
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 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 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
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) The 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
"Vesta 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 2001-HE20, CSFB Mortgage Pass-Through
Certificates, Series 2001-HE20", wherein the Servicer will have access to such
Collection Accounts. Each Collection Account shall be an Eligible Account. Any
funds deposited in a Collection Account shall at all times be either invested
in Eligible Investments or shall be fully insured to the full extent permitted
under applicable law. Funds deposited in a Collection Account may be drawn on
by the Servicer in accordance with Section 3.09.
(c) The 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 the Servicer and payments
made by the 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);
51
(v) all Advances made by the 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 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 the 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 the
Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.06, the Servicer may deduct from amounts received
by it, prior to deposit to the applicable Collection Account, any portion of
any Scheduled Payment representing the Servicing Fee. In the event that the
Servicer shall remit any amount not required to be remitted, it may at any
time withdraw or direct the institution maintaining the related Collection
Account to withdraw such amount from such Collection Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the Trustee or such other
institution maintaining such Collection Account which describes the amounts
deposited in error in such Collection Account. The Trustee may conclusively
rely on such notice and shall have no liability in connection with the
withdrawal of such funds at the direction of a Servicer. The Servicer shall
maintain adequate records with respect to all withdrawals made by it pursuant
to this Section. All funds deposited in a Collection Account shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
3.09(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:
(x) the aggregate amount remitted by the Servicer to the
Trustee pursuant to Section 3.09(a)(viii); and
(xi) any other amounts deposited hereunder which are required
to be deposited in the Certificate Account.
In the event that the Servicer shall remit to the Trustee any amount
not required to be remitted, it may at any time in writing direct the Trustee
to withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. Such direction may be accomplished by delivering
written notice to the Trustee (upon which the Trustee may conclusively rely)
which describes the amounts deposited in error in the Certificate Account. All
52
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 the 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 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 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 Servicer in such Collection Account. The Trustee in its fiduciary capacity
shall not be liable for the amount of any loss incurred in respect of any
investment or lack of investment of funds held in the Collection Account made
in accordance with this Section 3.06. All funds on deposit in the Certificate
Account shall remain uninvested or may be invested in by the Trustee, in its
sole discretion in Eligible Investments selected by the Trustee. All net
income and gain realized from the investment of, and all earnings on, funds
deposited in the Certificate Account shall be for the benefit of the Trustee
and shall be available to be withdrawn pursuant to Section 3.09(b)(i). All net
income and gain realized from the investment of, and all earnings on, funds
deposited in the Simple Interest Excess Sub-Accounts shall be paid in
accordance with Section 3.07. All income and gain net of any losses realized
from any such balances or investment of funds on deposit in the Prefunding
Account shall be for the benefit of the Depositor and shall be remitted to it
monthly. The amount of any net investment losses in the Prefunding Account
shall promptly be deposited by the Depositor in the Prefunding Account. The
Trustee in its fiduciary capacity shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in the 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) The Servicer shall give notice to the Trustee, each Rating Agency
and the Depositor of any proposed change of the location of the related
Collection Account prior to any change thereof. The Trustee shall give notice
to the Servicer, each Rating Agency and the Depositor of any proposed change
of the location of the Certificate Account 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 Pre-Funded 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.
53
If any funds remain in the Prefunding Account on December 24, 2001,
to the extent that they represent earnings on the amounts originally deposited
into the Prefunding Account, the Trustee shall distribute them to the order of
the Depositor. The remaining funds shall be transferred to the Certificate
Account to be included as part of principal distributions to the Certificates
on the December 2001 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 October 2001, November 2001 and December 2001 Distribution Date, the
Trustee shall transfer from the Capitalized Interest Account to the
Certificate Account an amount equal to the Capitalized Interest Requirement
for such Distribution Date. On any Subsequent Transfer Date, any Overfunded
Interest Amount shall be withdrawn from the Capitalized Interest Account and
paid to the Depositor. Any funds remaining in the Capitalized Interest Account
immediately after the termination of the Prefunding Period shall be paid to
the Depositor.
SECTION 3.07 Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts; Payments
of Taxes, Insurance and Other Charges; Simple Interest
Excess Sub-Accounts; Deposits in Simple Interest
Excess Sub-Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, each Servicer shall segregate and hold all funds
collected and received pursuant to a Mortgage Loan constituting Escrow
Payments separate and apart from any of its own funds and general assets and
shall establish and maintain one or more Escrow Accounts, in the form of time
deposit or demand accounts, titled, "[Servicer's name], in trust for various
mortgagors related to Credit Suisse First Boston Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2001-HE20". The Escrow Accounts
shall be Eligible Accounts. Funds deposited in the Escrow Account may be drawn
on by the Servicer in accordance with Section 3.07(d).
(b) The 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) The Servicer shall make withdrawals from the Escrow Account only
to effect such payments as are required under this Agreement, as set forth in
Section 3.07(d). The 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, the Servicer shall pay
interest on escrowed
54
funds to the Mortgagor notwithstanding that the 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 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 the Servicer for any Servicing Advances made
by the 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;
(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 the 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 the 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 Servicer shall determine that any such payments are made by the
Mortgagor prior to the applicable penalty or termination date. The Servicer
assumes fill 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
the Servicer shall make Servicing Advances from its own funds to effect such
payments to the extent that the Servicer, in accordance with Accepted
Servicing Practices, deems such Servicing
55
Advance recoverable, and (ii) any penalties or late charges incurred in
connection with such bills; provided, however, the Servicer shall not be so
obligated with respect to any Mortgage which does not provide for Escrow
Payments; provided, further, Vesta 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 Vesta pursuant to Section 3.05.
(f) No later than the Closing Date, Vesta shall establish and
maintain a sub-account of the Collection Account titled "Vesta, Simple
Interest Excess Sub-Account in trust for the Holders of Credit Suisse First
Boston Mortgage Securities Corp., CSFB ABS Trust Series 2001-HE20, CSFB
Mortgage Pass-Through Certificates, Series 2001-HE20". Vesta 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) Vesta 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 equal to the lesser of (i) the amount on
deposit therein, and (ii) the Net Simple Interest Shortfall for such
Distribution Date.
(h) Vesta 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 August, commencing in October, 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 Vesta 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 Vesta in such Simple Interest Excess Sub-Account.
SECTION 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections.
(a) The 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 Servicer. In addition, the Servicer shall provide to Vesta 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, the Servicer will
provide to each Certificateholder which is a savings and loan association,
bank or insurance company certain
56
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 the Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Servicer in providing such reports and access.
(c) The Servicer shall inspect the related Mortgaged Properties as
often as deemed necessary by the Servicer in the 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
Servicer shall keep a written or electronic report of each such inspection.
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and
Certificate Account.
(a) The Servicer may from time to time make withdrawals from the
related Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously
retained by the Servicer) the servicing compensation to which it is
entitled pursuant to Section 3.15, and to pay to the Servicer, as
additional servicing compensation, earnings on or investment income
with respect to funds in or credited to such Collection Account and
any sub-account thereof;
(ii) to reimburse the Servicer for unreimbursed Advances made
by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the 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 the Servicer);
(iii) to reimburse the Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse the Servicer for (A) unreimbursed Servicing
Advances, the Servicer's right to reimbursement pursuant to this
clause (iv) with respect to any 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, the Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to
Section 3.10 or 6.03 hereof;
57
(vii) to withdraw any amount deposited in such Collection
Account and not required to be deposited therein;
(viii) on or prior to 4:00 p.m. New York time on the Servicer
Remittance Date preceding each Distribution Date, to withdraw an
amount equal to the sum of the portion of the Interest Remittance
Amount and the Principal Remittance Amount in such Collection
Account applicable to the Mortgage Loans serviced by the 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, Vesta may withdraw
an amount equal to the sum of all Prepayment Premiums received
during the related Prepayment Period 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);
and
(xi) to clear and terminate such Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
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) and (v). Prior to making any withdrawal from a Collection
Account pursuant to subclause (iii), the Servicer shall deliver to the Trustee
a certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Servicer to be a Nonrecoverable Advance and
identifying the related 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 last paragraph of Section 8.11).
In addition, the Trustee may from time to time make withdrawals from the
Certificate Account for the following proposes:
(i) to pay to itself any investment income from balances in the
Certificate Account prior to distributions to Certificateholders;
(ii) to withdraw and return to the Servicer for deposit to the
applicable Collection Account any amount deposited in the
Certificate Account and not required to be deposited therein; and
(iii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
58
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage Impairment
Insurance and Primary Insurance Policy; Claims;
Restoration of Mortgaged Property.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer rated either: "V" or better in the
current Best's Key Rating Guide ("Best's") or acceptable to FNMA and/or FHLMC
against loss by fire, hazards of extended coverage and such other hazards as
are customary in the area where the Mortgaged Property is located, in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Mortgage Loan and (ii) the greater of
(A) the outstanding principal balance of the Mortgage Loan and (B) an amount
such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available), the 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 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, the
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, the
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
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 the 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.
The 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.
59
All policies required hereunder shall name the 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.
The 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 the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies are rated: V in Best's or acceptable FNMA and/or FHLMC and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The 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 the Servicer under
any such policies (other than amounts to be deposited in the related Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the 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 the 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 to the extent permitted by Section 3.09 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 the
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, the Servicer shall deposit
in the 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 the Servicer's funds, without reimbursement
therefor. In connection with its activities as Servicer of the related
Mortgage Loans, the 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.
60
(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, the 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 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, the 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, the 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 the Servicer shall in no
event have any responsibility or liability for any failure to recover under
the Primary Insurance Policy for such reason. If the Servicer determines that
recoveries are so jeopardized, it shall notify the Mortgagor, if required, and
obtain from another Qualified Insurer a replacement insurance policy. The
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
the 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, the 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, the 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 Mortgage Loans covered by a Primary Insurance Policy,
the Servicer agrees to effect timely payment of the premiums on each Primary
Insurance Policy, and such costs not otherwise recoverable shall be
recoverable by the Servicer from the related liquidation proceeds.
In connection with its activities as servicer, the 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]
61
(e) The Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, the Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds:
(i) the Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the 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, the Servicer shall place
the Insurance Proceeds in the related Escrow Account.
If the Trustee is named as an additional loss payee, the 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) The 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
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 the 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 the Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, the 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 the 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, the Servicer shall not be deemed
to be in default under this Section by reason of any transfer or assumption
which the 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.
62
(c) To the extent that any Mortgage Loan is assumable, the 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 Servicer
diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan.
(d) Subject to the 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 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 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 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 the Servicer for entering into an assumption or
substitution of liability agreement will be retained by the Servicer as
additional servicing compensation.
SECTION 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans.
(a) The 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, the Servicer shall
take such action as (i) the 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)
the 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 the Servicer shall not be required
to expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself of such expenses and
(ii) that such expenses will be
63
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the related Collection Account). The
Servicer shall be responsible for all other costs and expenses incurred by it
in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the Liquidation Proceeds with respect to the
related Mortgaged Property or otherwise pursuant to Section 3.08(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 the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee otherwise requests, an environmental inspection or review of
such Mortgaged Property conducted by a qualified inspector shall be arranged
for by the Servicer. Upon completion of the inspection, the 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,
the 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 the 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 the 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 the 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 the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.08(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, the Servicer
shall be reimbursed for all Servicing Advances made with respect to the
related Mortgaged Property from the related Collection Account pursuant to
Section 3.08(a) hereof, and the 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 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. The Servicer, either itself or through an agent
selected by the 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. The
Servicer shall furnish to the Trustee on or before each Distribution Date a
statement with respect
64
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 Collection
Account no later than the close of business on each Determination Date. The
Servicer shall perform the tax reporting and withholding required by Sections
1445 and 6050J of the Code with respect to foreclosures and abandonments, the
tax reporting required by Section 6050H of the Code with respect to the
receipt of mortgage interest from individuals and any tax reporting required
by Section 6050P of the Code with respect to the cancellation of indebtedness
by certain financial entities, by preparing such tax and information returns
as may be required for filing.
To the extent consistent with Accepted Servicing Practices, the
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 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 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 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
65
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 the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any REO Properties, net
of reimbursement to the Servicer for expenses incurred (including any property
or other taxes) in connection with such management and net of applicable
accrued and unpaid Servicing Fees, and unreimbursed Advances and Servicing
Advances, shall be applied to the payment of principal of and interest on the
related defaulted 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 Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for
any unreimbursed Advances; third, to reimburse the related Collection Account
for any Nonrecoverable Advances (or portions thereof) that were previously
withdrawn by the Servicer pursuant to Section 3.09(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 Servicer as additional servicing compensation pursuant to Section 3.15.
(f) The 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 Vesta to commence or delay foreclosure proceedings with respect
to delinquent Mortgage Loans serviced by it and will contain provisions for
the deposit of cash with the Servicer by the Holder that would be available
for distribution to Certificateholders if Liquidation Proceeds are less than
they otherwise may have been had Vesta acted in accordance with its normal
procedures, (ii) purchase delinquent Mortgage Loans serviced by Vesta 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 Mortgage Loans
serviced by Vesta so long as such Holder (A) meets the requirements for a
Subservicer set forth in Section 3.02(a), and (B) will service such Mortgage
Loans in accordance with this Agreement.
66
(g) Vesta , at its option, may (but is not obligated to) purchase
from the Trust Fund any Mortgage Loan which is 90 or more days delinquent. If
it elects to make any such purchase, Vesta shall purchase such Mortgage Loan
with its own funds at a price equal to the Repurchase Price.
SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the
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
Custodian shall within four Business Days release the related Mortgage File to
the Servicer, and the Trustee shall within four Business Days of the
Servicer's direction execute and deliver to the 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
the Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The 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 Custodian to release the Mortgage File
to the Servicer. Subject to the further limitations set forth below, the
Servicer shall cause the Mortgage File or documents so released to be returned
to the Trustee or the Custodian, as applicable, when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the related Collection Account, in which
case the 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, the
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, the Servicer
shall transmit to the Custodian on behalf of the Trustee as required by this
Agreement all documents and instruments in respect of a Mortgage Loan coming
into the possession of the Servicer from time to time required to be delivered
to the Trustee pursuant to the terms hereof and shall account
67
fully to the Trustee for any funds received by the Servicer or which otherwise
are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Servicer in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in a
Collection Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Servicer
also agrees that it shall not create, incur or subject any 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
the Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to the Servicer under this
Agreement.
SECTION 3.15 Servicing Fee.
As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the applicable Collection Account in accordance with
Section 3.09(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 the Servicer pursuant to Section
3.06(c)(vii). In connection with the servicing of any Special Serviced
Mortgage Loan, Vesta shall receive the Servicing Fee for each such Mortgage
Loan as its compensation.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Servicer. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02 and the payment
of any premiums for hazard insurance and 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.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related 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 Servicer.
Nothing in this Section shall limit the obligation of the Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
68
SECTION 3.17 Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor, the Rating Agencies and
the Trustee on or before 120 days after the end of the 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 the Servicer during
the preceding calendar year and of the performance of the Servicer under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, the Servicer has fulfilled
all its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof and the
action being taken by the Servicer to cure such default.
SECTION 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 120 days after the end of the Servicer's fiscal year,
commencing in its 2002 fiscal year, the Servicer, at its expense, shall cause
a nationally or regionally recognized firm of independent public accountants
(who may also render other services to the Servicer, the Seller or any
affiliate thereof) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Trustee and the Depositor to
the effect that with respect to the Servicer, such firm has examined certain
documents and records relating to the servicing of mortgage loans which the
Servicer is servicing, including the related 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.
The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Any such
Fidelity Bond and Errors and Omissions Insurance Policy shall be in the form
of the Financial Institution Bond Form 22 - Fidelity Bond American
International Specialty Lines Insurance Policy Form ("5713 5/93") Mortgage
Banker Broker E&O and shall protect and insure
69
the Servicer against losses, including forgery, theft, embezzlement, fraud,
errors and omissions and negligent acts of the Servicer Employees. Such
Fidelity Bond and Errors and Omissions Insurance Policy also shall protect and
insure the 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, the Servicer may not waive any Prepayment
Premium or portion thereof required by the terms of the related Mortgage Note
unless (i) the Servicer determines 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 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, the Servicer may waive a Prepayment Premium in connection
with a short sale or short payoff on a defaulted Mortgage Loan. If the
Servicer has waived all or a portion of a Prepayment Premium relating to a
Principal Prepayment, other than as provided above, the 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 the 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 Loss Mitigation Advisor.
For and on behalf of the Depositor, the Loss Mitigation Advisor 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 Loss Mitigation Advisory Agreement. The
Loss Mitigation Advisor shall look solely to the Servicer for all information
and data (including loss and delinquency information and data) and loan level
information and data relating to the servicing of the Mortgage Loans.
70
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 Advances by the Servicer.
The 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 Loss Mitigation
Advisor Fee Rate) which were due on the related Mortgage Loans during the
applicable Due Period and (ii) with respect to the Simple Interest Mortgage
Loans, 30 day's 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, the 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). The
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.
To the extent required by Accepted Servicing Practices, the 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 Servicer determines, in its sole discretion, that Advances with
respect to such Mortgage Loan are Nonrecoverable Advances. In the event that
the Servicer determines that any such advances are Nonrecoverable Advances,
the 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 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 the 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 Servicer from its own funds by deposit in such Collection Account on or
before any future Distribution Date in which such funds would be due.
71
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 1, to the
Trustee and FSA, any Trustee Fee and FSA Premium, respectively,
remaining unpaid after giving effect to clauses (A) and (B);
D. from the Interest Remittance Amount for Loan Group 1 and Loan
Group 2, to the Senior Certificates, pro rata, Current Interest
and any Carryforward Interest for such Class and such
Distribution Date, applied in accordance with the allocation
rules set forth below;
E. 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;
F. 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;
G. 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;
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 B Certificates, Current Interest and any Carryforward
Interest for such Class and such Distribution Date; and
I. 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 for such Distribution
Date.
The Interest Remittance Amount for Loan Group 1 and Loan Group 2
distributed pursuant to clause (D) above will be applied to the Senior
Certificates as follows:
72
(i) amounts distributed to the Class A-1 Certificates will
reduce the Interest Remittance 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. I. from the Principal Remittance Amount derived from Loan
Group 1, until the Class Principal Balance of either the
Class A-1 Certificates or the Class A-2 Certificates is
reduced to zero, to the Class A-1 Certificates,
79.7097142827% of such amount and to the Class A-2
Certificates, 20.2902857173% of such amount;
II. from the Principal Remittance Amount derived from Loan
Group 2, sequentially to the Class R Certificates and the
Class A-2 Certificates, in that order, until the
respective Class Principal Balance has been reduced to
zero;
III. 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 has been reduced to
zero; and
IV. from the Principal Remittance Amount derived from Loan
Group 2, to the Class A-1 Certificates, 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);
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 for such Distribution Date.
73
(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 Trustee shall
distribute the Principal Payment Amount for such date in the following order
of priority:
A. I to the extent of the Principal Remittance Amount derived
from Loan Group 1, until the Class Principal Balance of
either the Class A-1 Certificates or the Class A-2
Certificates is reduced to zero, to the Class A-1
Certificates, 79.7097142827% of the Group 1 Allocation
Amount and to the Class A-2 Certificates, 20.2902857173%
of the Group 1 Allocation Amount;
II to the extent of the Principal Remittance Amount derived
from Loan Group 2, sequentially, to the Class A-2
Certificates and the Class A-1 Certificates, in that
order, the Group 2 Allocation Amount, until the respective
Class Principal Balance has been reduced to zero; and
III to the extent of the Principal Remittance derived from
Loan Group 1, sequentially, to the Class A-1 Certificates
and the Class A-2 Certificates, in that order, the
remaining Group 1 Allocation Amount, until respective
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
Principal Payment Amount remaining 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. (I) 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
74
has occurred, to the extent of Monthly Excess Interest for
such Distribution Date, to the Offered Certificates, in
the following order of priority:
(aa) to the extent of the Monthly Excess Interest derived
from Loan Group 1, until the Class Principal Balance
of either the Class A-1 Certificates or the Class A-2
Certificates is reduced to zero, to the Class A-1
Certificates, 79.7097142827% of the Group 1 Excess
Interest Amount and to the Class A-2 Certificates,
20.2902857173% of the Group 1 Excess Interest Amount;
(bb) to the extent of the Monthly Excess Interest derived
from Loan Group 2, sequentially to the Class A-2
Certificates and the Class A-1 Certificates, in that
order, the Group 2 Excess Interest Amount, until the
respective Class Principal Balance has been reduced
to zero; and
(cc) to the extent of the Monthly Excess Interest Amount
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.
(dd) to the Class M-1 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero;
(ee) to the Class M-2 Certificates, until the Class
Principal Balance of such Class has been reduced to
zero; and
(ff) to the Class B Certificates, until the Class
Principal Balance of such Class has been reduced to
zero; and
(II) 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 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;
75
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, any amounts due to the Class X
Certificaeholders and required to be deposited in the Required
Basis Risk Reserve Fund;
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 the
amount distributable thereon pursuant to the pooling and
servicing agreement; 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 the Servicer with respect to
the preceding Prepayment Period.
SECTION 4.03 Allocation of Losses.
(a) On each Distribution Date, the Trustee shall determine the total
of the Applied Loss Amount, if any, for such Distribution Date. The Applied
Loss Amount for any Distribution Date shall be applied by reducing the Class
Principal Balance of each Class of Subordinate Certificates beginning with the
Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Class Principal Balance
thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of
Subordinate Certificates shall be allocated among the Subordinate Certificates
of such Class in proportion to their respective Percentage Interests.
SECTION 4.04 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Certificateholder, the
Servicer, the Depositor and each Rating Agency, a statement based on the
information provided by the 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;
76
(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 Balance for such Distribution Date;
(vi) the Overcollateralization Amount for such Distribution
Date
(vii) the amount of the Servicing Fees, the Trustee Fee, the
Loss Mitigation Advisor 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 in foreclosure, in bankruptcy or which are delinquent (with a
notation indicating which Mortgage Loans, if any, are in foreclosure
or bankruptcy) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days, as of the close of business on the last day of the
calendar month preceding such Distribution Date, assuming twelve,
thirty day months;
(xi) 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;
(xii) the Rolling Three Month Delinquency Rate for such
Distribution Date;
(xiii) the total number and principal balance of any REO
Properties (and market value, if available) as of the last day of
the calendar month preceding such Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during
the preceding calendar month and aggregate Realized Losses included
in such distribution;
(xv) the amount on deposit in the Prefunding Account (including
subsequent transfer amounts or amounts included in the Principal
Remittance Amount on December 1, 2001);
77
(xvi) 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;
(xvii) the portion of any distribution to the Class A
Certificateholders constituting an Insured Payment for such
Distribution Date;
(xviii) the amount on deposit in the Capitalized Interest
Account (including a breakdown of amounts required and released for
the calendar month preceding such Distribution Date; and
(xix) the gross weighted average coupon of the Mortgage Loans
as of the first date of the applicable period for such Distribution
Date.
The Trustee's responsibility for disbursing the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Servicer.
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 the Servicer.
(b) Upon request, within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii)
of this Section 4.04 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.
SECTION 4.05 Servicer to Cooperate.
The Servicer shall provide to the Trustee information which is
mutually agreeable to the Trustee and the Servicer with respect to each
Mortgage Loan serviced by the Servicer no later than the second business day
following the Servicer 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
78
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 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. 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 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.
(a) As soon as possible, and in no event later than 11:00 a.m., New
York time, on the third Business Day immediately preceding each Distribution
Date, the Trustee shall determine the amount of funds available for such
Distribution Date minus the amount of any FSA Premium and any Trustee Fee to
be paid on such Distribution Date.
If for any Distribution Date the Trustee determines that the funds
available for distribution to the Holders of the Class A Certificates pursuant
to Section 4.02 will be
79
insufficient to pay the Guaranteed Distribution, the Trustee shall complete a
notice in the form set forth as Exhibit A to the FSA Policy (the "Notice") and
shall submit such Notice to the Fiscal Agent no later than 12:00 noon, New
York time, on the third Business Day preceding such Distribution Date. The
Notice shall constitute a claim for an Insured Payment pursuant to the FSA
Policy. Upon receipt of the Insured Payment, at or prior to the latest time
payments of the Insured Payment are to be made by the FSA pursuant to the FSA
Policy, on behalf of the Holders of the Class A Certificates, the Trustee
shall deposit such Insured Payments in the Distribution Account and shall
distribute such Insured Payments only in accordance with Section 4.02, if
applicable.
The Trustee shall receive as attorney-in-fact of each Holder of a
Class A Certificate, any Insured Payment from FSA and disburse the same to
each Holder of a Class A Certificate in accordance with the provisions of
Article IV. Insured Payments 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
Certificate, and FSA shall become the owner of such unpaid amounts due from
the Trust in respect of such Insured Payments as the deemed assignee of such
Holder and shall be entitled to receive the FSA Reimbursement Amount pursuant
to Section 4.02. The Trustee hereby agrees on behalf of each Holder of a Class
A Certificate for the benefit of FSA that it and they recognize that to the
extent that FSA makes Insured Payments, either directly or indirectly (as by
paying through the Trustee), to the Class A Certificateholders, FSA will be
entitled to receive the FSA Reimbursement Amount pursuant to Section 4.02.
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 Certificates shall also have received the full amount of the
Guaranteed Distributions for such Distribution Date.
(b) The Trustee shall comply with the provisions of the FSA Policy
with respect to claims upon the FSA Policy.
(c) At the time of the execution and delivery of this Agreement, the
Trustee shall establish a separate special purpose trust account for the
benefit of Holders of the Class A Certificates referred to herein as the "FSA
Account" and over which the Trustee shall have exclusive control and sole
right of withdrawal. The Trustee shall deposit any Insured Payment made under
the FSA Policy in the FSA Account and thereafter into the Distribution Account
for distribution of such amount only for purposes of payment to Holders of the
Class A Certificates of Guaranteed Distributions for the Class A Certificates
for which a claim was made and such amount may not be applied to satisfy any
cost, expenses or liabilities of the Trustee or the Trust. Insured Payments
made under the FSA Policy shall be disbursed by the Trustee to Holders of the
Class A Certificates in the same manner as distributions on the Holders of the
Class A Certificates are made under Section 4.02. It shall not be necessary
for such distributions to be made by checks or wire transfers separate from
the check or wire transfer used to pay Guaranteed Distributions with other
funds available to make such distributions. However, the amount of any Insured
Payments made on the Class A Certificates to be paid from funds transferred
from the FSA Account shall be noted in the Certificate Register and in the
statements
80
to be furnished to Holders of the Certificates pursuant to Section 4.04
hereof. Funds held in the FSA Account shall not be invested by the Trustee.
(d) On any Distribution Date with respect to which a claim has been
made under the FSA Policy, the amount of any Insured Payment received by the
Trustee as a result of any claim under the FSA Policy and which is required to
make distributions on the Class A Certificates equal to Guaranteed
Distributions on the Class A Certificates on such Distribution Date, shall be
withdrawn from the FSA Account, deposited into the Distribution Account and
applied directly by the Trustee, together with all other funds to be withdrawn
from the Distribution Account, to the payment in full of Guaranteed
Distributions on the Class A Certificates. Any funds remaining in the FSA
Account on the first Business Day following a Distribution Date shall be
remitted in immediately available funds to FSA, pursuant to the instructions
of FSA, by the end of such Business Day. FSA shall have the right to inspect
such records at reasonable times during normal business hours upon reasonable
prior written notice to the Trustee.
(e) The Trustee shall promptly notify FSA of any proceeding or the
institution of any action, of which a Responsible Officer of the Trustee has
actual knowledge, seeking the avoidance as a preferential transfer under the
Bankruptcy Code (a "Preference Claim") of any distribution made with respect
to the Class A Certificates. Each Certificateholder of Class A Certificates,
by its purchase of Class A Certificates, the Seller, the Servicer and the
Trustee hereby agree that FSA (so long as there is no continuing default by
FSA under its obligations under the FSA Policy) 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 such Preference Claim and
(ii) the posting of any surety, supersedeas or performance bond pending any
such appeal.
(f) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A Certificates
from moneys received under the FSA Policy. FSA shall have the right to inspect
such records at reasonable times during normal business hours upon one
Business Day's prior notice to the Trustee.
(g) Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on any of the Class A Certificates which
is made with moneys received pursuant to the terms of the FSA Policy shall not
be considered payment of such Class A Certificates from the Trust Fund and
shall not result in the payment of or the provision for the payment of the
principal of or interest on such Certificates within the meaning of Section
4.02. The Depositor, the Seller, the Servicer and the Trustee acknowledge, and
each Holder by its acceptance of a Class A Certificate agrees, that without
the need for any further action on the part of FSA, the Depositor, the Seller,
the Servicer or the Trustee (a) to the extent FSA makes payments, directly or
indirectly, on account of principal of or interest on the Class A Certificates
to the Holders of such Certificates, FSA will be fully subrogated to the
rights of such Holders to receive such principal and interest from the Trust
Fund and (b) FSA shall be paid such principal and interest but only from the
sources and in the manner provided herein for the payment of such principal
and interest.
81
(h) The Trustee and the Servicer shall cooperate in all respects with
any reasonable request by FSA for action to preserve or enforce FSA's rights
or interests under this Agreement without limiting the rights or affecting the
interests of the Holders as otherwise set forth herein.
(i) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Trustee, the Rating Agencies or
the Class A Certificateholders shall also be sent at such time to FSA at
Financial Security Assurance, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attn: Transaction Oversight.
(j) FSA shall be a third-party beneficiary of this Agreement,
entitled to enforce the provisions hereof as if a party hereto.
82
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.
(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
83
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 and the servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
84
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
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 or the 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 attempt to 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
85
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 G.
(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 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 or the 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 Opinion
of Counsel furnished
86
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 Servicer, the Depositor or the Trustee shall be liable for any
delay in delivery of such instruction and each may conclusively rely on, and
shall be protected in relying on, such
87
instructions. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue of
its assumption of such obligations become liable to any party for any act or
failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Trustee such
security or indemnity as may be required by it to hold it harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest.
In connection with the issuance of any new Certificate under this Section
5.03, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
The Servicer and the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the Servicer or the Trustee or any agent of the Servicer or the Trustee shall
be affected by any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders
at such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
88
SECTION 5.06 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in St. Xxxx, Minnesota where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
89
ARTICLE VI
THE DEPOSITOR, THE SELLER AND THE SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Seller
and the Servicer.
The Depositor, the Seller and each Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller
or the Servicer.
The Depositor, the Seller and the Servicer will each keep in full
effect its existence, rights and franchises as a corporation under the laws of
the United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Seller or the Servicer may
be merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller or the Servicer shall be a
party, or any person succeeding to the business of the Depositor, the Seller
or the Servicer, shall be the successor of the Depositor, the Seller or the
Servicer, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, provided, however, that the
successor or surviving Person with respect to a merger or consolidation of the
Servicer shall be an institution 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 Servicer and Others.
(a) None of the Depositor, the Seller, the Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Seller, the Servicer or any
such Person against any breach of representations or warranties made by it
herein or protect the Depositor, the Seller, the Servicer or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The
Depositor, the Seller, the Servicer and any director, officer, employee or
agent of the Depositor, the Seller or the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. None of the Depositor, the
Seller or the
90
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 or the 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 and the Servicer shall be entitled to be reimbursed
therefor from the Trust Fund.
(b) The Servicer shall indemnify the Trustee and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trustee may sustain in any way related
to the failure of the Servicer to perform its duties and service the Mortgage
Loans in strict compliance with the terms of this Agreement. The 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 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 the Servicer to
service and administer the Mortgage Loans in strict compliance with the teens
of this Agreement.
SECTION 6.04 Limitation on Resignation of the Servicer.
(a) Subject to Section 6.04(b) below, the Servicer shall not resign
from the obligations and duties hereby imposed on it except (i)(a) upon
appointment of a successor servicer (which may be with respect to all or a
portion of the 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 the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
Servicer's responsibilities, duties, liabilities and obligations hereunder.
(b) Notwithstanding the foregoing, DLJ Mortgage Capital Inc. shall be
entitled to request that Vesta resign and appoint a successor servicer;
provided that such entity delivers to the Trustee the letter required by
6.04(a)(i) above.
91
SECTION 6.05 Limitation Upon Liability of the Loss
Mitigation Advisor.
Neither the Loss Mitigation Advisor, nor any of the directors,
officers, employees or agents of the Loss Mitigation Advisor, shall be under
any liability to the Trustee, the Certificateholders or the Depositor for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, in reliance upon information provided by the
Servicer under the Loss Mitigation Advisory Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Loss
Mitigation Advisor 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 Loss Mitigation Advisory
Agreement. The Loss Mitigation Advisor and any director, officer, employee or
agent of the Loss Mitigation Advisor may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder, and may rely in good faith upon the accuracy of
information furnished by the Servicer pursuant to the Loss Mitigation Advisory
Agreement in the performance of its duties thereunder and hereunder.
92
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 the Servicer to make any deposit or payment
required pursuant to this Agreement (including but not limited to
Advances to the extent required under Section 4.01) which continues
unremedied for a period of one day after the date upon which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee or the Depositor, or
to the Servicer and the Trustee by the Holders of Certificates
having not less than 25% of the Voting Rights evidenced by the
Certificates; or
(ii) any failure by the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement, or if any of the
representations and warranties of the Servicer in Section 2.03(a)
proves to be untrue in any material respect, which failure or breach
continues unremedied for a period of 60 days after the date on which
written notice of such failure or breach, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or
the Depositor, or to the Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights evidenced
by the Certificates, provided, however, that in the case of a
failure that cannot be cured within 60 days, the cure period may be
extended if the Servicer can demonstrate to the reasonable
satisfaction of the Trustee and FSA that the Servicer is diligently
pursuing remedial action; or;
(iii) failure by the Servicer to maintain, if required, its
license to do business in any jurisdiction where the related
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 the Servicer and such
decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating
to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of or commence a voluntary case under, any applicable
insolvency, bankruptcy or reorganization statute, make an
93
assignment for the benefit of its creditors, voluntarily suspend
payment of its obligations; or
(vii) the Servicer ceases to meet the qualifications of a FNMA
or FHLMC approved servicer.
Other than an Event of Default resulting from a failure of the
Servicer to make any required Advance, if an Event of Default shall occur and
a Responsible Officer of the Trustee has knowledge thereof, then, and in each
and every such case, so long as such Event of Default shall not have been
remedied, the Trustee may, or at the direction of the Holders of Certificates
evidencing not less than 51% of the Voting Rights evidenced by the
Certificates, the Trustee shall by notice in writing to the Servicer (with a
copy to each Rating Agency), terminate all of the rights and obligations of
the Servicer under this Agreement and in and to the related Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder.
If an Event of Default results from the failure of the Servicer to make a
required Advance, the Trustee shall, by notice in writing to the Servicer and
the Depositor (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the related
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder.
Upon receipt by the Servicer of such written notice of termination,
all authority and power of the Servicer under this Agreement, whether with
respect to the related 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, the Servicer shall prepare, execute and deliver to
the successor entity designated by the Trustee any and all documents and other
instruments, place in such successor's possession all related 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. The Servicer
shall cooperate with the Trustee and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to a
Collection Account or Escrow Account or thereafter received with respect to
the related 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 the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the related Mortgage Loans and
related documents, or otherwise.
SECTION 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 of this Agreement, the Trustee shall, subject to and
to the extent provided herein, be the successor to the Servicer, but only in
its capacity as servicer under this Agreement, and not in any other, and the
transactions set forth herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof
94
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 3.08(a) to the extent that such payment or reimbursement relates to
the period prior to termination of the Servicer. Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in
accordance with Section 7.01, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to 4.01 hereof, or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not
adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the 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 the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under
Section 7.01 hereunder), with like effect as if originally named as a party to
this Agreement; provided that each Rating Agency acknowledges that its rating
of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment and
delegation. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall,
subject to the limitations described herein, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on the related 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 the Servicer shall give notice to the Mortgagors of
such change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to this Agreement.
SECTION 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually
95
known to a Responsible Officer the Trustee, unless such Event of Default shall
have been cured or waived.
96
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;
97
(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
98
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, the 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 the
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Collection Account by the Depositor or the Servicer.
99
SECTION 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the Depositor,
the Seller, the Servicer and their affiliates, with the same rights as it
would have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
(a) The Trustee, as compensation for its activities hereunder, shall
be entitled to withdraw from the Certificate Account on each Distribution Date
prior to making distributions pursuant to Section 4.02 any investment income
or other benefit derived from balances in the Certificate Account for such
Distribution Date pursuant to Section 3.08(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 Agreement, (b) the Certificates, or (c)
the performance of any of the Trustee's duties hereunder or under the
Custodial Agreement, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or 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
100
$50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating which would not cause either of the Rating
Agencies to reduce their respective then current Ratings of the Certificates
(or having provided such security from time to time as is sufficient to avoid
such reduction), as evidenced in writing by each Rating Agency. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the proposes of this Section 8.06 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. 1n case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 8.06, the Trustee
shall resign immediately in the manner and with the effect specified in
Section 8.07. The entity serving as Trustee may have normal banking and trust
relationships with the Depositor, the Seller or the Servicer and their
affiliates; provided, however, that such entity cannot be an affiliate of the
Seller, the Depositor or the Servicer other than the Trustee in its role as
successor to the Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Seller, the Servicer and each Rating Agency not less than 60 days before the
date specified in such notice, when, subject to Section 8.08, such resignation
is to take effect, and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If the
Trustee gives notice of such resignation, the Depositor shall promptly appoint
a successor trustee. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation or removal (as provided below), the
resigning or removed Trustee may petition any court of competent jurisdiction
for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request thereto by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a
tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located and the imposition of such tax would be
avoided by the appointment of a different trustee, then the Depositor may
remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which shall be delivered to the Trustee, one copy to
the Servicer and the Seller and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Depositor, the servicer and the
Seller, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the successor trustee.
101
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08.
SECTION 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the Servicer and the Seller an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Servicer, the Seller
and the predecessor trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
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
102
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable. If the
Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred
or imposed upon the Trustee, except for the obligation of the
Trustee in its capacity as successor servicer under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or
imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act
separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular set or acts are to be performed (whether as Trustee
hereunder or as successor to the Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including
the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and
such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for
the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer and the Depositor.
103
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, a "real estate mortgage investment conduit"
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 roles, 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 last 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 when and as the
104
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 3.11(b).
The Trustee shall treat the Basis Risk Reserve Fund and Interest Rate
Cap Account as outside reserve funds within the meaning of Treasury Regulation
1.860G-2(h) that are owned by
105
the Class X Certificateholder and the Depositor, respectively, and that are
not assets of any REMIC. The Trustee shall treat the rights of the Class X-0,
Xxxxx X-0, Class M-1, Class M-2, and Class B Certificateholders to receive
payments from the Basis Risk Reserve Fund and the Interest Rate Cap Account as
rights in an interest rate cap contract written by the Class X
Certificateholder and the Depositor, respectively in favor of the Class A
(other than the Class A-IO), Class M-1, Class M-2, and Class B
Certificateholders. Thus, each Certificate other than the Class A-IO, Class X
and the Class R Certificates shall be treated as representing ownership of not
only REMIC Regular Interests, but also ownership of an interest in multiple
interest rate cap contracts. For purposes of determining the issue price of
the REMIC Regular interests, the Trustee shall assume that the Basis Risk
Reserve Fund and the Interest Rate Cap Account has a value of $5,000 and
$5,000, respectively.
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 Master Servicer 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 Master
Servicer 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.
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 Servicer shall, upon the written request of the
Trustee, timely
106
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 Servicer 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 the Servicer of its duties and obligations
set forth herein, that Servicer shall indemnify the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that the
Servicer shall not be liable for any such Losses attributable to the
negligence of the Trustee, the Depositor or the Holder of such Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict
the rights and remedies of the Holder of such Class R Certificate now or
hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action
or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent
performance by the Servicer of its duties and obligations set forth herein,
and (3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).
107
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 Servicer and the Trustee created hereunder with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by Vesta 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
the other Servicer 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.
(b) If Vesta elects to terminate the Trust Fund pursuant to Section
9.01(a) above, Vesta or a successor Servicer shall retain all servicing rights
with respect to the Mortgage Loans serviced by it. Vesta and any successor
Servicer shall enter into a servicing agreement mutually acceptable to such
parties, pursuant to which such successor Servicer shall continue to service
and administer such Mortgage Loans in accordance with the customary and usual
standards of practice of prudent mortgage loan servicers which service such
mortgage loans.
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 Vesta 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, Vesta shall notify the 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.
108
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 at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and
(d) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Certificates at the office therein specified. The Trustee shall give such
notice to each Rating Agency at the time such notice is given to
Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in each
case on the final Distribution Date in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, an
amount equal to (i) as to each Class of Offered Certificates, (A) first to the
Senior Certificates, and then to the Class M-1, Class M-2 and Class B
Certificates sequentially, in that order, an amount equal to the Class
Principal Balance thereof plus Current Interest and any Carryforward Interest
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-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 Vesta 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 Vesta , to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i)
result in the imposition
109
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 (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.
110
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor, the
Servicer, 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 Servicer, (iv) in connection with the
appointment of a successor Servicer, to modify, eliminate or add to any of the
servicing provisions contained in this Agreement, providing the Rating
Agencies confirm the then current rating of the Certificates giving effect to
such amendment, (v) to add any other provisions with respect to matters or
questions arising hereunder or (vi) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; and, provided,
further, that any action pursuant to clauses (v) or (vi) above shall not, as
evidenced by an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee or the Trust Fund, but shall be at the expense of the
party proposing such amendment), adversely affect in any material respect the
interests of any Certificateholder; provided, however, that no such Opinion of
Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates (without regard to the FSA Policy). The Trustee, the Depositor,
the Seller and the Servicer also may at any time and from time to time amend
this Agreement without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of any REMIC as a REMIC under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on any
REMIC pursuant to the Code that would be a claim at any time prior to the
final redemption of the Certificates or (iii) comply with any other
requirements of the Code; provided, that the Trustee has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund, to the effect that such action is necessary or helpful to, as
applicable, (i) maintain such qualification, (ii) avoid or minimize the risk
of the imposition of such a tax or (iii) comply with any such requirements of
the Code.
Notwithstanding the foregoing, FSA's written consent shall be
required for any amendment that adversely affects in any respect the rights
and interest of FSA hereunder.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, 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
111
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
112
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
113
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 and (d) in the case of Vesta ,
Vesta 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 the
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
114
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
(iii) engage in any business or activities.
115
(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.
116
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
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: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee
By: /s/ X. Xxxxxxxxxxxxxx
----------------------------------
Name: X. Xxxxxxxxxxxxxx
Title: Vice President
DLJ MORTGAGE CAPITAL, INC.,
as the Seller
By: /s/ Xxxxx Xxxx
----------------------------------
Name: Xxxxx Xxxx
Title: Vice President
VESTA SERVICING, L.P.,
as a Servicer and as the
Special Servicer
By: /s/ Xxxx Xxxx
----------------------------------
Name: Xxxx Xxxx
Title: Vice President and Chief
Operating Officer
000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
On this 25th day of September, 2001, before me, personally appeared
Xxxxxxx Xxxxxx, known to me to be a Vice President 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.
/s/ Xxxxxx Xxxxx
----------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 25th day of September, 2001, before me, personally appeared
Xxxxx Xxxx, known to me to be a Vice President 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.
/s/ Xxxxxx Xxxxx
----------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 24th of September, 2001 before me, a Notary Public in and for
said State, personally appeared X. Xxxxxxxxxxxxxx known to me to be a Vice
President 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 corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxxx
----------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 24th of September, 2001 before me, a Notary Public in and for
said State, personally appeared Xxxx Xxxx known to me to be a Vice President
of Vesta GP LLC, the general partner of Vesta 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 corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxxx
----------------------------------
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 : September 1, 2001
First Distribution Date : October 25, 2001
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Pass-Through Rate :
Maturity Date :
A-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
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 Servicer 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"), Vesta Servicing L.P., as servicer (the "Servicer")
and U.S. Bank National Association as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
A-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
Class A-[o]
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CSFB Mortgage Pass-Through
Certificates, Series 2001-HE20, 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 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 evidencing
the requisite Percentage Interest, as provided in the Agreement. Any such
consent by
A-5
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by
the Trustee in [St. Xxxx, Minnesota], accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Seller, and 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 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, the Servicer 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.
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________
for the account of _____________________________________________________________
account number ______________, or, if mailed by check, to ______________________
________________________________________________________________________________
________________________________________________________________________________
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by, the assignee named above, or, as its agent.
A-7
EXHIBIT B
[FORM OF CLASS M 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.
[For Private Certificates:]
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 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.]
B-1
Certificate No. :
Cut-off Date : Sepember 1, 2001
First Distribution Date : October 25, 2001
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date :
B-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage-Backed Pass-Through Certificates, Series 2001-HE20
Class M
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 Servicer, 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"), Vesta Servicing L.P., as servicer (the "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: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
B-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage- Pass-Through Certificates, Series 2001-HE20
Class M
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CSFB Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2001-HE20, 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 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 Servicer, FSA and the Trustee and any agent of the Servicer, FSA
or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Servicer,
FSA, the Trustee, or any such agent shall be affected by any notice to the
contrary.
The Depositor, the 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 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, the Servicer 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
B-6
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.
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.
[For Private Certificates:]
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, 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.]
C-1
Certificate No. :
Cut-off Date : September 1, 2001
First Distribution Date : October 25, 2001
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date :
C-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage-Backed Pass-Through Certificates, Series 2001-HE20
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 Servicer, 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"), Vesta Servicing L.P., as servicer (the "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.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
C-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage- Pass-Through Certificates, Series 2001-HE20
Class B
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CSFB Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2001-HE20, 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 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
C-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 Servicer, FSA and the Trustee and any agent of the Servicer, FSA
or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Servicer,
FSA, the Trustee, or any such agent shall be affected by any notice to the
contrary.
The Depositor, the 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 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, the Servicer 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
C-6
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.
C-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 _________________, 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-8
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 : September 1, 2001
First Distribution Date : October 25, 2001
Initial Certificate Principal Balance
of this Certificate
("Denomination") : $
Initial Certificate Principal Balances
of all Certificates
of this Class : $
CUSIP :
Pass-Through Rate :
Maturity Date :
D-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
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 Servicer 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"), Vesta Servicing L.P., as
servicer (the "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 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
D-3
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: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:________________________________
Authorized Signatory
D-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
Class R
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CSFB Mortgage Pass-Through
Certificates, Series 2001-HE20, 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 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 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 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 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, the Servicer 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.
D-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.
D-8
EXHIBIT E
[FORM OF CLASS X 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.
[For ERISA Restricted Certificates:]
[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.]
E-1
Certificate No. :
Cut-off Date : September 1, 2001
First Distribution Date : October 25, 2001
Percentage Interest :
CUSIP :
Maturity Date :
E-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
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 Servicer 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 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"), Vesta Servicing L.P., as
servicer (the "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.
[For ERISA Restricted Certificates:]
[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 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
E-3
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.
E-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ______________________
Authorized Signatory
E-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
Class X
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CSFB Mortgage Pass-Through
Certificates, Series 2001-HE20, 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 Servicer, the Seller and the Trustee with the
consent of the Holders of Certificates affected by such amendment
E-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 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 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, the Servicer 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").
F-1
Certificate No. :
Cut-off Date : September 1, 2001
First Distribution Date : October 25, 2001
Initial Notional Amount of this
Certificate ("Denomination") :
Initial Class Notional Amount of
all Certificates of this Class :
Percentage Interest :
CUSIP :
Pass-Through Rate :
Maturity Date :
F-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
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 Servicer 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"), Vesta Servicing L.P., as servicer (the "Servicer")
and U.S. Bank National Association as trustee (the "Trustee"). To the extent
not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
F-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated: September 25, 2001.
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: September 25, 2001
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ______________________
Authorized Signatory
F-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2001-HE20
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
Class A-IO
This Certificate is one of a duly authorized issue of Certificates
designated as CSFB ABS Trust Series 2001-HE20, CFSB Mortgage Pass-Through
Certificates, Series 2001-HE20, 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 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 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 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 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, the Servicer 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 TRUSTEE
[date]
[Depositor]
[Servicer/s]
[Seller]
__________________________
__________________________
Re: Pooling and Servicing Agreement among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"),
Vesta Servicing L.P., as servicer ("the "Servicer") and U.S.
Bank National Association as trustee (the "Trustee") CSFB
Mortgage Pass-Through Certificates, Series 2001-HE20
---------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, 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 Trustee 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 Trustee 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name: __________________________
Title: _________________________
G-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer/s]
[Seller]
__________________________
__________________________
Re: Pooling and Servicing Agreement among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"),
Vesta Servicing L.P., as servicer (the "Servicer") and U.S.
Bank National Association as trustee (the "Trustee") CSFB
Mortgage Pass-Through Certificates, Series 2001-HE20
---------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned,
as Trustee, 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 Trustee 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 Trustee 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 Trustee 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.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ____________________________
Name: __________________________
Title: _________________________
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2001-HE20
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"), Vesta
Servicing L.P., as servicer (the "Servicer") and U.S. Bank National
Association as trustee (the "Trustee"). Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to
such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii)
as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit.
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. (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-2
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-3
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-1-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
[TO BE INSERTED WHEN POOLING AND SERVICING AGREEMENT FINALIZED].
I-2-1
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 2001-HE20, 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
2001-HE20, 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) if the Certificate has been the
subject of an ERISA Qualifying Underwriting and we are an insurance company, a
representation that 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 that 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
K-1
that such sale, transfer or other disposition may be made 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
2001-HE20, 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) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting and we are an insurance
company, we are 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 completed either of the
L-1
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 $25,000,000 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
$25,000,000 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
--------
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
underwritten by insurance companies and which is subject to
supervision by the 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
L-1-2
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the 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 $100,000,000 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 2001-HE20
Class [_______]
Loan Information
Name of Mortgagor: ________________________
Servicer Loan No.: ________________________
Trustee
Name: ________________________
Address: ________________________
Trustee Mortgage File No.:
The undersigned Servicer hereby acknowledges that it has received
from [Bank One, National Association] [U.S. Bank National Association] as
Custodian for the Holders of 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"), Vesta
Servicing L.P., as servicer (the "Servicer") and U.S. Bank National
Association as trustee (the "Trustee").
( ) Mortgage Note dated ________, ____, in the original principal sum of
$_______, made by _________, payable to, or endorsed to the order of, the
Trustee.
( ) Mortgage recorded on __________ as instrument no. _________ in the County
Recorder's Office of the County of _________, State of _________ in
book/reel/docket of official records at page/image ____________.
( ) Deed of Trust recorded on __________ as instrument no. __________ in the
County Recorder's Office of the County of __________, State of _________
in book/reel/docket ______ of official records at page/image _________.
( ) 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 Servicer hereby acknowledges and agrees as follows:
(1) Such 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) Such 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 Servicer, if applicable,
assert or seek to assert any claims or rights of setoff to
or against the Documents or any proceeds thereof.
(3) Such 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 such Servicer shall at all times be earmarked for the
account of the Custodian, and such Servicer shall keep the
Documents and any proceeds separate and distinct from all
other property in such Servicer's possession, custody or
control.
[Servicer]
By: _________________
Its _________________
Date: ___________, 20[ ]
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:
1-30
31-60
61-90
91 +
Foreclosures
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 [_____], 2001 (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 September 1, 2001 specified above (the
"Pooling and Servicing Agreement") among the Depositor, DLJ Mortgage Capital,
Inc., as seller (in such capacity, "Seller"), Vesta Servicing L.P., as
servicer (the "Servicer") and U.S. Bank National Association as trustee (the
"Trustee") in relation to the CSFB ABS Trust Series 2001-HE20, Mortgage
Pass-Through Certificates, Series 2001-HE20;
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:
VESTA SERVICING, L.P.
as Servicer
By:
-----------------------------------
Name:
Title:
Q-3
SCHEDULE I
Mortgage Loan Schedule
(Provided Upon Request)
S-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 Servicer and the Depositor, constitutes a valid and binding obligation of
the Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); 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.
(vii) 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 Servicer for each mortgage loan in the mortgage pool or in
either of
S-2
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.
S-3
SCHEDULE IIB
Representations and Warranties of Servicer and Special Servicer-
Vesta Servicing, L.P.
(i) Vesta Servicing, L.P. ("Vesta") is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation;
(ii) Vesta 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 Vesta of this Agreement have been
duly authorized by all necessary corporate action on the part of Vesta; 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 Vesta or its properties or
the certificate of incorporation or bylaws of Vesta, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on Vesta's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;
(iv) this Agreement has been duly executed and delivered by Vesta
and, assuming due authorization, execution and delivery by the Trustee, the
Seller and the Depositor, constitutes a valid and binding obligation of Vesta
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 Vesta, there are no actions, litigation,
suits or proceedings pending or threatened against Vesta 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 Vesta if determined adversely to
Vesta would reasonably be expected to materially and adversely affect Vesta's
ability to perform its obligations under this Agreement, other than as Vesta
has previously advised Seller; and Vesta 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.
S-4
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, 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.
(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
S-5
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.
(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
S-6
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.
(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
S-7
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.
S-8
