EXECUTION VERSION
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
and
CHRISTIANA BANK & TRUST COMPANY,
as Delaware Trustee
POOLING AND SERVICING AGREEMENT
$552,822,727.89
Washington Mutual Mortgage Securities Corp.
Washington Mutual MSC Mortgage Pass-Through Certificates
Series 2002-MS11
Cut-Off Date: December 1, 2002
TABLE OF CONTENTS
Page
ARTICLE I...........................................................................................................7
Section 1.01. Definitions.....................................................................................7
Aggregate Certificate Principal Balance.......................................................................7
Appraised Value...............................................................................................7
Assignment of Proprietary Lease...............................................................................7
Authenticating Agent..........................................................................................7
Authorized Denomination.......................................................................................7
Bankruptcy Coverage...........................................................................................8
Bankruptcy Loss...............................................................................................8
Beneficial Holder.............................................................................................8
Benefit Plan Opinion..........................................................................................8
Book-Entry Certificates.......................................................................................8
Business Day..................................................................................................8
Buydown Agreement.............................................................................................8
Buydown Fund..................................................................................................9
Buydown Fund Account..........................................................................................9
Buydown Loan..................................................................................................9
Certificate...................................................................................................9
Certificate Account...........................................................................................9
Certificateholder or Holder...................................................................................9
Certificate Interest Rate....................................................................................10
Certificate of Trust.........................................................................................10
Certificate Principal Balance................................................................................10
Certificate Register and Certificate Registrar...............................................................10
Class........................................................................................................10
Class A Certificates.........................................................................................11
Class A-L Regular Interests..................................................................................11
Class C-B-1 Certificates.....................................................................................11
Class C-B-1-L Regular Interest...............................................................................11
Class C-B-2 Certificates.....................................................................................11
Class C-B-2-L Regular Interest...............................................................................11
Class C-B-3 Certificates.....................................................................................11
Class C-B-3-L Regular Interest...............................................................................11
Class C-B-4 Certificates.....................................................................................11
Class C-B-4-L Regular Interest...............................................................................11
Class C-B-5 Certificates.....................................................................................11
Class C-B-5-L Regular Interest...............................................................................11
Class C-B-6 Certificates.....................................................................................11
Class C-B-6-L Regular Interest...............................................................................11
Class C-Y Principal Reduction Amounts........................................................................12
Class C-Y Regular Interests..................................................................................12
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TABLE OF CONTENTS
(continued)
Page
Class C-Y-1 Principal Distribution Amount....................................................................12
Class C-Y-1 Regular Interest.................................................................................12
Class C-Y-2 Principal Distribution Amount....................................................................12
Class C-Y-2 Regular Interest.................................................................................12
Class C-Z Principal Reduction Amounts........................................................................12
Class C-Z Regular Interests..................................................................................12
Class C-Z-1 Principal Distribution Amount....................................................................13
Class C-Z-1 Regular Interest.................................................................................13
Class C-Z-2 Principal Distribution Amount....................................................................13
Class C-Z-2 Regular Interest.................................................................................13
Class I-A-1 Certificates.....................................................................................13
Class I-A-1-L Regular Interest...............................................................................13
Class I-P Certificates.......................................................................................13
Class I-P Fraction...........................................................................................13
Class I-P Mortgage Loan......................................................................................13
Class I-P-L Regular Interest.................................................................................13
Class I-P-M Regular Interest.................................................................................13
Class I-X Certificates.......................................................................................13
Class I-X Notional Amount....................................................................................13
Class I-X-L Regular Interest.................................................................................14
Class I-X-M Regular Interest.................................................................................14
Class II-A-1 Certificates....................................................................................14
Class II-A-1-L Regular Interest..............................................................................14
Class II-A-2 Certificates....................................................................................14
Class II-A-2-L Regular Interest..............................................................................14
Class II-A-3 Certificates....................................................................................14
Class II-A-3-L Regular Interest..............................................................................14
Class II-A-4 Certificates....................................................................................14
Class II-A-4-L Regular Interest..............................................................................14
Class II-A-5 Certificates....................................................................................14
Class II-A-5-L Regular Interest..............................................................................14
Class II-A-6 Certificates....................................................................................14
Class II-A-6-L Regular Interest..............................................................................15
Class II-A-7 Certificates....................................................................................15
Class II-A-7-L Regular Interest..............................................................................15
Class II-A-8 Certificates....................................................................................15
Class II-A-8 Notional Amount.................................................................................15
Class II-A-9 Certificates....................................................................................15
Class II-A-9-L Regular Interest..............................................................................15
Class II-A-10 Certificates...................................................................................15
Class II-A-10-L Regular Interest.............................................................................15
Class II-A-11 Certificates...................................................................................15
Class II-A-11-L Regular Interest.............................................................................15
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TABLE OF CONTENTS
(continued)
Page
Class II-A-12 Certificates...................................................................................15
Class II-A-12-L Regular Interest.............................................................................15
Class II-P Certificates......................................................................................15
Class II-P Fraction..........................................................................................16
Class II-P Mortgage Loan.....................................................................................16
Class II-P-L Regular Interest................................................................................16
Class II-P-M Regular Interest................................................................................16
Class II-X Certificates......................................................................................16
Class II-X Notional Amount...................................................................................16
Class II-X-L Regular Interest................................................................................16
Class II-X-M Regular Interest................................................................................16
Class III-A-1 Certificates...................................................................................16
Class III-A-1-L Regular Interest.............................................................................16
Class III-A-2 Certificates...................................................................................16
Class III-A-2-L Regular Interest.............................................................................16
Class III-P Certificates.....................................................................................17
Class III-P Fraction.........................................................................................17
Class III-P Mortgage Loan....................................................................................17
Class III-P-L Regular Interest...............................................................................17
Class III-P-M Regular Interest...............................................................................17
Class III-X Certificates.....................................................................................17
Class III-X Notional Amount..................................................................................17
Class III-X-L Regular Interest...............................................................................17
Class III-X-M Regular Interest...............................................................................17
Class Notional Amount........................................................................................17
Class P Certificates.........................................................................................17
Class P Fraction.............................................................................................18
Class P Mortgage Loan........................................................................................18
Class P-L Regular Interests..................................................................................18
Class P-M Regular Interests..................................................................................18
Class Principal Balance......................................................................................18
Class R Certificates.........................................................................................19
Class R Residual Interests...................................................................................19
Class R-1 Residual Interest..................................................................................19
Class R-2 Residual Interest..................................................................................19
Class R-3 Residual Interest..................................................................................19
Class X Certificates.........................................................................................19
Class X-L Regular Interest...................................................................................19
Class X-M Regular Interest...................................................................................19
Clean-Up Call Percentage.....................................................................................19
Clearing Agency..............................................................................................19
Closing Date.................................................................................................19
Code.........................................................................................................20
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TABLE OF CONTENTS
(continued)
Page
Company......................................................................................................20
Compensating Interest........................................................................................20
Cooperative..................................................................................................20
Cooperative Apartment........................................................................................20
Cooperative Lease............................................................................................20
Cooperative Loans............................................................................................20
Cooperative Stock............................................................................................20
Cooperative Stock Certificate................................................................................20
Corporate Trust Office.......................................................................................20
Corporation..................................................................................................20
Corresponding Class..........................................................................................21
Credit Support Depletion Date................................................................................21
Curtailment..................................................................................................21
Curtailment Shortfall........................................................................................21
Custodial Account for P&I....................................................................................21
Custodial Account for Reserves...............................................................................22
Custodial Agreement..........................................................................................22
Custodian....................................................................................................22
Cut-Off Date.................................................................................................22
Definitive Certificates......................................................................................22
Delaware Trustee.............................................................................................22
Depositary Agreement.........................................................................................23
Destroyed Mortgage Note......................................................................................23
Determination Date...........................................................................................23
Disqualified Organization....................................................................................23
Distribution Date............................................................................................23
DTC..........................................................................................................23
DTC Participant..............................................................................................23
Due Date.....................................................................................................23
Eligible Institution.........................................................................................23
Eligible Investments.........................................................................................24
ERISA........................................................................................................25
ERISA Restricted Certificate.................................................................................25
Event of Default.............................................................................................25
Excess Liquidation Proceeds..................................................................................25
FDIC.........................................................................................................25
FHA..........................................................................................................25
Xxxxxx Xxx...................................................................................................25
Final Maturity Date..........................................................................................25
Fitch........................................................................................................25
Fraud Coverage...............................................................................................25
Fraud Loss...................................................................................................26
Xxxxxxx Mac..................................................................................................26
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TABLE OF CONTENTS
(continued)
Page
Group C-B Certificates.......................................................................................26
Group C-B Percentage.........................................................................................26
Group C-B-L Regular Interests................................................................................26
Group I Certificates.........................................................................................26
Group I Loans................................................................................................26
Group I Premium Rate Mortgage Loans..........................................................................26
Group I Senior Liquidation Amount............................................................................26
Group I Senior Percentage....................................................................................27
Group I Senior Prepayment Percentage, Group II Senior Prepayment
Percentage or Group III Senior Prepayment Percentage.................................................27
Group I Senior Principal Distribution Amount.................................................................29
Group I Subordinate Balance..................................................................................29
Group I Subordinate Percentage...............................................................................29
Group I Subordinate Prepayment Percentage....................................................................29
Group I-A Certificates.......................................................................................29
Group I-A-L Regular Interests................................................................................29
Group I-L Regular Interests..................................................................................29
Group II Certificates........................................................................................29
Group II Loans...............................................................................................29
Group II Lockout Adjusted Percentage.........................................................................29
Group II Lockout Liquidation Amount..........................................................................30
Group II Lockout Percentage..................................................................................30
Group II Lockout Prepayment Percentage.......................................................................30
Group II Lockout Priority Amount.............................................................................30
Group II Premium Rate Mortgage Loans.........................................................................30
Group II Senior Liquidation Amount...........................................................................30
Group II Senior Percentage...................................................................................30
Group II Senior Prepayment Percentage........................................................................30
Group II Senior Principal Distribution Amount................................................................30
Group II Subordinate Percentage..............................................................................31
Group II Subordinate Prepayment Percentage...................................................................31
Group II-A Certificates......................................................................................31
Group II-A-L Regular Interests...............................................................................31
Group II-L Regular Interests.................................................................................31
Group III Certificates.......................................................................................31
Group III Loans..............................................................................................31
Group III Premium Rate Mortgage Loans........................................................................31
Group III Senior Liquidation Amount..........................................................................31
Group III Senior Percentage..................................................................................31
Group III Senior Prepayment Percentage.......................................................................32
Group III Senior Principal Distribution Amount...............................................................32
Group III Subordinate Percentage.............................................................................32
Group III Subordinate Prepayment Percentage..................................................................32
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TABLE OF CONTENTS
(continued)
Page
Group III-A Certificates.....................................................................................32
Group III-A-L Regular Interests..............................................................................32
Group III-L Regular Interests................................................................................32
Groups II and III Subordinate Balance........................................................................32
Indirect DTC Participants....................................................................................32
Insurance Proceeds...........................................................................................32
Interest Distribution Amount.................................................................................32
Interest Transfer Amount.....................................................................................33
Investment Account...........................................................................................33
Investment Depository........................................................................................33
Junior Subordinate Certificates..............................................................................33
Last Scheduled Distribution Date.............................................................................33
Lender.......................................................................................................33
LIBOR........................................................................................................33
LIBOR Determination Date.....................................................................................34
Liquidated Mortgage Loan.....................................................................................34
Liquidation Principal........................................................................................34
Liquidation Proceeds.........................................................................................35
Loan Group...................................................................................................35
Loan Group I.................................................................................................35
Loan Group II................................................................................................35
Loan Group III...............................................................................................35
Loan-to-Value Ratio..........................................................................................35
Lowest Class B Owner.........................................................................................35
Master Servicer..............................................................................................35
Master Servicer Business Day.................................................................................35
Master Servicing Fee.........................................................................................35
MERS.........................................................................................................35
MERS Loan....................................................................................................35
MERS(R)System................................................................................................35
MIN..........................................................................................................35
MOM Loan.....................................................................................................36
Monthly P&I Advance..........................................................................................36
Monthly Payment..............................................................................................36
Mortgage.....................................................................................................36
Mortgage File................................................................................................36
Mortgage Interest Rate.......................................................................................38
Mortgage Loan Schedule.......................................................................................39
Mortgage Loans...............................................................................................39
Mortgage Note................................................................................................39
Mortgage Pool................................................................................................39
Mortgage Pool Assets.........................................................................................39
Mortgaged Property...........................................................................................40
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TABLE OF CONTENTS
(continued)
Page
Mortgagor....................................................................................................40
Nonrecoverable Advance.......................................................................................40
Non-U.S. Person..............................................................................................40
Notice Addresses.............................................................................................40
OTS..........................................................................................................40
Officer's Certificate........................................................................................40
Opinion of Counsel...........................................................................................40
Original Trust Agreement.....................................................................................41
Original Value...............................................................................................41
Overcollateralized Group.....................................................................................41
Ownership Interest...........................................................................................41
Pass-Through Entity..........................................................................................41
Pass-Through Rate............................................................................................41
Paying Agent.................................................................................................41
Payoff.......................................................................................................41
Payoff Earnings..............................................................................................41
Payoff Interest..............................................................................................42
Payoff Period................................................................................................42
Percentage Interest..........................................................................................42
Permitted Transferee.........................................................................................43
Person.......................................................................................................43
Prepaid Monthly Payment......................................................................................43
Primary Insurance Policy.....................................................................................43
Principal Balance............................................................................................43
Principal Payment............................................................................................44
Principal Payment Amount.....................................................................................44
Principal Prepayment.........................................................................................44
Principal Prepayment Amount..................................................................................44
Principal Transfer Amount....................................................................................44
Prior Period.................................................................................................44
Pro Rata Allocation..........................................................................................44
Prospectus...................................................................................................45
Purchase Obligation..........................................................................................45
Purchase Price...............................................................................................45
Qualified Insurer............................................................................................45
Rating Agency................................................................................................45
Ratings......................................................................................................45
Realized Loss................................................................................................45
Recognition Agreement........................................................................................48
Record Date..................................................................................................48
Reference Banks..............................................................................................48
Regular Interest Group.......................................................................................48
Regular Interests............................................................................................48
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TABLE OF CONTENTS
(continued)
Page
Relief Act Shortfall.........................................................................................48
REMIC........................................................................................................49
REMIC Provisions.............................................................................................49
REMIC I......................................................................................................49
REMIC I Assets...............................................................................................49
REMIC I Available Distribution Amount........................................................................49
REMIC I Distribution Amount..................................................................................50
REMIC I Regular Interests....................................................................................52
REMIC II.....................................................................................................52
REMIC II Assets..............................................................................................52
REMIC II Available Distribution Amount.......................................................................52
REMIC II Distribution Amount.................................................................................53
REMIC II Regular Interests...................................................................................61
REMIC III....................................................................................................62
REMIC III Assets.............................................................................................62
REMIC III Available Distribution Amount......................................................................62
REMIC III Distribution Amount................................................................................62
REMIC III Regular Interests..................................................................................63
Residual Certificates........................................................................................63
Residual Distribution Amount.................................................................................63
Responsible Officer..........................................................................................64
S&P..........................................................................................................64
Secretary of State...........................................................................................64
Securities Act...............................................................................................64
Security Agreement...........................................................................................64
Selling and Servicing Contract...............................................................................64
Senior Certificates..........................................................................................64
Senior Regular Interests.....................................................................................64
Senior Subordinate Certificates..............................................................................64
Servicer.....................................................................................................64
Servicing Fee................................................................................................65
Servicing Officer............................................................................................65
Special Hazard Coverage......................................................................................65
Special Hazard Loss..........................................................................................65
Special Primary Insurance Policy.............................................................................66
Special Primary Insurance Premium............................................................................66
Statutory Trust Statute......................................................................................66
Step Down Percentage.........................................................................................66
Stripped Interest Rate.......................................................................................66
Subordinate Certificates.....................................................................................66
Subordinate Component Balance................................................................................66
Subordinate Liquidation Amount...............................................................................66
Subordinate Percentage.......................................................................................67
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TABLE OF CONTENTS
(continued)
Page
Subordinate Principal Distribution Amount....................................................................67
Subordinate Principal Prepayments Distribution Amount........................................................68
Subordination Level..........................................................................................68
Substitute Mortgage Loan.....................................................................................68
Tax Matters Person...........................................................................................68
Termination Date.............................................................................................69
Termination Payment..........................................................................................69
Total Transfer Amount........................................................................................69
Transfer.....................................................................................................69
Transferee...................................................................................................69
Transferee Affidavit and Agreement...........................................................................69
Trust........................................................................................................69
Trustee......................................................................................................69
Uncollected Interest.........................................................................................69
Uncompensated Interest Shortfall.............................................................................69
Undercollateralized Group....................................................................................70
Underwriter..................................................................................................70
Underwriting Standards.......................................................................................70
Uninsured Cause..............................................................................................70
U.S. Person..................................................................................................70
VA...........................................................................................................71
Withdrawal Date..............................................................................................71
ARTICLE II CREATION OF THE TRUST; CONVEYANCE OF
THE MORTGAGE POOL ASSETS, REMIC I REGULAR INTERESTS
AND REMIC II REGULAR INTERESTS; REMIC ELECTION AND
DESIGNATIONS; ORIGINAL ISSUANCE OF CERTIFICATES.....................................................71
Section 2.01. Creation of the Trust..........................................................................71
Section 2.02. Restrictions on Activities of the Trust........................................................72
Section 2.03. Separateness Requirements......................................................................73
Section 2.04. Conveyance of Mortgage Pool Assets; Security Interest..........................................74
Section 2.05. Delivery of Mortgage Files.....................................................................76
Section 2.06. REMIC Election for REMIC I.....................................................................77
Section 2.07. Acceptance by Trustee..........................................................................79
Section 2.08. Representations and Warranties of the Company Concerning
the Mortgage Loans.............................................................................80
Section 2.09. Acknowledgment of Transfer of Mortgage Pool Assets.............................................85
Section 2.10. Conveyance of REMIC I Regular Interests; Security Interest.....................................85
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TABLE OF CONTENTS
(continued)
Page
Section 2.11. REMIC Election for REMIC II....................................................................87
Section 2.12. Acknowledgement of Transfer of REMIC II Assets.................................................88
Section 2.13. Conveyance of REMIC II Regular Interests; Security Interest....................................88
Section 2.14. REMIC Election for REMIC III...................................................................90
Section 2.15. Acknowledgement of Transfer of REMIC III Assets;
Authentication of Certificates.................................................................91
Section 2.16. Legal Title....................................................................................91
Section 2.17. Compliance with ERISA Requirements.............................................................91
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......................................................91
Section 3.01. The Company to Act as Master Servicer..........................................................91
Section 3.02. Custodial Accounts and Buydown Fund Accounts...................................................94
Section 3.03. The Investment Account; Eligible Investments...................................................95
Section 3.04. The Certificate Account........................................................................96
Section 3.05. Permitted Withdrawals from the Certificate Account, the
Investment Account and Custodial Accounts for P&I and of
Buydown Funds from the Buydown Fund Accounts...................................................97
Section 3.06. Maintenance of Primary Insurance Policies; Collections
Thereunder.....................................................................................98
Section 3.07. Maintenance of Hazard Insurance................................................................99
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................99
Section 3.09. Realization Upon Defaulted Mortgage Loans.....................................................100
Section 3.10. Trustee to Cooperate; Release of Mortgage Files...............................................102
Section 3.11. Compensation to the Master Servicer and the Servicers.........................................103
Section 3.12. Reports to the Trustee; Certificate Account Statement.........................................103
Section 3.13. Annual Statement as to Compliance.............................................................104
Section 3.14. Access to Certain Documentation and Information Regarding
the Mortgage Loans............................................................................104
Section 3.15. Annual Independent Public Accountants' Servicing Report.......................................104
Section 3.16. [Reserved.]...................................................................................104
Section 3.17. [Reserved.]...................................................................................105
Section 3.18. [Reserved.]...................................................................................105
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TABLE OF CONTENTS
(continued)
Page
Section 3.19. [Reserved.]...................................................................................105
Section 3.20. Assumption or Termination of Selling and Servicing Contracts
by Trustee....................................................................................105
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS; PAYMENT OF EXPENSES................................................105
Section 4.01. Distributions to Holders of REMIC I Regular Interests and
Class R-1 Residual Interest...................................................................105
Section 4.02. Advances by the Master Servicer; Distribution Reports to the
Trustee.......................................................................................106
Section 4.03. Nonrecoverable Advances.......................................................................107
Section 4.04. Distributions to Holders of REMIC II Regular Interests and
Class R-2 Residual Interest...................................................................107
Section 4.05. Distributions to Certificateholders; Payment of Special Primary
Insurance Premiums............................................................................108
Section 4.06. Statements to Certificateholders..............................................................109
ARTICLE V THE CERTIFICATES...................................................................................110
Section 5.01. The Certificates..............................................................................110
Section 5.02. Certificates Issuable in Classes; Distributions of Principal and
Interest; Authorized Denominations............................................................116
Section 5.03. Registration of Transfer and Exchange of Certificates.........................................116
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.............................................117
Section 5.05. Persons Deemed Owners.........................................................................117
Section 5.06. Temporary Certificates........................................................................118
Section 5.07. Book-Entry for Book-Entry Certificates........................................................118
Section 5.08. Notices to Clearing Agency....................................................................119
Section 5.09. Definitive Certificates.......................................................................119
Section 5.10. Office for Transfer of Certificates...........................................................120
Section 5.11. Nature of Certificates........................................................................120
ARTICLE VI THE COMPANY AND THE MASTER SERVICER................................................................120
Section 6.01. Liability of the Company and the Master Servicer..............................................120
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TABLE OF CONTENTS
(continued)
Page
Section 6.02. Merger or Consolidation of the Company, or the Master
Servicer......................................................................................120
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others....................................................................................121
Section 6.04. The Company and the Master Servicer not to Resign.............................................121
Section 6.05. Trustee Access................................................................................122
ARTICLE VII DEFAULT............................................................................................122
Section 7.01. Events of Default.............................................................................122
Section 7.02. Trustee to Act; Appointment of Successor......................................................125
Section 7.03. Notification to Certificateholders............................................................126
ARTICLE VIII CONCERNING THE TRUSTEES............................................................................126
Section 8.01. Duties of Trustees............................................................................126
Section 8.02. Certain Matters Affecting the Trustees........................................................127
Section 8.03. Trustees Not Liable for Certificates or Mortgage Loans........................................128
Section 8.04. Trustees May Own Certificates.................................................................129
Section 8.05. The Master Servicer to Pay Trustees' Fees and Expenses........................................129
Section 8.06. Eligibility Requirements for Trustees.........................................................129
Section 8.07. Resignation and Removal of Trustees...........................................................129
Section 8.08. Successor Trustee.............................................................................130
Section 8.09. Merger or Consolidation of Trustee............................................................131
Section 8.10. Appointment of Co-Trustee or Separate Trustee.................................................131
Section 8.11. Authenticating Agents.........................................................................132
Section 8.12. Paying Agents.................................................................................133
Section 8.13. Duties of Delaware Trustee....................................................................134
Section 8.14. Amendment to Certificate of Trust.............................................................134
Section 8.15. Limitation of Liability.......................................................................134
ARTICLE IX TERMINATION........................................................................................134
Section 9.01. Termination Upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans.............................................................134
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TABLE OF CONTENTS
(continued)
Page
Section 9.02. Additional Termination Requirements...........................................................136
Section 9.03. Trust Irrevocable.............................................................................137
ARTICLE X MISCELLANEOUS PROVISIONS...........................................................................137
Section 10.01. Amendment.....................................................................................137
Section 10.02. Recordation of Agreement......................................................................138
Section 10.03. Limitation on Rights of Certificateholders....................................................139
Section 10.04. Access to List of Certificateholders..........................................................140
Section 10.05. Governing Law.................................................................................140
Section 10.06. Notices.......................................................................................140
Section 10.07. Severability of Provisions....................................................................140
Section 10.08. Counterpart Signatures........................................................................140
Section 10.09. Benefits of Agreement.........................................................................141
Section 10.10. Notices and Copies to Rating Agencies.........................................................141
Appendix 1 Definition of "Class C-Y Principal Reduction Amounts"
Exhibit A Form of Certificates (other than Class R Certificates)
Exhibit B Form of Class R Certificates
Exhibit C [Reserved]
Exhibit D Mortgage Loan Schedule
Exhibit E Selling And Servicing Contract
Exhibit F Form of Transferor Certificate For Junior Subordinate Certificates
Exhibit G Form of Transferee's Agreement For Junior Subordinate Certificates
Exhibit H Form of Additional Matter Incorporated Into The Certificates
Exhibit I Transferor Certificate
Exhibit J Transferee Affidavit And Agreement
Exhibit K [Reserved]
Exhibit L Form of Investment Letter
Exhibit M Form of Trustee's Certification Pursuant to Section 2.02
Exhibit N Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(d)
Exhibit O Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(g)
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This Pooling and Servicing Agreement, dated and effective as of December 1,
2002 (this "Agreement"), is executed by and among Washington Mutual Mortgage
Securities Corp., as depositor and Master Servicer (the "Company"), State Street
Bank and Trust Company, a Massachusetts trust company with a corporate trust
office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, as Trustee (the "Trustee"), and
Christiana Bank & Trust Company, as Delaware Trustee (the "Delaware Trustee").
Capitalized terms used in this Agreement and not otherwise defined have the
meanings ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Company at the Closing Date is the owner of the Mortgage Loans and the
other property being conveyed by it to the Trust. On the Closing Date, the
Company will acquire the REMIC I Regular Interests and the Class R-1 Residual
Interest from the Trust as consideration for its transfer to the Trust of the
Mortgage Loans and certain other assets and will be the owner of the REMIC I
Regular Interests and the Class R-1 Residual Interest. Thereafter on the Closing
Date, the Company will acquire the REMIC II Regular Interests and the Class R-2
Residual Interest from the Trust as consideration for its transfer to the Trust
of the REMIC I Regular Interests and will be the owner of the REMIC II Regular
Interests. Thereafter on the Closing Date, the Company will acquire the
Certificates (other than the Class R-1 and Class R-2 Residual Interests) and the
Class R-3 Residual Interest from the Trust as consideration for its transfer to
the Trust of the REMIC II Regular Interests and will be the owner of the
Certificates. The Company has duly authorized the execution and delivery of this
Agreement to provide for (i) the conveyance to the Trust of the Mortgage Loans
and certain other assets, (ii) the issuance to the Company of the REMIC I
Regular Interests and the Class R-1 Residual Interest representing in the
aggregate the entire beneficial interest in REMIC I, (iii) the conveyance to the
Trust of the REMIC I Regular Interests, (iv) the issuance to the Company of the
REMIC II Regular Interests and the Class R-2 Residual Interest representing in
the aggregate the entire beneficial interest in REMIC II, (v) the conveyance to
the Trust of the REMIC II Regular Interests and (vi) the issuance to the Company
of the Certificates, such Certificates (other than the portion of the Class R
Certificates representing ownership of the Class R-1 and Class R-2 Residual
Interests) representing in the aggregate the entire beneficial interest in REMIC
III. The Company is entering into this Agreement, and the Trustee and the
Delaware Trustee are each accepting the trust created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates issued hereunder, other than the Junior Subordinate
Certificates, have been offered for sale pursuant to a Prospectus, dated
November 21, 2002, and a Prospectus Supplement, dated December 19, 2002, of the
Company (together, the "Prospectus"). The Junior Subordinate Certificates have
been offered for sale pursuant to a Private Placement Memorandum, dated December
23, 2002. The Trust created hereunder is intended to be the "Trust" described in
the Prospectus and the Private Placement Memorandum and the Certificates are
intended to be the "Certificates" described therein. The following tables set
forth the designation, type of interest, Certificate Interest Rate, initial
Class Principal Balance and Final Maturity Date for the REMIC I Regular
Interests, the REMIC II Regular Interests, the Class R Residual Interests and
the Certificates:
1
REMIC I Interests
Class Designation
for each REMIC I
Regular Interest Certificate Initial Class
and the Class R-1 Type of Interest Principal
Residual Interest Interest Rate(1) Balance Final Maturity Date*
----------------- -------- ----------- --------------- --------------------
Class C-Y-1 Regular 5.250% $ 92,301.49 December 2017
Class C-Y-2 Regular 5.750% 183,718.00 December 2032
Class C-Z-1 Regular 5.250% 184,701,580.88 December 2017
Class C-Z-2 Regular 5.750% 367,252,279.52 December 2032
Class I-X-M Regular 5.250%(2) -- December 2017
Class II-X-M Regular 5.750%(2) -- December 2032
Class III-X-M Regular 5.750%(2) -- December 2032
Class I-P-M Regular (3) 67,740.57 December 2017
Class II-P-M Regular (3) 301,758.66 December 2032
Class III-P-M Regular (3) 223,250.92 December 2032
Class R-1+ Residual 5.750% 100.00 December 2032
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group (or
Loan Groups, as applicable) matures. For federal income tax purposes, for
each Class of REMIC I Regular and Residual Interests, the "latest possible
maturity date" shall be the Final Maturity Date.
+ The Class R-1 Residual Interest is entitled to receive the applicable
Residual Distribution Amount and any Excess Liquidation Proceeds.
(1) Interest distributed to the REMIC I Regular Interests (other than the Class
P-M Regular Interests, which shall not be entitled to receive any
distributions of interest) and the Class R-1 Residual Interest on each
Distribution Date will have accrued at the applicable per annum Certificate
Interest Rate on the applicable Class Principal Balance outstanding
immediately before such Distribution Date.
(2) Each Class of the Class X-M Regular Interests shall accrue interest on the
related Class Notional Amount. The Class X-M Regular Interests shall not be
entitled to receive any distributions of principal.
(3) The Class P-M Regular Interests shall not be entitled to receive any
distributions of interest.
As provided herein, with respect to REMIC I, the Company will cause an
election to be made on behalf of REMIC I to be treated for federal income tax
purposes as a REMIC. The REMIC I Regular Interests will be designated regular
interests in REMIC I and the Class R-1 Residual Interest will be designated the
sole class of residual interest in REMIC I, for purposes of the REMIC
Provisions.
2
REMIC II Interests
Class Designation for
each REMIC II
Regular Interest and Certificate Initial Class
the Class R-2 Type of Interest Principal Final Maturity
Residual Interest Interest Rate (1) Balance Date*
--------------------- -------- ----------- --------------- --------------
Class I-A-1-L Regular 5.250% $180,542,000.00 December 2032
Class II-A-1-L Regular 5.750% 130,274,000.00 December 2032
Class II-A-2-L Regular 5.750% 39,669,000.00 December 2032
Class II-A-3-L Regular 5.750% 3,395,000.00 December 2032
Class II-A-4-L Regular 5.750% 3,000,000.00 December 2032
Class II-A-5-L Regular 5.750% 2,252,000.00 December 2032
Class II-A-6-L Regular 5.750% 4,748,000.00 December 2032
Class II-A-7-L Regular 8.500% 33,211,000.00 December 2032
Class II-A-9-L Regular 8.500% 1,000,000.00 December 2032
Class II-A-10-L Regular 4.500% 75,265,000.00 December 2032
Class II-A-11-L Regular 5.750% 32,400,000.00 December 2032
Class II-A-12-L Regular 5.750% 1,000,000.00 December 2032
Class III-A-1-L Regular 5.750% 30,059,000.00 December 2032
Class III-A-2-L Regular 5.750% 2,700,000.00 December 2032
Class I-X-L Regular 5.250%(2) -- December 2032
Class II-X-L Regular 5.750%(2) -- December 2032
Class III-X-L Regular 5.750%(2) -- December 2032
Class I-P-L Regular (3) 67,740.57 December 2032
Class II-P-L Regular (3) 301,758.66 December 2032
Class III-P-L Regular (3) 223,250.92 December 2032
Class C-B-1-L Regular Variable(4) 5,804,000.00 December 2032
Class C-B-2-L Regular Variable(4) 2,764,000.00 December 2032
Class C-B-3-L Regular Variable(4) 1,382,000.00 December 2032
Class C-B-4-L Regular Variable(4) 1,106,000.00 December 2032
Class C-B-5-L Regular Variable(4) 553,000.00 December 2032
Class C-B-6-L Regular Variable(4) 1,105,879.89 December 2032
Class R-2 (5) Residual -- -- December 2032
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group (or
Loan Groups, as applicable) matures. For federal income tax purposes, for
each Class of REMIC II Regular and Residual Interests, the "latest possible
maturity date" shall be the Final Maturity Date.
(1) Interest distributed to the REMIC II Regular Interests (other than the
Class P-L Regular Interests, which shall not be entitled to receive any
distributions of interest) on each Distribution Date will have accrued at
the applicable per annum Certificate Interest Rate on the applicable Class
Principal Balance outstanding immediately before such Distribution Date.
(2) Each Class of the Class X-L Regular Interests shall accrue interest on the
related Class Notional Amount. The Class X-L Regular Interests shall not be
entitled to receive any distributions of principal.
(3) The Class P-L Regular Interests shall not be entitled to receive any
distributions of interest.
(4) The Certificate Interest Rate for each Class of the Group C-B-L Regular
Interests shall equal, on any Distribution Date, the weighted average of
the Certificate Interest Rates for the Class C-Y-1 and Class C-Y-2 Regular
Interests.
(5) The Class R-2 Residual Interest shall be entitled to receive the applicable
Residual Distribution Amount. The Class R-2 Residual Interest shall not be
entitled to receive any distributions of interest or principal.
3
As provided herein, with respect to REMIC II, the Company will cause an
election to be made on behalf of REMIC II to be treated for federal income tax
purposes as a REMIC. The REMIC II Regular Interests will be designated regular
interests in REMIC II and the Class R-2 Residual Interest will be designated the
sole class of residual interest in REMIC II, for purposes of the REMIC
Provisions.
4
REMIC III Interests
Class Designation for
each Class of
Certificates Certificate Initial Class
and the Class R-3 Type of Interest Principal Final Maturity
Residual Interest Interest Rate (1) Balance Date*
--------------------- -------- ----------- --------------- --------------
Class I-A-1 Regular 5.250% $180,542,000.00 December 2032
Class II-A-1 Regular 5.750% 130,274,000.00 December 2032
Class II-A-2 Regular 5.750% 39,669,000.00 December 2032
Class II-A-3 Regular 5.750% 3,395,000.00 December 2032
Class II-A-4 Regular 5.750% 3,000,000.00 December 2032
Class II-A-5 Regular 5.750% 2,252,000.00 December 2032
Class II-A-6 Regular 5.750% 4,748,000.00 December 2032
Class II-A-7 Regular (2) 33,211,000.00 December 2032
Class II-A-8 Regular (3) -- December 2032
Class II-A-9 Regular (2) 1,000,000.00 December 2032
Class II-A-10 Regular 4.500% 75,265,000.00 December 2032
Class II-A-11 Regular 5.750% 32,400,000.00 December 2032
Class II-A-12 Regular 5.750% 1,000,000.00 December 2032
Class III-A-1 Regular 5.750% 30,059,000.00 December 2032
Class III-A-2 Regular 5.750% 2,700,000.00 December 2032
Class I-X Regular 5.250%(4) -- December 2032
Class II-X Regular 5.750%(4) -- December 2032
Class III-X Regular 5.750%(4) -- December 2032
Class I-P Regular (5) 67,740.57 December 2032
Class II-P Regular (5) 301,758.66 December 2032
Class III-P Regular (5) 223,250.92 December 2032
Class C-B-1 Regular Variable(6) 5,804,000.00 December 2032
Class C-B-2 Regular Variable(6) 2,764,000.00 December 2032
Class C-B-3 Regular Variable(6) 1,382,000.00 December 2032
Class C-B-4 Regular Variable(6) 1,106,000.00 December 2032
Class C-B-5 Regular Variable(6) 553,000.00 December 2032
Class C-B-6 Regular Variable(6) 1,105,879.89 December 2032
Class R-3 (7) Residual -- -- December 2032
* The Distribution Date in the specified month, which is the month following
the month the latest maturing Mortgage Loan in the related Loan Group (or
Loan Groups, as applicable) matures. For federal income tax purposes, for
each Class of REMIC III Regular and Residual Interests, the "latest
possible maturity date" shall be the Final Maturity Date.
(1) Interest distributed on each Distribution Date to the Certificates (other
than the Class P Certificates, which shall not be entitled to receive any
distributions of interest) will have accrued at the applicable per annum
Certificate Interest Rate on the applicable Class Principal Balance or
Class Notional Amount outstanding immediately before such Distribution
Date.
(2) The Certificate Interest Rate for the Class II-A-7 and Class II-A-9
Certificates shall equal LIBOR plus 0.500%, subject to a minimum and
maximum Certificate Interest Rate of 0.500% and 8.500% per annum,
respectively.
(3) The Certificate Interest Rate for the Class II-A-8 Certificates shall equal
8.000% minus LIBOR, subject to a minimum and maximum Certificate Interest
Rate of 0.000% and 8.000% per annum, respectively. The Class II-A-8
Certificates shall accrue interest on the Class II-A-8 Notional Amount. The
Class II-A-8 Certificates shall not be entitled to receive any
distributions of principal.
5
(4) Each Class of the Class X Certificates shall accrue interest on the related
Class Notional Amount. Each Class of the Class X Certificates shall not be
entitled to receive any distributions of principal.
(5) The Class P Certificates shall not be entitled to receive any distributions
of interest.
(6) The Certificate Interest Rate for each Class of the Group C-B Certificates
shall equal, on any Distribution Date, the weighted average of the
Certificate Interest Rates for the Class C-Y-1 and Class C-Y-2 Regular
Interests.
(7) The Class R-3 Residual Interest shall be entitled to receive the applicable
Residual Distribution Amount. The Class R-3 Residual Interest shall not be
entitled to receive any distributions of interest or principal.
As provided herein, with respect to REMIC III, the Company will cause an
election to be made on behalf of REMIC III to be treated for federal income tax
purposes as a REMIC. The Certificates (other than the Class R Certificates) will
be designated regular interests in REMIC III, and the Class R-3 Residual
Interest will be designated the sole class of residual interest in REMIC III,
for purposes of the REMIC Provisions. As of the Cut-Off Date, the Mortgage Loans
have an aggregate Principal Balance of $552,822,730.04. As of the Closing Date,
the Certificates have an Aggregate Certificate Principal Balance of
$552,822,727.89.
In addition, the Trust will issue the Class R Certificates, which will
represent ownership of the Class R-1, Class R-2 and Class R-3 Residual
Interests.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized and existing under and
by virtue of the laws of the State of Delaware and has full corporate power and
authority to enter into this Agreement and to undertake the obligations
undertaken by it herein;
WHEREAS, the Trustee is a Massachusetts trust company duly organized and
existing under the laws of The Commonwealth of Massachusetts and has full power
and authority to enter into this Agreement;
WHEREAS, the Delaware Trustee is a banking corporation duly organized and
existing under the laws of the State of Delaware and has full power and
authority to enter into this Agreement;
WHEREAS, prior to the execution and delivery hereof, the Company and the
Delaware Trustee have entered into the Original Trust Agreement, and the
Delaware Trustee has filed the Certificate of Trust;
WHEREAS, it is the intention of the Company, the Trustee and the Delaware
Trustee that the Trust created by this Agreement constitute a statutory trust
under the Statutory Trust Statute, that this Agreement constitute the governing
instrument of the Trust, and that this Agreement amend and restate the Original
Trust Agreement;
6
WHEREAS, the Company is the owner of the Mortgage Loans identified in the
Mortgage Loan Schedule hereto having unpaid Principal Balances on the Cut-Off
Date as stated therein; and
WHEREAS, the Company has been duly authorized to create the Trust to (i)
hold the Mortgage Loans and certain other property, (ii) issue the REMIC I
Regular Interests and the Class R-1 Residual Interest, (iii) hold the REMIC I
Regular Interests, (iv) issue the REMIC II Regular Interests and the Class R-2
Residual Interest, (v) hold the REMIC II Regular Interests and (vi) issue the
Certificates.
NOW, THEREFORE, in order to declare the terms and conditions upon which the
REMIC I Regular Interests, the REMIC II Regular Interests, the Class R Residual
Interests and the Certificates are to be issued, and in consideration of the
premises and of the purchase and acceptance of the Certificates by the Holders
thereof, the Company covenants and agrees with the Trustee and the Delaware
Trustee, for the equal and proportionate benefit of the respective Holders from
time to time of the REMIC I Regular Interests, the REMIC II Regular Interests
and the Certificates, as applicable, as follows:
ARTICLE I
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Aggregate Certificate Principal Balance: At any given time, the sum of the
then current Class Principal Balances of the Certificates.
Appraised Value: The amount set forth in an appraisal made by or for (a)
the mortgage originator in connection with its origination of each Mortgage Loan
(including a Mortgage Loan originated to refinance mortgage debt), (b) with
respect to a Mortgage Loan originated to refinance mortgage debt, the originator
of the mortgage debt that was refinanced or (c) the Servicer, at any time, in
accordance with the Selling and Servicing Contract.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment or mortgage of the related Cooperative Lease from the Mortgagor to
the originator of the Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates (other than the
Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class
II-A-8, Class X and Class R Certificates), an initial Certificate Principal
Balance equal to $25,000 and multiples of $1 in excess thereof, except that one
Certificate of each Class of the Junior Subordinate Certificates may be issued
in an amount that is not an integral multiple of $1. With respect to the Class
II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6 Certificates, an
initial Certificate Principal Balance equal to $1,000 and multiples of $1 in
excess thereof. With respect to the
7
Class II-A-8 and Class X Certificates, a Class Notional Amount as of the Cut-Off
Date equal to $100,000 and multiples of $1 in excess thereof. With respect to
the Class R Certificates, one Certificate with a Percentage Interest equal to
0.01% and one Certificate with a Percentage Interest equal to 99.99%.
Bankruptcy Coverage: $100,000 less (a) any scheduled or permissible
reduction in the amount of Bankruptcy Coverage pursuant to the second paragraph
of this definition and (b) Bankruptcy Losses allocated to the Certificates.
The Bankruptcy Coverage may be reduced upon written confirmation from the
Rating Agencies that such reduction will not adversely affect the then current
ratings assigned to the Certificates by the Rating Agencies.
Bankruptcy Loss: A loss on a Mortgage Loan arising out of (i) a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a case under the United States Bankruptcy Code, other than any
such reduction that arises out of clause (ii) of this definition of "Bankruptcy
Loss," including, without limitation, any such reduction that results in a
permanent forgiveness of principal, or (ii) with respect to any Mortgage Loan, a
valuation, by a court of competent jurisdiction in a case under such Bankruptcy
Code, of the related Mortgaged Property in an amount less than the then
outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any Book-Entry
Certificate as or through a DTC Participant or an Indirect DTC Participant or a
Person holding a beneficial interest in any Definitive Certificate.
Benefit Plan Opinion: With respect to any Certificate presented for
registration in the name of any Person, an Opinion of Counsel acceptable to and
in form and substance satisfactory to the Trustee and the Company to the effect
that the purchase or holding of such Certificate is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, and will not subject the
Trust, the Trustee, the Delaware Trustee, the Master Servicer or the Company to
any obligation or liability (including obligations or liabilities under Section
406 of ERISA or Section 4975 of the Code) in addition to those undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trust,
the Trustee, the Delaware Trustee, the Master Servicer or the Company.
Book-Entry Certificates: The Class A, Class X, Class P and Senior
Subordinate Certificates, beneficial ownership and transfers of which shall be
made through book entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a day on which
banking institutions in Stockton, California, Chicago, Illinois, New York, New
York or Seattle, Washington or any city in which the Corporate Trust Office is
located are authorized or obligated by law or executive order to be closed.
Buydown Agreement: An agreement between a Person and a Mortgagor pursuant
to which such Person has provided a Buydown Fund.
8
Buydown Fund: A fund provided by the originator of a Mortgage Loan or
another Person with respect to a Buydown Loan which provides an amount
sufficient to subsidize regularly scheduled principal and interest payments due
on such Buydown Loan for a period. Buydown Funds may be (i) funded at the par
values of future payment subsidies, or (ii) funded in an amount less than the
par values of future payment subsidies, and determined by discounting such par
values in accordance with interest accruing on such amounts, in which event they
will be deposited in an account bearing interest. Buydown Funds may be held in a
separate Buydown Fund Account or may be held in a Custodial Account for P&I or a
Custodial Account for Reserves and monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created and maintained
pursuant to Section 3.02 (a) with the corporate trust department of the Trustee
or another financial institution approved by the Master Servicer, (b) within
FDIC insured accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and monitored by a
Servicer or (c) in a separate non-trust account without FDIC or other insurance
in an Eligible Institution. Such account or accounts may be non-interest bearing
or may bear interest. In the event that a Buydown Fund Account is established
pursuant to clause (b) of the preceding sentence, amounts held in such Buydown
Fund Account shall not exceed the level of deposit insurance coverage on such
account; accordingly, more than one Buydown Fund Account may be established.
Buydown Loan: A Mortgage Loan for which the Mortgage Interest Rate has been
subsidized through a Buydown Fund provided at the time of origination of such
Mortgage Loan.
Certificate: Any one of the Certificates issued pursuant to this Agreement,
executed by the Trustee and authenticated by or on behalf of the Trustee
hereunder in substantially one of the forms set forth in Exhibit A and B hereto.
The additional matter appearing in Exhibit H shall be deemed incorporated into
Exhibit A as though set forth at the end of such Exhibit.
Certificate Account: The separate trust account created and maintained with
the Trustee, the Investment Depository 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 3.04, which account shall
bear a designation clearly indicating that the funds deposited therein are held
in trust for the benefit of the Trust or any other account serving a similar
function acceptable to the Rating Agencies. Funds in the Certificate Account in
respect of the Mortgage Loans in each of the Loan Groups and amounts withdrawn
from the Certificate Account attributable to each of such Loan Groups shall be
accounted for separately. Funds in the Certificate Account may be invested in
Eligible Investments pursuant to Section 3.04(b) and reinvestment earnings
thereon shall be paid to the Master Servicer as additional servicing
compensation. Funds deposited in the Certificate Account (exclusive of the
Master Servicing Fee) shall be held in trust for the Certificateholders and for
the uses and purposes set forth in Section 2.01, Section 3.04, Section 3.05,
Section 4.01, Section 4.04 and Section 4.05.
Certificateholder or Holder: With respect to the Certificates, the person
in whose name a Certificate is registered in the Certificate Register, except
that, solely for the purposes of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Company, the Master Servicer or
any affiliate thereof shall be deemed not to be outstanding and the
9
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained; provided, that the Trustee may
conclusively rely upon an Officer's Certificate to determine whether any Person
is an affiliate of the Company or the Master Servicer. With respect to the REMIC
I Regular Interests, the owner of the REMIC I Regular Interests, which as of the
Closing Date shall be the Trust. With respect to the REMIC II Regular Interests,
the owner of the REMIC II Regular Interests, which as of the Closing Date shall
be the Trust.
Certificate Interest Rate: For each Class of Certificates and REMIC I and
REMIC II Regular Interests, the per annum rate set forth as the Certificate
Interest Rate for such Class in the Preliminary Statement hereto.
Certificate of Trust: The certificate of trust filed by the Delaware
Trustee with respect to the Trust with the Secretary of State in accordance with
Section 3810(a) of the Statutory Trust Statute.
Certificate Principal Balance: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
Certificate Register and Certificate Registrar: The register maintained and
the registrar appointed, respectively, pursuant to Section 5.03.
Class: All REMIC I Regular Interests or the Class R-1 Residual Interest
having the same priority and rights to payments on the Mortgage Loans from the
REMIC I Available Distribution Amount, all REMIC II Regular Interests or the
Class R-2 Residual Interest having the same priority and rights to payments on
the REMIC I Regular Interests from the REMIC II Available Distribution Amount,
and all REMIC III Regular Interests or the Class R-3 Residual Interest having
the same priority and rights to payments on the REMIC II Regular Interests from
the REMIC III Available Distribution Amount, as applicable, which REMIC I
Regular Interests, REMIC II Regular Interests, REMIC III Regular Interests and
Class R Residual Interests, as applicable, shall be designated as a separate
Class, and which, in the case of the Certificates (including the Class R
Certificates representing ownership of the Class R Residual Interests), shall be
set forth in the applicable forms of Certificates attached hereto as Exhibits A
and B. Each Class of REMIC I Regular Interests and the Class R-1 Residual
Interest shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "REMIC I Distribution Amount" only to the extent
of the REMIC I Available Distribution Amount for such Distribution Date
remaining after distributions in accordance with prior clauses of the definition
of "REMIC I Distribution Amount," each Class of REMIC II Regular Interests and
the Class R-2 Residual Interest shall be entitled to receive the amounts
allocated to such Class pursuant to the definition of "REMIC II Distribution
Amount" only to the extent of the REMIC II Available Distribution Amount for
such Distribution Date remaining after distributions in accordance with prior
clauses of the definition of "REMIC II Distribution Amount" and each Class of
REMIC III Regular Interests and the Class R-3 Residual Interest shall be
entitled to receive the amounts allocated to such Class pursuant to the
definition of "REMIC III Distribution Amount" only to the extent of the REMIC
III Available Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of "REMIC III
Distribution Amount."
10
Class A Certificates: The Group I-A, Group II-A and Group III-A
Certificates.
Class A-L Regular Interests: The Group I-A-L, Group II-A-L and Group
III-A-L Regular Interests.
Class C-B-1 Certificates: The Certificates designated as "Class C-B-1" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-1-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class C-B-2 Certificates: The Certificates designated as "Class C-B-2" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-2-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class C-B-3 Certificates: The Certificates designated as "Class C-B-3" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-3-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class C-B-4 Certificates: The Certificates designated as "Class C-B-4" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-4-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class C-B-5 Certificates: The Certificates designated as "Class C-B-5" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-5-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class C-B-6 Certificates: The Certificates designated as "Class C-B-6" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class C-B-6-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
11
Class C-Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class C-Y-1 and Class C-Y-2
Regular Interests, respectively, will be reduced on such Distribution Date by
the allocation of Realized Losses and the distribution of principal, determined
as described in Appendix 1.
Class C-Y Regular Interests: The Class C-Y-1 and Class C-Y-2 Regular
Interests.
Class C-Y-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class C-Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Y-1 Regular Interest on such Distribution Date.
Class C-Y-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class C-Y-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class C-Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Y-2 Regular Interest on such Distribution Date.
Class C-Y-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class C-Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class C-Z-1 and Class C-Z-2
Regular Interests, respectively, will be reduced on such Distribution Date by
the allocation of Realized Losses and the distribution of principal, which shall
be in each case the excess of (A) the sum of (x) the excess of the REMIC I
Available Distribution Amount for the related Loan Group or Groups (i.e. the
"related Loan Group" for the Class C-Z-1 Regular Interest is Loan Group I and
the "related Loan Groups" for the Class C-Z-2 Regular Interest are Loan Group II
and Loan Group III) over the sum of the amounts thereof distributable (i) in the
case of Loan Group I, to the Class I-P-M Regular Interest, in the case of Loan
Group II, to the Class II-P-M Regular Interest and, in the case of Loan Group
III, to the Class III-P-M Regular Interest, (ii) in the case of Loan Group I, to
the Class I-X-M Regular Interest, in the case of Loan Group II, to the Class
II-X-M Regular Interest and, in the case of Loan Group III, to the Class III-X-M
Regular Interest, (iii) in respect of interest on such Class C-Z Regular
Interest and the related Class C-Y Regular Interest, (iv) to such Class C-Z
Regular Interest and the related Class C-Y Regular Interest pursuant to clause
(c)(ii) of the definition of "REMIC I Distribution Amount" and (v) in the case
of Loan Group II, to the Class R-1 Residual Interest and (y) the amount of
Realized Losses allocable to principal for the related Loan Group or Groups
(reduced, in the case of Loan Group I, by the portion of such amount allocable
to the Class I-P-M Regular Interest, in the case of Loan Group II, by the
portion of such amount allocable to the Class II-P-M Regular Interest and, in
the case of Loan Group III, by the portion of such amount allocable to the Class
III-P-M Regular Interest) over (B) the Class C-Y Principal Reduction Amount for
the related Loan Group or Groups.
Class C-Z Regular Interests: The Class C-Z-1 and Class C-Z-2 Regular
Interests.
12
Class C-Z-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class C-Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Z-1 Regular Interest on such Distribution Date
Class C-Z-1 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class C-Z-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class C-Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class C-Z-2 Regular Interest on such Distribution Date.
Class C-Z-2 Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class I-A-1 Certificates: The Certificates designated as "Class I-A-1" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-1-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-P Certificates: The Certificates designated as "Class I-P" on the
face thereof in substantially the form attached hereto as Exhibit A.
Class I-P Fraction: For each Class I-P Mortgage Loan, a fraction, the
numerator of which is 5.250% less the Pass-Through Rate on such Class I-P
Mortgage Loan and the denominator of which is 5.250%.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate of less
than 5.250% per annum.
Class I-P-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-P-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class I-X Certificates: The Certificates designated as "Class I-X" on the
face thereof in substantially the form attached hereto as Exhibit A.
Class I-X Notional Amount: With respect to any Distribution Date, the
product of (x) the aggregate scheduled principal balance, as of the second
preceding Due Date after giving effect to payments scheduled to be received as
of such Due Date, whether or not received (and after giving effect to Principal
Prepayments, Monthly P&I Advances and the principal portion of Realized Losses
applied prior to such Due Date), or with respect to the initial Distribution
Date, as of the Cut-Off Date, of the Group I Premium Rate Mortgage Loans and (y)
a fraction, the numerator of
13
which is the weighted average of the Stripped Interest Rates for the Group I
Premium Rate Mortgage Loans as of such Due Date and the denominator of which is
5.250%.
Class I-X-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-X-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class II-A-1 Certificates: The Certificates designated as "Class II-A-1" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-1-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-2 Certificates: The Certificates designated as "Class II-A-2" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-2-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-3 Certificates: The Certificates designated as "Class II-A-3" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-3-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-4 Certificates: The Certificates designated as "Class II-A-4" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-4-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-5 Certificates: The Certificates designated as "Class II-A-5" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-5-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-6 Certificates: The Certificates designated as "Class II-A-6" on
the face thereof in substantially the form attached hereto as Exhibit A.
14
Class II-A-6-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-7 Certificates: The Certificates designated as "Class II-A-7" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-7-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-8 Certificates: The Certificates designated as "Class II-A-8" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-8 Notional Amount: For any Distribution Date, the aggregate
Class Principal Balance of the Class II-A-7 and Class II-A-9 Certificates
immediately before such Distribution Date.
Class II-A-9 Certificates: The Certificates designated as "Class II-A-9" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-9-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-10 Certificates: The Certificates designated as "Class II-A-10"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-10-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-11 Certificates: The Certificates designated as "Class II-A-10"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-11-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-A-12 Certificates: The Certificates designated as "Class II-A-10"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A-12-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-P Certificates: The Certificates designated as "Class II-P" on the
face thereof in substantially the form attached hereto as Exhibit A.
15
Class II-P Fraction: For each Class II-P Mortgage Loan, a fraction, the
numerator of which is 5.750% less the Pass-Through Rate on such Class II-P
Mortgage Loan and the denominator of which is 5.750%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-Through Rate of
less than 5.750% per annum.
Class II-P-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-P-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class II-X Certificates: The Certificates designated as "Class II-X" on the
face thereof in substantially the form attached hereto as Exhibit A.
Class II-X Notional Amount: With respect to any Distribution Date, the
product of (x) the aggregate scheduled principal balance, as of the second
preceding Due Date after giving effect to payments scheduled to be received as
of such Due Date, whether or not received (and after giving effect to Principal
Prepayments, Monthly P&I Advances and the principal portion of Realized Losses
applied prior to such Due Date), or with respect to the initial Distribution
Date, as of the Cut-Off Date, of the Group II Premium Rate Mortgage Loans and
(y) a fraction, the numerator of which is the weighted average of the Stripped
Interest Rates for the Group II Premium Rate Mortgage Loans as of such Due Date
and the denominator of which is 5.750%.
Class II-X-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-X-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class III-A-1 Certificates: The Certificates designated as "Class III-A-1"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class III-A-1-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class III-A-2 Certificates: The Certificates designated as "Class III-A-2"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class III-A-2-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
16
Class III-P Certificates: The Certificates designated as "Class III-P" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class III-P Fraction: For each Class III-P Mortgage Loan, a fraction, the
numerator of which is 5.750% less the Pass-Through Rate on such Class III-P
Mortgage Loan and the denominator of which is 5.750%.
Class III-P Mortgage Loan: Any Group III Loan with a Pass-Through Rate of
less than 5.750% per annum.
Class III-P-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class III-P-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class III-X Certificates: The Certificates designated as "Class III-X" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class III-X Notional Amount: With respect to any Distribution Date, the
product of (x) the aggregate scheduled principal balance, as of the second
preceding Due Date after giving effect to payments scheduled to be received as
of such Due Date, whether or not received (and after giving effect to Principal
Prepayments, Monthly P&I Advances and the principal portion of Realized Losses
applied prior to such Due Date), or with respect to the initial Distribution
Date, as of the Cut-Off Date, of the Group III Premium Rate Mortgage Loans and
(y) a fraction, the numerator of which is the weighted average of the Stripped
Interest Rates for the Group III Premium Rate Mortgage Loans as of such Due Date
and the denominator of which is 5.750%.
Class III-X-L Regular Interest: The uncertificated undivided beneficial
interest in REMIC II which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class III-X-M Regular Interest: The uncertificated undivided beneficial
interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Notional Amount: With respect to any of the Class X Certificates, the
Class X-L Regular Interests, the Class X-M Regular Interests and the Class
II-A-8 Certificates, the related notional amount for such Class, as specified
herein (e.g., the "Class Notional Amount" for the Class I-X Certificates, the
Class I-X-L Regular Interest and the Class I-X-M Regular Interest is the Class
I-X Notional Amount).
Class P Certificates: The Class I-P, Class II-P and Class III-P
Certificates. As such term is used herein, the Class I-P Certificates are
"related" to the Class I-P Mortgage Loans, the Class II-P Certificates are
"related" to the Class II-P Mortgage Loans and the Class III-P Certificates are
"related" to the Class III-P Mortgage Loans.
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Class P Fraction: Any Class I-P, Class II-P or Class III-P Fraction, as
applicable.
Class P Mortgage Loan: Any of the Class I-P, Class II-P or Class III-P
Mortgage Loans.
Class P-L Regular Interests: The Class I-P-L, Class II-P-L and Class
III-P-L Regular Interests. As such term is used herein, the Class I-P-L Regular
Interest is "related" to the Class I-P Mortgage Loans, the Class II-P-L Regular
Interest is "related" to the Class II-P Mortgage Loans and the Class III-P-L
Regular Interest is "related" to the Class III-P Mortgage Loans.
Class P-M Regular Interests: The Class I-P-M, Class II-P-M and Class
III-P-M Regular Interests. As such term is used herein, the Class I-P-M Regular
Interest is "related" to the Class I-P Mortgage Loans, the Class II-P-M Regular
Interest is "related" to the Class II-P Mortgage Loans and the Class III-P-M
Regular Interest is "related" to the Class III-P Mortgage Loans.
Class Principal Balance: For any Class of Certificates or Class of REMIC I
or REMIC II Regular Interests and for the Class R-1 Residual Interest, the
applicable initial Class Principal Balance therefor set forth in the Preliminary
Statement hereto (or, in the case of the Class R Certificates, the Class
Principal Balance of the Class R-1 Residual Interest), corresponding to the
rights of such Class in payments of principal due to be passed through to the
Certificateholders or the Holders of the Regular Interests from principal
payments on the Mortgage Loans, the REMIC I Regular Interests or the REMIC II
Regular Interests, as applicable, as reduced from time to time by (x)
distributions of principal to the Certificateholders or the Holders of the REMIC
I or REMIC II Regular Interests of such Class and (y) the portion of Realized
Losses allocated to the Class Principal Balance of such Class pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date. For any
Distribution Date, the reduction of the Class Principal Balance of any Class of
Certificates and REMIC I or REMIC II Regular Interests pursuant to the
definition of "Realized Loss" shall be deemed effective prior to the
determination and distribution of principal on such Class pursuant to the
definitions of "REMIC I Distribution Amount," "REMIC II Distribution Amount" and
"REMIC III Distribution Amount."
Notwithstanding the foregoing, (A) any amounts distributed in respect of
losses pursuant to paragraph (I)(e)(i) or (I)(e)(ii) of the definition of "REMIC
II Distribution Amount" shall not cause a further reduction in the Class
Principal Balance of the Class P-L Regular Interests or their Corresponding
Classes, (B) any amounts distributed in respect of principal losses pursuant to
paragraph (I)(e)(xxi) of the definition of "REMIC II Distribution Amount" shall
not cause a further reduction in the Class Principal Balances of the REMIC II
Regular Interests or their Corresponding Classes, (C) any amounts distributed in
respect of principal losses pursuant to clause (d)(i) of the definition of
"REMIC I Distribution Amount" shall not cause a further reduction in the Class
Principal Balance of the Class P-M Regular Interests and (D) any amounts
distributed in respect of principal losses pursuant to clause (d)(ii) of the
definition of "REMIC I Distribution Amount" shall not cause a further reduction
in the Class Principal Balances of the REMIC I Regular Interests.
The Class Principal Balance for the Class I-A-1 Certificates shall be
referred to as the "Class I-A-1 Principal Balance," the Class Principal Balance
for the Class I-A-1-L Regular Interest shall be referred to as the "Class
I-A-1-L Principal Balance" and so on. The Class
18
Principal Balances for the Class X Certificates, the Class X-L Regular
Interests, the Class X-M Regular Interests and the Class II-A-8 Certificates
shall each be zero.
Class R Certificates: The Certificates designated as "Class R" on the face
thereof in substantially the form attached hereto as Exhibit B, representing
ownership of the Class R-1, Class R-2 and Class R-3 Residual Interests, each of
which Class of Residual Interests has been designated as the sole class of
"residual interest" in REMIC I, REMIC II and REMIC III, respectively, pursuant
to Section 2.06, Section 2.11 and Section 2.14, respectively, for purposes of
Section 860G(a)(2) of the Code.
Class R Residual Interests: The Class R-1, Class R-2 and Class R-3 Residual
Interests (which shall be transferable only as a unit evidenced by the Class R
Certificates, in accordance with the applicable provisions of Section 5.01).
Class R-1 Residual Interest: The uncertificated undivided beneficial
interest in REMIC I which has been designated as the single class of "residual
interest" in REMIC I pursuant to Section 2.06. The Class R-1 Residual Interest,
together with the REMIC I Regular Interests, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC I Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.
Class R-2 Residual Interest: The uncertificated undivided beneficial
interest in REMIC II which has been designated as the single class of "residual
interest" in REMIC II pursuant to Section 2.11. The Class R-2 Residual Interest,
together with the REMIC II Regular Interests, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC II Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.
Class R-3 Residual Interest: The uncertificated undivided beneficial
interest in REMIC III which has been designated as the single class of "residual
interest" in REMIC III pursuant to Section 2.14. The Class R-3 Residual
Interest, together with the REMIC III Regular Interests, shall be deemed to be a
separate series of beneficial interests in the assets of the Trust consisting of
the REMIC III Assets pursuant to Section 3806(b)(2) of the Statutory Trust
Statute.
Class X Certificates: The Class I-X, Class II-X and Class III-X
Certificates.
Class X-L Regular Interest: The Class I-X-L, Class II-X-L and Class III-X-L
Regular Interests.
Class X-M Regular Interest: The Class I-X-M, Class II-X-M and Class III-X-M
Regular Interests.
Clean-Up Call Percentage: 5%.
Clearing Agency: An organization registered as a "clearing agency" pursuant
to Section 17A of the Securities Exchange Act of 1934, as amended, which
initially shall be DTC.
Closing Date: December 23, 2002, which is the date of settlement of the
sale of the Certificates to the original purchasers thereof.
19
Code: The Internal Revenue Code of 1986, as amended.
Company: Washington Mutual Mortgage Securities Corp., a Delaware
corporation, or its successor-in-interest.
Compensating Interest: For any Distribution Date with respect to each Loan
Group and the Mortgage Loans contained therein, the lesser of (i) the sum of (a)
the aggregate Master Servicing Fee payable with respect to such Loan Group on
such Distribution Date, (b) the aggregate Payoff Earnings with respect to such
Loan Group for such Distribution Date and (c) the aggregate Payoff Interest with
respect to such Loan Group for such Distribution Date and (ii) the aggregate
Uncollected Interest with respect to such Loan Group for such Distribution Date.
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building owned
or leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment or mortgage of the Cooperative Lease, (iv) financing statements and
(v) a stock power (or other similar instrument), and ancillary thereto, a
Recognition Agreement, each of which was transferred and assigned to the Trust
pursuant to Section 2.04.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
Corporate Trust Office: The corporate trust office of the Trustee, 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 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention:
Corporate Trust Washington Mutual 2002-MS11.
Corporation: Any Person (other than an individual, partnership, joint
venture or unincorporated organization) incorporated, associated, organized,
chartered or existing under the laws of any state or under the federal laws of
the United States of America; provided, that such Person have indefinite
existence under the law of its domicile.
20
Corresponding Class: With respect to the Certificates and the REMIC II
Regular Interests, the "Corresponding Class" shall be as indicated in the
following table:
Class I-A-1-L Class I-A-1
Class II-A-1-L Class II-A-1
Class II-A-2-L Class II-A-2
Class II-A-3-L Class II-A-3
Class II-A-4-L Class II-A-4
Class II-A-5-L Class II-A-5
Class II-A-6-L Class II-A-6
Class II-A-7-L Class II-A-7
Class II-A-9-L Class II-A-9
Class II-A-10-L Class II-A-10
Class II-A-11-L Class II-A-11
Class II-A-12-L Class II-A-12
Class III-A-1-L Class III-A-1
Class III-A-2-L Class III-A-2
Class I-X-L Class I-X
Class II-X-L Class II-X
Class III-X-L Class III-X
Class I-P-L Class I-P
Class II-P-L Class II-P
Class III-P-L Class III-P
Class C-B-1-L Class C-B-1
Class C-B-2-L Class C-B-2
Class C-B-3-L Class C-B-3
Class C-B-4-L Class C-B-4
Class C-B-5-L Class C-B-5
Class C-B-6-L Class C-B-6
Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Principal Balance of the Group C-B Certificates has been or will
be reduced to zero as a result of principal distributions thereon and the
allocation of Realized Losses on such Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan, made by or on
behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly
Payment or a Payoff, which is applied to reduce the outstanding principal
balance of the Mortgage Loan. (Prepayment penalties are not payments of
principal and hence Curtailments do not include prepayment penalties.)
Curtailment Shortfall: For any Distribution Date and for any Curtailment
applied with a Monthly Payment in the Prior Period other than a Prepaid Monthly
Payment, an amount equal to one month's interest on such Curtailment at the
applicable Pass-Through Rate on such Mortgage Loan.
Custodial Account for P&I: The Custodial Account for principal and interest
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established and
maintained pursuant to Section 3.02 (a) with the corporate trust department of
the Trustee or another financial institution approved by the Master Servicer
such that the rights of the Master Servicer, the Trustee, the Trust, the
Delaware Trustee and the
21
Certificateholders thereto shall be fully protected against the claims of any
creditors of the applicable Servicer and of any creditors or depositors of the
institution in which such account is maintained, (b) within FDIC insured
accounts (or other accounts with comparable insurance coverage acceptable to the
Rating Agencies) created, maintained and monitored by a Servicer or (c) in a
separate non-trust account without FDIC or other insurance in an Eligible
Institution. In the event that a Custodial Account for P&I is established
pursuant to clause (b) of the preceding sentence, amounts held in such Custodial
Account for P&I shall not exceed the level of deposit insurance coverage on such
account; accordingly, more than one Custodial Account for P&I may be
established. Any amount that is at any time not protected or insured in
accordance with the first sentence of this definition of "Custodial Account for
P&I" shall promptly be withdrawn from such Custodial Account for P&I and be
remitted to the Investment Account.
Custodial Account for Reserves: The Custodial Account for Reserves
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established and
maintained pursuant to Section 3.02 (a) with the corporate trust department of
the Trustee or another financial institution approved by the Master Servicer
such that the rights of the Master Servicer, the Trustee, the Trust, the
Delaware Trustee and the Certificateholders thereto shall be fully protected
against the claims of any creditors of the applicable Servicer and of any
creditors or depositors of the institution in which such account is maintained,
(b) within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to the Rating Agencies) created, maintained and monitored by
a Servicer or (c) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution. In the event that a Custodial Account for
Reserves is established pursuant to clause (b) of the preceding sentence,
amounts held in such Custodial Account for Reserves shall not exceed the level
of deposit insurance coverage on such account; accordingly, more than one
Custodial Account for Reserves may be established. Any amount that is at any
time not protected or insured in accordance with the first sentence of this
definition of "Custodial Account for Reserves" shall promptly be withdrawn from
such Custodial Account for Reserves and be remitted to the Investment Account.
Custodial Agreement: The agreement, if any, between the Trustee and a
Custodian (or the Trustee, a Custodian and the Master Servicer) providing for
the safekeeping of the Mortgage Files on behalf of the Trust.
Custodian: A custodian which is appointed by the Trustee with the consent
of the Master Servicer, as provided in Article II hereof, pursuant to a
Custodial Agreement. Any Custodian so appointed shall act as agent on behalf of
the Trustee. The reasonable fees and expenses of the Custodian shall be paid by
the Master Servicer. The Trustee shall remain at all times responsible under the
terms of this Agreement, notwithstanding the fact that certain duties have been
assigned to a Custodian.
Cut-Off Date: December 1, 2002.
Definitive Certificates: Certificates in definitive, fully registered and
certificated form.
Delaware Trustee: Christiana Bank & Trust Company, or its
successor-in-interest as provided in Section 8.09, or any successor trustee
appointed as herein provided.
22
Depositary Agreement: The Letter of Representations, dated December 20,
2002 by and among DTC, the Trust and the Trustee. The Trustee is authorized to
enter into the Depositary Agreement on behalf of the Trust.
Destroyed Mortgage Note: A Mortgage Note the original of which (or a
portion of the original of which) was permanently lost or destroyed and has not
been replaced.
Determination Date: A day not later than the 10th day preceding a related
Distribution Date, as determined by the Master Servicer.
Disqualified Organization: Any Person which is not a Permitted Transferee,
but does not include any Pass-Through Entity which owns or holds a Residual
Certificate and of which a Disqualified Organization, directly or indirectly,
may be a stockholder, partner or beneficiary.
Distribution Date: With respect to distributions on the REMIC I Regular
Interests, the REMIC II Regular Interests and the Certificates, the 25th day
(or, if such 25th day is not a Business Day, the Business Day immediately
succeeding such 25th day) of each month, with the first such date being January
27, 2003. The "related Due Date" for any Distribution Date is the Due Date
immediately preceding such Distribution Date.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial institution or
other Person for whom DTC effects book-entry transfers and pledges of securities
deposited with DTC.
Due Date: The day on which the Monthly Payment for each Mortgage Loan is
due.
Eligible Institution: An institution having (i) the highest short-term debt
rating, and one of the two highest long-term debt ratings of the Rating
Agencies, (ii) with respect to any Custodial Account for P&I and special
Custodial Account for Reserves, an unsecured long-term debt rating of at least
one of the two highest unsecured long-term debt ratings of the Rating Agencies,
(iii) with respect to any Buydown Fund Account or Custodial Account which also
serves as a Buydown Fund Account, the highest unsecured long-term debt rating by
the Rating Agencies, or (iv) the approval of the Rating Agencies. Such
institution may be the Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with written notice on the
Business Day following the date on which the Servicer determines that such
Servicer's short-term debt and unsecured long-term debt ratings fail to meet the
requirements of the prior sentence. Notwithstanding the foregoing, Washington
Mutual Bank, FA shall be an "Eligible Institution" if the following conditions
are satisfied: (i) Washington Mutual Bank, FA is acting as Servicer, (ii) if S&P
is a Rating Agency as defined herein, the long-term unsecured debt obligations
of Washington Mutual Bank, FA are rated no lower than "A-" by S&P and the
short-term unsecured debt obligations of Washington Mutual Bank, FA are rated no
lower than "A-2" by S&P, (iii) if Fitch is a Rating Agency as defined herein,
the long-term unsecured debt obligations of Washington Mutual Bank, FA are rated
no lower than "A" by Fitch and the short-term unsecured debt obligations of
Washington Mutual Bank, FA are rated no lower than "F1" by Fitch and (iv) if
Xxxxx'x is a Rating Agency as defined herein, the long-term unsecured debt
obligations of Washington Mutual Bank, FA are rated no lower than "A2" by
Moody's and the short-term unsecured debt obligations of
23
Washington Mutual Bank, FA are rated no lower than "P-1" by Moody's; provided,
that if the long-term or short-term unsecured debt obligations of Washington
Mutual Bank, FA are downgraded by any of the Rating Agencies to a rating lower
than the applicable rating specified in this sentence, Washington Mutual Bank,
FA shall cease to be an "Eligible Institution" ten Business Days after
notification of such downgrade.
Eligible Investments: Any one or more of the obligations or securities
listed below in which funds deposited in the Investment Account, the Certificate
Account, the Custodial Account for P&I and the Custodial Account for Reserves
may be invested:
(i) Obligations of, or guaranteed as to principal and interest by, the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) Repurchase agreements on obligations described in clause (i) of
this definition of "Eligible Investments," provided that the unsecured
obligations of the party (including the Trustee in its commercial capacity)
agreeing to repurchase such obligations have at the time one of the two
highest short term debt ratings of the Rating Agencies and provided that
such repurchaser's unsecured long term debt has one of the two highest
unsecured long term debt ratings of the Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits and
bankers' acceptances of any U.S. bank or trust company incorporated under
the laws of the United States or any state (including the Trustee in its
commercial capacity), provided that the debt obligations of such bank or
trust company (or, in the case of the principal bank in a bank holding
company system, debt obligations of the bank holding company) at the date
of acquisition thereof have one of the two highest short term debt ratings
of the Rating Agencies and unsecured long term debt has one of the two
highest unsecured long term debt ratings of the Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state of the
United States or the District of Columbia, provided that such obligations
at the date of acquisition thereof shall have the highest long-term debt
ratings available for such securities from the Rating Agencies;
(v) Commercial paper of any corporation incorporated under the laws of
the United States or any state thereof, which on the date of acquisition
has the highest commercial paper rating of the Rating Agencies, provided
that the corporation has unsecured long term debt that has one of the two
highest unsecured long term debt ratings of the Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States or any state thereof and
have the highest long-term unsecured rating available for such securities
from the Rating Agencies; provided, however, that securities issued by any
such corporation will not be investments to the extent that investment
therein would cause the outstanding principal amount of securities issued
by such
24
corporation that are then held as part of the Investment Account or the
Certificate Account to exceed 20% of the aggregate principal amount of all
Eligible Investments then held in the Investment Account and the
Certificate Account; and
(vii) Units of taxable money market funds (which may be 12b-1 funds,
as contemplated under the rules promulgated by the Securities and Exchange
Commission under the Investment Company Act of 1940), which funds have the
highest rating available for such securities from the Rating Agencies or
which have been designated in writing by the Rating Agencies as Eligible
Investments;
provided, however, that such obligation or security is held for a temporary
period pursuant to Section 1.860G-2(g)(1) of the Treasury Regulations, and that
such period can in no event exceed thirteen months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with respect
to the obligations underlying such instrument or (b) has been purchased at a
price greater than the outstanding principal balance of such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificate: Any Senior Subordinate Certificate.
Event of Default: Any event of default as specified in Section 7.01.
Excess Liquidation Proceeds: With respect to any Distribution Date, the
excess, if any, of aggregate Liquidation Proceeds received during the Prior
Period over the amount that would have been received if Payoffs had been made
with respect to such Mortgage Loans on the date such Liquidation Proceeds were
received.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FHA: Federal Housing Administration, or any successor thereto.
Xxxxxx Mae: The entity formerly known as the Federal National Mortgage
Association, or any successor thereto.
Final Maturity Date: With respect to each Class of the REMIC I Regular
Interests, the REMIC II Regular Interests and the Certificates, the date set
forth in the applicable table contained in the Preliminary Statement hereto.
Fitch: Fitch Ratings, provided that at any time it be a Rating Agency.
Fraud Coverage: During the period prior to the first anniversary of the
Cut-Off Date, 1.00% of the aggregate principal balance of the Mortgage Loans as
of the Cut-Off Date (the "Initial Fraud Coverage"), reduced by Fraud Losses
allocated to the Certificates since the Cut-Off Date; during the period from the
first anniversary of the Cut-Off Date to (but not including) the fifth
anniversary of the Cut-Off Date, the amount of the Fraud Coverage on the most
recent
25
previous anniversary of the Cut-Off Date (calculated in accordance with the
second sentence of this paragraph) reduced by Fraud Losses allocated to the
Certificates since such anniversary; and during the period on and after the
fifth anniversary of the Cut-Off Date, zero. On each anniversary of the Cut-Off
Date, the Fraud Coverage shall be reduced to the lesser of (i) on the first and
second anniversaries of the Cut-Off Date, 1.00%, and on the third and fourth
anniversaries of the Cut-Off Date, 0.50%, of the aggregate principal balance of
the Mortgage Loans as of the Due Date in the preceding month and (ii) the excess
of the Initial Fraud Coverage over cumulative Fraud Losses allocated to the
Certificates since the Cut-Off Date.
The Fraud Coverage may be reduced upon written confirmation from the Rating
Agencies that such reduction will not adversely affect the then current ratings
assigned to the Certificates by the Rating Agencies.
Fraud Loss: A Realized Loss (or portion thereof) with respect to a Mortgage
Loan arising from any action, event or state of facts with respect to such
Mortgage Loan which, because it involved or arose out of any dishonest,
fraudulent, criminal, negligent or knowingly wrongful act, error or omission by
the Mortgagor, originator (or assignee thereof) of such Mortgage Loan, Lender, a
Servicer or the Master Servicer, would result in an exclusion from, denial of,
or defense to coverage which otherwise would be provided by a Primary Insurance
Policy previously issued with respect to such Mortgage Loan.
Xxxxxxx Mac: The entity formerly known as the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Group C-B Certificates: The Class C-B-1, Class C-B-2, Class C-B-3, Class
C-B-4, Class C-B-5 and Class C-B-6 Certificates.
Group C-B Percentage: For any date of determination, the aggregate Class
Principal Balance of the Class C-B Certificates divided by the then outstanding
aggregate Principal Balance of the Mortgage Loans.
Group C-B-L Regular Interests: The Class C-B-1-L, Class C-B-2-L, Class
C-B-3-L, Class C-B-4-L, Class C-B-5-L and Class C-B-6-L Regular Interests.
Group I Certificates: The Group I-A, Class I-X and Class I-P Certificates.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan Schedule
as Group I Loans.
Group I Premium Rate Mortgage Loans: The Group I Loans having Pass-Through
Rates greater than or equal to 5.250% per annum.
Group I Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Group I Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of: (i) the Group I Senior Percentage of the
Principal Balance of such Mortgage Loan (exclusive of the Class I-P Fraction
thereof, with respect to any Class I-P Mortgage Loan) and (ii) the Group I
Senior Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
26
Group I Senior Percentage: For any Distribution Date, the lesser of (i)
100% and (ii) the aggregate Class Principal Balance of the Group I-A
Certificates divided by the aggregate Principal Balance of the Group I Loans
(exclusive of the Class I-P Fraction thereof with respect to any Class I-P
Mortgage Loan), in each case immediately before such Distribution Date.
Group I Senior Prepayment Percentage, Group II Senior Prepayment Percentage
or Group III Senior Prepayment Percentage: For any Distribution Date, each of
the Group I Senior Prepayment Percentage, the Group II Senior Prepayment
Percentage and the Group III Senior Prepayment Percentage shall equal 100%,
unless (i) the Group I Senior Percentage for such Distribution Date is less than
or equal to the Group I Senior Percentage as of the Closing Date, the Group II
Senior Percentage for such Distribution Date is less than or equal to the Group
II Senior Percentage as of the Closing Date and the Group III Senior Percentage
for such Distribution Date is less than or equal to the Group III Senior
Percentage as of the Closing Date, (ii) such Distribution Date occurs on or
after the fifth anniversary of the first Distribution Date and (iii) the
following tests specified in clauses (a) through (f) are met with respect to
each of Loan Group I, Loan Group II and Loan Group III:
(a) the mean aggregate Principal Balance as of the Distribution Date in
each of the immediately preceding six calendar months of the Group I
Loans which were 60 or more days delinquent as of such date (including
Mortgage Loans in foreclosure and Mortgaged Properties held by REMIC
I) is less than or equal to 50% of the Subordinate Component Balance
for Loan Group I as of the current Distribution Date,
(b) the mean aggregate Principal Balance as of the Distribution Date in
each of the immediately preceding six calendar months of the Group II
Loans which were 60 or more days delinquent as of such date (including
Mortgage Loans in foreclosure and Mortgaged Properties held by REMIC
I) is less than or equal to 50% of the Subordinate Component Balance
for Loan Group II as of the current Distribution Date,
(c) the mean aggregate Principal Balance as of the Distribution Date in
each of the immediately preceding six calendar months of the Group III
Loans which were 60 or more days delinquent as of such date (including
Mortgage Loans in foreclosure and Mortgaged Properties held by REMIC
I) is less than or equal to 50% of the Subordinate Component Balance
for Loan Group III as of the current Distribution Date,
(d) cumulative Realized Losses on the Group I Loans allocated to the Group
C-B-L Regular Interests, as a percentage of the Subordinate Component
Balance for Loan Group I as of the Closing Date, are less than or
equal to, for any Distribution Date (1) before the sixth anniversary
of the first Distribution Date, 30%, (2) on or after the sixth
anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but
before the eighth anniversary of the first Distribution Date, 40%, (4)
on or after the eighth anniversary but before the ninth anniversary of
the first Distribution Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%,
27
(e) cumulative Realized Losses on the Group II Loans allocated to the
Group C-B-L Regular Interests, as a percentage of the Subordinate
Component Balance for Loan Group II as of the Closing Date, are less
than or equal to, for any Distribution Date (1) before the sixth
anniversary of the first Distribution Date, 30%, (2) on or after the
sixth anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but
before the eighth anniversary of the first Distribution Date, 40%, (4)
on or after the eighth anniversary but before the ninth anniversary of
the first Distribution Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%, and
(f) cumulative Realized Losses on the Group III Loans allocated to the
Group C-B-L Regular Interests, as a percentage of the Subordinate
Component Balance for Loan Group III as of the Closing Date, are less
than or equal to, for any Distribution Date (1) before the sixth
anniversary of the first Distribution Date, 30%, (2) on or after the
sixth anniversary but before the seventh anniversary of the first
Distribution Date, 35%, (3) on or after the seventh anniversary but
before the eighth anniversary of the first Distribution Date, 40%, (4)
on or after the eighth anniversary but before the ninth anniversary of
the first Distribution Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%.
in which case the Group I Senior Prepayment Percentage, the Group II Senior
Prepayment Percentage and the Group III Senior Prepayment Percentage shall be
calculated as follows: (1) for any such Distribution Date on or after the fifth
anniversary but before the sixth anniversary of the first Distribution Date, the
Group I Senior Percentage, the Group II Senior Percentage or the Group III
Senior Percentage, as applicable, for such Distribution Date plus 70% of the
Subordinate Percentage for the related Loan Group for such Distribution Date;
(2) for any such Distribution Date on or after the sixth anniversary but before
the seventh anniversary of the first Distribution Date, the Group I Senior
Percentage, the Group II Senior Percentage or the Group III Senior Percentage,
as applicable, for such Distribution Date plus 60% of the Subordinate Percentage
for the related Loan Group for such Distribution Date; (3) for any such
Distribution Date on or after the seventh anniversary but before the eighth
anniversary of the first Distribution Date, the Group I Senior Percentage, the
Group II Senior Percentage or the Group III Senior Percentage, as applicable,
for such Distribution Date plus 40% of the Subordinate Percentage for the
related Loan Group for such Distribution Date; (4) for any such Distribution
Date on or after the eighth anniversary but before the ninth anniversary of the
first Distribution Date, the Group I Senior Percentage, the Group II Senior
Percentage or the Group III Senior Percentage, as applicable, for such
Distribution Date plus 20% of the Subordinate Percentage for the related Loan
Group for such Distribution Date; and (5) for any such Distribution Date
thereafter, the Group I Senior Percentage, the Group II Senior Percentage or the
Group III Senior Percentage, as applicable, for such Distribution Date.
If on any Distribution Date the allocation to the Group I-L, Group II-L or
Group III-L Regular Interests of Principal Prepayments in the percentage
required would reduce the aggregate Class Principal Balance of such Regular
Interests below zero, the Group I Senior Prepayment Percentage, the Group II
Senior Prepayment Percentage or the Group III Senior Prepayment Percentage, as
applicable, for such Distribution Date shall be limited to the
28
percentage necessary to reduce the aggregate Class Principal Balance of such
Regular Interests to zero. Notwithstanding the foregoing, however, on each
Distribution Date, the Class I-P Certificates shall receive the applicable Class
I-P Fraction of all principal payments, including, without limitation, Principal
Prepayments, received in respect of Class I-P Mortgage Loans, the Class II-P
Certificates shall receive the applicable Class II-P Fraction of all principal
payments, including, without limitation, Principal Prepayments, received in
respect of Class II-P Mortgage Loans, and the Class III-P Certificates shall
receive the applicable Class III-P Fraction of all principal payments,
including, without limitation, Principal Prepayments, received in respect of
Class III-P Mortgage Loans.
Group I Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Group I Senior Percentage of the Principal
Payment Amount for Loan Group I (exclusive of the portion thereof attributable
to principal distributions to the Class I-P-L Regular Interest pursuant to
clauses (I)(a)(i) and (II)(a)(i) of the definition of "REMIC II Distribution
Amount"), (b) the Group I Senior Prepayment Percentage of the Principal
Prepayment Amount for Loan Group I (exclusive of the portion thereof
attributable to principal distributions to the Class I-P-L Regular Interest
pursuant to clauses (I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Group I Senior Liquidation Amount.
Group I Subordinate Balance: For any date of determination, an amount equal
to the then outstanding aggregate Principal Balance of the Group I Loans reduced
by the aggregate Class Principal Balance of the Group I-A and Class I-P
Certificates.
Group I Subordinate Percentage: For any Distribution Date, the excess of
100% over the Group I Senior Percentage for such date.
Group I Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Group I Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Group I-A Certificates has been reduced to zero, then the Group I
Subordinate Prepayment Percentage shall equal 100%.
Group I-A Certificates: The Class I-A-1 Certificates.
Group I-A-L Regular Interests: The Class I-A-1-L Regular Interest.
Group I-L Regular Interests: The Group I-A-L, Class I-X-L and Class I-P-L
Regular Interests.
Group II Certificates: The Group II-A, Class II-X and Class II-P
Certificates.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan Schedule
as Group II Loans.
Group II Lockout Adjusted Percentage: For any Distribution Date occurring
before January 2008, 0%; and for any Distribution Date occurring in or after
January 2008, the Group II Lockout Percentage.
29
Group II Lockout Liquidation Amount: For any Distribution Date, the
aggregate, for each Group II Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of (i) the Group II Lockout Adjusted Percentage
of the Principal Balance of such Mortgage Loan (exclusive of the Class II-P
Fraction thereof, with respect to any Class II-P Mortgage Loan) and (ii) the
Group II Lockout Adjusted Percentage of the Liquidation Principal with respect
to such Mortgage Loan.
Group II Lockout Percentage: For any Distribution Date, the lesser of (i)
100% and (ii) the aggregate Class Principal Balance of the Class II-A-11 and
Class II-A-12 Certificates, divided by the aggregate Principal Balance of the
Group II Loans (exclusive of the Class II-P Fraction thereof with respect to any
Class II-P Mortgage Loan), in each case immediately before such Distribution
Date.
Group II Lockout Prepayment Percentage: For any Distribution Date, the
product of (i) the Group II Lockout Percentage and (ii) the Step Down
Percentage.
Group II Lockout Priority Amount: For any Distribution Date, the sum of (i)
the Group II Lockout Adjusted Percentage of the Principal Payment Amount for
Loan Group II (exclusive of the portion thereof attributable to principal
distributions to the Class II-P-L Regular Interest pursuant to clause (I)(b)(i)
of the definition of "REMIC II Distribution Amount"), (ii) the Group II Lockout
Prepayment Percentage of the Principal Prepayment Amount for Loan Group II
(exclusive of the portion thereof attributable to principal distributions to the
Class II-P-L Regular Interest pursuant to clause (I)(b)(i) of the definition of
"REMIC II Distribution Amount") and (iii) the Group II Lockout Liquidation
Amount.
Group II Premium Rate Mortgage Loans: The Group II Loans having
Pass-Through Rates greater than or equal to 5.750%.
Group II Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Group II Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of: (i) the Group II Senior Percentage of the
Principal Balance of such Mortgage Loan (exclusive of the Class II-P Fraction
thereof, with respect to any Class II-P Mortgage Loan) and (ii) the Group II
Senior Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
Group II Senior Percentage: For any Distribution Date, the lesser of (i)
100% and (ii) the aggregate Class Principal Balance of the Group II-A and
Residual Certificates divided by the aggregate Class Principal Balance of the
Group II Loans (exclusive of the Class II-P Fraction thereof, with respect to
any Class II-P Mortgage Loan), in each case immediately before such Distribution
Date.
Group II Senior Prepayment Percentage: See the definition of "Group I
Senior Prepayment Percentage, Group II Senior Prepayment Percentage or Group III
Senior Prepayment Percentage ."
Group II Senior Principal Distribution Amount: For any Distribution Date,
an amount equal to the sum of (a) the Group II Senior Percentage of the
Principal Payment Amount for Loan Group II (exclusive of the portion thereof
attributable to principal distributions to the Class
30
II-P-L Regular Interest pursuant to clauses (I)(b)(i) and (II)(b)(i) of the
definition of "REMIC II Distribution Amount"), (b) the Group II Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group II
(exclusive of the portion thereof attributable to principal distributions to the
Class II-P-L Regular Interest pursuant to clauses (I)(b)(i) and (II)(b)(i) of
the definition of "REMIC II Distribution Amount") and (c) the Group II Senior
Liquidation Amount.
Group II Subordinate Percentage: For any Distribution Date, the excess of
100% over the Group II Senior Percentage for such date.
Group II Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Group II Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Group II-A and Residual Certificates has been reduced to zero,
then the Group II Subordinate Prepayment Percentage shall equal 100%.
Group II-A Certificates: The Class II-A-1, Class II-A-2, Class II-A-3,
Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7, Class II-A-8, Class
II-A-9, Class II-A-10, Class II-A-11 and Class II-A-12 Certificates.
Group II-A-L Regular Interests: The Class II-A-1-L, Class II-A-2-L, Class
II-A-3-L, Class II-A-4-L, Class II-A-5-L, Class II-A-6-L, Class II-A-7-L, Class
II-A-9-L, Class II-A-10-L, Class II-A-11-L, Class II-A-12-L Regular Interests.
Group II-L Regular Interests: The Group II-A-L, Class II-X-L and Class
II-P-L Regular Interests.
Group III Certificates: The Group III-A, Class III-X and Class III-P
Certificates.
Group III Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group III Loans.
Group III Premium Rate Mortgage Loans: The Group III Loans having
Pass-Through Rates greater than or equal to 5.750% per annum.
Group III Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Group III Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Group III Senior Percentage
of the Principal Balance of such Mortgage Loan (exclusive of the Class III-P
Fraction thereof, with respect to any Class III-P Mortgage Loan) and (ii) the
Group III Senior Prepayment Percentage of the Liquidation Principal with respect
to such Mortgage Loan.
Group III Senior Percentage: For any Distribution Date, the lesser of (i)
100% and (ii) the aggregate Class Principal Balance of the Group III-A
Certificates divided by the aggregate Principal Balance of the Group III Loans
(exclusive of the Class III-P Fraction thereof, with respect to any Class III-P
Mortgage Loan), in each case immediately before such Distribution Date.
31
Group III Senior Prepayment Percentage: See the definition of "Group I
Senior Prepayment Percentage, Group II Senior Prepayment Percentage or Group III
Senior Prepayment Percentage."
Group III Senior Principal Distribution Amount: For any Distribution Date,
an amount equal to the sum of (a) the Group III Senior Percentage of the
Principal Payment Amount for Loan Group III (exclusive of the portion thereof
attributable to principal distributions to the Class III-P-L Regular Interest
pursuant to clauses (I)(c)(i) and (II)(c)(i) of the definition of "REMIC II
Distribution Amount"), (b) the Group III Senior Prepayment Percentage of the
Principal Prepayment Amount for Loan Group III (exclusive of the portion thereof
attributable to principal distributions to the Class III-P-L Regular Interest
pursuant to clauses (I)(c)(i) and (II)(c)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Group III Senior Liquidation Amount.
Group III Subordinate Percentage: For any Distribution Date, the excess of
100% over the Group III Senior Percentage for such date.
Group III Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Group III Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Group III-A Certificates has been reduced to zero, then the Group
III Subordinate Prepayment Percentage shall equal 100%.
Group III-A Certificates: The Class III-A-1 and Class III-A-2 Certificates.
Group III-A-L Regular Interests: The Class III-A-1-L and Class III-A-2-L
Regular Interests.
Group III-L Regular Interests: The Group III-A-L, Class III-X-L and Class
III-P-L Regular Interests.
Groups II and III Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the Group II
Loans and Group III Loans reduced by the aggregate Class Principal Balance of
the Group II-A, Group III-A, Class II-P, Class III-P and Residual Certificates.
Indirect DTC Participants: Entities such as banks, brokers, dealers or
trust companies, that clear through or maintain a custodial relationship with a
DTC Participant, either directly or indirectly.
Insurance Proceeds: Amounts paid or payable by the insurer under any
Primary Insurance Policy or any other insurance policy (including any
replacement policy permitted under this Agreement) covering any Mortgage Loan or
Mortgaged Property, including, without limitation, any hazard insurance policy
required pursuant to Section 3.07, any title insurance policy required pursuant
to Section 2.08 and any FHA insurance policy or VA guaranty.
Interest Distribution Amount: For any Distribution Date, for any Class of
the REMIC I Regular Interests, the REMIC II Regular Interests and the Class R-1
Residual Interest, the amount of interest accrued during the Prior Period (or,
in the case of the Class II-A-7-L and
32
Class II-A-9-L Regular Interests, during the period beginning on the 25th day of
the preceding calendar month and ending on the 24th day of the month of the
Distribution Date), at the related Certificate Interest Rate for such Class for
such Distribution Date, on the respective Class Principal Balance immediately
before such Distribution Date, reduced by Uncompensated Interest Shortfall and
the interest portion of Realized Losses allocated to such Class pursuant to the
definitions of "Uncompensated Interest Shortfall" and "Realized Loss,"
respectively. The computation of interest accrued shall be made on the basis of
a 360-day year of twelve 30-day months. The Interest Distribution Amounts for
the Class P-L and Class P-M Regular Interests shall equal zero.
Interest Transfer Amount: On any Distribution Date for an
Undercollateralized Group, an amount equal to one month's interest on the
applicable Principal Transfer Amount at 5.250% per annum if the
Undercollateralized Group is Loan Group I, and at 5.750% if the
Undercollateralized Group is Loan Group II or Loan Group III, plus any interest
accrued on the Senior Certificates related to such Undercollateralized Group
remaining unpaid from prior Distribution Dates.
Investment Account: The commingled account (which shall be commingled only
with investment accounts related to series of pass-through certificates with a
class of certificates which has a rating equal to the highest of the Ratings of
the Certificates) maintained by the Master Servicer in the trust department of
the Investment Depository pursuant to Section 3.03 and which bears a designation
acceptable to the Rating Agencies.
Investment Depository: JPMorgan Chase Bank, or another bank or trust
company designated from time to time by the Master Servicer. The Investment
Depository shall at all times be an Eligible Institution.
Junior Subordinate Certificates: The Class C-B-4, Class C-B-5 and Class
C-B-6 Certificates.
Last Scheduled Distribution Date: With respect to any Class of
Certificates, the Final Maturity Date for such Class; provided, however, that
with respect to the Group I Certificates, the "Last Scheduled Distribution Date"
shall be the Distribution Date in December 2017.
Lender: An institution from which the Company purchased any Mortgage Loans
pursuant to a Selling and Servicing Contract.
LIBOR: With respect to the first Distribution Date, 1.440%; and with
respect to each Distribution Date thereafter, the London Interbank Offered Rate
for one-month United States dollar deposits determined by the Master Servicer on
the LIBOR Determination Date on the basis of quotations provided by each of the
Reference Banks as of approximately 11:00 a.m. (London time) on the LIBOR
Determination Date as such quotations appear on The Bloomberg Professional
Service, as follows:
(A) in the event that only one or none of the Reference Banks provides
such quotations, the higher of:
33
(i) LIBOR as determined on the immediately preceding LIBOR
Determination Date (or, in the case of the first LIBOR Determination
Date, 1.440%), and
(ii) the Reserve Rate. The "Reserve Rate" will be the rate per
annum (rounded upward, if necessary, to the nearest multiple of 1/16th
of 1%) that the Master Servicer determines to be either
(x) the arithmetic mean of the offered quotations that the
leading banks in New York City selected by the Master Servicer in
its sole discretion are then quoting on the relevant LIBOR
Determination Date for one-month United States dollar deposits to
the principal London office of each of the Reference Banks or
those of them (being at least two in number) to which such
offered quotations are, in the opinion of the Master Servicer,
being so made, or
(y) in the event that the Master Servicer can determine no
such arithmetic mean, the arithmetic mean of the offered
quotations that the leading banks in New York City selected by
the Master Servicer in its sole discretion are quoting on such
LIBOR Determination Date to leading European banks for one-month
United States dollar deposits, provided, however, that if the
banks selected by the Master Servicer are not then so quoting,
LIBOR shall be as determined on the immediately preceding LIBOR
Determination Date (or, in the case of the first LIBOR
Determination Date, 1.440%);
(B) otherwise, the arithmetic mean (rounded upward, if necessary, to
the nearest multiple of 1/16th of 1%) of such offered quotations
the establishment of which, in each case, shall be final and binding in the
absence of manifest error.
LIBOR Determination Date: With respect to interest paid on any Distribution
Date, the second day on which banks in London and New York City are open for the
transaction of international business prior to the 25th day of the month
preceding the Distribution Date.
Liquidated Mortgage Loan: A Mortgage Loan (other than a Mortgage Loan with
respect to which a Payoff has been made) for which the Master Servicer or the
applicable Servicer has determined in accordance with its customary servicing
practices that it has received all amounts which it expects to recover from or
on account of such Mortgage Loan, whether from Insurance Proceeds, Liquidation
Proceeds or otherwise. For purposes of this definition, acquisition of a
Mortgaged Property by the Trust shall not constitute final liquidation of the
related Mortgage Loan.
Liquidation Principal: The principal portion of Liquidation Proceeds
received (exclusive of the portion thereof attributable to distributions to the
Class P-L Regular Interests pursuant to clauses (I)(a)(i), (I)(b)(i), (I)(c)(i),
(II)(a)(i) (II)(b)(i) and (II)(c)(i) of the definition of "REMIC II
34
Distribution Amount") with respect to each Mortgage Loan which became a
Liquidated Mortgage Loan (but not in excess of the principal balance thereof)
during the Prior Period.
Liquidation Proceeds: Amounts after deduction of amounts reimbursable under
Section 3.05(a)(i) and (ii) received and retained in connection with the
liquidation of defaulted Mortgage Loans, whether through foreclosure or
otherwise.
Loan Group: Loan Group I, Loan Group II or Loan Group III, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II Loans.
Loan Group III: The group of Mortgage Loans comprised of the Group III
Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage Loan
divided by the Original Value; provided, however, that references to "current
Loan-to-Value Ratio" or "Loan-to-Value Ratio as of the Cut-Off Date" in Section
2.08 shall be deemed to mean the then current Principal Balance of a Mortgage
Loan divided by the Original Value.
Lowest Class B Owner: An owner unaffiliated with the Company or the Master
Servicer of (i) a 100% interest in the Class of Group C-B Certificates with the
lowest priority or (ii) a 100% interest in a class of securities representing
such interest in such Class specified in clause (i) above.
Master Servicer: The Company, or any successor thereto appointed as
provided pursuant to Section 7.02, acting to service and administer the Mortgage
Loans pursuant to Section 3.01.
Master Servicer Business Day: Any day other than a Saturday, a Sunday, or a
day on which banking institutions in Chicago, Illinois are authorized or
obligated by law or executive order to be closed.
Master Servicing Fee: The fee charged by the Master Servicer for
supervising the mortgage servicing and advancing certain expenses, equal to a
per annum rate set forth for each Mortgage Loan in Exhibit D on the outstanding
Principal Balance of such Mortgage Loan, payable monthly from the Certificate
Account, the Investment Account or the Custodial Account for P&I.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor thereto.
MERS Loan: Any Mortgage Loan registered on the MERS(R) System for which
MERS appears as the mortgagee of record on the Mortgage or on an assignment
thereof.
MERS(R) System: The system of electronically recording transfers of
Mortgages maintained by MERS.
MIN: The Mortgage Identification Number for a MERS Loan.
35
MOM Loan: A Mortgage Loan that was registered on the MERS(R) System at the
time of origination thereof and for which MERS appears as the mortgagee of
record on the Mortgage.
Monthly P&I Advance: An advance of funds by the Master Servicer pursuant to
Section 4.02 or a Servicer pursuant to its Selling and Servicing Contract to
cover delinquent principal and interest installments.
Monthly Payment: The scheduled payment of principal and interest on a
Mortgage Loan (including any amounts due from a Buydown Fund, if any) which is
due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
Mortgage File: The following documents or instruments with respect to each
Mortgage Loan transferred and assigned by the Company pursuant to Section 2.04,
(X) with respect to each Mortgage Loan that is not a Cooperative Loan:
(i) The original Mortgage Note endorsed (A) in blank, without
recourse, or (B) to "State Street Bank and Trust Company, as
Custodian/Trustee, without recourse" or to "Washington Mutual MSC Mortgage
Pass-Through Certificates Series 2002-MS11 Trust, without recourse" and all
intervening endorsements evidencing a complete chain of endorsements from
the originator to the Trustee or the Trust, as applicable, or, in the event
of any Destroyed Mortgage Note, a copy or a duplicate original of the
Mortgage Note (or portion thereof, as applicable), together with an
original lost note affidavit from the originator of the Mortgage Loan or
the Company (or any affiliate of the Company from which the Company
acquired the Mortgage Loan), as applicable, stating that the original
Mortgage Note (or portion thereof, as applicable) was lost, misplaced or
destroyed, together with a copy of the Mortgage Note (or portion thereof,
as applicable); provided, however, that in the event the Company acquired
the Mortgage Loan from an affiliate of the Company, then the Mortgage Note
need not be endorsed in blank or to State Street Bank and Trust Company or
the Trust as provided above (but, if not so endorsed, shall be made payable
to, or endorsed by the mortgagee named therein to, such affiliate of the
Company);
(ii) The Buydown Agreement, if applicable;
(iii) A Mortgage that is either
(1) (x) the original recorded Mortgage with evidence of recording
thereon for the jurisdiction in which the Mortgaged Property is
located (which original recorded Mortgage, in the case of a MOM Loan,
shall set forth the MIN and shall indicate that the Mortgage Loan is a
MOM Loan), (y) unless the Mortgage Loan is a MERS Loan, an original
Mortgage assignment thereof duly executed and acknowledged in
recordable form (A) in blank or (B) to "State Street Bank and Trust
Company, as Custodian/Trustee," or to "Washington Mutual MSC Mortgage
Pass-Through Certificates Series 2002-MS11 Trust," and (z) unless the
Mortgage Loan is a MOM Loan, recorded originals of all intervening
assignments evidencing a complete chain of assignment, from the
36
originator to the name holder or the payee endorsing the related
Mortgage Note (or, in the case of a MERS Loan other than a MOM Loan,
from the originator to MERS); or
(2) (x) a copy (which may be in electronic form) of the Mortgage
(which Mortgage, in the case of a MOM Loan, shall set forth the MIN
and shall indicate that the Mortgage Loan is a MOM Loan) which
represents a true and correct reproduction of the original Mortgage
and which has either been certified (i) on the face thereof by the
public recording office in the appropriate jurisdiction in which the
Mortgaged Property is located, or (ii) by the originator, the related
Lender or the escrow or title company which provided closing services
in connection with such Mortgage Loan as a true and correct copy the
original of which has been sent for recordation, (y) unless the
Mortgage Loan is a MERS Loan, an original Mortgage assignment thereof
duly executed and acknowledged in recordable form (A) in blank or (B)
to "State Street Bank and Trust Company, as Custodian/Trustee," or to
"Washington Mutual MSC Mortgage Pass-Through Certificates Series
2002-MS11 Trust," and (z) unless the Mortgage Loan is a MOM Loan, true
and correct copies, certified by the applicable county recorder or by
the originator or Lender as described above, of all intervening
assignments evidencing a complete chain of assignment from the
originator to the name holder or the payee endorsing the related
Mortgage Note (or, in the case of a MERS Loan other than a MOM Loan,
from the originator to MERS);
provided, however, that in the event the Company acquired the Mortgage Loan
from an affiliate of the Company, then the Mortgage File need not include a
Mortgage assignment executed in blank or to State Street Bank and Trust
Company or the Trust as provided in clause (X)(iii)(1)(y) or (X)(iii)(2)(y)
above, as applicable (but the Mortgage File shall, unless the Mortgage Loan
was originated by such affiliate of the Company, include an intervening
Mortgage assignment to such affiliate as provided in clause (X)(iii)(1)(z)
or (X)(iii)(2)(z) above, as applicable); and
(iv) For any Mortgage Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment;
and (Y) with respect to each Cooperative Loan:
(i) the original Mortgage Note endorsed (A) in blank, without
recourse, or (B) to "State Street Bank and Trust Company, as
Custodian/Trustee, without recourse" or to "Washington Mutual MSC Mortgage
Pass-Through Certificates Series 2002-MS11 Trust, without recourse," and
all intervening endorsements evidencing a complete chain of endorsements,
from the originator to the Trustee or the Trust, as applicable, or, in the
event of any Destroyed Mortgage Note, a copy or a duplicate original of the
Mortgage Note (or portion thereof, as applicable), together with an
original lost note affidavit from the originator of the Cooperative Loan or
the Company (or any affiliate of the Company from which the Company
acquired the Mortgage Loan), as applicable, stating that the original
Mortgage Note (or portion thereof, as applicable) was lost, misplaced or
destroyed, together with a copy of the Mortgage Note (or portion thereof,
as applicable);
37
provided, however, that in the event the Company acquired the Cooperative
Loan from an affiliate of the Company, then the Mortgage Note need not be
endorsed in blank or to State Street Bank and Trust Company or the Trust as
provided above (but, if not so endorsed, shall be made payable to, or
endorsed by the originator or successor lender named therein to, such
affiliate of the Company);
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed
in blank;
(iv) The Recognition Agreement;
(v) The Security Agreement;
(vi) Copies of the original UCC financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan
as secured party, each with evidence of recording thereof, evidencing the
interest of the originator under the Security Agreement and the Assignment
of Proprietary Lease;
(vii) Copies of the filed UCC assignments or amendments of the
security interest referenced in clause (vi) above showing an unbroken chain
of title from the originator to the Trust, each with evidence of recording
thereof, evidencing the interest of the assignee under the Security
Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the
Security Agreement, the Assignment of Proprietary Lease and the Recognition
Agreement, showing an unbroken chain of title from the originator to the
Trust; and
(ix) For any Cooperative Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment;
provided, however, that in the event the Company acquired the Cooperative
Loan from an affiliate of the Company, then the Mortgage File need not include
(1) a UCC assignment or amendment of the security interest referenced in clause
(Y)(vi) above to the Trust as provided in clause (Y)(vii) above (but the
Mortgage File shall, unless the Cooperative Loan was originated by such
affiliate of the Company, include a UCC assignment or amendment of such security
interest to such affiliate) or (2) an assignment of the interest of the
originator in the Security Agreement, the Assignment of Proprietary Lease and
the Recognition Agreement to the Trust as provided in clause (Y)(viii) above
(but the Mortgage File shall, unless the Cooperative Loan was originated by such
affiliate of the Company, include an assignment of such interest to such
affiliate).
Mortgage Interest Rate: For any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan pursuant to the terms of the related
Mortgage Note.
38
Mortgage Loan Schedule: The schedule, as amended from time to time, of
Mortgage Loans attached hereto as Exhibit D, which shall set forth as to each
Mortgage Loan the following, among other things:
(i) its loan number,
(ii) the address of the Mortgaged Property,
(iii) the name of the Mortgagor,
(iv) the Original Value of the property subject to the Mortgage,
(v) the Principal Balance as of the Cut-Off Date,
(vi) the Mortgage Interest Rate borne by the Mortgage Note,
(vii) whether a Primary Insurance Policy is in effect as of the
Cut-Off Date, and, if so, whether such Primary Insurance Policy is a
Special Primary Insurance Policy,
(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee,
(x) its Loan Group, and
(xi) whether it imposes penalties for early prepayments.
Mortgage Loans: The mortgage loans and cooperative loans (if any) listed on
the Mortgage Loan Schedule and transferred and assigned to the Trust pursuant
hereto. With respect to each Mortgage Loan that is a Cooperative Loan, "Mortgage
Loan" shall include, but not be limited to, the related Mortgage Note, Security
Agreement, Assignment of Proprietary Lease, Recognition Agreement, Cooperative
Stock Certificate and Cooperative Lease and, with respect to each Mortgage Loan
other than a Cooperative Loan, "Mortgage Loan" shall include, but not be limited
to the Mortgages and the related Mortgage Notes.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
Mortgage Pool Assets: The following assets: (i) the Mortgage Loans and all
rights pertaining thereto; (ii) such assets as from time to time may be held by
the Trust (or its duly appointed agent) in the Certificate Account or the
Investment Account (except amounts representing the Master Servicing Fee or the
Servicing Fee); (iii) such assets as from time to time may be held by Servicers
in a Custodial Account for P&I or Custodial Account for Reserves or a Buydown
Fund Account related to the Mortgage Loans (except amounts representing the
Master Servicing Fee or the Servicing Fee); (iv) property which secured a
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure or, in the case of a Cooperative Loan,
39
a similar form of conversion, after the Cut-Off Date; and (v) amounts paid or
payable by the insurer under any FHA insurance policy or any Primary Insurance
Policy and proceeds of any VA guaranty and any other insurance policy related to
any Mortgage Loan or the Mortgage Pool.
Mortgaged Property: With respect to any Mortgage Loan, other than a
Cooperative Loan, the real property, together with improvements thereto, and,
with respect to any Cooperative Loan, the related Cooperative Stock and
Cooperative Lease, securing the indebtedness of the Mortgagor under the related
Mortgage Loan. "Mortgaged Property" shall also refer to property which once
secured the indebtedness of a Mortgagor under the related Mortgage Loan but
which was acquired by the Trust upon foreclosure or other liquidation of such
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Mortgage Loan, any advance
which the Master Servicer shall determine to be a Nonrecoverable Advance
pursuant to Section 4.03 and which was, or is proposed to be, made by (i) the
Master Servicer or (ii) a Servicer pursuant to its Selling and Servicing
Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
Notice Addresses: (a) In the case of the Company, 00 Xxxxx Xxxxxxx Xxxxx,
Xxxxxx Xxxxx, Xxxxxxxx 00000, Attention: Master Servicing Department, with a
copy to: Washington Mutual Legal Department, 1201 Third Avenue, WMT 1706,
Xxxxxxx, XX 00000, Attention: WMMSC, or such other address as may hereafter be
furnished to the Trustee in writing by the Company, (b) in the case of the
Trustee, at its Corporate Trust Office, or such other address as may hereafter
be furnished to the Master Servicer in writing by the Trustee, (c) in the case
of the Delaware Trustee, 0000 Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000, or such other
address as may hereafter be furnished to the Master Servicer in writing by the
Delaware Trustee, (d) in the case of the Trust, c/o State Street Bank and Trust
Company, at the Corporate Trust Office, or such other address as may hereafter
be furnished to the Master Servicer in writing by the Trustee, (e) in the case
of the Certificate Registrar, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the Trustee in writing by the
Certificate Registrar, (f) in the case of S&P, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 10041-0003, Attention: Xxxxx Xxxxxx, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in writing by S&P and
(g) in the case of Fitch, 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxxxxxx, or such other address as may hereafter be furnished
to the Trustee and Master Servicer in writing by Fitch.
OTS: The Office of Thrift Supervision, or any successor thereto.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the President, a Vice President, or the Treasurer of the Master Servicer and
delivered to the Trustee or the Delaware Trustee, as applicable.
Opinion of Counsel: A written opinion of counsel, who shall be reasonably
acceptable to the Trustee or the Delaware Trustee, as applicable, and who may be
counsel (including in-house counsel) for the Company or the Master Servicer.
40
Original Trust Agreement: The Trust Agreement, dated as of December 1,
2002, between the Company and the Delaware Trustee, providing for the creation
of the Trust.
Original Value: With respect to any Mortgage Loan other than a Mortgage
Loan originated for the purpose of refinancing an existing mortgage debt, the
lesser of (a) the Appraised Value (if any) of the Mortgaged Property at the time
the Mortgage Loan was originated or (b) the purchase price paid for the
Mortgaged Property by the Mortgagor. With respect to a Mortgage Loan originated
for the purpose of refinancing existing mortgage debt, the Original Value shall
be equal to the Appraised Value of the Mortgaged Property.
Overcollateralized Group: Any of Loan Group I, Loan Group II or Loan Group
III, if on any Distribution Date such Loan Group is not an Undercollateralized
Group and one or more of the other Loan Groups is an Undercollateralized Group.
Ownership Interest: With respect to any Residual Certificate, any ownership
or security interest in such Residual Certificate, including any interest in a
Residual Certificate as the Holder thereof and any other interest therein
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Entity: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a per annum rate equal to the
Mortgage Interest Rate for such Mortgage Loan less the per annum percentage
rates related to each of (i) the Servicing Fee for such Mortgage Loan, (ii) the
Master Servicing Fee for such Mortgage Loan and (iii) if such Mortgage Loan was
covered by a Special Primary Insurance Policy on the Closing Date (even if no
longer so covered), the applicable Special Primary Insurance Premium. For each
Mortgage Loan, any calculation of monthly interest at such rate shall be based
upon annual interest at such rate (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid Principal Balance of such Mortgage Loan
divided by twelve, and any calculation of interest at such rate by reason of a
Payoff shall be based upon annual interest at such rate on the outstanding
Principal Balance of such Mortgage Loan multiplied by a fraction, the numerator
of which is the number of days elapsed from the Due Date of the last scheduled
payment of principal and interest to, but not including, the date of such
Payoff, and the denominator of which is (a) for Payoffs received on a Due Date,
360, and (b) for all other Payoffs, 365.
Paying Agent: Any paying agent appointed by the Trustee pursuant to Section
8.12.
Payoff: Any Mortgagor 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. (Prepayment penalties are not payments of
principal and hence Payoffs do not include prepayment penalties.)
Payoff Earnings: For any Distribution Date with respect to each Mortgage
Loan on which a Payoff was received by the Master Servicer during the Payoff
Period, the aggregate of the interest earned by the Master Servicer from
investment of each such Payoff from the date of
41
receipt of such Payoff until the Business Day immediately preceding the related
Distribution Date (net of investment losses).
Payoff Interest: For any Distribution Date with respect to a Mortgage Loan
for which a Payoff was received on or after the first calendar day of the month
of such Distribution Date and before the 15th calendar day of such month, an
amount of interest thereon at the applicable Pass-Through Rate from the first
day of the month of distribution through the day of receipt thereof; to the
extent (together with Payoff Earnings and the aggregate Master Servicing Fee)
not required to be distributed as Compensating Interest on such Distribution
Date, Payoff Interest shall be payable to the Master Servicer as additional
servicing compensation.
Payoff Period: For the first Distribution Date, the period from the Cut-Off
Date through January 14, 2003, inclusive; and for any Distribution Date
thereafter, the period from the 15th day of the Prior Period through the 14th
day of the month of such Distribution Date, inclusive.
Percentage Interest: (a) With respect to the right of each Certificate of a
particular Class in the distributions allocated to such Class, "Percentage
Interest" shall mean the percentage equal to:
(i) with respect to any Certificate (other than the Residual, Class
II-A-8 and Class X Certificates), its Certificate Principal Balance divided
by the applicable Class Principal Balance;
(ii) with respect to any Class II-A-8 or Class X Certificate, the
portion of the respective Class Notional Amount evidenced by such
Certificate divided by the respective Class Notional Amount; and
(iii) with respect to any Residual Certificate, the percentage set
forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection with
Sections 5.09, 7.01, 8.01(c), 8.02, 8.07, 10.01 and 10.03, "Percentage Interest"
shall mean the percentage equal to:
(i) with respect to any Certificate (other than the Class II-A-8,
Class X and Residual Certificates), the product of (x) ninety-six percent
(96%) and (y) its Certificate Principal Balance divided by the Aggregate
Certificate Principal Balance of the Certificates; provided, however, that
the percentage in clause (x) above shall be increased by one percent (1%)
upon the retirement of each Class of Certificates referenced in the
parenthetical above (other than the Residual Certificates);
(ii) with respect to any Class II-A-8 or Class X Certificate, one
percent (1%) of such Certificate's Percentage Interest as calculated by
paragraph (a)(ii) of this definition; and
(iii) with respect to any Residual Certificate, zero.
42
Permitted Transferee: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State or
any 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 Code Section 521) which is
exempt from the taxes imposed by Chapter 1 of the Code (unless such organization
is subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any "electing large partnership" as defined in
Section 775(a) of the Code, (vi) any Person from whom the Trustee has not
received an affidavit to the effect that it is not a "disqualified organization"
within the meaning of Section 860E(e)(5) of the Code, and (vii) any other Person
so designated by the Company based upon an Opinion of Counsel that the transfer
of an Ownership Interest in a Residual Certificate to such Person may cause
REMIC I, REMIC II or REMIC III 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 Code Section
7701 or successor provisions. A corporation shall 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, with the exception of
the Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Mortgage Loan on its
scheduled Due Date and held in the related Custodial Account for P&I until the
Withdrawal Date following its scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty insurance, if any,
on an individual Mortgage Loan or on pools of mortgage loans that include an
individual Mortgage Loan, providing coverage as required by Section 2.08(xi)
(including any Special Primary Insurance Policy).
Principal Balance: Except as used in Sections 2.07, 3.09 and 9.01 and for
purposes of the definition of Purchase Price, at the time of any determination,
the principal balance of a Mortgage Loan remaining to be paid at the close of
business on the Cut-Off Date, after application of all scheduled principal
payments due on or before the Cut-Off Date, whether or not received, reduced by
all amounts distributed or (except when such determination occurs earlier in the
month than the Distribution Date) to be distributed to Certificateholders
through the Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used in Sections
2.07, 3.09 and 9.01, at the time of any determination, the principal balance of
a Mortgage Loan remaining to be paid at the close of business on the Cut-Off
Date, after deduction of all scheduled principal payments due on or before the
Cut-Off Date, whether or not received, reduced by all amounts
43
distributed or to be distributed to Certificateholders through the Distribution
Date in the month of determination that are reported as allocable to principal
of such Mortgage Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance" shall mean,
at the time of any determination, the principal balance of such Substitute
Mortgage Loan transferred to the Trust, on the date of substitution, reduced by
all amounts distributed or to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as allocable
to principal of such Substitute Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a Substitute Mortgage
Loan) shall not be adjusted solely by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period. Whenever a
Realized Loss has been incurred with respect to a Mortgage Loan during a
calendar month, the Principal Balance of such Mortgage Loan shall be reduced by
the amount of such Realized Loss as of the Due Date next following the end of
such calendar month.
Principal Payment: Any payment of principal on a Mortgage Loan other than a
Principal Prepayment.
Principal Payment Amount: For any Distribution Date and for any Loan Group,
the sum with respect to the Mortgage Loans in such Loan Group of (i) the
scheduled principal payments on the Mortgage Loans due on the related Due Date,
(ii) the principal portion of proceeds received with respect to any Mortgage
Loan which was purchased or repurchased pursuant to a Purchase Obligation or as
permitted by this Agreement during the Prior Period and (iii) any other
unscheduled payments of principal which were received with respect to any
Mortgage Loan during the Prior Period, other than Payoffs, Curtailments and
Liquidation Principal.
Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: For any Distribution Date and for any Loan
Group, the sum with respect to the Mortgage Loans in such Loan Group of (i)
Curtailments received during the Prior Period from such Mortgage Loans and (ii)
Payoffs received during the Payoff Period from such Mortgage Loans.
Principal Transfer Amount: For any Distribution Date for each
Undercollateralized Group, the excess, if any, of the aggregate Class Principal
Balance of the Class A-L Regular Interests related to such Undercollateralized
Group over the aggregate Principal Balance of the Mortgage Loans in such Loan
Group (less the applicable Class P Fraction thereof with respect to any Class P
Mortgage Loans in such Loan Group), in each case immediately prior to such
Distribution Date.
Prior Period: With respect to any Distribution Date, the calendar month
immediately preceding such Distribution Date.
Pro Rata Allocation: The allocation of the principal portion of Realized
Losses to all Classes of REMIC II Regular Interests (other than the Class P-L
Regular Interests) pro rata according to their respective Class Principal
Balances in reduction thereof (except if the loss is
44
recognized with respect to a Class P Mortgage Loan, in which case the applicable
Class P Fraction of such loss shall first be allocated to the related Class P-L
Regular Interest, and the remainder of such loss shall be allocated as set forth
above), and the allocation of the interest portion of Realized Losses to all
Classes of the REMIC II Regular Interests (other than the Class P-L Regular
Interests) pro rata according to the amount of interest accrued but unpaid on
each such Class, in reduction thereof, and then to such Classes (other than the
Class P-L and Class X-L Regular Interests) pro rata according to their
respective Class Principal Balances in reduction thereof.
Any losses allocated to an outstanding Class of REMIC II Regular Interests
pursuant to this definition of "Pro Rata Allocation" in reduction of the Class
Principal Balance thereof shall also be allocated to the Corresponding Class of
Certificates in reduction of the Class Principal Balance thereof by the same
amount.
Prospectus: The Prospectus, dated November 21, 2002, and the Prospectus
Supplement, dated December 19, 2002, of the Company.
Purchase Obligation: An obligation of the Company to repurchase Mortgage
Loans under the circumstances and in the manner provided in Section 2.07 or
Section 2.08.
Purchase Price: With respect to any Mortgage Loan to be purchased pursuant
to a Purchase Obligation or pursuant to Section 3.01, an amount equal to the sum
of (i) the Principal Balance thereof and (ii) unpaid accrued interest thereon,
if any, during the calendar month in which the date of purchase occurs to the
last day of such month at a rate equal to the applicable Pass-Through Rate;
provided, however, that no Mortgage Loan shall be purchased or required to be
purchased pursuant to Section 2.08, or more than two years after the Closing
Date under Section 2.07, unless (a) the Mortgage Loan to be purchased is in
default, or default is in the judgment of the Company reasonably imminent, or
(b) the Company, at its expense, delivers to the Trustee an Opinion of Counsel
addressed to the Trust and the Trustee to the effect that the purchase of such
Mortgage Loan will not give rise to a tax on a prohibited transaction, as
defined in Section 860F(a) of the Code.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the states in which the Mortgaged Properties are located
if such qualification is necessary to issue the applicable insurance policy or
bond, duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided by the Primary Insurance
Policies and approved as an insurer by the Master Servicer. A Qualified Insurer
must have the rating required by the Rating Agencies.
Rating Agency: Initially, each of S&P and Fitch and thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Company, or their respective successors in
interest.
Ratings: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to any Mortgage Loan
which became a Liquidated Mortgage Loan during the related Prior Period, the sum
of (i) the principal balance of such Mortgage Loan remaining outstanding and the
principal portion of
45
Nonrecoverable Advances actually reimbursed with respect to such Mortgage Loan
(the principal portion of such Realized Loss), and (ii) the accrued interest on
such Mortgage Loan remaining unpaid and the interest portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the interest
portion of such Realized Loss). For any Distribution Date, with respect to any
Mortgage Loan which is not a Liquidated Mortgage Loan, the amount of the
Bankruptcy Loss incurred with respect to such Mortgage Loan as of the related
Due Date.
Realized Losses on Group I, Group II and Group III Loans shall be allocated
to the REMIC I Regular Interests as follows: (1) The interest portion of
Realized Losses on Group I Loans, if any, shall be allocated, first, to the
Class I-X-M Regular Interest in an amount equal to the amount of such losses
allocated to the Class I-X-L Regular Interest pursuant to the third and fourth
paragraphs of this definition of "Realized Loss," in reduction of the amount of
interest accrued but unpaid thereon, and, second, the remainder of such losses
shall be allocated between the Class C-Y-1 and Class C-Z-1 Regular Interests pro
rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof and (2) the interest portion of Realized Losses on Group II
and Group III Loans, if any, shall be allocated, first, to the Class II-X-M and
Class III-X-M Regular Interests, respectively, in an amount equal to the amount
of such losses allocated to the Class II-X-L and Class III-X-L Regular Interests
pursuant to the third and fourth paragraphs of this definition of "Realized
Loss," in reduction of the amount of interest accrued but unpaid thereon, and,
second, the remainder of such losses shall be allocated between the Class C-Y-2
and Class C-Z-2 Regular Interests pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof. Any interest portion of such
Realized Losses in excess of the amount allocated pursuant to the preceding
sentence shall be treated as a principal portion of Realized Losses not
attributable to any specific Mortgage Loan in such Loan Group and allocated
pursuant to the succeeding sentences. The applicable Class P Fraction of any
principal portion of Realized Losses attributable to a Class P Mortgage Loan
shall be allocated to the related Class P-M Regular Interest in reduction of the
Class Principal Balance thereof. The remainder of the principal portion of
Realized Losses with respect to Loan Group I, Loan Group II and Loan Group III
shall be allocated to the REMIC I Regular Interests as follows: (1) The
principal portion of Realized Losses on Group I Loans shall be allocated, first,
to the Class C-Y-1 Regular Interest to the extent of the Class C-Y-1 Principal
Reduction Amount in reduction of the Class Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to the Class C-Z-1 Regular Interest in
reduction of the Class Principal Balance thereof and (2) the principal portion
of Realized Losses on Group II and Group III Loans shall be allocated, first, to
the Class C-Y-2 Regular Interest to the extent of the Class C-Y-2 Principal
Reduction Amount in reduction of the Class Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of such
Realized Losses shall be allocated to the Class C-Z-2 Regular Interest in
reduction of the Class Principal Balance thereof.
Except for Special Hazard Losses in excess of the Special Hazard Coverage,
Fraud Losses in excess of the Fraud Coverage and Bankruptcy Losses in excess of
the Bankruptcy Coverage, Realized Losses shall be allocated among the REMIC II
Regular Interests (i) for Realized Losses allocable to principal (a) first, to
the Class C-B-6-L Regular Interest, until the Class C-B-6-L Principal Balance
has been reduced to zero, (b) second, to the Class C-B-5-L Regular Interest,
until the Class C-B-5-L Principal Balance has been reduced to zero, (c) third,
to the Class C-B-4-L Regular Interest, until the Class C-B-4-L Principal Balance
has been reduced to zero, (d) fourth, to the Class C-B-3-L Regular Interest,
until the Class C-B-3-L Principal
46
Balance has been reduced to zero, (e) fifth, to the Class C-B-2-L Regular
Interest, until the Class C-B-2-L Principal Balance has been reduced to zero,
(f) sixth, to the Class C-B-1-L Regular Interest, until the Class C-B-1-L
Principal Balance has been reduced to zero, and (g) seventh, to the Class A-L
Regular Interests of the related Regular Interest Group, pro rata according to
the Class Principal Balance thereof, in reduction thereof; provided, however,
that if the loss is recognized with respect to a Class P Mortgage Loan, the
applicable Class P Fraction of such loss shall first be allocated to the related
Class P-L Regular Interest and the remainder of such loss shall be allocated as
set forth above in this clause (i); and (ii) for Realized Losses allocable to
interest (a) first, to the Class C-B-6-L Regular Interest, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class C-B-6-L
Principal Balance, (b) second, to the Class C-B-5-L Regular Interest, in
reduction of accrued but unpaid interest thereon and then in reduction of the
Class C-B-5-L Principal Balance, (c) third, to the Class C-B-4-L Regular
Interest, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class C-B-4-L Principal Balance, (d) fourth, to the Class
C-B-3-L Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class C-B-3-L Principal Balance, (e) fifth, to the
Class C-B-2-L Regular Interest, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class C-B-2-L Principal Balance, (f) sixth,
to the Class C-B-1-L Regular Interest, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class C-B-1-L Principal Balance,
and (g) seventh, to the Class A-L and Class X-L Regular Interests of the related
Regular Interest Group, pro rata according to accrued but unpaid interest on
such Classes, in reduction thereof, and then to the Class A-L Regular Interests
of the related Regular Interest Group, pro rata according to the Class Principal
Balances thereof, in reduction thereof; provided, however, that (a) until the
Class II-A-9-L Principal Balance has been reduced to zero, all principal losses
that would otherwise be allocated to the Class II-A-7-L Regular Interest
pursuant to clause (i) of this paragraph shall instead be allocated to the Class
II-A-9-L Regular Interest, in reduction of the Class II-A-9-L Principal Balance,
and all interest losses that would otherwise be allocated to the Class II-A-7-L
Regular Interest pursuant to clause (ii) of this paragraph shall instead be
allocated to the Class II-A-9-L Regular Interest, in reduction of accrued but
unpaid interest thereon, and then in reduction of the Class II-A-9-L Principal
Balance; (b) until the Class II-A-12-L Principal Balance has been reduced to
zero, all principal losses that would otherwise be allocated to the Class
II-A-11-L Regular Interests pursuant to clause (i) of this paragraph shall
instead be allocated to the Class II-A-12-L Regular Interest, in reduction of
the Class II-A-12-L Principal Balance, and all interest losses that would
otherwise be allocated to the Class II-A-11-L Regular Interest pursuant to
clause (ii) of this paragraph shall instead be allocated to the Class II-A-12-L
Regular Interest, in reduction of accrued but unpaid interest thereon, and then
in reduction of the Class II-A-12-L Principal Balance; and (c) until the Class
III-A-2-L Principal Balance has been reduced to zero, all principal losses that
would otherwise be allocated to the Class III-A-1-L Regular Interests pursuant
to clause (i) of this paragraph shall instead be allocated to the Class
III-A-2-L Regular Interest, in reduction of the Class III-A-2-L Principal
Balance, and all interest losses that would otherwise be allocated to the Class
III-A-1-L Regular Interest pursuant to clause (ii) of this paragraph shall
instead be allocated to the Class III-A-2-L Regular Interest, in reduction of
accrued but unpaid interest thereon, and then in reduction of the Class
III-A-2-L Principal Balance.
47
Special Hazard Losses in excess of the Special Hazard Coverage, Fraud
Losses in excess of the Fraud Coverage and Bankruptcy Losses in excess of the
Bankruptcy Coverage shall be allocated among the REMIC II Regular Interests by
Pro Rata Allocation.
Realized Losses allocated to any Class of REMIC II Regular Interests
pursuant to this definition of "Realized Loss" in reduction of the Class
Principal Balance thereof shall also be allocated to the Corresponding Class of
Certificates in reduction of the Class Principal Balance thereof by the same
amount.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement (without
regard to this paragraph), if the aggregate Class Principal Balance of all
outstanding Classes of REMIC II Regular Interests and the Class R-1 Residual
Interest exceeds the aggregate principal balance of the Mortgage Loans remaining
to be paid at the close of business on the Cut-Off Date, after deduction of (i)
all principal payments due on or before the Cut-Off Date in respect of each such
Mortgage Loan whether or not paid, and (ii) all amounts of principal in respect
of each Mortgage Loan that have been received or advanced and included in the
REMIC II Available Distribution Amount for the Group I-L, Group II-L and Group
III-L Regular Interests and all losses in respect of each Mortgage Loan that
have been allocated to the REMIC II Regular Interests on such Distribution Date
or prior Distribution Dates, then such excess will be deemed a principal loss
and will be allocated to the most junior Class of Group C-B-L Regular Interests,
in reduction of the Class Principal Balance thereof.
Recognition Agreement: With respect to a Cooperative Loan, the recognition
agreement between the Cooperative and the originator of such Cooperative Loan.
Record Date: The last Business Day of the month immediately preceding the
month of the related Distribution Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and JPMorgan Chase Bank
or, if any such bank shall cease to provide quotations for one-month United
States dollar deposits, any other leading bank with an established place of
business in London engaged in transactions in Eurodollar deposits in the
international Eurocurrency market not controlling, controlled by or under common
control with the Company, designated by the Company from time to time for the
purpose of providing quotations for one-month United States dollar-denominated
deposits.
Regular Interest Group: The Group I-L, Group II-L, Group III-L or Group
C-B-L Regular Interests, as applicable.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
Interests, (ii) with respect to REMIC II, the REMIC II Regular Interests and
(iii) with respect to REMIC III, the REMIC III Regular Interests.
Relief Act Shortfall: With respect to a Loan Group, for any Distribution
Date for any Mortgage Loan in such Loan Group with respect to which the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the "Relief Act"),
limits the amount of interest payable by the related Mortgagor, an amount equal
to one month's interest on such Mortgage Loan at an annual interest rate equal
to the excess, if any, of (i) the annual interest rate otherwise payable by the
Mortgagor
48
on the related Due Date under the terms of the related Mortgage Note over (ii)
the annual interest rate payable by the Mortgagoron the related Due Date by
application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as such term is defined
in the Code.
REMIC Provisions: Sections 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REMIC I: The segregated pool of assets of the Trust consisting of the REMIC
I Assets, which shall be a REMIC pursuant to the Code, with respect to which a
separate REMIC election is to be made and the beneficial interests in which
shall be the REMIC I Regular Interests and the Class R-1 Residual Interest.
REMIC I Assets: All of the Mortgage Pool Assets.
REMIC I Available Distribution Amount: For each Loan Group for any
Distribution Date, the sum of the following amounts with respect to the Mortgage
Loans in such Loan Group:
(1) the total amount of all cash received by or on behalf of the Master
Servicer with respect to such Mortgage Loans by the Determination Date for such
Distribution Date and not previously distributed, including Monthly P&I Advances
made by Servicers, Liquidation Proceeds and scheduled amounts of distributions
from Buydown Funds respecting Buydown Loans, if any, except:
(a) all scheduled payments of principal and interest collected but due
subsequent to such Distribution Date;
(b) all Curtailments received after the Prior Period;
(c) all Payoffs received after the Payoff Period immediately preceding
such Distribution Date (together with any interest payment received with
such Payoffs to the extent that it represents the payment of interest
accrued on the Mortgage Loans for the period subsequent to the Prior
Period), and interest which was accrued and received on Payoffs received
during the period from the 1st to the 14th day of the month of such
Distribution Date, which interest shall not be included in the calculation
of the REMIC I Available Distribution Amount for any Distribution Date;
(d) Insurance Proceeds and Liquidation Proceeds received on such
Mortgage Loans after the Prior Period;
(e) all amounts in the Certificate Account which are due and
reimbursable to a Servicer or the Master Servicer pursuant to the terms of
this Agreement;
(f) the sum of the Master Servicing Fee and the Servicing Fee for each
such Mortgage Loan, and any Special Primary Insurance Premium payable on
such Distribution Date with respect to such Mortgage Loan; and
(g) Excess Liquidation Proceeds;
49
(2) the sum, to the extent not previously distributed, of the following
amounts, to the extent advanced or received, as applicable, by the Master
Servicer:
(a) any Monthly P&I Advance made by the Master Servicer to the Trustee
with respect to such Distribution Date relating to such Mortgage Loans; and
(b) Compensating Interest; and
(3) the total amount of any cash received during the Prior Period by the
Trustee or the Master Servicer in respect of a Purchase Obligation under Section
2.07 and Section 2.08 or any permitted purchase of such a Mortgage Loan.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R-1 Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan
Group I:
(i) first, to the Class I-P-M Regular Interest, (A) the aggregate for
all of the Class I-P Mortgage Loans of the product for each Class I-P
Mortgage Loan of the applicable Class I-P Fraction and the sum of (x)
scheduled payments of principal on such Class I-P Mortgage Loan due on or
before the related Due Date in respect of which no distribution has been
made on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly P&I
Advance with respect to such Distribution Date, (y) the principal portion
received in respect of such Class I-P Mortgage Loan during the Prior Period
of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class I-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, concurrently, the sum of the Interest Distribution Amounts for
the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular Interests remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(iii) third, to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, concurrently the sum of the Interest Distribution Amounts for
the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular Interests for the
current Distribution Date, pro rata according to their respective Interest
Distribution Amounts; and
(iv) fourth, to the Class C-Y-1 and Class C-Z-1 Regular Interests, the
Class C-Y-1 Principal Distribution Amount and the Class C-Z-1 Principal
Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Loan
Group II and Loan Group III:
50
(i) first, (A) to the Class II-P-M Regular Interest, the aggregate for
all of the Class II-P Mortgage Loans of the product for each Class II-P
Mortgage Loan of the applicable Class II-P Fraction and the sum of (x)
scheduled payments of principal on such Class II-P Mortgage Loan due on or
before the related Due Date in respect of which no distribution has been
made on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly P&I
Advance with respect to such Distribution Date, (y) the principal portion
received in respect of such Class II-P Mortgage Loan during the Prior
Period of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if any,
of the principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class II-P Mortgage Loan during the Payoff Period and (B)
to the Class III-P-M Regular Interest, the aggregate for all of the Class
III-P Mortgage Loans of the product for each Class III-P Mortgage Loan of
the applicable Class III-P Fraction and the sum of (x) scheduled payments
of principal on such Class III-P Mortgage Loan due on or before the related
Due Date in respect of which no distribution has been made on any previous
Distribution Date and which were received by the Determination Date, or
which have been advanced as part of a Monthly P&I Advance with respect to
such Distribution Date, (y) the principal portion received in respect of
such Class III-P Mortgage Loan during the Prior Period of (1) Curtailments,
(2) Insurance Proceeds, (3) the amount, if any, of the principal portion of
the Purchase Price paid pursuant to a Purchase Obligation or any purchase
of a Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class III-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Class II-X-M, Class III-X-M, Class C-Y-2 and Class
C-Z-2 Regular Interests and the Class R-1 Residual Interest, concurrently,
the sum of the Interest Distribution Amounts for the Class II-X-M, Class
III-X-M, Class C-Y-2 and Class C-Z-2 Regular Interests and the Class R-1
Residual Interest remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(iii) third, to the Class II-X-M, Class III-X-M, Class C-Y-2 and Class
C-Z-2 Regular Interests and the Class R-1 Residual Interest, concurrently,
the sum of the Interest Distribution Amounts for the Class II-X-M, Class
III-X-M, Class C-Y-2 and Class C-Z-2 Regular Interests and the Class R-1
Residual Interest for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts;
(iv) fourth, to the Class R-1 Residual Interest, until the Class
Principal Balance thereof has been reduced to zero; and
(v) fifth, to the Class C-Y-2 and Class C-Z-2 Regular Interests, the
Class C-Y-2 Principal Distribution Amount and the Class C-Z-2 Principal
Distribution Amount, respectively.
51
(c) To the extent of the REMIC I Available Distribution Amounts for Loan
Group I, Loan Group II and Loan Group III for such Distribution Date remaining
after payment of the amounts pursuant to paragraphs (a) and (b) of this
definition of "REMIC I Distribution Amount":
(i) first, to the Class P-M Regular Interests, the aggregate amount of
any distributions to the related Class P-L Regular Interests pursuant to
paragraphs (I)(d)(i) and (I)(d)(ii) of the definition of "REMIC II
Distribution Amount" on such Distribution Date; provided, however, that any
amounts distributed pursuant to this paragraph (c)(i) of this definition of
"REMIC I Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of the Class P-M Regular Interests;
(ii) second, to each Class of Class C-Y and Class C-Z Regular
Interests, pro rata according to the amount of unreimbursed Realized Losses
allocable to principal previously allocated to each such Class, the
aggregate amount of any distributions to the REMIC II Regular Interests
pursuant to paragraph (I)(d)(xxi) of the definition of "REMIC II
Distribution Amount" on such Distribution Date; provided, however, that any
amounts distributed pursuant to this paragraph (c)(ii) of this definition
of "REMIC I Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of any of the Class C-Y and Class C-Z Regular
Interests; and
(iii) third, to the Class R-1 Residual Interest, the Residual
Distribution Amount for the Class R-1 Residual Interest for such
Distribution Date.
REMIC I Regular Interests: The Classes of undivided beneficial interests in
REMIC I designated as "regular interests" in the table titled "REMIC I
Interests" in the Preliminary Statement hereto. The REMIC I Regular Interests,
together with the Class R-1 Residual Interest, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC I Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.
REMIC II: The segregated pool of assets of the Trust consisting of the
REMIC II Assets, which shall be a REMIC pursuant to the Code, with respect to
which a separate REMIC election is to be made, and the beneficial interests in
which shall be the REMIC II Regular Interests and the Class R-2 Residual
Interest.
REMIC II Assets: The REMIC I Regular Interests.
REMIC II Available Distribution Amount: With respect to the Group I-L
Regular Interests, on any Distribution Date, the aggregate of all distributions
to the Class I-P-M, Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular Interests
(which amount shall be available for distributions to the Group I-L and Group
C-B-L Regular Interests and the Class R-2 Residual Interest as provided herein).
With respect to the Group II-L Regular Interests, on any Distribution Date, the
aggregate of all distributions to the Class II-P-M, Class II-X-M, Class C-Y-2
and Class C-Z-2 Regular Interests (which amount shall be available for
distributions to the Group II-L and Group C-B-L Regular Interests and the Class
R-2 Residual Interest as provided herein). With respect to the Group III-L
Regular Interests, on any Distribution Date, the aggregate of all distributions
to the Class III-P-M, Class III-X-M, Class C-Y-2 and Class C-Z-2
52
Regular Interests (which amount shall be available for distributions to the
Group III-L and Group C-B-L Regular Interests and the Class R-2 Residual
Interest as provided herein).
REMIC II Distribution Amount: (I) For any Distribution Date prior to the
Credit Support Depletion Date, the REMIC II Available Distribution Amount for
such Distribution Date shall be distributed to the REMIC II Regular Interests
and the Class R-2 Residual Interest in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests, on any Distribution
Date prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group I-L Regular Interests for such
Distribution Date:
(i) first, to the Class I-P-L Regular Interest, the aggregate for all
Class I-P Mortgage Loans of the product for each Class I-P Mortgage Loan of
the applicable Class I-P Fraction and the sum of (x) scheduled payments of
principal on such Class I-P Mortgage Loan due on or before the related Due
Date in respect of which no distribution has been made on any previous
Distribution Date and which were received by the Determination Date, or
which have been advanced as part of a Monthly P&I Advance with respect to
such Distribution Date, (y) the principal portion received in respect of
such Class I-P Mortgage Loan during the Prior Period of (1) Curtailments,
(2) Insurance Proceeds, (3) the amount, if any, of the principal portion of
the Purchase Price paid pursuant to a Purchase Obligation or any purchase
of a Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class I-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Class I-A-1-L and Class I-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(iii) third, to the Class I-A-1-L and Class I-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts; and
(iv) fourth, to the Class I-A-1-L Regular Interest, as principal, the
Group I Senior Principal Distribution Amount, until the Class I-A-1-L
Principal Balance has been reduced to zero;
(b) With respect to the Group II-L Regular Interests, on any Distribution
Date prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group II-L Regular Interests for such
Distribution Date:
(i) first, to the Class II-P-L Regular Interest, the aggregate for all
Class II-P Mortgage Loans of the product for each Class II-P Mortgage Loan
of the applicable Class II-P Fraction and the sum of (x) scheduled payments
of principal on such Class II-P Mortgage Loan due on or before the related
Due Date in respect of which no distribution has been made on any previous
Distribution Date and which were received by the
53
Determination Date, or which have been advanced as part of a Monthly P&I
Advance with respect to such Distribution Date, (y) the principal portion
received in respect of such Class II-P Mortgage Loan during the Prior
Period of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if any,
of the principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class II-P Mortgage Loan during the Payoff Period;
(ii) second, to the Group II-A-L and Class II-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(iii) third, to the Group II-A-L and Class II-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts; and
(iv) fourth, to the Group II-A-L Regular Interests, as principal, the
Group II Senior Principal Distribution Amount (reduced, on the first
Distribution Date, by $100), concurrently, as follows:
(a) first, to the Class II-A-11-L and Class II-A-12-L Regular
Interests, pro rata, an amount up to the amount of the Group II
Lockout Priority Amount for that Distribution Date, until the Class
II-A-11-L and Class I1-A-12-L Principal Balances have each been
reduced to zero;
(b) second, to the Class II-A-1-L, Class II-A-7-L, Class II-A-9-L
and Class II-A-10-L Regular Interests, pro rata, until the Class
II-A-1-L, Class II-A-7-L, Class II-A-9-L and Class II-A-10-L Principal
Balances have each been reduced to zero;
(c) third, to the Class II-A-2-L Regular Interest, until the
Class II-A-2-L Principal Balance has been reduced to zero; and
(d) fourth, until the Class II-A-3-L Principal Balance has been
reduced to zero, concurrently, as follows:
(0) 00.0000000000% to the Class II-A-3-L Regular Interest;
and
(0) 00.0000000000%, sequentially, as follows:
(A) first, to the Class II-A-4-L Regular Interest,
until the Class II-A-4-L Principal Balance has been reduced
to zero;
(B) second, to the Class II-A-5-L Regular Interest,
until the Class II-A-5-L Principal Balance has been reduced
to zero;
54
(C) third, to the Class II-A-6-L Regular Interest,
until the Class II-A-6-L Principal Balance has been reduced
to zero; and
(e) fifth, to the Class II-A-11-L and Class II-A-12-L Regular
Interests, pro rata, until the Class II-A-11-L and Class II-A-12-L
Principal Balances have each been reduced to zero;
(c) With respect to the Group III-L Regular Interests, on any Distribution
Date prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group III-L Regular Interests for such
Distribution Date:
(i) first, to the Class III-P-L Regular Interest, the aggregate for
all Class III-P Mortgage Loans of the product for each Class III-P Mortgage
Loan of the applicable Class III-P Fraction and the sum of (x) scheduled
payments of principal on such Class III-P Mortgage Loan due on or before
the related Due Date in respect of which no distribution has been made on
any previous Distribution Date and which were received by the Determination
Date, or which have been advanced as part of a Monthly P&I Advance with
respect to such Distribution Date, (y) the principal portion received in
respect of such Class III-P Mortgage Loan during the Prior Period of (1)
Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any purchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of Payoffs received in
respect of such Class III-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class III-A-L and Class III-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid amounts;
(iii) third, to the Class III-A-L and Class III-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts; and
(iv) fourth, to the Class III-A-1-L and Class III-A-2-L Regular
Interests, pro rata, as principal, the Group III Senior Principal
Distribution Amount, until the Class III-1-A-L and Class III-A-2-L
Principal Balances have each been reduced to zero; and
(d) With respect to the Group I-L, Group II-L, Group III-L and Group C-B-L
Regular Interests and the Class R-2 Residual Interest, on any Distribution Date
prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amounts for the Group I-L, Group II-L and Group III-L
Regular Interests for such Distribution Date remaining after the payment of the
amounts pursuant to paragraphs (I)(a), (I)(b) and (I)(c) of this definition of
"REMIC II Distribution Amount":
(i) first, to the Class I-P-L, Class II-P-L and Class III-P-L Regular
Interests, to the extent of amounts otherwise available to pay the
Subordinate Principal Distribution Amount (without regard to clause (B)(x)
of the definition thereof) on such Distribution
55
Date, the amount payable to such Classes of Regular Interest on previous
Distribution Dates pursuant to clause (I)(d)(ii) of this definition of
"REMIC II Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(ii) second, to the Class I-P-L, Class II-P-L and Class III-P-L
Regular Interests, to the extent of amounts otherwise available to pay the
Subordinate Principal Distribution Amount (without regard to clause (B)(x)
of the definition thereof) on such Distribution Date, principal in an
amount equal to (x) in the case of the Class I-P-L Regular Interest, the
applicable Class I-P Fraction of any Realized Loss on a Class I-P Mortgage
Loan incurred in the Prior Period, (y) in the case of the Class II-P-L
Regular Interest, the applicable Class II-P Fraction of any Realized Loss
on a Class II-P Mortgage Loan incurred in the Prior Period and (z) in the
case of the Class III-P-L Regular Interest, the applicable Class III-P
Fraction of any Realized Loss on a Class III-P Mortgage Loan incurred in
the Prior Period (in each case, other than a Realized Loss which, pursuant
to the definition of "Realized Loss," is allocated by Pro Rata Allocation);
provided, that any amounts distributed in respect of losses pursuant to
paragraph (I)(d)(i) or this paragraph (I)(d)(ii) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in
either of the Class I-P-L Principal Balance, Class II-P-L Principal Balance
or the Class III-P-L Principal Balance; provided, further, that if the
amounts otherwise available to pay the Subordinate Principal Distribution
Amount (without regard to clause (B)(x) of the definition thereof) for any
such Distribution Date are insufficient to cover such outstanding principal
losses for the Class I-P-L, Class II-P-L and Class III-P-L Regular
Interests as provided in paragraph (I)(d)(i) or this paragraph (I)(d)(ii)
of this definition of "REMIC II Distribution Amount," then such amounts
will be allocated pro rata to the Class I-P-L, Class II-P-L and Class
III-P-L Regular Interests based on the amount such Regular Interests are
entitled to receive pursuant to paragraph (I)(d)(i) or this paragraph
(I)(d)(ii) of this definition of "REMIC II Distribution Amount";
(iii) third, to the Class C-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(iv) fourth, to the Class C-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(v) fifth, to the Class C-B-1-L Regular Interest, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-1-L Principal Balance has been
reduced to zero;
(vi) sixth, to the Class C-B-2-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(vii) seventh, to the Class C-B-2-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
56
(viii) eighth, to the Class C-B-2-L Regular Interest, the portion of
the Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-2-L Principal Balance has been
reduced to zero;
(ix) ninth, to the Class C-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(x) tenth, to the Class C-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xi) eleventh, to the Class C-B-3-L Regular Interest, the portion of
the Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-3-L Principal Balance has been
reduced to zero;
(xii) twelfth, to the Class C-B-4-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xiii) thirteenth, to the Class C-B-4-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xiv) fourteenth, to the Class C-B-4-L Regular Interest, the portion
of the Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-4-L Principal Balance has been
reduced to zero;
(xv) fifteenth, to the Class C-B-5-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xvi) sixteenth, to the Class C-B-5-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xvii) seventeenth, to the Class C-B-5-L Regular Interest, the portion
of the Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-5-L Principal Balance has been
reduced to zero;
(xviii) eighteenth, to the Class C-B-6-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests remaining
unpaid from previous Distribution Dates;
(xix) nineteenth, to the Class C-B-6-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
57
(xx) twentieth, to the Class C-B-6-L Regular Interest, the portion of
the Subordinate Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class C-B-6-L Principal Balance has been
reduced to zero;
(xxi) twenty-first, to each Class of REMIC II Regular Interests in
order of seniority (which, from highest to lowest, shall be as follows: the
Group I-L, Group II-L and Group III-L Regular Interests of equal seniority,
and then Class C-B-1-L, Class C-B-2-L, Class C-B-3-L, Class C-B-4-L, Class
C-B-5-L and Class C-B-6-L of decreasing seniority) the remaining portion,
if any, of the REMIC II Available Distribution Amounts for the Group I-L,
Group II-L and Group III-L Regular Interests, up to the amount of
unreimbursed Realized Losses allocable to principal previously allocated to
such Class, if any; provided, however, that in the case of Classes of REMIC
II Regular Interests of equal seniority, the amount distributable to such
Classes shall be allocated among such Classes according to the amount of
losses previously allocated thereto; provided, further, that any amounts
distributed pursuant to this paragraph (I)(d)(xxi) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of any of the REMIC II Regular Interests; and
(xxii) twenty-second, to the Class R-2 Residual Interest, the Residual
Distribution Amounts for the Group I-L, Group II-L and Group III-L Regular
Interests for such Distribution Date.
Notwithstanding the foregoing paragraph (I)(d) of this definition of "REMIC
II Distribution Amount,"
(X) on any Distribution Date on which both of the following conditions
specified in clauses (1) and (2) are met:
(1) the aggregate Class Principal Balance of any of the Group I-A-L
Regular Interests, the Group II-A-L Regular Interests or the Group III-A-L
Regular Interests has been reduced to zero, and
(2) either (a) the Group C-B Percentage for such Distribution Date is
less than 200% of the Group C-B Percentage as of the Closing Date or (b)
the outstanding principal balance of the Mortgage Loans in any of Loan
Group I, Loan Group II or Loan Group III delinquent 60 days or more
averaged over the last six months (including Mortgage Loans in foreclosure
and Mortgage Loans the Mortgaged Property of which is held by REMIC I and
acquired by foreclosure or deed in lieu of foreclosure), as a percentage of
the related Subordinate Component Balance, is greater than or equal to 50%,
all principal received or advanced with respect to the Mortgage Loans in the
Loan Group related to the Class A-L Regular Interests that have been paid in
full (after distributions of principal to the related Class P-L Regular Interest
pursuant to paragraph (I)(a)(i), (I)(b)(i), (I)(c)(i), (I)(d)(i) and (I)(d)(ii)
above, if applicable) shall be paid as principal to the remaining Class A-L
Regular Interests of such other Regular Interest Group or Groups to the extent
of and in reduction of the
58
Class Principal Balances thereof (and, in the case of the Group II-A-L Regular
Interests, in the order of priority of paragraph (I)(b)(iv)(a)-(e) above), prior
to any distributions of principal to the Group C-B-L Regular Interests pursuant
to paragraph (I)(d) above; provided, however, that if there are two Regular
Interest Groups with outstanding Class A-L Regular Interests, then such
principal will be distributed between those Regular Interest Groups pro rata
according to the aggregate Class Principal Balance of the Class A-L Regular
Interests of such Regular Interest Groups, and
(Y) if on any Distribution Date any of Loan Group I, Loan Group II or Loan
Group III is an Undercollateralized Group and the other such Loan Group or
Groups is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group or Groups related to the
Overcollateralized Group or Groups, to the extent remaining following
distributions of interest and principal to the Group I-L, Group II-L and Group
III-L Regular Interests pursuant to paragraph (I)(a), (I)(b) or (I)(c) above, as
applicable, shall be paid in the following priority: (1) first, such remaining
amount, up to the Total Transfer Amount for each Undercollateralized Group, pro
rata according to the Total Transfer Amount for each such Undercollateralized
Group shall be distributed (a) first, to the Class A-L Regular Interests related
to each Undercollateralized Group, in payment of any portion of the Interest
Distribution Amounts for such Classes of Regular Interests remaining unpaid from
such Distribution Date or previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts, and (b) second, to the Class A-L
Regular Interests related to each such Undercollateralized Group, as principal
(and, in the case of the Group II-A-L Regular Interests, in the order of
priority of paragraph (I)(b)(iv)(a)-(e) above), and (2) second, any remaining
amount shall be distributed pursuant to paragraph (I)(d) above.
(II) For any Distribution Date on or after the Credit Support Depletion
Date, the REMIC II Available Distribution Amount for such Distribution Date
shall be distributed to the outstanding Classes of REMIC II Regular Interests
and the Class R-2 Residual Interest in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests, on each Distribution
Date on or after the Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group I-L Regular Interests for such
Distribution Date:
(i) first, to the Class I-P-L Regular Interest, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(a)(i) of this definition of "REMIC
II Distribution Amount";
(ii) second, to the Class I-A-1-L and Class I-X-L Regular Interests,
the amount payable to each such Class of Regular Interests on prior
Distribution Dates pursuant to clause (I)(a)(iii) or (II)(a)(iii) of this
definition of "REMIC II Distribution Amount," and remaining unpaid, pro
rata according to such amount payable to the extent of amounts available;
(iii) third, to the Class I-A-1-L and Class I-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular
59
Interests for the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts;
(iv) fourth, to the Class I-A-1-L Regular Interest, as principal, the
Group I Senior Principal Distribution Amount; and
(v) fifth, after any payments to the Group II-L or Group III-L Regular
Interests pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Residual Interest, the Residual
Distribution Amount for the Group I-L Regular Interests for such
Distribution Date.
(b) With respect to the Group II-L Regular Interests, on each Distribution
Date on or after the Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group II-L Regular Interests for such
Distribution Date:
(i) first, to the Class II-P-L Regular Interest, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(b)(i) of this definition of "REMIC
II Distribution Amount";
(ii) second, to the Group II-A-L and Class II-X-L Regular Interests,
the amount payable to each such Class of Regular Interests on prior
Distribution Dates pursuant to clause (I)(b)(iii) or (II)(b)(iii) of this
definition of "REMIC II Distribution Amount," and remaining unpaid, pro
rata according to such amount payable to the extent of amounts available;
(iii) third, to the Group II-A-L and Class II-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Group II-A-L Regular Interests, pro rata according
to Class Principal Balance, as principal, the Group II Senior Principal
Distribution Amount; and
(v) fifth, after any payments to the Group I-L or Group III-L Regular
Interests pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Residual Interest, the Residual
Distribution Amount for the Group II-L Regular Interests for such
Distribution Date.
(c) With respect to the Group III-L Regular Interests, on each Distribution
Date on or after the Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group III-L Regular Interests for such
Distribution Date:
(i) first, to the Class III-P-L Regular Interest, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(c)(i) of this definition of "REMIC
II Distribution Amount";
(ii) second, to the Group III-A-L and Class III-X-L Regular Interests,
the amount payable to each such Class of Regular Interests on prior
Distribution Dates
60
pursuant to clause (I)(c)(iii) or (II)(c)(iii) of this definition of "REMIC
II Distribution Amount," and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
(iii) third, to the Group III-A-L and Class III-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts for such Classes
of Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Group III-A-L Regular Interests, pro rata
according to Class Principal Balance, as principal, the Group III Senior
Principal Distribution Amount; and
(v) fifth, after any payments to the Group I-L or Group II-L Regular
Interests pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Residual Interest, the Residual
Distribution Amount for the Group III-L Regular Interests for such
Distribution Date.
If on any Distribution Date any of Loan Group I, Loan Group II or Loan
Group III is an Undercollateralized Group and the other such Loan Group or
Groups is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group or Groups related to the
Overcollateralized Group or Groups, to the extent remaining following
distributions of interest and principal to the Group I-L, Group II-L, Group
III-L, Class I-P-L, Class II-P-L Class III-P-L, Class I-X-L, Class II-X-L and
III-X-L Regular Interests pursuant to paragraph (II)(a)(i) through (II)(a)(iv),
paragraph (II)(b)(i) through (II)(b)(iv) or paragraph (II)(c)(i) through
(II)(c)(iv), as applicable, shall be paid in the following priority: (1) first,
such remaining amount, up to the Total Transfer Amount for each such
Undercollateralized Group, pro rata according to the Total Transfer Amount for
each such Undercollateralized Group, shall be distributed (a) first, to the
Class A-L Regular Interests related to each such Undercollateralized Group, in
payment of any portion of the Interest Distribution Amounts for such Classes of
Regular Interests remaining unpaid from such Distribution Date or previous
Distribution Dates, pro rata according to their respective shares of such unpaid
amounts, and (b) second, to the Class A-L Regular Interests related to each such
Undercollateralized Group, as principal, pro rata according to Class Principal
Balance, and (2) second, any remaining amount shall be distributed pursuant to
paragraph (II)(a)(v), (II)(b)(v) and (II)(c)(v) above, as applicable; provided
that if there are two Overcollateralized Groups and the sum of the remaining
REMIC II Available Distribution Amounts for the Regular Interest Groups related
to such Overcollateralized Groups exceeds the Total Transfer Amount for the
Undercollateralized Group, then the sum of such remaining REMIC II Available
Distribution Amounts shall be distributed to the Regular Interest Group related
to the Undercollateralized Group in accordance with clause (1) of this paragraph
pro rata according to such remaining REMIC II Available Distribution Amounts.
REMIC II Regular Interests: The Classes of undivided beneficial interests
in REMIC II designated as "regular interests" in the table titled "REMIC II
Interests" in the Preliminary Statement hereto. The REMIC II Regular Interests,
together with the Class R-2 Residual Interest, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC II Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.
61
REMIC III: The segregated pool of assets of the Trust consisting of the
REMIC III Assets, which shall be a REMIC pursuant to the Code, with respect to
which a separate REMIC election is to be made, and the beneficial interests in
which shall be the REMIC III Regular Interests and the Class R-3 Residual
Interest.
REMIC III Assets: The REMIC II Regular Interests.
REMIC III Available Distribution Amount: For the Group I Certificates, on
any Distribution Date, the aggregate of all distributions to the Group I-L
Regular Interests pursuant to clauses (I)(a), (I)(d) and (II)(a) of the
definition of "REMIC II Distribution Amount" (which amount shall be available
for distributions to the Group I Certificates and the Class R-3 Residual
Interest as provided herein). For the Group II Certificates, on any Distribution
Date, the aggregate of all distributions to the Group II-L Regular Interests
pursuant to clauses (I)(b), (I)(d) and (II)(b) of the definition of "REMIC II
Distribution Amount" (which amount shall be available for distributions to the
Group II Certificates and the Class R-3 Residual Interest as provided herein).
For the Group III Certificates, on any Distribution Date, the aggregate of all
distributions to the Group III-L Regular Interests pursuant to clauses (I)(c),
(I)(d) and (II)(c) of the definition of "REMIC II Distribution Amount" (which
amount shall be available for distributions to the Group III Certificates and
the Class R-3 Residual Interest as provided herein). For the Group C-B
Certificates, on any Distribution Date, the aggregate of all distributions to
the Group C-B-L Regular Interests (which amount shall be available for
distributions to the Group C-B Certificates and the Class R-3 Residual Interest
as provided herein).
REMIC III Distribution Amount: The REMIC III Available Distribution Amount
for any Distribution Date shall be distributed to the Certificates and the Class
R-3 Residual Interest in the following amounts and priority:
(a) With respect to the Group I Certificates, to the extent of the REMIC
III Available Distribution Amount for the Group I Certificates for such
Distribution Date, to each Class of the Group I Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date;
(b) With respect to the Group II Certificates, to the extent of the REMIC
III Available Distribution Amount for the Group II Certificates for such
Distribution Date:
(i) to each Class of Group II Certificates (other than the Class
II-A-7, Class II-A-8 and Class II-A-9 Certificates), the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) (A) to the Class II-A-7 and Class II-A-9 Certificates, the amount
distributed as principal to its Corresponding Class on such Distribution
Date and (B) to each Class of the Class II-A-7, Class II-A-8 and Class
II-A-9 Certificates, the aggregate amount distributed as interest to the
Class II-A-7-L and Class II-A-9-L Regular Interests on such Distribution
Date, pro rata according to, for each such Class, the product of 1/12 of
the Certificate Interest Rate for such Class and the Class Principal
Balance or Class Notional Amount, as applicable, for such Class before
allocating principal losses and giving effect to distributions of principal
on such Distribution Date;
62
(c) With respect to the Group III Certificates, to the extent of the REMIC
III Available Distribution Amount for the Group III Certificates for such
Distribution Date, to each Class of the Group III Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date;
(d) With respect to the Group C-B Certificates, to the extent of the REMIC
III Available Distribution Amount for the Group C-B Certificates for such
Distribution Date, to each such Class of Certificates, the amounts distributed
to its Corresponding Class on such Distribution Date; and
(e) To the Class R-3 Residual Interest, the Residual Distribution Amount
for the Class R-3 Residual Interest for such Distribution Date.
In each case where a distribution is required to be made concurrently to
two or more Classes of Certificates pursuant to this definition of "REMIC III
Distribution Amount," if the portion of the REMIC III Available Distribution
Amount from which such distribution is required to be made is insufficient to
make such distribution in full to such Classes, such distribution shall be
allocated between such Classes pro rata according to the respective amounts to
which they are otherwise entitled from such distribution.
REMIC III Regular Interests: The Classes of undivided beneficial interests
in REMIC III designated as "regular interests" in the table titled "REMIC III
Interests" in the Preliminary Statement hereto. The REMIC III Regular Interests,
together with the Class R-3 Residual Interest, shall be deemed to be a separate
series of beneficial interests in the assets of the Trust consisting of the
REMIC III Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute.
Residual Certificates: The Class R Certificates.
Residual Distribution Amount: For any Distribution Date, with respect to
the Class R-1 Residual Interest, any portion of the REMIC I Available
Distribution Amounts for Loan Group I, Loan Group II and Loan Group III
remaining after all distributions of such REMIC I Available Distribution Amounts
pursuant to clauses (a), (b) and (c) (other than the last subclause of clause
(c)) of the definition of "REMIC I Distribution Amount."
For any Distribution Date, with respect to the Class R-2 Residual Interest
and for the Group I-L, Group II-L and Group III-L Regular Interests, any portion
of the REMIC II Available Distribution Amount for the Group I-L, Group II-L and
Group III-L Regular Interests, respectively, remaining after all distributions
of such REMIC II Available Distribution Amount pursuant to clauses (I)(a),
(I)(b), (I)(c), (I)(d), (II)(a), (II)(b) and (II)(c), as applicable, of the
definition of "REMIC II Distribution Amount" (other than the distributions
pursuant to the last subclause of clauses (I)(d), (II)(a), (II)(b) and (II)(c)).
For any Distribution Date, with respect to the Class R-3 Residual Interest,
any portion of the REMIC III Available Distribution Amount for the Group I,
Group II, Group III and Group C-B Certificates remaining after all distributions
of the REMIC III Available Distribution Amount pursuant to clauses (a), (b), (c)
and (d) of the definition of "REMIC III Distribution Amount."
63
Upon termination of the obligations created by this Agreement and
liquidation of REMIC I, REMIC II and REMIC III, the amounts which remain on
deposit in the Certificate Account after payment to the Holders of the REMIC I
Regular Interests of the amounts set forth in Section 9.01 of this Agreement,
and subject to the conditions set forth therein, shall be distributed to the
Class R-1, Class R-2 and Class R-3 Residual Interests in accordance with the
preceding sentences of this definition as if the date of such distribution were
a Distribution Date.
Responsible Officer: When used with respect to the Trustee or the Delaware
Trustee, any officer assigned to and working in the Corporate Trust Department
(in the case of the Trustee) or its corporate trust office (in the case of the
Delaware Trustee) or, in each case, in a similar group and also, with respect to
a particular matter, any other officer to whom such matter is referred because
of such officer's knowledge of and familiarity with the particular subject.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., provided that at any time it be a Rating Agency.
Secretary of State: The Secretary of State of the State of Delaware.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the agreement or
mortgage creating a security interest in favor of the originator of the
Cooperative Loan in the related Cooperative Stock.
Selling and Servicing Contract: (a) The contract (including the Washington
Mutual Mortgage Securities Corp. Selling Guide and Washington Mutual Mortgage
Securities Corp. Servicing Guide to the extent incorporated by reference
therein) between the Company and a Person relating to the sale of the Mortgage
Loans to the Company and the servicing of such Mortgage Loans for the benefit of
the Certificateholders, which contract is substantially in the form of Exhibit E
hereto, as such contract may be amended or modified from time to time; provided,
however, that any such amendment or modification shall not materially adversely
affect the interests and rights of Certificateholders or (b) any other similar
contract, including any mortgage loan purchase and servicing agreement or any
assignment, assumption and recognition agreement related to a mortgage loan
purchase and sale agreement, providing substantially similar rights and benefits
as those provided by the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Group I, Group II, Group III and Residual
Certificates.
Senior Regular Interests: The Group I-L, Group II-L and Group III-L Regular
Interests.
Senior Subordinate Certificates: The Subordinate Certificates other than
the Junior Subordinate Certificates.
Servicer: A mortgage loan servicing institution to which the Master
Servicer has assigned servicing duties with respect to any Mortgage Loan under a
Selling and Servicing Contract; provided, however, the Master Servicer may
designate itself or one or more other mortgage loan servicing institutions as
Servicer upon termination of an initial Servicer's servicing duties.
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Servicing Fee: For each Mortgage Loan, the fee paid to the Servicer thereof
to perform primary servicing functions for the Master Servicer with respect to
such Mortgage Loan, equal to the per annum rate set forth for each Mortgage Loan
in the Mortgage Loan Schedule on the outstanding Principal Balance of such
Mortgage Loan. In addition, any prepayment penalty received on a Mortgage Loan
will be paid as additional servicing compensation to the Master Servicer or the
related Servicer.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans or the
Certificates, as applicable, whose name and specimen signature appear on a list
of servicing officers furnished to the Trustee by the Master Servicer, as such
list may from time to time be amended.
Special Hazard Coverage: The Special Hazard Coverage on the most recent
anniversary of the Cut-Off Date (calculated in accordance with the second
sentence of this paragraph) or, if prior to the first such anniversary,
$5,528,227, in each case reduced by Special Hazard Losses allocated to the
Certificates since the most recent anniversary of the Cut-Off Date (or, if prior
to the first such anniversary, since the Cut-Off Date). On each anniversary of
the Cut-Off Date, the Special Hazard Coverage shall be reduced, but not
increased, to an amount equal to the lesser of (1) the greatest of (a) the
aggregate principal balance of the Mortgage Loans located in the single
California zip code area containing the largest aggregate principal balance of
Mortgage Loans, (b) 1.0% of the aggregate unpaid principal balance of the
Mortgage Loans and (c) twice the unpaid principal balance of the largest single
Mortgage Loan, in each case calculated as of the Due Date in the immediately
preceding month, and (2) $5,528,227 as reduced by the Special Hazard Losses
allocated to the Certificates since the Cut-Off Date.
The Special Hazard Coverage may be reduced upon written confirmation from
the Rating Agencies that such reduction will not adversely affect the then
current ratings assigned to the Certificates by the Rating Agencies.
Special Hazard Loss: A Realized Loss (or portion thereof) with respect to a
Mortgage Loan arising from any direct physical loss or damage to a Mortgaged
Property not covered by a standard hazard maintenance policy with extended
coverage which is caused by or results from any cause except: (i) fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, vandalism, aircraft, vehicles, smoke, sprinkler leakage, except to
the extent of that portion of the loss which was uninsured because of the
application of a co-insurance clause of any insurance policy covering these
perils; (ii) normal wear and tear, gradual deterioration, inherent vice or
inadequate maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss; (iv) nuclear reaction or nuclear
radiation or radioactive contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by this
definition of Special Hazard Loss; (v) hostile or warlike action in time of
peace or war, including action in hindering, combating or defending against an
actual, impending or expected attack (a) by any government of sovereign power
(de jure or de facto), or by an authority maintaining or using military, naval
or air forces, (b) by military, naval or air forces, or (c) by an agent of any
such government, power, authority or forces; (vi) any weapon of war employing
atomic fission or radioactive force whether in time of peace or war; (vii)
insurrection, rebellion,
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revolution, civil war, usurped power or action taken by governmental authority
in hindering, combating or defending against such occurrence; or (viii) seizure
or destruction under quarantine or customs regulations, or confiscation by order
of any government or public authority.
Special Primary Insurance Policy: Any Primary Insurance Policy covering a
Mortgage Loan the premium of which is payable by the Trustee pursuant to Section
4.05(a), if so identified in the Mortgage Loan Schedule. There are no Special
Primary Insurance Policies with respect to any of the Mortgage Loans.
Special Primary Insurance Premium: With respect to any Special Primary
Insurance Policy, the monthly premium payable thereunder.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del.C.Section 3801 et seq., as the same may be amended form time to time.
Step Down Percentage: For any Distribution Date, the percentage indicated
below:
Distribution Date Occurring In Step Down Percentage
---------------------------------- --------------------
January 2003 through December 2007 0%
January 2008 through December 2008 30%
January 2009 through December 2009 40%
January 2010 through December 2010 60%
January 2011 through December 2011 80%
January 2012 and thereafter 100%
Stripped Interest Rate: For each Group I Loan, the excess, if any, of the
Pass-Through Rate for such Mortgage Loan over 5.250% per annum. For each Group
II Loan and Group III Loan, the excess, if any, of the Pass-Through Rate for
such Mortgage Loan over 5.750% per annum.
Subordinate Certificates: The Group C-B Certificates.
Subordinate Component Balance: With respect to Loan Group I for any date of
determination, the then outstanding aggregate Principal Balance of the Group I
Loans (less the applicable Class I-P Fraction thereof with respect to any Class
I-P Mortgage Loan) minus the then outstanding aggregate Class Principal Balance
of the Group I-A. With respect to Loan Group II for any date of determination,
the then outstanding aggregate Principal Balance of the Group II Loans (less the
applicable Class II-P Fraction thereof with respect to any Class II-P Mortgage
Loan) minus the then outstanding aggregate Class Principal Balance of the Group
II-A Certificates and Residual Certificates. With respect to Loan Group III for
any date of determination, the then outstanding aggregate Principal Balance of
the Group III Loans (less the applicable Class III-P Fraction thereof with
respect to any Class III-P Mortgage Loan) minus the then outstanding aggregate
Class Principal Balance of the Group III-A Certificates.
Subordinate Liquidation Amount: For any Distribution Date, the excess, if
any, of the aggregate of Liquidation Principal for all Mortgage Loans which
became Liquidated Mortgage Loans during the Prior Period, over the sum of the
Group I Senior Liquidation Amount, the
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Group II Senior Liquidation Amount and the Group III Senior Liquidation Amount
for such Distribution Date.
Subordinate Percentage: The Group I Subordinate Percentage, Group II
Subordinate Percentage or Group III Subordinate Percentage, as applicable.
Subordinate Principal Distribution Amount: For any Distribution Date, the
excess of (A) the sum of (i) the Group I Subordinate Percentage of the Principal
Payment Amount for Loan Group I (exclusive of the portion thereof attributable
to principal distributions to the Class I-P-L Regular Interest pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount"), (ii) the
Group II Subordinate Percentage of the Principal Payment Amount for Loan Group
II (exclusive of the portion thereof attributable to principal distributions to
the Class II-P-L Regular Interest pursuant to clause (I)(b)(i) of the definition
of "REMIC II Distribution Amount"), (iii) the Group III Subordinate Percentage
of the Principal Payment Amount for Loan Group III (exclusive of the portion
thereof attributable to principal distributions to the Class III-P-L Regular
Interest pursuant to clause (I)(c)(i) of the definition of "REMIC II
Distribution Amount"), (iv) the Subordinate Principal Prepayments Distribution
Amount (without regard to the proviso in the definition thereof) and (v) the
Subordinate Liquidation Amount over (B) the sum of (x) the amounts required to
be distributed to the Class P-L Regular Interests pursuant to clauses (I)(d)(i)
and (I)(d)(ii) of the definition of "REMIC II Distribution Amount" on such
Distribution Date, (y) in the event that the aggregate Class Principal Balance
of any of the Group I-A-L, Group II-A-L or Group III-A-L Regular Interests has
been reduced to zero, principal paid from the REMIC II Available Distribution
Amount related to such Class A-L Regular Interests to the remaining Class A-L
Regular Interests, as set forth in clause (X) of the sentence immediately
following paragraph (I)(d) of the definition of "REMIC II Distribution Amount,"
and (z) the amounts paid from the REMIC II Available Distribution Amount for the
Regular Interest Group related to an Overcollateralized Group to the Class A-L
Regular Interests related to an Undercollateralized Group pursuant to clause (Y)
of the sentence immediately following paragraph (I)(d) of the definition of
"REMIC II Distribution Amount."
On any Distribution Date, the Subordinate Principal Distribution Amount
shall be allocated pro rata, by Class Principal Balance, among the Classes of
Group C-B-L Regular Interests and paid in the order of distribution to such
Classes pursuant to clause (I)(d) of the definition of "REMIC II Distribution
Amount" except as otherwise stated in such definition. Notwithstanding the
foregoing, on any Distribution Date prior to distributions on such date, if the
Subordination Level for any Class of Group C-B-L Regular Interests is less than
such Subordination Level as of the Closing Date, the pro rata portion of the
Subordinate Principal Prepayments Distribution Amount otherwise allocable to the
Class or Classes of Group C-B-L Regular Interests junior to such Class will be
distributed to the most senior Class of Group C-B-L Regular Interests for which
the Subordination Level is less than the Subordination Level as of the Closing
Date, and to the Class or Classes of Group C-B-L Regular Interests senior
thereto, pro rata according to the Class Principal Balances of such Classes. For
purposes of this definition and the definition of "Subordination Level," the
relative seniority, from highest to lowest, of the Group C-B-L Regular Interests
shall be as follows: Class C-B-1-L, Class C-B-2-L, Class C-B-3-L, Class C-B-4-L,
Class C-B-5-L and Class C-B-6-L.
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Subordinate Principal Prepayments Distribution Amount: For any Distribution
Date, the sum of (i) the Group I Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group I (exclusive of the portion thereof
attributable to principal distributions to the Class I-P-L Regular Interest
pursuant to clause (I)(a)(i) of the definition of "REMIC II Distribution
Amount"), (ii) the Group II Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group II (exclusive of the portion thereof
attributable to principal distributions to the Class II-P-L Regular Interest
pursuant to clause (I)(b)(i) of the definition of "REMIC II Distribution
Amount") and (iii) the Group III Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group III (exclusive of the portion thereof
attributable to principal distributions to the Class III-P-L Regular Interest
pursuant to clause (I)(c)(i) of the definition of "REMIC II Distribution
Amount"); provided, however, that if the amount specified in clause (B) of the
definition of "Subordinate Principal Distribution Amount" is greater than the
sum of the amounts specified in clauses (A)(i), (A)(ii), (A)(iii) and (A)(v) of
such definition, then the Subordinate Principal Prepayments Distribution Amount
shall be reduced by the amount of such excess.
Subordination Level: On any specified date, with respect to any Class of
Group C-B-L Regular Interests, the percentage obtained by dividing the aggregate
Class Principal Balance of the Classes of Group C-B-L Regular Interests which
are subordinate in right of payment to such Class by the aggregate Class
Principal Balance of the Group I-L, Group II-L, Group III-L and Group C-B-L
Regular Interests and the Class R-1 Residual Interest as of such date prior to
giving effect to distributions of principal and interest and allocations of
Realized Losses on the Mortgage Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for another
Mortgage Loan pursuant to and in accordance with the provisions of Section 2.07.
Tax Matters Person: With respect to each of REMIC I, REMIC II and REMIC
III, a Holder of a Class R Certificate with a Percentage Interest of at least
0.01% or any Permitted Transferee of such Class R Certificateholder designated
as succeeding to the position of Tax Matters Person in a notice to the Trustee
signed by authorized representatives of the transferor and transferee of such
Class R Certificate. The Company is hereby appointed to act as the Tax Matters
Person for REMIC I, REMIC II and REMIC III so long as it holds a Class R
Certificate with a Percentage Interest of at least 0.01%. The Company is hereby
appointed to act as agent for the Tax Matters Person for REMIC I, REMIC II and
REMIC III, to perform the functions of such Tax Matters Person as provided
herein, so long as the Company is the Master Servicer hereunder, in the event
that the Company ceases to hold a Class R Certificate with the required
Percentage Interest. In the event that the Company ceases to be the Master
Servicer hereunder, the successor Master Servicer is hereby appointed to act as
agent for the Tax Matters Person for REMIC I, REMIC II and REMIC III, to perform
the functions of such Tax Matters Person as provided herein. If the Tax Matters
Person for REMIC I, REMIC II and REMIC III becomes a Disqualified Organization,
the last preceding Holder, that is not a Disqualified Organization, of the Class
R Certificate held by the Disqualified Organization shall be Tax Matters Person
pursuant to and as permitted by Section 5.01(c). If any Person is appointed as
tax matters person by the Internal Revenue Service pursuant to the Code, such
Person shall be Tax Matters Person.
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Termination Date: The date upon which final payment of the Certificates
will be made pursuant to the procedures set forth in Section 9.01(b).
Termination Payment: The final payment delivered to the Certificateholders
on the Termination Date pursuant to the procedures set forth in Section 9.01(b).
Total Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for such Undercollateralized Group.
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.
Transferee Affidavit and Agreement: An affidavit and agreement in the form
attached hereto as Exhibit J.
Trust: Washington Mutual MSC Mortgage Pass-Through Certificates Series
2002-MS11 Trust, a Delaware statutory trust, created pursuant to this Agreement.
Trustee: State Street Bank and Trust Company, or its successor-in-interest
as provided in Section 8.09, or any successor trustee appointed as herein
provided.
Uncollected Interest: With respect to any Distribution Date for any
Mortgage Loan on which a Payoff was made by a Mortgagor during the related
Payoff Period, except for Payoffs received during the period from the first
through the 14th day of the month of such Distribution Date, an amount equal to
one month's interest at the applicable Pass-Through Rate on such Mortgage Loan
less the amount of interest actually paid by the Mortgagor with respect to such
Payoff.
Uncompensated Interest Shortfall: With respect to a Loan Group, for any
Distribution Date, the sum of (i) the aggregate Relief Act Shortfall for such
Distribution Date with respect to the Mortgage Loans in such Loan Group, (ii)
aggregate Curtailment Shortfall for such Distribution Date with respect to the
Mortgage Loans in such Loan Group and (iii) the excess, if any, of (a) aggregate
Uncollected Interest for such Distribution Date with respect to the Mortgage
Loans in such Loan Group over (b) Compensating Interest for such Distribution
Date with respect to the Mortgage Loans in such Loan Group.
Uncompensated Interest Shortfall for Loan Group I shall be allocated to the
Group I-L Regular Interests and the portions of the Group C-B-L Regular
Interests that derive their Interest Distribution Amounts from the Group I
Loans, pro rata according to the amount of interest accrued but unpaid on each
such Class or portion thereof, in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be allocated to
the Group II-L Regular Interests and the portions of the Group C-B-L Regular
Interests that derive their Interest
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Distribution Amounts from the Group II Loans, pro rata according to the amount
of interest accrued but unpaid on each such Class or portion thereof, in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be allocated to
the Group III-L Regular Interests and the portions of the Group C-B-L Regular
Interests that derive their Interest Distribution Amounts from the Group III
Loans, pro rata according to the amount of interest accrued but unpaid on each
such Class or portion thereof, in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be allocated to the
Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular Interests, pro rata according
to the amount of interest accrued but unpaid on each such Class, in reduction
thereof.
The aggregate of Uncompensated Interest Shortfall for Loan Group II and
Loan Group III shall be allocated, first, to the Class II-X-M and Class III-X-M
Regular Interests, in an amount equal to the aggregate amount of Uncompensated
Interest Shortfall for Loan Group II and Loan Group III allocated to the Class
II-X-L and Class III-X-L Regular Interests, in reduction of the Interest
Distribution Amount to which such Class of Regular Interests would otherwise be
entitled, and, second, the remainder of such Uncompensated Interest Shortfall
shall be allocated between the Class C-Y-2 and Class C-Z-2 Regular Interests,
pro rata according to the amount of interest accrued but unpaid on each such
Class, in reduction thereof.
Undercollateralized Group: For any Distribution Date, Loan Group I, if
immediately prior to such Distribution Date the aggregate Class Principal
Balance of the Group I-A Certificates is greater than the aggregate Principal
Balance of the Group I Loans (less the applicable Class I-P Fraction thereof
with respect to each Class I-P Mortgage Loan); for any Distribution Date, Loan
Group II, if immediately prior to such Distribution Date the aggregate Class
Principal Balance of the Group II-A and Class R Certificates is greater than the
aggregate Principal Balance of the Group II Loans (less the applicable Class
II-P Fraction thereof with respect to each Class II-P Mortgage Loan); and for
any Distribution Date, Loan Group III, if immediately prior to such Distribution
Date the aggregate Class Principal Balance of the Group III-A Certificates is
greater than the aggregate Principal Balance of the Group III Loans (less the
applicable Class III-P Fraction thereof with respect to each Class III-P
Mortgage Loan).
Underwriter: UBS Warburg LLC.
Underwriting Standards: The published underwriting standards of the
Company, or, if the related Mortgage Loan was underwritten pursuant to
underwriting standards other than the published underwriting standards of the
Company, then such other underwriting standards.
Uninsured Cause: Any cause of damage to a Mortgaged Property, the cost of
the complete restoration of which is not fully reimbursable under the hazard
insurance policies required to be maintained pursuant to Section 3.07.
U.S. Person: A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate or
trust that is subject to U.S. federal income tax regardless of the source of its
income.
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VA: The Department of Veterans Affairs, formerly known as the Veterans
Administration, or any successor thereto.
Withdrawal Date: Any day during the period commencing on the 18th day of
the month of the related Distribution Date (or if such day is not a Business
Day, the immediately preceding Business Day) and ending on the last Business Day
prior to the 21st day of the month of such Distribution Date. The "related Due
Date" for any Withdrawal Date is the Due Date immediately preceding the related
Distribution Date.
ARTICLE II
Creation of the Trust; Conveyance of the Mortgage Pool Assets, REMIC I Regular
Interests and REMIC II Regular Interests; REMIC Election and Designations;
Original Issuance of Certificates
Section 2.01. Creation of the Trust. The Trust is hereby created and shall
be known as "Washington Mutual MSC Mortgage Pass-Through Certificates Series
2002-MS11 Trust". The purpose of the Trust is, and the Trust shall have the
power and authority, to engage in the following activities, all as provided by
and subject to the terms of this Agreement:
(i) to acquire, hold, lease, manage, administer, control, invest,
reinvest, operate and/or transfer the Mortgage Pool Assets, the REMIC
II Assets and the REMIC III Assets;
(ii) to issue the REMIC I Regular Interests, the REMIC II Regular
Interests, the Class R Residual Interests and the Certificates;
(iii) to make distributions to the REMIC I Regular Interests, the REMIC II
Regular Interests and the Certificates; and
(iv) to engage in such other activities, including entering into
agreements, as are described in or required by the terms of this
Agreement or as are necessary, suitable or convenient to accomplish
the foregoing or incidental thereto.
State Street Bank and Trust Company is hereby appointed as a trustee of the
Trust, to have all the rights, duties and obligations of the Trustee with
respect to the Trust expressly set forth hereunder, and State Street Bank and
Trust Company hereby accepts such appointment and the Trust created hereby.
Christiana Bank & Trust Company is hereby appointed as a Delaware trustee of the
Trust, to have all the rights, duties and obligations of the Delaware Trustee
with respect to the Trust hereunder, and Christiana Bank & Trust Company hereby
accepts such appointment and the Trust created hereby. It is the intention of
the Company, the Trustee and the Delaware Trustee that the Trust constitute a
statutory trust under the Statutory Trust Statute, that this Agreement
constitute the governing instrument of the Trust, and that this Agreement amend
and restate the Original Trust Agreement. The parties hereto acknowledge and
agree that, prior to the execution and delivery hereof, the Delaware Trustee has
filed the Certificate of Trust. The parties hereto acknowledge that the Trust
includes three separate pools of mortgage loans (referred to herein as Loan
Groups), and that the assets of each Loan Group are available to make payments
to the holders of Certificates as provided in the definitions of "REMIC I
Distribution
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Amount," "REMIC II Distribution Amount" and "REMIC III Distribution Amount"
Section 4.01, Section 4.04 and Section 4.05 hereof.
The assets of the Trust shall remain in the custody of the Trustee, on
behalf of the Trust, and shall be owned by the Trust except as otherwise
expressly set forth herein. Moneys to the credit of the Trust shall be held by
the Trustee and invested as provided herein. All assets received and held in the
Trust will not be subject to any right, charge, security interest, lien or claim
of any kind in favor of either of State Street Bank and Trust Company or
Christiana Bank & Trust Company in its own right, or any Person claiming through
it. Neither the Trustee nor the Delaware Trustee, on behalf of the Trust, shall
have the power or authority to transfer, assign, hypothecate, pledge or
otherwise dispose of any of the assets of the Trust to any Person, except as
permitted herein. No creditor of a beneficiary of the Trust, of the Trustee, of
the Delaware Trustee, of the Master Servicer or of the Company shall have any
right to obtain possession of, or otherwise exercise legal or equitable remedies
with respect to, the property of the Trust, except in accordance with the terms
of this Agreement.
Section 2.02. Restrictions on Activities of the Trust. Notwithstanding any
other provision of this Agreement and any provision of law that otherwise so
empowers the Trust, so long as any Certificates are outstanding, the Trust shall
not, and none of the Trustee, the Delaware Trustee, the Company or the Master
Servicer shall knowingly cause the Trust to, do any of the following:
(i) engage in any business or activity other than those set forth in
Section 2.01;
(ii) incur or assume any indebtedness except for such indebtedness that may
be incurred by the Trust in connection with the execution or
performance of this Agreement or any other agreement contemplated
hereby;
(iii) guarantee or otherwise assume liability for the debts of any other
party;
(iv) do any act in contravention of this Agreement or any other agreement
contemplated hereby to which the Trust is a party;
(v) do any act which would make it impossible to carry on the ordinary
business of the Trust;
(vi) confess a judgment against the Trust;
(vii) possess or assign the assets of the Trust for other than a Trust
purpose;
(viii) cause the Trust to lend any funds to any entity, except as
contemplated by this Agreement; or
(ix) change the purposes and powers of the Trust from those set forth in
this Agreement.
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Section 2.03. Separateness Requirements. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Trust, so long as any Certificates are outstanding, the Trust shall perform
the following:
(i) except as expressly permitted by this Agreement, maintain its books,
records, bank accounts and files separate from those of any other
Person;
(ii) except as expressly permitted by this Agreement, maintain its assets
in its own separate name and in such a manner that it is not costly or
difficult to segregate, identify, or ascertain such assets;
(iii) consider the interests of the Trust's creditors in connection with
its actions;
(iv) hold itself out to creditors and the public as a legal entity separate
and distinct from any other Person and correct any known
misunderstanding regarding its separate identity and refrain from
engaging in any activity that compromises the separate legal identity
of the Trust;
(v) prepare and maintain separate records, accounts and financial
statements in accordance with generally accepted accounting
principles, consistently applied, and susceptible to audit. To the
extent it is included in consolidated financial statements or
consolidated tax returns, such financial statements and tax returns
will reflect the separateness of the respective entities and indicate
that the assets of the Trust will not be available to satisfy the
debts of any other Person;
(vi) allocate and charge fairly and reasonably any overhead shared with any
other Person;
(vii) transact all business with affiliates on an arm's-length basis and
pursuant to written, enforceable agreements;
(viii) conduct business solely in the name of the Trust. In that regard all
written and oral communications of the Trust, including, without
limitation, letters, invoices, purchase orders and contracts, shall be
made solely in the name of the Trust;
(ix) maintain a separate office through which its business shall be
conducted, provided that such office may be an office of the Trustee,
which office shall not be shared with the Company or any affiliates of
the Company;
(x) in the event that services have been or are in the future performed or
paid by any Person on behalf of the Trust (other than the Trustee, the
Delaware Trustee, the Master Servicer or the Tax Matters Person as
permitted herein), reimburse such Person, as applicable, for the
commercially reasonable value of such services or expenses provided or
incurred by such Person. Accordingly, (i) the Trust shall reimburse
such Person, as applicable, for the commercially reasonable value of
such services or expenses provided or incurred by such Person; (ii) to
the extent invoices for such services are not allocated and separately
billed to the Trust, the amount thereof that was or is to be allocated
and separately billed to the Trust was
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or will be reasonably related to the services provided to the Trust;
and (iii) any other allocation of direct, indirect or overhead
expenses for items shared between the Trust and any other Person, was
or will be, to the extent practicable, allocated on the basis of
actual use or value of services rendered or otherwise on a basis
reasonably related to actual use or the value of services rendered;
(xi) except as expressly permitted by this Agreement, not commingle its
assets or funds with those of any other Person;
(xii) except as expressly permitted by this Agreement, not assume,
guarantee, or pay the debts or obligations of any other Person;
(xiii) except as expressly permitted by this Agreement, not pledge its
assets for the benefit of any other Person;
(xiv) not hold out its credit or assets as being available to satisfy the
obligations of others;
(xv) pay its liabilities only out of its funds;
(xvi) pay the salaries of its own employees, if any; and
(xvii) cause the agents and other representatives of the Trust, if any, to
act at all times with respect to the Trust consistently and in
furtherance of the foregoing.
None of the Trustee, the Delaware Trustee, the Company or the Master
Servicer shall take any action that is inconsistent with the purposes of the
Trust or Section 2.02 or Section 2.03. Neither the Company nor the Master
Servicer shall direct the Trustee or the Delaware Trustee to take any action
that is inconsistent with the purposes of the Trust or Section 2.02 or Section
2.03.
Section 2.04. Conveyance of Mortgage Pool Assets; Security Interest.
Concurrently with the execution and delivery hereof, the Company does
hereby irrevocably sell, transfer, assign, set over and otherwise convey to the
Trust, without recourse, all the Company's right, title and interest in and to
the Mortgage Pool Assets, including but not limited to all scheduled payments of
principal and interest due after the Cut-Off Date and received by the Company
with respect to the Mortgage Loans at any time, and all Principal Prepayments
received by the Company after the Cut-Off Date with respect to the Mortgage
Loans (such transfer and assignment by the Company to be referred to herein as
the "Conveyance," and the assets so transferred and assigned to be referred to
herein as the "Conveyed Assets").
It is the express intent of the parties hereto that the Conveyance of the
Conveyed Assets to the Trust by the Company as provided in this Section 2.04 be,
and be construed as, an absolute sale of the Conveyed Assets. It is, further,
not the intention of the parties that such Conveyance be deemed the grant of a
security interest in the Conveyed Assets by the Company to the Trust to secure a
debt or other obligation of the Company. However, in the event that,
notwithstanding the intent of the parties, the Conveyed Assets are held to be
the property of the Company, or if
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for any other reason this Agreement is held or deemed to create a security
interest in the Conveyed Assets, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the Conveyance provided for in this Section 2.04 shall be deemed to be
a grant by the Company to the Trust of, and the Company hereby grants to the
Trust, to secure all of the Company's obligations hereunder, a security interest
in all of the Company's right, title, and interest, whether now owned or
hereafter acquired, in and to:
(I) (i) the Mortgage Loans identified on the Mortgage Loan Schedule,
including the related Mortgage Notes, Mortgages, Cooperative Stock
Certificates, Cooperative Leases, Security Agreements, Assignments of
Proprietary Lease, and Recognition Agreements, all Substitute Mortgage
Loans and all distributions with respect to the Mortgage Loans and
Substitute Mortgage Loans payable on and after the Cut-Off Date; (ii) the
Certificate Account, the Investment Account and all money or other property
held therein, and the Custodial Accounts for P&I, the Custodial Accounts
for Reserves and any Buydown Fund Account (to the extent of the amounts on
deposit or other property therein attributable to the Mortgage Loans); and
(iii) amounts paid or payable by the insurer under any FHA insurance policy
or any Primary Insurance Policy and proceeds of any VA guaranty and any
other insurance policy related to any Mortgage Loan or the Mortgage Pool;
(II) All rights arising from or by virtue of the disposition of, or
collections with respect to, or insurance proceeds payable with respect to,
or claims against other persons with respect to, all or any part of the
collateral described in (I) above (including any accrued discount realized
on liquidation of any investment purchased at a discount);
(III) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, goods, letters of credit,
letter-of-credit rights, oil, gas, and other minerals, and investment
property consisting of, arising from or relating to any of the foregoing;
and
(IV) All proceeds of the foregoing;
(c) the possession by the Trust of any of the foregoing property shall be
deemed to be possession by the secured party or possession by a purchaser for
purposes of perfecting the security interest pursuant to the Uniform Commercial
Code (including, without limitation, Sections 9-313 and 9-314 thereof) as in
force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed to
be notifications to, or acknowledgments, receipts or confirmations from,
securities intermediaries, bailees or agents of, or persons holding for, the
Trust, as applicable, for the purpose of perfecting such security interest under
applicable law.
The Company shall file such financing statements, and the Company and the
Trustee acting on behalf of the Trust at the direction of the Company shall, to
the extent consistent with
75
this Agreement, take such other actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Conveyed Assets,
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. In connection herewith, the Trust shall have all of
the rights and remedies of a secured party and creditor under the Uniform
Commercial Code as in force in the relevant jurisdiction.
Section 2.05. Delivery of Mortgage Files.
In connection with the sale, transfer and assignment referred to in Section
2.04, the Company, concurrently with the execution and delivery hereof, does
deliver to, and deposit with, or cause to be delivered to and deposited with,
the Trustee or Custodian the Mortgage Files, which shall at all times be
identified in the records of the Trustee or the Custodian, as applicable, as
being held by or on behalf of the Trust.
Concurrently with the execution and delivery hereof, the Company shall
cause to be filed the UCC assignment or amendment referred to in clause (Y)(vii)
of the definition of "Mortgage File." In connection with its servicing of
Cooperative Loans, the Master Servicer will use its best efforts to file timely
continuation statements, if necessary, with regard to each financing statement
and assignment relating to Cooperative Loans.
In instances where the original recorded Mortgage or any intervening
assignment thereof (recorded or in recordable form) required to be included in
the Mortgage File pursuant to the definition of "Mortgage File" relating to a
Mortgage Loan is not included in the Mortgage File delivered to the Trustee (or
the Custodian) prior to or concurrently with the execution and delivery hereof
(due to a delay on the part of the recording office), the Company shall deliver
to the Trustee (or the Custodian) a fully legible reproduction (which may be in
electronic form) of the original Mortgage or intervening assignment provided
that the originator, the related Lender or the escrow or title company which
provided closing services in connection with such Mortgage Loan certifies on the
face of such reproduction(s) or copy as follows: "Certified true and correct
copy of original which has been transmitted for recordation." For purposes
hereof, transmitted for recordation means having been mailed or otherwise
delivered for recordation to the appropriate authority. In all such instances,
the Company shall transmit the original recorded Mortgage and any intervening
assignments with evidence of recording thereon (or a copy of such original
Mortgage or intervening assignment certified by the applicable recording office)
(which may be in electronic form) (collectively, "Recording Documents") to the
Trustee (or the Custodian) within 270 days after the execution and delivery
hereof. In instances where, due to a delay on the part of the recording office
where any such Recording Documents have been delivered for recordation, the
Recording Documents cannot be delivered to the Trustee within 270 days after
execution and delivery hereof, the Company shall deliver to the Trustee within
such time period a certificate (a "Company Officer's Certificate") signed by the
Chairman of the Board, President, any Vice President or Treasurer of the Company
stating the date by which the Company expects to receive such Recording
Documents from the applicable recording office. In the event that Recording
Documents have still not been received by the Company and delivered to the
Trustee (or the Custodian) by the date specified in its previous Company
Officer's Certificate delivered to the Trustee, the Company shall deliver to the
Trustee by such date an additional Company Officer's Certificate stating a
revised date by which the Company expects to
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receive the applicable Recording Documents. This procedure shall be repeated
until the Recording Documents have been received by the Company and delivered to
the Trustee (or the Custodian).
For Mortgage Loans for which the Company has received a Payoff after the
Cut-Off Date and prior to the date of execution and delivery hereof, the
Company, in lieu of delivering the above documents, herewith delivers to the
Trustee a certification of a Servicing Officer of the nature set forth in
Section 3.10.
The Trustee is authorized, with the Master Servicer's consent, to appoint
any bank or trust company approved by each of the Company and the Master
Servicer as Custodian of the documents or instruments referred to above in this
Section 2.05, and to enter into a Custodial Agreement for such purpose,
provided, however, that the Trustee shall be and remain liable for the acts of
any such Custodian only to the extent that it is responsible for its own acts
hereunder. Any documents delivered by the Company or the Master Servicer to the
Custodian, if any, shall be deemed to have been delivered to the Trustee for all
purposes hereunder; and any documents held by the Custodian, if any, shall be
deemed to be held by the Trustee for all purposes hereunder.
On or promptly after the Closing Date, the Master Servicer shall cause the
MERS(R) System to indicate that each MERS Loan, if any, has been assigned to
"State Street Bank and Trust Company, as Custodian/Trustee, without recourse" or
to "Washington Mutual MSC Mortgage Pass-Through Certificates Series 2002-MS11
Trust, without recourse" by including in the MERS(R) System computer files (a)
the code necessary to identify the Trustee and (b) the code necessary to
identify the series of the Certificates issued in connection with such Mortgage
Loans; provided, however, that in the event the Company acquired such Mortgage
Loans from an affiliate of the Company, then the Master Servicer need not cause
the MERS(R) System to indicate such assignment. The Master Servicer shall not
alter the codes referenced in this paragraph with respect to any MERS Loan
during the term of this Agreement except in connection with an assignment of
such MERS Loan or de-registration thereof from the MERS(R) System in accordance
with the terms of this Agreement.
Section 2.06. REMIC Election for REMIC I.
The Tax Matters Person, shall, on behalf of REMIC I, elect to treat REMIC I
as a REMIC within the meaning of Section 860D of the Code and, if necessary,
under applicable state laws. Such election shall be included in the Form 1066
and any appropriate state return to be filed on behalf of REMIC I for its first
taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC I
within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to REMIC I are hereby designated as
"regular interests" in REMIC I for purposes of Section 860G(a)(1) of the Code.
The Class R-1 Residual Interest is hereby designated as the sole class of
"residual interest" in REMIC I for purposes of Section 860G(a)(2) of the Code.
The REMIC I Regular Interests and the Class R-1 Residual Interest shall together
be
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deemed to be a separate series of beneficial interests in the assets of the
Trust consisting of the REMIC I Assets pursuant to Section 3806(b)(2) of the
Statutory Trust Statute.
The parties intend that the affairs of REMIC I shall constitute, and that
the affairs of REMIC I shall be conducted so as to qualify REMIC I as a REMIC.
In furtherance of such intention, the Tax Matters Person shall, on behalf of
REMIC I: (a) prepare and file, or cause to be prepared and filed, a federal tax
return using a calendar year as the taxable year and using an accrual method of
accounting for REMIC I when and as required by the REMIC Provisions and other
applicable federal income tax laws; (b) make an election, on behalf of the
trust, for REMIC I to be treated as a REMIC on the federal tax return of REMIC I
for its first taxable year, in accordance with the REMIC Provisions; (c) prepare
and forward, or cause to be prepared and forwarded, to the Holders of the REMIC
I Regular Interests and the Class R-1 Residual Interest and the Trustee, all
information reports as and when required to be provided to them in accordance
with the REMIC Provisions, and make available the information necessary for the
application of Section 860E(e) of the Code; (d) conduct the affairs of REMIC I
at all times that any REMIC I Regular Interests are outstanding so as to
maintain the status of REMIC I as a REMIC under the REMIC Provisions; (e) not
knowingly or intentionally take any action or omit to take any action that would
cause the termination of the REMIC status of REMIC I; and (f) pay the amount of
any federal prohibited transaction penalty taxes imposed on REMIC I when and as
the same shall be due and payable (but such obligation shall not prevent the
Company or any other appropriate person from contesting any such tax in
appropriate proceedings and shall not prevent the Company from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); provided, that the Company shall be entitled to be indemnified by
REMIC I for any such prohibited transaction penalty taxes if the Company's
failure to exercise reasonable care was not the primary cause of the imposition
of such prohibited transaction penalty taxes.
The Trustee and the Master Servicer shall promptly provide the Company with
such information in the possession of the Trustee or the Master Servicer,
respectively, as the Company may from time to time request for the purpose of
enabling the Company to prepare tax returns.
In the event that a Mortgage Loan is discovered to have a defect which, had
such defect been discovered before the startup day, would have prevented such
Mortgage Loan from being a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, and the Company does not repurchase such Mortgage Loan
within 90 days of such date, the Master Servicer, on behalf of the Trustee,
shall within 90 days of the date such defect is discovered sell such Mortgage
Loan at such price as the Master Servicer in its sole discretion, determines to
be the greatest price that will result in the purchase thereof within 90 days of
such date, unless the Master Servicer delivers to the Trustee an Opinion of
Counsel to the effect that continuing to hold such Mortgage Loan will not
adversely affect the status of the electing portion of REMIC I as a REMIC for
federal income tax purposes.
In the event that any tax is imposed on "prohibited transactions" of REMIC
I as defined in Section 860F of the Code and not paid by the Company pursuant to
clause (f) of the third preceding paragraph, such tax shall be charged against
amounts otherwise distributable to the Class R-1 Residual Interest.
Notwithstanding anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Class R-1
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Residual Interest on any Distribution Date sufficient funds to reimburse the Tax
Matters Person (or any agent therefor appointed in accordance with the
definition of "Tax Matters Person" herein, if applicable), for the payment of
such tax (upon the written request of the Tax Matters Person or its agent, to
the extent reimbursable, and to the extent that the Tax Matters Person or its
agent has not been previously reimbursed therefor).
Section 2.07. Acceptance by Trustee. The Trustee acknowledges receipt (or
with respect to any Mortgage Loan subject to a Custodial Agreement, receipt by
the Custodian thereunder) on behalf of the Trust of the documents (or certified
copies thereof as specified in Section 2.05) referred to in Section 2.05 above,
but without having made the review required to be made within 45 days pursuant
to this Section 2.07. The Trustee agrees, for the benefit of the Trust, to
review each Mortgage File within 45 days after the Closing Date and deliver to
the Company a certification in the form attached as Exhibit M hereto, to the
effect that, except as noted, all documents required (in the case of instruments
described in clauses (X)(iv) and (Y)(ix) of the definition of "Mortgage File,"
known by the Trustee to be required) pursuant to the definition of "Mortgage
File" and Section 2.05 have been executed and received, and that such documents
relate to the Mortgage Loans identified in the Mortgage Loan Schedule. In
performing such review, the Trustee may rely upon the purported genuineness and
due execution of any such document, and on the purported genuineness of any
signature thereon. The Trustee shall not be required to make any independent
examination of any documents contained in each Mortgage File beyond the review
specifically required herein. The Trustee makes no representations as to: (i)
the validity, legality, enforceability or genuineness of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any Mortgage Loan. If the Trustee
finds any document or documents constituting a part of a Mortgage File not to
have been executed or received, or to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, the Trustee shall promptly so notify
the Company. The Company hereby covenants and agrees that, if any such defect
cannot be corrected or cured, the Company shall, not later than 60 days after
the Trustee's notice to it respecting such defect, within the three-month period
commencing on the Closing Date (or within the two-year period commencing on the
Closing Date if the related Mortgage Loan is a "defective obligation" within the
meaning of Section 860G(a)(4)(B)(ii) of the Code and Treasury Regulation Section
1.860G-2(f)), either (i) repurchase the related Mortgage Loan from the Trust at
the Purchase Price, or (ii) substitute for any Mortgage Loan to which such
defect relates a different mortgage loan (a "Substitute Mortgage Loan") which is
a "qualified replacement mortgage" (as defined in the Code) and, (iii) after
such three-month or two-year period, as applicable, the Company shall repurchase
the Mortgage Loan from the Trust at the Purchase Price but only if the Mortgage
Loan is in default or default is, in the judgment of the Company, reasonably
imminent. If such defect would cause the Mortgage Loan to be other than a
"qualified mortgage" (as defined in the Code), then notwithstanding the previous
sentence, or any provision in the definition of "Purchase Price," the repurchase
or substitution must occur within the sooner of (i) 90 days from the date the
defect was discovered or (ii) in the case of substitution, two years from the
Closing Date.
Such Substitute Mortgage Loan shall mature no later than, and not more than
two years earlier than, have a principal balance and Loan-to-Value Ratio equal
to or less than, and have a Pass-Through Rate on the date of substitution equal
to or no more than 1 percentage point greater than the Mortgage Loan being
substituted for. If the aggregate of the principal balances of the
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Substitute Mortgage Loans substituted for a Mortgage Loan is less than the
Principal Balance of such Mortgage Loan, the Company shall pay the difference in
cash, together with unpaid accrued interest, if any, on the difference between
the aggregate of the principal balances of the Substitute Mortgage Loans and the
Principal Balance of such Mortgage Loan during the calendar month in which the
substitution occurs to the last day of such month at a rate equal to the
applicable Pass-Through Rate, to the Trustee for deposit into the Certificate
Account, and such payment by the Company shall be treated in the same manner as
proceeds of the repurchase by the Company of a Mortgage Loan pursuant to this
Section 2.07. Furthermore, such Substitute Mortgage Loan shall otherwise have
such characteristics so that the representations and warranties of the Company
set forth in Section 2.08 hereof would not have been incorrect had such
Substitute Mortgage Loan originally been a Mortgage Loan, and the Company shall
be deemed to have made such representations and warranties as to such Substitute
Mortgage Loan. A Substitute Mortgage Loan may be substituted for a defective
Mortgage Loan whether or not such defective Mortgage Loan is itself a Substitute
Mortgage Loan. Notwithstanding anything herein to the contrary, each Substitute
Mortgage Loan shall be deemed to have the same Pass-Through Rate as the Mortgage
Loan for which it was substituted.
The Purchase Price for each purchased or repurchased Mortgage Loan shall be
deposited by the Company in the Certificate Account and, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee shall (or, if applicable, shall cause the Custodian to) release to
the Company the related Mortgage File and shall execute and deliver (or, in the
event that the Mortgage Files are held in the name of the Custodian, shall cause
the Custodian to execute and deliver) on behalf of the Trust such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Company or its designee or assignee title to any Mortgage Loan
released pursuant hereto. In furtherance of the foregoing, if such Mortgage Loan
is a MERS Loan and as a result of the repurchase thereof such Mortgage Loan
shall cease to be serviced by a servicer that is a member of MERS or if the
Company or its assignee shall so request, the Master Servicer shall cause MERS
to execute and deliver an assignment of the Mortgage in recordable form from
MERS to the Company or its assignee and shall cause the Mortgage Loan to be
removed from registration on the MERS(R) System in accordance with MERS' rules
and procedures. The obligation of the Company to repurchase or substitute any
Mortgage Loan as to which such a defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to the Trust or the
Holders of the REMIC I Regular Interests or the Class R-1 Residual Interest.
Section 2.08. Representations and Warranties of the Company Concerning the
Mortgage Loans. With respect to the conveyance of the Mortgage Loans provided
for in Section 2.04 herein, the Company hereby represents and warrants to the
Trust that as of the Cut-Off Date unless otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule was true
and correct in all material respects at the date or dates respecting which
such information is furnished;
(ii) As of the Closing Date, each Mortgage relating to a Mortgage Loan
that is not a Cooperative Loan is a valid and enforceable (subject to
Section 2.08(xvi)) first lien on an unencumbered estate in fee simple or
(if the related Mortgage Loan is secured by
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the interest of the Mortgagor as a lessee under a ground lease) leasehold
estate in the related Mortgaged Property subject only to (a) liens for
current real property taxes and special assessments; (b) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal obtained in connection
with the origination of the Mortgage Loan; (c) exceptions set forth in the
title insurance policy relating to such Mortgage, such exceptions being
acceptable to mortgage lending institutions generally; and (d) 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;
(iii) Immediately upon the transfer and assignment contemplated
herein, the Trust shall have good title to, and will be the sole legal
owner of, each Mortgage Loan, free and clear of any encumbrance or lien
(other than any lien under this Agreement);
(iv) As of the day prior to the Cut-Off Date, all payments due on each
Mortgage Loan had been made and no Mortgage Loan had been delinquent (i.e.,
was more than 30 days past due) more than once in the preceding 12 months
and any such delinquency lasted for no more than 30 days;
(v) As of the Closing Date, there is no late assessment for delinquent
taxes outstanding against any Mortgaged Property;
(vi) As of the Closing Date, there is no offset, defense or
counterclaim to any Mortgage Note, including the obligation of the
Mortgagor to pay the unpaid principal or interest on such Mortgage Note
except to the extent that the Buydown Agreement for a Buydown Loan forgives
certain indebtedness of a Mortgagor;
(vii) As of the Closing Date, each Mortgaged Property is free of
damage and in good repair, ordinary wear and tear excepted;
(viii) Each Mortgage Loan at the time it was made complied with all
applicable state and federal laws, including, without limitation, usury,
equal credit opportunity, disclosure and recording laws;
(ix) Each Mortgage Loan was originated by a savings association,
savings bank, credit union, insurance company, or similar institution which
is supervised and examined by a federal or state authority or by a
mortgagee approved by the FHA and will be serviced by an institution which
meets the servicer eligibility requirements established by the Company;
(x) As of the Closing Date, each Mortgage Loan that is not a
Cooperative Loan is covered by an ALTA form or CLTA form of mortgagee title
insurance policy or other form of policy of insurance which has been issued
by, and is the valid and binding obligation of, a title insurer which, as
of the origination date of such Mortgage Loan, was qualified to do business
in the state in which the related Mortgaged Property is located. Such
policy insures the originator of the Mortgage Loan, its successors and
assigns as to
81
the first priority lien of the Mortgage in the original principal amount of
the Mortgage Loan subject to the exceptions set forth in such policy. Such
policy is in full force and effect and inures to the benefit of the Trust
upon the consummation of the transactions contemplated by this Agreement
and no claims have been made under such policy, and no prior holder of the
related Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such policy;
(xi) Each Mortgage Loan with a Loan-to-Value Ratio as of the Cut-Off
Date in excess of 80% was covered by a Primary Insurance Policy or an FHA
insurance policy or a VA guaranty, and such policy or guaranty is valid and
remains in full force and effect;
(xii) As of the Closing Date, all policies of insurance required by
this Agreement or by a Selling and Servicing Contract have been validly
issued and remain in full force and effect, including such policies
covering the Company, the Master Servicer or any Servicer;
(xiii) As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
(xiv) Each Mortgage (exclusive of any riders thereto) was documented
by appropriate Xxxxxx Xxx/Xxxxxxx Mac mortgage instruments in effect at the
time of origination, or other instruments approved by the Company;
(xv) As of the Closing Date, the Mortgaged Property securing each
Mortgage relating to a Mortgage Loan that is not a Cooperative Loan is
improved with a one- to four-family dwelling unit, including units in a
duplex, triplex, fourplex, condominium project, townhouse, a planned unit
development or a de minimis planned unit development;
(xvi) As of the Closing Date, each Mortgage and Mortgage Note is the
legal, valid and binding obligation of the maker thereof and is enforceable
in accordance with its terms, except only as such enforcement may be
limited by laws affecting the enforcement of creditors' rights generally
and principles of equity;
(xvii) As of the date of origination, as to Mortgaged Properties which
are units in condominiums or planned unit developments, all of such units
met the applicable Underwriting Standards, are located in a condominium or
planned unit development projects which have received Xxxxxx Mae or Xxxxxxx
Mac approval, or are approvable by Xxxxxx Mae or Xxxxxxx Mac or have
otherwise been approved by the Company;
(xviii) None of the Mortgage Loans are Buydown Loans;
(xix) Based solely on representations of the Mortgagors obtained at
the origination of the related Mortgage Loans, approximately 95.88% (by
Principal Balance) of the Group I Loans will be secured by owner occupied
Mortgaged Properties which are the primary residences of the related
Mortgagors, approximately 4.12% (by Principal Balance) of the Group I Loans
will be secured by owner occupied Mortgaged Properties which were second or
vacation homes of the Mortgagors and none of the Group I Loans
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will be secured by Mortgaged Properties which were investor properties of
the related Mortgagors; approximately 98.82% (by Principal Balance) of the
Group II Loans will be secured by owner occupied Mortgaged Properties which
are the primary residences of the related Mortgagors, approximately 0.95%
(by Principal Balance) of the Group II Loans will be secured by owner
occupied Mortgaged Properties which were second or vacation homes of the
Mortgagors and approximately 0.22% (by Principal Balance) of the Group II
Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors; approximately 98.14% (by Principal
Balance) of the Group III Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related Mortgagors,
approximately 1.86% (by Principal Balance) of the Group III Loans will be
secured by owner occupied Mortgaged Properties which were second or
vacation homes of the Mortgagors and none of the Group III Loans will be
secured by Mortgaged Properties which were investor properties of the
related Mortgagors;
(xx) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form satisfactory to
Xxxxxx Mae or Xxxxxxx Mac;
(xxi) The Mortgage Loans have been underwritten substantially in
accordance with the applicable Underwriting Standards;
(xxii) All of the Mortgage Loans have due-on-sale clauses; however,
the due on sale provisions may not be exercised at the time of a transfer
if prohibited by law;
(xxiii) The Company used no adverse selection procedures in selecting
the Mortgage Loans from among the outstanding fixed-rate conventional
mortgage loans purchased by it which were available for inclusion in the
Mortgage Pool and as to which the representations and warranties in this
Section 2.03 could be made;
(xxiv) With respect to each Cooperative Loan, the Cooperative Stock
that is pledged as security for the Cooperative Loan is held by a person as
a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(xxv) Each Cooperative Loan is secured by a valid, subsisting and
enforceable (except as such enforcement may be limited by laws affecting
the enforcement of creditors' rights generally and principles of equity)
perfected first lien and security interest in the related Cooperative Stock
securing the related Mortgage Note, subject only to (a) liens of the
Cooperative for unpaid assessments representing the Mortgagor's pro rata
share of the Cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject, and (b) other
matters to which like collateral is commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by the Security Agreement;
(xxvi) With respect to any Mortgage Loan as to which an affidavit has
been delivered to the Trustee certifying that the original Mortgage Note is
a Destroyed
83
Mortgage Note, if such Mortgage Loan is subsequently in default, the
enforcement of such Mortgage Loan or of the related Mortgage by or on
behalf of the Trust will not be materially adversely affected by the
absence of the original Mortgage Note (or portion thereof, as applicable);
(xxvii) Based upon an appraisal of the Mortgaged Property securing
each Mortgage Loan, approximately 99.25% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio less than or equal to 80%,
approximately 0.77% (by Principal Balance) of the Group I Loan had a
current Loan-to-Value Ratio greater than 80% but less than or equal to 95%
and no Group I Loan had a current Loan-to-Value Ratio greater than 95%;
approximately 97.99% (by Principal Balance) of the Group II Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately 2.01%
(by Principal Balance) of the Group II Loans had a current Loan-to-Value
Ratio greater than 80% but less than or equal to 95% and no Group II Loan
had a current Loan-to-Value Ratio greater than 95%; approximately 100.00%
(by Principal Balance) of the Group III Loans had a current Loan-to-Value
Ratio less than or equal to 80%, no Group III Loans had a current
Loan-to-Value Ratio greater than 80% but less than or equal to 95% and no
Group III Loan had a current Loan-to-Value Ratio greater than 95%;
(xxviii) Approximately 88.41% (by Principal Balance) of the Group I
Loans, approximately 80.70% (by Principal Balance) of the Group II Loans
and approximately 79.86% (by Principal Balance) of the Group III Loans were
originated for the purpose of refinancing existing mortgage debt, including
cash-out refinancings; and approximately 11.60% (by Principal Balance) of
the Group I Loans, approximately 19.30% (by Principal Balance) of the Group
II Loans and approximately 20.14% (by Principal Balance) of the Group III
Loans were originated for the purpose of purchasing the Mortgaged Property;
(xxix) Not less than approximately 84.67%, 89.52% and 85.45% (by
Principal Balance) of the Group I Loans, Group II Loans and Group III
Loans, respectively, were originated under full documentation programs; and
(xxx) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.08 shall survive delivery of the respective Mortgage
Files to the Trustee or the Custodian, as the case may be, and shall continue
throughout the term of this Agreement. Upon discovery by any of the Company, the
Master Servicer, the Trustee or the Custodian of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of the related Mortgage Loans or the interests of the Trust in the
related Mortgage Loans, the Company, the Master Servicer, the Trustee or the
Custodian, as the case may be, discovering such breach shall give prompt written
notice to the others. Within 90 days of its discovery or its receipt of notice
of breach, the Company shall repurchase, subject to the limitations set forth in
the definition of "Purchase Price," or substitute for the affected Mortgage Loan
or Mortgage Loans or any property acquired in respect thereof from the Trust,
unless it has cured such breach in all material respects. After the end of the
three-month period beginning on the "start-up day,"
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any such substitution shall be made only if the Company provides to the Trustee
an Opinion of Counsel addressed to the Trust and the Trustee reasonably
satisfactory to the Trustee that each Substitute Mortgage Loan will be a
"qualified replacement mortgage" within the meaning of Section 860G(a)(4) of the
Code. Such substitution shall be made in the manner and within the time limits
set forth in Section 2.07. Any such repurchase by the Company shall be
accomplished in the manner and at the Purchase Price, if applicable, but shall
not be subject to the time limits, set forth in Section 2.07. It is understood
and agreed that the obligation of the Company to provide such substitution or to
make such repurchase of any affected Mortgage Loan or Mortgage Loans or any
property acquired in respect thereof as to which a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach available to
the Holders of the REMIC I Regular Interests and the Class R-1 Residual Interest
or the Trustee on behalf of the Holders of the REMIC I Regular Interests and the
Class R-1 Residual Interest.
Section 2.09. Acknowledgment of Transfer of Mortgage Pool Assets. The
Trustee hereby acknowledges and accepts on behalf of the Trust the transfer and
assignment to the Trust of the Mortgage Pool Assets, but without having made the
review required to be made within 45 days pursuant to Section 2.07, and declares
that as of the Closing Date it holds and shall hold any documents constituting a
part of the Mortgage Pool Assets, and the Mortgage Pool Assets, as Trustee in
trust, upon the trust herein set forth, for the use and benefit of all present
and future Holders of the REMIC I Regular Interests and the Class R-1 Residual
Interest. In connection therewith, as of the Closing Date, in exchange for the
Mortgage Pool Assets, the Trust does hereby issue to the Company the REMIC I
Regular Interests and the Class R-1 Residual Interest.
Section 2.10. Conveyance of REMIC I Regular Interests; Security Interest.
Concurrently with the execution and delivery hereof, the Company does hereby
irrevocably sell, transfer, assign, set over, and otherwise convey to the Trust,
without recourse, all the Company's right, title and interest in and to the
REMIC II Assets, including all interest and principal received by the Company on
or with respect to the REMIC I Regular Interests after the Cut-Off Date.
Pursuant to Section 3818 of the Statutory Trust Statute, the REMIC I Regular
Interests shall not be cancelled and shall be held as treasury interests owned
by the Trust. It is the express intent of the parties hereto that the conveyance
of the REMIC II Assets to the Trust by the Company as provided in this Section
2.10 be, and be construed as, an absolute sale of the REMIC II Assets. It is,
further, not the intention of the parties that such conveyance be deemed the
grant of a security interest in the REMIC II Assets by the Company to the Trust
to secure a debt or other obligation of the Company. However, in the event that,
notwithstanding the intent of the parties, the REMIC II Assets are held to be
the property of the Company, or if for any other reason this Agreement is held
or deemed to create a security interest in the REMIC II Assets, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.10 shall be deemed to be
a grant by the Company to the Trust of, and the Company hereby grants to the
Trust, to secure all of the Company's obligations hereunder, a security interest
in all of the Company's right, title, and interest, whether now owned or
hereafter acquired, in and to:
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(I) The REMIC I Regular Interests, including without limitation all
rights represented thereby in and to (i) the Mortgage Loans identified on
the Mortgage Loan Schedule, including the related Mortgage Notes,
Mortgages, Cooperative Stock Certificates, Cooperative Leases, Security
Agreements, Assignments of Proprietary Lease, and Recognition Agreements,
all Substitute Mortgage Loans and all distributions with respect to such
Mortgage Loans and Substitute Mortgage Loans payable on and after the
Cut-Off Date, (ii) the Certificate Account, the Investment Account and all
money or other property held therein, and the Custodial Accounts for P&I,
the Custodial Accounts for Reserves and any Buydown Fund Account (to the
extent of the amounts on deposit therein attributable to the Mortgage
Loans); (iii) amounts paid or payable by the insurer under any FHA
insurance policy or any Primary Insurance Policy and proceeds of any VA
guaranty and any other insurance policy related to any Mortgage Loan or the
Mortgage Pool; and (iv) all rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance proceeds
payable with respect to, or claims against other persons with respect to,
all or any part of the collateral described in (i)-(iii) above (including
any accrued discount realized on liquidation of any investment purchased at
a discount);
(II) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, goods, letters of credit,
letter-of-credit rights, oil, gas, and other minerals, and investment
property consisting of, arising from or relating to any of the foregoing;
and
(III) All proceeds of the foregoing;
(c) the possession by the Trust of any of the foregoing property shall be
deemed to be possession by the secured party or possession by a purchaser for
purposes of perfecting the security interest pursuant to the Uniform Commercial
Code (including, without limitation, Sections 9-313 and 9-314 thereof) as in
force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, securities
intermediaries, bailees or agents of, or persons holding for, the Trust, as
applicable, for the purpose of perfecting such security interest under
applicable law.
The Company shall file such financing statements, and the Company and the
Trustee acting on behalf of the Trust at the direction of the Company shall, to
the extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the REMIC II Assets, 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 this Agreement. In connection
herewith, the Trust shall have all of the rights and remedies of a secured party
and creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to appoint
any bank or trust company approved by each of the Company and the Master
Servicer as Custodian of the
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documents or instruments referred to above in this Section 2.10, and to enter
into a Custodial Agreement for such purpose; provided, however, that the Trustee
shall be and remain liable for actions of any such Custodian only to the extent
it would otherwise be responsible for such acts hereunder. Any documents
delivered by the Company or the Master Servicer to the Custodian, if any, shall
be deemed to have been delivered to the Trustee for all purposes hereunder; and
any documents held by the Custodian, if any, shall be deemed to be held by the
Trustee for all purposes hereunder.
Section 2.11. REMIC Election for REMIC II.
The Tax Matters Person shall, on behalf of REMIC II, elect to treat REMIC
II as a REMIC within the meaning of Section 860D of the Code and, if necessary,
under applicable state laws. Such election shall be included in the Form 1066
and any appropriate state return to be filed on behalf of REMIC II for its first
taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC II
within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to REMIC II are hereby designated as
"regular interests" in REMIC II for purposes of Section 860G(a)(1) of the Code.
The Class R-2 Residual Interest is hereby designated as the sole class of
"residual interest" in REMIC II for purposes of Section 860G(a)(2) of the Code.
The REMIC II Regular Interests and the Class R-2 Residual Interest shall
together be deemed to be a separate series of beneficial interests in the assets
of the Trust consisting of the REMIC II Assets pursuant to Section 3806(b)(2) of
the Statutory Trust Statute.
The parties intend that the affairs of REMIC II shall constitute, and that
the affairs of REMIC II shall be conducted so as to qualify it as, a REMIC. In
furtherance of such intention, the Tax Matters Person shall, on behalf of REMIC
II: (a) prepare and file, or cause to be prepared and filed, a federal tax
return using a calendar year as the taxable year for REMIC II when and as
required by the REMIC provisions and other applicable federal income tax laws;
(b) make an election, on behalf of REMIC II, to be treated as a REMIC on the
federal tax return of REMIC II for its first taxable year, in accordance with
the REMIC provisions; (c) prepare and forward, or cause to be prepared and
forwarded, to the Holders of the REMIC II Regular Interests and the Class R-2
Residual Interest all information reports as and when required to be provided to
them in accordance with the REMIC provisions; (d) conduct the affairs of REMIC
II at all times that any of the REMIC II Regular Interests and the Class R-2
Residual Interest are outstanding so as to maintain the status of REMIC II as a
REMIC under the REMIC provisions; (e) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of REMIC II; and (f) pay the amount of any federal prohibited transaction
penalty taxes imposed on REMIC II when and as the same shall be due and payable
(but such obligation shall not prevent the Company or any other appropriate
person from contesting any such tax in appropriate proceedings and shall not
prevent the Company from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the Company shall be
entitled to be indemnified from REMIC II for any such prohibited transaction
penalty taxes if the Company's failure to exercise reasonable care was not the
primary cause of the imposition of such prohibited transaction penalty taxes.
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In the event that any tax is imposed on "prohibited transactions" of REMIC
II as defined in Section 860F of the Code and not paid by the Company pursuant
to clause (f) of the preceding paragraph, such tax shall be charged against
amounts otherwise distributable to the Holders of the Class R-2 Residual
Interest. Notwithstanding anything to the contrary contained herein, the Company
is hereby authorized to retain from amounts otherwise distributable to the
Holders of the Class R-2 Residual Interest on any Distribution Date sufficient
funds to reimburse the Company for the payment of such tax (to the extent that
the Company has not been previously reimbursed therefor).
Section 2.12. Acknowledgement of Transfer of REMIC II Assets. The Trustee
hereby acknowledges and accepts on behalf of the Trust the assignment to the
Trust of the REMIC II Assets and declares that as of the Closing Date it holds
and shall hold any documents constituting a part of the REMIC II Assets, and the
REMIC II Assets, as Trustee in trust, upon the trust herein set forth, for the
use and benefit of all present and future Holders of the REMIC II Regular
Interests and the Class R-2 Residual Interest. In connection therewith, as of
the Closing Date, in exchange for the REMIC II Assets, the Trust does hereby
issue to the Company the REMIC II Regular Interests and the Class R-2 Residual
Interest.
Section 2.13. Conveyance of REMIC II Regular Interests; Security Interest.
Concurrently with the execution and delivery hereof, the Company does hereby
irrevocably sell, transfer, assign, set over, and otherwise convey to the Trust,
without recourse, all the Company's right, title and interest in and to the
REMIC III Assets, including all interest and principal received by the Company
on or with respect to the REMIC II Regular Interests after the Cut-Off Date.
Pursuant to Section 3818 of the Statutory Trust Statute, the REMIC II Regular
Interests shall not be cancelled and shall be held as treasury interests owned
by the Trust. It is the express intent of the parties hereto that the conveyance
of the REMIC III Assets to the Trust by the Company as provided in this Section
2.13 be, and be construed as, an absolute sale of the REMIC III Assets. It is,
further, not the intention of the parties that such conveyance be deemed the
grant of a security interest in the REMIC III Assets by the Company to the Trust
to secure a debt or other obligation of the Company. However, in the event that,
notwithstanding the intent of the parties, the REMIC III Assets are held to be
the property of the Company, or if for any other reason this Agreement is held
or deemed to create a security interest in the REMIC III Assets, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.13 shall be deemed to be
a grant by the Company to the Trust of, and the Company hereby grants to the
Trust, to secure all of the Company's obligations hereunder, a security interest
in all of the Company's right, title, and interest, whether now owned or
hereafter acquired, in and to:
(I) The REMIC II Regular Interests, including without limitation all
rights represented thereby in and to (i) the Mortgage Loans identified on
the Mortgage Loan Schedule, including the related Mortgage Notes,
Mortgages, Cooperative Stock Certificates, Cooperative Leases, Security
Agreements, Assignments of Proprietary Lease, and Recognition Agreements,
all Substitute Mortgage Loans and all distributions with respect to such
Mortgage Loans and Substitute Mortgage Loans payable on and after
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the Cut-Off Date, (ii) the Certificate Account, the Investment Account and
all money or other property held therein, and the Custodial Accounts for
P&I, the Custodial Accounts for Reserves and any Buydown Fund Account (to
the extent of the amounts on deposit therein attributable to the Mortgage
Loans); (iii) amounts paid or payable by the insurer under any FHA
insurance policy or any Primary Insurance Policy and proceeds of any VA
guaranty and any other insurance policy related to any Mortgage Loan or the
Mortgage Pool; and (iv) all rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance proceeds
payable with respect to, or claims against other persons with respect to,
all or any part of the collateral described in (i)-(iii) above (including
any accrued discount realized on liquidation of any investment purchased at
a discount);
(II) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, goods, letters of credit,
letter-of-credit rights, oil, gas, and other minerals, and investment
property consisting of, arising from or relating to any of the foregoing;
and
(III) All proceeds of the foregoing;
(c) the possession by the Trust of any of the foregoing property shall be
deemed to be possession by the secured party or possession by a purchaser for
purposes of perfecting the security interest pursuant to the Uniform Commercial
Code (including, without limitation, Sections 9-313 and 9-314 thereof) as in
force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, securities
intermediaries, bailees or agents of, or persons holding for, the Trust, as
applicable, for the purpose of perfecting such security interest under
applicable law.
The Company shall file such financing statements, and the Company and the
Trustee acting on behalf of the Trust at the direction of the Company shall, to
the extent consistent with this Agreement, take such other actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the REMIC III Assets, 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 this Agreement. In connection
herewith, the Trust shall have all of the rights and remedies of a secured party
and creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to appoint
any bank or trust company approved by each of the Company and the Master
Servicer as Custodian of the documents or instruments referred to above in this
Section 2.13, and to enter into a Custodial Agreement for such purpose;
provided, however, that the Trustee shall be and remain liable for actions of
any such Custodian only to the extent it would otherwise be responsible for such
acts hereunder. Any documents delivered by the Company or the Master Servicer to
the Custodian, if any, shall be deemed to have been delivered to the Trustee for
all purposes hereunder; and any
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documents held by the Custodian, if any, shall be deemed to be held by the
Trustee for all purposes hereunder.
Section 2.14. REMIC Election for REMIC III.
The Tax Matters Person shall, on behalf of REMIC III, elect to treat REMIC
III as a REMIC within the meaning of Section 860D of the Code and, if necessary,
under applicable state laws. Such election shall be included in the Form 1066
and any appropriate state return to be filed on behalf of REMIC III for its
first taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC III
within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to REMIC III are hereby designated as
"regular interests" in REMIC III for purposes of Section 860G(a)(1) of the Code.
The Class R-3 Residual Interest is hereby designated as the sole class of
"residual interest" in REMIC III for purposes of Section 860G(a)(2) of the Code.
The REMIC III Regular Interests and the Class R-3 Residual Interest shall
together be deemed to be a separate series of beneficial interests in the assets
of the Trust consisting of the REMIC III Assets pursuant to Section 3806(b)(2)
of the Statutory Trust Statute.
The parties intend that the affairs of REMIC III shall constitute, and that
the affairs of REMIC III shall be conducted so as to qualify it as, a REMIC. In
furtherance of such intention, the Tax Matters Person shall, on behalf of REMIC
III: (a) prepare and file, or cause to be prepared and filed, a federal tax
return using a calendar year as the taxable year for REMIC III when and as
required by the REMIC provisions and other applicable federal income tax laws;
(b) make an election, on behalf of REMIC III, to be treated as a REMIC on the
federal tax return of REMIC III for its first taxable year, in accordance with
the REMIC provisions; (c) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and the Holders of the Class R-3 Residual
Interest all information reports as and when required to be provided to them in
accordance with the REMIC provisions; (d) conduct the affairs of REMIC III at
all times that any of the Certificates are outstanding so as to maintain the
status of REMIC III as a REMIC under the REMIC provisions; (e) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of REMIC III; and (f) pay the amount of any
federal prohibited transaction penalty taxes imposed on REMIC III when and as
the same shall be due and payable (but such obligation shall not prevent the
Company or any other appropriate person from contesting any such tax in
appropriate proceedings and shall not prevent the Company from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); provided, that the Company shall be entitled to be indemnified
from REMIC III for any such prohibited transaction penalty taxes if the
Company's failure to exercise reasonable care was not the primary cause of the
imposition of such prohibited transaction penalty taxes.
In the event that any tax is imposed on "prohibited transactions" of REMIC
III as defined in Section 860F of the Code and not paid by the Company pursuant
to clause (f) of the preceding paragraph, such tax shall be charged against
amounts otherwise distributable to the Holders of the Class R-3 Residual
Interest. Notwithstanding anything to the contrary contained herein, the
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Company is hereby authorized to retain from amounts otherwise distributable to
the Holders of the Class R-3 Residual Interest on any Distribution Date
sufficient funds to reimburse the Company for the payment of such tax (to the
extent that the Company has not been previously reimbursed therefor).
Section 2.15. Acknowledgement of Transfer of REMIC III Assets;
Authentication of Certificates. The Trustee hereby acknowledges and accepts on
behalf of the Trust the assignment to the Trust of the REMIC III Assets and
declares that as of the Closing Date it holds and shall hold any documents
constituting a part of the REMIC III Assets, and the REMIC III Assets, as
Trustee in trust, upon the trust herein set forth, for the use and benefit of
all present and future Holders of the Certificates (other than the Class R
Certificates) and the Class R-3 Residual Interest. In connection therewith, as
of the Closing Date, in exchange for the REMIC III Assets, the Trustee on behalf
of the Trust shall cause to be authenticated and delivered, upon and pursuant to
the order of the Company, the Certificates in Authorized Denominations.
Section 2.16. Legal Title. Legal title to all assets of the Trust shall be
vested at all times in the Trust as a separate legal entity.
Section 2.17. Compliance with ERISA Requirements. For purposes of ensuring
compliance with the requirements of the "underwriter's exemption" (U.S.
Department of Labor Prohibited Transaction Exemption 2000-58, 65 Fed. Reg. 67765
(Nov. 13, 2000)), issued under ERISA, and for the avoidance of any doubt as to
the applicability of other provisions of this Agreement, to the fullest extent
permitted by applicable law and except as contemplated by this Agreement, (1)
the Trust shall not be a party to any merger, consolidation or reorganization,
or liquidate or sell its assets and (2) so long as any Certificates are
outstanding, none of the Company, the Trustee or the Delaware Trustee shall
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy or insolvency proceedings under any federal or state bankruptcy,
insolvency or similar law.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. The Company to Act as Master Servicer. The Company shall act
as Master Servicer to service and administer the Mortgage Loans on behalf of the
Trust and for the benefit of the Certificateholders in accordance with the terms
hereof, consistent with prudent mortgage loan servicing practices and (unless
inconsistent with prudent mortgage loan servicing practices) in the same manner
in which, and with the same care, skill, prudence and diligence with which, it
services and administers similar mortgage loans for other portfolios, and shall
have full power and authority to do or cause to be done any and all things in
connection with such servicing and administration which a prudent servicer of
mortgage loans would do under similar circumstances, including, without
limitation, the power and authority to bring actions and defend the Mortgage
Pool Assets on behalf of the Trust in order to enforce the terms of the Mortgage
Notes. The Master Servicer may perform its master servicing responsibilities
through agents or independent contractors, but shall not thereby be released
from any of its responsibilities hereunder and the Master Servicer shall
diligently pursue all of its rights against such agents or independent
contractors.
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The Master Servicer shall make reasonable efforts to collect or cause to be
collected all payments called for under the terms and provisions of the Mortgage
Loans and shall, to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any Primary Insurance Policy, any FHA
insurance policy or VA guaranty, any hazard insurance policy, and federal flood
insurance, cause to be followed such collection procedures as are followed with
respect to mortgage loans comparable to the Mortgage Loans and held in
portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-sale"
clauses with respect to the related Mortgage Loans, to the extent permitted by
law, subject to the provisions set forth in Section 3.08.
Consistent with the foregoing, the Master Servicer may, in accordance with
prudent mortgage loan servicing practices, (i) waive or cause to be waived any
assumption fee or late payment charge in connection with the prepayment of any
Mortgage Loan and (ii) only upon determining that the coverage of any applicable
insurance policy or guaranty related to a Mortgage Loan will not be materially
adversely affected, arrange a schedule, running for no more than 180 days after
the first delinquent Due Date, for payment of any delinquent installment on any
Mortgage Note or for the liquidation of delinquent items. Subject to the fourth
sentence of this paragraph, the Master Servicer shall have the right, but not
the obligation, to purchase any Mortgage Loan delinquent 90 consecutive days or
more for an amount equal to its Purchase Price; provided, however, that the
aggregate Purchase Price of Mortgage Loans so purchased pursuant to this
sentence shall not exceed one-half of one percent (0.50%) of the aggregate
Principal Balance, as of the Cut-Off Date, of all Mortgage Loans. Subject to the
fourth sentence of this paragraph, the Master Servicer shall also have the
right, but not the obligation, to purchase, for an amount equal to its Purchase
Price, any Mortgage Loan delinquent 90 consecutive days or more, for the purpose
of requiring the Person who sold such Mortgage Loan to the Company to repurchase
such Mortgage Loan based on a breach of a representation or warranty made by
such Person in connection with the Company's purchase or acquisition of such
Mortgage Loan. Notwithstanding the immediately preceding two sentences, the
Master Servicer's right to purchase any Mortgage Loan pursuant to either of such
preceding sentences shall be subject to the following additional conditions: (x)
if the date on which the Mortgage Loan first became 90-day delinquent (the
"Initial Delinquency Date") occurred during the first two calendar months of a
calendar quarter, the Master Servicer may exercise the purchase right during the
period commencing on the Initial Delinquency Date and ending on the last Master
Servicer Business Day of such calendar quarter, (y) if the Initial Delinquency
Date occurred during the third calendar month of a calendar quarter, the Master
Servicer may exercise the purchase right during the period commencing on the
first day of the immediately succeeding calendar quarter and ending on the last
Master Servicer Business Day of such succeeding calendar quarter and (z) if the
Master Servicer does not exercise the purchase right with respect to a Mortgage
Loan during the period specified in clause (x) or (y), as applicable, such
Mortgage Loan shall thereafter again become eligible for purchase pursuant to
the preceding two sentences only after the Mortgage Loan ceases to be 90-day
delinquent and thereafter becomes 90-day delinquent again. For purposes of this
paragraph, a Mortgage Loan is considered delinquent for 90 consecutive days if a
Monthly Payment is not received by the first day of the third month following
the month during which such payment was due.
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Consistent with the terms of this Section 3.01, the Master Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected by such
waiver, modification, postponement or indulgence; provided, however, that
(unless the Mortgagor is in default with respect to the Mortgage Loan or in the
reasonable judgment of the Master Servicer such default is imminent) the Master
Servicer shall not permit any modification with respect to any Mortgage Loan
that would (i) change the applicable Mortgage Interest Rate, defer or forgive
the payment of any principal or interest, reduce the outstanding principal
balance (except for actual payments of principal) or extend the final maturity
date with respect to such Mortgage Loan, or (ii) be inconsistent with the terms
of any applicable Primary Insurance Policy, FHA insurance policy, VA guaranty,
hazard insurance policy or federal flood insurance policy. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with respect to
any Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code (including any proposed,
temporary or final regulations promulgated thereunder) (other than in connection
with a proposed conveyance or assumption of such Mortgage Loan that is treated
as a Principal Prepayment or in a default situation) and cause any REMIC to fail
to qualify as such under the Code. The Master Servicer shall be entitled to
approve a request from a Mortgagor for a partial release of the related
Mortgaged Property, the granting of an easement thereon in favor of another
Person, any alteration or demolition of the related Mortgaged Property or other
similar matters if it has determined, exercising its good faith business
judgment in the same manner as it would if it were the owner of the related
Mortgage Loan, that the security for, and the timely and full collectability of,
such Mortgage Loan would not be adversely affected thereby and that REMIC I,
REMIC II and REMIC III would not fail to continue to qualify as a REMICs under
the Code as a result thereof and that no tax on "prohibited transactions" or
"contributions" after the startup day would be imposed on any REMIC as a result
thereof.
The Master Servicer is hereby authorized and empowered by the Trust to
execute and deliver or cause to be executed and delivered on behalf of the
Holders of the REMIC I Regular Interests and the Class R-1 Residual Interest,
and the Trust or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release, discharge or modification,
assignments of Mortgages and endorsements of Mortgage Notes in connection with
refinancings (in jurisdictions where such assignments are the customary and
usual standard of practice of mortgage lenders) and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. The Master Servicer is hereby further authorized and
empowered by the Trust to execute and deliver or cause to be executed and
delivered on behalf of the Holders of the REMIC I Regular Interests and the
Class R-1 Residual Interest and the Trust, or any of them, such instruments of
assignment or other comparable instruments as the Master Servicer shall, in its
sole judgment, deem appropriate in order to register any Mortgage Loan on the
MERS(R) System or to cause the removal of any Mortgage Loan from registration
thereon. Any expenses incurred in connection with the actions described in the
preceding sentence shall be borne by the Master Servicer with no right of
reimbursement; provided, however, that any such expenses incurred as a result of
any termination by MERS of the MERS(R) System shall be reimbursable to the
Master Servicer. The Trustee on behalf of the
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Trust shall execute and furnish to the Master Servicer, at the Master Servicer's
direction, any powers of attorney and other documents prepared by the Master
Servicer and determined by the Master Servicer to be necessary or appropriate to
enable the Master Servicer to carry out its supervisory, servicing and
administrative duties under this Agreement.
The Master Servicer and each Servicer shall obtain (to the extent generally
commercially available) and maintain fidelity bond and errors and omissions
coverage acceptable to Xxxxxx Xxx or Xxxxxxx Mac with respect to their
obligations under this Agreement and the applicable Selling and Servicing
Contract, respectively. The Master Servicer or each Servicer, as applicable,
shall establish escrow accounts for, or pay when due (by means of an advance),
any tax liens in connection with the Mortgaged Properties that are not paid by
the Mortgagors when due to the extent that any such payment would not constitute
a Nonrecoverable Advance when made.
In connection with the servicing and administering of each Mortgage Loan,
the Master Servicer and any affiliate of the Master Servicer (i) may perform
services such as appraisals, default management and (in the case of affiliates
only) brokerage services that are not customarily provided by servicers of
mortgage loans, and shall be entitled to reasonable compensation therefor and
(ii) may, at its own discretion and on behalf of the Trust, obtain credit
information in the form of a "credit score" from a credit repository.
Section 3.02. Custodial Accounts and Buydown Fund Accounts. The Master
Servicer shall cause to be established and maintained by each Servicer under the
Master Servicer's supervision the Custodial Account for P&I, Buydown Fund
Accounts (if any) and special Custodial Account for Reserves and shall deposit
or cause to be deposited therein daily the amounts related to the Mortgage Loans
required by the Selling and Servicing Contracts to be so deposited. Proceeds
received with respect to individual Mortgage Loans from any title, hazard, or
FHA insurance policy, VA guaranty, Primary Insurance Policy or other insurance
policy (other than any Special Primary Insurance Policy) covering such Mortgage
Loans, if required for the restoration or repair of the related Mortgaged
Property, may be deposited either in the Custodial Account for Reserves or the
Custodial Account for P&I. Such proceeds (other than proceeds from any Special
Primary Insurance Policy), if not required for the restoration or repair of the
related Mortgaged Property, shall be deposited in the Custodial Account for P&I,
and shall be applied to the balances of the related Mortgage Loans as payments
of interest and principal.
The Master Servicer is hereby authorized to make withdrawals from and to
issue drafts against the Custodial Accounts for P&I and the Custodial Accounts
for Reserves for the purposes required or permitted by this Agreement. Each
Custodial Account for P&I and each Custodial Account for Reserves shall bear a
designation clearly showing the respective interests of the applicable Servicer,
as trustee, and of the Master Servicer, in substantially one of the following
forms:
(a) With respect to the Custodial Account for P&I: (i) [Servicer's
Name], as agent, trustee and/or bailee of principal and interest custodial
account for Washington Mutual Mortgage Securities Corp., its successors and
assigns, for various owners of interests in Washington Mutual Mortgage
Securities Corp. mortgage-backed pools or (ii) [Servicer's Name] in trust
for Washington Mutual Mortgage Securities Corp.;
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(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and insurance
custodial account for Washington Mutual Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners of
interests in Washington Mutual Mortgage Securities Corp. mortgage-backed
pools or (ii) [Servicer's Name] in trust for Washington Mutual Mortgage
Securities Corp. and various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that have been
collected by any Servicer and are due to the Certificate Account pursuant to
Section 4.01 of this Agreement.
Funds held in the Custodial Account for P&I and the Custodial Account for
Reserves may, at the Master Servicer's option, be invested in (i) one or more
Eligible Investments which shall in no event mature later than the Business Day
prior to the related Withdrawal Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature on the
Withdrawal Date), or (ii) such other instruments as shall be required to
maintain the Ratings.
Section 3.03. The Investment Account; Eligible Investments.(a) Not later
than the Withdrawal Date, the Master Servicer shall withdraw or direct the
withdrawal of funds in the Custodial Accounts for P&I, for deposit in the
Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the Mortgage
Loans received or advanced by the applicable Servicers which were due on
the related Due Date, net of Servicing Fees due the applicable Servicers
and less any amounts to be withdrawn later by the applicable Servicers from
the applicable Buydown Fund Accounts;
(ii) Payoffs and the proceeds of other types of liquidations of the
Mortgage Loans received by the applicable Servicer for such Mortgage Loans
during the applicable Payoff Period, with interest to the date of Payoff or
liquidation less any amounts to be withdrawn later by the applicable
Servicers from the applicable Buydown Fund Accounts; and
(iii) Curtailments received by the applicable Servicers in the Prior
Period.
At its option, the Master Servicer may invest funds withdrawn from the
Custodial Accounts for P&I, as well as any Buydown Funds, Insurance Proceeds and
Liquidation Proceeds previously received by the Master Servicer (including
amounts paid by the Company in respect of any Purchase Obligation or its
substitution obligations set forth in Section 2.07 or Section 2.08 or in
connection with the exercise of the option to terminate this Agreement pursuant
to Section 9.01) for its own account and at its own risk, during any period
prior to their deposit in the Certificate Account. Such funds, as well as any
funds which were withdrawn from the Custodial Accounts for P&I on or before the
Withdrawal Date, but not yet deposited into the Certificate Account, shall
immediately be deposited by the Master Servicer with the Investment Depository
in an Investment Account in the name of the Master Servicer and the Trust for
investment only as set forth in this Section 3.03. The Master Servicer shall
bear any and all losses incurred on any
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investments made with such funds and shall be entitled to retain all gains
realized on such investments as additional servicing compensation. Not later
than the Business Day prior to the Distribution Date, the Master Servicer shall
deposit such funds, net of any gains (except Payoff Earnings) earned thereon, in
the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i) one or
more Eligible Investments which shall in no event mature later than the Business
Day prior to the related Distribution Date (except if such Eligible Investments
are obligations of the Trustee, such Eligible Investments may mature on the
Distribution Date), or (ii) such other instruments as shall be required to
maintain the Ratings.
Section 3.04. The Certificate Account.
(a) On or prior to the Closing Date, the Trustee shall establish the
Certificate Account, which shall be entitled "Washington Mutual Mortgage
Securities Corp. Certificate Account under the Pooling and Servicing Agreement,
dated as of December 1, 2002, among Washington Mutual Mortgage Securities Corp.,
as Depositor and Master Servicer, and State Street Bank and Trust Company, as
the Trustee, and Christiana Bank & Trust Company, as the Delaware Trustee, for
the benefit of Washington Mutual MSC Mortgage Pass-Through Certificates Series
2002-MS11 Trust created pursuant thereto". Promptly after the Closing Date, the
Trustee shall communicate to the Master Servicer the account number and wiring
instructions for the Certificate Account.
Not later than the Business Day prior to the related Distribution Date, the
Master Servicer shall direct the Investment Depository to deposit into the
Certificate Account the amounts previously deposited into the Investment Account
(which may include a deposit of Eligible Investments) to which the Holders of
the REMIC I Regular Interests and the Class R-1 Residual Interest are entitled
or which are necessary for payment of any Special Primary Insurance Premiums. In
addition, not later than the Business Day prior to the Distribution Date, the
Master Servicer shall deposit into the Certificate Account any Monthly P&I
Advances or other payments required to be made by the Master Servicer pursuant
to Section 4.02 of this Agreement and any Insurance Proceeds or Liquidation
Proceeds (including amounts paid by the Company in respect of any Purchase
Obligation) not previously deposited in the Custodial Accounts for P&I or the
Investment Account, and any amounts paid by the Master Servicer in connection
with the exercise of its option to terminate this Agreement pursuant to Section
9.01 or any other purchase of Mortgage Loans permitted by this Agreement.
(b) Funds held in the Certificate Account shall be invested at the written
direction of the Master Servicer in (i) one or more Eligible Investments which
shall in no event mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are obligations of the
Trustee, such Eligible Investments may mature on the Distribution Date), or (ii)
such other instruments as shall be required to maintain the Ratings. The Master
Servicer shall be entitled to receive any gains earned on such Eligible
Investments and shall bear any losses suffered in connection therewith. If the
Trustee has not received such written investment directions from the Master
Servicer, the Trustee shall not invest funds held in the Certificate Account.
The Trustee shall have no liability for any losses on investments of funds held
in the Certificate Account.
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Section 3.05. Permitted Withdrawals from the Certificate Account, the
Investment Account and Custodial Accounts for P&I and of Buydown Funds from the
Buydown Fund Accounts.
(a) The Master Servicer is authorized to make withdrawals (or, in the case
of the Certificate Account, to direct the Trustee to make withdrawals), from
time to time, from the Investment Account, the Certificate Account or the
Custodial Accounts for P&I established by the Servicers of amounts deposited
therein in respect of the Certificates (and, to the extent applicable, to make
deposits of the amounts withdrawn), as follows:
(i) To reimburse itself or the applicable Servicer for Monthly P&I
Advances made pursuant to Section 4.02 or a Selling and Servicing Contract,
such right to reimbursement pursuant to this paragraph (i) being limited to
amounts received on particular Mortgage Loans (including, for this purpose,
Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of principal and/or interest respecting which any such Monthly
P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for amounts
expended by or for the account of the Master Servicer pursuant to Section
3.09 or amounts expended by such Servicer pursuant to the Selling and
Servicing Contracts in connection with the restoration of property damaged
by an Uninsured Cause or in connection with the liquidation of a Mortgage
Loan;
(iii) To pay to itself, with respect to the related Mortgage Loans,
the Master Servicing Fee (net of Compensating Interest reduced by Payoff
Earnings and Payoff Interest) as to which no prior withdrawals from funds
deposited by the Master Servicer have been made;
(iv) To reimburse itself or the applicable Servicer for advances made
with respect to related Mortgage Loans (except for Mortgage Loans purchased
pursuant to a Purchase Obligation or pursuant to the second or third
sentence of the third paragraph of Section 3.01) which the Master Servicer
has determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned in the
Investment Account and the Certificate Account to which it is entitled and
to reimburse itself for expenses incurred by and reimbursable to it
pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the Certificate
Account not required to be on deposit therein at the time of such
withdrawal;
(vii) To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts in the
Investment Account specified in Section 3.04(a);
(viii) To pay on behalf of the Trustee any Special Primary Insurance
Premium payable by the Trustee pursuant to Section 4.05(a); provided, the
Master Servicer shall give written notice thereof to the Trustee prior to
noon New York City time two Business Days prior to the applicable
Distribution Date; and
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after making or providing for the above withdrawals
(ix) To clear and terminate the Investment Account and the Certificate
Account following termination of this Agreement pursuant to Section 9.01.
Since, in connection with withdrawals pursuant to paragraphs (i) and (ii),
the Master Servicer's entitlement thereto is limited to collections or other
recoveries on the related Mortgage Loan, the Master Servicer or the applicable
Servicer shall keep and maintain separate accounting for each Mortgage Loan, for
the purpose of justifying any such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such Servicer holds
and maintains a Buydown Fund Account) is authorized to make withdrawals, from
time to time, of Buydown Funds from the Buydown Fund Account or Custodial
Account for P&I established by any Servicer under its supervision (and, to the
extent applicable, to make deposits of the amounts withdrawn), as follows:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) In the event of a Payoff of any Mortgage Loan having a related
Buydown Fund, to apply amounts remaining in Buydown Fund Accounts to reduce
the required amount of such principal Payoff (or, if the Mortgagor has made
a Payoff, to refund such remaining Buydown Fund amounts to the Person
entitled thereto);
(iii) In the event of foreclosure or liquidation of any Mortgage Loan
having a Buydown Fund, to deposit remaining Buydown Fund amounts in the
Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account representing
Buydown Funds following termination of this Agreement pursuant to Section
9.01;
(c) The Trustee is authorized to make withdrawals from time to time from
the Certificate Account to reimburse itself for advances it has made pursuant to
Section 7.01(a) hereof that it has determined to be Nonrecoverable Advances.
(d) Each Servicer is authorized to make withdrawals, from time to time,
from the related Custodial Account for P&I, (i) to pay to itself, with respect
to the related Mortgage Loans, the Servicing Fee and (ii) to reimburse itself
for expenses to the same extent that the Master Servicer is authorized to make
withdrawals to reimburse the Servicer for expenses pursuant to clauses (i), (ii)
and (iv) of Section 3.05(a), in the case of each of clause (d)(i) and (d)(ii),
to the extent no prior withdrawals of such amounts have been made by the
Servicer or the Master Servicer.
Section 3.06. Maintenance of Primary Insurance Policies; Collections
Thereunder. The Master Servicer shall use commercially reasonable efforts to
keep, and to cause the Servicers to keep, in full force and effect each Primary
Insurance Policy (except any Special Primary Insurance Policy) required with
respect to a Mortgage Loan, in the manner set forth in the applicable Selling
and Servicing Contract, until no longer required, and the Master Servicer shall
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use commercially reasonable efforts to keep in full force and effect each
Special Primary Insurance Policy, if any. Notwithstanding the foregoing, the
Master Servicer shall have no obligation to maintain any Primary Insurance
Policy for a Mortgage Loan for which the outstanding Principal Balance thereof
at any time subsequent to origination was 80% or less of the Appraised Value of
the related Mortgaged Property, unless required by applicable law.
Unless required by applicable law, the Master Servicer shall not cancel or
refuse to renew, or allow any Servicer under its supervision to cancel or refuse
to renew, any Primary Insurance Policy in effect at the date of the initial
issuance of the Certificates that is required to be kept in force hereunder;
provided, however, that neither the Master Servicer nor any Servicer shall
advance funds for the payment of any premium due under (i) any Primary Insurance
Policy (other than a Special Primary Insurance Policy) if it shall determine
that such an advance would be a Nonrecoverable Advance or (ii) any Special
Primary Insurance Policy.
Section 3.07. Maintenance of Hazard Insurance. The Master Servicer shall
cause to be maintained for each Mortgage Loan (other than a Cooperative Loan)
fire insurance with extended coverage in an amount which is not less than the
original principal balance of such Mortgage Loan, except in cases approved by
the Master Servicer in which such amount exceeds the value of the improvements
to the Mortgaged Property. The Master Servicer shall also require fire insurance
with extended coverage in a comparable amount on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan (other than a
Cooperative Loan). Any amounts collected under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property) shall be deposited into the Custodial Account for P&I, subject to
withdrawal pursuant to the applicable Selling and Servicing Contract and
pursuant to Section 3.03 and Section 3.05. Any unreimbursed costs incurred in
maintaining any insurance described in this Section 3.07 shall be recoverable as
an advance by the Master Servicer from the Investment Account or the Certificate
Account. Such insurance shall be with insurers approved by the Master Servicer
and Xxxxxx Xxx or Xxxxxxx Mac. Other additional insurance may be required of a
Mortgagor, in addition to that required pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. Where any part of any improvement to the Mortgaged
Property (other than a Mortgaged Property secured by a Cooperative Loan) is
located in a federally designated special flood hazard area and in a community
which participates in the National Flood Insurance Program at the time of
origination of the related Mortgage Loan, the Master Servicer shall cause flood
insurance to be provided. The hazard insurance coverage required by this Section
3.07 may be met with blanket policies providing protection equivalent to
individual policies otherwise required. The Master Servicer or the applicable
Servicer shall be responsible for paying any deductible amount on any such
blanket policy. The Master Servicer agrees to present, or cause to be presented,
on behalf of and for the benefit of the Trust, claims under the hazard insurance
policy respecting any Mortgage Loan, and in this regard to take such reasonable
actions as shall be necessary to permit recovery under such policy.
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
When any Mortgaged Property is about to be conveyed by the Mortgagor, the Master
Servicer shall, to the extent it has knowledge of such prospective conveyance
and prior to the time of the consummation of such conveyance, exercise on behalf
of the Trust the Trust's rights to accelerate the maturity of such Mortgage
Loan, to the extent that such acceleration is permitted
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by the terms of the related Mortgage Note, under any "due-on-sale" clause
applicable thereto; provided, however, that the Master Servicer shall not
exercise any such right if the due-on-sale clause, in the reasonable belief of
the Master Servicer, is not enforceable under applicable law or if such exercise
would result in non-coverage of any resulting loss that would otherwise be
covered under any insurance policy. In the event the Master Servicer is
prohibited from exercising such right, the Master Servicer is authorized to take
or enter into an assumption and modification agreement from or with the Person
to whom a Mortgaged Property has been or is about to be conveyed, pursuant to
which such Person becomes liable under the Mortgage Note and, unless prohibited
by applicable state law or unless the Mortgage Note contains a provision
allowing a qualified borrower to assume the Mortgage Note, the Mortgagor remains
liable thereon; provided that the Mortgage Loan shall continue to be covered (if
so covered before the Master Servicer enters such agreement) by any related
Primary Insurance Policy. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Master Servicer shall
not enter into any substitution or assumption with respect to a Mortgage Loan if
such substitution or assumption shall (i) both constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the Code (or Treasury regulations promulgated thereunder) and cause the REMICs
to fail to qualify as a REMIC under the REMIC Provisions or (ii) cause the
imposition of any tax on "prohibited transactions" or "contributions" after the
startup day under the REMIC Provisions. The Master Servicer shall notify the
Trustee that any such substitution or assumption agreement has been completed by
forwarding to the Trustee the original copy of such substitution or assumption
agreement and other documents and instruments constituting a part thereof. In
connection with any such assumption or substitution agreement, the terms of the
related Mortgage Note shall not be changed. Any fee collected by the applicable
Servicer for entering into an assumption or substitution of liability agreement
shall be retained by such Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Master Servicer
may be restricted by law from preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause to be
foreclosed upon or comparably converted, the ownership of any Mortgaged Property
securing a Mortgage Loan which comes into and continues in default and as to
which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.01. In lieu of such foreclosure or other
conversion, and taking into consideration the desirability of maximizing net
Liquidation Proceeds after taking into account the effect of Insurance Proceeds
upon Liquidation Proceeds, the Master Servicer may, to the extent consistent
with prudent mortgage loan servicing practices, accept a payment of less than
the outstanding Principal Balance of a delinquent Mortgage Loan in full
satisfaction of the indebtedness evidenced by the related Mortgage Note and
release the lien of the related Mortgage upon receipt of such payment. The
Master Servicer shall not foreclose upon or otherwise comparably convert a
Mortgaged Property if the Master Servicer is aware of evidence of toxic waste,
other hazardous substances or other evidence of environmental
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contamination thereon and the Master Servicer determines that it would be
imprudent to do so. In connection with such foreclosure or other conversion, the
Master Servicer shall cause to be followed such practices and procedures as it
shall deem necessary or advisable and as shall be normal and usual in general
mortgage servicing activities. The foregoing is subject to the provision that,
in the case of damage to a Mortgaged Property from an Uninsured Cause, the
Master Servicer shall not be required to advance its own funds towards the
restoration of the property unless it shall be determined in the sole judgment
of the Master Servicer, (i) that such restoration will increase the proceeds of
liquidation of the Mortgage Loan to Certificateholders after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds. The Master 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 (as well as its
normal servicing compensation) as an advance. The Master Servicer shall maintain
information required for tax reporting purposes regarding any Mortgaged Property
which is abandoned or which has been foreclosed or otherwise comparably
converted. The Master Servicer shall report such information to the Internal
Revenue Service and the Mortgagor in the manner required by applicable law.
The Master Servicer may enter into one or more special servicing agreements
with a Lowest Class B Owner, 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 Lowest Class B Owner may (a) instruct the Master
Servicer to instruct a Servicer to the extent provided in the applicable Selling
and Servicing Contract to commence or delay foreclosure proceedings with respect
to related delinquent Mortgage Loans, provided that the Lowest Class B Owner
deposits a specified amount of cash with the Master Servicer that will be
available for distribution to Certificateholders if Liquidation Proceeds are
less than they otherwise may have been had the Servicer acted pursuant to its
normal servicing procedures, (b) purchase such delinquent Mortgage Loans from
the Trust immediately prior to the commencement of foreclosure proceedings at a
price equal to the aggregate outstanding Principal Balance of such Mortgage
Loans plus accrued interest thereon at the applicable Mortgage Interest Rate
through the last day of the month in which such Mortgage Loans are purchased
and/or (c) assume all of the servicing rights and obligations with respect to
such delinquent Mortgage Loans so long as (i) the Master Servicer has the right
to transfer the servicing rights and obligations of such Mortgage Loans to
another servicer and (ii) such Lowest Class B Owner will service such Mortgage
Loans in accordance with the applicable Selling and Servicing Contract.
REMIC I shall not acquire any real property (or personal property incident
to such real property) except in connection with a default or imminent default
of a Mortgage Loan. In the event that REMIC I acquires any real property (or
personal property incident to such real property) in connection with a default
or imminent default of a Mortgage Loan, such property shall be disposed of by
the Master Servicer as soon as practicable in a manner that, consistent with
prudent mortgage loan servicing practices, maximizes the net present value of
the recovery to the Trust, but in any event within three years after its
acquisition by the Master Servicer for REMIC I unless the Master Servicer
provides to the Trustee an Opinion of Counsel to the effect that the holding by
REMIC I of such Mortgaged Property subsequent to three years after its
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acquisition will not result in the imposition of taxes on "prohibited
transactions" of REMIC I as defined in Section 860F of the Code or under the law
of any state in which real property securing a Mortgage Loan owned by REMIC I is
located or cause REMIC I to fail to qualify as a REMIC for federal income tax
purposes or for state tax purposes under the laws of any state in which real
property securing a Mortgage Loan owned by REMIC I is located at any time that
any Certificates are outstanding. The Master Servicer shall conserve, protect
and operate each such property for the Certificateholders solely for the purpose
of its prompt disposition and sale in a manner which does not cause such
property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by the REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions. Pursuant to its efforts to sell such property, the Master
Servicer shall either itself or through an agent selected by the Master Servicer
protect and conserve such property in the same manner and to such extent as is
customary in the locality where such property is located and may, incident to
its conservation and protection of the assets of the Trust, rent the same, or
any part thereof, as the Master Servicer deems to be in the best interest of the
Master Servicer and the Trust for the period prior to the sale of such property.
Additionally, the Master Servicer shall perform the tax withholding and shall
file information returns with respect to the receipt of mortgage interests
received in a trade or business, the reports of foreclosures and abandonments of
any Mortgaged Property and the information returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property required by Sections
6050H, 6050J and 6050P, respectively, of the Code, and deliver to the Trustee an
Officers' Certificate on or before March 31 of each year stating that such
reports have been filed. Such reports shall be in form and substance sufficient
to meet the reporting requirements imposed by Sections 6050H, 6050J and 6050P of
the Code.
Notwithstanding any other provision of this Agreement, the Master Servicer
and the Trustee, as applicable, shall comply with all federal withholding
requirements with respect to payments to Certificateholders of interest or
original issue discount that the Master Servicer or the Trustee reasonably
believes are applicable under the Code. The consent of Certificateholders shall
not be required for any such withholding. Without limiting the foregoing, the
Master Servicer agrees that it will not withhold with respect to payments of
interest or original issue discount in the case of a Certificateholder that has
furnished or caused to be furnished an effective Form W-8 or an acceptable
substitute form or a successor form and who is not a "10 percent shareholder"
within the meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect to REMIC I,
REMIC II, REMIC III or the depositor. In the event the Trustee withholds any
amount from interest or original issue discount payments or advances thereof to
any Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate the amount withheld to such Certificateholder.
Section 3.10. Trustee to Cooperate; Release of Mortgage Files. Upon the
Payoff or scheduled maturity of any Mortgage Loan, the Master Servicer shall
cause such final payment to be immediately deposited in the related Custodial
Account for P&I or the Investment Account. The Master Servicer shall promptly
notify the Trustee thereof by a certification (which certification shall include
a statement to the effect that all amounts received in connection with such
payment which are required to be deposited in either such account have been so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File; provided, however,
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that such certification shall not be required if the Mortgage File is held by a
Custodian which is also the Servicer of the Mortgage Loan. Upon receipt of such
certification and request, the Trustee shall, not later than the fifth
succeeding Business Day, release, or cause to be released, the related Mortgage
File to the Master Servicer or the applicable Servicer indicated in such
request. With any such Payoff or other final payment, the Master Servicer is
authorized (i) to prepare for and procure from the trustee or mortgagee under
the Mortgage which secured the Mortgage Note a deed of full reconveyance or
other form of satisfaction or assignment of Mortgage and endorsement of Mortgage
Note in connection with a refinancing covering the Mortgaged Property, which
satisfaction, endorsed Mortgage Note or assigning document shall be delivered by
the Master Servicer to the person or persons entitled thereto, and (ii) with
respect to any MERS Loan, to cause the removal of such Mortgage Loan from
registration on the MERS(R) System. No expenses incurred in connection with such
satisfaction or assignment shall be payable to the Master Servicer by the
Trustee or from the Certificate Account, the related Investment Account or the
related Custodial Account for P&I. From time to time as appropriate for the
servicing or foreclosure of any Mortgage Loan, including, for this purpose,
collection under any Primary Insurance Policy, the Trustee shall, upon request
of the Master Servicer and delivery to it of a trust receipt signed by a
Servicing Officer, release not later than the fifth Business Day following the
date of receipt of such request and trust receipt the related Mortgage File to
the Master Servicer or the related Servicer as indicated by the Master Servicer
and shall execute such documents as shall be necessary to the prosecution of any
such proceedings. Such trust receipt shall obligate the Master Servicer to
return the Mortgage File to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer similar to that
herein above specified, the trust receipt shall be released by the Trustee to
the Master Servicer.
Section 3.11. Compensation to the Master Servicer and the Servicers. As
compensation for its activities hereunder, the Master Servicer shall be entitled
to receive from the Investment Account or the Certificate Account the amounts
provided for by Section 3.05(a)(iii). The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor, except as specifically provided
herein.
As compensation for its activities under the applicable Selling and
Servicing Contract, the applicable Servicer shall be entitled to withhold or
withdraw from the related Custodial Account for P&I the amounts provided for in
such Selling and Servicing Contract to the extent not inconsistent with this
Agreement (including Section 3.05(d)). Each Servicer is required to pay all
expenses incurred by it in connection with its servicing activities under its
Selling and Servicing Contract (including payment of premiums for Primary
Insurance Policies, other than Special Primary Insurance Policies, if required)
and shall not be entitled to reimbursement therefor except as specifically
provided in such Selling and Servicing Contract and not inconsistent with this
Agreement.
Section 3.12. Reports to the Trustee; Certificate Account Statement. Not
later than 15 days after each Distribution Date, the Master Servicer shall
forward a statement, certified by a Servicing Officer, to the Trustee setting
forth the status of the Certificate Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate of deposits into and withdrawals from the Certificate Account for each
category of
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deposit specified in Section 3.04 and each category of withdrawal specified
in Section 3.05, and stating that all distributions required by this Agreement
have been made (or if any required distribution has not been made, specifying
the nature and amount thereof). The Trustee shall make available such statements
to any Certificateholder upon request at the expense of the Master Servicer.
Such statement shall also, to the extent available, include information
regarding delinquencies on the Mortgage Loans, indicating the number and
aggregate Principal Balance of Mortgage Loans which are one, two, three or more
months delinquent, the number and aggregate Principal Balance of Mortgage Loans
with respect to which foreclosure proceedings have been initiated and the book
value of any Mortgaged Property acquired by the Trust through foreclosure, deed
in lieu of foreclosure or other exercise of the Trust's security interest in the
Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master Servicer shall
deliver to the Trustee, on or before April 30 of each year, beginning with the
first April 30 succeeding the Cut-Off Date by at least six months, an Officer's
Certificate stating as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and
performance 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
Master 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. Copies of such statement shall be provided by the
Master Servicer to Certificateholders upon request or by the Trustee (solely to
the extent that such copies are available to the Trustee) at the expense of the
Master Servicer, should the Master Servicer fail to so provide such copies.
Section 3.14. Access to Certain Documentation and Information Regarding the
Mortgage Loans. In the event that the Certificates are legal for investment by
federally-insured savings associations, the Master Servicer shall provide to the
OTS, the FDIC and the supervisory agents and examiners of the OTS and the FDIC
access to the documentation regarding the related Mortgage Loans required by
applicable regulations of the OTS or the FDIC, as applicable, and shall in any
event provide such access to the documentation regarding such Mortgage Loans to
the Trustee and its representatives, such access being afforded without charge,
but only upon reasonable request and during normal business hours at the offices
of the Master Servicer designated by it.
Section 3.15. Annual Independent Public Accountants' Servicing Report. On
or before April 30 of each year, beginning with the first April 30 succeeding
the Cut-Off Date by at least six months, the Master Servicer, at its expense,
shall cause a firm of independent public accountants to furnish a statement to
the Trustee to the effect that, in connection with the firm's examination of the
financial statements as of the previous December 31 of the Master Servicer's
parent corporation (which shall include a limited examination of the Master
Servicer's financial statements), nothing came to their attention that indicated
that the Master Servicer was not in compliance with Section 3.02, Section 3.03,
Section 3.04, Section 3.05, Section 3.11, Section 3.12 and Section 3.13 of this
Agreement, except for (i) such exceptions as such firm believes to be
immaterial, and (ii) such other exceptions as are set forth in such statement.
Section 3.16. [Reserved.]
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Section 3.17. [Reserved.]
Section 3.18. [Reserved.]
Section 3.19. [Reserved.]
Section 3.20. Assumption or Termination of Selling and Servicing Contracts
by Trustee. In the event the Master Servicer, or any successor Master Servicer,
shall for any reason no longer be the Master Servicer (including by reason of an
Event of Default), the Trustee as trustee hereunder or its designee shall
thereupon assume all of the rights and obligations of the Master Servicer under
the Selling and Servicing Contracts with respect to the related Mortgage Loans
unless the Trustee elects to terminate the Selling and Servicing Contracts with
respect to such Mortgage Loans in accordance with the terms thereof. The
Trustee, its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein with respect to
the related Mortgage Loans and to have replaced the Master Servicer as a party
to the Selling and Servicing Contracts to the same extent as if the rights and
duties under the Selling and Servicing Contracts relating to such Mortgage Loans
had been assigned to the assuming party, except that the Master Servicer shall
not thereby be relieved of any liability or obligations under the Selling and
Servicing Contracts with respect to the Master Servicer's duties to be performed
prior to its termination hereunder.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to the Selling
and Servicing Contracts and the Mortgage Loans then being master serviced by the
Master Servicer and an accounting of amounts collected and held by the Master
Servicer and otherwise use its best efforts to effect the orderly and efficient
transfer of the rights and duties under the related Selling and Servicing
Contracts relating to such Mortgage Loans to the assuming party.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. Distributions to Holders of REMIC I Regular Interests and
Class R-1 Residual Interest. On each Distribution Date, the Trustee (or any duly
appointed paying agent) (i) shall be deemed to have distributed from the
Certificate Account the REMIC I Distribution Amount to the Holders of the REMIC
I Regular Interests and to have deposited such amount for their benefit into the
Certificate Account and (ii) from the Certificate Account shall distribute to
the Class R Certificateholders, in accordance with the written statement
received from the Master Servicer pursuant to Section 4.02(b), the sum of (a)
the Excess Liquidation Proceeds and (b) the amounts to be distributed to the
Holders of the Class R-1 Residual Interest pursuant to the definition of "REMIC
I Distribution Amount" for such Distribution Date. Amounts distributed pursuant
to clause (ii) above shall be distributed by wire transfer in immediately
available funds for the account of each Class R Certificateholder, or by any
other means of payment acceptable to each Class R Certificateholder of record on
the immediately preceding Record Date (other than as provided in Section 9.01
respecting the final distribution), as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register.
Notwithstanding any other provision of this Agreement, no actual distributions
pursuant to
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clause (i) of this Section 4.01 shall be made on account of the deemed
distributions described in this paragraph except in the event of a liquidation
of REMIC III and REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution Reports to the
Trustee.
(a) To the extent described below, the Master Servicer is obligated to
advance its own funds to the Certificate Account to cover any shortfall between
(i) payments scheduled to be received in respect of Mortgage Loans, and (ii) the
amounts actually deposited in the Certificate Account on account of such
payments. The Master Servicer's obligation to make any advance or advances
described in this Section 4.02 is effective only to the extent that such advance
is, in the good faith judgment of the Master Servicer made on or before the
second Business Day prior to each Distribution Date, reimbursable from Insurance
Proceeds or Liquidation Proceeds of the related Mortgage Loans or recoverable as
late Monthly Payments with respect to the related Mortgage Loans or otherwise.
Prior to the close of business on the second Business Day prior to each
Distribution Date, the Master Servicer shall determine whether or not it will
make a Monthly P&I Advance on the Business Day prior to such Distribution Date
(in the event that the applicable Servicer fails to make such advances) and
shall furnish a written statement to the Trustee, the Paying Agent, if any, and
to any Certificateholder requesting the same, setting forth the aggregate amount
to be advanced on account of principal and interest in respect of the Mortgage
Loans, stated separately.
In the event that the Master Servicer shall be required to make a Monthly
P&I Advance, it shall on the Business Day prior to the related Distribution Date
either (i) deposit in the Certificate Account an amount equal to such Monthly
P&I Advance, (ii) make an appropriate entry in the records of the Certificate
Account that funds in such account being held for future distribution or
withdrawal have been, as permitted by this Section 4.02, used by the Master
Servicer to make such Monthly P&I Advance, or (iii) make advances in the form of
any combination of (i) and (ii) aggregating the amount of such Monthly P&I
Advance. Any funds being held for future distribution to Certificateholders and
so used shall be replaced by the Master Servicer by deposit in the Certificate
Account on the Business Day immediately preceding any future Distribution Date
to the extent that funds in the Certificate Account on such Distribution Date
with respect to the Mortgage Loans shall be less than payments to
Certificateholders required to be made on such date with respect to the Mortgage
Loans. Under each Selling and Servicing Contract, the Master Servicer is
entitled to receive from the Custodial Accounts for P&I established by the
Servicers amounts received by the applicable Servicers on particular Mortgage
Loans as late payments of principal and interest or as Liquidation or Insurance
Proceeds and respecting which the Master Servicer has made an unreimbursed
advance of principal and interest. The Master Servicer is also entitled to
receive other amounts from the related Custodial Accounts for P&I established by
the Servicers to reimburse itself for prior Nonrecoverable Advances respecting
Mortgage Loans serviced by such Servicers. The Master Servicer shall deposit
these amounts in the Investment Account prior to withdrawal pursuant to Section
3.05.
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In accordance with Section 3.05, Monthly P&I Advances are reimbursable to
the Master Servicer from cash in the Investment Account or the Certificate
Account to the extent that the Master Servicer shall determine that any such
advances previously made are Nonrecoverable Advances pursuant to Section 4.03.
(b) Prior to noon New York City time two Business Days prior to each
Distribution Date, the Master Servicer shall provide (x) the Trustee and (y) the
Company (if the Company is no longer acting as Master Servicer) with a statement
in writing of (1) the amount, as applicable, of (i) interest, (ii) the interest
portion, if any, of Realized Losses, (iii) Uncompensated Interest Shortfall,
(iv) scheduled principal, (v) Principal Prepayments, (vi) the principal portion
of Realized Losses, (vii) the Residual Distribution Amount and (viii) the Excess
Liquidation Proceeds to be distributed or allocated, as applicable, to each
Class of Certificates on such Distribution Date (such amounts to be determined
in accordance with the definitions of "REMIC I Distribution Amount," "REMIC II
Distribution Amount" and "REMIC III Distribution Amount," Section 4.01, Section
4.04 and Section 4.05 hereof and other related definitions set forth in Article
I hereof); (2) the applicable Class Principal Balance after giving effect to
such distributions and allocations; and (3) the amount of any Special Primary
Insurance Premium payable on such Distribution Date.
Section 4.03. Nonrecoverable Advances. Any advance previously made by a
Servicer pursuant to its Selling and Servicing Contract with respect to a
Mortgage Loan or by the Master Servicer that the Master Servicer shall determine
in its good faith judgment not to be ultimately recoverable from Insurance
Proceeds or Liquidation Proceeds or otherwise with respect to such Mortgage Loan
or recoverable as late Monthly Payments with respect to such Mortgage Loan shall
be a Nonrecoverable Advance. The determination by the Master Servicer that it or
the applicable Servicer has made a Nonrecoverable Advance or that any advance
would constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee on the Determination
Date and detailing the reasons for such determination. Notwithstanding any other
provision of this Agreement, any insurance policy relating to the Mortgage
Loans, or any other agreement relating to the Mortgage Loans to which the
Company or the Master Servicer is a party, (a) the Master Servicer and each
Servicer shall not be obligated to, and shall not, make any advance that, after
reasonable inquiry and in its sole discretion, the Master Servicer or such
Servicer shall determine would be a Nonrecoverable Advance, and (b) the Master
Servicer and each Servicer shall be entitled to reimbursement for any advance as
provided in Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Distributions to Holders of REMIC II Regular Interests and
Class R-2 Residual Interest. On each Distribution Date, the Trustee (or any duly
appointed paying agent) (i) shall be deemed to have distributed from the
Certificate Account the REMIC II Distribution Amount to the Holders of the REMIC
II Regular Interests, and to have deposited such amount for their benefit into
the Certificate Account and (ii) shall distribute from the Certificate Account
to the Class R Certificateholders, in accordance with the written statement
received from the Master Servicer pursuant to Section 4.02(b), the amounts to be
distributed to the Holders of the Class R-2 Residual Interest pursuant to the
definition of "REMIC II Distribution Amount" for such Distribution Date. Amounts
distributed to the Class R Certificateholders pursuant to clause (ii) above
shall be distributed by wire transfer in immediately available funds for the
account of each Class R Certificateholder, or by any other means of payment
acceptable to each Class R
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Certificateholder of record on the immediately preceding Record Date (other than
as provided in Section 9.01 respecting the final distribution), as specified by
each Class R Certificateholder and at the address of such Holder appearing in
the Certificate Register. Notwithstanding any other provision of this Agreement,
no actual distributions pursuant to clause (i) of this Section 4.04 shall be
made on account of the deemed distributions described in this paragraph except
in the event of a liquidation of REMIC III and not REMIC II.
Section 4.05. Distributions to Certificateholders; Payment of Special
Primary Insurance Premiums.
(a) On each Distribution Date, the Trustee (or any duly appointed paying
agent) shall (i) subject to Section 3.05(a)(viii), withdraw from the Certificate
Account any Special Primary Insurance Premium payable on such Distribution Date
and pay such amount to the insurer under the applicable Special Primary
Insurance Policy and (ii) withdraw from the Certificate Account the REMIC III
Available Distribution Amount for such Distribution Date and distribute, from
the amount so withdrawn, to the extent of the REMIC III Available Distribution
Amount, the REMIC III Distribution Amount to the Certificateholders (including
the Class R Certificateholders with respect to any distribution to the Holders
of the Class R-3 Residual Interest), all in accordance with the written
statement received from the Master Servicer pursuant to Section 4.02(b). Any
Special Primary Insurance Premiums distributed pursuant to clause (i) above
shall be distributed by means of payment acceptable to the insurer under the
respective Special Primary Insurance Policy. Amounts distributed to the
Certificateholders pursuant to clause (ii) above shall be distributed by wire
transfer in immediately available funds for the account of, or by check mailed
to, each such Certificateholder of record on the immediately preceding Record
Date (other than as provided in Section 9.01 respecting the final distribution),
as specified by each such Certificateholder and at the address of such Holder
appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of a Certificate
effected by distributions of principal and all allocations of Realized Losses
made on any Distribution Date shall be binding upon all Holders of such
Certificate and of any Certificate issued upon the registration of transfer or
exchange therefor or in lieu thereof, whether or not such distribution is noted
on such Certificate. The final distribution of principal of each Certificate
(and the final distribution upon the Class R Certificates upon (i) the
termination of REMIC I, REMIC II and REMIC III and (ii) the payment, or making
provision for payment, of all liabilities of the Trust) shall be payable in the
manner provided above only upon presentation and surrender thereof on or after
the Distribution Date therefor at the office or agency of the Certificate
Registrar specified in the notice delivered pursuant to Section 4.05(c)(ii) and
Section 9.01(b).
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly Payments on
the Mortgage Loans and Insurance Proceeds and Liquidation Proceeds received and
expected to be received during the Payoff Period, the Master Servicer has
notified the Trustee that it believes that the entire remaining unpaid Class
Principal Balance of any Class of Certificates will become distributable on the
next Distribution Date, the Trustee shall, no later than the 18th day of the
month of such Distribution Date, mail or cause to be mailed to each Person in
whose name a Certificate to be so retired is registered at the close of business
on the Record Date and to the Rating Agencies a notice to the effect that:
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(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution will be
payable on such Distribution Date, but only upon presentation and surrender
of such Certificate at the office or agency of the Certificate Registrar
maintained for such purpose (the address of which shall be set forth in
such notice), and (B) no interest shall accrue on such Certificate after
such Distribution Date.
Section 4.06. Statements to Certificateholders. With each distribution from
the Certificate Account on a Distribution Date, the Trustee shall send to each
Rating Agency and shall make available to each Certificateholder the statement
required by Section 4.02(b). The Trustee may make available such statement and
certain other information, including, without limitation, information required
to be provided by the Trustee pursuant to Sections 3.12 and 3.13, to
Certificateholders through the Trustee's Corporate Trust home page on the world
wide web. Such web page is currently located at
"xxxxxxxxxxxxxx.xxxxxxxxxxx.xxx." Mortgage-Backed Securities information is
currently available by clicking the "Bondholder Reporting" button and selecting
the appropriate transaction. The location of such web page and the procedures
used therein are subject to change from time to time at the Trustee's
discretion.
Upon request by any Certificateholder or Rating Agency or the Trustee, the
Master Servicer shall forward to such Certificateholder or Rating Agency and the
Trustee and the Company (if the Company is no longer acting as Master Servicer)
an additional report which sets forth with respect to the Mortgage Loans:
(a) The number and aggregate Principal Balance of the Mortgage Loans
delinquent one, two and three months or more, in each case, by Loan Group;
(b) The (i) number and aggregate Principal Balance of Mortgage Loans
with respect to which foreclosure proceedings have been initiated, and (ii)
the number and aggregate book value of Mortgaged Properties acquired
through foreclosure, deed in lieu of foreclosure or other exercise of
rights respecting the Trust's security interest in the Mortgage Loans, in
each case, by Loan Group;
(c) The amount of the Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(d) The amount of the Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(e) The amount of the Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date; and
(f) The cumulative amount of Realized Losses incurred in respect of
each Loan Group allocated to the related Certificates since the Cut-Off
Date.
Upon request by any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary
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and appropriate, in the Master Servicer's sole discretion, for purposes of
satisfying applicable reporting requirements under Rule 144A of the Securities
Act.
The Company may make available any reports, statements or other information
to Certificateholders through the Company's home page on the world wide web. As
of the Closing Date, such web page is located at "xxx.xxxxxxx.xxx" and
information is available by clicking on "Investor Information."
ARTICLE V
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the forms set forth in
Exhibit A and B with the additional insertion from Exhibit H attached hereto,
and shall be executed by the Trustee on behalf of the Trust, authenticated by
the Trustee (or any duly appointed Authenticating Agent) and delivered (i) upon
and pursuant to the order of the Company and (ii) upon receipt by the Trustee of
the documents specified in Section 2.01. The Certificates shall be issuable in
Authorized Denominations. Certificates shall be executed by manual or facsimile
signature on behalf of the Trust by authorized officers of the Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were
at the time of execution the proper officers of the Trustee shall bind the
Trust, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of such Certificates. 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
substantially in the form provided for herein executed by the Trustee or any
Authenticating Agent by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The following definitions apply for purposes of this Section 5.01:
"Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment trust, common
trust fund, partnership, trust or estate, and any organization to which Section
1381 of the Code applies; "Ownership Interest" means, with respect to any
Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring or selling any
Ownership Interest in a Residual Certificate; and "Transferee" means any Person
who is acquiring by Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificates to Disqualified
Organizations are set forth in this Section 5.01(c).
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(i) 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 to have irrevocably authorized the Trustee or its designee
under clause (iii)(A) below to deliver payments to a Person other than such
Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of transfer and to do all
other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate to a U.S. Person, the Trustee shall
require delivery to it, and shall not register the Transfer of any
Residual Certificate until its receipt of (1) an affidavit and
agreement (a "Transferee Affidavit and Agreement") attached hereto as
Exhibit J from the proposed Transferee, in form and substance
satisfactory to the Company, representing and warranting, among other
things, that it is not a Non-U.S. Person, that such transferee is a
Permitted Transferee, that it is not acquiring its Ownership Interest
in the Residual Certificate that is the subject of the proposed
Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership
Interest in a Residual Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the provisions of this
Section 5.01(c) and agrees to be bound by them, and (2) a certificate,
attached hereto as Exhibit I, from the Holder wishing to transfer the
Residual Certificate, in form and substance satisfactory to the
Company, representing and warranting, among other things, that no
purpose of the proposed Transfer is to allow such Holder to impede the
assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the
Trustee has actual knowledge that the proposed Transferee is not a
Permitted Transferee, no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate agrees by holding or acquiring such Ownership
Interest (i) to require a Transferee Affidavit and Agreement from any
other Person to whom such Person attempts to transfer its Ownership
Interest and to provide a certificate to the Trustee in the form
attached hereto as Exhibit J; (ii) to obtain the express written
consent of the Company prior to any transfer of such Ownership
Interest, which consent may be withheld in the Company's sole
discretion; and (iii) to provide a certificate to the Trustee in the
form attached hereto as Exhibit I.
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(ii) The Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit J and all of such other documents as shall have
been reasonably required by the Trustee as a condition to such
registration.
(iii) (A) If any "disqualified organization" (as defined in Section
860E(e)(5) of the Code) shall become a holder of a Residual Certificate,
then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Residual
Certificate. If any Non-U.S. Person shall become a holder of a Residual
Certificate, then the last preceding holder which is a U.S. Person shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of the Transfer to
such Non-U.S. Person of such Residual Certificate. If a transfer of a
Residual Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last preceding
Permitted Transferee shall be restored, to the extent permitted by law, to
all rights and obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Residual Certificate. Neither the
Trust nor the Trustee shall be under any liability to any Person for any
registration of Transfer of a Residual Certificate that is in fact not
permitted by this Section 5.01(c) or for making any payments due on such
Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
5.01(c) and to the extent that the retroactive restoration of the
rights of the Holder of such Residual Certificate as described in
clause (iii)(A) above shall be invalid, illegal or unenforceable, then
the Company shall have the right, without notice to the Holder or any
prior Holder of such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Company on such terms as
the Company may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Company. Such purchaser may be the Company itself
or any affiliate of the Company. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Company or
its affiliates), expenses and taxes due, if any, shall be remitted by
the Company to such purported Transferee. The terms and conditions of
any sale under this clause (iii)(B) shall be determined in the sole
discretion of the Company, and the Company shall not be liable to any
Person having an Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion.
(iv) The Company, on behalf of the Trustee, shall make available, upon
written request from the Trustee, all information necessary to compute any
tax imposed (A) as a result of the Transfer of an Ownership Interest in a
Residual Certificate to any Person who is not a Permitted Transferee,
including the information regarding "excess inclusions" of such Residual
Certificates required to be provided to the Internal Revenue
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Service and certain Persons as described in Treasury Regulation Section
1.860D-1(b)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust, estate
or organizations described in Section 1381 of the Code having as among its
record holders at any time any Person who is not a Permitted Transferee.
Reasonable compensation for providing such information may be required by
the Company from such Person.
(v) The provisions of this Section 5.01 set forth prior to this
Section (v) may be modified, added to or eliminated by the Company and the
Trustee, provided that there shall have been delivered to the Trustee the
following:
(A) written notification from each of the Rating Agencies to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory to
the Company (as evidenced by a certificate of the Company), to the
effect that such modification, addition to or absence of such
provisions will not cause REMIC I, REMIC II and REMIC III to cease to
qualify as a REMIC and will not create a risk that (1) REMIC I, REMIC
II and REMIC III may be subject to an entity-level tax caused by the
Transfer of any Residual Certificate to a Person which is not a
Permitted Transferee or (2) a Certificateholder or another Person will
be subject to a REMIC-related tax caused by the Transfer of a Residual
Certificate to a Person which is not a Permitted Transferee.
(vi) The following legend shall appear on all Residual Certificates:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
COMPANY AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE
TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED
IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE
TRANSFEROR TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT
SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
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OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THE
CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
(vii) The Tax Matters Person for each of REMIC I, REMIC II and REMIC
III, while not a Disqualified Organization, shall be the tax matters person
for the related REMIC within the meaning of Section 6231(a)(7) of the Code
and Treasury Regulation Section 1.860F-4(d).
(d) In the case of any Junior Subordinate Certificate presented for
registration in the name of any Person, the Trustee shall require (i) an
officer's certificate substantially in the form of Exhibit N attached hereto
acceptable to and in form and substance satisfactory to the Trustee and the
Company, which officer's certificate shall not be an expense of the Trust, the
Trustee, the Master Servicer or the Company, and (ii) only if such officer's
certificate indicates that a Benefit Plan Opinion is delivered in connection
therewith, a Benefit Plan Opinion.
In the case of any Residual Certificate presented for registration in the
name of any Person, the Trustee shall require (i) a Transferee Affidavit and
Agreement which includes the representation set forth in paragraph 18 of the
form attached hereto as Exhibit J and (ii) only if the representation set forth
in such paragraph 18 indicates that a Benefit Plan Opinion is delivered in
connection therewith, a Benefit Plan Opinion.
(e) No transfer, sale, pledge or other disposition of a Junior Subordinate
Certificate shall be made unless such transfer, sale, pledge or other
disposition is made in accordance with this Section 5.01(e) or Section 5.01(f).
Each Person who, at any time, acquires any ownership interest in any Junior
Subordinate Certificate shall be deemed by the acceptance or acquisition of such
ownership interest to have agreed to be bound by the following provisions of
this Section 5.01(e) and Section 5.01(f), as applicable. No transfer of a Junior
Subordinate Certificate shall be deemed to be made in accordance with this
Section 5.01(e) unless such transfer is made pursuant to an effective
registration statement under the Securities Act or unless the Trustee is
provided with the certificates and an Opinion of Counsel, if required, on which
the Trustee may conclusively rely, to the effect that such transfer is exempt
from the registration requirements under the Securities Act, as follows: In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act, the Trustee shall require, in order to assure compliance with
the Securities Act, that the Certificateholder desiring to effect such transfer
certify to the Trustee in writing, in substantially the form attached hereto as
Exhibit F, the facts surrounding the transfer, with such modifications to such
Exhibit F as may be appropriate to reflect the actual facts of the proposed
transfer, and that the Certificateholder's proposed transferee certify to the
Trustee in writing, in substantially the form attached hereto as Exhibit G, the
facts surrounding the transfer, with such modifications to such Exhibit G as may
be appropriate to reflect the actual facts of the proposed transfer. If such
certificate of the proposed transferee does not contain substantially the
substance of Exhibit G, the Trustee shall require an Opinion of Counsel that
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such transfer may be made without registration, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the Trust or the Company. Such
Opinion of Counsel shall allow for the forwarding, and the Trustee shall
forward, a copy thereof to the Rating Agencies. Notwithstanding the foregoing,
any Junior Subordinate Certificate may be transferred, sold, pledged or
otherwise disposed of in accordance with the requirements set forth in Section
5.01(f).
(f) To effectuate a Certificate transfer of a Junior Subordinate
Certificate in accordance with this Section 5.01(f), the proposed transferee of
such Certificate must provide the Trustee and the Company with an investment
letter substantially in the form of Exhibit L attached hereto, which investment
letter shall not be an expense of the Trust, the Trustee or the Company, and
which investment letter states that, among other things, such transferee (i) is
a "qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (ii) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act
provided by Rule 144A. Notwithstanding the foregoing, the proposed transferee of
such Certificate shall not be required to provide the Trustee or the Company
with Annex 1 or Annex 2 to the form of Exhibit L attached hereto if the Company
so consents prior to each such transfer. Such transfers shall be deemed to have
complied with the requirements of this Section 5.01(f). The Holder of a
Certificate desiring to effect such transfer does hereby agree to indemnify the
Trust, the Trustee, the Company, and the Certificate Registrar against any
liability that may result if transfer is not made in accordance with this
Agreement.
(g) (1) In the case of any ERISA Restricted Certificate presented for
registration in the name of any Person, the prospective transferee shall be
required to provide the Trustee and the Company (A) an officer's certificate
substantially in the form of Exhibit O attached hereto acceptable to and in form
and substance satisfactory to the Trustee and the Company, which officer's
certificate shall not be an expense of the Trust, the Trustee, the Master
Servicer or the Company, and (B) only if such officer's certificate indicates
that a Benefit Plan Opinion is delivered in connection therewith, a Benefit Plan
Opinion.
(2) Notwithstanding the foregoing, a certification (and, if
applicable, a Benefit Plan Opinion) as described in Section 5.01(g)(1)
above will not be required with respect to the transfer of any ERISA
Restricted Certificate to a Clearing Agency, or for any subsequent transfer
of any interest in a ERISA Restricted Certificate for so long as such
Certificate is a Book-Entry Certificate (each such ERISA Restricted
Certificate, a "Book-Entry ERISA Restricted Certificate"). Any transferee
of a Book-Entry ERISA Restricted Certificate will be deemed to have
represented, by virtue of its acquisition or holding of such Certificate
(or interest therein), that either (i) such transferee is not an employee
benefit or other plan subject to the prohibited transaction provisions of
ERISA or Section 4975 of the Code, or any person (including an investment
manager, a named fiduciary or a trustee of any such plan) acting, directly
or indirectly, on behalf of or purchasing such Certificate with "plan
assets" of any such plan (a "Plan Investor"), (ii) such transferee is an
insurance company, the source of funds to be used by it to acquire or hold
such Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and the conditions in Section I and III of PTCE 95-60 have
been satisfied (each entity that
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satisfies this clause (ii), a "Complying Insurance Company") or (iii) such
Certificate was rated "BBB-" or better (or its equivalent) by at least one
of the Rating Agencies at the time of such transferee's acquisition of such
Certificate (or interest therein).
(3) If any Book-Entry ERISA Restricted Certificate (or any interest
therein) is acquired or held in violation of the provisions of Section
5.01(g)(2) above, then the last preceding transferee that either (i) is not
a Plan Investor, (ii) is a Complying Insurance Company or (iii) acquired
such Certificate at a time when such Certificate was rated "BBB-" or better
(or its equivalent) by at least one of the Rating Agencies shall be
restored, to the extent permitted by law, to all rights and obligations as
Beneficial Holder thereof retroactive to the date of transfer of such
Certificate by such preceding transferee. Neither the Trust nor the Trustee
shall be under any liability to any Person for making any payments due on
such Certificate to such preceding transferee.
(4) Any purported Beneficial Holder whose acquisition or holding of
any Book-Entry ERISA Restricted Certificate (or interest therein) was
effected in violation of the restrictions in this Section 5.01(g) shall
indemnify and hold harmless the Company, the Trustee, the Master Servicer,
the Trust and the Underwriter from and against any and all liabilities,
claims, costs or expenses incurred by such parties as a result of such
acquisition or holding.
Section 5.02. Certificates Issuable in Classes; Distributions of Principal
and Interest; Authorized Denominations. The aggregate principal amount of the
Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Principal Balance of the Mortgage Loans as of the
Cut-Off Date, as specified in the Preliminary Statement to this Agreement,
except for Certificates authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Certificates pursuant to
Section 5.03. Such aggregate principal amount shall be allocated among one or
more Classes having designations, types of interests, initial per annum
Certificate Interest Rates, initial Class Principal Balances and Final Maturity
Dates as specified in the Preliminary Statement to this Agreement. The aggregate
Percentage Interest of each Class of Certificates of which the Class Principal
Balance equals zero as of the Cut-Off Date that may be authenticated and
delivered under this Agreement is limited to 100%. Certificates shall be issued
in Authorized Denominations.
Section 5.03. Registration of Transfer and Exchange of Certificates. The
Trustee shall cause to be maintained at one of its offices or at its designated
agent, a Certificate Register in which there shall be recorded the name and
address of each Certificateholder. Subject to such reasonable rules and
regulations as the Trustee may prescribe, the Certificate Register shall be
amended from time to time by the Trustee or its agent to reflect notice of any
changes received by the Trustee or its agent pursuant to Section 10.06. The
Trustee hereby appoints itself as the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate to the
Trustee at the Corporate Trust Office of the Trustee or at the office of State
Street Bank and Trust Company, N.A., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Window, or such other address or agency as may
hereafter be provided to the Master Servicer in writing by the Trustee, the
Trustee shall execute, and the Trustee or any Authenticating Agent shall
authenticate
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and deliver, in the name of the designated transferee or transferees, one or
more new Certificates of Authorized Denominations. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates in
Authorized Denominations of like Certificate Principal Balance or Percentage
Interest, as applicable, upon surrender of the Certificates to be exchanged at
any such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee on behalf of the Trust shall execute, and the Trustee, or
any Authenticating Agent, shall authenticate and deliver, the Certificates which
the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer shall (if so required by the
Trustee or any Authenticating Agent) be duly endorsed by, or be accompanied by a
written instrument of transfer in form satisfactory to the Trustee or any
Authenticating Agent and duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or transfer
of Certificates, and the Trustee may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be cancelled by
the Trustee or any Authenticating Agent.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates. If (i) any
mutilated Certificate is surrendered to the Trustee or any Authenticating Agent,
or (ii) the Trustee or any Authenticating Agent receives evidence to their
satisfaction of the destruction, loss or theft of any Certificate, and there is
delivered to the Trustee or any Authenticating Agent such security or indemnity
as may be required by them to save each of them and the Trust harmless, then, in
the absence of notice to the Trustee or any Authenticating Agent that such
Certificate has been acquired by a protected purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Certificate Principal Balance or
Percentage Interest as applicable. Upon the issuance of any new Certificate
under this Section 5.04, the Trustee or any Authenticating Agent 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 or any Authenticating Agent) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in REMIC II (or with
respect to the Class R Certificates, the residual ownership interests in REMIC I
and REMIC II) as if originally issued, whether or not the lost or stolen
Certificate shall be found at any time.
Section 5.05. Persons Deemed Owners. The Company, the Master Servicer, the
Trust, the Trustee, the Delaware Trustee and any agent of any of them may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and Section 4.04 and for all other purposes whatsoever, and neither the Company,
the Master Servicer, the Trust, the Trustee, the Delaware Trustee, the
Certificate Registrar nor any agent of the Company, the Master Servicer, the
Trust, the Trustee or the Delaware Trustee shall be affected by notice to the
contrary.
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Section 5.06. Temporary Certificates. Upon the initial issuance of the
Certificates, the Trustee on behalf of the Trust may execute, and the Trustee or
any Authenticating Agent shall authenticate and deliver, temporary Certificates
which are printed, lithographed, typewritten or otherwise produced, in any
Authorized Denomination, of the tenor of the definitive Certificates in lieu of
which they are issued and with such variations in form from the forms of the
Certificates set forth as Exhibits A, B, C and H hereto as the Trustee's
officers executing such Certificates may determine, as evidenced by their
execution of the Certificates. Notwithstanding the foregoing, the Certificates
may remain in the form of temporary Certificates.
If temporary Certificates are issued, the Trustee shall cause definitive
Certificates to be prepared within ten Business Days after the Closing Date or
as soon as practicable thereafter. After preparation of definitive Certificates,
the temporary Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office or agency of the
Trustee to be maintained as provided in Section 5.10 hereof, without charge to
the holder. Any tax or governmental charge that may be imposed in connection
with any such exchange shall be borne by the Master Servicer. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee on behalf of
the Trust shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates of Authorized Denominations. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates. Notwithstanding the
foregoing, the Book-Entry Certificates, upon original issuance, shall be issued
in the form of one or more typewritten Certificates of Authorized Denomination
representing the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Company. The Book-Entry Certificates
shall initially be registered on the Certificate Register in the name of Cede &
Co., the nominee of DTC, as the initial Clearing Agency, and no Beneficial
Holder shall receive a definitive certificate representing such Beneficial
Holder's interest in any Class of Book-Entry Certificate, except as provided
above and in Section 5.09. Each Book-Entry Certificate shall bear the following
legend:
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or 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.
Unless and until definitive, fully registered Book-Entry Certificates (the
"Definitive Certificates") have been issued to the Beneficial Holders pursuant
to Section 5.09:
(a) the provisions of this Section 5.07 shall be in full force and
effect with respect to the Book-Entry Certificates;
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(b) the Master Servicer and the Trustee may deal with the Clearing
Agency for all purposes with respect to the Book-Entry Certificates
(including the making of distributions on the Book-Entry Certificates) as
the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.07 conflict
with any other provisions of this Agreement, the provisions of this Section
5.07 shall control; and
(d) the rights of the Beneficial Holders shall be exercised only
through the Clearing Agency and the DTC Participants and shall be limited
to those established by law and agreements between such Beneficial Holders
and the Clearing Agency and/or the DTC Participants. Pursuant to the
Depositary Agreement, unless and until Definitive Certificates are issued
pursuant to Section 5.09, the initial Clearing Agency will make book-entry
transfers among the DTC Participants and receive and transmit distributions
of principal and interest on the related Class of Book-Entry Certificates
to such DTC Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Holders of Book-Entry
Certificates evidencing a specified Percentage Interest, such direction or
consent may be given by the Clearing Agency at the direction of Beneficial
Holders owning Book-Entry Certificates evidencing the requisite Percentage
Interest represented by the Book-Entry Certificates. The Clearing Agency may
take conflicting actions with respect to the Book-Entry Certificates to the
extent that such actions are taken on behalf of the Beneficial Holders.
Section 5.08. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 5.09, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related DTC Participants in accordance with its applicable
rules, regulations and procedures.
Section 5.09. Definitive Certificates. If (a) the Master Servicer notifies
the Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depositary Agreement with
respect to the Book-Entry Certificates and the Trustee or the Master Servicer is
unable to locate a qualified successor, (b) the Master Servicer, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
with respect to the Book-Entry Certificates through the Clearing Agency or (c)
after the occurrence of an Event of Default, Certificateholders holding
Book-Entry Certificates evidencing Percentage Interests aggregating not less
than 66% of the aggregate Class Principal Balance of such Certificates advise
the Trustee and the Clearing Agency through DTC Participants in writing that the
continuation of a book-entry system with respect to the Book-Entry Certificates
through the Clearing Agency is no longer in the best interests of the
Certificateholders with respect to such Certificates, the Trustee shall notify
all Certificateholders of Book-Entry Certificates of the occurrence of any such
event and of the availability of Definitive Certificates. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
on behalf of the Trust shall execute and the Trustee or any
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Authenticating Agent shall authenticate and deliver the Definitive Certificates.
Neither the Company, the Master Servicer, the Trust nor the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates for all of the Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates, and the Trustee shall recognize
the Holders of Definitive Certificates as Certificateholders hereunder.
Section 5.10. Office for Transfer of Certificates. The Trustee shall
maintain in Massachusetts and in New York, New York, an office or agency where
Certificates may be surrendered for registration of transfer or exchange. The
Corporate Trust Office and State Street Bank and Trust Company, N.A., 00
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Corporate Trust Window are initially
designated for said purposes.
Section 5.11. Nature of Certificates. The Certificates shall be personal
property giving only the rights specifically set forth therein and in this
Agreement. The Certificates shall have no preemptive or similar rights and when
issued and delivered to the Holders against payment of the purchase price
therefor will be fully paid and nonassessable by the Trust. The Holders of the
Certificates, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. THE RECEIPT AND ACCEPTANCE OF A CERTIFICATE OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH CERTIFICATE OF
ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS
BETWEEN THE TRUST AND SUCH HOLDER AND SUCH OTHERS.
ARTICLE VI
The Company and the Master Servicer
Section 6.01. Liability of the Company and the Master Servicer. The Company
and the Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the
Company or the Master Servicer, as applicable, herein.
Section 6.02. Merger or Consolidation of the Company, or the Master
Servicer. Any Corporation into which the Company or the Master Servicer may be
merged or consolidated, or any Corporation resulting from any merger, conversion
or consolidation to which the Company or the Master Servicer shall be a party,
or any Corporation succeeding to the business of the Company or the Master
Servicer, shall be the successor of the Company or the Master Servicer
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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.
Section 6.03. Limitation on Liability of the Company, the Master Servicer
and Others. Neither the Company nor the Master Servicer nor any of the
directors, officers, employees or agents of the Company or the Master Servicer
shall be under any liability to the Trust, the Holders of the REMIC I or REMIC
II Regular Interests or the Certificateholders for any action taken by such
Person or by a Servicer or for such Person's or Servicer's 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 Company,
the Master Servicer or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
duties and obligations hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master Servicer may
rely in good faith on any document of any kind properly executed and submitted
by any Person respecting any matters arising hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the Company or the
Master Servicer shall be indemnified by the Trust and held harmless against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates, other than any loss, liability or expense
relating to any Mortgage Loan (other than as otherwise permitted in this
Agreement) or incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. The Company and the Master
Servicer shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Master Servicer
may in its discretion undertake any such action which it may deem necessary or
desirable with respect to the Mortgage Loans, this Agreement, the Certificates
or the rights and duties of the parties hereto and the interests of 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 and the Company and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account, as provided
by Section 3.05.
Section 6.04. The Company and the Master Servicer not to Resign. The
Company shall not resign from the obligations and duties (including, without
limitation, its obligations and duties as initial Master Servicer) hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any successor Master Servicer shall not resign
from the obligations and duties hereby imposed on it except upon determination
that its duties hereunder are no longer permissible under applicable law. Any
such determination permitting the resignation of the Company or any successor
Master 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 Master Servicer shall have assumed the Master Servicer's
responsibilities and obligations in accordance with Section 7.02 hereof.
If the Company is no longer acting as Master Servicer, then the successor
Master Servicer shall give prompt written notice to the Company of any
information received by such successor
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Master Servicer which affects or relates to an ongoing obligation or right of
the Company under this Agreement.
Section 6.05. Trustee Access. The Master Servicer shall afford the Company
and the Trustee, upon reasonable notice, during normal business hours access to
all records maintained by the Master Servicer, in respect of the Mortgage Loans
and in respect of its rights and obligations hereunder and access to such of its
officers as are responsible for such obligations. Upon reasonable request, the
Master Servicer, shall furnish the Company and the Trustee with its most recent
financial statements (or, for so long as the Company is the Master Servicer, the
most recent consolidated financial statements for the Company appearing in the
audited financial statements of Washington Mutual, Inc., or the entity with
whose financial statements the financial statements of the Company are
consolidated) and such other information as it possesses, and which it is not
prohibited by law or, to the extent applicable, binding obligations to third
parties with respect to confidentiality from disclosing, regarding its business,
affairs, property and condition, financial or otherwise.
ARTICLE VII
Default
Section 7.01. Events of Default. (a) In case one or more of the following
Events of Default by the Master Servicer or by a successor Master Servicer shall
occur and be continuing, that is to say:
(i) Any failure by the Master Servicer to deposit into the Certificate
Account any payment required to be deposited therein by the Master Servicer
under the terms of this Agreement which continues unremedied for a period
of ten days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Master
Servicer by the Trustee or to the Master Servicer and the Trustee by the
Holders of Certificates evidencing Percentage Interests aggregating not
less than 25% of REMIC III; or
(ii) Failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in the Certificates or in this
Agreement which continues unremedied for a period of 60 days after the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of REMIC III; or
(iii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of
60 days; or
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(iv) The Master Servicer shall consent to the appointment of a trustee
in bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or of or relating
to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations; or
(vi) Any failure of the Master Servicer to make any Monthly P&I
Advance (other than a Nonrecoverable Advance) which continues unremedied at
the opening of business on the Distribution Date in respect of which such
Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, either the Trustee or the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of REMIC III, by notice in
writing to the Company and the Master Servicer (and to the Trustee if given by
the Certificateholders, in which case such notice shall set forth evidence
reasonably satisfactory to the Trustee that such Event of Default has occurred
and shall not have been remedied) may terminate all of the rights (other than
its right to reimbursement for advances) and obligations of the Master Servicer,
including its right to the Master Servicing Fee, under this Agreement and in and
to the Mortgage Loans and the proceeds thereof, if any. Such determination shall
be final and binding. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section 7.01; and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master 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 Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee for administration by
it of all cash amounts which shall at the time be credited by the Master
Servicer to the Certificate Account or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default described in clause
(vi) of this Section 7.01(a) shall occur, the Trustee shall, by notice in
writing to the Master Servicer, which may be delivered by telecopy, immediately
suspend all of the rights and obligations of the Master Servicer thereafter
arising under this Agreement, but without prejudice to any rights it may have as
a Certificateholder or to reimbursement of Monthly P&I Advances and other
advances of its own funds, and the Trustee shall act as provided in Section 7.02
to carry out the duties of the Master Servicer, including the obligation to make
any Monthly P&I Advance the nonpayment of which was an Event of Default
described in clause (vi) of this Section 7.01(a). Any such action taken by the
Trustee must be prior to the distribution on the relevant Distribution Date. If
the Master Servicer shall within two Business Days following such
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suspension remit to the Trustee the amount of any Monthly P&I Advance the
nonpayment of which by the Master Servicer was an Event of Default described in
clause (vi) of this Section 7.01(a), the Trustee, subject to the last sentence
of this paragraph, shall permit the Master Servicer to resume its rights and
obligations as Master Servicer hereunder. The Master Servicer agrees that it
will reimburse the Trustee for actual, necessary and reasonable costs incurred
by the Trustee because of action taken pursuant to clause (vi) of this Section
7.01(a). The Master Servicer agrees that if an Event of Default as described in
clause (vi) of this Section 7.01(a) shall occur more than two times in any
twelve month period, the Trustee shall be under no obligation to permit the
Master Servicer to resume its rights and obligations as Master Servicer
hereunder.
(b) In case one or more of the following Events of Default by the Company
shall occur and be continuing, that is to say:
(i) Failure on the part of the Company duly to observe or perform in
any material respect any of the covenants or agreements on the part of the
Company contained in the Certificates or in this Agreement which continues
unremedied for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Company by the Trustee, or to the Company and the Trustee by the
Holders of Certificates evidencing Percentage Interests aggregating not
less than 25% of REMIC III; or
(ii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order shall
have remained in force undischarged or unstayed for a period of 60 days; or
(iii) The Company shall consent to the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Company or of or relating to all
or substantially all of its property; or
(iv) The Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of creditors, or voluntarily suspend payment of
its obligations;
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of REMIC III, by notice in writing to
the Company and the Trustee, may direct the Trustee in accordance with Section
10.03 to institute an action, suit or proceeding in its own name as Trustee
hereunder to enforce the Company's obligations hereunder.
(c) In any circumstances in which this Agreement states that
Certificateholders owning Certificates evidencing a certain percentage
Percentage Interest in REMIC III may take
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certain action, such action shall be taken by the Trustee, but only if the
requisite percentage of Certificateholders required under this Agreement for
taking like action or giving like instruction to the Trustee under this
Agreement shall have so directed the Trustee in writing.
Section 7.02. Trustee to Act; Appointment of Successor.
(a) On and after the date on which the Master Servicer receives a notice of
termination pursuant to Section 7.01 or the Master Servicer resigns pursuant to
Section 6.04, the Trustee shall be the successor in all respects to the Master
Servicer under this Agreement and under the Selling and Servicing Contracts with
respect to the Mortgage Loans in the Mortgage Pool and with respect to the
transactions set forth or provided for herein and shall have all the rights and
powers and be subject to all the responsibilities, duties and liabilities
relating thereto arising on or after such date of termination or resignation
placed on the Master Servicer by the terms and provisions hereof and thereof,
and shall have the same limitations on liability herein granted to the Master
Servicer; provided, that the Trustee shall not under any circumstances be
responsible for any representations and warranties or any Purchase Obligation of
the Company or any liability incurred by the Master Servicer prior to such date
of termination or resignation and the Trustee shall not be obligated to make a
Monthly P&I Advance if it is prohibited by law from so doing. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to retain or to
withdraw from the Certificate Account if the Master Servicer had continued to
act hereunder, except for those amounts due to the Master Servicer as
reimbursement for advances previously made or amounts previously expended and
are otherwise reimbursable hereunder. Notwithstanding the above, the Trustee
may, if it shall be unwilling to so act, or shall if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution having a net worth of not less
than $10,000,000 as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Pending any such appointment, the Trustee is
obligated to act in such capacity. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall, together with the
compensation to the Trustee, be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such actions, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(b) In connection with any termination or resignation of the Master
Servicer hereunder, in the event that any of the Mortgage Loans are MERS Loans,
either (i) the successor Master Servicer (including the Trustee if the Trustee
is acting as successor Master Servicer) shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material
respects with the rules and procedures of MERS in connection with the servicing
of the MERS Loans, in which case the predecessor Master Servicer shall cooperate
with the successor Master Servicer in registering the transfer of servicing of
the MERS Loans to the successor Master Servicer on the MERS(R) System in
accordance with MERS' rules and procedures, or (ii) if the successor Master
Servicer is not a member of MERS, the predecessor Master Servicer shall
cooperate with the successor Master Servicer in (A) de-registering the MERS
Loans from the MERS(R) System and (B) causing MERS to execute and deliver an
assignment from MERS to the Trust of the Mortgage securing each MERS Loan in
recordable
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form and in the form otherwise provided under clause (X)(iii) of the definition
of "Mortgage File" herein and to execute and deliver such other notices,
documents and other instruments as may be necessary or desirable to effect such
de-registration and assignment. The predecessor Master Servicer shall bear any
and all fees of MERS and all fees and costs of preparing and recording any
assignments of Mortgages as required under this Section 7.02(b).
Section 7.03. Notification to Certificateholders. Upon any such termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register.
ARTICLE VIII
Concerning the Trustees
Section 8.01. Duties of Trustees.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
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 its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to it which
are specifically required to be furnished to it 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 certificate, statement,
opinion, report, or other order or instrument furnished by the Company or Master
Servicer to the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee or the Delaware Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement,
(ii) Neither the Trustee nor the Delaware Trustee shall 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 or the
Delaware Trustee, and, in the absence of bad faith on the part of the
Trustee or the Delaware Trustee, such 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 such trustee and
conforming to the requirements of this Agreement; and
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(iii) Neither the Trustee nor the Delaware Trustee shall be personally
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Certificateholders
holding Certificates which evidence Percentage Interests aggregating not
less than 25% of REMIC III relating to the time, method and place of
conducting any proceeding for any remedy available to such trustee, or
relating to the exercise of any trust or power conferred upon such trustee
under this Agreement.
(d) Within ten Business Days after the occurrence of any Event of Default
known to the Trustee, the Trustee shall transmit by mail to the Rating Agencies
notice of each Event of Default. Within 90 days after the occurrence of any
Event of Default known to the Trustee, the Trustee shall transmit by mail to all
Certificateholders (with a copy to the Rating Agencies) notice of each Event of
Default, unless such Event of Default shall have been cured or waived; provided,
however, the Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the best interests of the Certificateholders;
and provided, further, that in the case of any Event of Default of the character
specified in Section 7.01(i) and Section 7.01(ii) no such notice to
Certificateholders or to the Rating Agencies shall be given until at least 30
days after the occurrence thereof.
Section 8.02. Certain Matters Affecting the Trustees. Except as otherwise
provided in Section 8.01:
(i) Each of the Trustee and the Delaware Trustee may request and 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, approval, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(ii) Each of the Trustee and the Delaware Trustee may consult with
counsel and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) Neither the Trustee nor the Delaware Trustee shall be personally
liable for any action taken or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, neither
the Trustee nor the Delaware Trustee shall 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 to do so by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of REMIC III; provided, however,
that if the payment within a reasonable time
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to the Trustee or the Delaware Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of such trustee, not reasonably assured to such trustee
by the security, if any, afforded to it by the terms of this Agreement,
such trustee may require reasonable indemnity against such expense or
liability as a condition to proceeding;
(v) Each of the Trustee and the Delaware Trustee may execute the trust
or any of the powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys selected by it with
reasonable care or designated by the Company;
(vi) Neither the Trustee nor the Delaware Trustee shall be deemed to
have knowledge or notice of any matter, including without limitation an
Event of Default, unless actually known by a Responsible Officer, or unless
written notice thereof referencing this Agreement or the Certificates is
received at the Notice Address of such trustee;
(vii) In no event shall the Trustee or the Delaware Trustee be held
liable for acts or omissions of the Master Servicer or the other trustee
(excepting the Trustee's own actions as Master Servicer). No provision of
this Agreement shall require the Trustee or the Delaware Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder (except for the giving of
required notices), or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it;
(viii) When the Trustee is acting as Master Servicer pursuant to
Section 7.02, and to the extent permitted under applicable law, the Trustee
is hereby authorized, in making or disposing of any investment permitted
hereunder, to deal with itself (in its individual capacity) or with any one
or more of its affiliates, whether it or its affiliate is acting as an
agent of the Trustee or of any third person or dealing as principal for its
own account; and
(ix) Except as expressly provided in this Agreement, in no event shall
the Trustee be under any duty or obligation to monitor, determine,
investigate or compel compliance by the Trust with the requirements of the
Statutory Trust Statute.
Section 8.03. Trustees Not Liable for Certificates or Mortgage Loans. The
recitals contained herein (other than those relating to the due organization,
power and authority of the Trustee and the Delaware Trustee) and in the
Certificates (other than the execution of, and certificate of authentication on,
the Certificates) shall be taken as the statements of the Company or the Trust,
as applicable, and neither the Trustee nor the Delaware Trustee assumes any
responsibility for their correctness. Neither the Trustee nor the Delaware
Trustee makes any representations as to the validity or sufficiency of this
Agreement or of the Certificates or any Mortgage Loan. Neither the Trustee nor
the Delaware Trustee shall be accountable for the use or application by the
Company or the Trust, as applicable, of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Master Servicer, the Servicers or the Company in respect of the Mortgage
Loans or deposited into the
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Custodial Accounts for P&I, any Buydown Fund Account, or the Custodial Accounts
for P&I by any Servicer or into the Investment Account, or the Certificate
Account by the Master Servicer or the Company.
Section 8.04. Trustees May Own Certificates. The Trustee, the Delaware
Trustee or any agent or affiliate of such trustee, in its individual or any
other capacity, may become the owner or pledgee of Certificates with the same
rights it would have if it were not trustee.
Section 8.05. The Master Servicer to Pay Trustees' Fees and Expenses.
Subject to separate written agreements with the Trustee and the Delaware
Trustee, the Master Servicer covenants and agrees to, and the Master Servicer
shall, pay each of the Trustee and the Delaware Trustee from time to time, and
such trustee shall be entitled to payment, for all services rendered by it in
the execution of the trust hereby created and in the exercise and performance of
any of the powers and duties hereunder of such trustee. Except as otherwise
expressly provided herein, the Master Servicer shall pay or reimburse each of
the Trustee and the Delaware Trustee upon such trustee's request for all
reasonable expenses and disbursements incurred or made by such trustee in
accordance with any of the provisions of this Agreement and indemnify such
trustee from any loss, liability or expense incurred by it hereunder (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ and any expenses which arise out
of or are imposed upon the Trustee or the Delaware Trustee in connection with
the creation, operation or termination of the Trust) except any such expense or
disbursement as may arise from its own negligence or bad faith. Such obligation
shall survive the termination of this Agreement or resignation or removal of the
Trustee or the Delaware Trustee. The Tax Matters Person shall, at its expense,
prepare or cause to be prepared all federal and state income tax and franchise
tax and information returns relating to REMIC I, REMIC II or REMIC III required
to be prepared or filed by the Trustee or the Delaware Trustee and shall
indemnify the Trustee and the Delaware Trustee for any liability of such
trustees arising from any error in such returns.
Section 8.06. Eligibility Requirements for Trustees. The Trustee hereunder
shall at all times be (i) an institution insured by the FDIC, (ii) a Corporation
organized and doing business under the laws of the United States of America or
of any state, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority and (iii) acceptable
to the Rating Agencies. If such Corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of any aforementioned
supervising or examining authority, then for the purposes of this Section 8.06,
the combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. The Delaware Trustee hereunder shall at all times have its
principal place of business in the State of Delaware and shall satisfy the
applicable requirements under the laws of the State of Delaware authorizing it
to act as the Delaware trustee of the Trust. In case at any time the Trustee or
the Delaware Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, such trustee shall resign immediately in the
manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustees. Each of the Trustee and
the Delaware Trustee may at any time resign and be discharged from the trust
hereby created by
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giving written notice thereof to the Master Servicer. Upon receiving such notice
of resignation, the Master Servicer shall promptly appoint a successor trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee or the Delaware Trustee shall cease to be
eligible in accordance with the provisions of Section 8.06 and shall fail to
resign after written request therefor by the Master Servicer, or if at any time
the Trustee or the Delaware Trustee shall become incapable of acting, or shall
be adjudged bankrupt or insolvent, or a receiver of such trustee or of its
property shall be appointed, or any public officer shall take charge or control
of such trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Master Servicer may remove such trustee
and appoint a successor trustee by written instrument, in duplicate, copies of
which instrument shall be delivered to the trustee so removed, the trustee
continuing in its capacity and the successor trustee.
The Holders of Certificates evidencing Percentage Interests aggregating
more than 50% of REMIC III may at any time remove the Trustee or the Delaware
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 instruments shall be delivered to the Master Servicer,
one complete set to the Trustee so removed and one complete set to the successor
so appointed.
Any resignation or removal of the Trustee or the Delaware 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. Any expenses associated with the
resignation of the Trustee or the Delaware Trustee shall be borne by such
trustee, and any expenses associated with the removal of the Trustee or the
Delaware Trustee shall be borne by the Master Servicer.
Section 8.08. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee or Delaware Trustee herein. The predecessor shall deliver to
the successor trustee all Mortgage Files, related documents, statements and all
other property held by it hereunder, and the Master Servicer 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 appointment such successor trustee shall be
eligible under the provisions of Section 8.06.
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Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Master Servicer shall mail notice of the succession of such
trustee hereunder to (i) all Certificateholders at their addresses as shown in
the Certificate Register and (ii) the Rating Agencies. If the Master Servicer
fails to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed.
Section 8.09. Merger or Consolidation of Trustee. Any Corporation into
which the Trustee or the Delaware 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 or the Delaware Trustee shall
be a party, or any Corporation succeeding to the corporate trust business of
such trustee, shall be the successor of such trustee hereunder, provided such
resulting or successor Corporation shall be eligible under the provisions of
Section 8.06, 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.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
assets of the Trust may at the time be located, the Master Servicer and the
Trustee or the Delaware Trustee, as applicable, acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by such trustee to act as co-trustee or co-trustees, jointly
with such trustee, or separate trustee or separate trustees, of all or any part
of the assets of the Trust and to vest in such Person or Persons, in such
capacity, such title to the assets of the Trust, or any part thereof, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee or the
Delaware Trustee, as applicable, may consider necessary or desirable; provided,
that the Trustee or the Delaware Trustee, as applicable, shall remain liable for
all of its obligations and duties under this Agreement. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee or the Delaware Trustee, as applicable, alone shall have
the power to make such appointment; provided, that such trustee shall remain
liable for all of its obligations and duties under this Agreement. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 hereunder and no notice to
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee or the Delaware Trustee, as applicable, shall be
conferred or imposed upon and exercised or performed by the Trustee or the
Delaware Trustee, as applicable, and such separate trustee or co-trustee jointly
and severally, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed by the Trustee or the
Delaware Trustee, as applicable (whether as Trustee or Delaware Trustee
hereunder or as successor to the Master Servicer hereunder), such 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
assets of the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee or the Delaware Trustee, as applicable.
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Any notice, request or other writing given to the Trustee or the Delaware
Trustee shall be deemed to have been given to each of the then related separate
trustee(s) and co-trustee(s), as effectively as if given to each of them. Every
instrument appointing any separate trustee(s) or co-trustee(s) 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 the Delaware Trustee, as applicable, 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 or the
Delaware Trustee, as applicable. Every such instrument shall be filed with the
Trustee or the Delaware Trustee, as applicable.
Any separate trustee or co-trustee may, at any time, constitute the Trustee
or the Delaware Trustee, as applicable, 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 the trust shall
vest in and be exercised by the Trustee or the Delaware Trustee, as applicable,
to the extent permitted by law, without the appointment of a new or successor
trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents which shall be authorized to act on behalf of the Trustee
in authenticating Certificates. Wherever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent must be acceptable to the Master Servicer and must be
a corporation, trust company or banking association organized and doing business
under the laws of the United States of America or of any state, having a
principal office and place of business in New York, New York or a principal
office and place of business in Boston, Massachusetts and a place of business in
New York, New York, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent so
long as it shall be eligible in accordance with the provisions of the first
paragraph of this Section 8.11 without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and the Master Servicer. The Trustee may, upon prior
written approval of the Master Servicer, at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Master Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent
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shall cease to be eligible in accordance with the provisions of the first
paragraph of this Section 8.11, the Trustee may appoint, upon prior written
approval of the Master Servicer, a successor Authenticating Agent, shall give
written notice of such appointment to the Master Servicer and shall mail notice
of such appointment to all Certificateholders. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent. Any reasonable
compensation paid to an Authenticating Agent shall be a reimbursable expense
pursuant to Section 8.05 if paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or more Paying
Agents which shall be authorized to act on behalf of the Trustee in making
withdrawals from the Certificate Account, and distributions to
Certificateholders as provided in Section 4.01, Section 4.04, Section 4.05(a)
and Section 9.01(b) to the extent directed to do so by the Master Servicer.
Wherever reference is made in this Agreement to the withdrawal from the
Certificate Account by the Trustee, such reference shall be deemed to include
such a withdrawal on behalf of the Trustee by a Paying Agent. Whenever reference
is made in this Agreement to a distribution by the Trustee or the furnishing of
a statement to Certificateholders by the Trustee, such reference shall be deemed
to include such a distribution or furnishing on behalf of the Trustee by a
Paying Agent. Each Paying Agent shall provide to the Trustee such information
concerning the Certificate Account as the Trustee shall request from time to
time. Each Paying Agent must be reasonably acceptable to the Master Servicer and
must be a corporation, trust company or banking association organized and doing
business under the laws of the United States of America or of any state, having
a principal office and place of business in New York, New York or a principal
office and place of business in Boston, Massachusetts and a place of business in
New York, New York, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
Any corporation into which any Paying Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which any Paying Agent shall be a party, or any
corporation succeeding to the corporate agency business of any Paying Agent,
shall continue to be the Paying Agent provided that such corporation after the
consummation of such merger, conversion, consolidation or succession meets the
eligibility requirements of this Section 8.12.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Master Servicer; provided, that the Paying
Agent has returned to the Certificate Account or otherwise accounted, to the
reasonable satisfaction of the Master Servicer, for all amounts it has withdrawn
from the Certificate Account. The Trustee may, upon prior written approval of
the Master Servicer, at any time terminate the agency of any Paying Agent by
giving written notice of termination to such Paying Agent and to the Master
Servicer. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Paying Agent shall cease to be eligible in accordance
with the provisions of the first paragraph of this Section 8.12, the Trustee may
appoint, upon prior written approval of the Master Servicer, a successor Paying
Agent, shall give written notice of such appointment to the Master Servicer and
shall mail notice of such appointment to all Certificateholders. Any successor
Paying Agent upon acceptance of its appointment hereunder shall become vested
with all the rights, powers, duties
133
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Paying Agent. Any reasonable compensation paid to any Paying
Agent shall be a reimbursable expense pursuant to Section 8.05 if paid by the
Trustee.
Section 8.13. Duties of Delaware Trustee.
(a) The Delaware Trustee is appointed to serve as the trustee of the Trust
in the State of Delaware for the sole purpose of satisfying the requirement of
Section 3807(a) of the Statutory Trust Statute that the Trust have at least one
trustee with a principal place of business in Delaware. It is understood and
agreed by the parties hereto that the Delaware Trustee shall have none of the
duties or liabilities of the Trustee.
(b) The duties of the Delaware Trustee shall be limited to (i) accepting
legal process served on the Trust in the State of Delaware, (ii) the execution
of any certificates with respect to the Trust required to be filed with the
Secretary of State which the Delaware Trustee is required to execute under
Section 3811 of the Statutory Trust Statute and (iii) such other duties as are
set forth in this Article VIII. To the extent that, at law or in equity, the
Delaware Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or the Holders of the REMIC I Regular Interests,
the REMIC II Regular Interests or the Certificates, it is hereby understood and
agreed by the parties hereto that such duties and liabilities are replaced by
the duties and liabilities of the Delaware Trustee expressly set forth in this
Agreement.
Section 8.14. Amendment to Certificate of Trust. If at any time required by
Section 3810 of the Statutory Trust Statute, the Trustee, the Delaware Trustee
and any other trustee of the Trust shall cause an amendment to the Certificate
of Trust to be filed with the Secretary of State in accordance with the
provisions of such Section 3810.
Section 8.15. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) each of the representations, undertakings
and agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by the Trustee but is made
and intended for the purpose of binding only the Trust and (b) under no
circumstances shall the Trustee be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement.
ARTICLE IX
Termination
Section 9.01. Termination Upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans.
(a) Except as otherwise set forth in this Article IX, including, without
limitation, the obligation of the Master Servicer to make payments to
Certificateholders as hereafter set forth, the Trust and the respective
obligations and responsibilities of the Company, the Master Servicer, the
Trustee and the Delaware Trustee created hereby shall terminate in accordance
with Section 3808 of the Statutory Trust Statute upon (i) the purchase by the
Master Servicer pursuant to the following paragraph of this Section 9.01(a) of
all Mortgage Loans (other than Liquidated
134
Mortgage Loans), all property acquired in respect of any Mortgage Loan remaining
in the Trust and all other property included in the REMIC formed under this
Agreement at a price equal, after the deduction of related advances, to the sum
of (x) the excess of (A) 100% of the aggregate outstanding Principal Balance of
such Mortgage Loans (other than Liquidated Mortgage Loans) plus accrued interest
at the applicable Pass-Through Rate with respect to such Mortgage Loan (other
than a Liquidated Mortgage Loan) through the last day of the month of such
purchase, over (B) with respect to any Mortgage Loan which is not a Liquidated
Mortgage Loan, the amount of the Bankruptcy Loss incurred with respect to such
Mortgage Loan as of the date of such purchase by the Master Servicer to the
extent that the Principal Balance of such Mortgage Loan has not been previously
reduced by such Bankruptcy Loss, and (y) the appraised fair market value as of
the effective date of the termination of the Trust of (A) all property in the
Trust which secured a Mortgage Loan and which was acquired by foreclosure or
deed in lieu of foreclosure after the Cut-Off Date, including related Insurance
Proceeds, and (B) all other property included in any REMIC formed under this
Agreement, any such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee, or (ii) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust or the disposition of all property acquired
upon foreclosure in respect of any Mortgage Loan, and the payment to the
Certificateholders of all amounts required to be paid to them hereunder;
provided, however, that in no event shall the Trust continue beyond the
expiration of 21 years from the death of the survivor of the issue of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. Xxxxx,
living on the date hereof.
On any Distribution Date after the first date on which the aggregate
Principal Balance of the Mortgage Loans is less than the Clean-Up Call
Percentage of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-Off Date, the Master Servicer may purchase the outstanding Mortgage Loans
(other than Liquidated Mortgage Loans), all property acquired in respect of any
Mortgage Loan remaining in the Trust and all other property included in any
REMIC formed under this Agreement at the price stated in clause (i) of the
preceding paragraph; provided, that the Master Servicer may not so purchase the
outstanding Mortgage Loans (other than Liquidated Mortgage Loans), all property
acquired in respect of any Mortgage Loan remaining in the Trust and all other
property included in any REMIC formed under this Agreement if the price stated
in clause (i) of the preceding paragraph exceeds the fair market value,
determined in accordance with prudent industry practices, of all outstanding
Mortgage Loans (other than Liquidated Mortgage Loans), all property acquired in
respect of any Mortgage Loan remaining in the Trust and all other property
included in any REMIC formed under this Agreement. If such right is exercised,
the Master Servicer shall provide to the Trustee (and to the Company, if the
Company is no longer acting as Master Servicer) the written certification of an
officer of the Master Servicer (which certification shall include a statement to
the effect that all amounts required to be paid in order to purchase the
Mortgage Loans have been deposited in the Certificate Account) and the Trustee
on behalf of the Trust shall promptly execute all instruments as may be
necessary to release and assign to the Master Servicer the Mortgage Files and
any foreclosed Mortgaged Property pertaining to the Trust.
In no event shall the Master Servicer be required to expend any amounts
other than those described in the first paragraph of this Section 9.01(a) in
order to terminate the Trust or purchase
135
the Mortgage Loans under this Section 9.01, and in no event shall the Company be
required to expend any amounts in connection with such termination or purchase.
(b) Notice of any termination, specifying the date upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
and cancellation, shall be given promptly by letter from the Trustee to
Certificateholders mailed not less than 30 days prior to such final
distribution, specifying (i) the date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at the
office of the Certificate Registrar therein designated (the "Termination Date"),
(ii) the amount of such final payment (the "Termination Payment") and (iii) that
the Record Date otherwise applicable to the Distribution Date upon which the
Termination Date occurs is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the Certificate
Registrar therein specified. Upon any such notice, the Certificate Account shall
terminate subject to the Master Servicer's obligation to hold all amounts
payable to Certificateholders in trust without interest pending such payment.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the Termination Date, the
Master Servicer shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the Termination Payment with respect thereto. If within one year after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Master Servicer may take appropriate steps to contact the
remaining Certificateholders concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other assets which remain in
trust hereunder.
Upon the completion of winding up of the Trust, including the payment or
the making reasonable provision for payment of all obligations of the Trust in
accordance with Section 3808(e) of the Statutory Trust Statute, the Delaware
Trustee shall prepare, the Trustee, the Delaware Trustee and any other trustee
hereunder shall sign, and the Delaware Trustee (upon the Trustee's consent
acting at the direction of the Master Servicer) shall file, a certificate of
cancellation with the Secretary of State in accordance with Section 3810 of the
Statutory Trust Statute, at which time the Trust and this Agreement shall
terminate. The Master Servicer shall act as the liquidator of the Trust and
shall be responsible for taking all actions in connection with winding up the
Trust, in accordance with the requirements of this Agreement (including this
Section 9.01 and Section 9.02) and applicable law.
Section 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option as
provided in Section 9.01, REMIC I, REMIC II and REMIC III shall be terminated in
accordance with the following additional requirements, unless the Master
Servicer, at its own expense, obtains for the Trustee an Opinion of Counsel to
the effect that the failure of REMIC I, REMIC II and REMIC III to comply with
the requirements of this Section 9.02 will not (i) result in the imposition of
taxes on "prohibited transactions" of REMIC I, REMIC II and REMIC III as
described in Section 860F of the Code, or (ii) cause REMIC I, REMIC II or REMIC
III to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
136
(i) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Trustee under Section 9.01, the Tax Matters Person
shall prepare the documentation required and the Tax Matters Person and the
Trustee shall adopt a plan of complete liquidation on behalf of REMIC I,
REMIC II and REMIC III meeting the requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder, as evidenced
by an Opinion of Counsel obtained at the expense of the Master Servicer, on
behalf of REMIC I, REMIC II and REMIC III; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Master
Servicer as agent of the Trust shall sell all of the assets of REMIC I,
REMIC II and REMIC III to the Master Servicer for cash in the amount
specified in Section 9.01.
(b) By its acceptance of any Residual Certificate, the Holder thereof
hereby agrees to authorize the Tax Matters Person and the Trustee to adopt such
a plan of complete liquidation upon the written request of the Tax Matters
Person and the Trustee and to take such other action in connection therewith as
may be reasonably requested by the Tax Matters Person or the Trustee.
Section 9.03. Trust Irrevocable. Except as expressly provided herein, the
trust created hereby is irrevocable.
ARTICLE X
Miscellaneous Provisions
Section 10.01. Amendment.
(a) This Agreement may be amended from time to time by the Master Servicer,
the Company and the Trustee, without the consent of any of the
Certificateholders:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision herein which may be
defective or inconsistent with any other provisions herein;
(iii) to comply with any requirements imposed by the Code or any
regulations thereunder;
(iv) to correct the description of any property at any time included
in REMIC I, REMIC II or REMIC III, or to assure the conveyance to the Trust
of any property included in REMIC I, REMIC II or REMIC III;
(v) pursuant to Section 5.01(c)(v); and
(vi) to add any provision to, or amend any provision in, this
Agreement, provided that such amendment or addition does not adversely
affect in any material respect the interests of any Certificateholder;
137
provided, however, that any such amendment which modifies the rights or
obligations of the Delaware Trustee hereunder shall require the consent of the
Delaware Trustee. No such amendment (other than one entered into pursuant to
clause (iii) of the preceding sentence) shall change the powers of the Master
Servicer. Prior to entering into any amendment (other than one entered into
pursuant to clause (iii) of the second preceding sentence) without the consent
of Certificateholders pursuant to this paragraph, the Trustee shall require an
Opinion of Counsel addressed to the Trust and the Trustee to the effect that
such amendment is permitted under this Agreement and has no material adverse
effect on the interests of the Certificateholders; provided, however, that no
such Opinion of Counsel shall be required if the Company 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. Prior to entering into any amendment pursuant to clause (iii) of
the third preceding sentence without the consent of Certificateholders pursuant
to this paragraph, the Trustee shall require an Opinion of Counsel to the effect
that such action is necessary or helpful to comply with the requirements imposed
by the Code or any regulations thereunder and shall not cause any REMIC formed
under the Agreement to fail to qualify as such under the Code.
(b) This Agreement may also be amended from time to time by the Master
Servicer, the Company and the Trustee with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66% of
REMIC III 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 Certificateholders; provided, however, that no such
amendment shall, without the consent of the Holder of each Certificate affected
thereby (i) reduce in any manner the amount of, or delay the timing of,
distributions of principal or interest required to be made hereunder or reduce
the Certificateholder's Percentage Interest, the Certificate Interest Rate or
the Termination Payment with respect to any of the Certificates, (ii) reduce the
percentage of Percentage Interests specified in this Section 10.01 which are
required to amend this Agreement, (iii) create or permit the creation of any
lien against any part of REMIC I, REMIC II or REMIC III, or (iv) modify any
provision in any way which would permit an earlier retirement of the
Certificates; provided, further, that any such amendment which modifies the
rights or obligations of the Delaware Trustee hereunder shall require the
consent of the Delaware Trustee.
Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to the Delaware
Trustee and each Certificateholder. Any failure to provide such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amendment.
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.
Section 10.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or the comparable
jurisdictions in which any Mortgaged Property is situated, and
138
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Company and at its expense on direction by the Trustee,
but only upon direction accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders. Without limiting the foregoing, the Trustee shall make the
filings required by Chapter 182 of the Massachusetts General Laws.
Section 10.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding-up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote or in any manner
otherwise to control the operation and management of the Trust or the
obligations of the parties hereto (except as provided in Section 5.09, Section
7.01, Section 8.01, Section 8.02, Section 8.07, Section 10.01 and this Section
10.03), 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 person 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 of any
provision 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 default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 25% of REMIC III shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the 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. However, the Trustee is under no obligation to
exercise any of the extraordinary trusts or powers vested in it by this
Agreement or to make any investigation of matters arising hereunder or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby. It is understood and intended, and 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 of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such 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 equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this
Section 10.03, each and every Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
139
Section 10.04. Access to List of Certificateholders. The Certificate
Registrar shall furnish or cause to be furnished to the Trustee, within 30 days
after receipt of a request by the Trustee in writing, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date for payment of
distributions to such Certificateholders.
If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states that
the applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such list from the Certificate Registrar, afford such applicants access during
normal business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of a date more than 90 days prior to the date of
receipt of such applicants' request, the Trustee shall promptly request from the
Certificate Registrar a current list as provided above, and shall afford such
applicants access to such list promptly upon receipt.
Every Certificateholder, by receiving and holding the same, agrees with the
Master Servicer, the Trust, the Trustee and the Delaware Trustee that none of
the Master Servicer, the Trust, the Trustee or the Delaware Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
Section 10.05. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Delaware without giving effect to its
conflict of laws provisions and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws without
giving effect to conflict of laws provisions.
Section 10.06. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered or certified mail to the applicable Notice
Address. Notices to the Rating Agencies shall also be deemed to have been duly
given if mailed by first class mail, postage prepaid, to the above listed
addresses of the Rating Agencies. Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 10.07. 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 10.08. Counterpart Signatures. For the purpose of facilitating the
recordation of this Agreement as herein provided and for other purposes, this
Agreement may be executed
140
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.09. Benefits of Agreement. Nothing in this Agreement or in any
Certificate, expressed or implied, shall give to any Person, other than the
parties hereto and their respective successors hereunder, any separate trustee
or co-trustee appointed under Section 8.10 and the Certificateholders, any
benefit or any legal or equitable right, remedy or claim under this Agreement.
Section 10.10. Notices and Copies to Rating Agencies.
(a) The Trustee shall notify the Rating Agencies of the occurrence of any
of the following events, in the manner provided in Section 10.06:
(i) the occurrence of an Event of Default pursuant to Section 7.01,
subject to the provisions of Section 8.01(d);
(ii) the appointment of a successor Master Servicer pursuant to
Section 7.02;
(b) The Master Servicer shall notify the Rating Agencies of the occurrence
of any of the following events, or in the case of clauses (iii), (iv), (vii) and
(viii) promptly upon receiving notice thereof, in the manner provided in Section
10.06:
(i) any amendment of this Agreement pursuant to Section 10.01;
(ii) the appointment of a successor Trustee or successor Delaware
Trustee pursuant to Section 8.08;
(iii) the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions coverage
pursuant to Section 3.01 and Section 3.06 with respect to the Master
Servicer or any Servicer;
(iv) any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
(v) the purchase of any Mortgage Loan pursuant to a Purchase
Obligation or as permitted by this Agreement or the purchase of the
outstanding Mortgage Loans pursuant to Section 9.01;
(vi) the occurrence of the final Distribution Date or the termination
of the trust pursuant to Section 9.01(a)(ii);
(vii) the failure of the Master Servicer to make a Monthly P&I Advance
following a determination on the Determination Date that the Master
Servicer would make such advance pursuant to Section 4.02; and
(viii) the failure of the Master Servicer to make a determination on
the Determination Date regarding whether it would make a Monthly P&I
Advance when a
141
shortfall exists between (x) payments scheduled to be received in respect
of the Mortgage Loans and (y) the amounts actually deposited in the
Certificate Account on account of such payments, pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements pursuant to Section
4.02, Section 4.06, Section 3.12, Section 3.13 or Section 3.15 or any other
statements or reports to the Rating Agencies in such time and manner that such
statements or determinations are required to be provided to Certificateholders.
With respect to the reports described in the second paragraph of Section 4.06,
the Master Servicer shall provide such reports to the Rating Agencies in respect
of each Distribution Date, without regard to whether any Certificateholder or
the Trustee or the Delaware Trustee has requested such report for such
Distribution Date.
142
IN WITNESS WHEREOF, the Company, the Trustee and the Delaware Trustee have
caused their names to be signed hereto by their respective officers, thereunto
duly authorized, all as of the day and year first above written.
WASHINGTON MUTUAL MORTGAGE
SECURITIES CORP.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
STATE STREET BANK AND TRUST
COMPANY,
as Trustee
By: /s/ Xxxxx X. X'Xxxxx
-------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Vice President
CHRISTIANA BANK & TRUST COMPANY,
as Delaware Trustee
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
[Signature page to Pooling and Servicing Agreement for Washington Mutual
MSC Series 2002-MS11]
ACKNOWLEDGEMENT OF CORPORATION
STATE OF WASHINGTON )
) SS.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Xxxxxxx X. Xxxxxx
is the person who appeared before me, and said person acknowledged that he
signed this instrument, on oath stated that. he was authorized to execute the
instrument and acknowledged it as the Vice President of WASHINGTON MUTUAL
MORTGAGE SECURITIES CORP., to be the free and voluntary act of such party for
the uses and purposes mentioned therein.
Dated this 13th day of December, 2002.
/s/ Xxxx Xxxxxx
----------------------------------
Notary Public in and for the
State of Washington,
residing at Bellevue.
My commission expires: January 26, 2004.
ACKNOWLEDGEMENT
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 13th day of December 2002 before me, a Notary Public in and for
said State, personally appeared Xxxxx X. X'Xxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacit(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Xxx X. Xxxxx
------------------------
(SEAL)
ACKNOWLEDGEMENT
STATE OF DELAWARE )
) SS.
COUNTY OF NEWCASTLE )
On this 13th day of December 2002 before me, a Notary Public in and for
said State, personally appeared Xxxx X. Xxxxxxx, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacit(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ Xxxx Xxxxxxx
------------------------
(SEAL)
Appendix 1: Definition of Class C-Y Principal Reduction Amounts
Copies of Appendix 1 (which has been intentionally omitted from this
filing) may be obtained from Washington Mutual Mortgage Securities Corp. or
State Street Bank and Trust Company by contacting:
in the case of Washington Mutual Mortgage Securities Corp.,
Xxxxx Xxxxxx
Master Servicing Department
Washington Mutual Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx, XXX0X00
Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
in the case of State Street Bank and Trust Company,
Xxxxx X. X'Xxxxx
Global Investor Services Group
Corporate Trust
State Street Bank and Trust Company
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
1
Exhibit A
CUSIP 939336 ME 0
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-1
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class I-A-1 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$180,542,000.00
Class I-A-1 Certificate Interest Rate: 5.250%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2017
Class I-A-1 Principal Balance
as of the Cut-Off Date: $180,542,000.00
Cede & Co.
Registered Owner
A-1
Exhibit A
CUSIP 939336 MF 7
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-1
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-1 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$130,274,000.00
Class II-A-1 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-1 Principal Balance
as of the Cut-Off Date: $130,274,000.00
Cede & Co.
Registered Owner
A-2
Exhibit A
CUSIP 939336 MG 5
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-2
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-2 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$39,669,000.00
Class II-A-2 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-2 Principal Balance
as of the Cut-Off Date: $39,669,000.00
Cede & Co.
Registered Owner
A-3
Exhibit A
CUSIP 939336 MH 3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-3
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-3 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$3,395,000.00
Class II-A-3 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-3 Principal Balance
as of the Cut-Off Date: $3,395,000.00
Cede & Co.
Registered Owner
A-4
Exhibit A
CUSIP 939336 MJ 9
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-4
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-4 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$3,000,000.00
Class II-A-4 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-4 Principal Balance
as of the Cut-Off Date: $3,000,000.00
Cede & Co.
Registered Owner
A-5
Exhibit A
CUSIP 939336 MK 6
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-5
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-5 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$2,252,000.00
Class II-A-5 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-5 Principal Balance
as of the Cut-Off Date: $2,252,000.00
Cede & Co.
Registered Owner
A-6
Exhibit A
CUSIP 939336 NQ 2
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-6
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-6 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$4,748,000.00
Class II-A-6 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-6 Principal Balance
as of the Cut-Off Date: $4,748,000.00
Cede & Co.
Registered Owner
A-7
Exhibit A
CUSIP 939336 NR 0
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-7
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-7 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$33,211,000.00
Class II-A-7 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-7 Principal Balance
as of the Cut-Off Date: $33,211,000.00
Cede & Co.
Registered Owner
A-8
Exhibit A
CUSIP 939336 NS 8
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-8
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-8 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$34,211,000.00
Class II-A-8 Certificate Interest Rate: Variable, applied to
the Class II-A-8 Notional Amount
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-8 Principal Balance
as of the Cut-Off Date: $0.00
Class II-A-8 Notional Amount
as of the Cut-Off Date: $34,211,000.00
Cede & Co.
Registered Owner
A-9
Exhibit A
CUSIP 939336 NT 6
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-9
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
The Class II-A-9 Certificates will provide credit support to another Class of
Certificates, as described in the Pooling Agreement.
Series 2002-MS11 Portion of the Class II-A-9 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$1,000,000.00
Class II-A-9 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-9 Principal Balance
as of the Cut-Off Date: $1,000,000.00
Cede & Co.
Registered Owner
A-10
Exhibit A
CUSIP 939336 NU 3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-10
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-10 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$75,265,000.00
Class II-A-10 Certificate Interest Rate: 4.500%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-10 Principal Balance
as of the Cut-Off Date: $75,265,000.00
Cede & Co.
Registered Owner
A-11
Exhibit A
CUSIP 939336 NV 1
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-11
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-11 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$32,400,000.00
Class II-A-11 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-11 Principal Balance
as of the Cut-Off Date: $32,400,000.00
Cede & Co.
Registered Owner
A-12
Exhibit A
CUSIP 939336 NW 9
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-12
Evidencing a beneficial interest in a pool of assets consistingz of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
The Class II-A-12 Certificates will provide credit support to another Class of
Certificates, as described in the Pooling Agreement.
Series 2002-MS11 Portion of the Class II-A-12 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$1,000,000.00
Class II-A-12 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-A-12 Principal Balance
as of the Cut-Off Date: $1,000,000.00
Cede & Co.
Registered Owner
A-13
Exhibit A
CUSIP 939336 ML 4
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-1
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-A-1 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$30,059,000.00
Class III-A-1 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class III-A-1 Principal Balance
as of the Cut-Off Date: $30,059,000.00
Cede & Co.
Registered Owner
A-14
Exhibit A
CUSIP 939336 MM 2
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-2
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
The Class III-A-2 Certificates will provide credit support to another Class of
Certificates, as described in the Pooling Agreement.
Series 2002-MS11 Portion of the Class II-A-2 Principal Balance as
of the Cut-Off Date Evidenced by this Certificate:
$2,700,000.00
Class III-A-2 Certificate Interest Rate: 5.750%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class III-A-2 Principal Balance
as of the Cut-Off Date: $2,700,000.00
Cede & Co.
Registered Owner
A-15
Exhibit A
CUSIP 939336 MP 5
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class I-X Notional Amount as of the
Cut-Off Date Evidenced by this Certificate:
$16,995,171.00
Class I-X Certificate Interest Rate: 5.250% applied to the
Class I-X Notional Amount
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2017
Class I-X Principal Balance
as of the Cut-Off Date: $0.00
Class I-X Notional Amount
as of the Cut-Off Date: $16,995,171.00
Cede & Co.
Registered Owner
A-16
Exhibit A
CUSIP 939336 MQ 3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-X Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$24,203,277.00
Class II-X Certificate Interest Rate: 5.750% applied to the
Class II-X Notional Amount
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-X Principal Balance
as of the Cut-Off Date: $0.00
Class II-X Notional Amount
as of the Cut-Off Date: $24,203,277.00
Cede & Co.
Registered Owner
A-17
Exhibit A
CUSIP 939336 MR 1
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class III-X
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class III-X Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$1,634,175.00
Class III-X Certificate Interest Rate: 5.750% applied to the
Class III-X Notional Amount
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class III-X Principal Balance
as of the Cut-Off Date: $0.00
Class III-X Notional Amount
as of the Cut-Off Date: $1,634,175.00
Cede & Co.
Registered Owner
A-18
Exhibit A
CUSIP 939336 MT 7
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class I-P
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002. Interest is not payable with respect to this Certificate.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class I-P Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$67,740.00
Class I-P Certificate Interest Rate: 0.00%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2017
Class I-P Principal Balance
as of the Cut-Off Date: $67,740.00
Cede & Co.
Registered Owner
A-19
Exhibit A
CUSIP 939336 MU 4
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class II-P
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002. Interest is not payable with respect to this Certificate.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class II-P Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$301,758.00
Class II-P Certificate Interest Rate: 0.00%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class II-P Principal Balance
as of the Cut-Off Date: $301,758.00
Cede & Co.
Registered Owner
A-20
Exhibit A
CUSIP 939336 MV 2
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class III-P
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002. Interest is not payable with respect to this Certificate.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
Series 2002-MS11 Portion of the Class III-P Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$223,250.00
Class III-P Certificate Interest Rate: 0.00%
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class III-P Principal Balance
as of the Cut-Off Date: $223,250.00
Cede & Co.
Registered Owner
A-21
Exhibit A
CUSIP 939336 MX 8
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-1
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
NO TRANSFER OF THIS CLASS C-B-1 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS C-B-1 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:
1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA OR SECTION 4975 OF THE CODE, OR ANY PERSON (INCLUDING AN INVESTMENT
MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) ACTING, DIRECTLY
OR INDIRECTLY, ON BEHALF OF OR PURCHASING THIS CERTIFICATE WITH "PLAN
ASSETS" OF ANY SUCH PLAN (A "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN
INSURANCE COMPANY, THE SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD
THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE
BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER (OR
ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME OF SUCH
TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST HEREIN); AND
2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN THE LAST
PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR, (II) IS A
COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS CERTIFICATE AT A TIME
WHEN THIS CERTIFICATE WAS RATED
A-22
"BBB-" OR BETTER (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES
SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF
TRANSFER OF THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE
TRUST NOR THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING
ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITER FROM AND AGAINST
ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A
RESULT OF SUCH ACQUISITION OR HOLDING.
The Class C-B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-1 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$5,804,000.00
Class C-B-1 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-1 Principal Balance
as of the Cut-Off Date: $5,804,000.00
Cede & Co.
Registered Owner
A-23
Exhibit A
CUSIP 939336 MY 6
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-2
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
NO TRANSFER OF THIS CLASS C-B-2 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS C-B-2 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:
1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA OR SECTION 4975 OF THE CODE, OR ANY PERSON (INCLUDING AN INVESTMENT
MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) ACTING, DIRECTLY
OR INDIRECTLY, ON BEHALF OF OR PURCHASING THIS CERTIFICATE WITH "PLAN
ASSETS" OF ANY SUCH PLAN (A "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN
INSURANCE COMPANY, THE SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD
THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE
BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER (OR
ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME OF SUCH
TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST HEREIN); AND
2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN THE LAST
PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR, (II) IS A
COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS CERTIFICATE AT A TIME
WHEN THIS CERTIFICATE WAS RATED
A-24
"BBB-" OR BETTER (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES
SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF
TRANSFER OF THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE
TRUST NOR THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING
ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITER FROM AND AGAINST
ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A
RESULT OF SUCH ACQUISITION OR HOLDING.
The Class C-B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-2 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$2,764,000.00
Class C-B-2 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-2 Principal Balance
as of the Cut-Off Date: $2,764,000.00
Cede & Co.
Registered Owner
A-25
Exhibit A
CUSIP 939336 MZ 3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-3
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any Certificate
issued is registered in the name of Cede & Co. or 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.
NO TRANSFER OF THIS CLASS C-B-3 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE HAS
RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION 5.01(g)
OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S CERTIFICATE,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO
THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE, AND WILL NOT SUBJECT THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT
BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS C-B-3 CERTIFICATE TO DTC OR ANY OTHER CLEARING AGENCY OR ANY SUBSEQUENT
TRANSFER OF ANY INTEREST IN THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS
HELD BY DTC OR ANY OTHER CLEARING AGENCY, (I) AN OFFICER'S CERTIFICATE (AND, IF
APPLICABLE, A BENEFIT PLAN OPINION), AS DESCRIBED IN THE FOREGOING PARAGRAPH,
SHALL NOT BE REQUIRED, AND (II) THE FOLLOWING CONDITIONS SHALL APPLY:
1. ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE
REPRESENTED, BY VIRTUE OF ITS ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN), THAT EITHER (A) SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA OR SECTION 4975 OF THE CODE, OR ANY PERSON (INCLUDING AN INVESTMENT
MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY SUCH PLAN) ACTING, DIRECTLY
OR INDIRECTLY, ON BEHALF OF OR PURCHASING THIS CERTIFICATE WITH "PLAN
ASSETS" OF ANY SUCH PLAN (A "PLAN INVESTOR"), (B) SUCH TRANSFEREE IS AN
INSURANCE COMPANY, THE SOURCE OF FUNDS TO BE USED BY IT TO ACQUIRE OR HOLD
THIS CERTIFICATE IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE
MEANING OF DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
("PTCE") 95-60), AND THE CONDITIONS IN SECTION I AND III OF PTCE 95-60 HAVE
BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (B), A "COMPLYING
INSURANCE COMPANY") OR (C) THIS CERTIFICATE WAS RATED "BBB-" OR BETTER (OR
ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES AT THE TIME OF SUCH
TRANSFEREE'S ACQUISITION OF THIS CERTIFICATE (OR INTEREST HEREIN); AND
2. IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN THE LAST
PRECEDING TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR, (II) IS A
COMPLYING INSURANCE COMPANY OR (III) ACQUIRED THIS CERTIFICATE AT A TIME
WHEN THIS CERTIFICATE WAS RATED
A-26
"BBB-" OR BETTER (OR ITS EQUIVALENT) BY AT LEAST ONE OF THE RATING AGENCIES
SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND
OBLIGATIONS AS BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF
TRANSFER OF THIS CERTIFICATE BY SUCH PRECEDING TRANSFEREE. NEITHER THE
TRUST NOR THE TRUSTEE SHALL BE UNDER ANY LIABILITY TO ANY PERSON FOR MAKING
ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED BENEFICIAL HOLDER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN SECTION
5.01(g) OF THE POOLING AGREEMENT SHALL INDEMNIFY AND HOLD HARMLESS THE COMPANY,
THE TRUSTEE, THE MASTER SERVICER, THE TRUST AND THE UNDERWRITER FROM AND AGAINST
ANY AND ALL LIABILITIES, CLAIMS, COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A
RESULT OF SUCH ACQUISITION OR HOLDING.
The Class C-B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-3 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$1,382,000.00
Class C-B-3 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-3 Principal Balance
as of the Cut-Off Date: $1,382,000.00
Cede & Co.
Registered Owner
A-27
Exhibit A
CUSIP 939336 NB 5
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-4
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
NO TRANSFER OF THIS CLASS C-B-4 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST,
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-4 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$1,106,000.00
Class C-B-4 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-4 Principal Balance
as of the Cut-Off Date: $1,106,000.00
--------------------
Registered Owner
A-28
Exhibit A
CUSIP 939336 NC 3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-5
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
NO TRANSFER OF THIS CLASS C-B-5 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST,
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-5 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$553,000.00
Class C-B-5 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-5 Principal Balance
as of the Cut-Off Date: $553,000.00
--------------------
Registered Owner
A-29
Exhibit A
CUSIP 939336 ND 1
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-6
Evidencing a beneficial interest in a pool of assets consisting of beneficial
interests in another pool of assets consisting of beneficial interests in
another pool of assets consisting of, among other things, conventional one- to
four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. This Certificate represents ownership of a
"regular interest" in a "real estate mortgage investment conduit," as those
terms are defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date of this Certificate is December
23, 2002.
NO TRANSFER OF THIS CLASS C-B-6 CERTIFICATE WILL BE MADE UNLESS THE TRUSTEE
HAS RECEIVED (I) AN OFFICER'S CERTIFICATE IN THE FORM DESCRIBED IN SECTION
5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED IN SUCH OFFICER'S
CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT SUBJECT THE
TRUST, THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST,
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-6 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 2002-MS11 Portion of the Class C-B-6 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$1,105,879.89
Class C-B-6 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class C-B-6 Principal Balance
as of the Cut-Off Date: $1,105,879.89
--------------------
Registered Owner
A-30
Exhibit B
CUSIP 939336 NA 7
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class R
Evidencing a Percentage Interest in certain distributions with respect to a pool
of conventional one- to four-family mortgage loans formed and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE COMPANY AND THE
TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED
TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE NAME OF
ANY PERSON, THE TRUSTEE SHALL REQUIRE (I) AN OFFICER'S CERTIFICATE IN THE FORM
DESCRIBED IN SECTION 5.01(d) OF THE POOLING AGREEMENT AND (II) IF SO INDICATED
IN SUCH OFFICER'S CERTIFICATE, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM
AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE AND HOLDING OF A CLASS R CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE
LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUST, THE
TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST, THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY.
This Certificate is issued by Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2002-MS11 Trust. Solely for U.S. federal income tax
purposes, this Certificate represents "residual interests" in "real estate
mortgage investment conduits," as those terms are defined in Sections 860G and
860D, respectively, of the Internal Revenue Code of 1986, as amended.
Series 2002-MS11 Percentage Interest evidenced by this Class R
Certificate in the distributions to be made with
respect to the Class R
Certificates: ______________________%
Class R Certificate Interest Rate: 5.750%. Additionally the
Class R Certificates are entitled to Excess Liquidation
Proceeds and the Residual Distribution Amount as defined in
the Pooling Agreement.
Cut-Off Date: December 1, 2002
First Distribution Date: January 27, 2003
Last Scheduled Distribution Date: December 25, 2032
Class R Principal Balance as of the Cut-Off Date: $100.00
--------------------
Registered Owner
Certificate No. _________
B-1
This Certificate does not represent an obligation of or interest in
Washington Mutual Mortgage Securities Corp. or any of its affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed by any agency
or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in (i) a pool of assets ("REMIC I") consisting of,
among other things, conventional one- to four-family mortgage loans (the
"Mortgage Loans"), formed and administered by Washington Mutual Mortgage
Securities Corp. (the "Company"), which term includes any successor entity under
the Pooling Agreement referred to below, (ii) a pool of assets ("REMIC II")
consisting of interests in REMIC I and (iii) a pool of assets ("REMIC III")
consisting of interests in REMIC II. REMIC I, REMIC II and REMIC III were
created pursuant to a Pooling and Servicing Agreement, dated as of the Cut-Off
Date stated above (the "Pooling Agreement"), among the Company, State Street
Bank and Trust Company, as Trustee (the "Trustee"), and Christiana Bank & Trust
Company, as Delaware Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Pooling
Agreement. Nothing herein shall be deemed inconsistent with such meanings, and
in the event of any conflict between the Pooling Agreement and the terms of this
Certificate, the Pooling Agreement shall control. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Pooling
Agreement, to which Pooling Agreement the Holder of this Certificate, by virtue
of the acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, 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 above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
to the extent of such Certificateholder's Percentage Interest represented by
this Certificate in the portions (if any) then distributable on the Certificates
of this Class of (i) the REMIC I Available Distribution Amount for such
Distribution Date, as specified in Section 4.01 of the Pooling Agreement, (ii)
the REMIC II Available Distribution Amount for such Distribution Date, as
specified in Section 4.04 of the Pooling Agreement, and (iii) the REMIC III
Available Distribution Amount for such Distribution Date, as specified in
Section 4.05 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.
B-2
IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.
WASHINGTON MUTUAL MSC MORTGAGE PASS-
THROUGH CERTIFICATES SERIES 2002-MS11 TRUST
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned
Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------------------
Dated:
--------------------------------
B-3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Washington Mutual MSC Mortgage Pass-Through Certificates of the
Series and Class specified hereon (herein called the "Certificates") and
representing certain interests in REMIC I, REMIC II and REMIC III.
The Certificates do not represent an obligation of, or an interest in, the
Company or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Pooling Agreement. In the event funds
are advanced with respect to any Mortgage Loan, such advance is reimbursable to
the Master Servicer from the related recoveries on such Mortgage Loan or from
other cash deposited in the Certificate Account to the extent that such advance
is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement to the Master Servicer
of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Pooling Agreement at
any time by the Company, the Master Servicer and the Trustee with the consent of
the Holders of the Certificates evidencing Percentage Interests aggregating not
less than 66% of REMIC III. The Pooling 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 Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained by
the Trustee in the City and State of New York, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of Authorized Denominations evidencing
the same Percentage Interest set forth hereinabove will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations of like Certificate Principal Balance or Percentage Interest, as
applicable, as requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent of the
Company, the Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Company, the Trustee, the Certificate Registrar nor any such agent
shall be affected by notice to the contrary.
B-4
The obligations created by the Pooling Agreement and the Trust created
thereby shall terminate upon (i) the later of the maturity or other liquidation
(including purchase by the Master Servicer) of the last Mortgage Loan remaining
in the Trust or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, and (ii) the payment to
Certificateholders of all amounts held by the Trustee and required to be paid to
them pursuant to the Pooling Agreement. In the event that the Company or the
Master Servicer purchases any Mortgage Loan pursuant to the Pooling Agreement,
the Pooling Agreement generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of the unpaid
Principal Balance of such Mortgage Loan, plus unpaid accrued interest thereon at
the applicable Pass-Through Rate to the last day of the month in which such
purchase occurs. The Pooling Agreement permits, but does not require, the Master
Servicer to purchase from the Trust all Mortgage Loans at the time subject
thereto and all property acquired in respect of any Mortgage Loan upon payment
to the Certificateholders of the amounts specified in the Pooling Agreement. The
exercise of such right will effect early retirement of the Certificates, the
Master Servicer's right to purchase being subject to the aggregate Principal
Balance of the Mortgage Loans at the time of purchase being less than the
Clean-Up Call Percentage of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date.
B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Washington Mutual MSC Mortgage Pass-Through Certificate and hereby
irrevocably constitutes and appoints
________________________________________________________________________________
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:
----------------------- ----------------------------------------------
Signature Guaranteed
----------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without
alteration or enlargement or any
change whatever. This Certificate does
not represent an obligation of or an
interest in Washington Mutual Mortgage
Securities Corp. or any of its
affiliates. Neither this Certificate
nor the underlying Mortgage Loans are
guaranteed by any agency or
instrumentality of the United States.
B-6
Exhibit C
[Reserved]
C-1
Exhibit D
Mortgage Loan Schedule
Copies of the Mortgage Loan Schedule (which has been intentionally omitted
from this filing) may be obtained from Washington Mutual Mortgage Securities
Corp. or State Street Bank and Trust Company by contacting:
in the case of Washington Mutual Mortgage Securities Corp.,
Xxxxx Xxxxxx
Master Servicing Department
Washington Mutual Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx, XXX0X00
Xxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
in the case of State Street Bank and Trust Company,
Xxxxx X. X'Xxxxx
Global Investor Services Group
Corporate Trust
State Street Bank and Trust Company
0 Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
D-1
Exhibit E
SELLING AND SERVICING
CONTRACT
This Selling and Servicing Contract (this "Agreement") is made and entered into
by Washington Mutual Mortgage Securities Corp. and its successors and assigns
("Washington Mutual Mortgage") and the entity identified below and its
successors and assigns (the "Company").
WITNESSETH:
WHEREAS, this Company wishes to sell first lien residential mortgage loans
to, and service first lien residential mortgage loans on behalf of, Washington
Mutual Mortgage; and
WHEREAS, the Company has submitted a Seller Application to Washington
Mutual Mortgage and has been approved by Washington Mutual Mortgage for
participation in the Washington Mutual Mortgage Purchase Programs; and
WHEREAS, the Company has received and reviewed the Washington Mutual
Mortgage Purchase Programs Seller Guide (the "Seller Guide"), as well as the
Washington Mutual Mortgage Servicing Guide (the "Servicing Guide" and, together
with the Seller Guide, the "Guides"), and understands each and every provision
thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, Washington Mutual Mortgage and the Company hereby
agree as follows:
1. Guides. The Guides, which set forth the terms and conditions under which
Washington Mutual Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of Washington
Mutual Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by Washington Mutual Mortgage, are
incorporated into this Agreement in full by reference and made a part hereof as
fully as if set forth at length herein. All capitalized terms used and not
defined herein have the meanings ascribed to them in the Guides.
2. Company's Duties. The Company shall diligently perform all duties
incident to the origination, sale and servicing of the mortgage loans subject to
this Agreement. In the performance of its servicing duties, the Company shall
exercise the same degree of care it exercises when servicing mortgage loans for
its own account, but in no event shall the Company exercise less care than a
reasonable prudent servicer would exercise under similar circumstances. In
addition, the Company shall comply with all of the provisions of the Guides and
with all other requirements and instructions of Washington Mutual Mortgage. The
Company shall perform such duties at its sole expense, except as otherwise
expressly provided in the Guides.
3. Representations, Warranties and Covenants of the Company; Remedies of
Washington Mutual Mortgage. With respect to each mortgage loan sold by the
Company to Washington Mutual Mortgage pursuant to the terms of this Agreement,
the Company shall make all of the representations, warranties and covenants set
forth in the Guide and, in the event of the breach of any of such
representations, warranties and covenants, Washington Mutual Mortgage shall have
all of the remedies available at law or in equity, as well as all of the
remedies set forth in the Guide, including, but not limited to, repurchase and
indemnification. The representations and warranties made by the Company
E-1
with respect to any mortgage loan subject to this Agreement, as well as the
remedies available to Washington Mutual Mortgage upon the breach thereof, shall
survive: (a) any investigation regarding the mortgage loan conducted by
Washington Mutual Mortgage, its assignees or designees, (b) the liquidation of
the mortgage loan, (c) the purchase of the mortgage loan by Washington Mutual
Mortgage, its assignee or designee, (d) the repurchase of the mortgage loan by
the Company and (e) the termination of this Agreement.
4. Compensation. The Company shall be compensated for its services
hereunder as specified in the Guides.
5. No Assignment. This Agreement may not be assigned by the Company without
the prior written consent of Washington Mutual Mortgage. The Company hereby
consents to the assignment by Washington Mutual Mortgage of all or any part of
its rights and obligations under this Agreement to any affiliate designated by
Washington Mutual Mortgage. Any other transfer by Washington Mutual Mortgage
will be allowed and be effective upon written notice by Washington Mutual
Mortgage to the Company.
6. Prior Agreements. This Agreement supersedes any prior agreements and
understandings between Washington Mutual Mortgage and the Company governing the
subject matter hereof; provided, however, the Company shall not be released from
any responsibility or liability that may have arisen under such agreements and
understanding.
7. Effective Date of Agreement. This Agreement is not effective until it is
executed and accepted by Washington Mutual Mortgage at its home office in
Illinois.
8. Notices. All notices, requests, demands or other communications that are
to be given under this Agreement shall be in writing, addressed to the
appropriate parties, and shall be sent by certified mail, return receipt
requested, postage prepaid, if to the Company, at the address below and, if to
Washington Mutual Mortgage, to the appropriate address or facsimile number
specified in the Guides. Any such notice, request, demand or other communication
shall be deemed effective upon receipt.
9. Independent Contractor. At no time shall the Company represent that it
is acting as an agent, partner or joint venturer of Washington Mutual Mortgage.
The Company shall at all times act as an independent contracting party.
10. Amendment. This Agreement may not be amended or modified orally, and no
provision of this Agreement may be waived or amended, except in writing signed
by the party against whom enforcement is sought. Such a written waiver or
amendment must expressly reference this Agreement. However, by their terms the
Guides may be amended or supplemented by Washington Mutual Mortgage from time to
time. Any such amendment(s) to the Guides shall be in writing and be binding
upon the parties hereto on and after the effective date specified therein.
11. Miscellaneous. This Agreement, including all documents incorporated by
reference herein, constitutes the entire understanding between the parties
hereto and supersedes all other agreements, covenants, representations,
warranties, understandings and communications between the parties, whether
written or oral, with respect to the transactions contemplated by this
Agreement. All section headings contained herein are for convenience only and
shall not be construed as part of this Agreement. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or affecting
the validity or enforceability of such provision in any other jurisdiction, and
to this end, the provisions hereof are severable. This Agreement shall be
governed by, and construed and enforced in accordance with, applicable federal
laws and laws of the State of Illinois, without reference to conflict of laws
principles. This Agreement may be executed in one
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or more counterparts, each of which shall constitute an original and all of
which shall constitute the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by proper
officials duly authorized on the dates hereinafter set forth. This Agreement
shall take effect as of the date of its execution in original or facsimile
signature by a duly authorized officer of Washington Mutual Mortgage.
------------------------------------------ --------------------------------
Name of the Company Company I.D. Number
------------------------------------------ --------------------------------
Type of organization Organized under laws of
--------------------------------------------------------------------------------
Principal place of business: xxxxxx xxxxxxx, xxxx, xxxxx, zip code
--------------------------------------------------------------------------------
Typed name and title of the Company's authorized officer
------------------------------------------------------- ---------------------
Signature of the Company's authorized officer Date
Agreed to and accepted by Washington Mutual Mortgage Securities Corp.
--------------------------------------------------------------------------------
Typed name and title of authorized representative
------------------------------------------------------- ---------------------
Signature of authorized representative Date
E-3
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department, Washington Mutual 2002-MS11
Re: Purchase of Washington Mutual MSC Mortgage Pass-Through Certificates
Series 2002-MS11, Class [_] (the "Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand 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, and
(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, or taken any other action which would result in
a violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By:
--------------------------------
Authorized Officer
F-1
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department, Washington Mutual 2002-MS11
Washington Mutual Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
The undersigned (the "Purchaser") proposes to purchase Washington
Mutual MSC Mortgage Pass-Through Certificates, Series 2002-MS11, Class [_] (the
"Purchased Certificates") in the principal amount of $______________. In doing
so, the Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Pooling
and Servicing Agreement, dated as of December 1, 2002 (the "Pooling Agreement"),
by and among Washington Mutual Mortgage Securities Corp. ("Washington Mutual"),
State Street Bank and Trust Company, as trustee (the "Trustee"), and Christiana
Bank & Trust Company, as Delaware trustee, of the Washington Mutual MSC Mortgage
Pass-Through Certificates, Series 2002-MS11.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
Washington Mutual, the Trustee and the Trust that:
(a) The Purchaser is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which the Purchaser is organized,
is authorized to invest in the Purchased Certificates, and to enter into this
Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for its own
account as principal and not with a view to the distribution thereof, in whole
or in part;
(c) The Purchaser is an "accredited investor" as such term is defined
in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501 of
Regulation D under the Securities Act of 1933, as amended (the "Act"), has
knowledge of financial and business matters and is capable of evaluating the
merits and risks of an investment in the Purchased Certificates; the Purchaser
has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision; and the Purchaser is able to bear the
economic risk of an investment in the Purchased Certificates and can afford a
complete loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
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(e) The Purchaser confirms that Washington Mutual has made available
to the Purchaser the opportunity to ask questions of, and receive answers from
Washington Mutual concerning the trust funds created pursuant to the Pooling
Agreement (the "Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that Washington Mutual possesses
or can acquire without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 13a issued April 23,
1998, by the Office of Regulatory Activities of the Federal Home Loan Bank
System.
Section 3.Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates have not
been registered under the Act, or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from registration is
available. The Purchaser further understands that neither Washington Mutual nor
the Trust is under any obligation to register the Purchased Certificates or make
an exemption available. In the event that such a transfer is to be made within
two years from the Closing Date without registration under the Act or applicable
state securities laws, (i) the Trustee shall require, in order to assure
compliance with such laws, that the Certificateholder's prospective transferee
each certify to Washington Mutual, the Trustee and the Trust as to the factual
basis for the registration or qualification exemption relied upon, and (ii) the
Trustee or Washington Mutual may require an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Act and state securities
laws, which Opinion of Counsel shall not be an expense of the Trust, the Trustee
or Washington Mutual. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trust, the Trustee and
Washington Mutual 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.
(b) No transfer of a Purchased Certificate shall be made unless the
transferee provides Washington Mutual and the Trustee with (i) a Transferee's
Agreement, substantially in the form of this Agreement, (ii) an affidavit
substantially in the form of Exhibit N to the Pooling Agreement and (iii) if so
indicated in such affidavit, a Benefit Plan Opinion (as defined in Section 1.01
of the Pooling Agreement).
(c) The Purchaser acknowledges that its Purchased Certificates bear a
legend setting forth the applicable restrictions on transfer.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
validly executed by its duly authorized representative as of the day and the
year first above written.
[Purchaser]
By:
--------------------------------
Its:
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Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE CERTIFICATES (OTHER THAN THE CLASS R CERTIFICATES)
This Certificate does not represent an obligation of or interest in
Washington Mutual Mortgage Securities Corp. or any of its affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed by any agency
or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in a pool of assets ("REMIC III") consisting of
interests in another pool of assets ("REMIC II") consisting of interests in
another pool of assets ("REMIC I") consisting of, among other things,
conventional one- to four-family mortgage loans (the "Mortgage Loans"), formed
and administered by Washington Mutual Mortgage Securities Corp. (the "Company"),
which term includes any successor entity under the Pooling Agreement referred to
below. REMIC I, REMIC II and REMIC III were created pursuant to a Pooling and
Servicing Agreement, dated as of the Cut-Off Date stated above (the "Pooling
Agreement"), among the Company, State Street Bank and Trust Company, as Trustee
(the "Trustee"), and Christiana Bank & Trust Company, as Delaware Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Pooling Agreement. Nothing herein shall be deemed
inconsistent with such meanings, and in the event of any conflict between the
Pooling Agreement and the terms of this Certificate, the Pooling Agreement shall
control. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling Agreement, to which Pooling Agreement
the Holder of this Certificate, by virtue of the acceptance hereof, assents and
by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, 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 above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
to the extent of such Certificateholder's Percentage Interest represented by
this Certificate in the portion of the REMIC III Available Distribution Amount
for such Distribution Date then distributable on the Certificates of this Class,
as specified in Section 4.05 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.
H-1
IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.
WASHINGTON MUTUAL MSC MORTGAGE PASS-
THROUGH CERTIFICATES SERIES 2002-MS11
TRUST
By: STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned
Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
------------------------------------
Dated:
---------------------------------
H-2
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Washington Mutual MSC Mortgage Pass-Through Certificates of the
Series and Class specified hereon (herein called the "Certificates") and
representing certain interests in REMIC III.
The Certificates do not represent an obligation of, or an interest in, the
Company or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Pooling Agreement. In the event funds
are advanced with respect to any Mortgage Loan, such advance is reimbursable to
the Master Servicer from the related recoveries on such Mortgage Loan or from
other cash deposited in the Certificate Account to the extent that such advance
is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement to the Master Servicer
of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Pooling Agreement at
any time by the Company, the Master Servicer and the Trustee with the consent of
the Holders of the Certificates evidencing Percentage Interests aggregating not
less than 66% of REMIC III. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Pooling 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 Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained by
the Trustee in the City and State of New York, duly endorsed by, or accompanied
by an assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of Authorized Denominations evidencing
the same Percentage Interest set forth hereinabove will be issued to the
designated transferee or transferees.
[to be used only in the case of the Junior Subordinate Certificates:] [No
transfer of a Certificate will be made unless such transfer is exempt from or is
made in accordance with the registration requirements of the Securities Act of
1933, as amended (the "Securities Act") and any applicable state securities
laws. In the event that a transfer is to be made without registration or
qualification under applicable laws, (i) in the event such transfer is made
pursuant to Rule 144A under the Securities Act, the Company and the Trustee
shall require the transferee to execute an investment letter in substantially
the form attached as Exhibit L to the Pooling Agreement, which investment letter
shall not be an expense of the Company, the Master Servicer, the Trust or the
Trustee and (ii) in the event that such a transfer is not made pursuant to Rule
144A under the Securities Act, the Trustee may require an Opinion of Counsel
satisfactory to the Trustee that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an expense
of the Company, the Master Servicer, the Trust or the Trustee. Neither the
Company nor the Trust will register the Certificate under the Securities Act,
qualify the Certificate under any state securities law or provide registration
rights to any purchaser. Any Holder
H-3
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Trustee, the Company and the Master 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.]
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations of like Certificate Principal Balance or Percentage Interest, as
applicable, as requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent of the
Company, the Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
neither the Company, the Trustee, the Certificate Registrar nor any such agent
shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the Trust created
thereby shall terminate upon (i) the later of the maturity or other liquidation
(including purchase by the Master Servicer) of the last Mortgage Loan remaining
in the Trust or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, and (ii) the payment to
Certificateholders of all amounts held by the Trustee and required to be paid to
them pursuant to the Pooling Agreement. In the event that the Company or the
Master Servicer purchases any Mortgage Loan pursuant to the Pooling Agreement,
the Pooling Agreement generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of the unpaid
Principal Balance of such Mortgage Loan, plus unpaid accrued interest thereon at
the applicable Pass-Through Rate to the last day of the month in which such
purchase occurs. The Pooling Agreement permits, but does not require, the Master
Servicer to purchase from the Trust all Mortgage Loans at the time subject
thereto and all property acquired in respect of any Mortgage Loan upon payment
to the Certificateholders of the amounts specified in the Pooling Agreement. The
exercise of such right will effect early retirement of the Certificates, the
Master Servicer's right to purchase being subject to the aggregate Principal
Balance of the Mortgage Loans at the time of purchase being less than the
Clean-Up Call Percentage of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date.
H-4
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Washington Mutual MSC Mortgage Pass-Through Certificate and hereby
irrevocably constitutes and appoints ___________________________________________
________________________________________________________________________________
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:
----------------------- ----------------------------------------------
Signature Guaranteed
NOTICE: The signature to this assignment must
correspond with the name as written
upon the face of the within instrument
in every particular, without
alteration or enlargement or any
change whatever. This Certificate does
not represent an obligation of or an
interest in Washington Mutual Mortgage
Securities Corp. or any of its
affiliates. Neither this Certificate
nor the underlying Mortgage Loans are
guaranteed by any agency or
instrumentality of the United States.
H-5
Exhibit I
TRANSFEROR CERTIFICATE
[Date]
State Street Bank and Trust Company, as Trustee
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department, Washington Mutual 2002-MS11
Re: Washington Mutual MSC Mortgage Pass-Through Certificates, Series
2002-MS11, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale from
______________________________ (the "Seller") to ______________________________
(the "Purchaser") of $____________________ initial Certificate Principal Balance
of Washington Mutual MSC Mortgage Pass-Through Certificates, Series 2002-MS11,
Class R (the "Certificate"), pursuant to Section 5.01 of the Pooling and
Servicing Agreement (the "Pooling Agreement"), dated as of December 1, 2002
among Washington Mutual Mortgage Securities Corp., as depositor and master
servicer (the "Company"), State Street Bank and Trust Company, as trustee (the
"Trustee"), and Christiana Bank & Trust Company, as Delaware trustee. All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling Agreement. The Seller hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Trust that:
1. No purpose of the Seller relating to the sale of the Certificate by the
Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Company a transferee affidavit and agreement in the form attached to the
Pooling Agreement as Exhibit J. The Seller does not know or believe that any
representation contained therein is false.
3. The Seller has no actual knowledge that the proposed Transferee is not a
Permitted Transferee.
4. The Seller has no actual knowledge that the Purchaser would be unwilling
or unable to pay taxes due on its share of the taxable income attributable to
the Certificates.
5. The Seller has conducted a reasonable investigation of the financial
condition of the Purchaser and, as a result of the investigation, found that the
Purchaser has historically paid its debts as they came due, and found no
significant evidence to indicate that the Purchaser will not continue to pay its
debts as they come due in the future.
I-1
6. The Purchaser has represented to the Seller that, if the Certificates
constitute a noneconomic residual interest, it (i) understands that as holder of
a noneconomic residual interest it may incur tax liabilities in excess of any
cash flows generated by the interest, and (ii) intends to pay taxes associated
with its holding of the Certificates as they become due.
Very truly yours,
[Seller]
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
I-2
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class R Certificate (the "Owner")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of ______________] [the United States], on behalf of which he makes this
affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code") and will endeavor
to remain other than a disqualified organization for so long as it retains its
ownership interest in the Class R Certificates, and (ii) is acquiring the Class
R Certificates for its own account or for the account of another Owner from
which it has received an affidavit and agreement in substantially the same form
as this affidavit and agreement. (For this purpose, a disqualified organization"
means the United States, any state or political subdivision thereof, or any
agency or instrumentality of any of the foregoing (other than an instrumentality
all of the activities of which are subject to tax and, except for the Federal
Home Loan Mortgage Corporation, a majority of whose board of directors is not
selected by any such governmental entity), or any foreign government or
international organization, or any agency or instrumentality of such foreign
government or organization, any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that is generally exempt
from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates after March 31, 1988; (ii) that such tax
would be on the transferor, or, if such transfer is through an agent (which
person includes a broker, nominee or middle-man) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be a "noneconomic
residual interest" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, if a significant purpose of the transfer was to enable the transferor
to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if at any time during the taxable year
of the pass-through entity a disqualified organization is the record holder of
an interest in such entity. (For this purpose, a "pass through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
J-1
5. That the Owner is aware that the Trustee will not register the
Transfer of the Class R Certificates unless the transferee, or the transferees'
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.01 of the Pooling
Agreement under which the Class R Certificates were issued (in particular,
clauses (iii)(A) and (iii)(B) of Section 5.01(c) which authorize the Trustee to
deliver payments to a person other than the Owner and negotiate a mandatory sale
by the Trustee in the event the Owner holds such Certificates in violation of
Section 5.01). The Owner expressly agrees to be bound by and to comply with such
restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
8. The Owner's Taxpayer Identification Number is ___________________.
9. That no purpose of the Owner relating to the purchase of the Class
R Certificates by the Owner is or will be to enable the transferor to impede the
assessment or collection of tax. In making this representation, the Owner
warrants that the Owner is familiar with Treasury Regulation 1.860E-1(c) and
with the preamble to the adoption of amendments to that regulation as of July
19, 2002, attached hereto as Exhibit 1.
10. That the Owner anticipates that it will, so long as it holds the
Class R Certificates, have sufficient assets to pay any taxes owed by the holder
of such Certificates, and hereby represents to and for the benefit of the person
from whom it acquired the Class R Certificates that the Owner intends to pay
taxes associated with holding such Certificates as they become due, fully
understanding that it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates. That the Owner has provided financial
statements or other financial information requested by the transferor in
connection with the transfer of the Class R Certificates to permit the
transferor to assess the financial capability of the Owner to pay such taxes.
11. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Class R Certificates remain outstanding.
12. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Class R Certificates remain outstanding.
13. That the Owner is familiar with Treasury Regulation 1.860E-1(c)
and with the preamble to the adoption of amendments to that regulation as of
July 19, 2002, attached hereto as Exhibit 1, and that no purpose of the Owner
relating to any sale of the Class R Certificates by the Owner will be to impede
the assessment or collection of tax.
14. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity treated as a partnership or corporation
for U.S. federal income tax purposes created or organized in, or under the laws
of, the United States or any state thereof or the District of Columbia, or an
estate or trust whose income from sources without the United States is
includible in gross income for
J-2
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
15. The Owner hereby agrees that it will not cause income from the
Class R Certificates to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the Owner
or another United States taxpayer.
16. The Owner hereby agrees to cooperate with the Company and to take
any action required of it by the Code or Treasury regulations thereunder
(whether now or hereafter promulgated) in order to create or maintain the REMIC
status of REMIC I, REMIC II and REMIC III (the "REMICs").
17. The Owner hereby agrees that it will not take any action that
could endanger the REMIC status of the REMICs or result in the imposition of tax
on the REMICs unless counsel for, or acceptable to, the Company has provided an
opinion that such action will not result in the loss of such REMIC status or the
imposition of such tax, as applicable.
18. The Owner as transferee of the Class R Certificates has
represented to the transferor that, if the Class R Certificates constitute a
noneconomic residual interest, the Owner (i) understands that as holder of a
noneconomic residual interest it may incur tax liabilities in excess of any cash
flows generated by the interest, and (ii) intends to pay taxes associated with
its holding of the Class R Certificates as they become due.
19. That the Owner satisfies the condition in the paragraph marked
below [xxxx one paragraph only]:
___ The Owner is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue
Code of 1986, as amended (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of, or purchasing the Class R
Certificates with "plan assets" of, any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. Section 2510.3-101.
___ The Owner has delivered a Benefit Plan Opinion (as defined in Section
1.01 of the Pooling Agreement under which the Class R Certificates were
issued).
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this ____________ day of _______, 20 __ .
[Name of Owner]
By:
-------------------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
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[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and Acknowledged to me that he executed
the same as his free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this ___ day of __________________, 20__.
NOTARY PUBLIC
COUNTY OF STATE OF
My Commission expires the ___ day
of _________________ , 20______
J-4
Exhibit 1 to Transferee Affidavit
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
--------------------------------------------------
SUMMARY: This document contains final regulations relating to safe harbor
transfers of noneconomic residual interests in real estate mortgage investment
conduits (REMICs). The final regulations provide additional limitations on the
circumstances under which transferors may claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: Xxxxxxxx Xxxxxxxxxx at (000) 000-0000 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed and,
pending receipt and evaluation of public comments, approved by the Office of
Management and Budget (OMB) under 44 U.S.C. 3507 and assigned control number
1545-1675. The collection of information in this regulation is in Sec.
1.860E-1(c)(5)(ii). This information is required to enable the IRS to verify
that a taxpayer is complying with the conditions of this regulation. The
collection of information is mandatory and is required. Otherwise, the taxpayer
will not receive the benefit of safe harbor treatment as provided in the
regulation. The likely respondents are businesses and other for-profit
institutions.
Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Xxxxxxxxxx, XX, 00000, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, Xxxxxxxxxx, XX 00000. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
J-5
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests. In general, a transfer of
a noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax. A purpose to impede the assessment or
collection of tax (a wrongful purpose) exists if the transferor, at the time of
the transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the REMIC's taxable income.
Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements are
satisfied: (1) the transferor conducts a reasonable investigation of the
transferee's financial condition (the investigation requirement); and (2) the
transferor secures a representation from the transferee to the effect that the
transferee understands the tax obligations associated with holding a residual
interest and intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the
J-6
interest; (2) the present value of the expected future distributions on the
interest; and (3) the present value of the anticipated tax savings associated
with holding the interest as the REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335)
to set forth an alternative safe harbor that taxpayers could use while the IRS
and the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two-prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in
the case of a transfer or assignment of a noneconomic residual interest to a
foreign branch of an otherwise eligible transferee. If such a transfer or
assignment were permitted, a corporate taxpayer might seek to claim that the
provisions of an applicable income tax treaty would resource excess inclusion
income as foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset by foreign
tax credits. Such a claim would impede the assessment or collection of U.S. tax
on excess inclusion income, contrary to the congressional purpose of assuring
that such income will be taxable in all events. See, e.g., sections 860E(a)(1),
(b), (e) and 860G(b) of the Code.
The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer may use
to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(i) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be
J-7
used if the transferee can demonstrate that it regularly borrows, in the course
of its trade or business, substantial funds at such lower rate from an unrelated
third party." The IRS and the Treasury Department have learned that, based on
this provision, certain taxpayers have been attempting to use unrealistically
low or zero interest rates to satisfy the formula test, frustrating the intent
of the test. Furthermore, the Treasury Department and the IRS believe that a
rule allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
It is anticipated that when final regulations are adopted with respect to
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern transfers of FASIT ownership
interests with substantially the same applicability date as is contained in this
document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August 19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
Drafting Information
The principal author of these regulations is Xxxxxxxx Xxxxxxxxxx. However,
other personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations
J-8
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
J-9
Exhibit K
[Reserved]
K-1
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
------------------------
------------------------
------------------------
------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Seller,
the Trustee, the Trust and the Master Servicer (as defined in Section 1.01 of
the Pooling and Servicing Agreement (the "Agreement") dated as of December 1,
2002 among Washington Mutual Mortgage Securities Corp., as Depositor and Master
Servicer, State Street Bank and Trust Company, as Trustee, and Christiana Bank &
Trust Company, as Delaware trustee) pursuant to Section 5.01(f) of the
Agreement, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has received and reviewed the Private Placement
Memorandum dated as of December [23], 2002 relating to the Rule 144A
Securities and has been furnished with all information regarding the Rule
144A Securities that it has requested from the Seller, the Trustee, the
Company or the Master Servicer.
L-1
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would
render the disposition of the Rule 144A Securities a violation of Section 5
of the 1933 Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has (1) completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2, or (2) obtained the waiver of the Company with respect to Annex 1 and
Annex 2 pursuant to Section 5.01(f) of the Agreement. The Buyer is aware
that the sale to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the accounts of
other qualified institutional buyers, understands that such Rule 144A
Securities may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
f. The Buyer is not affiliated with (i) the Trustee or (ii) any Rating
Agency that rated the Rule 144A Securities.
g. If applicable, the Buyer has complied, and will continue to comply,
with the guidelines established by Thrift Bulletin 13a issued April 23,
1998, by the Office of Regulatory Activities of the Federal Home Loan Bank
System.
3. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
-------------------------------------- --------------------------------------
Print Name of Seller Print Name of Buyer
By: By:
----------------------------------- -----------------------------------
Name: Name:
Title: Title:
L-2
Taxpayer Identification: Taxpayer Identification:
--------------- --------------
No.: No.:
----------------------------------- -----------------------------------
Date: Date:
---------------------------------- ---------------------------------
L-3
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
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 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $______________________ (the Buyer must own and/or invest on
a discretionary basis at least $100,000,000 in securities unless the Buyer is a
dealer, and, in that case, the Buyer must own and/or invest on a discretionary
basis at least $10,000,000 in securities) 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.
___ 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.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring
of risks underwritten by insurance companies and which is subject to
supervision by the insurance commissioner or a similar official or agency
of a State or 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.
L-1-1
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and is subject to the fiduciary responsibility provisions
of ERISA.
___ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
___ SBIC. The 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. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act of
1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans 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, or (b) employee benefit plans within the meaning of Title
I of the Employee Retirement Income Security Act of 1974, but is not a
trust fund that includes as participants individual retirement accounts or
H.R. 10 plans.
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) 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.
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. 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.
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.
L-1-2
Will the Buyer be purchasing the Rule 144A
--------- ----------
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. 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 Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.
--------------------------------------
Print Name of Buyer
By:
-----------------------------------
Name:
Title:
Date:
---------------------------------
L-1-3
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
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 ("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, 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.
____ 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) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made 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. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A
L-2-1
Securities will constitute a reaffirmation of this certification by the
undersigned as of the date of such purchase.
--------------------------------------
Print Name of Buyer
By:
-----------------------------------
Name:
Title:
Date:
---------------------------------
IF AN ADVISER:
--------------------------------------
Print Name of Buyer
By:
-----------------------------------
Name:
Title:
Date:
---------------------------------
(SEAL)
L-2-2
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of December 1, 2002 by
and among Washington Mutual Mortgage Securities Corp., as
Depositor and Master Servicer, State Street Bank and Trust
Company, as Trustee, and Christiana Bank & Trust Company, as
Delaware trustee, relating to Washington Mutual MSC Mortgage
Pass-Through Certificates, Series 2002-MS11
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as noted on the attachment hereto, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto) it or the Custodian on its behalf has reviewed the
documents delivered to it or to the Custodian on its behalf pursuant to Section
2.01 of the Pooling and Servicing Agreement and has determined that (i) all
documents required (in the case of instruments described in clauses (X)(iv) and
(Y)(ix) of the definition of "Mortgage File," known by the Trustee to be
required) pursuant to the definition of "Mortgage File" and Section 2.01 of the
Pooling and Servicing Agreement have been executed and received as of the date
hereof are in its possession or in the possession of the Custodian on its behalf
and (ii) all such documents have been executed and relate to the Mortgage Loans
identified in the Mortgage Loan Schedule. The Trustee has made no independent
examination of such documents beyond the review specifically required in the
above referenced Pooling and Servicing Agreement and has relied upon the
purported genuineness and due execution of any such documents and upon the
purported genuineness of any signature thereon. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or genuineness
of any of the documents contained in each Mortgage File or any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
--------------------------------------
as Trustee
By:
-----------------------------------
Name:
Title:
M-1
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee (the "Trustee")
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department, Washington Mutual 2002-MS11
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: CLASS [C-B-4] [C-B-5] [C-B-6] CERTIFICATES (THE "PURCHASED CERTIFICATES")
ISSUED BY WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2002-MS11 TRUST (THE "TRUST")
Under penalties of perjury, I, _____________________, declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete; and
1. That I am the _______________ of __________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on behalf
of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the assets of the Trust.
3. That the Purchaser satisfies the condition in the paragraph marked
below [xxxx one paragraph only]:
___ The Purchaser is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue
Code of 1986, as amended (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of, or purchasing any of the Purchased
Certificates with "plan assets" of, any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. Section 2510.3-101.
___ The Purchaser is an insurance company, the source of funds to be used
by it to acquire or hold the Purchased Certificate is an "insurance company
general account" (within the meaning of DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the conditions in Sections I and III of PTCE
95-60 have been satisfied.
___ The Purchaser has delivered to Washington Mutual and the Trustee a
Benefit Plan Opinion (as defined in Section 1.01 of the Pooling and
Servicing Agreement, dated as of December 1, 2002, by and among Washington
Mutual, the Trustee and the Delaware Trustee thereunder, and relating to
the Trust).
N-1
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
duly executed on its behalf, by its duly authorized officer this _____ day of
__________________, 20__.
[Purchaser]
By:
-----------------------------------
Its:
N-2
Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.
SUBSCRIBED and SWORN to before me this day of ____________, 20__.
----------------------------------------
Notary Public
N-3
Exhibit O
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee (the "Trustee")
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Corporate Trust Department, Washington Mutual 2002-MS11
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: CLASS [C-B-1] [C-B-2] [C-B-3] CERTIFICATES (THE "PURCHASED CERTIFICATES")
ISSUED BY WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 2002-MS11 TRUST (THE "TRUST")
Under penalties of perjury, I, _____________________, declare that, to the
best of my knowledge and belief, the following representations are true, correct
and complete; and
1. That I am the _______________ of __________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on behalf
of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the assets of the Trust.
3. That the Purchaser satisfies the condition in the paragraph marked
below [xxxx one paragraph only]:
___ The Purchaser is not an employee benefit or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any such Plan)
acting, directly or indirectly, on behalf of or purchasing the Purchased
Certificate with "plan assets" of, any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. Section 2510.3-101.
___ The Purchaser is an insurance company, the source of funds to be
used by it to acquire or hold the Purchased Certificate is an "insurance
company general account" (within the meaning of DOL Prohibited Transaction
Class Exemption ("PTCE") 95-60), and the conditions in Sections I and III
of PTCE 95-60 have been satisfied.
___ The Purchased Certificate was rated "BBB-" or better (or its
equivalent) by at least one of the Rating Agencies (as defined in Section
1.01 of the Pooling and Servicing Agreement (the "the Pooling and Servicing
Agreement"), dated as of December 1, 2002, by and among Washington Mutual,
the Trustee and the Delaware Trustee thereunder, and relating to the Trust)
at the time of Purchaser's acquisition of the Purchased Certificate (or
interest therein).
___ The Purchaser has delivered to Washington Mutual and the Trustee a
Benefit Plan Opinion (as defined in Section 1.01 of the Pooling and
Servicing Agreement).
O-1
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
duly executed on its behalf, by its duly authorized officer this _____ day of
__________________, 20__.
[Purchaser]
By:
-----------------------------------
Its:
O-2
Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.
SUBSCRIBED and SWORN to before me this day of ____________, 20__.
----------------------------------------
Notary Public
O-3
