EXECUTION VERSION
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
POOLING AND SERVICING AGREEMENT
$275,191,959.62
Washington Mutual Mortgage Securities Corp.
Washington Mutual MSC Mortgage Pass-Through Certificates
Series 2001-AR1
Cut-Off Date: December 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I ..................................................................................................3
Section 1.01. Definitions..............................................................................3
Adjustment Date................................................................................3
Aggregate Certificate Principal Balance........................................................3
Appraised Value................................................................................3
Assignment of Proprietary Lease................................................................3
Authenticating Agent...........................................................................3
Authorized Denomination........................................................................3
Available Distribution Amount..................................................................3
Bankruptcy Coverage............................................................................4
Bankruptcy Loss................................................................................5
Beneficial Holder..............................................................................5
Benefit Plan Opinion...........................................................................5
Book-Entry Certificates........................................................................5
Business Day...................................................................................5
Buydown Agreement..............................................................................5
Buydown Fund...................................................................................5
Buydown Fund Account...........................................................................6
Buydown Loan...................................................................................6
Certificate....................................................................................6
Certificate Account............................................................................6
Certificateholder or Holder....................................................................6
Certificate Interest Rate......................................................................6
Certificate Principal Balance..................................................................6
Certificate Register and Certificate Registrar.................................................7
Class..........................................................................................7
Class A Certificates...........................................................................7
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Class B Certificates...........................................................................7
Class B-1 Certificates.........................................................................7
Class B-2 Certificates.........................................................................7
Class B-3 Certificates.........................................................................7
Class B-4 Certificates.........................................................................7
Class B-5 Certificates.........................................................................7
Class B-6 Certificates.........................................................................7
Class Principal Balance........................................................................7
Class R Certificates...........................................................................8
Clean-Up Call Percentage.......................................................................8
Clearing Agency................................................................................8
Closing Date...................................................................................8
Code...........................................................................................8
Company........................................................................................8
Compensating Interest..........................................................................8
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(continued)
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Cooperative....................................................................................8
Cooperative Apartment..........................................................................8
Cooperative Lease..............................................................................8
Cooperative Loans..............................................................................8
Cooperative Stock..............................................................................9
Cooperative Stock Certificate..................................................................9
Corporate Trust Office.........................................................................9
Corporation....................................................................................9
Curtailment....................................................................................9
Curtailment Shortfall..........................................................................9
Custodial Account for P&I......................................................................9
Custodial Account for Reserves................................................................10
Custodial Agreement...........................................................................10
Custodian.....................................................................................10
Cut-Off Date..................................................................................10
Definitive Certificates.......................................................................10
Depositary Agreement..........................................................................10
Destroyed Mortgage Note.......................................................................10
Determination Date............................................................................10
Disqualified Organization.....................................................................10
Distribution Amount...........................................................................11
Distribution Date.............................................................................13
DTC...........................................................................................13
DTC Participant...............................................................................13
Due Date......................................................................................13
Eligible Institution..........................................................................13
Eligible Investments..........................................................................13
ERISA ........................................................................................14
ERISA Restricted Certificate..................................................................14
Event of Default..............................................................................14
Excess Liquidation Proceeds...................................................................14
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TABLE OF CONTENTS
(continued)
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FDIC .........................................................................................15
FHA ..........................................................................................15
Xxxxxx Xxx....................................................................................15
Final Maturity Date...........................................................................15
Fraud Coverage................................................................................15
Fraud Loss....................................................................................15
Xxxxxxx Mac...................................................................................15
Index ........................................................................................15
Indirect DTC Participants.....................................................................16
Insurance Proceeds............................................................................16
Interest Distribution Amount..................................................................16
Investment Account............................................................................16
Investment Depository.........................................................................16
Junior Subordinate Certificates...............................................................16
Last Scheduled Distribution Date..............................................................16
Lender .......................................................................................16
Liquidated Mortgage Loan......................................................................16
Liquidation Principal.........................................................................17
Liquidation Proceeds..........................................................................17
Loan-to-Value Ratio...........................................................................17
Lowest Class B Owner..........................................................................17
Margin........................................................................................17
Master Servicer...............................................................................17
Master Servicer Business Day..................................................................17
Master Servicing Fee..........................................................................17
Master Servicing Fee Rate.....................................................................17
MERS..........................................................................................17
MERS Loan.....................................................................................17
MERS'r' System................................................................................17
MIN...........................................................................................17
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(continued)
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MOM Loan......................................................................................18
Monthly P&I Advance...........................................................................18
Monthly Payment...............................................................................18
Xxxxx'x.......................................................................................18
Mortgage......................................................................................18
Mortgage File.................................................................................18
Mortgage Interest Rate........................................................................21
Mortgage Loan Schedule........................................................................21
Mortgage Loans................................................................................21
Mortgage Note.................................................................................21
Mortgage Pool.................................................................................21
Mortgaged Property............................................................................21
Mortgagor.....................................................................................22
Nonrecoverable Advance........................................................................22
Non-U.S. Person...............................................................................22
Notice Addresses..............................................................................22
OTS...........................................................................................22
Officer's Certificate.........................................................................22
Opinion of Counsel............................................................................22
Original Value................................................................................22
Ownership Interest............................................................................22
Pass-Through Entity...........................................................................22
Pass-Through Rate.............................................................................23
Paying Agent..................................................................................23
Payoff .......................................................................................23
Payoff Earnings...............................................................................23
Payoff Interest...............................................................................23
Payoff Period.................................................................................23
Percentage Interest...........................................................................23
Periodic Cap..................................................................................24
Permitted Transferee..........................................................................24
Person .......................................................................................24
PMI Insurer...................................................................................24
PMI Insurer Fee...............................................................................25
PMI Insurer Fee Rate..........................................................................25
PMI Mortgage Loans............................................................................25
PMI Policy....................................................................................25
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(continued)
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Prepaid Monthly Payment.......................................................................25
Primary Insurance Policy......................................................................25
Principal Balance.............................................................................25
Principal Payment.............................................................................26
Principal Payment Amount......................................................................26
Principal Prepayment..........................................................................26
Principal Prepayment Amount...................................................................26
Prior Period..................................................................................26
Pro Rata Allocation...........................................................................26
Prospectus....................................................................................26
Purchase Obligation...........................................................................26
Purchase Price................................................................................26
Qualified Insurer.............................................................................27
Rate Ceiling..................................................................................27
Rate Floor....................................................................................27
Rating Agency.................................................................................27
Ratings.......................................................................................27
Realized Loss.................................................................................27
Recognition Agreement.........................................................................28
Record Date...................................................................................28
REMIC.........................................................................................28
REMIC Provisions..............................................................................28
REMIC I.......................................................................................28
REMIC I Regular Interests.....................................................................29
REMIC I Trust Fund............................................................................29
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TABLE OF CONTENTS
(continued)
Page
Residual Certificates.........................................................................29
Residual Distribution Amount..................................................................29
Responsible Officer...........................................................................29
S&P...........................................................................................29
Securities Act................................................................................29
Security Agreement............................................................................29
Selling and Servicing Contract................................................................29
Senior Certificates...........................................................................29
Senior Liquidation Amount.....................................................................30
Senior Percentage.............................................................................30
Senior Prepayment Percentage..................................................................30
Senior Principal Distribution Amount..........................................................31
Senior Subordinate Certificates...............................................................31
Servicer......................................................................................32
Servicing Fee.................................................................................32
Servicing Fee Rate............................................................................32
Servicing Officer.............................................................................32
Special Hazard Coverage.......................................................................32
Special Hazard Loss...........................................................................32
Special Primary Insurance Policy..............................................................33
Special Primary Insurance Premium.............................................................33
Subordinate Certificates......................................................................33
Subordinate Liquidation Amount................................................................33
Subordinate Percentage........................................................................33
Subordinate Prepayment Percentage.............................................................33
Subordinate Principal Distribution Amount.....................................................33
Subordinate Principal Prepayments Distribution Amount.........................................34
Subordination Level...........................................................................34
Substitute Mortgage Loan......................................................................34
Tax Matters Person............................................................................34
Termination Date..............................................................................34
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(continued)
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Termination Payment...........................................................................34
Transfer......................................................................................34
Transferee....................................................................................34
Transferee Affidavit and Agreement............................................................35
Trust.........................................................................................35
Trust Fund....................................................................................35
Trustee.......................................................................................35
Uncollected Interest..........................................................................35
Uncompensated Interest Shortfall..............................................................35
Underwriter...................................................................................35
Underwriting Standards........................................................................35
Uninsured Cause...............................................................................35
U.S. Person...................................................................................36
VA............................................................................................36
Withdrawal Date...............................................................................36
ARTICLE II Conveyance of the Trust Funds; REMIC Election and Designations;
Original Issuance of Certificates....................................................36
Section 2.01. Conveyance of the Trust Fund; REMIC Election and Designations.................36
Section 2.02. Acceptance by Trustee.........................................................41
Section 2.03. Representations and Warranties of the Company Concerning the Mortgage Loans...43
Section 2.04. Acknowledgment of Transfer of Trust Fund......................................46
ARTICLE III Administration and Servicing of Mortgage Loans.......................................47
Section 3.01. The Company to Act as Master Servicer.........................................47
Section 3.02. Custodial Accounts and Buydown Fund Accounts..................................49
Section 3.03. The Investment Account; Eligible Investments..................................50
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TABLE OF CONTENTS
(continued)
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Section 3.04. The Certificate Account.......................................................51
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......................................................................52
Section 3.06. Maintenance of Primary Insurance Policies; Collections Thereunder.............54
Section 3.07. Maintenance of Hazard Insurance...............................................54
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements.....................55
Section 3.09. Realization Upon Defaulted Mortgage Loans.....................................55
Section 3.10. Trustee to Cooperate; Release of Mortgage Files...............................58
Section 3.11. Compensation to the Master Servicer and the Servicers.........................58
Section 3.12. Reports to the Trustee; Certificate Account Statement.........................59
Section 3.13. Annual Statement as to Compliance.............................................59
Section 3.14. Access to Certain Documentation and Information Regarding the Mortgage Loans..59
Section 3.15. Annual Independent Public Accountants' Servicing Report.......................60
Section 3.16. [Reserved.]...................................................................60
Section 3.17. [Reserved.]...................................................................60
Section 3.18. [Reserved.]...................................................................60
Section 3.19. [Reserved.]...................................................................60
Section 3.20. Assumption or Termination of Selling and Servicing Contracts by Trustee.......60
Section 3.21. PMI Policy....................................................................60
ARTICLE IV Payments to Certificateholders; Payment of Expenses..................................61
Section 4.01. Distributions to Certificateholders; Payment of Special Primary
Insurance Premiums............................................................61
Section 4.02. Advances by the Master Servicer; Distribution Reports to the Trustee..........62
Section 4.03. Nonrecoverable Advances.......................................................63
Section 4.04. Statements to Certificateholders..............................................64
ARTICLE V The Certificates.....................................................................65
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(continued)
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Section 5.01. The Certificates..............................................................65
Section 5.02. Certificates Issuable in Classes; Distributions of Principal and Interest;
Authorized Denominations......................................................71
Section 5.03. Registration of Transfer and Exchange of Certificates.........................71
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.............................72
Section 5.05. Persons Deemed Owners.........................................................72
Section 5.06. Temporary Certificates........................................................73
Section 5.07. Book-Entry for Book-Entry Certificates........................................73
Section 5.08. Notices to Clearing Agency....................................................74
Section 5.09. Definitive Certificates.......................................................74
Section 5.10. Office for Transfer of Certificates...........................................75
ARTICLE VI The Company and the Master Servicer..................................................75
Section 6.01. Liability of the Company and the Master Servicer..............................75
Section 6.02. Merger or Consolidation of the Company, or the Master Servicer................75
Section 6.03. Limitation on Liability of the Company, the Master Servicer and Others........75
Section 6.04. The Company and the Master Servicer not to Resign.............................76
Section 6.05. Trustee Access................................................................76
ARTICLE VII Default..............................................................................77
Section 7.01. Events of Default.............................................................77
Section 7.02. Trustee to Act; Appointment of Successor......................................79
Section 7.03. Notification to Certificateholders............................................80
ARTICLE VIII Concerning the Trustee...............................................................81
Section 8.01. Duties of Trustee.............................................................81
Section 8.02. Certain Matters Affecting the Trustee.........................................82
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........................83
Section 8.04. Trustee May Own Certificates..................................................83
Section 8.05. The Master Servicer to Pay Trustee's Fees and Expenses........................83
Section 8.06. Eligibility Requirements for Trustee..........................................84
Section 8.07. Resignation and Removal of Trustee............................................84
Section 8.08. Successor Trustee.............................................................85
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Section 8.09. Merger or Consolidation of Trustee............................................85
Section 8.10. Appointment of Co-Trustee or Separate Trustee.................................85
Section 8.11. Authenticating Agents.........................................................86
Section 8.12. Paying Agents.................................................................87
ARTICLE IX Termination..........................................................................88
Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of All
Mortgage Loans................................................................88
Section 9.02. Additional Termination Requirements...........................................90
Section 9.03. Trusts Irrevocable............................................................90
ARTICLE X Miscellaneous Provisions.............................................................90
Section 10.01. Amendment.....................................................................90
Section 10.02. Recordation of Agreement......................................................91
Section 10.03. Limitation on Rights of Certificateholders....................................91
Section 10.04. Access to List of Certificateholders..........................................92
Section 10.05. Governing Law.................................................................93
Section 10.06. Notices.......................................................................93
Section 10.07. Severability of Provisions....................................................93
Section 10.08. Counterpart Signatures........................................................93
Section 10.09. Benefits of Agreement.........................................................93
Section 10.10. Notices and Copies to Rating Agencies.........................................93
Exhibit A Form of Certificates
Exhibit B [Reserved]
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 Form of PMI Policy
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)
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TABLE OF CONTENTS
(continued)
Exhibit O Officer's Certificate With Respect to ERISA Matters Pursuant to
Section 5.01(g)
Exhibit P [Schedule of PMI Mortgage Loans]
-xii-
This Pooling and Servicing Agreement, dated and effective as of
December 1, 2001 (this "Agreement"), is executed by and between Washington
Mutual Mortgage Securities Corp., as depositor and Master Servicer (the
"Company"), and Bankers Trust Company of California, N.A., a national banking
association with a corporate trust office at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx
Xxx, XX 00000, as Trustee (the "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 Trustee for inclusion in the
Trust Fund. On the Closing Date, the Company will acquire the Certificates from
the REMIC I Trust Fund as consideration for its transfer to the Trust Fund of
the Mortgage Loans and certain other assets and will be the owner of the
Certificates. The Company has duly authorized the execution and delivery of this
Agreement to provide for the conveyance to the Trustee of the Mortgage Loans and
the issuance to the Company of the Certificates, representing in the aggregate
the entire beneficial ownership of REMIC I. All covenants and agreements made by
the Company and the Trustee herein with respect to the Mortgage Loans and the
other property constituting the assets of REMIC I are for the benefit of the
Holders from time to time of the Certificates. The Company is entering into this
Agreement, and the Trustee is 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 October
5, 2001, and a Prospectus Supplement, dated December 10, 2001, of the Company
(together, the "Prospectus"). The Junior Subordinate Certificates have been
offered for sale pursuant to a Private Placement Memorandum, dated December 12,
2001. The Trust Fund 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 table sets
forth the designation, type of interest, Certificate Interest Rate, initial
Class Principal Balance and Final Maturity Date for the Certificates:
1
REMIC I Interests
Class Designation for
each Class of Certificate Initial Class
Certificates Type of Interest Principal Final Maturity
and the Class R Residual Interest Rate (1) Balance Date*
Interest
------------------------ ------------ -------------------- -------------------- ------------------------
Class A Regular Variable (2) $266,523,000.00 December 2031
Class B-1 Regular Variable (2) 3,027,000.00 December 2031
Class B-2 Regular Variable (2) 2,063,000.00 December 2031
Class B-3 Regular Variable (2) 1,513,000.00 December 2031
Class B-4 Regular Variable (2) 963,000.00 December 2031
Class B-5 Regular Variable (2) 550,000.00 December 2031
Class B-6 Regular Variable (2) 552,859.62 December 2031
Class R (3) Residual 6.025% $100.00 December 2031
* The Distribution Date in the specified month, which is the month
following the month the latest maturing Mortgage Loan 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.
(1) Interest distributed on each Distribution Date to the Certificates will
have accrued at the applicable per annum Certificate Interest Rate on
the applicable Class Principal Balance outstanding following the
immediately prior Distribution Date (or, with respect to the first
Distribution Date, as of the Closing Date).
(2) For each Distribution Date, the Certificate Interest Rate for the Class
A Certificates and each Class of the Class B Certificates shall equal
the weighted average of the Pass-Through Rates on the Mortgage Loans as
of the second preceding Due Date or, in the case of the first
Distribution Date, as of December 1, 2001.
(3) The Class R Certificates shall be entitled to receive the Residual
Distribution Amount and any Excess Liquidation Proceeds. The Class R
Certificates shall not be entitled to receive any distributions of
interest or principal.
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 Certificates (other than the Class R Certificates) will
be designated regular interests in REMIC I, and the Class R Certificates will
be designated the sole class of residual interest in REMIC I, for purposes of
the REMIC Provisions. As of the Cut-Off Date, the Mortgage Loans have an
aggregate Principal Balance of $275,191,959.62 and the Certificates have an
Aggregate Certificate Principal Balance of $275,191,959.62.
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 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;
2
WHEREAS, the Company has been duly authorized to create a trust (the
"Trust Fund") to (i) hold the Mortgage Loans and certain other property and (ii)
provide for the issuance of the Certificates; and
WHEREAS, the Trustee is a national banking association duly organized
and existing under the laws of the United States and has full power and
authority to enter into this Agreement.
NOW, THEREFORE, in order to declare the terms and conditions upon which
the Certificates are to be issued, authenticated and delivered, 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, for the equal and proportionate benefit of the respective Holders from
time to time of the Certificates, 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:
Adjustment Date: As to each Mortgage Loan, a Due Date on or about the
fifth anniversary of the first Due Date and annually thereafter, as set forth in
the related Mortgage Note, on which date an adjustment to the Mortgage Interest
Rate of such Mortgage Loan becomes effective.
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 each Class of the
Certificates, other than the 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 R Certificates, one Certificate with a Percentage Interest equal to 0.01%
and one Certificate with a Percentage Interest equal to 99.99%.
3
Available Distribution Amount: For any Distribution Date, the sum of
the following amounts with respect to the Mortgage Loans:
(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, Insurance Proceeds, 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 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, the Servicing Fee and the
PMI Insurer Fee, if applicable, 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;
(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 2.02 and Section 2.03 or any permitted purchase of such a Mortgage Loan.
4
Bankruptcy Coverage: $150,000 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
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 Trustee, the Master Servicer or the
Company.
Book-Entry Certificates: The Class A 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 or a Sunday, or a day on
which banking institutions in Stockton, California, Chicago, Illinois, New York,
New York, Seattle, Washington or any city in which the Corporate Trust Office is
located (which shall initially be Santa Ana, California) 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.
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
5
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 a 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 (including the
Trustee). 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
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 Trustee on behalf of the Certificateholders or
any other account serving a similar function acceptable to the Rating Agencies.
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 and Section 4.01.
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
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.
Certificate Interest Rate: For each Class of Certificates, the per
annum rate set forth as the Certificate Interest Rate for such Class in the
Preliminary Statement hereto.
6
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 Certificates having the same priority and rights to payments
on the Mortgage Loans from the Available Distribution Amount, which Certificates
shall be designated as a separate Class, and which shall be set forth in the
applicable forms of Certificates attached hereto as Exhibit A. Each Class of
Certificates shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "Distribution Amount" only to the extent of the
Available Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of
"Distribution Amount."
Class A Certificates: The Certificates designated as "Class A" on the
face thereof in substantially the form attached hereto as Exhibit A.
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates.
Class B-1 Certificates: The Certificates designated as "Class B-1" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class B-2 Certificates: The Certificates designated as "Class B-2" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class B-3 Certificates: The Certificates designated as "Class B-3" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class B-4 Certificates: The Certificates designated as "Class B-4" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class B-5 Certificates: The Certificates designated as "Class B-5" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class B-6 Certificates: The Certificates designated as "Class B-6" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class Principal Balance: For any Class of Certificates, the applicable
initial Class Principal Balance therefor set forth in the Preliminary Statement
hereto, corresponding to the rights of such Class in payments of principal due
to be passed through to the Certificateholders from principal payments on the
Mortgage Loans, as reduced from time to time by (x) distributions of principal
to the Certificateholders 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 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 definition of "Distribution Amount."
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Notwithstanding the foregoing, any amounts distributed in respect of
principal losses pursuant to paragraph (xxii) of the definition of "Distribution
Amount" shall not cause a further reduction in the Class Principal Balances of
the Certificates.
The Class Principal Balance for the Class A Certificates shall be
referred to as the "Class A Principal Balance," and so on.
Class R Certificates: The Certificates designated as "Class R" on the
face thereof in substantially the form attached hereto as Exhibit A, have been
designated as the sole class of "residual interest" in REMIC I, pursuant to
Section 2.01 for purposes of Section 860G(a)(2) of the Code.
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 12, 2001, which is the date of settlement of the
sale of the Certificates to the original purchasers thereof.
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, the lesser of (i) the
sum of (a) the aggregate Master Servicing Fee payable with respect to the
Mortgage Loans on such Distribution Date, (b) the aggregate Payoff Earnings with
respect to the Mortgage Loans for such Distribution Date and (c) the aggregate
Payoff Interest with respect to the Mortgage Loans for such Distribution Date
and (ii) the aggregate Uncollected Interest with respect to the Mortgage Loans
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.
8
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 Trustee
pursuant to Section 2.01 and are from time to time held as part of the Trust
Fund created hereunder.
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 in
the State of California, 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 0000 Xxxx Xx. Xxxxxx
Xxxxx, Xxxxx Xxx, XX 00000, Attention: Trust Administration WA01A1.
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.
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 a financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the 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 (including the Trustee). 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
9
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 a financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the 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 (including the Trustee). 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 Certificateholders.
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, 2001.
Definitive Certificates: Certificates in definitive, fully registered
and certificated form.
Depositary Agreement: The Letter of Representations, dated December 11,
2001 by and among DTC, the Company and the Trustee.
Destroyed Mortgage Note: A Mortgage Note 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.
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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 Amount: For any Distribution Date, the Available
Distribution Amount for such Distribution Date shall be distributed to the
Certificates in the following amounts and priority, to the extent of the
Available Distribution Amount for such Distribution Date:
(i) first, to the Class A and Class R Certificates, concurrently,
the sum of the Interest Distribution Amounts for such Classes remaining
unpaid from previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(ii) second, to the Class A and Class R Certificates, concurrently,
the sum of the Interest Distribution Amounts for such Classes for the
current Distribution Date, pro rata according to their respective
Interest Distribution Amounts;
(iii) third, to the Class A and Class R Certificates, as principal,
the Senior Principal Distribution Amount, sequentially, as follows:
(a) first, to the Class R Certificates, until the Class R
Principal Balance has been reduced to zero; and
(b) second, to the Class A Certificates, until the Class A
Principal Balance has been reduced to zero;
(iv) fourth, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(v) fifth, to the Class B-1 Certificates, the Interest Distribution
Amount for such Class of Certificates for the current Distribution
Date;
(vi) sixth, to the Class B-1 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-1 Principal Balance has been
reduced to zero;
(vii) seventh, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(viii) eighth, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(ix) ninth, to the Class B-2 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-2 Principal Balance has been
reduced to zero;
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(x) tenth, to the Class B-3 Certificates, the Interest Distribution
Amount for such Class of Certificates remaining unpaid from previous
Distribution Dates;
(xi) eleventh, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xii) twelfth, to the Class B-3 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-3 Principal Balance has been
reduced to zero;
(xiii) thirteenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xiv) fourteenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xv) fifteenth, to the Class B-4 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-4 Principal Balance has been
reduced to zero;
(xvi) sixteenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xvii) seventeenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xviii) eighteenth, to the Class B-5 Certificates, the portion of
the Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-5 Principal Balance has been
reduced to zero;
(xix) nineteenth, to the Class B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xx) twentieth, to the Class B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xxi) twenty-first, to the Class B-6 Certificates, the portion of
the Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate Principal
Distribution Amount," until the Class B-6 Principal Balance has been
reduced to zero;
(xxii) twenty-second, to the outstanding Classes of Certificates in
the order of seniority (which, from highest to lowest, shall be as
follows: the Class A Certificates, and then Class B-1, Class B-2, Class
B-3, Class B-4, Class B-5 and Class B-6 of decreasing seniority) the
remaining portion, if any, of the Available Distribution Amount, up to
the
12
amount of unreimbursed Realized Losses allocable to principal
previously allocated to each such Class, if any; provided, further,
that any amounts distributed pursuant to this paragraph (xxii) of this
definition of "Distribution Amount" shall not cause a further reduction
in the Class Principal Balances of any of the Classes of Certificates;
and
(xxiii) twenty-third, to the Class R Certificates, the Residual
Distribution Amount for such Distribution Date.
Distribution Date: With respect to distributions on 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 25, 2002. 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.
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;
13
(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 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.
14
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 Certificates, the
date set forth in the table contained in the Preliminary Statement hereto.
Fraud Coverage: During the period prior to the first anniversary of the
Cut-Off Date, 2.00% 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 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,
second, third and fourth anniversaries of the Cut-Off Date, 1.00% 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, the
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 (including the PMI 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.
Index: Six-Month Libor, which is the rate for six-month U.S. dollar
denominated deposits offered in the London interbank market as published in The
Wall Street Journal and most
15
recently available as of the first business day of the month immediately
preceding the month of the applicable Adjustment Date. In the event the Index is
no longer available, the Master Servicer will select a substitute Index in
accordance with the terms of the related Mortgage Note and in compliance with
applicable law.
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 2.03 and any FHA insurance policy or VA guaranty and amounts paid or
payable by the PMI Insurer under the PMI Policy.
Interest Distribution Amount: For any Distribution Date, for any Class
of Certificates, the amount of interest accrued during the Prior Period, 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.
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: The Chase Manhattan Bank, New York, New York 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 B-4, Class B-5 and Class B-6
Certificates.
Last Scheduled Distribution Date: With respect to any Class of
Certificates, the Final Maturity Date for such Class.
Lender: An institution from which the Company purchased any Mortgage
Loans pursuant to a Selling and Servicing Contract.
Liquidated Mortgage Loan: A Mortgage Loan 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
16
definition, acquisition of a Mortgaged Property by the Trust Fund shall not
constitute final liquidation of the related Mortgage Loan.
Liquidation Principal: The principal portion of Liquidation Proceeds
received 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-to-Value Ratio: The original principal amount of a Mortgage Loan
divided by the Original Value; however, references to "current Loan-to-Value
Ratio" or "Loan-to-Value Ratio as of the Cut-Off Date" in Section 2.03 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 Class 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.
Margin: For each Mortgage Loan, the applicable fixed per annum
percentage rate specified in the applicable Mortgage Note and designated as such
in the Mortgage Loan Schedule.
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: For each Mortgage Loan, the fee charged by the
Master Servicer for supervising the mortgage servicing and advancing certain
expenses, equal to 1/12 of the product of (i) the Master Servicing Fee Rate
for such Mortgage Loan and (ii) the outstanding Principal Balance of such
Mortgage Loan, payable monthly from the Certificate Account, the Investment
Account or the Custodial Account for P&I.
Master Servicing Fee Rate: for each Mortgage Loan, the per annum rate
set forth for such Mortgage Loan in the Mortgage Loan Schedule.
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.
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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.
Moody's: Xxxxx'x Investors Service, Inc., provided that at any time it
be a Rating Agency.
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
2.01, (X) with respect to each Mortgage Loan that is not a Cooperative Loan:
(i) The original Mortgage Note endorsed (A) in blank or (B) to
"Bankers Trust Company of California, N.A., as Trustee, without
recourse" or "Bankers Trust Company of California, N.A., as Trustee for
the benefit of the Holders from time to time of Washington Mutual
Mortgage Securities Corp. Washington Mutual MSC Mortgage Pass-Through
Certificates, Series 2001-AR1, without recourse" and all intervening
endorsements evidencing a complete chain of endorsements from the
originator to the Trustee, or, in the event of any Destroyed Mortgage
Note, a copy or a duplicate original of the Mortgage Note, together
with an original lost note affidavit from the originator of the
Mortgage Loan or the Company, as applicable, stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of
the Mortgage Note; 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 Bankers Trust Company
of California, N.A. 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 "Bankers Trust Company of
California, N.A., as Trustee," or to "Bankers Trust Company of
California, N.A., as Trustee for the Holders of Washington Mutual
Mortgage
18
Securities Corp. Washington Mutual MSC Mortgage Pass-Through
Certificates, Series 2001-AR1," and (z) unless the Mortgage Loan is
a MOM Loan, recorded originals 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); 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 "Bankers Trust Company of California, N.A., as
Trustee," or to "Bankers Trust Company of California, N.A., as
Trustee for the Holders of Washington Mutual Mortgage Securities
Corp. Washington Mutual MSC Mortgage Pass-Through Certificates,
Series 2001-AR1," 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 Bankers Trust
Company of California, N.A. 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 or (B) to
"Bankers Trust Company of California, N.A., as Trustee," or to "Bankers
Trust Company of California, N.A., as Trustee for the Holders of
Washington Mutual Mortgage Securities Corp. Washington Mutual MSC
Mortgage Pass-Through Certificates, Series 2001-AR1" and all
intervening endorsements evidencing a complete chain of endorsements,
from the originator to the Trustee, or, in the event of any Destroyed
Mortgage Note, a copy or a
19
duplicate original of the Mortgage Note, together with an original lost
note affidavit from the originator of the Cooperative Loan or the
Company, as applicable, stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the Mortgage
Note; 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 Bankers Trust Company of
California, N.A. 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 Trustee, 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 Trustee; 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 Trustee 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 Trustee 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).
20
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.
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 and the
Rate Ceiling, Rate Floor, subsequent Periodic Cap and Margin, as
applicable, 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, and
(ix) the Servicing Fee Rate and the Master Servicing Fee Rate.
Mortgage Loans: The mortgage loans and cooperative loans (if any)
listed on the Mortgage Loan Schedule and transferred and assigned to the Trustee
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.
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.
21
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 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, (d) 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
(e) in the case of Xxxxx'x, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Monitoring, or such other address as may hereafter be furnished to
the Trustee and Master Servicer in writing by Xxxxx'x.
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.
Opinion of Counsel: A written opinion of counsel, who shall be
reasonably acceptable to the Trustee and who may be counsel (including in-house
counsel) for the Company or the Master Servicer.
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.
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.
22
Pass-Through Rate: For each Mortgage Loan, the Mortgage Interest Rate
for such Mortgage Loan less (i) the Servicing Fee Rate for such Mortgage Loan,
(ii) the Master Servicing Fee Rate for such Mortgage Loan, (iii) the PMI Insurer
Fee Rate, if applicable, for such Mortgage Loan and (iv) if such Mortgage Loan
was covered by a Special Primary Insurance Policy on the Closing Date (even if
no longer so covered), the per annum rate at which the applicable Special
Primary Insurance Premium for such Mortgage Loan is calculated. 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 the related 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 the related 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 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, 2002, 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 undivided beneficial ownership interest
evidenced by such Certificate of such Class, which percentage shall equal:
23
(i) with respect to any Certificate (other than the Residual
Certificates), its Certificate Principal Balance divided by the
applicable Class Principal Balance; and
(ii) 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 undivided beneficial interest evidenced by such
Certificate in REMIC I, which for purposes of such rights only shall equal:
(i) with respect to any Certificate (other than the Residual
Certificates), the percentage calculated by dividing its Certificate
Principal Balance by the Aggregate Certificate Principal Balance of the
Certificates; and
(ii) with respect to any Residual Certificate, zero.
Periodic Cap: For each Mortgage Loan, any applicable limit on
adjustment of the Mortgage Interest Rate for each Adjustment Date specified in
the applicable Mortgage Note and designated as such in the Mortgage Loan
Schedule.
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 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.
PMI Insurer: Initially, Radian Guaranty Inc., or any successor thereto
or the named insurer in any replacement policy obtained by the Master Servicer
pursuant to Section 3.21.
24
PMI Insurer Fee: The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal 1/12 of the product of (i) the PMI
Insurer Fee Rate and (ii) the aggregate Principal Balance of the PMI Mortgage
Loans as of the second preceding Due Date.
PMI Insurer Fee Rate: 0.39% per annum.
PMI Mortgage Loans: Any Mortgage Loan with an original Loan-to-Value
Ratio of 60% or greater and not more than thirty days delinquent in the payment
of principal and interest as of the Cut-Off-Date.
PMI Policy: The Primary Mortgage Insurance Policy (policy reference
number: 01-888072), a form of which is attached as Exhibit K to this Agreement,
issued by the PMI Insurer, or any replacement insurance policy obtained by the
Master Servicer pursuant to Section 3.21.
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 2.03(xi)
(including any Special Primary Insurance Policy and the PMI Policy).
Principal Balance: Except as used in Sections 2.02, 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 2.02, 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
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 Fund, 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
25
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, the sum 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, the sum of (i)
Curtailments received during the Prior Period from the Mortgage Loans and (ii)
Payoffs received during the Payoff Period from the Mortgage Loans.
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 Certificates pro rata according to their
respective Class Principal Balances in reduction thereof, and the allocation of
the interest portion of Realized Losses to all Classes of Certificates pro rata
according to the amount of interest accrued but unpaid on each such Class, in
reduction thereof, and then to such Classes pro rata according to their
respective Class Principal Balances in reduction thereof.
Prospectus: The Prospectus, dated October 5, 2001, and the Prospectus
Supplement, dated December 10, 2001, of the Company.
Purchase Obligation: An obligation of the Company to repurchase
Mortgage Loans under the circumstances and in the manner provided in Section
2.02 or Section 2.03.
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 2.03, or more than two years after the Closing
Date under Section 2.02, 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
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.
26
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.
Rate Ceiling: The maximum per annum Mortgage Interest Rate permitted
under the related Mortgage Note.
Rate Floor: The minimum per annum Mortgage Interest Rate permitted
under the related Mortgage Note.
Rating Agency: Initially, each of S&P and Xxxxx'x 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 applicable 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 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.
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 (to the extent that (x) such
losses are not covered by the PMI Policy, (y) coverage under the PMI Policy for
the applicable Mortgage Loan has been exhausted through the payment of claims or
(z) the PMI Insurer defaults or otherwise does not pay on a valid claim with
respect to such Mortgage Loan for such losses) shall be allocated among the
Certificates (i) for Realized Losses allocable to principal (a) first, to the
Class B-6 Certificates, until the Class B-6 Principal Balance has been reduced
to zero, (b) second, to the Class B-5 Certificates, until the Class B-5
Principal Balance has been reduced to zero, (c) third, to the Class B-4
Certificates, until the Class B-4 Principal Balance has been reduced to zero,
(d) fourth, to the Class B-3 Certificates, until the Class B-3 Principal Balance
has been reduced to zero, (e) fifth, to the Class B-2 Certificates, until the
Class B-2 Principal Balance has been reduced to zero, (f) sixth, to the Class
B-1 Certificates, until the Class B-1 Principal Balance has been reduced to
zero, and (g) seventh, to the Class A Certificates, in reduction of the Class A
Principal Balance; and (ii) for Realized Losses allocable to interest (a) first,
to the Class B-6 Certificates, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class B-6 Principal Balance, (b) second, to
the Class B-5 Certificates, in reduction of accrued but unpaid interest thereon
and then
27
in reduction of the Class B-5 Principal Balance, (c) third, to the Class B-4
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-4 Principal Balance, (d) fourth, to the Class B-3
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-3 Principal Balance, (e) fifth, to the Class B-2
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-2 Principal Balance, (f) sixth, to the Class B-1
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class B-1 Principal Balance, and (g) seventh, to the Class A
Certificates, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class A Principal Balance.
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 Certificates by Pro Rata
Allocation.
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 Certificates 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 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 Available Distribution Amount and all losses in
respect of each Mortgage Loan that have been allocated to the Certificates 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 Class
B Certificates, 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.
Relief Act Shortfall: For any Distribution Date for any Mortgage Loan
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 on the related Due Date under the terms
of the related Mortgage Note over (ii) the annual interest rate payable by the
Mortgagor on 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 consisting of the REMIC I Trust
Fund conveyed in trust to the Trustee for the benefit of the Certificateholders
and the Class R Residual Interest pursuant to Section 2.01 with respect to which
a REMIC election is to be made.
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REMIC I Regular Interests: The Certificates (other than the Class R
Certificates).
REMIC I Trust Fund: All of the assets in the Trust Fund.
Residual Certificates: The Class R Certificates.
Residual Distribution Amount: For any Distribution Date, any portion of
the Available Distribution Amount remaining after all distributions of the
Available Distribution Amount pursuant to the definition of "Distribution
Amount" (other than the distributions pursuant to subclause (xxiii) thereof).
Upon termination of the obligations created by this Agreement and the
REMIC I Trust Fund created hereby, 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
Certificates 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, any officer
assigned to and working in its Corporate Trust Department or 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.
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 Class A Certificate and the Class R
Certificates.
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Senior Liquidation Amount: For any Distribution Date, the aggregate,
for each Mortgage Loan which became a Liquidated Mortgage Loan during the Prior
Period, of the lesser of: (i) the Senior Percentage of the Principal Balance of
such Mortgage Loan and (ii) the Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan.
Senior Percentage: For any Distribution Date, the aggregate Class
Principal Balance of the Class A and Residual Certificates divided by the
aggregate Class Principal Balance of the Class A, Class B and Residual
Certificates, in each case immediately before such Distribution Date.
Senior Prepayment Percentage: Subject to the immediately succeeding
paragraph, (A) for any Distribution Date prior to the seventh anniversary of the
first Distribution Date, the Senior Prepayment Percentage shall equal 100% and
(B) for any Distribution Date on or after the seventh anniversary of the first
Distribution Date, the Senior Prepayment Percentage shall be calculated as
follows: (1) for any such Distribution Date on or after the seventh anniversary
but before the eighth anniversary of the first Distribution Date, the Senior
Percentage for such Distribution Date plus 70% of the Subordinate Percentage for
such Distribution Date; (2) for any such Distribution Date on or after the
eighth anniversary but before the ninth anniversary of the first Distribution
Date, the Senior Percentage for such Distribution Date plus 60% of the
Subordinate Percentage for such Distribution Date; (3) for any such Distribution
Date on or after the ninth anniversary but before the tenth anniversary of the
first Distribution Date, the Senior Percentage for such Distribution Date plus
40% of the Subordinate Percentage for such Distribution Date; (4) for any such
Distribution Date on or after the tenth anniversary but before the eleventh
anniversary of the first Distribution Date, the Senior Percentage for such
Distribution Date plus 20% of the Subordinate Percentage for such Distribution
Date; and (5) for any such Distribution Date thereafter, the Senior Percentage
for such Distribution Date; provided, however, that (x) for any Distribution
Date on or prior to the Distribution Date in November 2004, if the Subordinate
Percentage for such Distribution Date is greater than or equal to twice the
Subordinate Percentage as of the Closing Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for such Distribution Date plus 50%
of the Subordinate Percentage for such Distribution Date and (y) for any
Distribution Date after the Distribution Date in November 2004, if the
Subordinate Percentage for such Distribution Date is greater than or equal to
twice the Subordinate Percentage as of the Closing Date, then the Senior
Prepayment Percentage shall equal the Senior Percentage for such Distribution
Date.
Notwithstanding the immediately preceding paragraph, (A) for any
Distribution Date, if the Senior Percentage for such Distribution Date is
greater than the Senior Percentage as of the Closing Date, then the Senior
Prepayment Percentage shall equal 100%, (B) for any Distribution Date on or
before the seventh anniversary of the first Distribution Date, if any of the
tests specified in clauses (a) and (b) below is met, then the Senior Prepayment
Percentage shall equal 100% and (C) for any Distribution Date after the seventh
anniversary of the first Distribution Date, if any of the tests specified in
clauses (a) and (b) below is met (unless either (x) the Senior Percentage for
such Distribution Date is greater than the Senior Percentage as of the Closing
Date or (y) there is no Earlier Distribution Date (as defined below), in each of
which case the Senior Prepayment Percentage shall equal 100%), then the Senior
Prepayment Percentage shall be calculated as follows: (1) if the most recent
preceding Distribution Date on which none of the tests specified in clauses (a)
and (b) below was met (such date referred to as the "Earlier
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Distribution Date") is on or after the seventh anniversary but before the eighth
anniversary of the first Distribution Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for the current Distribution Date
plus 70% of the Subordinate Percentage for the current Distribution Date, (2) if
the Earlier Distribution Date is on or after the eighth anniversary but before
the ninth anniversary of the first Distribution Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for the current Distribution Date
plus 60% of the Subordinate Percentage for the current Distribution Date, (3) if
the Earlier Distribution Date is on or after the ninth anniversary but before
the tenth anniversary of the first Distribution Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for the current Distribution Date
plus 40% of the Subordinate Percentage for the current Distribution Date, (4) if
the Earlier Distribution Date is on or after the tenth anniversary but before
the eleventh anniversary of the first Distribution Date, then the Senior
Prepayment Percentage shall equal the Senior Percentage for the current
Distribution Date plus 20% of the Subordinate Percentage for the current
Distribution Date, and (5) if the Earlier Distribution Date is on or after the
eleventh anniversary of the first Distribution Date, then the Senior Prepayment
Percentage shall equal the Senior Percentage for the current Distribution Date:
(a) the mean aggregate Principal Balance, as of the Distribution Date
in each of the immediately preceding six calendar months, of the
Mortgage 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 greater than 50% of the aggregate
Class Principal Balance of the Class B Certificates as of the
current Distribution Date, or
(b) cumulative Realized Losses on the Mortgage Loans allocated to the
Class B Certificates, as a percentage of the aggregate Class
Principal Balance of the Class B Certificates as of the Closing
Date, are greater than, for any Distribution Date (1) before the
eighth anniversary of the first Distribution Date, 30%, (2) on or
after the eighth anniversary but before the ninth anniversary of
the first Distribution Date, 35%, (3) on or after the ninth
anniversary but before the tenth anniversary of the first
Distribution Date, 40%, (4) on or after the tenth anniversary but
before the eleventh anniversary of the first Distribution Date,
45%, and (5) on or after the eleventh anniversary of the first
Distribution Date, 50%.
If on any Distribution Date the allocation to the Class A Certificates
of Principal Prepayments in the percentage required would reduce the aggregate
Class Principal Balance of such Certificates below zero, the Senior Prepayment
Percentage for such Distribution Date shall be limited to the percentage
necessary to reduce such aggregate Class Principal Balance to zero.
Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Senior Percentage of the Principal Payment
Amount, (b) the Senior Prepayment Percentage of the Principal Prepayment Amount
and (c) the Senior Liquidation Amount.
Senior Subordinate Certificates: The Subordinate Certificates other
than the Junior Subordinate Certificates.
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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.
Servicing Fee: For each Mortgage Loan, the monthly fee paid to the
Servicer thereof to perform primary servicing functions for the Master Servicer
with respect to such Mortgage Loan, equal to 1/12 of the product of (i) the
Servicing Fee Rate for such Mortgage Loan and (ii) 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 Fee Rate: For each Mortgage Loan, the per annum rate set
forth for such Mortgage Loan in the Mortgage Loan Schedule.
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,
$4,448,169, 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) $4,448,169 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,
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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, 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 4.01(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.
Subordinate Certificates: The Class B 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 Senior
Liquidation Amount for such Distribution Date.
Subordinate Percentage: For any Distribution Date, the excess of 100%
over the Senior Percentage for such date.
Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the aggregate Class Principal Balance of the Class A
and Residual Certificates has been reduced to zero, then the Subordinate
Prepayment Percentage shall equal 100%.
Subordinate Principal Distribution Amount: For any Distribution Date,
the sum of (i) the Subordinate Percentage of the Principal Payment Amount, (ii)
the Subordinate Principal Prepayments Distribution Amount and (iii) the
Subordinate Liquidation Amount.
On any Distribution Date, the Subordinate Principal Distribution Amount
shall be allocated pro rata, by Class Principal Balance, among the Classes of
Class B Certificates and paid in the order of distribution to such Classes
pursuant to the definition of "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
Class B Certificates 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 Class B Certificates
junior to such Class will be distributed to the most senior Class of Class B
Certificates for which the Subordination Level is less than the Subordination
Level as of the Closing Date, and to the Class or Classes of Class B
Certificates 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
33
Class B Certificates shall be as follows: Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6.
Subordinate Principal Prepayments Distribution Amount: For any
Distribution Date, the Subordinate Prepayment Percentage of the Principal
Prepayment Amount.
Subordination Level: On any specified date, with respect to any Class
of Class B Certificates, the percentage obtained by dividing the aggregate Class
Principal Balance of such Class and the Classes of Class B Certificates which
are subordinate in right of payment to such Class by the aggregate Class
Principal Balance of the Certificates 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 2.02.
Tax Matters Person: 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 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, 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, to perform the functions of such Tax Matters Person
as provided herein. If the Tax Matters Person 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.
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).
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.
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Trust: The pool of assets consisting of the Trust Fund conveyed
pursuant to Section 2.01 of this Agreement.
Trust Fund: The corpus of the trust created pursuant to Section 2.01 of
this Agreement. The Trust Fund consists of (i) the Mortgage Loans and all rights
pertaining thereto; (ii) such assets as from time to time may be held by the
Trustee (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, a similar form of conversion,
after the Cut-Off Date; and (v) the PMI Policy and 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.
Trustee: Bankers Trust Company of California, N.A., 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: For any Distribution Date, the sum of
(i) the aggregate Relief Act Shortfall for such Distribution Date, (ii)
aggregate Curtailment Shortfall for such Distribution Date and (iii) the excess,
if any, of (a) aggregate Uncollected Interest for such Distribution Date over
(b) Compensating Interest for such Distribution Date.
Uncompensated Interest Shortfall shall be allocated to the Classes of
Certificates pro rata according to the amount of the Interest Distribution
Amount to which each such Class would otherwise be entitled in reduction
thereof.
Underwriter: Greenwich Capital Markets, Inc.
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
35
District of Columbia, or an estate or trust that is subject to U.S. federal
income tax regardless of the source of its income.
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
Conveyance of the Trust Funds; REMIC Election and Designations;
Original Issuance of Certificates
Section 2.01. Conveyance of the Trust Fund; REMIC Election and
Designations. The Trust of which the Trustee is the trustee is hereby created
for the benefit of the Holders of the Certificates. The purpose of the Trust is
to hold the Trust Fund and provide for the issuance, execution and delivery of
the Certificates. The assets of the Trust shall consist of the Trust Fund. The
Trust shall be irrevocable.
The assets of the Trust shall remain in the custody of the Trustee, on
behalf of the Trust, and shall be kept in 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 Bankers Trust Company of California, N.A. in its own
right, or any Person claiming through it. The Trustee, on behalf of the Trust,
shall not 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 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.
Concurrently with the execution and delivery hereof, the Company does
hereby irrevocably sell, transfer, assign, set over and otherwise convey to the
Trustee, in trust for the benefit of the Holders of the Certificates, without
recourse, all the Company's right, title and interest in and to the Trust Fund,
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"). The Trustee hereby accepts delivery of the Trust Fund on behalf of the
Trust and acknowledges that it holds the Mortgage Loans for the benefit of the
Holders of the Certificates issued pursuant to this Agreement.
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It is the express intent of the parties hereto that the Conveyance of
the Conveyed Assets to the Trustee by the Company as provided in this Section
2.01 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
Trustee 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 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 2.01 shall be deemed to
be a grant by the Company to the Trustee of, and the Company hereby grants to
the Trustee, 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, and 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) the PMI Policy
and 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 Trustee 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
37
acknowledgments, receipts or confirmations from, securities intermediaries,
bailees or agents of, or persons holding for, the Trustee, 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 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 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 Trustee 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.
In the event that a pleading is filed in a court of competent
jurisdiction asserting that this Agreement creates a security interest in the
Conveyed Assets, the Trustee shall take actual possession of the Conveyed Assets
or, at the Company's option, the Trustee shall be provided an Opinion of Counsel
reasonably satisfactory to the Trustee to the effect that such security interest
is a perfected security interest of first priority while the Conveyed Assets are
in the possession of the Company or its affiliates.
In connection with the sale, transfer and assignment referred to in the
third paragraph of this Section 2.01, 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 Trustee.
Concurrently with the execution and delivery hereof, assignments of the
Mortgage Loans to the Trustee to be recorded or filed, except in states where,
in the opinion of counsel admitted to practice in such state acceptable to the
Company, the Trustee and the Rating Agencies submitted in lieu of such recording
or filing, such recording or filing is not required to protect the Trustee's
interest in such Mortgage Loans against creditors of, or against sale, further
assignments, satisfaction or discharge by, the Lender, a Servicer, the Company
or the Master Servicer, and 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
38
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 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 2.01, 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
"Bankers Trust Company of California, N.A., as Trustee, without recourse" or
"Bankers Trust Company of California, N.A., as Trustee for the benefit of the
Holders from time to time of Washington Mutual Mortgage Securities Corp.
Washington Mutual MSC Mortgage Pass-Through Certificates, Series 2001-AR1,
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
39
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.
The Tax Matters Person, shall, on behalf of the REMIC I Trust Fund,
elect to treat the REMIC I Trust Fund 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 the REMIC I Trust Fund are hereby
designated as "regular interests" for purposes of Section 860G(a)(1) of the
Code. The Class R Certificates are hereby designated as the sole class of
"residual interest" in the REMIC I Trust Fund for purposes of Section 860G(a)(2)
of the Code.
The parties intend that the affairs of the REMIC I Trust Fund formed
hereunder shall constitute, and that the affairs of the REMIC I Trust Fund shall
be conducted so as to qualify the REMIC I Trust Fund as a REMIC. In furtherance
of such intention, the Tax Matters Person shall, on behalf of the REMIC I Trust
Fund: (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 the REMIC I Trust Fund 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 the REMIC I Trust Fund to be treated as a REMIC on
the federal tax return of the REMIC I Trust Fund 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 Certificates 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 the REMIC
I Trust Fund at all times that any REMIC I Regular Interests are outstanding so
as to maintain the status of the REMIC I Trust Fund 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 the REMIC I
Trust Fund; and (f) pay the amount of any federal prohibited transaction penalty
taxes imposed on the REMIC I Trust Fund 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 the REMIC I Trust Fund 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.
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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 the REMIC I
Trust Fund as a REMIC for federal income tax purposes.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC I Trust Fund 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
Certificates. Notwithstanding anything to the contrary contained herein, the
Trustee is hereby authorized to retain from amounts otherwise distributable to
the Class R Certificates 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 2.02. Acceptance by Trustee. The Trustee acknowledges receipt
(or with respect to any Mortgage Loan subject to a Custodial Agreement, receipt
by the Custodian thereunder) of the documents (or certified copies thereof as
specified in Section 2.01) referred to in Section 2.01 above, but without having
made the review required to be made within 45 days pursuant to this Section
2.02, and declares that as of the Closing Date it holds and shall hold any
documents constituting a part of the Mortgage Files delivered to it, and the
Trust Fund, as Trustee in trust, upon the trusts herein set forth, for the use
and benefit of all present and future Holders of the Certificates. The Trustee
agrees, for the benefit of the Holders of the Certificates, to review or cause
the Custodian 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 2.01 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
41
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 Trustee
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 Trustee 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, 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 be an adjustable rate mortgage loan
with a first Adjustment Date occurring on approximately the same date as, but
not earlier than, the first Adjustment Date for the Mortgage Loan being
substituted for and adjustments annually thereafter, based on the Index, 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, and a Margin, Rate Ceiling and Rate Floor equal to or greater
than, and a Periodic Cap no more than 0.5 percentage point greater or smaller
than, the Mortgage Loan being substituted for. In addition, if the Mortgage Loan
being substituted for does not provide for any payments of principal prior to
its first Adjustment Date, such Substitute Mortgage Loan also shall not provide
for such payments of principal. If the aggregate of the principal balances of
the 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 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 2.02. Furthermore,
such Substitute Mortgage Loan shall otherwise have such characteristics so that
the representations and warranties of the Company set forth in Section 2.03
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) 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
42
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 Holders of
the Certificates or the Trustee on behalf of the Holders of the Certificates.
Section 2.03. Representations and Warranties of the Company Concerning
the Mortgage Loans. With respect to the conveyance of the Mortgage Loans
provided for in Section 2.01 herein, the Company hereby represents and warrants
to the Trustee 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 is a valid and
enforceable (subject to Section 2.03(xvi)) first lien on an
unencumbered estate in fee simple or 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 Trustee 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;
43
(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 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
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 Holders of the Certificates 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 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;
44
(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 99.19% (by Principal Balance) of the Mortgage Loans will
be secured by owner occupied Mortgaged Properties which are the primary
residences of the related Mortgagors, approximately 0.81% (by Principal
Balance) of the Mortgage Loans will be secured by owner occupied
Mortgaged Properties which were second or vacation homes of the
Mortgagors and none of the Mortgage 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 adjustable 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 any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Destroyed 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 Trustee will not be
materially adversely affected by the absence of the original Mortgage
Note;
(xxv) Based upon an appraisal of the Mortgaged Property
securing each Mortgage Loan, approximately 99.89% (by Principal
Balance) of the Mortgage Loans had a current Loan-to-Value Ratio less
than or equal to 80%, approximately 0.11% (by Principal Balance) of the
Mortgage Loans had a current Loan-to-Value Ratio greater than 80% but
less than or equal to 95% and no Mortgage Loan had a current
Loan-to-Value Ratio greater than 95%;
45
(xxvi) Approximately 53.45% (by Principal Balance) of the
Mortgage Loans were originated for the purpose of refinancing existing
mortgage debt, including cash-out refinancings; and approximately
46.55% (by Principal Balance) of the Mortgage Loans were originated for
the purpose of purchasing the Mortgaged Property;
(xxvii) Not less than approximately 15.27% (by Principal
Balance) of the Mortgage Loans were originated under full documentation
programs;
(xxviii) 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); and
(xxix) With respect to each Mortgage Loan, the Periodic Cap
shall equal 5% on the first Adjustment Date and shall equal 1% on each
Adjustment Date thereafter.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03 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
Certificateholders 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 Trustee, unless it has cured such breach in
all material respects. After the end of the three-month period beginning on the
"start-up day," any such substitution shall be made only if the Company provides
to the Trustee an Opinion of Counsel 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 2.02. 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 2.02. 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 Certificates or
the Trustee on behalf of the Holders of the Certificates.
Section 2.04. Acknowledgment of Transfer of Trust Fund; Authentication
of Certificates. The Trustee acknowledges and accepts the transfer and
assignment to it of the property constituting the Trust Fund, but without having
made the review required to be made within 45 days pursuant to Section 2.02,
and, as of the Closing Date, shall cause to be authenticated and delivered, upon
and pursuant to the order of the Company, the Certificates in Authorized
Denominations evidencing the entire ownership of the Trust Fund.
46
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 Trustee 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
Trust Fund on behalf of the Trustee 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.
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, the PMI
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
47
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.
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 the
applicable trust fund would not fail to continue to qualify as a REMIC 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.
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The Master Servicer is hereby authorized and empowered by the Trustee
to execute and deliver or cause to be executed and delivered on behalf of the
Holders of the Certificates, and the Trustee 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 Trustee to execute and deliver or cause to be
executed and delivered on behalf of the Holders of the Certificates and the
Trustee, 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 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 Trustee,
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
49
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.;
(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 the 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
50
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 2.02 or Section 2.03 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 Trustee for
investment only as set forth in this Section 3.03. The Master Servicer shall
bear any and all losses incurred on any 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, 2001, between Washington Mutual Mortgage Securities
Corp., as Depositor and Master Servicer, and Bankers Trust Company of
California, N.A., as the Trustee, for the benefit of Bankers Trust Company of
California, N.A., on behalf of the Series 2001-AR1 Certificateholders". 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 Certificates 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
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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.
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;
52
(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 4.01(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;
(ix) To pay on behalf of the Trustee any PMI Insurer Fee
payable pursuant to Section 3.21; and
after making or providing for the above withdrawals
(x) 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;
53
(c) The Trustee is authorized to make withdrawals from time to time
from the Certificate Account to reimburse itself for advances it has made as
successor Master Servicer pursuant to Section 7.01(a) hereof that it has
determined to be Nonrecoverable Advances.
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
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 Mae 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
54
be presented, on behalf of and for the benefit of the Trustee and the
Certificateholders, 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 Trustee the Trustee's rights to accelerate
the maturity of such Mortgage Loan, to the extent that such acceleration is
permitted 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 and the PMI 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 REMIC I 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
55
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 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 or in connection with
the preservation of the coverage of the PMI Policy; 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 REMIC I Trust Fund 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.
56
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
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 interests of the Certificateholders, rent
the same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders 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 or the depositor. In the event the Trustee withholds any
amount from interest or original issue discount payments
57
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, 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 and 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. 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,
58
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 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 REMIC I Trust Fund through
foreclosure, deed in lieu of foreclosure or other exercise of the REMIC I Trust
Fund'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
59
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.]
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.
Section 3.21. PMI Policy . The Master Servicer agrees to exercise
commercially reasonable efforts to maintain and keep the PMI Policy in full
force and effect throughout the term of this Agreement and on each Distribution
Date shall remit the PMI Insurer Fee for such Distribution Date to the PMI
Insurer in accordance with the terms of the PMI Policy; provided, however, that
in no case shall the Master Servicer be required to (i) expend its own funds to
maintain such policy or (ii) make a Nonrecoverable Advance to maintain such
policy. In the event that (i) the claims paying ability rating of the PMI
Insurer is reduced below the level of the rating originally given and,
consequently, the Ratings are reduced below the level of the Ratings originally
given, (ii) the PMI Insurer ceases to be a qualified mortgage insurer duly
qualified as such under applicable laws or (iii) the PMI Policy is cancelled for
any reason, the Master Servicer acting on behalf of the Trustee shall exercise
commercially
60
reasonable efforts to obtain from another insurer acceptable to the Rating
Agencies a replacement policy comparable to the initial PMI Policy; provided,
however, that if the cost of any such replacement policy shall be greater than
the cost of the initial PMI Policy, the amount of coverage of such replacement
policy shall be reduced to a level such that the premium rate therefor shall not
exceed 100% of the PMI Insurer Fee Rate.
In connection with its activities hereunder, the Master Servicer agrees
to present, on behalf of the Trustee and Certificateholders, claims to the PMI
Insurer under the PMI Policy, and, in this regard, to take such commercially
reasonable action (other than the making of Nonrecoverable Advances) as shall be
necessary to permit recovery under the PMI Policy. The Master Servicer shall
collect all amounts relating to the Certificates under the PMI Policy and shall
deposit such amounts in the related Custodial Account for P&I or in the
Certificate Account until distributed in accordance with Section 4.01 or
withdrawn in accordance with Section 3.03 or Section 3.05 of this Agreement.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. 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
(a) the Excess Liquidation Proceeds for such Distribution Date and distribute
such amounts to the Class R Certificateholders and (b) the Available
Distribution Amount for such Distribution Date and distribute, from the amount
so withdrawn, to the extent of the Available Distribution Amount, the
Distribution Amount to the Certificates pursuant to the definition of
"Distribution Amount," 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 the termination of REMIC I) shall be payable in the manner provided above
only upon presentation and surrender thereof on or after the
61
Distribution Date therefor at the office or agency of the Certificate Registrar
specified in the notice delivered pursuant to Section 4.01(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:
(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 4.02. 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
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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.
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 to each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definition of "Distribution Amount," Section 4.01 hereof and other related
definitions set forth in Article I hereof); (2) the applicable Class Principal
Balance after giving effect to such distributions; (3) the amount of any Special
Primary Insurance Premium payable on such Distribution Date; and (4) the amount,
if any, to be drawn upon the PMI Policy.
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
63
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. 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 web site. Such web site is
currently located at "xxxx://xxx-xxxx.xxx.xxxxxxxx-xxxx.xxx/xxxx." Assistance in
using the web site can currently be obtained by calling the Trustee's investor
relations desk at 000-000-0000. Parties unable to use this distribution method
may request that a paper copy be mailed to them via first class mail by calling
the investor relations desk. 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;
(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 Trustee's security interest in
the Mortgage Loans;
(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 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 and appropriate, in the Master Servicer's sole
discretion, for purposes of satisfying applicable reporting requirements under
Rule 144A of the Securities Act.
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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 with the additional insertion from Exhibit H attached hereto, and
shall be executed by the Trustee, 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
evidencing Percentage Interests. Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee 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 Trustee, 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).
(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
65
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.
(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
66
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. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by 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 Service and certain Persons as described in
Treasury Regulation Section 1.860D-1(b)(5),
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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 to
cease to qualify as a REMIC and will not create a risk that
(1) REMIC I 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 OF THIS CLASS R CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION,
SUCH REGISTRATION SHALL
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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, while not a
Disqualified Organization, shall be the tax matters person for REMIC I
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 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
such transfer may be made without registration, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the REMIC I Trust Fund or the
Company. Such Opinion of Counsel shall allow for the forwarding, and the Trustee
shall forward, a copy thereof to the
69
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 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
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 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 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).
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(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. The Trustee shall be under no 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 Underwriters 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 office of the Trustee's agent at DTC Transfer Agent Services, 00
Xxxxx Xxxxxx, Xxxxxxxx Xxxx Entrance, New York, New York 10041, Attention:
Xxxxxx Xxxxx, or at BT Services Tennessee, 000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxx,
XX 00000, Attention: Transfer Department, 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 and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of Authorized Denominations of like
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Percentage Interest. At the option of the Certificateholders, Certificates may
be exchanged for other Certificates in Authorized Denominations of like
Percentage Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee 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 harmless, then, in the
absence of notice to the Trustee or any Authenticating Agent that such
Certificate has been acquired by a bona fide 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 Percentage Interest. 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 the REMIC I Trust Fund 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 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 for all other purposes
whatsoever, and neither the Company, the Master Servicer, the Trustee, the
Certificate Registrar nor any agent of the Company, the Master Servicer or the
Trustee shall be affected by notice to the contrary.
Section 5.06. Temporary Certificates. Upon the initial issuance of the
Certificates, the Trustee 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
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v
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 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;
(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
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(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 shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver the
Definitive Certificates. Neither the Company, the Master Servicer 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.
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Section 5.10. Office for Transfer of Certificates. The Trustee shall
maintain in New York, New York an office or agency where Certificates may be
surrendered for registration of transfer or exchange. The office of the
Trustee's agent at DTC Transfer Agent Services, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx
Entrance, New York, New York 10041, Attention: Xxxxxx Xxxxx is initially
designated for said purposes.
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
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 Fund or the REMIC I Trust Fund 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 Fund and held harmless against any loss, liability or expense incurred
in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense 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
75
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 Fund 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 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
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the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC I Trust Fund; 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 the REMIC I Trust Fund; 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
(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 the REMIC I Trust Fund, 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
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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 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 the REMIC I Trust
Fund; 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
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(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 the REMIC I Trust Fund, 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 the REMIC I Trust Fund may take 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
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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 Trustee of the Mortgage securing each MERS Loan in
recordable 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 successor Master Servicer shall
promptly cause the assignments referred to in clause (ii)(B) of the immediately
preceding sentence to be recorded or filed, except in states where, in the
opinion of counsel admitted to practice in such state acceptable to the Company,
the Trustee and the Rating Agencies submitted in lieu of such recording or
filing, such recording or filing is not required to protect the Trustee's
interest in such Mortgage Loans against creditors of, or against sale, further
assignments, satisfaction or discharge by, the Lender, a Servicer, the Company
or the Master Servicer. 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 Trustee
Section 8.01. Duties of Trustee.
(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
80
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 the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such 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 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) the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee, and, in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
and
(iii) The Trustee shall not 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 the REMIC I Trust Fund relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or relating to the exercise of any trust or power conferred
upon the 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.
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(e) The Trustee acknowledges that it is named as the "insured" under
the PMI Policy and acknowledges that the Master Servicer has agreed, pursuant to
Section 3.21 hereof, to perform the obligations of the Trustee under the PMI
Policy on behalf of the Trustee. Each of the Trustee and the Master Servicer
hereby covenant not to cancel the PMI Policy until the Trust is terminated in
accordance with the provisions hereof.
Section 8.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(i) The 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) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall not 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,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so
by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC I Trust Fund; provided,
however, that if the payment within a reasonable time to the Trustee of
the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security, if any, afforded to
it by the terms of this Agreement, the Trustee may require reasonable
indemnity against such expense or liability as a condition to
proceeding;
(v) The 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;
(vi) The Trustee shall not 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 Corporate Trust Office at the address set forth in
Section 10.06;
(vii) In no event shall the Trustee be held liable for acts or
omissions of the Master Servicer (excepting the Trustee's own actions
as Master Servicer). No provision
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of this Agreement shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder (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; and
(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.
Section 8.03. Trustee 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 in the Certificates (other
than the execution of, and certificate of authentication on, the Certificates)
shall be taken as the statements of the Company and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of the Certificates or any
Mortgage Loan. The Trustee shall not be accountable for the use or application
by the Company 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 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. Trustee May Own Certificates. The Trustee or any agent or
affiliate of the 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 Trustee's Fees and Expenses.
Subject to a separate written agreement with the Trustee, the Master Servicer
covenants and agrees to, and the Master Servicer shall, pay the Trustee from
time to time, and the 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 the Trustee. Except
as otherwise expressly provided herein, the Master Servicer shall pay or
reimburse the Trustee upon the Trustee's request for all reasonable expenses and
disbursements incurred or made by the Trustee in accordance with any of the
provisions of this Agreement and indemnify the 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) except any such expense or disbursement as may arise from its
negligence or bad faith. Such obligation shall survive the termination of this
Agreement or resignation or removal of the Trustee. The Company shall, at its
expense, prepare or cause to be prepared all federal and state income tax and
franchise tax and information returns relating to the REMIC I Trust Fund
required to be prepared or filed by the Trustee and shall indemnify the Trustee
for any liability of the Trustee arising from any error in such returns.
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Section 8.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC, (ii) a
corporation or association 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 or
association 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. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by 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 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 shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Master Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor.
The Holders of Certificates evidencing Percentage Interests aggregating
more than 50% of the REMIC I Trust Fund may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys in-fact duly authorized, one complete
set of which 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 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 shall be borne by the Trustee, and any expenses associated with the
removal of the 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
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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 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.
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 or
association into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
successor of the 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
REMIC I Trust Fund may at the time be located, the Master Servicer and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the REMIC I Trust Fund and to vest in
such Person or Persons, in such capacity, such title to the REMIC I Trust Fund,
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 may consider necessary or desirable; provided, that the Trustee
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 alone shall have the power to
make such appointment; provided, that the 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.
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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 shall be conferred or imposed upon and
exercised or performed by the Trustee 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 (whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the REMIC I Trust Fund 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.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then 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 separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and the trust shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. 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, 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
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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 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(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, 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
87
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 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.
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 respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby shall terminate upon (i) the purchase by the Master Servicer pursuant to
the following paragraph of this Section 9.01(a) of all Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund 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 created hereby of (A) all
property in the Trust Fund 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 in the Trust Fund, 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 Fund 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 trusts created hereby 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
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Mortgage Loans and any Mortgaged Properties acquired by the Trust Fund at the
price stated in clause (i) of the preceding paragraph. 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 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 Fund.
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 Fund or purchase 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) In the event that the Master Servicer elects to exercise its
purchase option as provided in Section 9.01(a), the Master Servicer shall
provide to the Trustee (and to the Company, if the Company is no longer acting
as Master Servicer) notice thereof not less than 40 days prior to the date of
the final distribution to Certificateholders. Notice of such purchase,
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.
Section 9.02. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option as
provided in Section 9.01, the REMIC I Trust Fund 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 the REMIC I Trust Fund to comply with the
requirements of this Section 9.02 will not (i) result in the imposition of taxes
on "prohibited transactions" of the REMIC I Trust Fund as described in Section
860F of the Code, or (ii) cause
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the REMIC I Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(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 the REMIC I Trust Fund 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 the REMIC
I Trust Fund; 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 on behalf of the Trustee shall sell all of the
assets of the REMIC I Trust Fund 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 and to take such other action in connection
therewith as may be reasonably necessary.
Section 9.03. Trusts Irrevocable. Except as expressly provided herein,
the trusts created hereby are 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 the REMIC I Trust Fund, or to assure the conveyance to the
Trustee of any property included in the REMIC I Trust Fund; and (v) pursuant to
Section 5.01(c)(v). No such amendment (other than one entered into pursuant to
clause (iii) of the preceding sentence) shall adversely affect in any material
respect the interest of any Certificateholder, and no such amendment shall
change the powers of the Master Servicer. Prior to entering into any amendment
without the consent of Certificateholders pursuant to this paragraph, the
Trustee may require an Opinion of Counsel to the effect that such amendment is
permitted under this paragraph. The placement of an "original issue discount"
legend on, or any change required to correct any such legend previously placed
on a Certificate shall not be deemed any amendment to this Agreement.
(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
the REMIC I Trust Fund for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this
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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 the REMIC I Trust Fund, or
(iv) modify any provision in any way which would permit an earlier retirement of
the Certificates.
Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to 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 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.
Section 10.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, the REMIC I Trust Fund, 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 REMIC I Trust Fund,
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 REMIC I Trust Fund 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
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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 the REMIC I Trust Fund 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.
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 and the Trustee that neither the Master Servicer nor the
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.
92
Section 10.05. Governing Law. This Agreement (including the creation of
the trusts created hereunder) shall be construed in accordance with the laws of
the State of California 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 principles.
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 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;
93
(ii) the appointment of a successor 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 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 4.04, 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 4.05,
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 has requested such report for such Distribution Date.
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IN WITNESS WHEREOF, the Company and the 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:_______________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:_______________________________________
Name:
Title:
Exhibit A
CUSIP 939335 YC3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class A
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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 12, 2001.
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 2001-AR1 Portion of the Class A Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$266,523,000.00
Class A Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class A Principal Balance
as of the Cut-Off Date: $266,523,000.00
Cede & Co.
Registered Owner
A-1
Exhibit A
CUSIP 939335 YG4
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
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 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 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 TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS 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 "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
A-2
BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF THIS
CERTIFICATE BY SUCH PRECEDING TRANSFEREE. THE TRUSTEE SHALL BE UNDER NO
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 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 2001-AR1 Portion of the Class B-1 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$3,027,000.00
Class B-1 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-1 Principal Balance
as of the Cut-Off Date: $3,027,000.00
Cede & Co.
Registered Owner
A-3
Exhibit A
CUSIP 939335 XX0
XXXXXXXXXX MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
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 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 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 TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS 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 "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
A-4
BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF THIS
CERTIFICATE BY SUCH PRECEDING TRANSFEREE. THE TRUSTEE SHALL BE UNDER
NO 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 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 2001-AR1 Portion of the Class B-2 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$2,063,000.00
Class B-2 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-2 Principal Balance
as of the Cut-Off Date: $2,063,000.00
Cede & Co.
Registered Owner
A-5
Exhibit A
CUSIP 939335 YJ8
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-3
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
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 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 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 TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
NOTWITHSTANDING THE FOREGOING PARAGRAPH, WITH RESPECT TO THE TRANSFER OF THIS
CLASS 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 "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
A-6
BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF THIS
CERTIFICATE BY SUCH PRECEDING TRANSFEREE. THE TRUSTEE SHALL BE UNDER
NO 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 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 2001-AR1 Portion of the Class B-3 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$1,513,000.00
Class B-3 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-3 Principal Balance
as of the Cut-Off Date: $1,513,000.00
Cede & Co.
Registered Owner
A-7
Exhibit A
CUSIP 939335 YK5
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
NO TRANSFER OF THIS CLASS 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
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 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 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 2001-AR1 Portion of the Class B-4 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$963,000.00
Class B-4 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-4 Principal Balance
as of the Cut-Off Date: $963,000.00
---------------------
Registered Owner
A-8
Exhibit A
CUSIP 939335 YL3
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
NO TRANSFER OF THIS CLASS 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
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 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 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 2001-AR1 Portion of the Class B-5 Principal Balance as of the Cut- Off
Date Evidenced by this Certificate:
$550,000.00
Class B-5 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-5 Principal Balance
as of the Cut-Off Date: $550,000.00
---------------------
Registered Owner
A-9
Exhibit A
CUSIP 939335 YM1
WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATE
Class B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of, among
other things, a pool of conventional one- to four-family mortgage loans formed
and administered by
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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
"Code"). The issue date of this Certificate is December 12, 2001.
NO TRANSFER OF THIS CLASS 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
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 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 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 2001-AR1 Portion of the Class B-6 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$552,859.62
Class B-6 Certificate Interest Rate: Variable
Cut-Off Date: December 1, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class B-6 Principal Balance
as of the Cut-Off Date: $552,859.62
---------------------
Registered Owner
A-10
Exhibit A
CUSIP 939335 YF6
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
CERTIFICATE REGISTRAR 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 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 TRUSTEE, THE MASTER SERVICER OR THE
COMPANY.
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 2001-AR1 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: 6.025%. 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, 2001
First Distribution Date: January 25, 2002
Last Scheduled Distribution Date: December 26, 2031
Class R Principal Balance as of the Cut-Off Date: $50.00
------------------
Registered Owner
Certificate No. _________
A-11
Exhibit B
[Reserved]
B-1
Exhibit C
[Reserved]
C-1
Exhibit D
Mortgage Loan Schedule
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
E-2
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]
Bankers Trust Company of California, N.A., as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A1
Re: Purchase of Washington Mutual MSC Mortgage Pass-Through
Certificates Series 2001-AR1, 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]
Bankers Trust Company of California, N.A., as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A1
Washington Mutual Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
The undersigned (the "Purchaser") proposes to purchase Class [
] Certificates evidencing an undivided interest in Washington Mutual MSC
Mortgage Pass-Through Certificates, Series 2001-AR1 (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, 2001 (the "Pooling
Agreement"), by and between Washington Mutual Mortgage Securities Corp.
("Washington Mutual") and Bankers Trust Company of California, N.A., as trustee
(the "Trustee"), of the Washington Mutual MSC Mortgage Pass-Through
Certificates, Series 2001-AR1.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants to
Washington Mutual and the Trustee 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;
(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
G-1
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 Funds are 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 and the Trustee 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 Trustee or
Washington Mutual. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify 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.
G-2
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:
G-3
Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE 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 trust fund (the "REMIC I Trust Fund") whose
assets consist of, among other things, a pool (the "Mortgage Pool") of
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. The Mortgage Pool was created pursuant to a Pooling and Servicing
Agreement, dated as of the Cut-Off Date stated above (the "Pooling Agreement"),
between the Company and Bankers Trust Company of California, N.A., as Trustee
(the "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 Available Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.01 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 Trustee has caused this Certificate to be duly
executed.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:
---------------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By:
----------------------------------------
Dated:
-------------------------------------
H-2
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
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 the REMIC I Trust Fund.
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 the REMIC I Trust Fund.
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 or the Trustee and
(ii) in the event that such a transfer is not made pursuant to Rule 144A under
the Securities Act, the Company may require an Opinion of Counsel satisfactory
to the Company 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 or the Trustee. Neither the Company nor the Trustee 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
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 evidencing the same aggregate interest in the portion of the
Available Distribution Amount distributable on this Class of Certificate, 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 funds
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 REMIC I Trust Fund 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 REMIC I Trust Fund 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]
Bankers Trust Company of California, N.A., as Trustee
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A1
Re: Washington Mutual MSC Mortgage Pass-Through
Certificates, Series 2001-AR1, 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 2001-AR1, Class R (the
"Certificate"), pursuant to Section 5.01 of the Pooling and Servicing Agreement
(the "Pooling Agreement"), dated as of December 1, 2001 among Washington Mutual
Mortgage Securities Corp., as depositor and master servicer (the "Company") and
Bankers Trust Company of California, N.A., as trustee (the "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 and the Trustee 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.
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 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 created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
15. 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 the REMIC I Trust Fund (the "Trust Fund").
J-2
16. The Owner hereby agrees that it will not take any action that
could endanger the REMIC status of the Trust Funds or result in the imposition
of tax on the Trust Funds 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.
17. The Owner as transferee of the Class R Certificates has
represented to their 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.
18. 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:
[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__.
J-3
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the day
of , 20
-------------- ----
J-4
Exhibit K
Form of PMI Policy
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 and the Master Servicer (as defined in Section 1.01 of the
Pooling and Servicing Agreement (the "Agreement") dated as of December 1, 2001
between Washington Mutual Mortgage Securities Corp., as Depositor and Master
Servicer and Bankers Trust Company of California, N.A., as 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 12, 2001 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, 2001 by
and between Washington Mutual Mortgage Securities Corp., as
Depositor and Master Servicer, and Bankers Trust Company of
California, N.A., as Trustee, relating to Washington Mutual MSC
Mortgage Pass-Through Certificates, Series 2001-AR1
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 has reviewed the documents delivered to it 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 it to be required)
pursuant to the definition of "Mortgage File" and Section 2.01 of the Pooling
and Servicing Agreement to have been executed and received as of the date hereof
are in its possession 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
Bankers Trust Company of California, N.A., as Trustee (the "Trustee")
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A1
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2001-AR1
(THE "TRUST") CLASS [B-4] [B-5] [B-6] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
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 Trust Funds.
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, 2001, by and between
Washington Mutual and the Trustee, and relating to the Washington
Mutual MSC Mortgage Pass-Through Certificates, Series 2001-AR1).
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__.
N-1
[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
Bankers Trust Company of California, N.A., as Trustee (the "Trustee")
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A1
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2001-AR1
(THE "TRUST") CLASS [B-1] [B-2] [B-3] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
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 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, 2001, by and
between Washington Mutual and the Trustee, and relating to the
Washington Mutual MSC Mortgage Pass-Through Certificates, Series
2001-AR1) at the time of Purchaser's acquisition of the Purchased
Certificate (or interest therein).
O-1
___ 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).
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
Exhibit P
Schedule of PMI Mortgage Loans
P-1
