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
$1,167,350,333.57
Washington Mutual Mortgage Securities Corp.
WaMu Mortgage Pass-Through Certificates
Series 2001-AR3
Cut-Off Date: November 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I........................................................................................................4
Section 1.01. Definitions...........................................................................4
Aggregate Certificate Principal Balance........................................................4
Appraised Value................................................................................4
Assignment of Proprietary Lease................................................................4
Authenticating Agent...........................................................................4
Authorized Denomination........................................................................4
Bankruptcy Coverage............................................................................5
Bankruptcy Loss................................................................................5
Beneficial Holder..............................................................................5
Benefit Plan Opinion...........................................................................5
Book-Entry Certificates........................................................................5
Business Day...................................................................................5
Buydown Agreement..............................................................................5
Buydown Fund...................................................................................6
Buydown Fund Account...........................................................................6
Buydown Loan...................................................................................6
Certificate....................................................................................6
Certificate Account............................................................................6
Certificateholder or Holder....................................................................6
Certificate Group..............................................................................7
Certificate Interest Rate......................................................................7
Certificate Principal Balance..................................................................7
Certificate Register and Certificate Registrar.................................................7
Class..........................................................................................7
Class A Certificates...........................................................................7
Class B-1 Certificates.........................................................................7
Class B-2 Certificates.........................................................................7
Class B-3 Certificates.........................................................................7
Class B-4 Certificates.........................................................................8
Class B-5 Certificates.........................................................................8
Class B-6 Certificates.........................................................................8
Class I-A Certificates.........................................................................8
Class II-A Certificates........................................................................8
Class Principal Balance........................................................................8
Class R Certificates...........................................................................8
Class R Residual Interests.....................................................................9
Class Y Principal Reduction Amounts............................................................9
Class Y Regular Interests......................................................................9
Class Y-1 Principal Distribution Amount........................................................9
Class Y-1 Regular Interest.....................................................................9
Class Y-2 Principal Distribution Amount........................................................9
Class Y-2 Regular Interest.....................................................................9
Class Z Principal Reduction Amounts............................................................9
Class Z Regular Interests.....................................................................10
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Class Z-1 Principal Distribution Amount.......................................................10
Class Z-1 Regular Interest....................................................................10
Class Z-2 Principal Distribution Amount.......................................................10
Class Z-2 Regular Interest....................................................................10
Clean-Up Call Percentage......................................................................10
Clearing Agency...............................................................................10
Closing Date..................................................................................10
Code..........................................................................................10
COFI..........................................................................................10
Company.......................................................................................10
Compensating Interest.........................................................................10
Cooperative...................................................................................11
Cooperative Apartment.........................................................................11
Cooperative Lease.............................................................................11
Cooperative Loans.............................................................................11
Cooperative Stock.............................................................................11
Cooperative Stock Certificate.................................................................11
Corporate Trust Office........................................................................11
Corporation...................................................................................11
Credit Support Depletion Date.................................................................11
Curtailment...................................................................................11
Curtailment Shortfall.........................................................................12
Custodial Account for P&I.....................................................................12
Custodial Account for Reserves................................................................12
Custodial Agreement...........................................................................12
Custodian.....................................................................................12
Cut-Off Date..................................................................................13
Definitive Certificates.......................................................................13
Depositary Agreement..........................................................................13
Destroyed Mortgage Note.......................................................................13
Determination Date............................................................................13
Disqualified Organization.....................................................................13
Distribution Date.............................................................................13
DTC...........................................................................................13
DTC Participant...............................................................................13
Due Date......................................................................................13
Eligible Institution..........................................................................13
Eligible Investments..........................................................................13
ERISA.........................................................................................15
ERISA Restricted Certificate..................................................................15
Event of Default..............................................................................15
Excess Liquidation Proceeds...................................................................15
FDIC..........................................................................................15
FHA...........................................................................................15
Xxxxxx Xxx....................................................................................15
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TABLE OF CONTENTS
(continued)
Page
Final Maturity Date...........................................................................15
Fraud Coverage................................................................................15
Fraud Loss....................................................................................16
Xxxxxxx Mac...................................................................................16
Group B Certificates..........................................................................16
Group B Percentage............................................................................16
Group I Certificates..........................................................................16
Group I Loans.................................................................................16
Group I Senior Liquidation Amount.............................................................16
Group I Senior Percentage.....................................................................16
Group I Senior Prepayment Percentage or Group II Senior Prepayment Percentage.................16
Group I Senior Principal Distribution Amount..................................................18
Group I Subordinate Balance...................................................................18
Group I Subordinate Percentage................................................................19
Group I Subordinate Prepayment Percentage.....................................................19
Group II Certificates.........................................................................19
Group II Loans................................................................................19
Group II Senior Liquidation Amount............................................................19
Group II Senior Percentage....................................................................19
Group II Senior Prepayment Percentage.........................................................19
Group II Senior Principal Distribution Amount.................................................19
Group II Subordinate Balance..................................................................19
Group II Subordinate Percentage...............................................................19
Group II Subordinate Prepayment Percentage....................................................19
Index.........................................................................................19
Indirect DTC Participants.....................................................................20
Initial Custodial Agreement...................................................................20
Initial Custodian.............................................................................20
Insurance Proceeds............................................................................20
Interest Distribution Amount..................................................................20
Interest Rate Adjustment Date.................................................................20
Interest Transfer Amount......................................................................20
Investment Account............................................................................20
Investment Depository.........................................................................21
Junior Subordinate Certificates...............................................................21
Last Scheduled Distribution Date..............................................................21
Lender........................................................................................21
Liquidated Mortgage Loan......................................................................21
Liquidation Principal.........................................................................21
Liquidation Proceeds..........................................................................21
Loan Group....................................................................................21
Loan Group I..................................................................................21
Loan Group II.................................................................................21
Loan-to-Value Ratio...........................................................................21
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TABLE OF CONTENTS
(continued)
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Lowest Class B Owner..........................................................................21
Margin........................................................................................21
Master Servicer...............................................................................22
Master Servicer Business Day..................................................................22
Master Servicing Fee..........................................................................22
MERS..........................................................................................22
MERS Loan.....................................................................................22
MERS'r' System................................................................................22
MIN...........................................................................................22
MOM Loan..................................................................................... 22
Monthly P&I Advance...........................................................................22
Monthly Payment...............................................................................22
Monthly Payment Adjustment Terms..............................................................22
Xxxxx'x.......................................................................................22
Mortgage......................................................................................22
Mortgage File.................................................................................23
Mortgage Interest Rate........................................................................25
Mortgage Loan Schedule........................................................................25
Mortgage Loans................................................................................26
Mortgage Note.................................................................................26
Mortgage Pool.................................................................................26
Mortgaged Property............................................................................26
Mortgagor.....................................................................................26
Negative Amortization Amount..................................................................26
Nonrecoverable Advance........................................................................27
Non-U.S. Person...............................................................................27
Notice Addresses..............................................................................27
OTS...........................................................................................27
Officer's Certificate.........................................................................27
One-Year MTA..................................................................................27
Opinion of Counsel............................................................................28
Original Value................................................................................28
Overcollateralized Group......................................................................28
Ownership Interest............................................................................28
Pass-Through Entity...........................................................................28
Pass-Through Rate.............................................................................28
Paying Agent..................................................................................29
Payoff........................................................................................29
Payoff Earnings...............................................................................29
Payoff Interest...............................................................................29
Payoff Period.................................................................................29
Percentage Interest...........................................................................29
Permitted Transferee..........................................................................30
Person........................................................................................30
Prepaid Monthly Payment.......................................................................30
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TABLE OF CONTENTS
(continued)
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Primary Insurance Policy......................................................................30
Principal Balance.............................................................................30
Principal Payment.............................................................................31
Principal Payment Amount......................................................................31
Principal Prepayment..........................................................................31
Principal Prepayment Amount...................................................................31
Principal Transfer Amount.....................................................................31
Prior Period..................................................................................31
Pro Rata Allocation...........................................................................31
Prospectus....................................................................................32
Purchase Obligation...........................................................................32
Purchase Price................................................................................32
Qualified Insurer.............................................................................32
Rate Ceiling..................................................................................32
Rate Floor....................................................................................32
Rating Agency.................................................................................32
Ratings.......................................................................................32
Realized Loss.................................................................................32
Recognition Agreement.........................................................................34
Record Date...................................................................................34
Regular Interests.............................................................................34
Relief Act Shortfall..........................................................................34
REMIC.........................................................................................34
REMIC Provisions..............................................................................34
REMIC I.......................................................................................34
REMIC I Available Distribution Amount.........................................................34
REMIC I Distribution Amount...................................................................35
REMIC I Realized Loss and Negative Amortization Allocation....................................36
REMIC I Regular Interests.....................................................................37
REMIC I Trust Fund............................................................................37
REMIC II......................................................................................37
REMIC II Available Distribution Amount........................................................37
REMIC II Distribution Amount..................................................................37
REMIC II Regular Interests....................................................................42
REMIC II Trust Fund...........................................................................42
Residual Certificates.........................................................................42
Residual Distribution Amount..................................................................42
Responsible Officer...........................................................................42
S&P...........................................................................................42
Securities Act................................................................................42
Security Agreement............................................................................43
Selling and Servicing Contract................................................................43
Senior Certificates...........................................................................43
Senior Subordinate Certificates...............................................................43
Servicer..................................................................................... 43
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Servicing Fee.................................................................................43
Servicing Officer.............................................................................43
Special Hazard Coverage.......................................................................43
Special Hazard Loss...........................................................................44
Special Primary Insurance Policy..............................................................44
Special Primary Insurance Premium.............................................................44
Subordinate Certificates......................................................................44
Subordinate Component Balance.................................................................44
Subordinate Liquidation Amount................................................................45
Subordinate Percentage........................................................................45
Subordinate Principal Distribution Amount.....................................................45
Subordinate Principal Prepayments Distribution Amount.........................................45
Subordination Level...........................................................................46
Substitute Mortgage Loan......................................................................46
Tax Matters Person............................................................................46
Termination Date..............................................................................46
Termination Payment...........................................................................46
Total Transfer Amount.........................................................................46
Transfer......................................................................................46
Transferee....................................................................................46
Transferee Affidavit and Agreement............................................................47
Trust.........................................................................................47
Trust Fund....................................................................................47
Trustee.......................................................................................47
Uncollected Interest..........................................................................47
Uncompensated Interest Shortfall..............................................................47
Undercollateralized Group.....................................................................48
Underwriters..................................................................................48
Underwriting Standards........................................................................48
Uninsured Cause...............................................................................48
U.S. Person...................................................................................48
VA............................................................................................48
Withdrawal Date...............................................................................48
ARTICLE II Conveyance of the Trust Funds; REMIC Election and Designations;
Original Issuance of Certificates.........................................................49
Section 2.01. Conveyance of the Trust Fund; REMIC Election and Designations........................49
Section 2.02. Acceptance by Trustee................................................................54
Section 2.03. Representations and Warranties of the Company Concerning the Mortgage Loans..........55
Section 2.04. Acknowledgment of Transfer of Trust Fund.............................................59
Section 2.05. Conveyance of REMIC II; REMIC Election and Designations..............................60
Section 2.06. Acceptance by Trustee; Authentication of Certificates................................63
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TABLE OF CONTENTS
(continued)
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ARTICLE III Administration and Servicing of Mortgage Loans............................................63
Section 3.01. The Company to Act as Master Servicer................................................63
Section 3.02. Custodial Accounts and Buydown Fund Accounts.........................................66
Section 3.03. The Investment Account; Eligible Investments.........................................67
Section 3.04. The Certificate Account..............................................................68
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.......69
Section 3.06. Maintenance of Primary Insurance Policies; Collections Thereunder....................70
Section 3.07. Maintenance of Hazard Insurance......................................................71
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements............................71
Section 3.09. Realization Upon Defaulted Mortgage Loans............................................72
Section 3.10. Trustee to Cooperate; Release of Mortgage Files......................................74
Section 3.11. Compensation to the Master Servicer and the Servicers................................75
Section 3.12. Reports to the Trustee; Certificate Account Statement................................75
Section 3.13. Annual Statement as to Compliance....................................................76
Section 3.14. Access to Certain Documentation and Information Regarding the Mortgage Loans.........76
Section 3.15. Annual Independent Public Accountants' Servicing Report..............................76
Section 3.16. [Reserved.]..........................................................................76
Section 3.17. [Reserved.]..........................................................................76
Section 3.18. [Reserved.]..........................................................................76
Section 3.19. [Reserved.]..........................................................................76
Section 3.20. Assumption or Termination of Selling and Servicing Contracts by Trustee..............76
ARTICLE IV Payments to Certificateholders; Payment of Expenses.......................................77
Section 4.01. Distributions to Holders of REMIC I Regular Interests and Class R-1 Residual
Interest.............................................................................77
Section 4.02. Advances by the Master Servicer; Distribution Reports to the Trustee.................77
Section 4.03. Nonrecoverable Advances..............................................................79
Section 4.04. Distributions to Certificateholders; Payment of Special Primary Insurance
Premiums.............................................................................79
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TABLE OF CONTENTS
(continued)
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Section 4.05. Statements to Certificateholders.....................................................80
ARTICLE V The Certificates..........................................................................81
Section 5.01. The Certificates.....................................................................81
Section 5.02. Certificates Issuable in Classes; Distributions of Principal and Interest;
Authorized Denominations.............................................................88
Section 5.03. Registration of Transfer and Exchange of Certificates................................88
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates....................................89
Section 5.05. Persons Deemed Owners................................................................89
Section 5.06. Temporary Certificates...............................................................89
Section 5.07. Book-Entry for Book-Entry Certificates...............................................90
Section 5.08. Notices to Clearing Agency...........................................................91
Section 5.09. Definitive Certificates..............................................................91
Section 5.10. Office for Transfer of Certificates..................................................91
ARTICLE VI The Company and the Master Servicer.......................................................92
Section 6.01. Liability of the Company and the Master Servicer.....................................92
Section 6.02. Merger or Consolidation of the Company, or the Master Servicer.......................92
Section 6.03. Limitation on Liability of the Company, the Master Servicer and Others...............92
Section 6.04. The Company and the Master Servicer not to Resign....................................93
Section 6.05. Trustee Access.......................................................................93
ARTICLE VII Default...................................................................................93
Section 7.01. Events of Default....................................................................93
Section 7.02. Trustee to Act; Appointment of Successor.............................................96
Section 7.03. Notification to Certificateholders...................................................97
ARTICLE VIII Concerning the Trustee....................................................................97
Section 8.01. Duties of Trustee....................................................................97
Section 8.02. Certain Matters Affecting the Trustee................................................98
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans...............................100
Section 8.04. Trustee May Own Certificates........................................................100
Section 8.05. The Master Servicer to Pay Trustee's Fees and Expenses..............................100
Section 8.06. Eligibility Requirements for Trustee................................................100
Section 8.07. Resignation and Removal of Trustee..................................................101
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(continued)
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Section 8.08. Successor Trustee...................................................................101
Section 8.09. Merger or Consolidation of Trustee..................................................102
Section 8.10. Appointment of Co-Trustee or Separate Trustee.......................................102
Section 8.11. Authenticating Agents...............................................................103
Section 8.12. Paying Agents.......................................................................104
ARTICLE IX Termination..............................................................................105
Section 9.01. Termination Upon Purchase by the Master Servicer or Liquidation of All
Mortgage Loans......................................................................105
Section 9.02. Additional Termination Requirements.................................................106
Section 9.03. Trusts Irrevocable..................................................................107
ARTICLE X Miscellaneous Provisions.................................................................107
Section 10.01. Amendment...........................................................................107
Section 10.02. Recordation of Agreement............................................................108
Section 10.03. Limitation on Rights of Certificateholders..........................................108
Section 10.04. Access to List of Certificateholders................................................109
Section 10.05. Governing Law.......................................................................109
Section 10.06. Notices.............................................................................110
Section 10.07. Severability of Provisions..........................................................110
Section 10.08. Counterpart Signatures..............................................................110
Section 10.09. Benefits of Agreement...............................................................110
Section 10.10. Notices and Copies to Rating Agencies...............................................110
Appendix 1 Definition of "Class Y Principal Reduction Amounts"
Exhibit A Form of Certificates (other than Class R Certificates)
Exhibit B Form of Class R Certificates
Exhibit C [Reserved]
Exhibit D Mortgage Loan Schedule
Exhibit E Selling And Servicing Contract
Exhibit F Form of Transferor Certificate For Junior Subordinate Certificates
Exhibit G Form of Transferee's Agreement For Junior Subordinate Certificates
Exhibit H Form of Additional Matter Incorporated Into The Certificates
Exhibit I Transferor Certificate
Exhibit J Transferee Affidavit And Agreement
Exhibit K [Reserved]
Exhibit L Form of Investment Letter
Exhibit M Form of Trustee's Certification Pursuant to Section 2.02
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Exhibit N Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(d)
Exhibit O Officer's Certificate With Respect to ERISA Matters Pursuant to Section 5.01(g)
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This Pooling and Servicing Agreement, dated and effective as of
November 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 REMIC I Regular
Interests and the Class R-1 Residual Interest 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 REMIC I Regular Interests and
the Class R-1 Residual Interest. Thereafter on the Closing Date, the Company
will acquire the Certificates (other than the Class R Certificates) and the
Class R-2 Residual Interest from REMIC II as consideration for its transfer to
REMIC II of the REMIC I Regular Interests and will be the owner of the
Certificates and the Class R-2 Residual Interest. The Company has duly
authorized the execution and delivery of this Agreement to provide for (i) the
conveyance to the Trustee of the Mortgage Loans, (ii) the conveyance to the
Company of the REMIC I Regular Interests and the Class R-1 Residual Interest
representing in the aggregate the entire beneficial ownership of REMIC I, (iii)
the conveyance to the Trustee of the REMIC I Regular Interests and (iv) the
conveyance to the Company of the Class R-2 Residual Interest and the issuance to
the Company of the Certificates, such Class R-2 Residual Interest and
Certificates (other than the portion of the Class R Certificates representing
ownership of the Class R-1 Residual Interest) representing in the aggregate the
entire beneficial interest of REMIC II. 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 REMIC I Regular Interests and the Class R-1 Residual
Interest. All covenants and agreements made by the Company and the Trustee
herein with respect to the REMIC I Regular Interests are for the benefit of the
Holders from time to time of the Certificates (other than the portion of the
Class R Certificates representing ownership of the Class R-1 Residual Interest).
The Company is entering into this Agreement, and the Trustee is accepting the
two separate trusts 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 November 8, 2001 (as supplemented by
a Supplement dated November 9, 2001), of the Company (together, the
"Prospectus"). The Junior Subordinate Certificates have been offered for sale
pursuant to a Private Placement Memorandum, dated November 9, 2001. The Trust
Fund and the REMIC II Trust Fund created hereunder are collectively intended to
be the "Trust" described in the Prospectus and the Private Placement Memorandum
and the Certificates are intended to be the "Certificates" described therein.
The following tables set forth the designation, type of interest, Certificate
Interest Rate, initial Class Principal Balance and Final Maturity Date for the
REMIC I Regular Interests, the Class R Residual Interests and the Certificates:
1
REMIC I Interests
Class Designation for
each REMIC I Regular Certificate Initial Class
Interest and the Class Type of Interest Principal
R-1 Residual Interest Interest Rate (1) Balance Final Maturity Date*
---------------------- ------------ -------------------- -------------------- ----------------------
Class Y-1 Regular Variable (2) $ 382,997.27 November 2041
Class Y-2 Regular Variable (3) 200,676.38 November 2041
Class Z-1 Regular Variable (2) 765,614,524.27 November 2041
Class Z-2 Regular Variable (3) 401,152,085.65 November 2041
Class R-1'D' Residual Variable (3) 50.00 November 2041
* The Distribution Date in the specified month, which is the month
following the month the latest maturing Mortgage Loan in the related
Loan Group (or Loan Groups, as applicable) matures.
'D' The Class R-1 Residual Interest is entitled to receive the applicable
Residual Distribution Amount and any Excess Liquidation Proceeds. 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 to the REMIC I Regular Interests and the Class R-1
Residual Interest on each Distribution Date will have accrued at the
applicable per annum Certificate Interest Rate on the applicable Class
Principal Balance outstanding 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 on the Class
Y-1 and Class Z-1 Regular Interests shall equal the weighted average of
the Pass-Through Rates on the Group I Loans as of the second preceding
Due Date.
(3) For each Distribution Date, the Certificate Interest Rate on the Class
Y-2 and Class Z-2 Regular Interests and the Class R-1 Residual Interest
shall equal the weighted average of the Pass-Through Rates on the Group
II Loans as of the second preceding Due Date.
As provided herein, with respect to REMIC I, the Company will cause an
election to be made on behalf of REMIC I to be treated for federal income tax
purposes as a REMIC. The REMIC I Regular Interests will be designated regular
interests in REMIC I and the Class R-1 Residual Interest will be designated the
sole class of residual interest in REMIC I, for purposes of the REMIC
Provisions.
2
REMIC II Interests
Class Designation for
each Class of
Certificates Certificate Initial Class
and the Class R-2 Type of Interest Principal Final Maturity
Residual Interest Interest Rate (1) Balance Date*
------------------------ ------------ -------------------- -------------------- ------------------------
Class I-A Regular (2) $731,527,600.00 November 2041
Class II-A Regular (3) 383,291,800.00 November 2041
Class B-1 Regular Variable (4) 25,098,000.00 November 2041
Class B-2 Regular Variable (4) 11,089,900.00 November 2041
Class B-3 Regular Variable (4) 7,004,100.00 November 2041
Class B-4 Regular Variable (4) 2,334,700.00 November 2041
Class B-5 Regular Variable (4) 2,334,700.00 November 2041
Class B-6 Regular Variable (4) 4,669,483.57 November 2041
Class R-2 (5) Residual ----- ----- November 2041
* 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 II 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 on the Class
I-A Certificates shall equal the weighted average of the Pass-Through
Rates on the Group I Loans as of the second preceding Due Date.
(3) For each Distribution Date, the Certificate Interest Rate on the Class
II-A Certificates shall equal the weighted average of the Pass-Through
Rates on the Group II Loans as of the second preceding Due Date.
(4) For each Distribution Date, the Certificate Interest Rate for each
Class of the Group B Certificates shall equal the weighted average of
the Certificate Interest Rates for the Class Y-1 and Class Y-2 Regular
Interests.
(5) The Class R-2 Residual Interest shall be entitled to receive the
applicable Residual Distribution Amount. The Class R-2 Residual
Interest shall not be entitled to receive any distributions of interest
or principal.
As provided herein, with respect to REMIC II, the Company will cause an
election to be made on behalf of REMIC II to be treated for federal income tax
purposes as a REMIC. The Certificates (other than the Class R Certificates) will
be designated regular interests in REMIC II and the Class R-2 Residual Interest
will be designated the sole class of residual interest in REMIC II, for purposes
of the REMIC Provisions. As of the Cut-Off Date, the Mortgage Loans have an
aggregate Principal Balance of $1,167,350,333.57 and the Certificates have an
Aggregate Certificate Principal Balance of $1,167,350,333.57.
In addition, the Trust will issue the Class R Certificates, which will
represent ownership of the Class R-1 and Class R-2 Residual Interests.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized and existing under
and by virtue of the laws of the State of Delaware and has full corporate power
and authority to enter into this Agreement and to undertake the obligations
undertaken by it herein;
3
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;
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 creation and conveyance of the REMIC I Regular Interests and the
Class R-1 Residual Interest;
WHEREAS, the Company has been duly authorized to create a trust ("REMIC
II") to (i) hold the REMIC I Regular Interests, (ii) provide for the creation
and conveyance of the Class R-2 Residual Interest and (iii) 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 REMIC I Regular Interests and the Class R Residual Interests are to be
created and conveyed and 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 REMIC I Regular Interests and the
Certificates, as applicable, as follows:
ARTICLE I
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Aggregate Certificate Principal Balance: At any given time, the sum of
the then current Class Principal Balances of the Certificates.
Appraised Value: The amount set forth in an appraisal made by or for
(a) the mortgage originator in connection with its origination of each Mortgage
Loan (including a Mortgage Loan originated to refinance mortgage debt), (b) with
respect to a Mortgage Loan originated to refinance mortgage debt, the originator
of the mortgage debt that was refinanced or (c) the Servicer, at any time, in
accordance with the Selling and Servicing Contract.
Assignment of Proprietary Lease: With respect to a Cooperative Loan,
the assignment or mortgage of the related Cooperative Lease from the Mortgagor
to the originator of the Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 8.11.
Authorized Denomination: With respect to each Class of 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
4
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%.
Bankruptcy Coverage: $250,114 less (a) any scheduled or permissible
reduction in the amount of Bankruptcy Coverage pursuant to the second paragraph
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 (i) a Saturday or a Sunday or (ii) 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.
5
Buydown Fund: A fund provided by the originator of a Mortgage Loan or
another Person with respect to a Buydown Loan which provides an amount
sufficient to subsidize regularly scheduled principal and interest payments due
on such Buydown Loan for a period. Buydown Funds may be (i) funded at the par
values of future payment subsidies, or (ii) funded in an amount less than the
par values of future payment subsidies, and determined by discounting such par
values in accordance with interest accruing on such amounts, in which event they
will be deposited in an account bearing interest. Buydown Funds may be held in a
separate Buydown Fund Account or may be held in a Custodial Account for P&I or a
Custodial Account for Reserves and monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created and
maintained pursuant to Section 3.02 (a) with 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 and B
hereto. The additional matter appearing in Exhibit H shall be deemed
incorporated into Exhibit A as though set forth at the end of such Exhibit.
Certificate Account: The separate trust account created and maintained
with the Trustee, the Investment Depository or any other bank or trust company
acceptable to the Rating Agencies which is incorporated under the laws of the
United States or any state thereof pursuant to Section 3.04, which account shall
bear a designation clearly indicating that the funds deposited therein are held
in trust for the benefit of the Trustee on behalf of the Certificateholders or
any other account serving a similar function acceptable to the Rating Agencies.
Funds in the Certificate Account in respect of the Mortgage Loans in each of the
Loan Groups and amounts withdrawn from the Certificate Account attributable to
each of such Loan Groups shall be accounted for separately by the Master
Servicer. Funds in the Certificate Account may be invested in Eligible
Investments pursuant to Section 3.04(b) and reinvestment earnings thereon shall
be paid to the Master Servicer as additional servicing compensation. Funds
deposited in the Certificate Account (exclusive of the Master Servicing Fee)
shall be held in trust for the Certificateholders and for the uses and purposes
set forth in Section 2.01, Section 3.04, Section 3.05, Section 4.01 and Section
4.04.
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
6
Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percentage of Percentage Interests necessary
to effect any such consent has been obtained; provided, that the Trustee may
conclusively rely upon an Officer's Certificate to determine whether any Person
is an affiliate of the Company or the Master Servicer. With respect to the REMIC
I Regular Interests, the owner of the REMIC I Regular Interests, which as of the
Closing Date shall be the Trustee.
Certificate Group: The Group I or Group II Certificates, as applicable.
Certificate Interest Rate: For each Class of Certificates and REMIC I
Regular Interests, the per annum rate set forth as the Certificate Interest Rate
for such Class in the Preliminary Statement hereto.
Certificate Principal Balance: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed, respectively, pursuant to Section 5.03.
Class: All REMIC I Regular Interests or the Class R-1 Residual Interest
having the same priority and rights to payments on the Mortgage Loans from the
REMIC I Available Distribution Amount, and all REMIC II Regular Interests or the
Class R-2 Residual Interest having the same priority and rights to payments on
the REMIC I Regular Interests from the REMIC II Available Distribution Amount,
as applicable, which REMIC I Regular Interests, REMIC II Regular Interests and
Class R Residual Interests, as applicable, shall be designated as a separate
Class, and which, in the case of the Certificates (including the Class R
Certificates representing ownership of the Class R Residual Interests), shall be
set forth in the applicable forms of Certificates attached hereto as Exhibits A
and B. Each Class of REMIC I Regular Interests and the Class R-1 Residual
Interest shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "REMIC I Distribution Amount" only to the extent
of the REMIC I Available Distribution Amount for such Distribution Date
remaining after distributions in accordance with prior clauses of the definition
of "REMIC I Distribution Amount" and each Class of REMIC II Regular Interests
and the Class R-2 Residual Interest shall be entitled to receive the amounts
allocated to such Class pursuant to the definition of "REMIC II Distribution
Amount" only to the extent of the REMIC II Available Distribution Amount for
such Distribution Date remaining after distributions in accordance with prior
clauses of the definition of "REMIC II Distribution Amount."
Class A Certificates: The Class I-A and Class II-A 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.
7
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 I-A Certificates: The Certificates designated as "Class I-A" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class II-A Certificates: The Certificates designated as "Class II-A" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class Principal Balance: For any Class of Certificates or Class of
Regular Interests and for the Class R-1 Residual Interest, the applicable
initial Class Principal Balance therefor set forth in the Preliminary Statement
hereto (or, in the case of the Class R Certificates, the Class Principal Balance
of the Class R-1 Residual Interest), corresponding to the rights of such Class
in payments of principal due to be passed through to the Certificateholders or
the Holders of the Regular Interests from principal payments on the Mortgage
Loans or the REMIC I Regular Interests, as applicable, as reduced from time to
time by (x) distributions of principal to the Certificateholders or the Holders
of the Regular Interests of such Class and (y) the portion of Realized Losses
allocated to the Class Principal Balance of such Class pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date, and as
increased from time to time by the portion of Negative Amortization Amounts
allocated to the Class Principal Balance of such Class pursuant to the
definition of "Negative Amortization Amount" with respect to a given
Distribution Date. For any Distribution Date, the reduction of the Class
Principal Balance of any Class of Certificates and Regular Interests pursuant to
the definition of "Realized Loss" and the increase in the Class Principal
Balance of any Class of Certificates and Regular Interests pursuant to the
definition of "Negative Amortization Amount" shall be deemed effective prior to
the determination and distribution of principal on such Class pursuant to the
definitions of "REMIC I Distribution Amount" and "REMIC II Distribution Amount."
Notwithstanding the foregoing, (A) any amounts distributed in respect
of principal losses pursuant to paragraph (I)(c)(xix) of the definition of
"REMIC II Distribution Amount" shall not cause a further reduction in the Class
Principal Balances of the Certificates and (B) any amounts distributed in
respect of principal losses pursuant to clause (c) of the definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class Principal
Balances of the REMIC I Regular Interests.
The Class Principal Balance for the Class I-A Certificates shall be
referred to as the "Class I-A Principal Balance," the Class Principal Balance
for the Class II-A Certificates shall be referred to as the "Class II-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 B,
representing ownership of the Class R-1 and Class R-2 Residual Interests, each
of which Class of Residual Interests has been designated as
8
the sole class of "residual interest" in REMIC I and REMIC II, respectively,
pursuant to Section 2.01 and Section 2.05, respectively, for purposes of Section
860G(a)(2) of the Code.
Class R Residual Interests: The Class R-1 and Class R-2 Residual
Interests.
Class R-1 Residual Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which has been designated as the single
class of "residual interest" in REMIC I pursuant to Section 2.01.
Class R-2 Residual Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC II which has been designated as the
single class of "residual interest" in REMIC II pursuant to Section 2.05.
Class Y Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Y-1 and Class Y-2
Regular Interests, respectively, will be reduced or increased on such
Distribution Date by the allocation of Realized Losses and Negative Amortization
Amounts and the distribution of principal, determined as described in Appendix
1.
Class Y Regular Interests: The Class Y-1 and Class Y-2 Regular
Interests.
Class Y-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-1 Regular Interest on such Distribution Date.
Class Y-1 Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I Regular
Interest and is entitled to distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Y-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Y-2 Regular Interest on such Distribution Date.
Class Y-2 Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I Regular
Interest and is entitled to distributions as set forth herein.
Class Z Principal Reduction Amounts: For any Distribution Date, the
amounts by which the Class Principal Balances of the Class Z-1 and Class Z-2
Regular Interests, respectively, will be reduced or increased on such
Distribution Date by the allocation of Realized Losses and Negative Amortization
Amounts and the distribution of principal, which shall be in each case the
excess of (A) the sum of (x) the excess of the REMIC I Available Distribution
Amount for the related Loan Group (i.e. the "related Loan Group" for the Class
Z-1 Regular Interest is Loan Group I and the "related Loan Group" for the Class
Z-2 Regular Interest is Loan Group II) over the sum of the amounts thereof
distributable (i) in respect of interest on such Class Z Regular Interest and
the related Class Y Regular Interest, (ii) to such Class Z Regular Interest and
the related Class Y Regular Interest pursuant to clause (c) of the definition of
"REMIC I Distribution Amount" and (iii) in the case of Loan Group II, to the
Class R-1 Residual Interest and (y) the amount of Realized
9
Losses allocable to principal for the related Loan Group over (B) the sum of (x)
any Negative Amortization Amounts allocated to such Class Z Regular Interest
pursuant to the definition of "REMIC I Realized Loss and Negative Amortization
Allocation" for such Distribution Date and (y) the Class Y Principal Reduction
Amount for the related Loan Group.
Class Z Regular Interests: The Class Z-1 and Class Z-2 Regular
Interests.
Class Z-1 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-1 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Z-1 Regular Interest on such Distribution Date.
Class Z-1 Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I Regular
Interest and is entitled to distributions as set forth herein.
Class Z-2 Principal Distribution Amount: For any Distribution Date, the
excess, if any, of the Class Z-2 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated to the
Class Z-2 Regular Interest on such Distribution Date.
Class Z-2 Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I Regular
Interest and is entitled to distributions as set forth herein.
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: November 9, 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.
COFI: The 11th District Cost of Funds Index published each month by the
Federal Home Loan Bank of San Francisco for the prior month in its monthly
Information Bulletin. In the event COFI is no longer available, the Master
Servicer will instead use One-Year MTA or a substitute Index as provided in the
definition of "One-Year MTA."
Company: Washington Mutual Mortgage Securities Corp., a Delaware
corporation, or its successor-in-interest.
Compensating Interest: For any Distribution Date with respect to each
Loan Group and the Mortgage Loans contained therein, the lesser of (i) the sum
of (a) the aggregate Master Servicing Fee payable with respect to such Loan
Group on such Distribution Date, (b) the aggregate Payoff Earnings with respect
to such Loan Group and (c) the aggregate Payoff Interest with respect to such
Loan Group and (ii) the aggregate Uncollected Interest with respect to such Loan
Group.
10
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment or mortgage of the Cooperative Lease, (iv) financing statements and
(v) a stock power (or other similar instrument), and ancillary thereto, a
Recognition Agreement, each of which was transferred and assigned to the 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 WA01A3.
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.
Credit Support Depletion Date: The first Distribution Date on which the
aggregate Class Principal Balance of the Group B Certificates has been or will
be reduced to zero as a result of principal distributions thereon and the
allocation of Realized Losses on such Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan, made by or on
behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly
Payment or a Payoff, which is applied to reduce the outstanding principal
balance of the Mortgage Loan. (Prepayment penalties are not payments of
principal and hence Curtailments do not include prepayment penalties.)
11
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 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
12
under the terms of this Agreement, notwithstanding the fact that certain duties
have been assigned to a Custodian.
Cut-Off Date: November 1, 2001.
Definitive Certificates: Certificates in definitive, fully registered
and certificated form.
Depositary Agreement: The Letter of Representations, dated November 8,
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.
Disqualified Organization: Any Person which is not a Permitted
Transferee, but does not include any Pass-Through Entity which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary.
Distribution Date: With respect to distributions on the REMIC I Regular
Interests and the Certificates, the 25th day (or, if such 25th day is not a
Business Day, the Business Day immediately succeeding such 25th day) of each
month, with the first such date being December 26, 2001. 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:
13
(i) Obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(ii) Repurchase agreements on obligations described in clause
(i) of this definition of "Eligible Investments," provided that the
unsecured obligations of the party (including the Trustee in its
commercial capacity) agreeing to repurchase such obligations have at
the time one of the two highest short term debt ratings of the Rating
Agencies and provided that such repurchaser's unsecured long term debt
has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits
and bankers' acceptances of any U.S. bank or trust company incorporated
under the laws of the United States or any state (including the Trustee
in its commercial capacity), provided that the debt obligations of such
bank or trust company (or, in the case of the principal bank in a bank
holding company system, debt obligations of the bank holding company)
at the date of acquisition thereof have one of the two highest short
term debt ratings of the Rating Agencies and unsecured long term debt
has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state
of the United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the highest
long-term debt ratings available for such securities from the Rating
Agencies;
(v) Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date of
acquisition has the highest commercial paper rating of the Rating
Agencies, provided that the corporation has unsecured long term debt
that has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(vi) Securities (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States or any
state thereof and have the highest long-term unsecured rating available
for such securities from the Rating Agencies; provided, however, that
securities issued by any such corporation will not be investments to
the extent that investment therein would cause the outstanding
principal amount of securities issued by such 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;
14
provided, however, that such obligation or security is held for a temporary
period pursuant to Section 1.860G-2(g)(1) of the Treasury Regulations, and that
such period can in no event exceed thirteen months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with respect
to the obligations underlying such instrument or (b) has been purchased at a
price greater than the outstanding principal balance of such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificate: Any Senior Subordinate Certificate.
Event of Default: Any event of default as specified in Section 7.01.
Excess Liquidation Proceeds: With respect to any Distribution Date, the
excess, if any, of aggregate Liquidation Proceeds received during the Prior
Period over the amount that would have been received if Payoffs had been made
with respect to such Mortgage Loans on the date such Liquidation Proceeds were
received.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FHA: Federal Housing Administration, or any successor thereto.
Xxxxxx Mae: The entity formerly known as the Federal National Mortgage
Association, or any successor thereto.
Final Maturity Date: With respect to each Class of the REMIC I Regular
Interests and the Certificates, the date set forth in the applicable 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.
15
Fraud Loss: A Realized Loss (or portion thereof) with respect to a
Mortgage Loan arising from any action, event or state of facts with respect to
such Mortgage Loan which, because it involved or arose out of any dishonest,
fraudulent, criminal, negligent or knowingly wrongful act, error or omission by
the Mortgagor, originator (or assignee thereof) of such Mortgage Loan, Lender, a
Servicer or the Master Servicer, would result in an exclusion from, denial of,
or defense to coverage which otherwise would be provided by a Primary Insurance
Policy previously issued with respect to such Mortgage Loan.
Xxxxxxx Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
Group B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5 and Class B-6 Certificates.
Group B Percentage: For any date of determination, the aggregate Class
Principal Balance of the Group B Certificates divided by the then outstanding
aggregate Principal Balance of the Mortgage Loans.
Group I Certificates: The Class I-A Certificates.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group I Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Group I Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of: (i) the Group I Senior Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Group I Senior Prepayment
Percentage of the Liquidation Principal with respect to such Mortgage Loan.
Group I Senior Percentage: For any Distribution Date, the lesser of (i)
100% and (ii) the Class I-A Principal Balance divided by the aggregate Principal
Balance of the Group I Loans, in each case immediately before such Distribution
Date.
Group I Senior Prepayment Percentage or Group II Senior Prepayment
Percentage: Subject to the immediately succeeding paragraph, (A) for any
Distribution Date prior to the tenth anniversary of the first Distribution Date,
each of the Group I Senior Prepayment Percentage and the Group II Senior
Prepayment Percentage shall equal 100% and (B) for any Distribution Date on or
after the tenth anniversary of the first Distribution Date, the Group I Senior
Prepayment Percentage and the Group II Senior Prepayment Percentage shall be
calculated as follows: (1) for any such Distribution Date on or after the tenth
anniversary but before the eleventh anniversary of the first Distribution Date,
the Group I Senior Percentage or the Group II Senior Percentage, as applicable,
for such Distribution Date plus 70% of the Subordinate Percentage for the
related Loan Group for such Distribution Date; (2) for any such Distribution
Date on or after the eleventh anniversary but before the twelfth anniversary of
the first Distribution Date, the Group I Senior Percentage or the Group II
Senior Percentage, as applicable, for such Distribution Date plus 60% of the
Subordinate Percentage for the related Loan Group for such Distribution Date;
(3) for any such Distribution Date on or after the twelfth anniversary but
before the thirteenth anniversary of the first Distribution Date, the Group I
Senior Percentage or the Group II Senior
16
Percentage, as applicable, for such Distribution Date plus 40% of the
Subordinate Percentage for the related Loan Group for such Distribution Date;
(4) for any such Distribution Date on or after the thirteenth anniversary but
before the fourteenth anniversary of the first Distribution Date, the Group I
Senior Percentage or the Group II Senior Percentage, as applicable, for such
Distribution Date plus 20% of the Subordinate Percentage for the related Loan
Group for such Distribution Date; and (5) for any such Distribution Date
thereafter, the Group I Senior Percentage or the Group II Senior Percentage, as
applicable, for such Distribution Date; provided, however, that (x) for any
Distribution Date prior to the Distribution Date in December 2004, if the Group
B Percentage for such Distribution Date is greater than or equal to twice the
Group B Percentage as of the Closing Date, then the Group I Senior Prepayment
Percentage and the Group II Senior Prepayment Percentage shall equal the Group I
Senior Percentage or the Group II Senior Percentage, as applicable, for such
Distribution Date plus 50% of the Subordinate Percentage for the related Loan
Group for such Distribution Date and (y) for any Distribution Date on or after
the Distribution Date in December 2004, if the Group B Percentage for such
Distribution Date is greater than or equal to twice the Group B Percentage as of
the Closing Date, then the Group I Senior Prepayment Percentage and the Group II
Senior Prepayment Percentage shall equal the Group I Senior Percentage or the
Group II Senior Percentage, as applicable, for such Distribution Date.
Notwithstanding the immediately preceding paragraph, (A) for any
Distribution Date, if the Group I Senior Percentage for such Distribution Date
is greater than the Group I Senior Percentage as of the Closing Date or the
Group II Senior Percentage for such Distribution Date is greater than the Group
II Senior Percentage as of the Closing Date, then each of the Group I Senior
Prepayment Percentage and the Group II Senior Prepayment Percentage shall equal
100%, (B) for any Distribution Date on or before the tenth anniversary of the
first Distribution Date, if any of the tests specified in clauses (a) and (b)
below is met, then each of the Group I Senior Prepayment Percentage and the
Group II Senior Prepayment Percentage shall equal 100% and (C) for any
Distribution Date after the tenth anniversary of the first Distribution Date, if
any of the tests specified in clauses (a) and (b) below is met (unless either
(x) the Group I Senior Percentage for such Distribution Date is greater than the
Group I Senior Percentage as of the Closing Date, (y) the Group II Senior
Percentage for such Distribution Date is greater than the Group II Senior
Percentage as of the Closing Date or (z) there is no Earlier Distribution Date
(as defined below), in each of which case each of the Group I Senior Prepayment
Percentage and the Group II Senior Prepayment Percentage shall equal 100%), then
each of the Group I Senior Prepayment Percentage and the Group II 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 Distribution Date")
is on or after the tenth anniversary but before the eleventh anniversary of the
first Distribution Date, then the Group I Senior Prepayment Percentage and the
Group II Senior Prepayment Percentage shall equal the Group I Senior Percentage
or the Group II Senior Percentage, as applicable, for the current Distribution
Date plus 70% of the Subordinate Percentage for the related Loan Group for the
current Distribution Date, (2) if the Earlier Distribution Date is on or after
the eleventh anniversary but before the twelfth anniversary of the first
Distribution Date, then the Group I Senior Prepayment Percentage and the Group
II Senior Prepayment Percentage shall equal the Group I Senior Percentage or the
Group II Senior Percentage, as applicable, for the current Distribution Date
plus 60% of the Subordinate Percentage for the related Loan Group for the
current Distribution Date, (3) if the Earlier Distribution Date is on or after
the twelfth
17
anniversary but before the thirteenth anniversary of the first Distribution
Date, then the Group I Senior Prepayment Percentage and the Group II Senior
Prepayment Percentage shall equal the Group I Senior Percentage or the Group II
Senior Percentage, as applicable, for the current Distribution Date plus 40% of
the Subordinate Percentage for the related Loan Group for the current
Distribution Date, (4) if the Earlier Distribution Date is on or after the
thirteenth anniversary but before the fourteenth anniversary of the first
Distribution Date, then the Group I Senior Prepayment Percentage and the Group
II Senior Prepayment Percentage shall equal the Group I Senior Percentage or the
Group II Senior Percentage, as applicable, for the current Distribution Date
plus 20% of the Subordinate Percentage for the related Loan Group for the
current Distribution Date, and (5) if the Earlier Distribution Date is on or
after the fourteenth anniversary of the first Distribution Date, then the Group
I Senior Prepayment Percentage and the Group II Senior Prepayment Percentage
shall equal the Group I Senior Percentage, the Group I Senior Percentage or the
Group II Senior Percentage, as applicable, 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 Group B Certificates as of the
current Distribution Date, or
(b) cumulative Realized Losses on the Mortgage Loans allocated to the
Group B Certificates, as a percentage of the aggregate Class
Principal Balance of the Group B Certificates as of the Closing
Date, are greater than, for any Distribution Date (1) before the
eleventh anniversary of the first Distribution Date, 30%, (2) on
or after the eleventh anniversary but before the twelfth
anniversary of the first Distribution Date, 35%, (3) on or after
the twelfth anniversary but before the thirteenth anniversary of
the first Distribution Date, 40%, (4) on or after the thirteenth
anniversary but before the fourteenth anniversary of the first
Distribution Date, 45%, and (5) on or after the fourteenth
anniversary of the first Distribution Date, 50%.
If on any Distribution Date the allocation to the Class I-A or Class
II-A Certificates of Principal Prepayments in the percentage required would
reduce the Class Principal Balance of such Certificates below zero, the Group I
Senior Prepayment Percentage or the Group II Senior Prepayment Percentage, as
applicable, for such Distribution Date shall be limited to the percentage
necessary to reduce such Class Principal Balance to zero.
Group I Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group I Senior Percentage of the
Principal Payment Amount for Loan Group I, (b) the Group I Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group I and (c) the Group
I Senior Liquidation Amount.
Group I Subordinate Balance: For any date of determination, an amount
equal to the then outstanding aggregate Principal Balance of the Group I Loans
reduced by the Class I-A Principal Balance.
18
Group I Subordinate Percentage: For any Distribution Date, the excess
of 100% over the Group I Senior Percentage for such date.
Group I Subordinate Prepayment Percentage: For any Distribution Date,
the excess of 100% over the Group I Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the Class I-A Principal Balance
has been reduced to zero, then the Group I Subordinate Prepayment Percentage
shall equal 100%.
Group II Certificates: The Class II-A Certificates.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group II Loans.
Group II Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Group II Loan which became a Liquidated Mortgage Loan during
the Prior Period, of the lesser of: (i) the Group II Senior Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Group II Senior Prepayment
Percentage of the Liquidation Principal with respect to such Mortgage Loan.
Group II Senior Percentage: For any Distribution Date, the lesser of
(i) 100% and (ii) the aggregate Class Principal Balance of the Class II-A and
Residual Certificates divided by the aggregate Principal Balance of the Group II
Loans, in each case immediately before such Distribution Date.
Group II Senior Prepayment Percentage: See the definition of "Group I
Senior Prepayment Percentage or Group II Senior Prepayment Percentage."
Group II Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group II Senior Percentage of the
Principal Payment Amount for Loan Group II, (b) the Group II Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group II and (c) the
Group II Senior Liquidation Amount.
Group II Subordinate Balance: For any date of determination, an amount
equal to the then outstanding aggregate Principal Balance of the Group II Loans
reduced by the aggregate Class Principal Balance of the Class II-A and Residual
Certificates.
Group II Subordinate Percentage: For any Distribution Date, the excess
of 100% over the Group II Senior Percentage for such date.
Group II Subordinate Prepayment Percentage: For any Distribution Date,
the excess of 100% over the Group II Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Class II-A and Residual Certificates has been reduced to zero,
then the Group II Subordinate Prepayment Percentage shall equal 100%.
Index: For each Mortgage Loan, COFI or One-Year MTA, as specified in
the Mortgage Note.
19
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.
Initial Custodial Agreement: The Custodial Agreement, dated the date
hereof, among the Trustee, the Master Servicer and the Initial Custodian.
Initial Custodian: Washington Mutual Bank, FA, which has been
designated by the Company to be appointed by the Trustee to act as Custodian,
and whose appointment has been approved by the Master Servicer.
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.
Interest Distribution Amount: For any Distribution Date, for any Class
of the REMIC I Regular Interests, the Certificates and the Class R-1 Residual
Interest, 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 (i) any Negative Amortization Amounts added to the Class Principal
Balance of such Class for such Distribution Date pursuant to the definition of
"Negative Amortization Amount" and (ii) 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.
Interest Rate Adjustment Date: As to each Mortgage Loan, the initial
Due Date on which an adjustment to the Mortgage Interest Rate of such Mortgage
Loan becomes effective and each Due Date thereafter, as set forth in the related
Mortgage Note.
Interest Transfer Amount: On any Distribution Date for an
Undercollateralized Group, an amount equal to one month's interest on the
applicable Principal Transfer Amount at the weighted average of the Pass-Through
Rates on the Group I Loans as of the second preceding Due Date if the
Undercollateralized Group is Loan Group I and at the weighted average of the
Pass-Through Rates on the Group II Loans as of the second preceding Due Date if
the Undercollateralized Group is Loan Group II, plus any interest accrued on the
Senior Certificates related to the Undercollateralized Group remaining unpaid
from prior Distribution Dates.
Investment Account: The commingled account (which shall be commingled
only with investment accounts related to series of pass-through certificates
with a class of certificates which has a rating equal to the highest of the
Ratings of the Certificates) maintained by the Master Servicer in the trust
department of the Investment Depository pursuant to Section 3.03 and which bears
a designation acceptable to the Rating Agencies.
20
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 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 Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
Loans.
Loan-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 Group 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.
21
Master Servicer: The Company, or any successor thereto appointed as
provided pursuant to Section 7.02, acting to service and administer the Mortgage
Loans pursuant to Section 3.01.
Master Servicer Business Day: Any day other than a Saturday, a Sunday,
or a day on which banking institutions in Chicago, Illinois are authorized or
obligated by law or executive order to be closed.
Master Servicing Fee: The fee charged by the Master Servicer for
supervising the mortgage servicing and advancing certain expenses, equal to a
per annum rate set forth for each Mortgage Loan in Exhibit D on the outstanding
Principal Balance of such Mortgage Loan, payable monthly from the Certificate
Account, the Investment Account or the Custodial Account for P&I.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor thereto.
MERS Loan: Any Mortgage Loan registered on the MERS'r' System for which
MERS appears as the mortgagee of record on the Mortgage or on an assignment
thereof.
MERS'r' System: The system of electronically recording transfers of
Mortgages maintained by MERS.
MIN: The Mortgage Identification Number for a MERS Loan.
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 (which scheduled payment may be less than the amount of interest
accrued on such Mortgage Loan) (including any amounts due from a Buydown Fund,
if any) which is due on the related Due Date for such Mortgage Loan.
Monthly Payment Adjustment Terms: As to each Mortgage Loan, the terms
for adjusting the amount of the Monthly Payment on such Mortgage Loan, as set
forth in the related Mortgage Note, including the dates on which or the
circumstances under which such adjustments become effective and limitations on
the amounts of such adjustments.
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.
22
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. WaMu Mortgage Pass-Through Certificates,
Series 2001-AR3, 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 Securities Corp. WaMu
Mortgage Pass-Through Certificates, Series 2001-AR3," 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
23
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. WaMu
Mortgage Pass-Through Certificates, Series 2001-AR3," 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:
(v) 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. WaMu Mortgage
Pass-Through Certificates, Series 2001-AR3" 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
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);
(vi) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan;
(vii) 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;
24
(viii) The Recognition Agreement;
(ix) The Security Agreement;
(x) 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;
(xi) 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;
(xii) 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
(xiii) 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).
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,
25
(vi) the Mortgage Interest Rate borne by the Mortgage Note and
the Rate Ceiling, Rate Floor and Margin, as applicable, borne by the
Mortgage Note and the Index, Interest Rate Adjustment Date and Monthly
Payment Adjustment Terms applicable to such Mortgage Loan,
(vii) whether a Primary Insurance Policy is in effect as of the
Cut-Off Date, and, if so, whether such Primary Insurance Policy is a
Special Primary Insurance Policy,
(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee, and
(x) its Loan Group.
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.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization Amount: For any Due Date for any Mortgage Loan,
the excess, if any, of (i) the amount of interest accrued on such Mortgage Loan,
during the immediately preceding calendar month, at the related Mortgage
Interest Rate, over (ii) the Monthly Payment due on such Mortgage Loan on such
Due Date.
For any Distribution Date, the aggregate of Negative Amortization
Amounts with respect to the Group I Loans for the Due Date in the calendar month
of such Distribution Date shall be added to the Class Principal Balances of the
Class I-A and Group B Certificates. Such aggregate amount shall be allocated pro
rata between the Class I-A Certificates, on the one hand, and the Group B
Certificates, on the other hand, according to the Class I-A Principal Balance
and the Subordinate Component Balance for Loan Group I, respectively (and the
portion so allocated to
26
the Group B Certificates shall be allocated among the Classes of Group B
Certificates according to Class Principal Balance).
For any Distribution Date, the aggregate of Negative Amortization
Amounts with respect to the Group II Loans for the Due Date in the calendar
month of such Distribution Date (reduced, on the first Distribution Date, by any
portion of such Negative Amortization Amounts allocated to the Class R-1
Residual Interest on such Distribution Date pursuant to the definition of "REMIC
I Realized Loss and Negative Amortization Allocation") shall be added to the
Class Principal Balances of the Class II-A and Group B Certificates. Such
aggregate amount shall be allocated pro rata between the Class II-A
Certificates, on the one hand, and the Group B Certificates, on the other hand,
according to the Class II-A Principal Balance and the Subordinate Component
Balance for Loan Group II, respectively (and the portion so allocated to the
Group B Certificates shall be allocated among the Classes of Group B
Certificates according to Class Principal Balance).
For any Distribution Date, the aggregate of Negative Amortization
Amounts with respect to the Group I and Group II Loans shall be allocated to the
REMIC I Regular Interests and the Class R-1 Residual Interest pursuant to the
definition of "REMIC I Realized Loss and Negative Amortization Allocation."
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, 0000 Xxxxx Xxxxxx, XXX 0000,
Xxxxxxx, Xxxxxxxxxx 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.
One-Year MTA: The twelve-month moving average monthly yield on United
States Treasury Securities adjusted to a constant maturity of one year, as
published by the Federal
27
Reserve Board in the Federal Reserve Statistical Release "Selected Interest
Rates (G.13)," determined by averaging the most recently available twelve
months, based on the most recent release 15 days before the applicable Interest
Rate Adjustment Date. In the event Federal Reserve Statistical Release "Selected
Interest Rates (G.13)" is no longer available, the Master Servicer will
determine One-Year MTA based on Federal Reserve Statistical Release H.15. In the
event One-Year MTA is no longer available, the Master Servicer will choose a new
Index that is based on comparable information.
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.
Overcollateralized Group: Either of Loan Group I or Loan Group II, if
on any Distribution Date such Loan Group is not an Undercollateralized Group and
the other Loan Group is an Undercollateralized Group.
Ownership Interest: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Entity: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a per annum rate equal to
the Mortgage Interest Rate for such Mortgage Loan less the per annum percentage
rates related to each of (i) the Servicing Fee for such Mortgage Loan, (ii) the
Master Servicing Fee for such Mortgage Loan and (iii) if such Mortgage Loan was
covered by a Special Primary Insurance Policy on the Closing Date (even if no
longer so covered), the applicable Special Primary Insurance Premium. For each
Mortgage Loan, any calculation of monthly interest at such rate shall be based
upon annual interest at such rate (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid Principal Balance of such Mortgage Loan
divided by twelve, and any calculation of interest at such rate by reason of a
Payoff shall be based upon annual interest at such rate on the outstanding
Principal Balance of 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.
28
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 December 14, 2001, 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:
(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 II, 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.
29
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 or REMIC II to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in Code Section
7701 or successor provisions. A corporation shall not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof if all of its activities are subject to tax, and, with the exception of
the Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Mortgage Loan on its
scheduled Due Date and held in the related Custodial Account for P&I until the
Withdrawal Date following its scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty insurance, if
any, on an individual Mortgage Loan or on pools of mortgage loans that include
an individual Mortgage Loan, providing coverage as required by Section 2.03(xi)
(including any Special Primary Insurance 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
30
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 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. The Principal Balance of each Mortgage Loan shall be
increased, as of each Due Date, by the amount of any Negative Amortization
Amount for such Mortgage Loan for such Due Date.
Principal Payment: Any payment of principal on a Mortgage Loan other
than a Principal Prepayment.
Principal Payment Amount: For any Distribution Date and for either Loan
Group, the sum with respect to the Mortgage Loans in such Loan Group of (i) the
scheduled principal payments on the Mortgage Loans due on the related Due Date,
(ii) the principal portion of proceeds received with respect to any Mortgage
Loan which was purchased or repurchased pursuant to a Purchase Obligation or as
permitted by this Agreement during the Prior Period and (iii) any other
unscheduled payments of principal which were received with respect to any
Mortgage Loan during the Prior Period, other than Payoffs, Curtailments and
Liquidation Principal.
Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: For any Distribution Date and for either
Loan Group, the sum with respect to the Mortgage Loans in such Loan Group of (i)
Curtailments received during the Prior Period from such Mortgage Loans and (ii)
Payoffs received during the Payoff Period from such Mortgage Loans.
Principal Transfer Amount: For any Distribution Date for an
Undercollateralized Group, the excess, if any, of the Class Principal Balance of
the Class A Certificates related to such Undercollateralized Group over the
aggregate Principal Balance of the Mortgage Loans in such Loan Group, in each
case immediately prior to such Distribution Date.
Prior Period: With respect to any Distribution Date, the calendar month
immediately preceding such Distribution Date.
Pro Rata Allocation: The allocation of the principal portion of
Realized Losses to all Classes of Certificates (other than the Class R
Certificates) pro rata according to their respective
31
Class Principal Balances in reduction thereof, and the allocation of the
interest portion of Realized Losses to all Classes of Certificates (other than
the Class R Certificates) pro rata according to the amount of interest accrued
but unpaid on each such Class, in reduction thereof, and then to such Classes
(other than the Class R Certificates) pro rata according to their respective
Class Principal Balances in reduction thereof.
Prospectus: The Prospectus, dated October 5, 2001, and the Prospectus
Supplement, dated November 8, 2001 (as supplemented by a Supplement dated
November 9, 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.
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
32
principal portion of such Realized Loss), and (ii) the accrued interest on such
Mortgage Loan remaining unpaid and the interest portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the interest
portion of such Realized Loss). For any Distribution Date, with respect to any
Mortgage Loan which is not a Liquidated Mortgage Loan, the amount of the
Bankruptcy Loss incurred with respect to such Mortgage Loan as of the related
Due Date.
Realized Losses on Group I and Group II Loans shall be allocated to the
REMIC I Regular Interests pursuant to the definition of "REMIC I Realized Loss
and Negative Amortization Allocation."
Except for Special Hazard Losses in excess of the Special Hazard
Coverage, Fraud Losses in excess of the Fraud Coverage and Bankruptcy Losses in
excess of the Bankruptcy Coverage, Realized Losses shall be allocated among the
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 of the related Certificate
Group, in reduction of the Class Principal Balance thereof; 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 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 of the
related Certificate Group, in reduction of accrued but unpaid interest on such
Class, and then in reduction of the Class Principal Balance thereof.
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 and Negative Amortization Amounts 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 REMIC II
Available Distribution Amount for the Group I and
33
Group II Certificates and all losses in respect of each Mortgage Loan that have
been allocated to the Certificates on such Distribution Date or prior
Distribution Dates, and after giving effect to all Negative Amortization Amounts
in respect of each Mortgage Loan that have been added to the principal balance
of such Mortgage Loan prior to such Distribution Date, then such excess will be
deemed a principal loss and will be allocated to the most junior Class of Group
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.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
Interests and (ii) with respect to REMIC II, the REMIC II Regular Interests.
Relief Act Shortfall: With respect to a Loan Group, for any
Distribution Date for any Mortgage Loan in such Loan Group with respect to which
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the "Relief
Act"), limits the amount of interest payable by the related Mortgagor, an amount
equal to one month's interest on such Mortgage Loan at an annual interest rate
equal to the excess, if any, of (i) the annual interest rate at which interest
otherwise accrued during the Prior Period under the terms of the related
Mortgage Note over (ii) the annual interest rate at which interest accrued
during the Prior Period 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, with respect to which a separate REMIC election is to be made.
REMIC I Available Distribution Amount: For each Loan Group for any
Distribution Date, the sum of the following amounts with respect to the Mortgage
Loans in such Loan Group:
(1) the total amount of all cash received by or on behalf of the Master
Servicer with respect to such Mortgage Loans by the Determination Date for such
Distribution Date and not previously distributed, including Monthly P&I Advances
made by Servicers, Liquidation Proceeds and scheduled amounts of distributions
from Buydown Funds respecting Buydown Loans, if any, except:
(a) all scheduled payments of principal and interest collected
but due subsequent to such Distribution Date;
(b) all Curtailments received after the Prior Period;
(c) all Payoffs received after the Payoff Period immediately
preceding such Distribution Date (together with any interest payment
received with such Payoffs to the
34
extent that it represents the payment of interest accrued on the
Mortgage Loans for the period subsequent to the Prior Period), and
interest which was accrued and received on Payoffs received during the
period from the 1st to the 14th day of the month of such Distribution
Date, which interest shall not be included in the calculation of the
REMIC I Available Distribution Amount for any Distribution Date;
(d) Insurance Proceeds and Liquidation Proceeds received on
such Mortgage Loans after the Prior Period;
(e) all amounts in the Certificate Account which are due and
reimbursable to a Servicer or the Master Servicer pursuant to the terms
of this Agreement;
(f) the sum of the Master Servicing Fee and the Servicing Fee
for each such Mortgage Loan, and any Special Primary Insurance Premium
payable on such Distribution Date with respect to such Mortgage Loan;
and
(g) Excess Liquidation Proceeds;
(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.
REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to the REMIC I Regular
Interests and the Class R-1 Residual Interest in the following amounts and
priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan
Group I:
(i) first, to the Class Y-1 and Class Z-1 Regular Interests,
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 Y-1 and Class Z-1 Regular Interests,
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; and
(iii) third, to the Class Y-1 and Class Z-1 Regular Interests,
the Class Y-1 Principal Distribution Amount and the Class Z-1 Principal
Distribution Amount, respectively.
35
(b) To the extent of the REMIC I Available Distribution Amount for Loan
Group II:
(i) first, to the Class Y-2 and Class Z-2 Regular Interests
and the Class R-1 Residual Interest, 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 Y-2 and Class Z-2 Regular Interests
and the Class R-1 Residual Interest, 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 R-1 Residual Interest, until the
Class Principal Balance thereof has been reduced to zero; and
(iv) fourth, to the Class Y-2 and Class Z-2 Regular Interests,
the Class Y-2 Principal Distribution Amount and the Class Z-2 Principal
Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts for
Loan Group I and Loan Group II for such Distribution Date remaining after
payment of the amounts pursuant to paragraphs (a) and (b) of this definition of
"REMIC I Distribution Amount," to each Class of the REMIC I Regular Interests,
pro rata according to the amount of unreimbursed Realized Losses allocable to
principal previously allocated to each such Class, the aggregate amount of any
distributions to the Certificates pursuant to paragraph (I)(c)(xix) of the
definition of "REMIC II Distribution Amount" on such Distribution Date;
provided, however, that any amounts distributed pursuant to this paragraph (c)
of this definition of "REMIC I Distribution Amount" shall not cause a further
reduction in the Class Principal Balances of any of the REMIC I Regular
Interests.
(d) To the Class R-1 Residual Interest, the Residual Distribution
Amount for the Class R-1 Residual Interest for such Distribution Date.
REMIC I Realized Loss and Negative Amortization Allocation: Realized
Losses on Group I and Group II Loans shall be allocated to the REMIC I Regular
Interests as follows: The interest portion of such Realized Losses, if any,
shall be allocated, first, to the Class Z Regular Interest related to each such
Loan Group in reduction of interest accrued and unpaid thereon (i.e. the
"related" Loan Group for the Class Y-1 and Class Z-1 Regular Interests is Loan
Group I and the "related" Loan Group for the Class Y-2 and Class Z-2 Regular
Interests is Loan Group II) and, second, any remainder shall be allocated to the
Regular Interest related to such Loan Group in reduction of interest accrued and
unpaid thereon. Any interest portion of such Realized Losses in excess of the
amount allocated pursuant to the preceding sentence shall be treated as a
principal portion of Realized Losses not attributable to any specific Mortgage
Loan in such Loan Group and allocated pursuant to the succeeding sentence. The
principal portion of Realized Losses with respect to Loan Group I and Loan Group
II shall be allocated, first, to the Class Y Regular Interest related to the
Loan Group to the extent that the applicable Class Y Principal Reduction Amount
is positive in reduction of the Class Principal Balance of such Regular Interest
and,
36
second, the remainder, if any, of such principal portion of such Realized Losses
shall be allocated to the related Class Z Regular Interest in reduction of the
Class Principal Balance thereof.
The aggregate of Negative Amortization Amounts with respect to Group I
Loans and the aggregate of Negative Amortization Amounts with respect to Group
II Loans shall be allocated to the REMIC I Regular Interests and the Class R-1
Residual Interest as follows: first (in the case of such aggregate amount with
respect to Group II Loans), to the Class R-1 Residual Interest, pro rata
(relative to the Class Y-2 and Class Z-2 Regular Interests) according to the
interest accrued and unpaid thereon, to increase the Class Principal Balance
thereof, second, to the Class Y Regular Interest related to the Loan Group to
the extent that the applicable Class Y Principal Reduction Amount is negative to
increase the Class Principal Balance of such Regular Interest and, third, the
remainder, if any, to the related Class Z Regular Interest to increase the Class
Principal Balance thereof.
REMIC I Regular Interests: The Classes of interests in the REMIC I
Trust Fund designated as "regular interests" in the table titled "REMIC I
Interests" in the Preliminary Statement hereto.
REMIC I Trust Fund: All of the assets in the Trust Fund.
REMIC II: The segregated pool of assets consisting of the REMIC II
Trust Fund conveyed in trust to the Trustee for the benefit of the Holders of
the REMIC II Regular Interests and the Class R-2 Residual Interest pursuant to
Section 2.05, with respect to which a separate REMIC election is to be made.
REMIC II Available Distribution Amount: For the Group I Certificates,
for any Distribution Date, the aggregate of all distributions to the Class Y-1
and Class Z-1 Regular Interests (which amount shall be available for
distributions to the Group I and Group B Certificates and the Class R-2 Residual
Interest as provided herein). For the Group II Certificates, for any
Distribution Date, the aggregate of all distributions to the Class Y-2 and Class
Z-2 Regular Interests (which amount shall be available for distributions to the
Group II and Group B Certificates and the Class R-2 Residual Interest as
provided herein).
REMIC II Distribution Amount: (I) For any Distribution Date prior to
the Credit Support Depletion Date, the REMIC II Available Distribution Amount
for such Distribution Date shall be distributed to the Certificates and the
Class R-2 Residual Interest in the following amounts and priority:
(a) With respect to the Group I Certificates, on any Distribution Date
prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group I Certificates for such Distribution
Date:
(i) first, to the Class I-A Certificates, the Interest
Distribution Amount for such Class remaining unpaid from previous
Distribution Dates;
(ii) second, to the Class I-A Certificates, the Interest
Distribution Amount for such Class for the current Distribution Date;
and
37
(iii) third, to the Class I-A Certificates, as principal, the
Group I Senior Principal Distribution Amount;
(b) With respect to the Group II Certificates, on any Distribution Date
prior to the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group II Certificates for such
Distribution Date:
(i) first, to the Class II-A Certificates, the Interest
Distribution Amount for such Class remaining unpaid from previous
Distribution Dates;
(ii) second, to the Class II-A Certificates, the Interest
Distribution Amount for such Class for the current Distribution Date;
and
(iii) third, to the Class II-A Certificates, as principal, the
Group II Senior Principal Distribution Amount (reduced, on the first
Distribution Date, by the amount distributed as principal to the Class
R-1 Residual Interest on such Distribution Date pursuant to the
definition of "REMIC I Distribution Amount"); and
(c) With respect to the Group I, Group II and Group B Certificates and
the Class R-2 Residual Interest, on any Distribution Date prior to the Credit
Support Depletion Date, to the extent of the REMIC II Available Distribution
Amounts for the Group I and Group II Certificates for such Distribution Date
remaining after the payment of the amounts pursuant to paragraph (I)(a) and
paragraph (I)(b) of this definition of "REMIC II Distribution Amount":
(i) first, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(ii) second, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(iii) third, 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;
(iv) fourth, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(v) fifth, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(vi) sixth, 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;
(vii) seventh, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
38
(viii) eighth, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(ix) ninth, 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;
(x) tenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xi) eleventh, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xii) twelfth, 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;
(xiii) thirteenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xiv) fourteenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xv) fifteenth, 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;
(xvi) sixteenth, to the Class B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
(xvii) seventeenth, to the Class B-6 Certificates, the
Interest Distribution Amount for such Class of Certificates for the
current Distribution Date;
(xviii) eighteenth, 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;
(xix) nineteenth, to the outstanding Classes of Certificates
in order of seniority (which, from highest to lowest, shall be as
follows: the Class I-A and Class II-A Certificates of equal seniority,
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 REMIC II Available Distribution Amounts for the Group I and Group
II Certificates, up to the amount of unreimbursed Realized Losses
allocable to principal previously allocated to each such Class, if any;
provided, however, that in the case of Classes of Certificates of
39
equal seniority, the amount distributable to such Classes shall be
allocated among such Classes according to the amount of losses
previously allocated thereto; provided, further, that any amounts
distributed pursuant to this paragraph (I)(c)(xix) of this definition
of "REMIC II Distribution Amount" shall not cause a further reduction
in the Class Principal Balances of any of the Classes of Certificates;
and
(xx) twentieth, to the Class R-2 Residual Interest, the
Residual Distribution Amounts for the Group I and Group II Certificates
for such Distribution Date.
Notwithstanding the foregoing paragraph (I)(c) of this definition of
"REMIC II Distribution Amount,"
(X) on any Distribution Date occurring on or after the date on which
both of the following conditions specified in clauses (1) and (2) are met:
(1) the Class Principal Balance of either of the Class I-A
Certificates or the Class II-A Certificates has been reduced to zero,
and
(2) either (a) the Group B Percentage for such Distribution
Date is less than 200% of the Group B Percentage as of the Closing Date
or (b) the outstanding principal balance of the Mortgage Loans in
either of Loan Group I or Loan Group II delinquent 60 days or more
averaged over the last six months (including Mortgage Loans in
foreclosure and Mortgage Loans the Mortgaged Property of which is held
by REMIC I and acquired by foreclosure or deed in lieu of foreclosure),
as a percentage of the related Subordinate Component Balance, is
greater than or equal to 50%,
all principal received or advanced with respect to the Mortgage Loans in the
Loan Group related to the Class A Certificates that have been paid in full shall
be paid as principal to the remaining Class A Certificates of such other
Certificate Group to the extent of and in reduction of the Class Principal
Balances thereof, prior to any distributions of principal to the Group B
Certificates pursuant to paragraph (I)(c) above, and
(Y) if on any Distribution Date either of Loan Group I or Loan Group II
is an Undercollateralized Group and the other such Loan Group is an
Overcollateralized Group, then the REMIC II Available Distribution Amount for
the Certificate Group related to the Overcollateralized Group, to the extent
remaining following distributions of interest and principal to the Group I and
Group II Certificates pursuant to paragraph (I)(a) or (I)(b) above, as
applicable, shall be paid in the following priority: (1) first, such remaining
amount, up to the Total Transfer Amount for the Undercollateralized Group, shall
be distributed (a) first, to the Class A Certificates related to the
Undercollateralized Group, in payment of any portion of the Interest
Distribution Amount for such Class of Certificates remaining unpaid from such
Distribution Date or previous Distribution Dates, and (b) second, to the Class A
Certificates related to the Undercollateralized Group, as principal, and (2)
second, any remaining amount shall be distributed pursuant to paragraph (I)(c)
above.
(II) For any Distribution Date on or after the Credit Support Depletion
Date, the REMIC II Available Distribution Amount for such Distribution Date
shall be distributed to the
40
outstanding Classes of Certificates and the Class R-2 Residual Interest in the
following amounts and priority:
(a) With respect to the Group I Certificates, on each Distribution Date
on or after the Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group I Certificates for such Distribution
Date:
(i) first, to the Class I-A Certificates, the amount payable
to such Class of Certificates on prior Distribution Dates pursuant to
clause (I)(a)(ii) or (II)(a)(ii) of this definition of "REMIC II
Distribution Amount," and remaining unpaid;
(ii) second, to the Class I-A Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(iii) third, to the Class I-A Certificates, as principal, the
Group I Senior Principal Distribution Amount; and
(iv) fourth, after any payments to the Class II-A Certificates
pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Residual Interest, the Residual
Distribution Amount for the Group I Certificates for such Distribution
Date; and
(b) With respect to the Group II Certificates, on each Distribution
Date on or after the Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group II Certificates for such
Distribution Date:
(i) first, to the Class II-A Certificates, the amount payable
to such Class of Certificates on prior Distribution Dates pursuant to
clause (I)(b)(ii) or (II)(b)(ii) of this definition of "REMIC II
Distribution Amount," and remaining unpaid;
(ii) second, to the Class II-A Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(iii) third, to the Class II-A Certificates, as principal, the
Group II Senior Principal Distribution Amount; and
(iv) fourth, after any payments to the Class I-A Certificates
pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Residual Interest, the Residual
Distribution Amount for the Group II Certificates for such Distribution
Date.
If on any Distribution Date either of Loan Group I or Loan Group II is
an Undercollateralized Group and the other such Loan Group is an
Overcollateralized Group, then the REMIC II Available Distribution Amount for
the Certificate Group related to the Overcollateralized Group, to the extent
remaining following distributions of interest and principal to the Group I and
Group II Certificates pursuant to paragraph (II)(a)(i) through (II)(a)(iii) or
paragraph (II)(b)(i) through (II)(b)(iii), as applicable, shall be paid in the
following priority: (1) first, such remaining amount, up to the Total Transfer
Amount for the
41
Undercollateralized Group, shall be distributed (a) first, to the Class A
Certificates related to the Undercollateralized Group, in payment of any portion
of the Interest Distribution Amount for such Class of Certificates remaining
unpaid from such Distribution Date or previous Distribution Dates, and (b)
second, to the Class A Certificates related to the Undercollateralized Group, as
principal, and (2) second, any remaining amount shall be distributed pursuant to
paragraph (II)(a)(iv) and (II)(b)(iv) above, as applicable.
REMIC II Regular Interests: The Classes of interests in the REMIC II
Trust Fund designated as "regular interests" in the table titled "REMIC II
Interests" in the Preliminary Statement hereto.
REMIC II Trust Fund: The REMIC II Trust Fund created pursuant to
Section 2.05 of this Agreement. The REMIC II Trust Fund consists of the REMIC I
Regular Interests to be held by the Trustee for the benefit of the Holders from
time to time of the REMIC II Regular Interests and the Class R-2 Residual
Interest.
Residual Certificates: The Class R Certificates.
Residual Distribution Amount: For any Distribution Date, with respect
to the Class R-1 Residual Interest, any portion of the REMIC I Available
Distribution Amounts for Loan Group I and Loan Group II remaining after all
distributions of such REMIC I Available Distribution Amounts pursuant to clauses
(a), (b) and (c) of the definition of "REMIC I Distribution Amount."
For any Distribution Date, with respect to the Class R-2 Residual
Interest and for the Group I and Group II Certificates, any portion of the REMIC
II Available Distribution Amount for the Group I and Group II Certificates,
respectively, remaining after all distributions of such REMIC II Available
Distribution Amount pursuant to clauses (I)(a), (I)(b), (I)(c), (II)(a) and
(II)(b), as applicable, of the definition of "REMIC II Distribution Amount"
(other than the distributions pursuant to the last subclause of clauses (I)(c),
(II)(a) and (II)(b)).
Upon termination of the obligations created by this Agreement and the
REMIC I Trust Fund and the REMIC II 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-1 and Class R-2 Residual Interests in accordance with the
preceding sentences of this definition as if the date of such distribution were
a Distribution Date.
Responsible Officer: When used with respect to the Trustee, 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.
42
Security Agreement: With respect to a Cooperative Loan, the agreement
or mortgage creating a security interest in favor of the originator of the
Cooperative Loan in the related Cooperative Stock.
Selling and Servicing Contract: (a) The contract (including the
Washington Mutual Mortgage Securities Corp. Selling Guide and Washington Mutual
Mortgage Securities Corp. Servicing Guide to the extent incorporated by
reference therein) between the Company and a Person relating to the sale of the
Mortgage Loans to the Company and the servicing of such Mortgage Loans for the
benefit of the Certificateholders, which contract is substantially in the form
of Exhibit E hereto, as such contract may be amended or modified from time to
time; provided, however, that any such amendment or modification shall not
materially adversely affect the interests and rights of Certificateholders or
(b) any other similar contract, including any mortgage loan purchase and
servicing agreement or any assignment, assumption and recognition agreement
related to a mortgage loan purchase and sale agreement, providing substantially
similar rights and benefits as those provided by the forms of contract attached
as Exhibit E hereto.
Senior Certificates: The Group I, Group II and Residual Certificates.
Senior Subordinate Certificates: The Subordinate Certificates other
than the Junior Subordinate Certificates.
Servicer: A mortgage loan servicing institution to which the Master
Servicer has assigned servicing duties with respect to any Mortgage Loan under a
Selling and Servicing Contract; provided, however, the Master Servicer may
designate itself or one or more other mortgage loan servicing institutions as
Servicer upon termination of an initial Servicer's servicing duties.
Servicing Fee: For each Mortgage Loan, the fee paid to the Servicer
thereof to perform primary servicing functions for the Master Servicer with
respect to such Mortgage Loan, equal to the per annum rate set forth for each
Mortgage Loan in the Mortgage Loan Schedule on the outstanding Principal Balance
of such Mortgage Loan. In addition, any prepayment penalty received on a
Mortgage Loan will be paid as additional servicing compensation to the Master
Servicer or the related Servicer.
Servicing Officer: Any officer of the Master Servicer (or of the
Servicer, but only with respect to the Custodial Agreement) 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,
$12,998,698, 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
43
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) $12,998,698 as reduced by the Special Hazard Losses
allocated to the Certificates since the Cut-Off Date.
The Special Hazard Coverage may be reduced upon written confirmation
from the Rating Agencies that such reduction will not adversely affect the then
current ratings assigned to the Certificates by the Rating Agencies.
Special Hazard Loss: A Realized Loss (or portion thereof) with respect
to a Mortgage Loan arising from any direct physical loss or damage to a
Mortgaged Property not covered by a standard hazard maintenance policy with
extended coverage which is caused by or results from any cause except: (i) fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike, civil
commotion, vandalism, aircraft, vehicles, smoke, sprinkler leakage, except to
the extent of that portion of the loss which was uninsured because of the
application of a co-insurance clause of any insurance policy covering these
perils; (ii) normal wear and tear, gradual deterioration, inherent vice or
inadequate maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part thereof
ensues and then only for the ensuing loss; (iv) nuclear reaction or nuclear
radiation or radioactive contamination, all whether controlled or uncontrolled
and whether such loss be direct or indirect, proximate or remote or be in whole
or in part caused by, contributed to or aggravated by a peril covered by this
definition of Special Hazard Loss; (v) hostile or warlike action in time of
peace or war, including action in hindering, combating or defending against an
actual, impending or expected attack (a) by any government of sovereign power
(de jure or de facto), or by an authority maintaining or using military, naval
or air forces, (b) by military, naval or air forces, or (c) by an agent of any
such government, power, authority or forces; (vi) any weapon of war employing
atomic fission or radioactive force whether in time of peace or war; (vii)
insurrection, rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public authority.
Special Primary Insurance Policy: Any Primary Insurance Policy covering
a Mortgage Loan the premium of which is payable by the Trustee pursuant to
Section 4.05(a), if so identified in the Mortgage Loan Schedule. There are no
Special Primary Insurance Policies with respect to any of the Mortgage Loans.
Special Primary Insurance Premium: With respect to any Special Primary
Insurance Policy, the monthly premium payable thereunder.
Subordinate Certificates: The Group B Certificates.
Subordinate Component Balance: With respect to Loan Group I for any
date of determination, the then outstanding aggregate Principal Balance of the
Group I Loans minus the then outstanding Class Principal Balance of the Class
I-A Certificates. With respect to Loan Group II for any date of determination,
the then outstanding aggregate Principal Balance of the
44
Group II Loans minus the then outstanding aggregate Class Principal Balance of
the Class II-A and Residual Certificates.
Subordinate Liquidation Amount: For any Distribution Date, the excess,
if any, of the aggregate of Liquidation Principal for all Mortgage Loans which
became Liquidated Mortgage Loans during the Prior Period, over the sum of the
Group I Senior Liquidation Amount and the Group II Senior Liquidation Amount for
such Distribution Date.
Subordinate Percentage: The Group I Subordinate Percentage or Group II
Subordinate Percentage, as applicable.
Subordinate Principal Distribution Amount: For any Distribution Date,
the excess of (A) the sum of (i) the Group I Subordinate Percentage of the
Principal Payment Amount for Loan Group I, (ii) the Group II Subordinate
Percentage of the Principal Payment Amount for Loan Group II, (iii) the
Subordinate Principal Prepayments Distribution Amount (without regard to the
proviso in the definition thereof) and (iv) the Subordinate Liquidation Amount
over (B) the sum of (x) in the event that the Class Principal Balance of either
the Class I-A or Class II-A Certificates has been reduced to zero, principal
paid from the REMIC II Available Distribution Amount related to such Class A
Certificates to the remaining Class A Certificates, as set forth in clause (X)
of the sentence immediately following paragraph (I)(c) of the definition of
"REMIC II Distribution Amount," and (y) the amounts paid from the REMIC II
Available Distribution Amount for the Certificate Group related to an
Overcollateralized Group to the Class A Certificates related to an
Undercollateralized Group pursuant to clause (Y) of the sentence immediately
following paragraph (I)(c) of the definition of "REMIC II Distribution Amount."
On any Distribution Date, the Subordinate Principal Distribution Amount
shall be allocated pro rata, by Class Principal Balance, among the Classes of
Group B Certificates and paid in the order of distribution to such Classes
pursuant to clause (I)(c) of the definition of "REMIC II Distribution Amount"
except as otherwise stated in such definition. Notwithstanding the foregoing, on
any Distribution Date prior to distributions on such date, if the Subordination
Level for any Class of Group B Certificates is less than such Subordination
Level as of the Closing Date, the pro rata portion of the Group B Subordinate
Principal Prepayments Distribution Amount otherwise allocable to the Class or
Classes of Group B Certificates junior to such Class will be distributed to the
most senior Class of Group 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 Group 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 Group 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 sum of (i) the Group I Subordinate Prepayment Percentage
of the Principal Prepayment Amount for Loan Group I and (ii) the Group II
Subordinate Prepayment Percentage of the Principal Prepayment Amount for Loan
Group II; provided, however, that if the amount specified in clause (B) of the
definition of "Subordinate Principal Distribution Amount" is greater than the
sum of the amounts specified in clauses (A)(i), (A)(ii) and (A)(iv) of such
definition, then the
45
Subordinate Principal Prepayments Distribution Amount shall be reduced by the
amount of such excess.
Subordination Level: On any specified date, with respect to any Class
of Group B Certificates, the percentage obtained by dividing the aggregate Class
Principal Balance of such Class and the Classes of Group 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: With respect to each of REMIC I and REMIC II, 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 and REMIC II 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 and REMIC II, 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 and REMIC II, to perform the functions of such Tax Matters Person as
provided herein. If the Tax Matters Person for REMIC I and REMIC II 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).
Total Transfer Amount: For any Distribution Date and for an
Undercollateralized Group, an amount equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for such Undercollateralized Group.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
46
Transferee Affidavit and Agreement: An affidavit and agreement in the
form attached hereto as Exhibit J.
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) 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: With respect to a Loan Group, for any
Distribution Date, the sum of (i) the aggregate Relief Act Shortfall with
respect to the Mortgage Loans in such Loan Group for such Distribution Date,
(ii) aggregate Curtailment Shortfall with respect to the Mortgage Loans in such
Loan Group for such Distribution Date and (iii) the excess, if any, of (a)
aggregate Uncollected Interest with respect to the Mortgage Loans in such Loan
Group for such Distribution Date over (b) Compensating Interest with respect to
such Loan Group for such Distribution Date.
Uncompensated Interest Shortfall for Loan Group I shall be allocated to
the Group I Certificates and the portions of the Group B Certificates that
derive their Interest Distribution Amounts from the Group I Loans, pro rata
according to the amount of the Interest Distribution Amount or portion thereof
to which each such Class or portion thereof would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be allocated
to the Group II Certificates and the portions of the Group B Certificates that
derive their Interest Distribution Amounts from the Group II Loans, pro rata
according to the amount of the Interest Distribution
47
Amount or portion thereof to which each such Class or portion thereof would
otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be allocated to
the Class Y-1 and Class Z-1 Regular Interests, pro rata according to the amount
of the Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be allocated
to the Class Y-2 and Class Z-2 Regular Interests, pro rata according to the
amount of the Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Undercollateralized Group: For any Distribution Date, Loan Group I, if
immediately prior to such Distribution Date the Class Principal Balance of the
Class I-A Certificates is greater than the aggregate Principal Balance of the
Group I Loans; and for any Distribution Date, Loan Group II, if immediately
prior to such Distribution Date the aggregate Class Principal Balance of the
Class II-A and Residual Certificates is greater than the aggregate Principal
Balance of the Group II Loans.
Underwriters: Bear, Xxxxxxx & Co. Inc., Xxxxx, Xxxxxxxx & Xxxxx, Inc.
and Sandler X'Xxxxx & Partners, L.P.
Underwriting Standards: The underwriting standards of the Company,
Washington Mutual Bank, FA or Washington Mutual Bank, a Washington state
chartered savings bank, as applicable.
Uninsured Cause: Any cause of damage to a Mortgaged Property, the cost
of the complete restoration of which is not fully reimbursable under the hazard
insurance policies required to be maintained pursuant to Section 3.07.
U.S. Person: A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate or
trust that is subject to U.S. federal income tax regardless of the source of its
income.
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
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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 REMIC I Regular Interests and the Class
R-1 Residual Interest. The purpose of the Trust is to hold the Trust Fund and
provide for the creation of the REMIC I Regular Interests and the Class R-1
Residual Interest. The assets of the Trust shall consist of the Trust Fund. The
Trust shall be irrevocable. The Trust shall be deemed to consist of two
sub-trusts, one with respect to each of the Group I and Group II Loans, as
determined by the Master Servicer.
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 REMIC I Regular
Interests and the Class R-1 Residual Interest, 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").
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
49
the Company's obligations hereunder, a security interest in all of the Company's
right, title, and interest, whether now owned or hereafter acquired, in and to:
(I) (i) the Mortgage Loans identified on the Mortgage Loan
Schedule, including the related Mortgage Notes, Mortgages, Cooperative
Stock Certificates, Cooperative Leases, Security Agreements,
Assignments of Proprietary Lease, and Recognition Agreements, all
Substitute Mortgage Loans and all distributions with respect to the
Mortgage Loans and Substitute Mortgage Loans payable on and after the
Cut-Off Date; (ii) the Certificate Account, the Investment Account and
all money or other property held therein, and the Custodial Accounts
for P&I, the Custodial Accounts for Reserves and any Buydown Fund
Account (to the extent of the amounts on deposit or other property
therein attributable to the Mortgage Loans); and (iii) amounts paid or
payable by the insurer under any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage Pool;
(II) All rights arising from or by virtue of the disposition
of, or collections with respect to, or insurance proceeds payable with
respect to, or claims against other persons with respect to, all or any
part of the collateral described in (I) above (including any accrued
discount realized on liquidation of any investment purchased at a
discount);
(III) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, goods, letters of
credit, letter-of-credit rights, oil, gas, and other minerals, and
investment property consisting of, arising from or relating to any of
the foregoing; and
(IV) All proceeds of the foregoing;
(c) the possession by the 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 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.
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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, the Company shall
cause to be filed the UCC assignment or amendment referred to in clause (Y)(vii)
of the definition of "Mortgage File." In connection with its servicing of
Cooperative Loans, the Master Servicer will use its best efforts to file timely
continuation statements, if necessary, with regard to each financing statement
and assignment relating to Cooperative Loans.
In instances where the original recorded Mortgage or any intervening
assignment thereof (recorded or in recordable form) required to be included in
the Mortgage File pursuant to the definition of "Mortgage File" relating to a
Mortgage Loan is not included in the Mortgage File delivered to the Trustee (or
the Custodian) prior to or concurrently with the execution and delivery hereof
(due to a delay on the part of the recording office), the Company shall deliver
to the Trustee (or the Custodian) a fully legible reproduction (which may be in
electronic form) of the original Mortgage or intervening assignment provided
that the originator, the related Lender or the escrow or title company which
provided closing services in connection with such Mortgage Loan certifies on the
face of such reproduction(s) or copy as follows: "Certified true and correct
copy of original which has been transmitted for recordation." For purposes
hereof, transmitted for recordation means having been mailed or otherwise
delivered for recordation to the appropriate authority. In all such instances,
the Company shall transmit the original recorded Mortgage and any intervening
assignments with evidence of recording thereon (or a copy of such original
Mortgage or intervening assignment certified by the applicable recording office)
(which may be in electronic form) (collectively, "Recording Documents") to the
Trustee (or the Custodian) within 270 days after the execution and delivery
hereof. In instances where, due to a delay on the part of the recording office
where any such Recording Documents have been delivered for recordation, the
Recording Documents cannot be delivered to the Trustee within 270 days after
execution and delivery hereof, the Company shall deliver to the Trustee within
such time period a certificate (a "Company Officer's Certificate") signed by the
Chairman of the Board, President, any Vice President or Treasurer of the Company
stating the date by which the Company expects to receive such Recording
Documents from the applicable recording office. In the event that Recording
Documents have still not been received by the Company and delivered to the
Trustee (or the Custodian) by the date specified in its previous Company
Officer's Certificate delivered to the Trustee, the Company shall deliver to the
Trustee by such date an additional Company Officer's Certificate stating a
revised date by which the Company expects to receive the applicable Recording
Documents. This procedure shall be repeated until the
51
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. Pursuant to the
Initial Custodial Agreement, the Initial Custodian shall perform
responsibilities of the Trustee with respect to the delivery, receipt,
examination and custody of the Mortgage Files on the Trustee's behalf, as
provided therein.
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. WaMu
Mortgage Pass-Through Certificates, Series 2001-AR2, without recourse" by
including in the MERS'r' System computer files (a) the code necessary to
identify the Trustee and (b) the code necessary to identify the series of the
Certificates issued in connection with such Mortgage Loans; provided, however,
that in the event the Company acquired such Mortgage Loans from an affiliate of
the Company, then the Master Servicer need not cause the MERS'r' System to
indicate such assignment. The Master Servicer shall not alter the codes
referenced in this paragraph with respect to any MERS Loan during the term of
this Agreement except in connection with an assignment of such MERS Loan or
de-registration thereof from the MERS'r' System in accordance with the terms of
this Agreement.
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-1 Residual Interest is 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.
52
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 REMIC I Regular Interests and the
Class R-1 Residual Interest and the Trustee, all information reports as and when
required to be provided to them in accordance with the REMIC Provisions, and
make available the information necessary for the application of Section 860E(e)
of the Code; (d) conduct the affairs of 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.
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-1
Residual Interest. Notwithstanding anything to the contrary contained herein,
the Trustee is hereby authorized to retain from amounts otherwise distributable
to the Class R-1 Residual Interest on any Distribution Date sufficient funds to
reimburse the Tax
53
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. The Trustee agrees, for the benefit of the Holders of the REMIC I Regular
Interests and the Class R-1 Residual Interest, to review (or cause the Initial
Custodian to review) each Mortgage File within 45 days after the Closing Date
and deliver to the Company a certification (or cause the Initial Custodian to
deliver to the Company a certification, which satisfies the applicable
requirements of this Agreement) 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)(ii), (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 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 Interest Rate Adjustment Date occurring on approximately the same
date as, but not earlier than, the first Interest Rate Adjustment Date for the
Mortgage Loan being substituted for and adjustments monthly thereafter, based on
the same Index as the Mortgage Loan being substituted
54
for, and with the same Monthly Payment Adjustment Terms as the Mortgage Loan
being substituted for, 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, the Mortgage Loan being substituted for. 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 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 REMIC I Regular Interests or the Class R-1 Residual Interest or the Trustee
on behalf of the Holders of the REMIC I Regular Interests or the Class R-1
Residual Interest.
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;
55
(ii) As of the Closing Date, each Mortgage relating to a Mortgage
Loan 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;
(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
56
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 REMIC I Regular Interests and the Class R-1 Residual Interest 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) Approximately 14.3%% (by Principal Balance) of the Group I
Loans and approximately 9.4%% (by Principal Balance) of the Group II
Loans 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;
(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 92.97%
(by Principal Balance) of the Group I Loans will be secured by owner
occupied Mortgaged Properties which are
57
the primary residences of the related Mortgagors, approximately 4.52%
(by Principal Balance) of the Group I Loans will be secured by owner
occupied Mortgaged Properties which were second or vacation homes of
the Mortgagors and approximately 2.51% (by Principal Balance) of the
Group I Loans will be secured by Mortgaged Properties which were
investor properties of the related Mortgagors; and approximately 94.91%
(by Principal Balance) of the Group II Loans will be secured by owner
occupied Mortgaged Properties which are the primary residences of the
related Mortgagors, approximately 2.07% (by Principal Balance) of the
Group II Loans will be secured by owner occupied Mortgaged Properties
which were second or vacation homes of the Mortgagors and approximately
3.03% (by Principal Balance) of the Group II 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 or by the terms of the related Mortgage
Note;
(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 87.57% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio less than or equal to
80%, approximately 12.37% (by Principal Balance) of the Group I Loans
had a current Loan-to-Value Ratio greater than 80% but less than or
equal to 95% and approximately 0.05% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio greater than 95%; and
approximately 80.44% (by Principal Balance) of the Group II Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately
19.56% (by Principal Balance) of the Group II Loans had a current
Loan-to-Value Ratio greater than 80% but less than or equal to 95% and
no Group II Loan had a current Loan-to-Value Ratio greater than 95%;
(xxvi) Approximately 67.19% (by Principal Balance) of the Group I
Loans and approximately 63.92% (by Principal Balance) of the Group II
Loans were originated for
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the purpose of refinancing existing mortgage debt, including cash-out
refinancings; and approximately 32.81% (by Principal Balance) of the
Group I Loans and approximately 36.08% (by Principal Balance) of the
Group II Loans were originated for the purpose of purchasing the
Mortgaged Property;
(xxvii) Not less than approximately 28.74% and 33.71% (by
Principal Balance) of the Group I Loans and Group II Loans,
respectively, were originated under full documentation programs; and
(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).
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 REMIC I Regular
Interests and the Class R-1 Residual Interest or the Trustee on behalf of the
Holders of the REMIC I Regular Interests and the Class R-1 Residual Interest.
Section 2.04. Acknowledgment of Transfer of Trust Fund . The Trustee
hereby accepts the Trust created hereby, 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 declares that as of the Closing Date it holds and shall hold any
documents constituting a part of the Trust Fund, 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 REMIC I Regular Interests and the Class R-1
Residual Interest. In connection therewith, as of the Closing Date, in exchange
for the property constituting the Trust Fund, the Trustee does hereby convey to
the Company the REMIC I Regular Interests and the Class R-1 Residual Interest.
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Section 2.05. Conveyance of REMIC II; REMIC Election and Designations.
A trust ("REMIC II") of which the Trustee is the trustee is hereby created for
the benefit of the Holders of the Certificates (other than the Class R
Certificates) and the Class R-2 Residual Interest. The purpose of REMIC II is to
hold the REMIC II Trust Fund and provide for the issuance, execution and
delivery of the Certificates (other than the Class R Certificates) and the
creation of the Class R-2 Residual Interest. The assets of REMIC II shall
consist of the REMIC II Trust Fund. REMIC II shall be irrevocable.
The assets of REMIC II shall remain in the custody of the Trustee, on
behalf of REMIC II, and shall be kept in REMIC II. Moneys to the credit of REMIC
II shall be held by the Trustee and invested as provided herein. All assets
received and held in REMIC II 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 REMIC II, shall not have the power or authority to
transfer, assign, hypothecate, pledge or otherwise dispose of any of the assets
of REMIC II to any Person, except as permitted herein. No creditor of a
beneficiary of REMIC II, 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 REMIC II, 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 (other than
the Class R Certificates) and the Class R-2 Residual Interest, without recourse,
all the Company's right, title and interest in and to the REMIC II Trust Fund,
including all interest and principal received by the Company on or with respect
to the REMIC I Regular Interests after the Cut-Off Date. The Trustee hereby
accepts REMIC II created hereby and accepts delivery of the REMIC II Trust Fund
on behalf of REMIC II and acknowledges that it holds the REMIC I Regular
Interests for the benefit of the Holders of the Certificates (other than the
Class R Certificates) issued pursuant to this Agreement and the Class R-2
Residual Interest. It is the express intent of the parties hereto that the
conveyance of the REMIC II Trust Fund to the Trustee by the Company as provided
in this Section 2.05 be, and be construed as, an absolute sale of the REMIC II
Trust Fund. It is, further, not the intention of the parties that such
conveyance be deemed the grant of a security interest in the REMIC II Trust Fund
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 REMIC II Trust Fund is held to be the property of the Company, or if for any
other reason this Agreement is held or deemed to create a security interest in
the REMIC II Trust Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.05 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) The REMIC I Regular Interests, including without
limitation all rights represented thereby in and to (i) the Mortgage
Loans identified on the Mortgage Loan
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Schedule, including the related Mortgage Notes, Mortgages, Cooperative
Stock Certificates, Cooperative Leases, Security Agreements,
Assignments of Proprietary Lease, and Recognition Agreements, all
Substitute Mortgage Loans and all distributions with respect to such
Mortgage Loans and Substitute Mortgage Loans payable on and after the
Cut-Off Date, (ii) the Certificate Account, the Investment Account and
all money or other property held therein, and the Custodial Accounts
for P&I, the Custodial Accounts for Reserves and any Buydown Fund
Account (to the extent of the amounts on deposit therein attributable
to the Mortgage Loans); (iii) amounts paid or payable by the insurer
under any FHA insurance policy or any Primary Insurance Policy and
proceeds of any VA guaranty and any other insurance policy related to
any Mortgage Loan or the Mortgage Pool; and (iv) all rights arising
from or by virtue of the disposition of, or collections with respect
to, or insurance proceeds payable with respect to, or claims against
other persons with respect to, all or any part of the collateral
described in (i)-(iii) above (including any accrued discount realized
on liquidation of any investment purchased at a discount);
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, goods, letters of
credit, letter-of-credit rights, oil, gas, and other minerals, and
investment property consisting of, arising from or relating to any of
the foregoing; and
(III) All proceeds of the foregoing;
(c) the possession by the 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 notifications to, or 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 REMIC II Trust
Fund, such security interest would be deemed to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term of this 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
REMIC II Trust Fund, the Trustee shall take actual possession of the REMIC II
Trust Fund 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
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security interest is a perfected security interest of first priority while the
REMIC II Trust Fund is in the possession of the Company or its affiliates.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by each of the Company and the Master
Servicer as Custodian of the documents or instruments referred to above in this
Section 2.05, and to enter into a Custodial Agreement for such purpose;
provided, however, that the Trustee shall be and remain liable for actions of
any such Custodian only to the extent it would otherwise be responsible for such
acts hereunder. Any documents delivered by the Company or the Master Servicer to
the Custodian, if any, shall be deemed to have been delivered to the Trustee for
all purposes hereunder; and any documents held by the Custodian, if any, shall
be deemed to be held by the Trustee for all purposes hereunder. Pursuant to the
Initial Custodial Agreement, the Initial Custodian shall perform
responsibilities of the Trustee with respect to the delivery, receipt,
examination and custody of the Mortgage Files on the Trustee's behalf, as
provided therein.
The Tax Matters Person shall, on behalf of the REMIC II Trust Fund,
elect to treat the REMIC II 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 II for its first taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC II
within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC II Trust Fund are hereby
designated as "regular interests" for purposes of Section 860G(a)(1) of the
Code. The Class R-2 Residual Interest is hereby designated as the sole class of
"residual interest" in the REMIC II Trust Fund for purposes of Section
860G(a)(2) of the Code.
The parties intend that the affairs of the REMIC II Trust Fund formed
hereunder shall constitute, and that the affairs of the REMIC II Trust Fund
shall be conducted so as to qualify it as, a REMIC. In furtherance of such
intention, the Tax Matters Person shall, on behalf of the REMIC II 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 for the REMIC II 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 REMIC II Trust Fund, to be treated
as a REMIC on the federal tax return of the REMIC II 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 Certificateholders and the Holders
of the Class R-2 Residual Interest all information reports as and when required
to be provided to them in accordance with the REMIC provisions; (d) conduct the
affairs of the REMIC II Trust Fund at all times that any of the Certificates are
outstanding so as to maintain the status of the REMIC II 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 II Trust Fund; and (f) pay the amount of any federal prohibited
transaction penalty taxes imposed on the REMIC II 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
62
prevent the Company from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the Company shall be
entitled to be indemnified from the REMIC II 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.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC II Trust Fund as defined in Section 860F of the Code and not paid by
the Company pursuant to clause (f) of the preceding paragraph, such tax shall be
charged against amounts otherwise distributable to the Holders of the Class R-2
Residual Interest. Notwithstanding anything to the contrary contained herein,
the Company is hereby authorized to retain from amounts otherwise distributable
to the Holders of the Class R-2 Residual Interest on any Distribution Date
sufficient funds to reimburse the Company for the payment of such tax (to the
extent that the Company has not been previously reimbursed therefor).
Section 2.06. Acceptance by Trustee; Authentication of Certificates.
The Trustee hereby accepts the REMIC II Trust created hereby, acknowledges and
accepts the assignment to it of the property constituting the REMIC II Trust
Fund and declares that as of the Closing Date it holds and shall hold any
documents constituting a part of the REMIC II Trust Fund, and the REMIC II 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 (other than the
Class R Certificates) and the Class R-2 Residual Interest. In connection
therewith, as of the Closing Date, in exchange for the property constituting the
REMIC II Trust Fund, the Trustee does hereby convey to the Company the Class R-2
Residual Interest and shall cause to be authenticated and delivered, upon and
pursuant to the order of the Company, the Certificates (other than the Class R
Certificates) in Authorized Denominations evidencing the entire ownership of the
Regular Interests in REMIC II. In addition, the Trustee shall cause to be
authenticated and delivered, upon and pursuant to the order of the Company, the
Class R Certificates.
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.
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The Master Servicer shall make reasonable efforts to collect or cause
to be collected all payments called for under the terms and provisions of the
Mortgage Loans and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of any Primary Insurance Policy, any
FHA insurance policy or VA guaranty, any hazard insurance policy, and federal
flood insurance, cause to be followed such collection procedures as are followed
with respect to mortgage loans comparable to the Mortgage Loans and held in
portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-sale"
clauses with respect to the related Mortgage Loans, to the extent permitted by
law, subject to the provisions set forth in Section 3.08.
Consistent with the foregoing, the Master Servicer may, in accordance
with prudent mortgage loan servicing practices, (i) waive or cause to be waived
any assumption fee or late payment charge in connection with the prepayment of
any Mortgage Loan and (ii) only upon determining that the coverage of any
applicable insurance policy or guaranty related to a Mortgage Loan will not be
materially adversely affected, arrange a schedule, running for no more than 180
days after the first delinquent Due Date, for payment of any delinquent
installment on any Mortgage Note or for the liquidation of delinquent items.
Subject to the fourth sentence of this paragraph, the Master Servicer shall have
the right, but not the obligation, to purchase any Mortgage Loan delinquent 90
consecutive days or more for an amount equal to its Purchase Price; provided,
however, that the aggregate Purchase Price of Mortgage Loans so purchased
pursuant to this sentence shall not exceed one-half of one percent (0.50%) of
the aggregate Principal Balance, as of the Cut-Off Date, of all Mortgage Loans.
Subject to the fourth sentence of this paragraph, the Master Servicer shall also
have the right, but not the obligation, to purchase, for an amount equal to its
Purchase Price, any Mortgage Loan delinquent 90 consecutive days or more, for
the purpose of requiring the Person who sold such Mortgage Loan to the Company
to repurchase such Mortgage Loan based on a breach of a representation or
warranty made by such Person in connection with the Company's purchase or
acquisition of such Mortgage Loan. Notwithstanding the immediately preceding two
sentences, the Master Servicer's right to purchase any Mortgage Loan pursuant to
either of such preceding sentences shall be subject to the following additional
conditions: (x) if the date on which the Mortgage Loan first became 90-day
delinquent (the "Initial Delinquency Date") occurred during the first two
calendar months of a calendar quarter, the Master Servicer may exercise the
purchase right during the period commencing on the Initial Delinquency Date and
ending on the last Master Servicer Business Day of such calendar quarter, (y) if
the Initial Delinquency Date occurred during the third calendar month of a
calendar quarter, the Master Servicer may exercise the purchase right during the
period commencing on the first day of the immediately succeeding calendar
quarter and ending on the last Master Servicer Business Day of such succeeding
calendar quarter and (z) if the Master Servicer does not exercise the purchase
right with respect to a Mortgage Loan during the period specified in clause (x)
or (y), as applicable, such Mortgage Loan shall thereafter again become eligible
for purchase pursuant to the preceding two sentences only after the Mortgage
Loan ceases to be 90-day delinquent and thereafter becomes 90-day delinquent
again. For purposes of this paragraph, a Mortgage Loan is considered delinquent
for 90 consecutive days if a Monthly Payment is not received by the first day of
the third month following the month during which such payment was due.
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Consistent with the terms of this Section 3.01, the Master Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected by such
waiver, modification, postponement or indulgence; provided, however, that
(unless the Mortgagor is in default with respect to the Mortgage Loan or in the
reasonable judgment of the Master Servicer such default is imminent) the Master
Servicer shall not permit any modification with respect to any Mortgage Loan
that would (i) change the applicable Mortgage Interest Rate, defer or forgive
the payment of any principal or interest, reduce the outstanding principal
balance (except for actual payments of principal) or extend the final maturity
date with respect to such Mortgage Loan, or (ii) be inconsistent with the terms
of any applicable Primary Insurance Policy, FHA insurance policy, VA guaranty,
hazard insurance policy or federal flood insurance policy. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with respect to
any Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code (including any proposed,
temporary or final regulations promulgated thereunder) (other than in connection
with a proposed conveyance or assumption of such Mortgage Loan that is treated
as a Principal Prepayment or in a default situation) and cause any REMIC to fail
to qualify as such under the Code. The Master Servicer shall be entitled to
approve a request from a Mortgagor for a partial release of the related
Mortgaged Property, the granting of an easement thereon in favor of another
Person, any alteration or demolition of the related Mortgaged Property or other
similar matters if it has determined, exercising its good faith business
judgment in the same manner as it would if it were the owner of the related
Mortgage Loan, that the security for, and the timely and full collectability of,
such Mortgage Loan would not be adversely affected thereby and that 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.
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 REMIC I Regular Interests and the Class R-1 Residual Interest,
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 REMIC I Regular Interests and the
Class R-1 Residual Interest 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
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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 of the
related Mortgaged Property, shall be deposited in the Custodial Account for P&I,
and shall be applied to the balances of the related Mortgage Loans as payments
of interest and principal.
The Master Servicer is hereby authorized to make withdrawals from and
to issue drafts against the Custodial Accounts for P&I and the Custodial
Accounts for Reserves for the purposes required or permitted by this Agreement.
Each Custodial Account for P&I and each Custodial Account for Reserves shall
bear a designation clearly showing the respective interests of the applicable
Servicer, as trustee, and of the Master Servicer, in substantially one of the
following forms:
(a) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of principal and
interest custodial account for Washington Mutual Mortgage Securities
Corp., its successors and assigns, for various owners of interests in
Washington Mutual Mortgage Securities Corp. mortgage-backed pools or
(ii) [Servicer's Name] in trust for Washington Mutual Mortgage
Securities Corp.;
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(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and
insurance custodial account for Washington Mutual Mortgage Securities
Corp., its successors and assigns for various mortgagors and/or various
owners of interests in Washington Mutual Mortgage Securities Corp.
mortgage-backed pools or (ii) [Servicer's Name] in trust for Washington
Mutual Mortgage Securities Corp. and various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that have been
collected by any Servicer and are due to the Certificate Account pursuant to
Section 4.01 of this Agreement.
Funds held in the Custodial Account for P&I and the Custodial Account
for Reserves may, at the Master Servicer's option, be invested in (i) one or
more Eligible Investments which shall in no event mature later than the Business
Day prior to the related Withdrawal Date (except if such Eligible Investments
are obligations of the Trustee, such Eligible Investments may mature on the
Withdrawal Date), or (ii) such other instruments as shall be required to
maintain the Ratings.
Section 3.03. The Investment Account; Eligible Investments.(a) Not
later than the Withdrawal Date, the Master Servicer shall withdraw or direct the
withdrawal of funds in the Custodial Accounts for P&I, for deposit in the
Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers which
were due on the related Due Date, net of the fixed portion 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 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
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investments made with such funds and shall be entitled to retain all gains
realized on such investments as additional servicing compensation. Not later
than the Business Day prior to the Distribution Date, the Master Servicer shall
deposit such funds, net of any gains (except Payoff Earnings) earned thereon, in
the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i) one
or more Eligible Investments which shall in no event mature later than the
Business Day prior to the related Distribution Date (except if such Eligible
Investments are obligations of the Trustee, such Eligible Investments may mature
on the Distribution Date), or (ii) such other instruments as shall be required
to maintain the Ratings.
Section 3.04. The Certificate Account.
(a) On or prior to the Closing Date, the Trustee shall establish the
Certificate Account, which shall be entitled "Washington Mutual Mortgage
Securities Corp. Certificate Account under the Pooling and Servicing Agreement,
dated as of November 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-AR3 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 REMIC I Regular Interests and the Class R-1 Residual Interest are entitled
or which are necessary for payment of any Special Primary Insurance Premiums. In
addition, not later than the Business Day prior to the Distribution Date, the
Master Servicer shall deposit into the Certificate Account any Monthly P&I
Advances or other payments required to be made by the Master Servicer pursuant
to Section 4.02 of this Agreement and any Insurance Proceeds or Liquidation
Proceeds (including amounts paid by the Company in respect of any Purchase
Obligation) not previously deposited in the Custodial Accounts for P&I or the
Investment Account, and any amounts paid by the Master Servicer in connection
with the exercise of its option to terminate this Agreement pursuant to Section
9.01 or any other purchase of Mortgage Loans permitted by this Agreement.
(b) Funds held in the Certificate Account shall be invested at the
written direction of the Master Servicer in (i) one or more Eligible Investments
which shall in no event mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are obligations of the
Trustee, such Eligible Investments may mature on the Distribution Date), or (ii)
such other instruments as shall be required to maintain the Ratings. The Master
Servicer shall be entitled to receive any gains earned on such Eligible
Investments and shall bear any losses suffered in connection therewith. If the
Trustee has not received such written investment directions from the Master
Servicer, the Trustee shall not invest funds held in the Certificate Account.
The Trustee shall have no liability for any losses on investments of funds held
in the Certificate Account.
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Section 3.05. Permitted Withdrawals from the Certificate Account, the
Investment Account and Custodial Accounts for P&I and of Buydown Funds from the
Buydown Fund Accounts.
(a) The Master Servicer is authorized to make withdrawals (or, in the
case of the Certificate Account, to direct the Trustee to make withdrawals),
from time to time, from the Investment Account, the Certificate Account or the
Custodial Accounts for P&I established by the Servicers of amounts deposited
therein in respect of the Certificates (and, to the extent applicable, to make
deposits of the amounts withdrawn), as follows:
(i) To reimburse itself or the applicable Servicer for Monthly
P&I Advances made pursuant to Section 4.02 or a Selling and Servicing
Contract, such right to reimbursement pursuant to this paragraph (i)
being limited to amounts received on particular Mortgage Loans
(including, for this purpose, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of principal and/or interest
respecting which any such Monthly P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for amounts
expended by or for the account of the Master Servicer pursuant to
Section 3.09 or amounts expended by such Servicer pursuant to the
Selling and Servicing Contracts in connection with the restoration of
property damaged by an Uninsured Cause or in connection with the
liquidation of a Mortgage Loan;
(iii) To pay to itself, with respect to the related Mortgage
Loans, the Master Servicing Fee (net of Compensating Interest reduced
by Payoff Earnings and Payoff Interest) as to which no prior
withdrawals from funds deposited by the Master Servicer have been
made;
(iv) To reimburse itself or the applicable Servicer for advances
made with respect to related Mortgage Loans (except for Mortgage Loans
purchased pursuant to a Purchase Obligation or pursuant to the second
or third sentence of the third paragraph of Section 3.01) which the
Master Servicer has determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned in
the Investment Account and the Certificate Account to which it is
entitled and to reimburse itself for expenses incurred by and
reimbursable to it pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the
Certificate Account not required to be on deposit therein at the time
of such withdrawal;
(vii) To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts in
the Investment Account specified in Section 3.04(a);
(viii) To pay on behalf of the Trustee any Special Primary
Insurance Premium payable by the Trustee pursuant to Section 4.04(a);
provided, the Master Servicer shall give written notice thereof to the
Trustee prior to noon New York City time two Business Days prior to
the applicable Distribution Date; and
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after making or providing for the above withdrawals
(ix) To clear and terminate the Investment Account and the
Certificate Account following termination of this Agreement pursuant
to Section 9.01.
Since, in connection with withdrawals pursuant to paragraphs (i) and
(ii), the Master Servicer's entitlement thereto is limited to collections or
other recoveries on the related Mortgage Loan, the Master Servicer or the
applicable Servicer shall keep and maintain separate accounting for each
Mortgage Loan, for the purpose of justifying any such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such Servicer
holds and maintains a Buydown Fund Account) is authorized to make withdrawals,
from time to time, of Buydown Funds from the Buydown Fund Account or Custodial
Account for P&I established by any Servicer under its supervision (and, to the
extent applicable, to make deposits of the amounts withdrawn), as follows:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) In the event of a Payoff of any Mortgage Loan having a
related Buydown Fund, to apply amounts remaining in Buydown Fund
Accounts to reduce the required amount of such principal Payoff (or,
if the Mortgagor has made a Payoff, to refund such remaining Buydown
Fund amounts to the Person entitled thereto);
(iii) In the event of foreclosure or liquidation of any Mortgage
Loan having a Buydown Fund, to deposit remaining Buydown Fund amounts
in the Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account
representing Buydown Funds following termination of this Agreement
pursuant to Section 9.01;
(c) The Trustee is authorized to make withdrawals from time to time
from the Certificate Account to reimburse itself for advances it has made 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
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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 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
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and, unless prohibited by applicable state law or unless the Mortgage Note
contains a provision allowing a qualified borrower to assume the Mortgage Note,
the Mortgagor remains liable thereon; provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by any related Primary Insurance Policy. The Master Servicer is also
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall not enter into any substitution or assumption with
respect to a Mortgage Loan if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause the REMICs to fail to qualify as a REMIC under the REMIC
Provisions or (ii) cause the imposition of any tax on "prohibited transactions"
or "contributions" after the startup day under the REMIC Provisions. The Master
Servicer shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original copy of
such substitution or assumption agreement and other documents and instruments
constituting a part thereof. In connection with any such assumption or
substitution agreement, the terms of the related Mortgage Note shall not be
changed. Any fee collected by the applicable Servicer for entering into an
assumption or substitution of liability agreement shall be retained by such
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Master Servicer
may be restricted by law from preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause to be
foreclosed upon or comparably converted, the ownership of any Mortgaged Property
securing a Mortgage Loan which comes into and continues in default and as to
which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.01. In lieu of such foreclosure or other
conversion, and taking into consideration the desirability of maximizing net
Liquidation Proceeds after taking into account the effect of Insurance Proceeds
upon Liquidation Proceeds, the Master Servicer may, to the extent consistent
with prudent mortgage loan servicing practices, accept a payment of less than
the outstanding Principal Balance of a delinquent Mortgage Loan in full
satisfaction of the indebtedness evidenced by the related Mortgage Note and
release the lien of the related Mortgage upon receipt of such payment. The
Master Servicer shall not foreclose upon or otherwise comparably convert a
Mortgaged Property if the Master Servicer is aware of evidence of toxic waste,
other hazardous substances or other evidence of environmental 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
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after reimbursement to itself for such expenses, and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds. The Master Servicer
shall be responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof (as well as its normal servicing compensation) as an advance. The Master
Servicer shall maintain information required for tax reporting purposes
regarding any Mortgaged Property which is abandoned or which has been foreclosed
or otherwise comparably converted. The Master Servicer shall report such
information to the Internal Revenue Service and the Mortgagor in the manner
required by applicable law.
The Master Servicer may enter into one or more special servicing
agreements with a Lowest Class B Owner, subject to each Rating Agency's
acknowledgment that the Ratings of the Certificates in effect immediately prior
to the entering into of such agreement would not be qualified, downgraded or
withdrawn and the Certificates would not be placed on credit review status
(except for possible upgrading) as a result of such agreement. Any such
agreement may contain provisions whereby such Lowest Class B Owner may (a)
instruct the Master Servicer to instruct a Servicer to the extent provided in
the applicable Selling and Servicing Contract to commence or delay foreclosure
proceedings with respect to related delinquent Mortgage Loans, provided that the
Lowest Class B Owner deposits a specified amount of cash with the Master
Servicer that will be available for distribution to Certificateholders if
Liquidation Proceeds are less than they otherwise may have been had the Servicer
acted pursuant to its normal servicing procedures, (b) purchase such delinquent
Mortgage Loans from the 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.
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
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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, REMIC II or the depositor. In the event the Trustee
withholds any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholder.
Section 3.10. Trustee to Cooperate; Release of Mortgage Files. Upon
the Payoff or scheduled maturity of any Mortgage Loan, the Master Servicer shall
cause such final payment to be immediately deposited in the related Custodial
Account for P&I or the Investment Account. The Master Servicer shall promptly
notify the Trustee thereof by a certification (which certification shall include
a statement to the effect that all amounts received in connection with such
payment which are required to be deposited in either such account have been so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File; provided, however, 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
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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, 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
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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 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
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hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under the Selling and Servicing Contracts
with respect to the related Mortgage Loans unless the Trustee elects to
terminate the Selling and Servicing Contracts with respect to such Mortgage
Loans in accordance with the terms thereof. The Trustee, its designee or the
successor servicer for the Trustee shall be deemed to have assumed all of the
Master Servicer's interest therein with respect to the related Mortgage Loans
and to have replaced the Master Servicer as a party to the Selling and Servicing
Contracts to the same extent as if the rights and duties under the Selling and
Servicing Contracts relating to such Mortgage Loans had been assigned to the
assuming party, except that the Master Servicer shall not thereby be relieved of
any liability or obligations under the Selling and Servicing Contracts with
respect to the Master Servicer's duties to be performed prior to its termination
hereunder.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to the Selling
and Servicing Contracts and the Mortgage Loans then being master serviced by the
Master Servicer and an accounting of amounts collected and held by the Master
Servicer and otherwise use its best efforts to effect the orderly and efficient
transfer of the rights and duties under the related Selling and Servicing
Contracts relating to such Mortgage Loans to the assuming party.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. Distributions to Holders of REMIC I Regular Interests
and Class R-1 Residual Interest. On each Distribution Date, the Trustee (or any
duly appointed paying agent) (i) shall be deemed to have distributed from the
Certificate Account the REMIC I Distribution Amount to the Holders of the REMIC
I Regular Interests, and to have deposited such amount for their benefit into
the Certificate Account and (ii) from the Certificate Account shall distribute
to the Class R Certificateholders, in accordance with the written statement
received from the Master Servicer pursuant to Section 4.02(b), the sum of (a)
the Excess Liquidation Proceeds and (b) the amounts to be distributed to the
Holders of the Class R-1 Residual Interest pursuant to the definition of "REMIC
I Distribution Amount" for such Distribution Date. Amounts distributed pursuant
to clause (ii) above shall be distributed by wire transfer in immediately
available funds for the account of each Class R Certificateholder, or by any
other means of payment acceptable to each Class R Certificateholder of record on
the immediately preceding Record Date (other than as provided in Section 9.01
respecting the final distribution), as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register.
Notwithstanding any other provision of this Agreement, no actual distributions
pursuant to clause (i) of this Section 4.01 shall be made on account of the
deemed distributions described in this paragraph except in the event of a
liquidation of REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution Reports to
the Trustee.
(a) To the extent described below, the Master Servicer is obligated to
advance its own funds to the Certificate Account to cover any shortfall between
(i) payments scheduled to be received in respect of Mortgage Loans, and (ii) the
amounts actually deposited in the Certificate Account on account of such
payments. The Master Servicer's obligation to make any advance or
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advances described in this Section 4.02 is effective only to the extent that
such advance is, in the good faith judgment of the Master Servicer made on or
before the second Business Day prior to each Distribution Date, reimbursable
from Insurance Proceeds or Liquidation Proceeds of the related Mortgage Loans or
recoverable as late Monthly Payments with respect to the related Mortgage Loans
or otherwise.
Prior to the close of business on the second Business Day prior to
each Distribution Date, the Master Servicer shall determine whether or not it
will make a Monthly P&I Advance on the Business Day prior to such Distribution
Date (in the event that the applicable Servicer fails to make such advances) and
shall furnish a written statement to the Trustee, the Paying Agent, if any, and
to any Certificateholder requesting the same, setting forth the aggregate amount
to be advanced on account of principal and interest in respect of the Mortgage
Loans, stated separately.
In the event that the Master Servicer shall be required to make a
Monthly P&I Advance, it shall on the Business Day prior to the related
Distribution Date either (i) deposit in the Certificate Account an amount equal
to such Monthly P&I Advance, (ii) make an appropriate entry in the records of
the Certificate Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 4.02, used by
the Master Servicer to make such Monthly P&I Advance, or (iii) make advances in
the form of any combination of (i) and (ii) aggregating the amount of such
Monthly P&I Advance. Any funds being held for future distribution to
Certificateholders and so used shall be replaced by the Master Servicer by
deposit in the Certificate Account on the Business Day immediately preceding any
future Distribution Date to the extent that funds in the Certificate Account on
such Distribution Date with respect to the Mortgage Loans shall be less than
payments to Certificateholders required to be made on such date with respect to
the Mortgage Loans. Under each Selling and Servicing Contract, the Master
Servicer is entitled to receive from the Custodial Accounts for P&I established
by the Servicers amounts received by the applicable Servicers on particular
Mortgage Loans as late payments of principal and interest or as Liquidation or
Insurance Proceeds and respecting which the Master Servicer has made an
unreimbursed advance of principal and interest. The Master Servicer is also
entitled to receive other amounts from the related Custodial Accounts for P&I
established by the Servicers to reimburse itself for prior Nonrecoverable
Advances respecting Mortgage Loans serviced by such Servicers. The Master
Servicer shall deposit these amounts in the Investment Account prior to
withdrawal pursuant to Section 3.05.
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) Negative Amortization Amounts, (vi) Principal
Prepayments, (vii) the principal portion of Realized Losses, (viii) the Residual
Distribution
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Amount and (ix) the Excess Liquidation Proceeds to be distributed or allocated,
as applicable, to each Class of Certificates on such Distribution Date (such
amounts to be determined in accordance with the definitions of "REMIC I
Distribution Amount" and "REMIC II Distribution Amount," Section 4.01 and
Section 4.04 hereof and other related definitions set forth in Article I
hereof); (2) the applicable Class Principal Balance after giving effect to such
distributions and allocations; and (3) the amount of any Special Primary
Insurance Premium payable on such Distribution Date.
Section 4.03. Nonrecoverable Advances. Any advance previously made by
a Servicer pursuant to its Selling and Servicing Contract with respect to a
Mortgage Loan or by the Master Servicer that the Master Servicer shall determine
in its good faith judgment not to be ultimately recoverable from Insurance
Proceeds or Liquidation Proceeds or otherwise with respect to such Mortgage Loan
or recoverable as late Monthly Payments with respect to such Mortgage Loan shall
be a Nonrecoverable Advance. The determination by the Master Servicer that it or
the applicable Servicer has made a Nonrecoverable Advance or that any advance
would constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee on the Determination
Date and detailing the reasons for such determination. Notwithstanding any other
provision of this Agreement, any insurance policy relating to the Mortgage
Loans, or any other agreement relating to the Mortgage Loans to which the
Company or the Master Servicer is a party, (a) the Master Servicer and each
Servicer shall not be obligated to, and shall not, make any advance that, after
reasonable inquiry and in its sole discretion, the Master Servicer or such
Servicer shall determine would be a Nonrecoverable Advance, and (b) the Master
Servicer and each Servicer shall be entitled to reimbursement for any advance as
provided in Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Distributions to Certificateholders; Payment of Special
Primary Insurance Premiums.
(a) On each Distribution Date, the Trustee (or any duly appointed
paying agent) shall (i) subject to Section 3.05(a)(viii), withdraw from the
Certificate Account any Special Primary Insurance Premium payable on such
Distribution Date and pay such amount to the insurer under the applicable
Special Primary Insurance Policy and (ii) withdraw from the Certificate Account
the REMIC II Available Distribution Amount for such Distribution Date and
distribute, from the amount so withdrawn, to the extent of the REMIC II
Available Distribution Amount, the REMIC II Distribution Amount to the
Certificateholders (including the Class R Certificateholders with respect to any
distribution to the Holders of the Class R-2 Residual Interest), all in
accordance with the written statement received from the Master Servicer pursuant
to Section 4.02(b). Any Special Primary Insurance Premiums distributed pursuant
to clause (i) above shall be distributed by means of payment acceptable to the
insurer under the respective Special Primary Insurance Policy. Amounts
distributed to the Certificateholders pursuant to clause (ii) above shall be
distributed by wire transfer in immediately available funds for the account of,
or by check mailed to, each such Certificateholder of record on the immediately
preceding Record Date (other than as provided in Section 9.01 respecting the
final distribution), as specified by each such Certificateholder and at the
address of such Holder appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all allocations of
Realized Losses made on any Distribution Date
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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 and REMIC II)
shall be payable in the manner provided above only upon presentation and
surrender thereof on or after the Distribution Date therefor at the office or
agency of the Certificate Registrar specified in the notice delivered pursuant
to Section 4.04(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 4.05. 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, in each case, by
Loan Group;
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(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, in each case, by Loan Group;
(c) The amount of the Special Hazard Coverage available to the
Senior Certificates remaining as of the close of business on the
applicable Determination Date;
(d) The amount of the Bankruptcy Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date;
(e) The amount of the Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the applicable
Determination Date; and
(f) The cumulative amount of Realized Losses incurred in respect
of each Loan Group allocated to the related Certificates since the
Cut-Off Date.
Upon request by any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder with such
information as is necessary and appropriate, in the Master Servicer's sole
discretion, for purposes of satisfying applicable reporting requirements under
Rule 144A of the Securities Act.
The Company may make available any reports, statements or other
information to Certificateholders through the Company's home page on the world
wide web. As of the Closing Date, such web page is located at "xxx.xxxxxxx.xxx"
and information is available by clicking on "Investor Information."
ARTICLE V
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the forms set forth in
Exhibit A and B with the additional insertion from Exhibit H attached hereto,
and shall be executed by the Trustee, 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
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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 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
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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 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.
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(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), 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 and REMIC II to
cease to qualify as a REMIC and will not create a risk that (1)
REMIC I and REMIC II 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.
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(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 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 and REMIC II,
while not a Disqualified Organization, shall be the tax matters person
for the related REMIC within the meaning of Section 6231(a)(7) of the
Code and Treasury Regulation Section 1.860F-4(d).
(d) In the case of any Junior Subordinate Certificate presented for
registration in the name of any Person, the Trustee shall require (i) an
officer's certificate substantially in the form of Exhibit N attached hereto
acceptable to and in form and substance satisfactory to the Trustee and the
Company, which officer's certificate shall not be an expense of the 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
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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, the REMIC
II Trust Fund or the Company. Such Opinion of Counsel shall allow for the
forwarding, and the Trustee shall forward, a copy thereof to the Rating
Agencies. Notwithstanding the foregoing, any Junior Subordinate Certificate may
be transferred, sold, pledged or otherwise disposed of in accordance with the
requirements set forth in Section 5.01(f).
(f) To effectuate a Certificate transfer of a Junior Subordinate
Certificate in accordance with this Section 5.01(f), the proposed transferee of
such Certificate must provide the Trustee and the Company with an investment
letter substantially in the form of Exhibit L attached hereto, which investment
letter shall not be an expense of the 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.
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(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).
(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.
(h) Each Plan Investor (as defined in Section 5.01(g)(2) hereof) that
acquires any Certificate from the Underwriters or from Washington
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Mutual Bank, FA or any of its affiliates shall be deemed to represent and
warrant that no person who has discretionary authority or renders investment
advice with respect to such acquisition (and no affiliate of such person) is a
Mortgagor with respect to any of the Mortgage Loans.
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
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.
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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 II Trust Fund (or with respect to the Class R
Certificates, the residual ownership interests in the REMIC I Trust Fund and
REMIC II 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 Section 4.04 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 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
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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
(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
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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.
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.
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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 or REMIC II 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 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.
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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 the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II
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
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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 II 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 II 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
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
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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 II 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
(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
95
(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 II 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 II 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 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.
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(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
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
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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 II 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.
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,
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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 II 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 selected by it with reasonable care or (as
in the case of the Initial Custodian) designated by the Company;
(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 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
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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 or the
REMIC II 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.
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
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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 II 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 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.
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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 or the REMIC II 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 or the REMIC II Trust Fund and to vest in such Person or Persons, in such
capacity, such title to the REMIC I Trust Fund or the REMIC II 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.
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 the REMIC II Trust
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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
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
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8.11, the Trustee may appoint, upon prior written approval of the Master
Servicer, a successor Authenticating Agent, shall give written notice of such
appointment to the Master Servicer and shall mail notice of such appointment to
all Certificateholders. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers,
duties and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. Any reasonable compensation paid to an
Authenticating Agent shall be a reimbursable expense pursuant to Section 8.05 if
paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or more Paying
Agents which shall be authorized to act on behalf of the Trustee in making
withdrawals from the Certificate Account, and distributions to
Certificateholders as provided in Section 4.01, Section 4.04(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 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.
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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 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.
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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 and the REMIC II 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 and
the REMIC II 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 and the REMIC II Trust Fund as described in Section 860F
of the Code, or (ii) cause the REMIC I Trust Fund or the REMIC II 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 and the REMIC II Trust Fund meeting
the requirements of a qualified liquidation under Section 860F of the
Code and
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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 the REMIC II 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 and the REMIC II 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 the REMIC II Trust Fund, or to
assure the conveyance to the Trustee of any property included in the REMIC I
Trust Fund or the REMIC II 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 II Trust Fund for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Agreement or of
modifying in any manner the rights of the Certificateholders; provided, however,
that no such amendment shall, without the consent of the Holder of each
Certificate affected thereby (i) reduce in any manner the amount of, or delay
the timing of, distributions of principal or interest required to be made
hereunder or reduce the Certificateholder's Percentage Interest, the Certificate
Interest Rate or the Termination Payment with respect to any of the
107
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
the REMIC II 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 or the REMIC II 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 or the REMIC II 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 REMIC II 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 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 II 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
108
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.
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.
109
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;
(ii) the appointment of a successor Trustee pursuant to Section
8.08;
110
(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 4.05, 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: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Assistant Secretary
Appendix 1: Definition of Class Y Principal Reduction Amounts
For any Distribution Date, the amounts by which the Class Principal
Balances of the Class Y-1 and Class Y-2 Regular Interests, respectively, will be
reduced or increased on such Distribution Date by the allocation of Realized
Losses and Negative Amortization Amounts and the distribution of principal,
determined as follows:
Let S% and T% represent the Certificate Interest Rates applicable for
distributions to be made on the next succeeding Distribution Date on the Class
Y-1 and Class Y-2 Regular Interests respectively.
If T% <= S% apply the following generic definition of the principal reduction
amounts with the following identifications:
J%=S%; K%=T%; AA=I; BB=II; Y-A=Y-1; Z-A=Z-1; Y-B=Y-2; Z-B=Z-2; j=1; k=2
If S% <= T% apply the following generic definition of the principal reduction
amounts with the following identifications:
J%=T%; K%=S%; AA=II; BB=I; Y-A=Y-2; Z-A=Z-2; Y-B=Y-1; Z-B=Z-1; j=2; k=1
Generic Definition of Class Y Principal Reduction Amounts
J% and K% represent the interest rates on Loan Group AA and Loan Group BB
respectively. K% < J%.
For purposes of the succeeding formulas the following symbols shall have the
meanings set forth below:
P[u]A[u]A[u]B = the Group AA Subordinate Balance after the allocation of
Realized Losses and Negative Amortization Amounts and
distributions of principal on such Distribution Date.
P[u]B[u]B[u]B = the Group BB Subordinate Balance after the allocation of
Realized Losses and Negative Amortization Amounts and
distributions of principal on such Distribution Date.
R = the Group B Certificate Interest Rate = (J%P[u]A[u]A[u]B +
K%P[u]B[u]B[u]B)/(P[u]A[u]A[u]B + P[u]B[u]B[u]B)
B[u]j = the Group AA Subordinate Balance after the allocation of
Realized Losses and Negative Amortization Amounts and
distributions of principal on the prior Distribution Date.
B[u]k = the Group BB Subordinate Balance after the allocation of
Realized Losses and Negative Amortization Amounts and
distributions of principal on the prior Distribution Date.
[D]B[u]j = B[u]j - P[u]A[u]A[u]B.
[D]B[u]k = B[u]k - P[u]B[u]B[u]B.
Y[u]k = the Class Y-B Principal Balance after distributions on the
prior Distribution Date.
Y[u]j = the Class Y-A Principal Balance after distributions on the
prior Distribution Date.
[D]Y[u]k = the Class Y-B Principal Reduction Amount.
[D]Y[u]j = the Class Y-A Principal Reduction Amount.
Z[u]k = the Class Z-B Principal Balance after distributions on the
prior Distribution Date.
1
Z[u]j = the Class Z-A Principal Balance after distributions on the
prior Distribution Date.
[D]Z[u]k = the Class Z-B Principal Reduction Amount.
[D]Z[u]j = the Class Z-A Principal Reduction Amount.
N[u]j = the interest that accrued on the Class Y-A Regular Interest
during the accrual period related to such Distribution Date
N[u]k = the interest that accrued on the Class Y-B Regular Interest
during the accrual period related to such Distribution Date
U[u]j = the aggregate gross positive principal amortization (i.e.,
payments of scheduled principal and principal prepayments) and
Realized Losses on the Group AA Loans for such Distribution
Date reduced by the portion thereof allocable to the Class R-1
Residual Interest, if any.
U[u]k = the aggregate gross positive principal amortization (i.e.,
payments of scheduled principal and principal prepayments) and
Realized Losses on the Group BB Loans for such Distribution
Date reduced by the portion thereof allocable to the Class R-1
Residual Interest, if any.
P[u]k = the aggregate Class Principal Balance of the Class Y-B and
Class Z-B Regular Interests after distributions on the prior
Distribution Date, which is equal to the aggregate principal
balance of the Group BB Loans reduced by the Class R-1
Principal Balance, if applicable.
P[u]j = the aggregate Class Principal Balance of the Class Y-A and
Class Z-A Regular Interests after distributions on the prior
Distribution Date, which is equal to the aggregate principal
balance of the Group AA Loans reduced by the Class R-1
Principal Balance, if applicable.
[D]P[u]k= the aggregate principal reduction or increase resulting on
such Distribution Date on the Group BB Loans as a result of
principal distributions (exclusive of any amounts distributed
pursuant to clause (c) of the definition of REMIC I
Distribution Amount) to be made and Realized Losses and
Negative Amortization Amounts to be allocated on such
Distribution Date (reduced by the portion, if any, of such
reduction allocable to the Class R-1 Residual Interest, if
applicable), which is equal to the aggregate of the Class Y-B
and Class Z-B Principal Reduction Amounts.
[D]P[u]j = the aggregate principal reduction or increase resulting on
such Distribution Date on the Group AA Loans as a result of
principal distributions (exclusive of any amounts distributed
pursuant to clause (c) of the definition of REMIC I
Distribution Amount) to be made and Realized Losses and
Negative Amortization Amounts to be allocated on such
Distribution Date (reduced by the portion, if any, of such
reduction allocable to Class R-1 Residual Interest, if
applicable), which is equal to the aggregate of the Class Y-A
and Class Z-A Principal Reduction Amounts.
[a] = .0005
[g] = (R - K%)/(J% - R). [g] is a non-negative number unless its
denominator is zero, in which event it is undefined.
If [g] is zero, [D]Y[u]j = Y[u]j and [D]Y[u]k = (Y[u]k/P[u]k)[D]P[u]k.
If [g] is undefined, [D]Y[u]k = Y[u]k, [D]Y[u]j = (Y[u]j/P[u]j)[D]P[u]j.
In the remaining situations, [D]Y[u]j and [D]Y[u]k shall be defined as
follows:
If no payments are being made on such Distribution Date pursuant to clause (X)
of paragraph (I)(c) of the definition of REMIC II Distribution Amount,
2
(I) [D]Y[u]j = [z][D]B[u]j and [D]Y[u]k = [z][D]B[u]k, where [z] =
Y[u]j/B[u]j = Y[u]k/B[u]k, provided Y[u]j-[D]Y[u]j <= lesser of
[a](P[u]j-[D]P[u]j) and B[u]j/2 and Y[u]k-[D]Y[u]k <= lesser of
[a]P[u]k and B[u]k/2; otherwise,
(II) [D]Y[u]j and [D]Y[u]k are defined by whichever of (i) through
(iv) below makes Y[u]j-[D]Y[u]j <= [a]P[u]j, Y[u]j-[D]Y[u]j <=
B[u]j/2, Y[u]k-[D]Y[u]k <= [a]P[u]k and Y[u]k-[D]Y[u]k <=
B[u]k/2
(i) [a]P[u]j < B[u]j/2
[D]Y[u]j = [z][D]B[u]j + (Y[u]j - [D]Y[u]j - [a](P[u]j -
[D]P[u]j))
[D]Y[u]k = [z][D]B[u]k + (1/[g])(Y[u]j - [D]Y[u]j -
[a](P[u]j - [D]P[u]j))
(ii) B[u]j/2 < [a]P[u]j
[D]Y[u]j = [z][D]B[u]j + (Y[u]j - [D]Y[u]j - 1/2
(B[u]j - [D]B[u]j))
[D]Y[u]k = [z][D]B[u]k + (1/[g])(Y[u]j - [D]Y[u]j - 1/2
(B[u]j - [D]B[u]j))
(iii) [a]P[u]k < B[u]k/2
[D]Y[u]k = [z][D]B[u]k + (Y[u]k - [D]Y[u]k - [a](P[u]k - [D]P[u]k))
[D]Y[u]j = [z][D]B[u]j + [g](Y[u]k - [D]Y[u]k - [a](P[u]k -
[D]P[u]k))
(iv) B[u]k/2 < [a]P[u]k
[D]Y[u]k = [z][D]B[u]k + (Y[u]k - [D]Y[u]k - 0/0 (X[x]x -
[X]X[x]x))
[D]Y[u]j = [z][D]B[u]j + [g](Y[u]k - [D]Y[u]k - 1/2 (B[u]k -
[D]B[u]k)),
unless [D]Y[u]j> U[u]j, [D]Y[u]j <- N[u]j, [D]Y[u]k > U[u]k or
[D]Y[u]k <- N[u]k; in which case,
(III) [D]Y[u]j and [D]Y[u]k shall be defined by whichever of (i)
through (iv) below makes -N[u]j <= [D]Y[u]j <= U[u]j and
-N[u]k, <= [D]Y[u]k <= U[u]k:
(i) [D]Y[u]j > U[u]j
[D]Y[u]j = U[u]j
[D]Y[u]k = [z][D]B[u]k+(1/[g])(U[u]j-[z][D]B[u]j)
` (ii) [D]Y[u]j <-N[u]j
[D]Y[u]j = - N[u]j
[D]Y[u]k=[z][D]B[u]k + (1/[g])(-N[u]j-[z][D]B[u]j)
(iii) [D]Y[u]k > U[u]k
3
[D]Y[u]k = U[u]k
[D]Y[u]k=[z][D]B[u]k + [g](U[u]k -[z][D]B[u]k)
(iv) [D]Y[u]k<- N[u]k
[D]Y[u]k = - N[u]k
[D]Y[u]k= [z][D]B[u]k + [g](-N[u]k - [z][D]B[u]k).
If there are payments being made on such Distribution Date pursuant to clause
(X) of paragraph (I)(c) of the definition of REMIC II Distribution Amount, apply
the definitions above with the proviso that the definitions under (I) will apply
if as so defined -N[u]j <= [D]Y[u]j <= U[u]j, -N[u]k <= [D]Y[u]k <= U[u]k,
Y[u]j - [D]Y[u]j <= [a]P[u]j, Y[u]j - [D]Y[u]k <= B[u]j/2, Y[u]k - [D]Y[u]k <=
[a]P[u]k and Y[u]k - [D]Y[u]k <= B[u]k/2; otherwise, the definitions under
(II) will apply if, as so defined, -N[u]j <= [D]Y[u]j <= U[u]j, and -N[u]k <=
[D]Y[u]k <= U[u]k; and, otherwise, the definitions under (III) will apply if,
as so defined, -N[u]j <= [D]Y[u]j <= U[u]j, and -N[u]k <= [D]Y[u]k <= U[u]k.
If none of the definitions in the preceding sentence produce values of [D]Y[u]j
and [D]Y[u]k so that -N[u]j <= [D]Y[u]j <= U[u]j, and -N[u]k <= [D]Y[u]k <=
U[u]k, then [D]Y[u]j and [D]Y[u]k shall be defined by whichever of the
following definitions minimizes |[g] - (Y[u]k - [D]Y[u]k) / (Y[u]j - [D]Y[u]j)|
(i) [D]Y[u]j = U[u]j, [D]Y[u]k = U[u]k
(ii) [D]Y[u]j = U[u]j, [D]Y[u]k = -N[u]k
(iii) [D]Y[u]j = -N[u]j, [D]Y[u]k = U[u]k
(iv) [D]Y[u]j = -N[u]j, [D]Y[u]k = -N[u]k
To calculate the initial balances for the Class Y-B, Class Y-A, Class
Z-B and Class Z-A Regular Interests, first calculate the Group BB Subordinate
Balance and the Group AA Subordinate Balance as of the Cut-Off Date. Then
calculate R according to the definition above. Calculate [g] according to the
definition above. Calculate P[u]k and P[u]j as the aggregate principal balance
of the Group BB Loans as of the Cut-Off Date reduced by the Class R-1 Principal
Balance as of the Cut-Off Date, if applicable, and the aggregate principal
balance of the Group AA Loans as of the Cut-Off Date reduced by the Class R-1
Principal Balance as of the Cut-Off Date, if applicable, respectively.
If 0.0005 [g] P[u]k <= 0.0005 P[u]j, Y[u]k = 0.0005 P[u]k
and Y[u]j = 0.0005 [g] P[u]k .
If 0.0005 [g] P[u]k > 0.0005 P[u]j, Y[u]j = 0.0005 P[u]j,
Y[u]k = 0.0005 P[u]j /[g] .
Then Z[u]k = P[u]k - Y[u]k and Z[u]j = P[u]j - Y[u]j.
In the execution copy of this Agreement, symbols are represented by the
following labels; in any conformed copy of this Agreement, such symbols may be
represented by characters other than numerals and the upper and lower case
letters of the alphabet and standard punctuation, including, without limitation,
Greek letters and mathematical symbols.
Example:
-------------------------------------------------------------------------------
[a] alpha
-------------------------------------------------------------------------------
[D] delta
-------------------------------------------------------------------------------
[g] gamma
-------------------------------------------------------------------------------
[z] zeta
-------------------------------------------------------------------------------
4
Exhibit A
CUSIP 929227 EL 6
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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-AR3 Portion of the Class I-A Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $731,527,600.00
Class I-A Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class I-A Principal Balance
as of the Cut-Off Date: $731,527,600.00
Cede & Co.
Registered Owner
A-1
Exhibit A
CUSIP 929227 EM 4
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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-AR3 Portion of the Class II-A Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $383,291,800.00
Class II-A Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class II-A Principal Balance
as of the Cut-Off Date: $383,291,800.00
Cede & Co.
Registered Owner
A-2
Exhibit A
CUSIP 929227 EN 2
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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 BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
THIS CERTIFICATE BY
A-3
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 UNDERWRITERS 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-AR3 Portion of the Class B-1 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $25,098,000.00
Class B-1 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-1 Principal Balance
as of the Cut-Off Date: $25,098,000.00
Cede & Co.
Registered Owner
A-4
Exhibit A
CUSIP 929227 EP 7
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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 BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
THIS CERTIFICATE BY
A-5
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 UNDERWRITERS 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-AR3 Portion of the Class B-2 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $11,089,900.00
Class B-2 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-2 Principal Balance
as of the Cut-Off Date: $11,089,900.00
Cede & Co.
Registered Owner
A-6
Exhibit A
CUSIP 929227 EQ 5
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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 BENEFICIAL HOLDER THEREOF RETROACTIVE TO THE DATE OF TRANSFER OF
THIS CERTIFICATE BY
A-7
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 UNDERWRITERS 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-AR3 Portion of the Class B-3 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $7,004,100.00
Class B-3 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-3 Principal Balance
as of the Cut-Off Date: $7,004,100.00
Cede & Co.
Registered Owner
A-8
Exhibit A
CUSIP 929227 FD 3
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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-AR3 Portion of the Class B-4 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $2,334,700.00
Class B-4 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-4 Principal Balance
as of the Cut-Off Date: $2,334,700.00
---------------------
Registered Owner
A-9
Exhibit A
CUSIP 929227 FE 1
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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-AR3 Portion of the Class B-5 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate: $2,334,700.00
Class B-5 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-5 Principal Balance
as of the Cut-Off Date: $2,334,700.00
---------------------
Registered Owner
A-10
Exhibit A
CUSIP 929227 FF 8
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
Class B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 November 9, 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-AR3 Portion of the Class B-6 Principal Balance as of the Cut-
Off Date Evidenced by this Certificate:
$4,669,483.57
Class B-6 Certificate Interest Rate: Variable
Cut-Off Date: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class B-6 Principal Balance
as of the Cut-Off Date: $4,669,483.57
---------------------
Registered Owner
A-11
Exhibit B
CUSIP 929227 ER 3
WaMu 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-AR3 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: Variable. 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: November 1, 2001
First Distribution Date: December 26, 2001
Last Scheduled Distribution Date: November 25, 2041
Class R Principal Balance as of the Cut-Off Date: $50.00
------------------
Registered Owner
Certificate No. _________
B-1
This Certificate does not represent an obligation of or interest in
Washington Mutual Mortgage Securities Corp. or any of its affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed by any agency
or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in (i) a 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, and (ii) a trust fund (the "REMIC II Trust Fund") whose assets consist of
interests in the REMIC I Trust Fund. 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 portions (if any) then distributable on the Certificates
of this Class of (i) the REMIC I Available Distribution Amount for such
Distribution Date, as specified in Section 4.01 of the Pooling Agreement and
(ii) the REMIC II Available Distribution Amount for such Distribution Date, as
specified in Section 4.04 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due notice
by the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any purpose.
B-2
IN WITNESS WHEREOF, the 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:
-------------------------------------
B-3
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as WaMu 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 and the REMIC II 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 II Trust Fund.
The Pooling Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices of the Certificate Registrar or the office maintained
by the Trustee in the City and State of New York, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of Authorized Denominations
evidencing the same Percentage Interest set forth hereinabove will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the portions of the
REMIC I Available Distribution Amount and the REMIC II Available Distribution
Amount distributable on this Class of Certificates, as requested by the Holder
surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent
of the Company, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
B-4
The obligations created by the Pooling Agreement and the trust 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.
B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within WaMu Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints___________________________________________________
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:
------------- ----------------------------------------------------
Signature Guaranteed
----------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate does
not represent an obligation of or an interest
in Washington Mutual Mortgage Securities
Corp. or any of its affiliates. Neither this
Certificate nor the underlying Mortgage Loans
are guaranteed by any agency or
instrumentality of the United States.
B-6
Exhibit C
[Reserved]
C-1
Exhibit D
Mortgage Loan Schedule
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 WA01A3
Re: Purchase of Washington Mutual Mortgage Securities Corp. WaMu
Mortgage Pass-Through Certificates Series 2001-AR3, 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 WA01A3
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 Mortgage
Securities Corp. WaMu Mortgage Pass-Through Certificates, Series 2001-AR3 (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 November 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 Mortgage Securities Corp. WaMu Mortgage Pass-Through
Certificates, Series 2001-AR3.
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;
G-1
(e) The Purchaser confirms that Washington Mutual has made available
to the Purchaser the opportunity to ask questions of, and receive answers from
Washington Mutual concerning the trust funds created pursuant to the Pooling
Agreement (the "Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that Washington Mutual possesses
or can acquire without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will continue to
comply, with the guidelines established by Thrift Bulletin 13a issued April 23,
1998, by the Office of Regulatory Activities of the Federal Home Loan Bank
System.
Section 3.Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates have not
been registered under the Act, or any state securities laws and that no transfer
may be made unless the Purchased Certificates are registered under the Act and
under applicable state law or unless an exemption from registration is
available. The Purchaser further understands that neither Washington Mutual nor
the Trust 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 (OTHER THAN THE R CERTIFICATES)
This Certificate does not represent an obligation of or interest in
Washington Mutual Mortgage Securities Corp. or any of its affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed by any agency
or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in a trust fund (the "REMIC II Trust Fund") whose
assets consist of 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 REMIC II Available Distribution Amount
for such Distribution Date then distributable on the Certificates of this Class,
as specified in Section 4.04 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.
WaMu MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as WaMu Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing certain
interests in the REMIC II 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 II 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 REMIC
II 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 WaMu 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 WA01A3
Re: Washington Mutual Mortgage Securities Corp. WaMu Mortgage
Pass-Through Certificates, Series 2001-AR3, 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 WaMu Mortgage
Pass-Through Certificates, Series 2001-AR3, Class R (the "Certificate"),
pursuant to Section 5.01 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of November 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
J-2
order to create or maintain the REMIC status of the REMIC I Trust Fund and the
REMIC II Trust Fund (the "Trust Funds").
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
J-3
Acknowledged to me that he executed the same as his free act and deed and the
free act and deed of the Owner.
Subscribed and sworn before me this ___ day of ______________, 20__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the day
of _____________________, 20__
J-4
Exhibit K
[Reserved]
K-1
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in Section 1.01 of the
Pooling and Servicing Agreement (the "Agreement") dated as of November 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 November 9, 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 November 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
Mortgage Securities Corp. WaMu Mortgage Pass-Through
Certificates, Series 2001-AR3
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as [Trustee] [Initial Custodian], 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)(ii), (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] [Initial Custodian] 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] [Initial
Custodian] 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] [Initial Custodian]
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 WA01A3
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
WaMu MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2001-AR3
(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 November 1, 2001, by and between
Washington Mutual and the Trustee, and relating to the Washington
Mutual Mortgage Securities Corp. WaMu Mortgage Pass-Through
Certificates, Series 2001-AR3).
N-1
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this _____ day of
__________________, 20__.
[Purchaser]
By:
----------------------------------------
Its:
N-2
Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he executed
the same as his/her free act and deed and as the free act and deed of the
Purchaser.
SUBSCRIBED and SWORN to before me this day of ____________, 20__.
-----------------------------------------
Notary Public
N-3
Exhibit O
BENEFIT PLAN AFFIDAVIT
Bankers Trust Company of California, N.A., as Trustee (the "Trustee")
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, XX 00000
Attn: Trust Administration WA01A3
Washington Mutual Mortgage Securities Corp. ("Washington Mutual")
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
WaMu MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2001-AR3
(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 November 1, 2001, by and between
Washington Mutual and the Trustee, and relating to the Washington
Mutual Mortgage Securities Corp. WaMu Mortgage Pass-Through
Certificates, Series 2001-AR3) 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
