SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
June 29, 1999
(date of earliest event reported)
PNC MORTGAGE SECURITIES CORP.
as Depositor and Master Servicer under a
Pooling and Servicing Agreement
dated as of June 1, 1999
providing for the issuance of
$268,748,626.90
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-6
Delaware 333-65911 94-2528990
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
Incorporation) Number)
75 NORTH FAIRWAY DRIVE
VERNON HILLS, ILLINOIS 60061
(Address of principal executive offices)
Registrant's telephone number, including area code:
(847) 549-6500
Item 1. Changes in Control of Registrant. Not applicable.
Item 2. Acquisition or Disposition of Assets. Not applicable.
Item 3. Bankruptcy or Receivership. Not applicable.
Item 4. Changes in Registrant's Certifying Accountant. Not
applicable.
Item 5. Other Events. Not applicable.
Item 6. Resignation of Registrant's Directors. Not applicable.
Item 7. Financial Statements and Exhibits.
The following exhibit is furnished herewith:
7.1 Pooling and Servicing Agreement between
PNC Mortgage Securities Corp., Depositor and
Master Servicer, and State Street Bank and Trust
Company, Trustee, dated as of June 1, 1999.
Item 8. Change in Fiscal Year. Not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Dated: July 13, 1999.
PNC MORTGAGE SECURITIES CORP.
(Registrant)
By: /s/ Thomas G. Lehmann
-----------------------------------
Thomas G. Lehmann
Vice President and General Counsel
(Authorized Officer)
EXHIBIT 7.1
<PAGE> 1
Page
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$268,748,626.90
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1999-6
Cut-Off Date: June 1, 1999
This Pooling and Servicing Agreement, dated and effective as
of June 1, 1999 (this "Agreement"), is executed by and between
PNC Mortgage Securities Corp., as Depositor and Master Servicer
(the "Company") and State Street Bank and Trust Company, 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 PNC
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 Certificates from the REMIC I Trust Fund as consideration for
its transfer to the Trust Fund of the PNC Mortgage Loans and
certain other assets and the deposit into the Certificate Account
of the Clipper Mortgage Loan Purchase Amount and will be the
owner of the REMIC I Regular Interests and the Class R-1
Certificates. Thereafter on the Closing Date, the Company will
acquire the Certificates (other than the Class R-1 Certificates)
from REMIC II as consideration for its transfer to REMIC II of
<PAGE> 2
the REMIC I Regular Interests and will be the owner of the
Certificates. The Company has duly authorized the execution and
delivery of this Agreement to provide for (i) the conveyance to
the Trustee of the PNC Mortgage Loans and the issuance to the
Company of the REMIC I Regular Interests and the Class R-1
Certificates representing in the aggregate the entire beneficial
ownership of REMIC I, (ii) the conveyance to the Trustee of the
Clipper Mortgage Loans pursuant to the Clipper Loan Sale
Agreement and (iii) the conveyance to the Trustee of the REMIC I
Regular Interests and the issuance to the Company of the
Certificates (other than the Class R-1 Certificates) 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 Certificates. 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 Class R-1 Certificates).
The Company is entering into this Agreement, and the Trustee is
accepting the three 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 May 25, 1999, and a Prospectus Supplement,
dated June 25, 1999, of the Company (together, the "Prospectus").
The Junior Subordinate Certificates have been offered for sale
pursuant to a Private Placement Memorandum, dated June 29, 1999.
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, initial Certificate Interest Rate, initial Class
Principal Balance, initial Class Notional Amount and Final
Maturity Date for the REMIC I Regular Interests and the
Certificates:
<TABLE>
<CAPTION>
REMIC I Interests
Class Designation Certificate Last
Scheduled
for each Type of Interest Initial Class
Distribution
Certificate Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<PAGE> 3
<S> <C> <C> <C> <C>
Class C-Y-1 Regular 6.750% $ 112,329.43 July 2029
Class C-Y-2 Regular 6.500% 21,853.79 July 2014
Class C-Z-1 Regular 6.750% 224,546,531.24 July 2029
Class C-Z-2 Regular 6.500% 43,689,301.44 July 2014
Class I-X-M Regular 6.750% (2) --------- July 2029
Class II-X-M Regular 6.500% (2) --------- July 2014
Class I-P-M Regular (3) 319,903.00 July 2029
Class II-P-M Regular (3) 58,658.00 July 2014
Class R-1+ Residual 6.750% 50.00 July 2029
*The Distribution Date in the month following the month the
latest maturing Mortgage Loan in the related Loan Group (or Loan
Groups, as applicable) matures.
+The Class R-1 Certificates are entitled to receive the
applicable Residual Distribution Amount and any Excess
Liquidation Proceeds.
(1)Interest distributed to the REMIC I Regular Interests (other
than the Class P-M Regular Interests, which shall not be entitled
to receive any distributions of interest) and the Class R-1
Certificates on each Distribution Date will have accrued at the
applicable per annum Certificate Interest Rate on the Class
Principal Balance or Class Notional Amount outstanding following
the immediately prior Distribution Date (or with respect to the
first Distribution Date, as of the Closing Date).
(2)Each Class of the Class X-M Regular Interests will accrue
interest on the related Class Notional Amount. The Class X-M
Regular Interests will not be entitled to receive any
distributions of principal.
(3)The Class P-Mortgage Regular Interests will not be entitled to
receive any distributions of interest.
</TABLE>
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 Certificates will be designated the sole class
of residual interest in REMIC I, for purposes of the REMIC
Provisions.
<TABLE>
<CAPTION>
REMIC II Interests
<PAGE> 4
Class Designation Certificate Last
Scheduled
for each Type of Interest Initial Class
Distribution
Certificate Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
Class I-A-1 Regular 7.250% $ 150,000,000.00 July 2029
Class I-A-2 Regular 7.250% 22,447,000.00 July 2029
Class I-A-3 Regular (2) 11,111,111.00 July 2029
Class I-A-4 Regular 6.750% 20,550,142.00 July 2029
Class I-A-5 Regular 7.500% 3,946,000.00 July 2029
Class I-A-6 Regular 7.500% 4,471,000.00 July 2029
Class I-A-7 Regular 7.500% 989,000.00 July 2029
Class I-A-8 Regular (2) 1,045,111.00 July 2029
Class I-A-9 Regular (2) 1,662,741.00 July 2029
Class II-A-1 Regular 6.500% 42,069,787.00 July 2029
Class I-X Regular 6.750% (3) ----------- July 2029
Class II-X Regular 6.500% (3) ----------- July 2029
Class I-P Regular (2) 319,903.00 July 2029
Class II-P Regular (2) 58,658.00 July 2029
Class C-B-1 Regular Variable (4) 4,703,100.00 July 2029
Class C-B-2 Regular Variable (4) 2,284,364.00 July 2029
Class C-B-3 Regular Variable (4) 940,620.00 July 2029
Class C-B-4 Regular Variable (4) 940,620.00 July 2029
Class C-B-5 Regular Variable (4) 537,497.00 July 2029
Class C-B-6 Regular Variable (4) 671,872.90 July 2029
Class R-2+ Residual 6.750% 50.00 July 2029
*The Distribution Date in the month following the month the
latest maturing Mortgage Loan matures.
<PAGE> 5
+The Class R-2 Certificates are entitled to receive the
applicable Residual Distribution Amount.
(1) Interest distributed to the Certificates (other than the
Class P, Class I-A-3, Class I-A-8 and Class I-A-9 Certificates,
which will not be entitled to receive any distributions of
interest) on each Distribution Date will have accrued at the
applicable per annum Certificate Interest Rate on the Class
Principal Balance or Class Notional Amount outstanding following
the immediately prior Distribution Date (or, with respect to the
first Distribution Date, as of the Closing Date).
(2) The Class P, Class I-A-3, Class I-A-8 and Class I-A-9
Certificates shall not be entitled to receive any distributions
of interest.
(3)Each of the Class X Certificates shall accrue interest on the
related Class Notional Amount. The Class X Certificates shall
not be entitled to receive any distributions of principal.
(4)The Certificate Interest Rate on the Group C-B Certificates
shall equal, on any Distribution Date, the weighted average of
the Certificate Interest Rates on the Class C-Y-1 and Class C-Y-2
Regular Interests.
</TABLE>
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-1 and Class R-2
Certificates) will be designated regular interests in REMIC II,
and the Class R-2 Certificates 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 $268,748,627.39 and the
Certificates have an Aggregate Certificate Principal Balance of
$268,748,626.90.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized and
existing under and by virtue of the laws of the State of Delaware
and has full corporate power and authority to enter into this
Agreement and to undertake the obligations undertaken by it
herein;
WHEREAS, the Company is the owner of the PNC 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 (i) create
a trust (the "Trust Fund") to hold the PNC Mortgage Loans, the
Clipper Mortgage Loans and certain other property and (ii) sell
undivided beneficial ownership interests in REMIC I and in order
to do so is selling the REMIC I Regular Interests issued
hereunder as hereinafter provided;
<PAGE> 6
WHEREAS, the Company has been duly authorized to (i) create
a trust ("REMIC II") to hold the REMIC I Regular Interests and
(ii) sell undivided beneficial ownership interests in REMIC II
and in order to do so is selling the Certificates issued
hereunder as hereinafter provided; and
WHEREAS, the Trustee is a Massachusetts trust company duly
organized and existing under the laws of The Commonwealth of
Massachusetts and has full power and authority to enter into this
Agreement.
NOW, THEREFORE, in order to declare the terms and conditions
upon which the Certificates are, and are to be, authenticated,
issued and delivered, and in consideration of the premises and of
the purchase and acceptance of the Certificates by the Holders
thereof, the Company covenants and agrees with the Trustee, for
the equal and proportionate benefit of the respective Holders
from time to time of the Certificates, as follows:
ARTICLE I.
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
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 the mortgage originator in connection with its
origination of each Mortgage Loan, or with respect to certain
Mortgage Loans originated to refinance mortgage debt, the
appraisal made by or for the mortgage originator in connection
with the origination of such mortgage debt.
Assignment of Proprietary Lease: With respect to a
Cooperative Loan, the assignment or mortgage of the related
Cooperative Lease from the Mortgagor to the originator of the
Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by
the Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates
(other than the Class X, Class I-A-2, Class I-A-5, Class I-A-6,
Class I-A-7 and Residual Certificates), an initial Certificate
Principal Balance equal to $25,000 and multiples of $1 in excess
thereof, except that one Certificate of each Class of the Junior
Subordinate Certificates may be issued in an amount that is not
<PAGE> 7
an integral multiple of $1. With respect to the Class I-A-2,
Class I-A-5, Class I-A-6 and Class I-A-7 Certificates, an initial
Certificate Principal Balance equal to $1,000 and multiples of $1
in excess thereof. With respect to the Class X Certificates, a
Class Notional Amount as of the Cut-Off Date equal to $100,000
and multiples of $1 in excess thereof, except that one
Certificate of each Class of Class X Certificates may be offered
in a different amount. With respect to each Class of the Residual
Certificates, one Certificate with a Percentage Interest equal to
0.01% and one Certificate with a Percentage Interest equal to
99.99%.
Bankruptcy Coverage: $100,000 less (a) any scheduled or
permissible reduction in the amount of Bankruptcy Coverage
pursuant to 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.
Book-Entry Certificates: The Class A, Class X and Class P
Certificates, beneficial ownership and transfers of which shall
be made through book entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a
day on which banking institutions in Chicago, Illinois, Boston,
Massachusetts or New York, New York 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.
<PAGE> 8
Buydown Fund: A fund provided by the originator of a
Mortgage Loan or another Person with respect to a Buydown Loan
which provides an amount sufficient to subsidize regularly
scheduled principal and interest payments due on such Buydown
Loan for a period. Buydown Funds may be (i) funded at the par
values of future payment subsidies, or (ii) funded in an amount
less than the par values of future payment subsidies, and
determined by discounting such par values in accordance with
interest accruing on such amounts, in which event they will be
deposited in an account bearing interest. Buydown Funds may be
held in a separate Buydown Fund Account or may be held in a
Custodial Account for P&I or a Custodial Account for Reserves and
monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created
and maintained pursuant to Section 3.02 (a) with the corporate
trust department of the Trustee or another financial institution
approved by the Master Servicer, (b) within FDIC insured accounts
(or other accounts with comparable insurance coverage acceptable
to the Rating Agencies) created, maintained and monitored by a
Servicer or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution. Such account or
accounts may be non-interest bearing or may bear interest. In the
event that a Buydown Fund Account is established pursuant to
clause (b) of the preceding sentence, amounts held in such
Buydown Fund Account shall not exceed the level of deposit
insurance coverage on such account; accordingly, more than one
Buydown Fund Account may be established.
Buydown Loan: A Mortgage Loan for which the Mortgage
Interest Rate has been subsidized through a Buydown Fund provided
at the time of origination of such Mortgage Loan.
Certificate: Any one of the Group I, Group II, Group C-B or
Residual 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
<PAGE> 9
Account attributable to each of such Loan Groups shall be
accounted for separately. Funds in the Certificate Account may
be invested in Eligible Investments pursuant to Section 3.04(b)
and reinvestment earnings thereon shall be paid to the Master
Servicer as additional servicing compensation. Funds deposited in
the Certificate Account (exclusive of the Master Servicing Fee)
shall be held in trust for the Certificateholders and for the
uses and purposes set forth in Section 2.01, Section 3.04,
Section 3.05, Section 4.01 and Section 4.04.
Certificate Group: The Group I, Group II or Group C-B
Certificates, as applicable.
Certificateholder or Holder: With respect to the
Certificates, the person in whose name a Certificate is
registered in the Certificate Register, except that, solely for
the purposes of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Company, the Master
Servicer or any affiliate thereof shall be deemed not to be
outstanding and the Percentage Interest evidenced thereby shall
not be taken into account in determining whether the requisite
percentage of Percentage Interests necessary to effect any such
consent has been obtained; provided, that the Trustee may
conclusively rely upon an Officer's Certificate to determine
whether any Person is an affiliate of the Company or the Master
Servicer. 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 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
Certificates 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 Certificates
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 Residual Certificates, as applicable, shall
be designated as a separate Class, and which, in the case of the
Certificates, shall be set forth in the applicable forms of
<PAGE> 10
Certificates attached hereto as Exhibits A and B. Each Class of
REMIC I Regular Interests and the Class R-1 Certificates 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 Certificates (other than the Class R-1
Certificates) 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 Group I-A and Class II-A-1
Certificates.
Class B Certificates: The Group C-B Certificates.
Class C-B-1 Certificates: The Certificates designated as
"Class C-B-1" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-B-2 Certificates: The Certificates designated as
"Class C-B-2" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-B-3 Certificates: The Certificates designated as
"Class C-B-3" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-B-4 Certificates: The Certificates designated as
"Class C-B-4" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-B-5 Certificates: The Certificates designated as
"Class C-B-5" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-B-6 Certificates: The Certificates designated as
"Class C-B-6" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-Y Regular Interests: The Class C-Y-1 and Class C-Y-2
Regular Interests.
Class C-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.
<PAGE> 11
Class C-Y-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Y-1
Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class C-Y-1
Regular Interest on such Distribution Date.
Class C-Y-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 C-Y-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Y-2
Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class C-Y-2
Regular Interest on such Distribution Date.
Class C-Y Principal Reduction Amounts: For any Distribution
Date, the amounts by which the Class Principal Balances of the
Class C-Y-1 and Class C-Y-2 Regular Interests respectively will
be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding formulas the following
symbols shall have the meanings set forth below:
PIB = the Group I Subordinate Balance after the allocation of
Realized Losses and distributions of principal on such
Distribution Date.
PIIB = the Group II Subordinate Balance after the allocation
of Realized Losses and distributions of principal on such
Distribution Date.
R = the Class C-B Certificate Interest Rate = (6.75%PIB +
6.50%PIIB)/(PIB + PIIB)
CY1 = the Class C-Y-1 Principal Balance after distributions
on the prior Distribution Date.
CY2 = the Class C-Y-2 Principal Balance after distributions
on the prior Distribution Date.
DeltaCY1 = the Class C-Y-1 Principal Reduction Amount.
DeltaCY2 = the Class C-Y-2 Principal Reduction Amount.
P1 = the aggregate Class Principal Balance of the Class C-Y-
1 and Class C-Z-1 Regular Interests after distributions on
the prior Distribution Date.
<PAGE> 12
P2 = the aggregate Class Principal Balance of the Class C-Y-
2 and Class C-Z-2 Regular Interests after distributions on
the prior Distribution Date.
DeltaP1 = the aggregate of the Class C-Y-1 and Class C-Z-1
Principal Reduction Amounts.
DeltaP2= the aggregate of the Class C-Y-2 and Class C-Z-2
Principal Reduction Amounts.
alpha = .0005
gamma1 = (R u 6.50%)/(6.75% - R). gamma1 is a non-negative
number unless its denominator is zero, in which event it is
undefined.
If gamma1 is zero, DeltaCY1 = CY1 and DeltaCY2 = (CY2/P2)DeltaP2.
If gamma1 is undefined, DeltaCY2 = CY2, DeltaCY1 =
(CY1/P1)DeltaP1.
In the remaining situations, DeltaCY1 and DeltaCY2 shall be
defined as follows:
1. If CY1 - alpha(P1 - DeltaP1) 0, CY2- alpha(P2 - DeltaP2)
0, and gamma1(P2 - DeltaP2) < (P1 - DeltaP1), DeltaCY1 = CY1 -
alphagamma1(P2 - DeltaP2) and DeltaCY2 = CY2 - alpha(P2 -
DeltaP2).
2. If CY1 - alpha(P1 - DeltaP1) 0, CY2 - alpha(P2 - DeltaP2)
0, and gamma1(P2 - DeltaP2) (P1 - DeltaP1),
DeltaCY1 = CY1 - alpha(P1 - DeltaP1) and
DeltaCY2 = CY2 - (alpha/gamma1)(P1 - DeltaP1).
3. If CY1 - alpha(P1 - DeltaP1) < 0, CY2 - alpha(P2 - DeltaP2)
0, and CY2 - alpha(P2 - DeltaP2) CY2 - (CY1/gamma1),
DeltaCY1 = CY1 - alphagamma1(P2 - DeltaP2) and
DeltaCY2 = CY2 - alpha(P2 - DeltaP2).
4. If CY1 - alpha(P1 - DeltaP1) < 0, CY2 - (CY1/gamma1) 0, and
CY2 - alpha(P2 - DeltaP2) CY2 - (CY1/gamma1), DeltaCY1 = 0 and
DeltaCY2 = CY2 - (CY1/gamma1).
5. If CY2 - alpha(P2 - DeltaP2) < 0, CY2 - (CY1/gamma1) < 0,
and CY1 - alpha(P1 - DeltaP1) CY1 - (gamma1CY2),
DeltaCY1 = CY1 - (gamma1CY2) and DeltaCY2 = 0.
6. If CY2 - alpha(P2 - DeltaP2) < 0, CY1 - alpha(P1 - DeltaP1)
0, and CY1 - alpha(P1 - DeltaP1) CY1 - (gamma1CY2),
DeltaCY1 = CY1 - alpha(P1 - DeltaP1) and
DeltaCY2 = CY2 - (alpha/gamma1)(P1 - DeltaP1).
<PAGE> 13
The purpose of the foregoing definitional provisions together
with the related provisions allocating Realized Losses and
defining the Class C-Y and Class C-Z Principal Distribution
Amounts is to accomplish the following goals in the following
order of priority:
1. Making the ratio of CY1 to CY2 equal to gamma1 after taking
account of the allocation of Realized Losses and the
distributions that will be made through end of the Distribution
Date to which such provisions relate and assuring that the
Principal Reduction Amount for each of the Class C-Y-1, Class C-Y-
2, Class C-Z-1 and Class C-Z-2 Regular Interests is greater than
or equal to zero for such Distribution Date;
2. Making the Class C-Y-1 Principal Balance less than or equal
to 0.0005 of the sum of the Class C-Y-1 and Class C-Z-1 Principal
Balances and the Class C-Y-2 Principal Balance less than or equal
to 0.0005 of the sum of the Class C-Y-2 and Class C-Z-2 Principal
Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of
the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is CY2
and whose denominator is the sum of CY2 and the Class C-Z-2
Principal Balance and (b) the fraction whose numerator is CY2 and
whose denominator is the sum of CY2 and the Class C-Z-1 Principal
Balance as large as possible while remaining less than or equal
to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class C-Y Principal Reduction Amounts to accomplish
both of goals 1 and 2 above, the amounts thereof should be
adjusted so as to accomplish such goals within the requirement
that each Class C-Y Principal Reduction Amount must be less than
or equal to the sum of (a) the principal portion of Realized
Losses to be allocated on the related Distribution Date for the
related Loan Group remaining after the allocation of such
Realized Losses to the related Class P-M Regular Interest and (b)
the remainder of the REMIC I Available Distribution Amount for
the related Loan Group after reduction thereof by the
distributions to be made on such Distribution Date (i) to the
related Class P-M Regular Interest, (ii) to the related Class X-M
Regular Interest and (iii) in respect of interest on the related
Class C-Y and Class C-Z Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such
adjustment as is necessary shall be made to accomplish goal 1
within such requirement. In the event of any conflict among the
provisions of the definition of the Class C-Y Principal Reduction
Amounts, such conflict shall be resolved on the basis of the
goals and their priorities set forth above within the requirement
set forth in the preceding sentence.
In the execution copy of this Agreement, symbols are
represented by the following labels; in any conformed copy of
<PAGE> 14
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:
Greek letter alpha alpha
Greek letter delta Delta
Greek letter gamma gamma
To calculate the initial Class Principal Balances for the
Class C-Y-1, Class C-Y-2, Class C-Z-1 and Class C-Z-2 Regular
Interests, first calculate the Group I and Group II Subordinate
Balances as of the Cut-Off Date. Then calculate R according to
the definition above. Calculate gamma1 according to the
definition above. Calculate P1 and P2 as the aggregate Class
Principal Balance of the Group I Certificates reduced by the
Class I-P Principal Balance and the aggregate Class Principal
Balance of the Group II Certificates reduced by the Class II-P
Principal Balance, respectively.
If 0.0005 gamma1 P2 0.0005 P1, CY2 = 0.0005 P2, and
CY1 = 0.0005 gamma1 P2.
If 0.0005 gamma1 P2 > 0.0005 P1, CY1 = 0.0005 P1 and
CY2 = 0.0005 P1/gamma1.
Then Z1 = P1 - CY1 and Z2 = P2 - CY2.
Class C-Z Regular Interests: The Class C-Z-1 and Class C-Z-2
Regular Interests.
Class C-Z Principal Reduction Amounts: For any Distribution
Date, the amounts by which the Class Principal Balances of the
Class C-Z-1 and Class C-Z-2 Regular Interests, respectively, will
be reduced on such Distribution Date by the allocation of
Realized Losses and the distribution of principal, which shall be
in each case the excess of (A) the sum of (x) the excess of the
REMIC I Available Distribution Amount for the related Loan Group
(i.e. the "related Loan Group" for the Class C-Z-1 Regular
Interest is Loan Group I, and the "related Loan Group" for the
Class C-Z-2 Regular Interest is Loan Group II) over the sum of
the amounts thereof distributable (i) to the related Class P-M
Regular Interest, (ii) to the related Class X-M Regular Interest,
(iii) in respect of interest on the related Class C-Y and Class C-
Z Regular Interests and (iv) to the Class R-1 Certificates (in
the case of Loan Group I) and (y) the excess of the Realized
Losses allocable to principal for the related Loan Group over the
portion of such Realized Losses allocable to the related Class P-
M Regular Interest over (B) the Class C-Y Principal Reduction
Amount for the related Loan Group.
<PAGE> 15
Class C-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 C-Z-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Z-1
Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class C-Z-1
Regular Interest on such Distribution Date.
Class C-Z-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 C-Z-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Z-2
Principal Reduction Amount for such Distribution Date over the
principal portion of Realized Losses allocated to the Class C-Z-2
Regular Interest on such Distribution Date.
Class I-A-1 Certificates: The Certificates designated as
"Class I-A-1" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-2 Certificates: The Certificates designated as
"Class I-A-2" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-3 Certificates: The Certificates designated as
"Class I-A-3" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-4 Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in July 2004, 0%; and
for the Distribution Date occurring in July 2004 and any
Distribution Date thereafter, the Class I-A-4 Percentage.
Class I-A-4 Certificates: The Certificates designated as
"Class I-A-4" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-4 Liquidation Amount: The aggregate, for each
Group I Loan which became a Liquidated Mortgage Loan during the
calendar month preceding the month of the Distribution Date, of
the lesser of (i) the Class I-A-4 Percentage of the Principal
Balance of such Mortgage Loan (exclusive of the Class I-P
Fraction thereof, with respect to any Class I-P Mortgage Loan)
and (ii) the Class I-A-4 Percentage of the Liquidation Principal
with respect to such Mortgage Loan.
<PAGE> 16
Class I-A-4 Percentage: For any Distribution Date, the
lesser of (a) 100% and (b) the Class I-A-4 Principal Balance
divided by the aggregate Principal Balance of the Group I Loans
(less the Class I-P Fraction of each Class I-P Mortgage Loan), in
each case immediately prior to such Distribution Date.
Class I-A-4 Prepayment Percentage: For any Distribution
Date, the product of the Class I-A-4 Percentage and the Step Down
Percentage.
Class I-A-4 Priority Amount: For any Distribution Date, the
sum of (i) the Class I-A-4 Adjusted Percentage of the Principal
Payment Amount for Loan Group I (exclusive of the portion thereof
attributable to principal distributions to the Class I-P
Certificates pursuant to clause (I)(a)(i) of the definition of
"REMIC II Distribution Amount"), (ii) the Class I-A-4 Prepayment
Percentage of the Principal Prepayment Amount for Loan Group I
(exclusive of the portion thereof attributable to principal
distributions to the Class I-P Certificates pursuant to clause
(I)(a)(i) of the definition of "REMIC II Distribution Amount")
and (iii) the Class I-A-4 Liquidation Amount.
Class I-A-5 Certificates: The Certificates designated as
"Class I-A-5" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-6 Certificates: The Certificates designated as
"Class I-A-6" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-7 Certificates: The Certificates designated as
"Class I-A-7" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-8 Certificates: The Certificates designated as
"Class I-A-8" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-A-9 Certificates: The Certificates designated as
"Class I-A-9" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-P Certificates: The Certificates designated as
"Class I-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-P Fraction: For each Class I-P Mortgage Loan, a
fraction, the numerator of which is 6.750% less the Pass-Through
Rate on such Class I-P Mortgage Loan and the denominator of which
is 6.750%.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-
<PAGE> 17
Through Rate of less than 6.750% per annum.
Class I-P-M 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 I-X Certificates: The Certificates designated as
"Class I-X" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-X Notional Amount: With respect to any Distribution
Date, the product of (x) the aggregate scheduled principal
balance, as of the second preceding Due Date after giving effect
to payments scheduled to be received as of such Due Date, whether
or not received (and after giving effect to Principal
Prepayments, Monthly P&I Advances and the principal portion of
Realized Losses applied prior to such Due Date), or with respect
to the initial Distribution Date, as of the Cut-Off Date, of the
Group I Premium Rate Mortgage Loans and (y) a fraction, the
numerator of which is the weighted average of the Stripped
Interest Rates for the Group I Premium Rate Mortgage Loans as of
such Due Date and the denominator of which is 6.750%.
Class I-X-M 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 II-A-1 Certificates: The Certificates designated as
"Class II-A-1" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class II-P Certificates: The Certificates designated as
"Class II-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class II-P Fraction: For each Class II-P Mortgage Loan, a
fraction, the numerator of which is 6.500% less the Pass-Through
Rate on such Class II-P Mortgage Loan and the denominator of
which is 6.500%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-
Through Rate of less than 6.500% per annum.
Class II-P-M 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 II-X Certificates: The Certificates designated as
"Class II-X" on the face thereof in substantially the form
<PAGE> 18
attached hereto as Exhibit A.
Class II-X Notional Amount: With respect to any Distribution
Date, the product of (x) the aggregate scheduled principal
balance, as of the second preceding Due Date after giving effect
to payments scheduled to be received as of such Due Date, whether
or not received (and after giving effect to Principal
Prepayments, Monthly P&I Advances and the principal portion of
Realized Losses applied prior to such Due Date), or with respect
to the initial Distribution Date, as of the Cut-Off Date, of the
Group II Premium Rate Mortgage Loans and (y) a fraction, the
numerator of which is the weighted average of the Stripped
Interest Rates for the Group II Premium Rate Mortgage Loans as of
such Due Date and the denominator of which is 6.500%.
Class II-X-M 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 Notional Amount: With respect to any of the Class X
Certificates and the Class X-M Regular Interests, the related
notional amount for any such Class, as specified herein (i.e. the
"Class Notional Amount" for each of the Class I-X Certificates
and the Class I-X-M Regular Interest is the Class I-X Notional
Amount).
Class P Certificates: The Class I-P and Class II-P
Certificates.
Class P Fraction: The Class I-P or Class II-P Fraction, as
applicable.
Class P Mortgage Loan: Any of the Class I-P or Class II-P
Mortgage Loans.
Class P-M Regular Interests: The Class I-P-M and Class II-P-
M Regular Interests.
Class Principal Balance: For any Class of Certificates and
for any Class of REMIC I Regular Interests, the applicable
initial Class Principal Balance therefor set forth in the
Preliminary Statement hereto, corresponding to the rights of such
Class in payments of principal due to be passed through to the
Certificateholders or the Holders of the REMIC I 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 REMIC I Regular Interests of such Class and
(y) the portion of Realized Losses allocated to the Class
Principal Balance of such Class pursuant to the definition of
"Realized Loss" with respect to a given Distribution Date. For
<PAGE> 19
any Distribution Date, the reduction of the Class Principal
Balance of any Class of Certificates and REMIC I Regular
Interests pursuant to the definition of "Realized Loss" shall be
deemed effective prior to the determination and distribution of
principal on such Class pursuant to the definitions of "REMIC I
Distribution Amount" and "REMIC II Distribution Amount."
Notwithstanding the foregoing, any amounts distributed in respect
of losses pursuant to paragraph (I)(c)(i) or (I)(c)(ii) of the
definition of "REMIC II Distribution Amount" shall not cause a
further reduction in the Class Principal Balances of the Class P
Certificates and any amounts distributed in respect of losses
pursuant to paragraph (I)(c)(xxi) of the definition of "REMIC II
Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of the Group C-B Certificates. The
Class Principal Balance for the Class I-A-1 Certificates shall be
referred to as the "Class I-A-1 Principal Balance", the Class
Principal Balance for the Class C-Y-1 Regular Interests shall be
referred to as the "Class C-Y-1 Principal Balance" and so on.
The Class Principal Balances for the Class X Certificates and the
Class X-M Regular Interests shall each be zero.
Class X Certificates: The Class I-X and Class II-X
Certificates.
Class X-M Regular Interests: The Class I-X-M and Class II-X-
M Regular Interests.
Class R-1 Certificates: The Certificates designated as
"Class R-1" on the face thereof in substantially the form
attached hereto as Exhibit B, which have been designated as the
single class of "residual interest" in REMIC I pursuant to
Section 2.01.
Class R-2 Certificates: The Certificates designated as
"Class R-2" on the face thereof in substantially the form
attached hereto as Exhibit B, which have been designated as the
single class of "residual interest" in REMIC II pursuant to
Section 2.05.
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.
Clipper: Clipper Receivables Corporation, a Delaware
corporation.
Clipper Loan Sale Agreement: The Loan Sale Agreement,
substantially in the form of Exhibit O hereto, to be entered into
between Clipper and the Trustee pursuant to Section 2.01.
Clipper Mortgage Loans: The Mortgage Loans identified as
Clipper Mortgage Loans on the Mortgage Loan Schedule and conveyed
<PAGE> 20
by Clipper to the Trustee pursuant to the Clipper Loan Sale
Agreement.
Clipper Mortgage Loan Purchase Amount: The amount of
$143,002,634.26, which shall be deposited by the Company into the
Certificate Account on the Closing Date and withdrawn therefrom
and applied by the Trustee in payment of the purchase price for
the Clipper Mortgage Loans pursuant to Section 2.01.
Closing Date: June 29, 1999, which is the date of settlement
of the sale of the Certificates to the original purchasers
thereof.
Code: The Internal Revenue Code of 1986, as amended.
Company: PNC 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.
Cooperative: A private, cooperative housing corporation
organized under the laws of, and headquartered in, the States of
New York, New Jersey or Washington which owns or leases land and
all or part of a building or buildings located in any such state,
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
<PAGE> 21
power (or other similar instrument), and ancillary thereto, a
recognition agreement between the Cooperative and the originator
of the Cooperative Loan, 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 Commonwealth of Massachusetts, 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 225 Franklin Street,
Boston, MA 02110, Attention: Corporate Trust PNC 1999-6.
Credit Support Depletion Date: The first Distribution Date
on which the aggregate Class Principal Balance of the Group C-B
Certificates has been or will be reduced to zero as a result of
principal distributions thereon and the allocation of Realized
Losses on such Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan,
made by or on behalf of the related Mortgagor, other than a
Monthly Payment, a Prepaid Monthly Payment or a Payoff, which is
applied to reduce the outstanding principal balance of the
Mortgage Loan.
Curtailment Shortfall: With respect to any Curtailment
applied with a Monthly Payment other than a Prepaid Monthly
Payment, an amount equal to one month's interest on such
Curtailment at the applicable Pass-Through Rate on such Mortgage
Loan.
Custodial Account for P&I: The Custodial Account for
principal and interest established and maintained by each
Servicer pursuant to its Selling and Servicing Contract and
caused by the Master Servicer to be established and maintained
pursuant to Section 3.02 (a) with the corporate trust department
of the Trustee or another financial institution approved by the
Master Servicer such that the rights of the Master Servicer, the
Trustee 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
<PAGE> 22
monitored by a Servicer or (c) in a separate non-trust account
without FDIC or other insurance in an Eligible Institution. In
the event that a Custodial Account for P&I is established
pursuant to clause (b) of the preceding sentence, amounts held in
such Custodial Account for P&I shall not exceed the level of
deposit insurance coverage on such account; accordingly, more
than one Custodial Account for P&I may be established. Any amount
that is at any time not protected or insured in accordance with
the first sentence of this definition of "Custodial Account for
P&I" shall promptly be withdrawn from such Custodial Account for
P&I and be remitted to the Investment Account.
Custodial Account for Reserves: The Custodial Account for
Reserves established and maintained by each Servicer pursuant to
its Selling and Servicing Contract and caused by the Master
Servicer to be established and maintained pursuant to Section
3.02 (a) with the corporate trust department of the Trustee or
another financial institution approved by the Master Servicer
such that the rights of the Master Servicer, the Trustee and the
Certificateholders thereto shall be fully protected against the
claims of any creditors of the applicable Servicer and of any
creditors or depositors of the institution in which such account
is maintained, (b) within FDIC insured accounts (or other
accounts with comparable insurance coverage acceptable to the
Rating Agencies) created, maintained and monitored by a Servicer
or (c) in a separate non-trust account without FDIC or other
insurance in an Eligible Institution. In the event that a
Custodial Account for Reserves is established pursuant to clause
(b) of the preceding sentence, amounts held in such Custodial
Account for Reserves shall not exceed the level of deposit
insurance coverage on such account; accordingly, more than one
Custodial Account for Reserves may be established. Any amount
that is at any time not protected or insured in accordance with
the first sentence of this definition of "Custodial Account for
Reserves" shall promptly be withdrawn from such Custodial Account
for Reserves and be remitted to the Investment Account.
Custodial Agreement: The agreement, if any, among the Master
Servicer, the Trustee and a Custodian providing for the
safekeeping of the Mortgage Files on behalf of the
Certificateholders.
Custodian: A custodian (other than the Trustee) which is not
an affiliate of the Master Servicer or the Company and which is
appointed pursuant to a Custodial Agreement. Any Custodian so
appointed shall act as agent on behalf of the Trustee, and shall
be compensated by the Trustee at no additional charge to the
Master Servicer. The Trustee shall remain at all times
responsible under the terms of this Agreement, notwithstanding
the fact that certain duties have been assigned to a Custodian.
Cut-Off Date: June 1, 1999.
<PAGE> 23
DCR: Duff and Phelps Credit Rating Co., provided that at any
time it be a Rating Agency.
Definitive Certificates: Certificates in definitive, fully
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated
June 28, 1999 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.
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 July 26, 1999. The "related Due Date" for
any Distribution Date is the Due Date immediately preceding such
Distribution Date.
DLJ: Donaldson, Lufkin & Jenrette Securities Corporation.
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
<PAGE> 24
Servicing Contract requires the Servicer to provide the Master
Servicer with written notice on the Business Day following the
date on which the Servicer determines that such Servicer's short-
term debt and unsecured long-term debt ratings fail to meet the
requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or
securities listed below in which funds deposited in the
Investment Account, the Certificate Account, the Custodial
Account for P&I and the Custodial Account for Reserves may be
invested:
(i) Obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof
when such obligations are backed by the full faith and credit of
the United States;
(ii) Repurchase agreements on obligations described in clause (i)
of this definition of "Eligible Investments", provided that the
unsecured obligations of the party (including the Trustee in its
commercial capacity) agreeing to repurchase such obligations have
at the time one of the two highest short term debt ratings of
the Rating Agencies and provided that such repurchaser's
unsecured long term debt has one of the two highest unsecured
long term debt ratings of the Rating Agencies;
(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,
<PAGE> 25
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;
(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; and
(viii) Such other investments the investment in which will
not, as evidenced by a letter from each of the Rating Agencies,
result in the downgrading or withdrawal of the Ratings;
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.
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.
Final Maturity Date: With respect to each Class of the
REMIC I Regular Interests and the Certificates, the date set
forth in the table contained in the Preliminary Statement hereto.
Fannie Mae: The entity formerly known as the Federal
<PAGE> 26
National Mortgage Association, or any successor thereto.
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; 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.
The Fraud Coverage may be reduced upon written confirmation
from the Rating Agencies that such reduction will not adversely
affect the then current ratings assigned to the Certificates by
the Rating Agencies.
Fraud Loss: The occurrence of a loss on 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.
Freddie Mac: The entity formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
Group C-B Certificates: The Class C-B-1, Class C-B-2, Class
C-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates.
Group C-B Percentage: At any time, the aggregate Class
Principal Balance of the Group C-B Certificates divided by the
then outstanding aggregate Principal Balance of the Mortgage
Loans.
Group I Certificates: The Group I-A, Class I-P and Class I-X
Certificates.
Group I Loans: The Mortgage Loans designated on the
<PAGE> 27
Mortgage Loan Schedule as Group I Loans.
Group I Premium Rate Mortgage Loans: The Group I Loans
having Pass-Through Rates in excess of 6.750% per annum.
Group I Senior Liquidation Amount: The aggregate, for each
Group I Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of: (i) the Group I Senior Percentage
of the Principal Balance of such Mortgage Loan (exclusive of the
Class I-P Fraction thereof, with respect to any Class I-P
Mortgage Loan) and (ii) the Group I Senior Prepayment Percentage
of the Liquidation Principal with respect to such Mortgage Loan.
Group I Senior Percentage: With respect to any Distribution
Date, the lesser of (i) 100% and (ii) the aggregate Class
Principal Balance of the Group I-A and Residual Certificates
divided by the aggregate Principal Balance of the Group I Loans
(less the Class I-P Fraction of each Class I-P Mortgage Loan), in
each case immediately prior to the Distribution Date.
Group I Senior Prepayment Percentage or Group II Senior
Prepayment Percentage: (i) On any Distribution Date occurring
before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, each of the Group I
Senior Prepayment Percentage and the Group II Senior Prepayment
Percentage shall equal 100%; (ii) on any other Distribution Date
on which the Group I Senior Percentage for such Distribution Date
exceeds the Group I Senior Percentage as of the Closing Date or
the Group II Senior Percentage for such Distribution Date exceeds
the Group II Senior Percentage as of the Closing Date, each of
the Group I Senior Prepayment Percentage and the Group II Senior
Prepayment Percentage shall equal 100%; and (iii) on any other
Distribution Date in each of the months of the fifth anniversary
of the first Distribution Date and thereafter, each of the Group
I Senior Prepayment Percentage and the Group II Senior Prepayment
Percentage shall equal 100%, unless the following tests specified
in clauses (a) through (d) are met with respect to each of Loan
Group I and Loan Group II:
(a) the mean aggregate Principal Balance of the Group I
Loans which are 60 or more days delinquent (including
loans in foreclosure and property held by REMIC I) for
each of the immediately preceding six calendar months
is less than or equal to 50% of the Subordinate
Component Balance for Loan Group I as of such
Distribution Date,
(b) the mean aggregate Principal Balance of the Group II
Loans which are 60 or more days delinquent (including
loans in foreclosure and property held by REMIC I) for
each of the immediately preceding six calendar months
is less than or equal to 50% of the Subordinate
<PAGE> 28
Component Balance for Loan Group II as of such
Distribution Date,
(c) cumulative Realized Losses on the Group I Loans
allocated to the Group C-B Certificates are less than
or equal to (1) for any Distribution Date before the
month of the sixth anniversary of the month of the
first Distribution Date, 30% of the Subordinate
Component Balance for Loan Group I as of the Closing
Date, (2) for any Distribution Date in or after the
month of the sixth anniversary of the month of the
first Distribution Date but before the seventh
anniversary of the month of the first Distribution
Date, 35% of the Subordinate Component Balance for Loan
Group I as of the Closing Date, (3) for any
Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date
but before the eighth anniversary of the month of the
first Distribution Date, 40% of the Subordinate
Component Balance for Loan Group I as of the Closing
Date, (4) for any Distribution Date in or after the
month of the eighth anniversary of the month of the
first Distribution Date but before the ninth
anniversary of the month of the first Distribution
Date, 45% of the Subordinate Component Balance for Loan
Group I as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution
Date, 50% of the Subordinate Component Balance for Loan
Group I as of the Closing Date, and
(d) cumulative Realized Losses on the Group II Loans
allocated to the Group C-B Certificates are less than
or equal to (1) for any Distribution Date before the
month of the sixth anniversary of the month of the
first Distribution Date, 30% of the Subordinate
Component Balance for Loan Group II as of the Closing
Date, (2) for any Distribution Date in or after the
month of the sixth anniversary of the month of the
first Distribution Date but before the seventh
anniversary of the month of the first Distribution
Date, 35% of the Subordinate Component Balance for Loan
Group II as of the Closing Date, (3) for any
Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date
but before the eighth anniversary of the month of the
first Distribution Date, 40% of the Subordinate
Component Balance for Loan Group II as of the Closing
Date, (4) for any Distribution Date in or after the
month of the eighth anniversary of the month of the
first Distribution Date but before the ninth
anniversary of the month of the first Distribution
<PAGE> 29
Date, 45% of the Subordinate Component Balance for Loan
Group II as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution
Date, 50% of the Subordinate Component Balance for Loan
Group II as of the Closing Date,
in which case the Group I Senior Prepayment Percentage and the
Group II Senior Prepayment Percentage shall be calculated as
follows: (1) for any such Distribution Date in or after the month
of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month 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 in or
after the month of the sixth anniversary of the month of the
first Distribution Date but before the seventh anniversary of the
month 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 in or after the month of the seventh
anniversary of the month of the first Distribution Date but
before the eighth anniversary of the month of the first
Distribution Date, the Group I Senior Percentage or the Group II
Senior Percentage, as applicable, for such Distribution Date plus
40% of the Subordinate Percentage for the related Loan Group for
such Distribution Date; (4) for any such Distribution Date in or
after the month of the eighth anniversary of the month of the
first Distribution Date but before the ninth anniversary of the
month 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.
If on any Distribution Date the allocation to the Group I or
the Group II Certificates (other than the Class I-P and Class II-
P Certificates) of Principal Prepayments in the percentage
required would reduce the sum of the Class Principal Balances 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 sum to zero. Notwithstanding
the foregoing, however, on each Distribution Date, the Class I-P
Certificates will receive the applicable Class I-P Fraction of
all principal payments, including, without limitation, Principal
Prepayments, received in respect of Class I-P Mortgage Loans, and
the Class II-P Certificates will receive the applicable Class II-
<PAGE> 30
P Fraction of all principal payments, including, without
limitation, Principal Prepayments, received in respect of Class
II-P Mortgage Loans.
Group I Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the Group I
Senior Percentage of the Principal Payment Amount for Loan Group
I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P Certificates pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount"), (b) the Group I Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group I
(exclusive of the portion thereof attributable to principal
distributions to the Class I-P Certificates pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Group I Senior Liquidation
Amount.
Group I Subordinate Balance: For any date of determination,
an amount equal to the then outstanding aggregate Principal
Balance of the Group I Loans reduced by the aggregate Class
Principal Balance of the Group I-A, Class I-P and Residual
Certificates.
Group I Subordinate Percentage: With respect to any
Distribution Date, the excess of 100% over the Group I Senior
Percentage for such date.
Group I Subordinate Prepayment Percentage: On any
Distribution Date, the excess of 100% over the Group I Senior
Prepayment Percentage for such Distribution Date; provided,
however, that if the aggregate Class Principal Balance of the
Group I-A and Residual Certificates has been reduced to zero,
then the Group I Subordinate Prepayment Percentage shall equal
100%.
Group I-A Certificates: The Class I-A-1, Class I-A-2, Class
I-A-3, Class I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class
I-A-8 and Class I-A-9 Certificates.
Group II Certificates: The Class II-A-1, Class II-P and
Class II-X Certificates.
Group II Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group II Loans.
Group II Premium Rate Mortgage Loans: The Group II Loans
having Pass-Through Rates in excess of 6.500% per annum.
Group II Senior Liquidation Amount: 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
<PAGE> 31
Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class II-P Fraction thereof, with respect to
any Class II-P Mortgage Loan) and (ii) the Group II Senior
Prepayment Percentage of the Liquidation Principal with respect
to such Mortgage Loan.
Group II Senior Percentage: With respect to any Distribution
Date, the lesser of (i) 100% and (ii) the Class II-A-1 Principal
Balance divided by the aggregate Principal Balance of the Group
II Loans (less the Class II-P Fraction of each Class II-P
Mortgage Loan), in each case immediately prior to the
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 (exclusive of the portion thereof attributable to principal
distributions to the Class II-P Certificates pursuant to clauses
(I)(b)(i) and (II)(b)(i) of the definition of "REMIC II
Distribution Amount"), (b) the Group II Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group II
(exclusive of the portion thereof attributable to principal
distributions to the Class II-P Certificates pursuant to clauses
(I)(b)(i) and (II)(b)(i) of the definition of "REMIC II
Distribution Amount";) and (c) the Group II Senior Liquidation
Amount.
Group II Subordinate 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-1 and Class II-P
Certificates.
Group II Subordinate Percentage: With respect to any
Distribution Date, the excess of 100% over the Group II Senior
Percentage for such date.
Group II Subordinate Prepayment Percentage: On any
Distribution Date, the excess of 100% over the Group II Senior
Prepayment Percentage for such Distribution Date; provided,
however, that if the Class II-A-1 Principal Balance has been
reduced to zero, then the Group II Subordinate Prepayment
Percentage shall equal 100%.
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.
<PAGE> 32
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: On any Distribution Date, for
any Class of the REMIC I Regular Interests and the Certificates,
the amount of interest accrued on the respective Class Principal
Balance or Class Notional Amount, as applicable, at the related
Certificate Interest Rate for such Class during the Prior Period,
in each case before giving effect to allocations of Realized
Losses for the Prior Period or distributions to be made on such
Distribution Date, reduced by Uncompensated Interest Shortfall,
interest shortfalls related to the Relief Act and the interest
portion of Realized Losses allocated to such Class pursuant to
the definitions of "Uncompensated Interest Shortfall", "Relief
Act" and "Realized Loss", respectively. The Interest
Distribution Amount for the Class P, Class I-A-3, Class I-A-8 and
Class I-A-9 Certificates and the Class P-M Regular Interests
shall equal zero.
Interest Transfer Amount: On any Distribution Date for an
Undercollateralized Group, an amount equal to one month's
interest on the applicable Principal Transfer Amount at 6.750%
per annum if the Undercollateralized Group is Loan Group I or at
6.500% per annum if the Undercollateralized Group is Loan Group
II, plus any interest accrued on the Senior Certificates related
to such Undercollateralized Group remaining unpaid from prior
Distribution Dates.
Investment Account: The commingled account (which shall be
commingled only with investment accounts related to series of
pass-through certificates with a class of certificates which has
a rating equal to the highest of the Ratings of the Certificates)
maintained by the Master Servicer in the trust department of the
Investment Depository pursuant to Section 3.03 and which bears a
designation acceptable to the Rating Agencies.
Investment Depository: 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 C-B-4, Class C-B-
5 and Class C-B-6 Certificates.
Last Scheduled Distribution Date: With respect to any Class
of Certificates, the Final Maturity Date for such Class; provided
that with respect to the Group II Certificates, the "Last
<PAGE> 33
Scheduled Distribution Date" shall be the Distribution Date in
July 2014.
Lender: An institution from which the Company purchased any
Mortgage Loans pursuant to a Selling and Servicing Contract.
Liquidated Mortgage Loan: A Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined in
accordance with its customary servicing practices that all
amounts which it expects to recover from or on account of such
Mortgage Loan, whether from Insurance Proceeds, Liquidation
Proceeds or otherwise, have been recovered. 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 (exclusive of the portion thereof attributable
to distributions to the Class P Certificates pursuant to clauses
(I)(a)(i), (I)(b)(i), (II)(a)(i) and (II)(b)(i) of the definition
of "REMIC II Distribution Amount") with respect to each Mortgage
Loan which became a Liquidated Mortgage Loan (but not in excess
of the principal balance thereof) during the Prior Period.
Liquidation Proceeds: Amounts after deduction of amounts
reimbursable under Section 3.05(a)(i) and (ii) received and
retained in connection with the liquidation of defaulted Mortgage
Loans, whether through foreclosure or otherwise.
Loan Group: Loan Group I 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" shall mean the then current
Principal Balance of a Mortgage Loan divided by the Original
Value.
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 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
<PAGE> 34
Investment Account or the Custodial Account for P&I.
Monthly P&I Advance: An advance of funds by the Master
Servicer pursuant to Section 4.02 or a Servicer pursuant to its
Selling and Servicing Contract to cover delinquent principal and
interest installments.
Monthly Payment: The scheduled payment of principal and
interest on a Mortgage Loan (including any amounts due from a
Buydown Fund, if any) which is due on the related Due Date for
such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note.
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.
Mortgage File: The following documents or instruments with
respect to each PNC Mortgage Loan transferred and assigned by the
Company pursuant to Section 2.01 and each Clipper Mortgage Loan
transferred and assigned by Clipper pursuant to the Clipper Loan
Sale Agreement, (X) with respect to each Mortgage Loan that is
not a Cooperative Loan:
(i) The original Mortgage Note endorsed to "State Street Bank
and Trust Company, as Custodian/Trustee, without recourse" or
"State Street Bank and Trust Company, as Trustee for the benefit
of the Holders from time to time of PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates, Series 1999-6, 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 related Mortgage Loan
or the Company or Clipper, as applicable, stating that the
original Mortgage Note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note; in the event the
Mortgage Notes are endorsed in blank as of the Closing Date, the
Company shall, within 45 days of the Closing Date, cause such
Mortgage Notes to be endorsed pursuant to the terms set forth
herein; provided, that, with respect to any Mortgage Note whereby
the related Mortgaged Property is located in California, such
original Mortgage Note may be endorsed in blank and the Company
shall not be required to endorse such Mortgage Notes pursuant to
the terms otherwise set forth in this clause (i);
(ii) The Buydown Agreement, if applicable;
<PAGE> 35
(iii) A Mortgage that is either
(1) the original recorded Mortgage with recording
information thereon for the jurisdiction in which the
Mortgaged Property is located and a Mortgage assignment
thereof in recordable form to "State Street Bank and
Trust Company, as Custodian/Trustee", or to "State
Street Bank and Trust Company, as Trustee for the
Holders of PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates, Series 1999-6" and 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
(2) a copy of the Mortgage 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 or
Lender as a true and correct copy the original of which
has been sent for recordation and an original Mortgage
assignment thereof duly executed and acknowledged in
recordable form to "State Street Bank and Trust
Company, as Custodian/Trustee" or to "State Street Bank
and Trust Company, as Trustee for the Holders of PNC
Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-6" and all intervening
assignments evidencing a complete chain of assignment
from the originator to the name holder or the payee
endorsing the related Mortgage Note; provided, that in
the event the assignments are executed in blank as of
the Closing Date, the Company shall, within 45 days of
the Closing Date, cause such assignments to be executed
pursuant to the terms set forth herein; provided, that,
with respect to any Mortgage whereby the related
Mortgaged Property is located in California, the
Mortgage assignment may be executed and acknowledged in
blank and the Company shall not be required to deliver
such Mortgage assignment in the form otherwise set
forth in clause (iii)(1) or this clause (iii)(2);
(iv) A copy of (a) the title insurance policy, or (b) in lieu
thereof, a title insurance binder, a copy of an attorney's title
opinion, certificate or other evidence of title acceptable to the
Company; and
(v) For any Mortgage Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment;
and (Y) with respect to each Cooperative Loan:
(i) the original Mortgage Note endorsed to "State Street Bank
<PAGE> 36
and Trust Company, as Custodian/Trustee", or to "State Street
Bank and Trust Company, as Trustee for the Holders of PNC
Mortgage Securities Corp. Mortgage Pass-Through Certificates,
Series 1999-6" 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 related
Mortgage Loan or the Company or Clipper, as applicable, stating
that the original Mortgage Note was lost, misplaced or destroyed,
together with a copy of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from
such originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such
Cooperative Loan, together with an undated stock power (or other
similar instrument) executed in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related
Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such
Cooperative Loan as secured party, each with evidence of
recording thereof, evidencing the interest of the originator
under the Security Agreement and the Assignment of Proprietary
Lease;
(vii) Copies of the filed UCC-3 assignments 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
originator under the Security Agreement and the Assignment of
Proprietary Lease;
(viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of Proprietary
Lease and the recognition agreement referenced in clause (iv)
above, showing an unbroken chain of title from the originator to
the Trustee;
(ix) An executed UCC-1 financing statement showing the Company or
Clipper, as applicable, as debtor and the Trustee as secured
party, each in a form sufficient for filing, evidencing the
interest of such debtors in the Cooperative Loans; and
(x) For any Cooperative Loan that has been modified or amended,
the original instrument or instruments effecting such
modification or amendment.
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.
<PAGE> 37
Mortgage Loan Schedule: The schedule, as amended from time
to time, of Mortgage Loans attached hereto as Exhibit D, which
shall set forth as to each Mortgage Loan the following, among
other things:
(i) its loan number,
(ii) the address of the Mortgaged Property,
(iii) the name of the Mortgagor,
(iv) the Original Value of the property subject to the Mortgage,
(v) the Principal Balance as of the Cut-Off Date,
(vi) the Mortgage Interest Rate borne by the Mortgage Note,
(vii) whether a Primary Insurance Policy is in effect as of
the Cut-Off Date,
(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee,
(x) its Loan Group, and
(xi) whether it is a PNC Mortgage Loan or a Clipper Mortgage
Loan.
Mortgage Loans: With respect to each Cooperative Loan, the
related Mortgage Note, Security Agreement, Assignment of
Proprietary Lease, Cooperative Stock Certificate and Cooperative
Lease, and, with respect to each Mortgage Loan other than a
Cooperative Loan, the Mortgages and the related Mortgage Notes,
each transferred and assigned to the Trustee pursuant to the
provisions hereof or of the Clipper Loan Sale Agreement as from
time to time are held as part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Mortgage Loan,
any advance which the Master Servicer shall determine to be a
Nonrecoverable Advance pursuant to Section 4.03 and which was, or
is proposed to be, made by (i) the Master Servicer or (ii) a
Servicer pursuant to its Selling and Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
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.
<PAGE> 38
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 at the time the Mortgage Loan was originated
or the appraised value at the time the refinanced mortgage debt
was incurred.
Overcollateralized Group: Either of Loan Group I or Loan
Group II, if on any Distribution Date the other of such Loan
Groups is an Undercollateralized Group.
Ownership Interest: With respect to any Residual
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as
the Holder thereof and any other interest therein whether direct
or indirect, legal or beneficial, as owner or as pledgee.
PNC Mortgage Loans: The Mortgage Loans identified as PNC
Mortgage Loans on the Mortgage Loan Schedule and conveyed by the
Company to the Trustee pursuant to Section 2.01.
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 rate equal to
the Mortgage Interest Rate for such Mortgage Loan less the
applicable per annum percentage rates related to each of (i) the
Servicing Fee and (ii) the Master Servicing Fee. For each
Mortgage Loan, any calculation of monthly interest at such rate
shall be based upon annual interest at such rate (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid
Principal Balance of the related Mortgage Loan divided by twelve,
and any calculation of interest at such rate by reason of a
Payoff shall be based upon annual interest at such rate on the
outstanding Principal Balance of the related Mortgage Loan
multiplied by a fraction, the numerator of which is the number of
days elapsed from the Due Date of the last scheduled payment of
principal and interest to, but not including, the date of such
Payoff, and the denominator of which is (a) for Payoffs received
on a Due Date, 360, and (b) for all other Payoffs, 365.
<PAGE> 39
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.
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: With respect to the first Distribution Date,
the period from the Cut-Off Date through July 14, 1999,
inclusive; and with respect to 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 and
Class X Certificates), its Certificate Principal Balance divided
by the applicable Class Principal Balance;
(ii) with respect to the Class X Certificates, the portion of the
respective Class Notional Amount evidenced by such Certificate
divided by the respective Class Notional Amount; and
(iii) with respect to the Residual Certificates, the
percentage set forth on the face of such Certificate.
<PAGE> 40
(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 Class X and
Class R-2 Certificates), the product of (x) ninety-eight (98%)
and (y) the percentage calculated by dividing its Certificate
Principal Balance by the Aggregate Certificate Principal Balance
of the Certificates; provided, however, that the percentage in
(x) above shall be increased by one percent (1%) upon each
retirement of the Classes of Certificates referenced in the
parenthetical above (other than the Class R-2 Certificates);
(ii) with respect to any of the Class X Certificates, one percent
(1%) of such Certificate's Percentage Interest as calculated by
paragraph (a)(ii) of this definition; and
(iii) with respect to the Class R-2 Certificates, zero.
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, as applicable, 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
Freddie 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
<PAGE> 41
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).
Principal Balance: Except as used in Sections 2.02, 3.09 and
9.01 and for purposes of the definition of Purchase Price, at the
time of any determination, the principal balance of a Mortgage
Loan remaining to be paid at the close of business on the Cut-Off
Date, after application of all scheduled principal payments due
on or before the Cut-Off Date, whether or not received, reduced
by all amounts distributed or (except when such determination
occurs earlier in the month than the Distribution Date) to be
distributed to Certificateholders through the Distribution Date
in the month of determination that are reported as allocable to
principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used
in Sections 2.02, 3.09 and 9.01, at the time of any
determination, the principal balance of a Mortgage Loan remaining
to be paid at the close of business on the Cut-Off Date, after
deduction of all scheduled principal payments due on or before
the Cut-Off Date, whether or not received, reduced by all amounts
distributed or to be distributed to Certificateholders through
the Distribution Date in the month of determination that are
reported as allocable to principal of such Mortgage Loan.
In the case of a Substitute Mortgage Loan, "Principal
Balance" shall mean, at the time of any determination, the
principal balance of such Substitute Mortgage Loan transferred to
the Trust Fund, on the date of substitution, reduced by all
amounts distributed or to be distributed to Certificateholders
through the Distribution Date in the month of determination that
are reported as allocable to principal of such Substitute
Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a
Substitute Mortgage Loan) shall not be adjusted solely by reason
of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period. Whenever a Realized Loss has been
incurred with respect to a 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 Distribution Date next
following the end of such calendar month after giving effect to
<PAGE> 42
the allocation of Realized Losses and distributions of principal
to the Certificates.
Principal Payment: Any payment of principal on a Mortgage
Loan other than a Principal Prepayment.
Principal Payment Amount: On 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 by the Company 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. In addition, in the event that all or a
portion of the Clipper Mortgage Loan Purchase Amount has not been
applied to the purchase of Clipper Mortgage Loans under the
Clipper Loan Sale Agreement in accordance with Section 2.01, such
remaining portion shall on the first Distribution Date be
included in the Principal Payment Amount for each Loan Group, pro
rata according to the aggregate Principal Balance of the Clipper
Mortgage Loans not so purchased but intended for inclusion in
such Loan Group.
Principal Prepayment: Any payment of principal on a Mortgage
Loan which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On 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 aggregate
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 (less the
applicable Class P Fraction of any Class P Mortgage Loan in such
Loan Group), in each case immediately prior to such Distribution
Date.
Prior Period: The calendar month immediately preceding any
Distribution Date.
Pro Rata Allocation: The allocation of the principal portion
of Realized Losses on Group I and Group II Loans to all Classes
of Certificates (other than the Class P Certificates), pro rata
according to their respective Class Principal Balances in
reduction thereof (except if the loss is recognized with respect
<PAGE> 43
to a Class I-P or Class II-P Mortgage Loan, in which case the
applicable Class P Fraction of such loss will first be allocated
to the related Class P Certificates, and the remainder of such
loss will be allocated as set forth above), and the allocation of
the interest portion of such losses to all Classes of
Certificates (other than the Class P, Class I-A-3, Class I-A-8
and Class I-A-9 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 P, Class
I-A-3, Class I-A-8, Class I-A-9 and Class X Certificates) pro
rata according to their respective Class Principal Balances in
reduction thereof.
Prospectus: The Prospectus, dated May 25, 1999, and the
Prospectus Supplement, dated June 25, 1999, of the Company.
Protective Transfer Agreement: The Protective Transfer
Agreement, substantially in the form of Exhibit P hereto, to be
entered into between Fairway Drive Funding Corp. and the Trustee
pursuant to Section 2.01.
Purchase Obligation: An obligation of the Company to
purchase or 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, an amount equal to
the sum of the Principal Balance thereof, and unpaid accrued
interest thereon, if any, to the last day of the calendar month
in which the date of purchase or repurchase occurs 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 Freddie
Mac or Fannie Mae and the Master Servicer. A Qualified Insurer
must have the rating required by the Rating Agencies.
Rating Agency: Initially, each of S&P and DCR and
<PAGE> 44
thereafter, each nationally recognized statistical rating
organization that has rated the Certificates at the request of
the Company, or their respective successors in interest.
Ratings: As of any date of determination, the ratings, if
any, of the Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to
any Mortgage Loan which became a Liquidated Mortgage Loan during
the related Prior Period, the sum of (i) the principal balance of
such Mortgage Loan remaining outstanding and the principal
portion of Nonrecoverable Advances actually reimbursed with
respect to such Mortgage Loan (the principal portion of such
Realized Loss), and (ii) the accrued interest on such Mortgage
Loan remaining unpaid and the interest portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan
(the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Mortgage Loan which is not
a Liquidated Mortgage Loan, the amount of the Bankruptcy Loss
incurred with respect to such Mortgage Loan as of the related Due
Date.
Realized Losses, Special Hazard Losses, Fraud Losses and
Bankruptcy Losses on Group I and Group II Loans shall be
allocated to the REMIC I Regular Interests as follows: The
interest portion of Realized Losses, if any, shall be allocated
among the Classes of REMIC I Regular Interests related to each
such Loan Group pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof (i.e. the
"related" Loan Group for the Class C-Y-1, Class C-Z-1 and Class I-
X-M Regular Interests is Loan Group I, and the "related" Loan
Group for the Class C-Y-2, Class C-Z-2 and Class II-X-M Regular
Interests is Loan Group II). Any interest portion of Realized
Losses in excess of the amount allocated pursuant to the
preceding sentence shall be treated as a principal portion of
Realized Losses not attributable to any specific Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding
sentences. The applicable Class P Fraction of any principal
portion of Realized Losses attributable to a Class P Mortgage
Loan shall be allocated to the related Class P-M Regular Interest
in reduction of the principal balance thereof. The remainder of
the principal portion of Realized Losses with respect to Loan
Group I and Loan Group II shall be allocated, first, to the Class
C-Y Regular Interest related to the Loan Group to the extent of
the applicable Class C-Y Principal Reduction Amount in reduction
of the Class Principal Balance of such Regular Interest and,
second, the remainder, if any, of such principal portion of
Realized Losses shall be allocated to the related Class C-Z
Regular Interest in reduction of the Class Principal Balance
thereof.
Except for Special Hazard Losses in excess of the Special
<PAGE> 45
Hazard Coverage, Fraud Losses in excess of the Fraud Coverage and
Bankruptcy Losses in excess of the Bankruptcy Coverage, Realized
Losses with respect to the Group I and Group II Loans shall be
allocated among the Certificates (i) for Realized Losses
allocable to principal (a) first, to the Class C-B-6
Certificates, until the Class C-B-6 Principal Balance has been
reduced to zero, (b) second, to the Class C-B-5 Certificates,
until the Class C-B-5 Principal Balance has been reduced to zero,
(c) third, to the Class C-B-4 Certificates, until the Class C-B-4
Principal Balance has been reduced to zero, (d) fourth, to the
Class C-B-3 Certificates, until the Class C-B-3 Principal Balance
has been reduced to zero, (e) fifth, to the Class C-B-2
Certificates, until the Class C-B-2 Principal Balance has been
reduced to zero, (f) sixth, to the Class C-B-1 Certificates,
until the Class C-B-1 Principal Balance has been reduced to zero,
and (g) seventh, to (I) the Group I-A and Residual Certificates,
pro rata according to the Class Principal Balances thereof, in
reduction thereof, or (II) the Class II-A-1 Certificates, in
reduction of the Class Principal Balance thereof, as applicable;
provided, however, that if the loss is recognized with respect to
a Class I-P or Class II-P Mortgage Loan, the applicable Class P
Fraction of such loss will first be allocated to the related
Class P Certificates, and the remainder of such loss will be
allocated as set forth above in this clause (i); and (ii) for
Realized Losses allocable to interest (a) first, to the Class C-B-
6 Certificates, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class C-B-6 Principal
Balance, (b) second, to the Class C-B-5 Certificates, in
reduction of accrued but unpaid interest thereon and then in
reduction of the Class C-B-5 Principal Balance, (c) third, to the
Class C-B-4 Certificates, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class C-B-4
Principal Balance, (d) fourth, to the Class C-B-3 Certificates,
in reduction of accrued but unpaid interest thereon and then in
reduction of the Class C-B-3 Principal Balance, (e) fifth, to the
Class C-B-2 Certificates, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class C-B-2
Principal Balance, (f) sixth, to the Class C-B-1 Certificates, in
reduction of accrued but unpaid interest thereon and then in
reduction of the Class C-B-1 Principal Balance, and (g) seventh,
to (I) the Group I-A Certificates (other than the Class I-A-3,
Class I-A-8 and Class I-A-9 Certificates) and the Class I-X and
Residual Certificates or (II) the Class II-A-1 and Class II-X
Certificates, as applicable, pro rata according to accrued but
unpaid interest on such Classes in reduction thereof and then to
the Group I-A Certificates (other than the Class I-A-3, Class I-A-
8 and Class I-A-9 Certificates) and the Residual Certificates or
the Class II-A-1 Certificates, as applicable, pro rata according
to the Class Principal Balances thereof in reduction thereof;
provided, however, that in the case of clause (i)(g) and (ii)(g)
of this paragraph, if such loss occurs in an Overcollateralized
Group, the Senior Certificates related to the Undercollateralized
<PAGE> 46
Group (including, if Loan Group I is the Undercollateralized
Group, the Residual Certificates) will receive a portion of such
loss (such portion equal to a fraction, the numerator of which is
the Subordinate Component Balance with respect to the
Overcollateralized Group that suffered such loss and the
denominator of which is the aggregate Principal Balance of the
Mortgage Loans in such Overcollateralized Group less the
applicable Class P Fraction of any Class P Mortgage Loan in such
Overcollateralized Group), and the remainder of such loss will be
allocated to the Senior Certificates related to the Loan Group
that suffered such loss (including, if Loan Group I suffered such
loss, the Residual Certificates); provided, further, that all
such losses allocated to the Senior Certificates related to a
Loan Group (including, with respect to Loan Group I, the Residual
Certificates) pursuant to the immediately preceding proviso to
this paragraph will be allocated to such Senior Certificates as
described in clause (i)(g) and (ii)(g) of this paragraph.
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 outstanding Classes of Certificates by Pro
Rata Allocation.
On each Distribution Date, after giving effect to the
principal distributions and allocations of losses as provided in
this Agreement (without regard to this paragraph), if the
aggregate Class Principal Balance of all outstanding Classes of
Certificates exceeds the aggregate principal balance of the
Mortgage Loans remaining to be paid at the close of business on
the Cut-Off Date, after deduction of (i) all principal payments
due on or before the Cut-Off Date in respect of each such
Mortgage Loan whether or not paid and (ii) all amounts of
principal in respect of each such Mortgage Loan that have been
received or advanced and included in the REMIC II Available
Distribution Amounts for the Group I and Group II Certificates,
and all losses in respect of each such Mortgage Loan that have
been allocated to the Certificates on such Distribution Date or
prior Distribution Dates, then such excess will be deemed a
principal loss and will be allocated to the most junior Class of
Group C-B Certificates, in reduction of the Class Principal
Balance thereof.
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: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended. Interest shortfalls related to the Relief Act
<PAGE> 47
shall be allocated in the same manner as Realized Losses
attributable to interest are allocated.
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: With respect to each
Loan Group on 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 on or subsequent to such Distribution
Date;
(b) all Curtailments received after the Prior Period
(together with any interest payment received with such
prepayments to the extent that it represents the payment of
interest accrued on a related Mortgage Loan subsequent to
the Prior Period);
(c) all Payoffs received after the Payoff Period
immediately preceding such Distribution Date (together with
any interest payment received with such Payoffs to the
extent that it represents the payment of interest accrued on
the Mortgage Loans for the period subsequent to the Prior
Period), and interest which was accrued and received on
Payoffs received during the period from the 1st to the 14th
day of the month of such Determination 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;
<PAGE> 48
(f) the sum of the Master Servicing Fee and the
Servicing Fee for each 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, to the extent not previously
distributed, of all cash received by the Distribution Date 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 or repurchase of 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 Certificates in the
following amounts and priority:
(a) To the extent of the REMIC I Available Distribution
Amount for Loan Group I:
(i) first, to the Class I-P-M Regular Interest, the aggregate
for all of the Class I-P Mortgage Loans of the product for each
Class I-P Mortgage Loan of the applicable Class I-P Fraction and
the sum of (x) scheduled payments of principal on such Class I-P
Mortgage Loan due on or before the related Due Date in respect of
which no distribution has been made on any previous Distribution
Date and which were received by the Determination Date, or which
have been advanced as part of a Monthly P&I Advance with respect
to such Distribution Date, (y) the principal portion received in
respect of such Class I-P Mortgage Loan during the Prior Period
of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if
any, of the principal portion of the Purchase Price paid pursuant
to a Purchase Obligation or any purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds
and (z) the principal portion of Payoffs received in respect of
such Class I-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class C-Y-1, Class C-Z-1 and Class I-X-M
Regular Interests and the Class R-1 Certificates, concurrently,
the sum of the Interest Distribution Amounts for such Classes of
Regular Interests and Certificates remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares
<PAGE> 49
of such unpaid amounts;
(iii) third, to the Class C-Y-1, Class C-Z-1 and Class I-X-M
Regular Interests and the Class R-1 Certificates, concurrently,
the sum of the Interest Distribution Amounts for such Classes of
Regular Interests and Certificates for the current Distribution
Date, pro rata according to their respective Interest
Distribution Amounts;
(iv) fourth, to the Class R-1 Certificates, until the Class
Principal Balance thereof has been reduced to zero;
(v) fifth, to the Class C-Y-1 and Class C-Z-1 Regular Interests,
the Class C-Y-1 Principal Distribution Amount and the Class C-Z-1
Principal Distribution Amount, respectively; and
(vi) sixth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group I for such Distribution Date.
(b) To the extent of the REMIC I Available Distribution
Amount for Loan Group II:
(i) first, to the Class II-P-M Regular Interest, the aggregate
for all of the Class II-P Mortgage Loans of the product for each
Class II-P Mortgage Loan of the applicable Class II-P Fraction
and the sum of (x) scheduled payments of principal on such Class
II-P Mortgage Loan due on or before the related Due Date in
respect of which no distribution has been made on any previous
Distribution Date and which were received by the Determination
Date, or which have been advanced as part of a Monthly P&I
Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class II-P Mortgage Loan
during the Prior Period of (1) Curtailments, (2) Insurance
Proceeds, (3) the amount, if any, of the principal portion of the
Purchase Price paid pursuant to a Purchase Obligation or any
purchase or repurchase of a Mortgage Loan permitted hereunder and
(4) Liquidation Proceeds and (z) the principal portion of Payoffs
received in respect of such Class II-P Mortgage Loan during the
Payoff Period;
(ii) second, to the Class C-Y-2, Class C-Z-2 and Class II-X-M
Regular Interests, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Regular Interests
remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(iii) third, to the Class C-Y-2, Class C-Z-2 and Class II-X-M
Regular Interests, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Regular Interests for
the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts;
(iv) fourth, to the Class C-Y-2 and Class C-Z-2 Regular
Interests, the Class C-Y-2 Principal Distribution Amount and the
Class C-Z-2 Principal Distribution Amount, respectively; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group II for such Distribution Date.
<PAGE> 50
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 Certificateholders 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, on any Distribution Date, the aggregate of all
distributions to the Class I-X-M, Class I-P-M, Class C-Y-1 and
Class C-Z-1 Regular Interests (which amount shall be available
for distributions to the Group I, Group C-B and Class R-2
Certificates as provided herein). For the Group II Certificates,
on any Distribution Date, the aggregate of all distributions to
the Class II-X-M, Class II-P-M, Class C-Y-2 and Class C-Z-2
Regular Interests (which amount shall be available for
distributions to the Group II, Group C-B and Class R-2
Certificates 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 shall be distributed to the
Certificates (other than the Class R-1 Certificates) in the
following amounts and priority:
(a) With respect to the Group I and Class R-2 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 remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class I-P Certificates, the aggregate for all
Class I-P Mortgage Loans of the product for each Class I-P
Mortgage Loan of the applicable Class I-P Fraction and the sum of
(x) scheduled payments of principal on such Class I-P Mortgage
Loan due on or before the related Due Date in respect of which no
distribution has been made on any previous Distribution Date and
which were received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to such
Distribution Date, (y) the principal portion received in respect
of such Class I-P Mortgage Loan during the Prior Period of (1)
Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of
the principal portion of the Purchase Price paid pursuant to a
Purchase Obligation or any purchase or repurchase of a Mortgage
Loan permitted hereunder and (4) Liquidation Proceeds and (z) the
principal portion of Payoffs received in respect of such Class I-
P Mortgage Loan during the Payoff Period;
<PAGE> 51
(ii) second, to the Group I-A, Class R-2 and Class I-X
Certificates, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Certificates remaining unpaid from
previous Distribution Dates, pro rata according to their
respective shares of such unpaid amounts;
(iii) third, to the Group I-A, Class R-2 and Class I-X
Certificates, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Certificates for the current
Distribution Date, pro rata according to their respective
Interest Distribution Amounts; and
(iv) fourth, to the Group I-A and Class R-2 Certificates, as
principal, the Group I Senior Principal Distribution Amount, as
follows:
(a) first, to the Class I-A-4 Certificates, an
amount, up to the amount of the Class I-A-4 Priority
Amount for such Distribution Date, until the Class I-A-
4 Principal Balance has been reduced to zero;
(b) second, to the Class R-2 Certificates, until
the Class Principal Balance thereof has been reduced to
zero;
(c) third, to the Class I-A-1 and Class I-A-3
Certificates, pro rata, until their respective Class
Principal Balances have each been reduced to zero;
(d) fourth, until the Class I-A-2 and Class I-A-9
Certificates have received a total of $7,593,000.00
according to this paragraph (I)(a)(iv)(d),
concurrently, as follows:
(1) 93.1034472747% to the Class I-A-2
Certificates; and
(2) 6.8965527253% to the Class I-A-9
Certificates;
(e) fifth, until the Class I-A-8 Principal
Balance has been reduced to zero, concurrently, as
follows:
(1) 6.3834834739% to the Class I-A-8
Certificates;
(2) 33.6710098846% to the Class I-A-2
Certificates;
(3) 2.4941492692% to the Class I-A-9
Certificates; and
<PAGE> 52
(4) 57.4513573723%, sequentially, as
follows:
(A) first, to the Class I-A-5
Certificates, until the Class I-A-5 Principal
Balance has been reduced to zero;
(B) second, to the Class I-A-6
Certificates, until the Class I-A-6 Principal
Balance has been reduced to zero; and
(C) third, to the Class I-A-7
Certificates, until the Class I-A-7 Principal
Balance has been reduced to zero;
(f) sixth, until the Class I-A-2 Principal
Balance has been reduced to zero, concurrently, as
follows:
(1) 93.1034472747% to the Class I-A-2
Certificates; and
(2) 6.8965527253% to the Class I-A-9
Certificates; and
(g) seventh, to the Class I-A-4 Certificates,
until the Class I-A-4 Principal Balance has been
reduced to zero;
(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 remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class II-P Certificates, the aggregate for all
Class II-P Mortgage Loans of the product for each Class II-P
Mortgage Loan of the applicable Class II-P Fraction and the sum
of (x) scheduled payments of principal on such Class II-P
Mortgage Loan due on or before the related Due Date in respect of
which no distribution has been made on any previous Distribution
Date and which were received by the Determination Date, or which
have been advanced as part of a Monthly P&I Advance with respect
to such Distribution Date, (y) the principal portion received in
respect of such Class II-P Mortgage Loan during the Prior Period
of (1) Curtailments, (2) Insurance Proceeds, (3) the amount, if
any, of the principal portion of the Purchase Price paid pursuant
to a Purchase Obligation or any purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds
and (z) the principal portion of Payoffs received in respect of
such Class II-P Mortgage Loan during the Payoff Period;
<PAGE> 53
(ii) second, to the Class II-A-1 and Class II-X Certificates,
concurrently, the sum of the Interest Distribution Amounts for
such Classes of Certificates remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares
of such unpaid amounts;
(iii) third, to the Class II-A-1 and Class II-X Certificates,
concurrently, the sum of the Interest Distribution Amounts for
such Classes of Certificates for the current Distribution Date,
pro rata according to their respective Interest Distribution
Amounts; and
(iv) fourth, to the Class II-A-1 Certificates, as principal, the
Group II Senior Principal Distribution Amount; and
(c) With respect to the Group C-B, Class I-P, Class II-P
and Class R-2 Certificates, on any Distribution Date prior to the
Credit Support Depletion Date and subject to the payment of the
amounts pursuant to paragraph (I)(a) and paragraph (I)(b) of this
definition of "REMIC II Distribution Amount", and to the extent
of the REMIC II Available Distribution Amounts for the Group I
and Group II Certificates remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class I-P and Class II-P Certificates, to the
extent of amounts otherwise available to pay the Subordinate
Principal Distribution Amount (without regard to clause (B)(x) of
the definition thereof) on such Distribution Date, the amount
payable to such Classes of Certificates on previous Distribution
Dates pursuant to clause (I)(c)(ii) of this definition of "REMIC
II Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(ii) second, to the Class I-P and Class II-P Certificates, to the
extent of amounts otherwise available to pay the Subordinate
Principal Distribution Amount (without regard to clause (B)(x) of
the definition thereof) on such Distribution Date, principal in
an amount equal to the Class I-P or Class II-P Fraction, as
applicable, of any Realized Loss on a Class I-P Mortgage Loan or
a Class II-P Mortgage Loan (other than a Realized Loss which,
pursuant to the definition of "Realized Loss", is allocated by
Pro Rata Allocation); provided, that any amounts distributed in
respect of losses pursuant to paragraph (I)(c)(i) or this
paragraph (I)(c)(ii) of this definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the Class I-P or
Class II-P Principal Balance; provided, further, that if the
amounts otherwise available to pay the Subordinate Principal
Distribution Amount (without regard to clause (B)(x) of the
definition thereof) for any such Distribution Date are
insufficient to cover such outstanding principal losses for the
Class I-P and Class II-P Certificates as provided in paragraph
(I)(c)(i) or this paragraph (I)(c)(ii) of this definition of
"REMIC II Distribution Amount", then such amounts will be
allocated pro rata to the Class I-P and Class II-P Certificates
based on the amount such Certificates are entitled to receive
<PAGE> 54
pursuant to paragraph (I)(c)(i) or this paragraph (I)(c)(ii) of
this definition of "REMIC II Distribution Amount";
(iii) third, to the Class C-B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining
unpaid from previous Distribution Dates;
(iv) fourth, to the Class C-B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates for the
current Distribution Date;
(v) fifth, to the Class C-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 C-B-1 Principal
Balance has been reduced to zero;
(vi) sixth, to the Class C-B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining
unpaid from previous Distribution Dates;
(vii) seventh, to the Class C-B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the
current Distribution Date;
(viii) eighth, to the Class C-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 C-B-2 Principal
Balance has been reduced to zero;
(ix) ninth, to the Class C-B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining
unpaid from previous Distribution Dates;
(x) tenth, to the Class C-B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates for the
current Distribution Date;
(xi) eleventh, to the Class C-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 C-B-3 Principal
Balance has been reduced to zero;
(xii) twelfth, to the Class C-B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining
unpaid from previous Distribution Dates;
(xiii) thirteenth, to the Class C-B-4 Certificates, the
Interest Distribution Amount for such Class of Certificates for
the current Distribution Date;
(xiv) fourteenth, to the Class C-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 C-B-4 Principal Balance has been reduced to zero;
(xv) fifteenth, to the Class C-B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining
unpaid from previous Distribution Dates;
(xvi) sixteenth, to the Class C-B-5 Certificates, the
Interest Distribution Amount for such Class of Certificates for
<PAGE> 55
the current Distribution Date;
(xvii) seventeenth, to the Class C-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 C-B-5 Principal Balance has been reduced to zero;
(xviii) eighteenth, to the Class C-B-6 Certificates, the
Interest Distribution Amount for such Class of Certificates
remaining unpaid from previous Distribution Dates;
(xix) nineteenth, to the Class C-B-6 Certificates, the
Interest Distribution Amount for such Class of Certificates for
the current Distribution Date;
(xx) twentieth, to the Class C-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 C-B-6 Principal
Balance has been reduced to zero;
(xxi) twenty-first, to each Class of Group C-B Certificates
in the order of 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
previously allocated to such Class, if any; provided, however,
that any amounts distributed pursuant to this paragraph
(I)(c)(xxi) of this definition of "REMIC II Distribution Amount"
shall not cause a further reduction in the Class Principal
Balances of any of the Group C-B Certificates; and
(xxii) twenty-second, to the Class R-2 Certificates, the
Residual Distribution Amounts for the Group I and Group II
Certificates for such Distribution Date.
Notwithstanding the foregoing paragraphs (I)(a), (I)(b) and
(I)(c) of this definition of "REMIC II Distribution Amount,"
(X) on any Distribution Date occurring after the date on
which either the aggregate Class Principal Balance of the Group I-
A Certificates or the Class II-A-1 Principal Balance has been
reduced to zero, 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 (after distributions of
principal to the Class I-P or Class II-P Certificates pursuant to
paragraph (I)(a)(i) or (I)(b)(i) above, if applicable) shall be
paid as principal to the remaining Class A Certificates of such
other Certificate Group in accordance with paragraph (I)(a)(iv)
or (I)(b)(iv) above (with such amounts being added to the Group I
or Group II Senior Principal Distribution Amount, as applicable)
to the extent of and in reduction of the Class Principal Balances
thereof, prior to any distributions of principal to the Class I-
P, Class II-P and Group C-B Certificates pursuant to paragraph
(I)(c) above; provided, however, that principal will not be
distributed as set forth above if on such Distribution Date (a)
the Group C-B Percentage for such Distribution Date is greater
than or equal to 200% of the Group C-B Percentage as of the
Closing Date and (b) the average outstanding principal balance of
<PAGE> 56
the Mortgage Loans in each of Loan Group I and Loan Group II
delinquent 60 days or more over the last six months (including
Mortgage Loans in foreclosure and Mortgage Loans the 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 less than 50%, 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 after
distributions to the Class A, Class X and Class P Certificates of
such Certificate Group pursuant to paragraph (I)(a) or paragraph
(I)(b) above, as applicable, will be paid in the following
priority: (i) an amount equal to the Interest Transfer Amount
will be distributed to the Class A and Class X Certificates
related to the Undercollateralized Group in the amounts and in
the priority described in clauses (I)(a)(ii) and (I)(a)(iii) or
clauses (I)(b)(ii) and (I)(b)(iii), as applicable; (ii) an amount
equal to the Principal Transfer Amount will be distributed to the
Class A Certificates related to the Undercollateralized Group in
the amounts and in the priority described in clause (I)(a)(iv) or
clause (I)(b)(iv), as applicable (with such Principal Transfer
Amount being added to the Group I or Group II Senior Principal
Distribution Amount, as applicable); and (iii) any remaining
amounts will be distributed pursuant to paragraph (I)(c) of this
definition of "REMIC II Distribution Amount."
(II) For any Distribution Date on or after the Credit
Support Depletion Date, the REMIC II Available Distribution
Amount shall be distributed to the outstanding Classes of
Certificates (other than the Class R-1 Certificates) in the
following amounts and priority:
(a) With respect to the Group I and Class R-2 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 remaining
following prior distributions, if any, on such Distribution Date:
(i) first, to the Class I-P Certificates, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(a)(i) of this definition
of "REMIC II Distribution Amount";
(ii) second, to the Group I-A, Class R-2 and Class I-X
Certificates, the amount payable to each such Class of
Certificates on prior Distribution Dates pursuant to clause
(I)(a)(iii) or (II)(a)(iii) of this definition of "REMIC II
Distribution Amount", and remaining unpaid, pro rata according to
such amount payable to the extent of amounts available;
<PAGE> 57
(iii) third, to the Group I-A, Class R-2 and Class I-X
Certificates, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Certificates for the current
Distribution Date, pro rata according to their respective
Interest Distribution Amounts;
(iv) fourth, to the Group I-A and Class R-2 Certificates, pro
rata, the Group I Senior Principal Distribution Amount; and
(v) fifth, after any payments to the Group II Certificates
pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I Certificates for such
Distribution Date; and
(b) With respect to the Group II and Class R-2
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 remaining
following prior distributions, if any, on such Distribution Date:
(i) first, to the Class II-P Certificates, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(b)(i) of this definition
of "REMIC II Distribution Amount";
(ii) second, to the Class II-A-1 and Class II-X Certificates, the
amount payable to each such Class of Certificates on prior
Distribution Dates pursuant to clause (I)(b)(iii) or (II)(b)(iii)
of this definition of "REMIC II Distribution Amount", and
remaining unpaid, pro rata according to such amount payable to
the extent of amounts available;
(iii) third, to the Class II-A-1 and Class II-X Certificates,
concurrently, the sum of the Interest Distribution Amounts for
such Classes of Certificates for the current Distribution Date,
pro rata according to their respective Interest Distribution
Amounts;
(iv) fourth, to the Class II-A-1 Certificates, the Group II
Senior Principal Distribution Amount; and
(v) fifth, after any payments to the Group I Certificates
pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Certificates, the Residual
Distribution Amount for the Group II Certificates for such
Distribution Date.
Notwithstanding the foregoing paragraphs (II)(a) and (II)(b)
of this definition of "REMIC II Distribution Amount" and prior to
distributions pursuant to paragraph (II)(a)(v) and paragraph
(II)(b)(v), if on any Distribution Date either 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 after
distributions to the Class A, Class P and Class X Certificates of
<PAGE> 58
such Certificate Group pursuant to paragraph (II)(a)(i) through
(II)(a)(iv) or paragraph (II)(b)(i) through (II)(b)(iv), as
applicable, will be paid in the following priority: (i) an amount
equal to the Interest Transfer Amount will be distributed to the
Class A and Class X Certificates of the Certificate Group related
to the Undercollateralized Group in the amounts and in the
priority described in clauses (II)(a)(ii) and (II)(a)(iii) or
clauses (II)(b)(ii) and (II)(b)(iii), as applicable, and (ii) an
amount equal to the Principal Transfer Amount will be distributed
to the Class A Certificates of the Certificate Group related to
the Undercollateralized Group in the amounts and in the priority
described in clause (II)(a)(iv) or clause (II)(b)(iv), as
applicable (with such Principal Transfer Amount being added to
the Group I or Group II Senior Principal Distribution Amount, 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 Certificates issued
hereunder.
Residual Certificates: With respect to REMIC I, the Class R-
1 Certificates, which are being issued in a single class, and
with respect to REMIC II, the Class R-2 Certificates, which are
being issued in a single class. The Class R-1 and Class R-2
Certificates are hereby designated the sole Class of "residual
interests" in REMIC I and REMIC II, respectively, for purposes of
Section 860G(a)(2) of the Code.
Residual Distribution Amount: On any Distribution Date, with
respect to the Class R-1 Certificates and for Loan Group I and
Loan Group II, any portion of the REMIC I Available Distribution
Amount for Loan Group I and Loan Group II, respectively,
remaining after all distributions of such REMIC I Available
Distribution Amount pursuant to clauses (a)(i) through (a)(v) and
(b)(i) through (b)(iv), as applicable, of the definition of
"REMIC I Distribution Amount." On any Distribution Date, with
respect to the Class R-2 Certificates 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)(i) through (I)(c)(xxi), (II)(a)(i) through (II)(a)(iv) and
(II)(b)(i) through (II)(b)(iv), as applicable, of the definition
of "REMIC II Distribution Amount." Upon termination of the
<PAGE> 59
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 Certificates in accordance with the preceding sentence
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
McGraw-Hill Companies, Inc., provided that at any time it be a
Rating Agency.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the
agreement or mortgage creating a security interest in favor of
the originator of the Cooperative Loan in the related Cooperative
Stock.
Selling and Servicing Contract: (a) The contract (including
the PNC Mortgage Securities Corp. Selling Guide and PNC 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 and (b) any other similar contract providing
substantially similar rights and benefits as those provided by
the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Group I Certificates, the Group II
Certificates and the 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
<PAGE> 60
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.
Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing
of the Mortgage Loans or the Certificates, as applicable, whose
name and specimen signature appear on a list of servicing
officers furnished to the Trustee by the Master Servicer, as such
list may from time to time be amended.
Special Hazard Coverage: The Special Hazard Coverage on the
most recent anniversary of the Cut-Off Date (calculated in
accordance with the second sentence of this paragraph) or, if
prior to the first such anniversary, $3,018,539, in each case
reduced by Special Hazard Losses allocated to the Certificates
since the most recent anniversary of the Cut-Off Date (or, if
prior to the first such anniversary, since the Cut-Off Date). On
each anniversary of the Cut-Off Date, the Special Hazard Coverage
shall be reduced, but not increased, to an amount equal to the
lesser of (1) the greatest of (a) the aggregate principal balance
of the Mortgage Loans located in the single California zip code
area containing the largest aggregate principal balance of the
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) $3,018,539 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: The occurrence of 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,
<PAGE> 61
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.
Step Down Percentage: For any Distribution Date, the
percentage indicated below:
Distribution Date Occurring In Step Down Percentage
July 1999 through June 2004 0%
July 2004 through June 2005 30%
July 2005 through June 2006 40%
July 2006 through June 2007 60%
July 2007 through June 2008 80%
July 2008 and thereafter 100%
Stripped Interest Rate: For each Group I Loan, the excess,
if any, of the Pass-Through Rate for such Mortgage Loan over
6.750% per annum. For each Group II Loan, the excess, if any, of
the Pass-Through Rate for such Mortgage Loan over 6.500% per
annum.
Subordinate Certificates: The Group C-B Certificates.
Subordinate Component Balance: With respect to Loan Group I
at any time, the then outstanding aggregate Principal Balance of
the Group I Loans (less the applicable Class I-P Fraction of any
Class I-P Mortgage Loan) minus the then outstanding aggregate
Class Principal Balance of the Group I-A and Residual
Certificates. With respect to Loan Group II at any time, the then
outstanding aggregate Principal Balance of the Group II Loans
(less the applicable Class II-P Fraction of any Class II-P
Mortgage Loan) minus the then outstanding Class II-A-1 Principal
Balance.
<PAGE> 62
Subordinate Liquidation Amount: 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: On any
Distribution Date, the excess of (A) the sum of (i) the Group I
Subordinate Percentage of the Principal Payment Amount for Loan
Group I (exclusive of the portion thereof attributable to
principal distributions to the Class I-P Certificates pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution
Amount"), (ii) the Group II Subordinate Percentage of the
Principal Payment Amount for Loan Group II (exclusive of the
portion thereof attributable to principal distributions to the
Class II-P Certificates pursuant to clause (I)(b)(i) of the
definition of "REMIC II Distribution Amount"), (iii) the
Subordinate Principal Prepayments Distribution Amount and (iv)
the Subordinate Liquidation Amount over (B) the sum of (x) the
amounts required to be distributed to the Class I-P and Class II-
P Certificates pursuant to clauses (I)(c)(i) and (I)(c)(ii) of
the definition of "REMIC II Distribution Amount" on such
Distribution Date, (y) in the event that either the aggregate
Class Principal Balance of the Group I-A Certificates or the
Class II-A-1 Principal Balance 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 of the other Certificate Group, as set forth in
clause (X) of the sentence immediately following paragraph (I)(c)
of the definition of "REMIC II Distribution Amount", and (z) the
amounts in respect of principal 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." Any reduction in the
Subordinate Principal Distribution Amount pursuant to clause (B)
of this definition shall offset: (i) first, the amount calculated
pursuant to clause (A)(i) and clause (A)(ii) of this definition,
pro rata, (ii) second, the amount calculated pursuant to clause
(A)(iv) of this definition and (iii) third, the amount calculated
pursuant to clause (A)(iii) of this definition.
On any Distribution Date, the Subordinate Principal
Distribution Amount shall be allocated pro rata, by Class
Principal Balance, among the Classes of Group C-B 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
<PAGE> 63
the foregoing, on any Distribution Date prior to distributions on
such date, if the Subordination Level for any Class of Group C-B
Certificates is less than such percentage as of the Closing Date,
the pro rata portion of the Subordinate Principal Prepayments
Distribution Amount otherwise allocable to the Class or Classes
of Group C-B Certificates junior to such Class will be
distributed to the most senior Class of Group C-B Certificates
for which the Subordination Level is less than such percentage as
of the Closing Date, and to the Class or Classes of Group C-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 C-B
Certificates shall be as follows: Class C-B-1, Class C-B-2, Class
C-B-3, Class C-B-4, Class C-B-5 and Class C-B-6.
Subordinate Principal Prepayments Distribution Amount: On
any Distribution Date, the sum of (i) the Group I Subordinate
Prepayment Percentage of the Principal Prepayment Amount for Loan
Group I (exclusive of the portion thereof attributable to
principal distributions to the Class I-P Certificates pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution
Amount") and (ii) the Group II Subordinate Prepayment Percentage
of the Principal Prepayment Amount for Loan Group II (exclusive
of the portion thereof attributable to principal distributions to
the Class II-P Certificates pursuant to clause (I)(b)(i) of the
definition of "REMIC II Distribution Amount").
Subordination Level: On any specified date, with respect to
any Class of Group C-B Certificates, the percentage obtained by
dividing the sum of the Class Principal Balances of the Classes
of Group C-B Certificates which are subordinate in right of
payment to such Class by the sum of the Class Principal Balances
of all Classes of Certificates as of such date prior to giving
effect to distributions of principal or interest or allocations
of Realized Losses on the Mortgage Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is
substituted for another Mortgage Loan pursuant to and in
accordance with the provisions of Section 2.02.
Tax Matters Person: A Holder of a Class R-1 Certificate,
with respect to REMIC I, and a Holder of a Class R-2 Certificate,
with respect to REMIC II, in each case with a Percentage Interest
of at least 0.01% or any Permitted Transferee of such Class R-1
or Class R-2 Certificateholder designated as succeeding to the
position of Tax Matters Person with respect to the applicable
trust fund in a notice to the Trustee signed by authorized
representatives of the transferor and transferee of such Class R-
1 or Class R-2 Certificate. The Company is hereby appointed to
act as the Tax Matters Person for REMIC I so long as it holds a
Class R-1 Certificate, and to act as the Tax Matters Person for
<PAGE> 64
REMIC II so long as it holds a Class R-2 Certificate, in each
case with a Percentage Interest of at least 0.01%. The Company is
hereby appointed to act as agent for the Tax Matters Person for
either REMIC I or REMIC II, to perform the functions of such Tax
Matters Person as provided herein, in the event that the Company
ceases to hold a Class R-1 or Class R-2 Certificate, as
applicable, with the required Percentage Interest. If the Tax
Matters Person for REMIC I or REMIC II becomes a Disqualified
Organization, the last preceding Holder, that is not a
Disqualified Organization, of the Class R-1 or Class R-2
Certificate, as applicable, held by the Disqualified Organization
shall be Tax Matters Person for such trust pursuant to and as
permitted by Section 5.01(c). If any Person is appointed as tax
matters person by the Internal Revenue Service pursuant to the
Code, such Person shall be Tax Matters Person.
Termination Date: The date upon which final payment of the
Certificates will be made pursuant to the procedures set forth in
Section 9.01(b).
Termination Payment: The final payment delivered to the
Certificateholders on the Termination Date pursuant to the
procedures set forth in Section 9.01(b).
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any
Ownership Interest in a Residual Certificate.
Transferee Affidavit and Agreement: An affidavit and
agreement in the form attached hereto as Exhibit J.
Trust: The pool of assets consisting of the Trust Fund
conveyed pursuant to Section 2.01 of this Agreement.
Trustee: State Street Bank and Trust Company, or its
successor-in-interest as provided in Section 8.09, or any
successor trustee appointed as herein provided.
Trust Fund: The corpus of the trust created pursuant to
Section 2.01 of this Agreement. The Trust Fund consists of (i)
the PNC Mortgage Loans and (upon purchase thereof by the Trustee
pursuant to Section 2.01) the Clipper 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 (including (a) an initial deposit therein on
the Closing Date by the Company in the amount of $2,459.10 for
the payment of interest on a Mortgage Loan which does not have a
Due Date until August 1, 1999 and (b) an initial deposit therein
on the Closing Date by the Company in the amount of the Clipper
Mortgage Loan Purchase Amount for the purchase by the Trustee of
<PAGE> 65
the Clipper Mortgage Loans pursuant to Section 2.01, which
initial deposits shall be irrevocable) 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.
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 excess, if any, of (i) the
sum of (a) aggregate Uncollected Interest with respect to the
Mortgage Loans in such Loan Group and (b) aggregate Curtailment
Shortfall with respect to the Mortgage Loans in such Loan Group
over (ii) Compensating Interest with respect to such Loan Group.
Uncompensated Interest Shortfall for Loan Group I shall be
allocated to the Group I and Residual Certificates and the
portion of the Group C-B Certificates that derives its Interest
Distribution Amount from the Group I Loans pro rata according to
the amount of the Interest Distribution Amount to which each such
Class would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Group II Certificates and the portion of the
Group C-B Certificates that derives its Interest Distribution
Amount from the Group II Loans pro rata according to the amount
of the Interest Distribution Amount to which each such Class
would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be
allocated to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, pro rata according to the amount of the Interest
Distribution Amount to which each such Class of Regular Interests
would otherwise be entitled in reduction thereof.
<PAGE> 66
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Class II-X-M, Class C-Y-2 and Class C-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
aggregate Class Principal Balance of the Group I-A and Residual
Certificates is greater than the aggregate Principal Balance of
the Mortgage Loans in Loan Group I (less the applicable Class I-P
Fraction of each Class I-P Mortgage Loan); and for any
Distribution Date, Loan Group II, if immediately prior to such
Distribution Date the Class II-A-1 Principal Balance is greater
than the aggregate Principal Balance of the Mortgage Loans in
Loan Group II (less the applicable Class II-P Fraction of each
Class II-P Mortgage Loan).
Underwriting Standards: The underwriting standards of the
Company, CTX Mortgage Company, Downey Savings & Loan Association,
F.A., First Republic Savings Bank, GMAC Mortgage Corporation of
Pennsylvania, Headlands Mortgage Company, HomeSide Lending, Inc.,
Old Kent Mortgage Company, PNC Mortgage Corp. of America, Prism
Mortgage Company, Provident Savings Bank, FSB, Republic Bancorp
Mortgage, Inc. and Suntrust Mortgage, Inc.
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
Conveyance of the Trust Funds; REMIC Election and Designations;
Original Issuance of Certificates
<PAGE> 67
Section 2.01. Conveyance of the Trust Fund; REMIC Election and
Designations. The Trust of which the Trustee is the trustee is
hereby created under the laws of the State of New York for the
benefit of the Holders of the REMIC I Regular Interests and the
Class R-1 Certificates. The purpose of the Trust is to hold the
Trust Fund and provide for the issuance, execution and delivery
of the Class R-1 Certificates. The assets of the Trust shall
consist of the Trust Fund. The Trust shall be irrevocable.
The assets of the Trust shall remain in the custody of the
Trustee, on behalf of the Trust, and shall be kept in the Trust
except as otherwise expressly set forth herein. Moneys to the
credit of the Trust shall be held by the Trustee and invested as
provided herein. All assets received and held in the Trust will
not be subject to any right, charge, security interest, lien or
claim of any kind in favor of State Street Bank and Trust Company
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 (i) does hereby irrevocably sell, transfer, assign, set
over and otherwise convey to the Trustee, in trust for the
benefit of the Holders of REMIC I Regular Interests and the Class
R-1 Certificates, without recourse, all the Company's right,
title and interest in and to the Trust Fund (other than the
Clipper Mortgage Loans), 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 PNC
Mortgage Loans at any time, and all Principal Prepayments
received by the Company after the Cut-Off Date with respect to
the PNC 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 "PNC Conveyed Assets") and (ii) shall deposit into the
Certificate Account the Clipper Mortgage Loan Purchase Amount.
Concurrently with the execution and delivery hereof, the Trustee
shall (a) execute and deliver the Clipper Loan Sale Agreement,
and withdraw from the Certificate Account the Clipper Mortgage
Loan Purchase Amount and apply such amount to payment of the
purchase price for the assets conveyed to the Trustee under the
Clipper Loan Sale Agreement and (b) execute and deliver the
Protective Transfer Agreement. The Trustee shall have no duty to
review or otherwise determine the adequacy of the Clipper Loan
Sale Agreement and the Protective Transfer Agreement. The Clipper
<PAGE> 68
Mortgage Loans and the other assets conveyed to the Trustee under
the Clipper Loan Sale Agreement and the Protective Transfer
Agreement shall become part of the Trust Fund. The Trustee hereby
accepts the Trust created hereby and accepts delivery of the
Trust Fund on behalf of the Trust and acknowledges that it holds
the Mortgage Loans for the benefit of the Holders of the REMIC I
Regular Interests and the Class R-1 Certificates issued pursuant
to this Agreement.
It is the express intent of the parties hereto that the
Conveyance of the PNC 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 PNC Conveyed Assets. It is, further, not
the intention of the parties that such Conveyance be deemed a
pledge of the PNC 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
PNC 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 PNC 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 a
security interest in all of the Company's right, title, and
interest, whether now owned or hereafter acquired, in and to:
(I) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices
of credit and investment property consisting of, arising
from or relating to any of the property described in (i),
(ii) and (iii) below: (i) the PNC Mortgage Loans identified
on the Mortgage Loan Schedule, including the related
Mortgage Notes, Mortgages, Cooperative Stock Certificates,
and Cooperative Leases, all related Substitute Mortgage
Loans and all distributions with respect to such PNC
Mortgage Loans and related Substitute Mortgage Loans payable
on and after the Cut-Off Date; (ii) the Certificate Account,
the Investment Account, and all money or other property held
therein, and the Custodial Accounts for P&I and the
Custodial Accounts for Reserves (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 accounts, general intangibles, chattel paper,
<PAGE> 69
instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices
of credit, investment property, and other 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); and
(III) All cash and non-cash proceeds of the collateral
described in (I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes,
the Mortgages, the Security Agreements, Assignments of
Proprietary Lease, Cooperative Stock Certificates and Cooperative
Leases related to the PNC Mortgage Loans and such other goods,
letters of credit, advices of credit, instruments, money,
documents, chattel paper or certificated securities 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 9-305 and 9-115 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 and the Trustee at the direction of the Company
shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement
were deemed to create a security interest in the PNC Conveyed
Assets, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will
be maintained as such throughout the term of the Agreement. In
connection herewith, the Trustee shall have all of the rights and
remedies of a secured party and creditor under the Uniform
Commercial Code as in force in the relevant jurisdiction.
In 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
for the PNC Mortgage Loans, which shall on original issuance
thereof and at all times be registered in the name of the
Trustee. In the event that the Mortgage Files delivered or caused
<PAGE> 70
to be delivered by Clipper to the Trustee with respect to the
Clipper Mortgage Loans pursuant to the Clipper Loan Sale
Agreement do not include all the documents or instruments
required to be included therein pursuant to the definition of
"Mortgage File" herein, the Company shall deliver or cause to be
delivered to the Trustee or Custodian such missing documents or
instruments.
Concurrently with the execution and delivery hereof, the
Company shall cause assignments of the Mortgage Loans to the
Trustee to be recorded or filed, except in states where, in the
opinion of counsel admitted to practice in such state acceptable
to the Company, the Trustee and the Rating Agencies submitted in
lieu of such recording or filing, such recording or filing is not
required to protect the Trustee's interest in such Mortgage Loans
against creditors of, or against sale, further assignments,
satisfaction or discharge by the Lender, a Servicer, Clipper, the
Company or the Master Servicer, and the Company shall cause to be
filed the Form UCC-3 assignment and Form UCC-1 financing
statement referred to in clause (Y)(vii) and (ix), respectively,
of the definition of "Mortgage File." Notwithstanding the
immediately preceding sentence, in the event that any Mortgage
Loan is delivered to the Trustee by a custodian which is not an
affiliate of the Company and the related Mortgage File does not
contain an assignment of the Mortgage as required by clause
(X)(iii)(1) or clause (X)(iii)(2) of the definition of "Mortgage
File," the Company shall cause such custodian promptly to deliver
such an assignment, but in no event later than 30 days after the
Closing Date. 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)
relating to a Mortgage Loan is not included in the Mortgage File
delivered to the Trustee prior to or concurrently with the
execution and delivery hereof or of the Clipper Loan Sale
Agreement, as applicable (due to a delay on the part of the
recording office), the Company shall deliver to the Trustee a
fully legible reproduction of the original Mortgage or
intervening assignment provided that the related Lender or
originator 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) (collectively, "Recording Documents") to the Trustee
<PAGE> 71
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 by the date
specified in its previous Company Officer's Certificate delivered
to the Trustee, the Company shall deliver to the Trustee by such
date an additional Company Officer's Certificate stating a
revised date by which the Company expects to receive the
applicable Recording Documents. This procedure shall be repeated
until the Recording Documents have been received by the Company
and delivered to the Trustee.
In instances where, due to a delay on the part of the title
insurer, a copy of the title insurance policy for a particular
Mortgage Loan is not included in the Mortgage File delivered to
the Trustee prior to or concurrently with the execution and
delivery hereof or of the Clipper Loan Sale Agreement, as
applicable, the Company shall provide a copy of such title
insurance policy to the Trustee within 90 days after the
Company's receipt of the Recording Documents necessary to issue
such title insurance policy. In addition, the Company shall,
subject to the limitations set forth in the preceding sentence,
provide to the Trustee upon request therefor a duplicate title
insurance policy for any Mortgage Loan.
For Mortgage Loans for which the Company or Clipper, as
applicable, 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 and
unaffiliated with 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.
The Company and the Trustee agree that the Company, as the
Tax Matters Person or as agent therefor, as applicable, shall, on
behalf of the REMIC I Trust Fund, elect to treat the REMIC I
<PAGE> 72
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
Certificates are being issued in a single Class, which 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.
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 Company covenants and agrees that it shall act as the Tax
Matters Person or as agent therefor, as applicable, on behalf of
the REMIC I Trust Fund and that in such capacity it shall: (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
Certificates and the Trustee, all information reports as and when
required to be provided to them in accordance with the REMIC
Provisions, and make available the information necessary for the
application of Section 860E(e) of the Code; (d) conduct the
affairs of the REMIC I Trust Fund at all times that any REMIC I
Regular Interests are outstanding so as to maintain the status of
the REMIC I Trust Fund as a REMIC under the REMIC Provisions; (e)
not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status
of the REMIC I Trust Fund; and (f) pay the amount of any federal
prohibited transaction penalty taxes imposed on the REMIC I Trust
Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Company or any other appropriate
person from contesting any such tax in appropriate proceedings
and shall not prevent the Company from withholding payment of
such tax, if permitted by law, pending the outcome of such
proceedings); provided, that the Company shall be entitled to be
indemnified by the REMIC I Trust Fund for any such prohibited
<PAGE> 73
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 purchase or 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
Certificateholders. Notwithstanding anything to the contrary
contained herein, the Trustee is hereby authorized to retain from
amounts otherwise distributable to the Class R-1
Certificateholders on any Distribution Date sufficient funds to
reimburse the Company in its capacity as the Tax Matters Person
or as agent therefor, as applicable, for the payment of such tax
(upon the written request of the Company, to the extent
reimbursable, and to the extent that the Company has not been
previously reimbursed therefor).
Section 2.02. Acceptance by Trustee. The Trustee acknowledges
receipt (or with respect to any Mortgage Loan subject to a
Custodial Agreement, receipt by the Custodian thereunder) of the
documents (or certified copies thereof as specified in Section
2.01) referred to in Section 2.01 above, but without having made
the review required to be made within 45 days pursuant to this
Section 2.02, and declares that as of the Closing Date it holds
and will hold such documents and the other documents constituting
a part of the Mortgage Files delivered to it, and the Trust Fund,
as Trustee in trust, upon the trusts herein set forth, for the
use and benefit of the Holders from time to time of the REMIC I
<PAGE> 74
Regular Interests and Class R-1 Certificates. The Trustee agrees,
for the benefit of the Holders of the REMIC I Regular Interests
and Class R-1 Certificates, to review or cause the Custodian to
review each Mortgage File within 45 days after the Closing Date
and deliver to the Company a certification in the form attached
as Exhibit M hereto, to the effect that, except as noted, all
documents required (in the case of instruments described in
clauses (X)(v) and (Y)(x) 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) purchase or 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 purchase or 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,
purchase, repurchase or substitution must occur within the sooner
of (i) 90 days from the date the defect was discovered or (ii) in
the case of substitution, two years from the Closing Date.
Such Substitute Mortgage Loan shall mature no later than,
and not more than two years earlier than, have a principal
balance and Loan-to-Value Ratio equal to or less than, and have a
<PAGE> 75
Pass-Through Rate on the date of substitution equal to or no more
than 1% 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 purchase or
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 release to the Company the related Mortgage File
and shall 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. The obligation of the
Company to purchase or 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
Certificateholders or the Trustee on behalf of the Holders of the
REMIC I Regular Interests or the Class R-1 Certificateholders.
Section 2.03. Representations and Warranties of the Company
Concerning the Mortgage Loans. With respect to the conveyance of
the PNC Mortgage Loans provided for in Section 2.01 herein and
the conveyance of the Clipper Mortgage Loans provided for in the
Clipper Loan Sale Agreement, the Company hereby represents and
warrants to the Trustee that as of the Cut-Off Date unless
otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule was
true and correct in all material respects at the date or dates
respecting which such information is furnished;
(ii) As of the Closing Date, each Mortgage is a valid and
enforceable (subject to Section 2.03(xvi)) first lien on an
<PAGE> 76
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 and in the Clipper Loan Sale Agreement, the
Trustee shall have good title to, and will be the sole legal
owner of, each PNC Mortgage Loan and Clipper Mortgage Loan,
respectively, 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, as of the origination
date of such Mortgage Loan, was acceptable to Fannie Mae or
Freddie Mac, and 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 acceptable to Fannie Mae or Freddie
<PAGE> 77
Mac and qualified to do business in the state in which the
related Mortgaged Property is located. Such policy insures the
originator of the Mortgage Loan, its successors and assigns as to
the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan subject to the exceptions set forth
in such policy. Such policy is in full force and effect and will
be in full force and effect and inure to the benefit of the
Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders 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) All of the Mortgage Loans with Loan-to-Value Ratios as of
the Cut-Off Date in excess of 80% were 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 was documented by appropriate Fannie
Mae/Freddie 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, 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 Fannie Mae or Freddie Mac
requirements, are located in a condominium or planned unit
development projects which have received Fannie Mae or Freddie
Mac approval, or are approvable by Fannie Mae or Freddie 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 98.47% (by Principal Balance) of the Group I Loans
will be secured by owner occupied Mortgaged Properties which are
the primary residences of the related Mortgagors, approximately
<PAGE> 78
1.30% (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 0.22% (by
Principal Balance) of the Group I Loans will be secured by
Mortgaged Properties which were investor properties of the
related Mortgagors; approximately 94.84% (by Principal Balance)
of the Group II Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related
Mortgagors, approximately 0.12% (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 5.04% (by Principal Balance) of the Group II
Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors; and none of the Group I and
Group II Loans will be secured by interests in Cooperative
Apartments;
(xx) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form
satisfactory to Fannie Mae or Freddie 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; by
the terms of the Mortgage Notes, however, the due on sale
provisions may not be exercised at the time of a transfer if
prohibited by law;
(xxiii) The Company used no adverse selection procedures in
selecting the Mortgage Loans from among the outstanding fixed-
rate conventional mortgage loans purchased by it which were
available for inclusion in the Mortgage Pool and as to which the
representations and warranties in this Section 2.03 could be
made;
(xxiv) With respect to 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 91.10% (by Principal
Balance) of the Group I Loans had a current Loan-to-Value Ratio
less than or equal to 80%, approximately 8.91% (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 none of the
Group I Loans had a current Loan-to-Value Ratio greater than 95%;
and approximately 95.63% (by Principal Balance) of the Group II
Loans had a current Loan-to-Value Ratio less than or equal to
80%, approximately 4.36% (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 none of the Group II Loans had a current
Loan-to-Value Ratio greater than 95%;
(xxvi) Approximately 61.26% (by Principal Balance) of the
<PAGE> 79
Group I Loans and approximately 87.61% (by Principal Balance) of
the Group II Loans were originated for the purpose of refinancing
existing mortgage debt, including cash-out refinancings; and
approximately 38.75% (by Principal Balance) of the Group I Loans
and approximately 12.39% (by Principal Balance) of the Group II
Loans were originated for the purpose of purchasing the Mortgaged
Property;
(xxvii) Not less than approximately 81.46% and 48.09% (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
purchase or 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 purchase or 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 purchase or 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 Certificateholders or the Trustee on behalf of
the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders.
<PAGE> 80
Section 2.04. Acknowledgment of Transfer of Trust Fund;
Authentication of Class R-1 Certificates. The Trustee
acknowledges the transfer and assignment to it of the property
constituting the Trust Fund, but without having made the review
required to be made within 45 days pursuant to Section 2.02, and,
as of the Closing Date, does hereby convey to the Company the
REMIC I Regular Interests, and shall cause to be authenticated
and delivered, upon and pursuant to the order of the Company, the
Class R-1 Certificates in Authorized Denominations evidencing the
residual beneficial ownership interest in the REMIC I Trust Fund.
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 under the laws of the State of New York
for the benefit of the Holders of the REMIC II Regular Interests
and the Class R-2 Certificates. The purpose of REMIC II is to
hold the REMIC II Trust Fund and provide for the issuance,
execution and delivery of the REMIC II Regular Interests and the
Class R-2 Certificates. 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 State Street Bank
and Trust Company 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-1
Certificates), 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-1 Certificates) issued pursuant to this Agreement. It is the
express intent of the parties hereto that the conveyance of the
<PAGE> 81
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 a pledge of 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 a
security interest in all of the Company's right, title, and
interest, whether now owned or hereafter acquired, in and to:
(I) All accounts, contract rights, general
intangibles, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters of
credit, advices of credit and investment property consisting
of, arising from or relating to any of the property
described below: The uncertificated REMIC I Regular
Interests, including without limitation all rights
represented thereby in and to (i) the Mortgage Loans
identified on the Mortgage Loan Schedule, including the
related Mortgage Notes, Mortgages, Cooperative Stock
Certificates, and Cooperative Leases, 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 and the
Custodial Accounts for Reserves (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; (iv) all
property or 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), and (v) all cash and non-cash proceeds of the
collateral described in (i)-(iv) above;
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts,
<PAGE> 82
certificates of deposit, goods, letters of credit, advices
of credit, investment property and other 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); and
(III) All cash and non-cash proceeds of the
collateral described in (I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes,
the Mortgages and such other goods, letters of credit, advices of
credit, instruments, money, documents, chattel paper or
certificated securities 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 9-305
and 9-115 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 and the Trustee shall, to the extent consistent
with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security
interest in the 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.
The Trustee is authorized, with the Master Servicer's
consent, to appoint any bank or trust company approved by and
unaffiliated with 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.
The Company and the Trustee agree that the Company, as the
Tax Matters Person or as agent therefor, as applicable, shall, on
behalf of the REMIC II Trust Fund, elect to treat the REMIC II
<PAGE> 83
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
Certificates are being issued in a single Class, which 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 Company
covenants and agrees that it shall act as the Tax Matters Person
or as agent therefor, as applicable, on behalf of the REMIC II
Trust Fund and that in such capacity it shall: (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 Holders of the REMIC II Regular Interests and the Class R-2
Certificates 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 REMIC II Regular Interests and the Class R-2
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 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
<PAGE> 84
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
Certificates. 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
Certificates 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 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
Certificateholders (other than the Class R-1 Certificateholders).
In connection therewith, as of the Closing Date, the Trustee
shall cause to be authenticated and delivered, upon and pursuant
to the order of the Company, in exchange for the property
constituting the REMIC II Trust Fund, the Certificates (other
than the Class R-1 Certificates) in Authorized Denominations
evidencing the entire ownership of the REMIC II Trust Fund.
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 and
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 it may
deem necessary or desirable, 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.
<PAGE> 85
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
its discretion (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. The
Master Servicer shall have the right, but not the obligation, to
purchase or repurchase any related delinquent Mortgage Loan 90
days after the first delinquent Due Date or any time thereafter
for an amount equal to its Purchase Price; provided, however,
that the aggregate Purchase Price of Mortgage Loans so purchased
or repurchased 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.
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
<PAGE> 86
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
either REMIC to fail to qualify as such under the Code.
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 Certificateholders, 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 Trustee shall execute and
furnish to the Master Servicer, at the Master Servicer's
direction, any powers of attorney and other documents prepared by
the Master Servicer and determined by the Master Servicer to be
necessary or appropriate to enable the Master Servicer to carry
out its supervisory, servicing and administrative duties under
this Agreement.
The Master Servicer and each Servicer shall obtain (to the
extent generally commercially available from time to time) and
maintain fidelity bond and errors and omissions coverage
acceptable to Fannie Mae or Freddie 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. 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 either of the REMICs 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
<PAGE> 87
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
either REMIC as a result thereof.
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 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. 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 covering such Mortgage Loans shall be
deposited first in the Custodial Account for Reserves if required
for the restoration or repair of the related Mortgaged Property.
Proceeds from such insurance policies not so deposited in the
Custodial Account for Reserves 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 PNC Mortgage
<PAGE> 88
Securities Corp., its successors and assigns, for various
owners of interests in PNC Mortgage Securities Corp.
mortgage-backed pools or (ii) [Servicer's Name] in trust for
PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for
Reserves: (i) [Servicer's Name], as agent, trustee and/or
bailee of taxes and insurance custodial account for PNC
Mortgage Securities Corp., its successors and assigns for
various mortgagors and/or various owners of interests in PNC
Mortgage Securities Corp. mortgage-backed pools or (ii)
[Servicer's Name] in trust for PNC 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.
Section 3.03. The Investment Account; Eligible Investments.(a)
Not later than the Withdrawal Date, the Master Servicer shall
withdraw or direct the withdrawal of funds in the Custodial
Accounts for P&I, for deposit in the Investment Account, in an
amount representing:
(i) Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers
which were due on the related Due Date, net of Servicing Fees due
the applicable Servicers and less any amounts to be withdrawn
later by the applicable Servicers from the applicable Buydown
Fund Accounts;
(ii) Payoffs and the proceeds of other types of liquidations of
the Mortgage Loans received by the applicable Servicer for such
Mortgage Loans during the applicable Payoff Period, with interest
to the date of Payoff or liquidation less any amounts to be
withdrawn later by the applicable Servicers from the applicable
Buydown Fund Accounts; and
(iii) Curtailments received by the applicable Servicers in
the Prior Period.
At its option, the Master Servicer may invest funds
withdrawn from the Custodial Accounts for P&I, as well as any
Buydown Funds, Insurance Proceeds and Liquidation Proceeds
previously received by the Master Servicer (including amounts
paid by the Company in respect of any Purchase Obligation or its
substitution obligations set forth in Section 2.02 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
<PAGE> 89
funds which were withdrawn from the Custodial Accounts for P&I on
or before the Withdrawal Date, but not yet deposited into the
Certificate Account, shall immediately be deposited by the Master
Servicer with the Investment Depository in an Investment Account
in the name of the Master Servicer and the Trustee for investment
only as set forth in this Section 3.03. The Master Servicer shall
bear any and all losses incurred on any investments made with
such funds and shall be entitled to retain all gains realized on
such investments as additional servicing compensation. Not later
than the Business Day prior to the Distribution Date, the Master
Servicer shall deposit such funds, net of any gains (except
Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested
in (i) one or more Eligible Investments which shall in no event
mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature
on the Distribution Date), or (ii) such other instruments as
shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
(a) Not later than the Business Day prior to the related
Distribution Date, the Master Servicer shall direct the
Investment Depository to deposit 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 Certificateholders are entitled into
the Certificate Account. 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 or in connection
with the exercise of its option to terminate this Agreement
pursuant to Section 9.01) not previously deposited in the
Custodial Accounts for P&I or the Investment Account.
(b) Funds held in the Certificate Account shall be invested
at the 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.
Section 3.05. Permitted Withdrawals from the Certificate
<PAGE> 90
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,
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, 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 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 specified in Section 3.04(a); and
(viii) 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
<PAGE> 91
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, from the
Buydown Fund Account or Custodial Account for P&I established by
any Servicer under its supervision of the following amounts of
Buydown Funds:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) In the event of a Payoff of any Mortgage Loan having a
related Buydown Fund, to apply amounts remaining in Buydown Fund
Accounts to reduce the required amount of such principal Payoff
(or, if the Mortgagor has made a Payoff, to refund such remaining
Buydown Fund amounts to the Person entitled thereto);
(iii) In the event of foreclosure or liquidation of any
Mortgage Loan having a Buydown Fund, to deposit remaining Buydown
Fund amounts in the Investment Account as Liquidation Proceeds;
and
(iv) To clear and terminate the portion of any account
representing Buydown Funds following termination of this
Agreement pursuant to Section 9.01;
(c) The Trustee is authorized to make withdrawals from time
to time from the Certificate Account to reimburse itself for
advances it has made pursuant to Section 7.01(a) hereof that it
has determined to be Nonrecoverable Advances.
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 required with respect to a Mortgage Loan, in the
manner set forth in the applicable Selling and Servicing
Contract, until no longer required. 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 value of the
related Mortgaged Property (as determined by the appraisal
obtained at the time of origination), 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 such Primary
Insurance Policy in effect at the date of the initial issuance of
the Certificates that is required to be kept in force hereunder;
provided, however, that neither the Master Servicer nor any
<PAGE> 92
Servicer shall advance funds for the payment of any premium due
under any Primary Insurance Policy if it shall determine that
such an advance would be a Nonrecoverable Advance.
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 Fannie
Mae or Freddie 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 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
<PAGE> 93
by the terms of the related Mortgage Note, under any "due-on-
sale" clause applicable thereto; provided, however, that the
Master Servicer shall not exercise any such right if the due-on-
sale clause, in the reasonable belief of the Master Servicer, is
not enforceable under applicable law or if such exercise would
result in non-coverage of any resulting loss that would otherwise
be covered under any insurance policy. In the event the Master
Servicer is prohibited from exercising such right, the Master
Servicer is authorized to take or enter into an assumption and
modification agreement from or with the Person to whom a
Mortgaged Property has been or is about to be conveyed, pursuant
to which such Person becomes liable under the Mortgage Note and,
unless prohibited by applicable state law or unless the Mortgage
Note contains a provision allowing a qualified borrower to assume
the Mortgage Note, the Mortgagor remains liable thereon; provided
that the Mortgage Loan shall continue to be covered (if so
covered before the Master Servicer enters such agreement) by any
related Primary Insurance Policy. The Master Servicer is also
authorized to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is
released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. The Master
Servicer shall not enter into any substitution or assumption with
respect to a Mortgage Loan if such substitution or assumption
shall (i) both constitute a "significant modification" effecting
an exchange or reissuance of such Mortgage Loan under the Code
(or Treasury regulations promulgated thereunder) and cause the
REMICs to fail to qualify as a REMIC under the REMIC Provisions
or (ii) cause the imposition of any tax on "prohibited
transactions" or "contributions" after the startup day under the
REMIC Provisions. The Master Servicer shall notify the Trustee
that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original copy of such
substitution or assumption agreement and other documents and
instruments constituting a part thereof. In connection with any
such assumption or substitution agreement, the terms of the
related Mortgage Note shall not be changed. Any fee collected by
the applicable Servicer for entering into an assumption or
substitution of liability agreement shall be retained by such
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other
provision of this Agreement, the Master Servicer shall not be
deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason
whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The
Master Servicer shall foreclose upon or otherwise comparably
convert, or cause to be foreclosed upon or comparably converted,
<PAGE> 94
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 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 unaffiliated holders of a 100%
Percentage Interest of the Class B Certificate with the lowest
priority or holders of a 100% interest in a class of securities
representing such interests in such Class, 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
<PAGE> 95
agreement may contain provisions whereby such holder 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
delinquent Mortgage Loans, provided that the holder 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 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 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 holder 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 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
manage, conserve, protect and operate each such property for the
Certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such
property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) or result in the receipt by the
REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income
from foreclosure property" which is subject to taxation under the
REMIC Provisions. Pursuant to its efforts to sell such property,
the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such
<PAGE> 96
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. Upon notice thereof, the Master Servicer
shall promptly notify the Trustee 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. Upon receipt of such certification and
request, the Trustee shall, not later than the fifth succeeding
<PAGE> 97
Business Day, release 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 to prepare for and procure from the trustee or
mortgagee under the Mortgage which secured the Mortgage Note a
deed of full reconveyance or other form of satisfaction or
assignment of Mortgage and endorsement of Mortgage Note in
connection with a refinancing covering the Mortgaged Property,
which satisfaction, endorsed Mortgage Note or assigning document
shall be delivered by the Master Servicer to the person or
persons entitled thereto. No expenses incurred in connection with
such satisfaction or assignment shall be payable to the Master
Servicer by the Trustee or from the Certificate Account, the
related Investment Account or the related Custodial Account for
P&I. From time to time as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose,
collection under any Primary Insurance Policy, the Trustee shall,
upon request of the Master Servicer and delivery to it of a trust
receipt signed by a Servicing Officer, release not later than the
fifth Business Day following the date of receipt of such request
and trust receipt the related Mortgage File to the Master
Servicer or the related Servicer as indicated by the Master
Servicer and shall execute such documents as shall be necessary
to the prosecution of any such proceedings. Such trust receipt
shall obligate the Master Servicer to return the Mortgage File to
the Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer
similar to that herein above specified, the trust receipt shall
be released by the Trustee to the Master Servicer.
Section 3.11. Compensation to the Master Servicer and the
Servicers. As compensation for its activities hereunder, the
Master Servicer shall be entitled to receive from the Investment
Account or the Certificate Account the amounts provided for by
Section 3.05(a)(iii). The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor,
except as specifically provided herein.
As compensation for its activities under the applicable
Selling and Servicing Contract, the applicable Servicer shall be
entitled to withhold or withdraw from the related Custodial
Account for P&I the amounts provided for in such Selling and
Servicing Contract. 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, 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.
<PAGE> 98
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 provide such statements to any Certificateholder
upon request at the expense of the Master Servicer. Such
statement shall also, to the extent available, include
information regarding delinquencies on the Mortgage Loans,
indicating the number and aggregate Principal Balance of Mortgage
Loans which are one, two, three or more months delinquent, the
number and aggregate Principal Balance of Mortgage Loans with
respect to which foreclosure proceedings have been initiated and
the book value of any Mortgaged Property acquired by the REMIC I
Trust Fund through foreclosure, deed in lieu of foreclosure or
other exercise of the REMIC I Trust Fund's security interest in
the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master
Servicer shall deliver to the Trustee, on or before April 30 of
each year, beginning with the first April 30 succeeding the Cut-
Off Date by at least six months, an Officer's Certificate stating
as to the signer thereof, that (i) a review of the activities of
the Master Servicer during the preceding calendar year and
performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of such
statement shall be provided by the Master Servicer to
Certificateholders upon request or by the Trustee (solely to the
extent that such copies are available to the Trustee) at the
expense of the Master Servicer, should the Master Servicer fail
to so provide such copies.
Section 3.14. Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event that the Certificates
are legal for investment by federally-insured savings
associations, the Master Servicer shall provide to the OTS, the
FDIC and the supervisory agents and examiners of the OTS and the
FDIC access to the documentation regarding the related Mortgage
Loans required by applicable regulations of the OTS or the FDIC,
as applicable, and shall in any event provide such access to the
<PAGE> 99
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 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
<PAGE> 100
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 Certificateholders. 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-1 Certificateholders the
sum of (a) the Excess Liquidation Proceeds and (b) the amounts to
be distributed to the Class R-1 Certificateholders pursuant to
the definition of "REMIC I Distribution Amount" for such
Distribution Date, all in accordance with written statements
received from the Master Servicer pursuant to Section 4.02(b), by
wire transfer in immediately available funds for the account of
each such Holder and the Class R-1 Certificateholder, or by any
other means of payment acceptable to each such Holder and the
Class R-1 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 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 Business Day immediately following
the Withdrawal Date, reimbursable from Insurance Proceeds or
<PAGE> 101
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 Business Day
immediately following each Withdrawal Date, the Master Servicer
shall determine whether or not it will make a Monthly P&I Advance
on the Business Day prior to the next succeeding 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
distributed on the next succeeding Distribution Date on account
of principal and interest in respect of the Mortgage Loans,
stated separately. In the event that full scheduled amounts of
principal and interest in respect of the Mortgage Loans shall not
have been received by or on behalf of the Master Servicer prior
to such Determination Date and the Master Servicer shall have
determined that a Monthly P&I Advance shall be made in accordance
with this Section 4.02, the Master Servicer shall so specify and
shall specify the aggregate amount of such advance.
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.
<PAGE> 102
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 the Trustee with a statement in writing regarding the
amount of principal and interest, the Residual Distribution
Amount and the Excess Liquidation Proceeds to be distributed to
each Class of REMIC I Regular Interests and 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).
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.
(a) On each Distribution Date, the Trustee (or any duly
appointed paying agent) shall 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 Certificates (other than the
Class R-1 Certificates), in accordance with written statements
<PAGE> 103
received from the Master Servicer pursuant to Section 4.02(b), by
wire transfer in immediately available funds for the account of,
or by check mailed to, each such Certificateholder of record on
the immediately preceding Record Date (other than as provided in
Section 9.01 respecting the final distribution), as specified by
each such Certificateholder and at the address of such Holder
appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of
a Certificate effected by distributions of principal and all
allocations of Realized Losses made on any Distribution Date
shall be binding upon all Holders of such Certificates and of any
Certificates 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-1
and Class R-2 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 Master Servicer shall prepare and forward to the Trustee (and
to the Company if the Company is no longer acting as Master
Servicer), and the Trustee shall send to each Rating Agency and
shall make available to each Certificateholder, a statement
<PAGE> 104
setting forth, to the extent applicable: the amount of the
distribution payable to the applicable Class that represents
principal and the amount that represents interest, and the
applicable Class Principal Balance after giving effect to such
distribution. The Trustee may make available such statements and
certain other information, including, without limitation,
information required to be provided by the Trustee pursuant to
Sections 3.12 and 3.13, to Certificateholders through the
Trustee's Corporate Trust home page on the world wide web. Such
web page is located at "corporatetrust.statestreet.com". Mortgage-
Backed Securities information is available by clicking the
"Investor Information & Reporting" button and selecting the
appropriate transaction.
Upon request by any Certificateholder or Rating Agency or
the Trustee, the Master Servicer shall forward to such
Certificateholder or Rating Agency and the Trustee and the
Company (if the Company is no longer acting as Master Servicer)
an additional report which sets forth with respect to the
Mortgage Loans:
(a) The number and aggregate Principal Balance of the
Mortgage Loans delinquent one, two and three months or more;
(b) The (i) number and aggregate Principal Balance of
Mortgage Loans with respect to which foreclosure proceedings
have been initiated, and (ii) the number and aggregate book
value of Mortgaged Properties acquired through foreclosure,
deed in lieu of foreclosure or other exercise of rights
respecting the Trustee's security interest in the Mortgage
Loans, 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 amount of Realized Losses incurred in respect
of each Loan Group allocable to the Certificates on the
related Distribution Date and the cumulative amount of
Realized Losses incurred in respect of each Loan Group
allocated to such Certificates since the Cut-Off Date.
Upon request by any Certificateholder, the Master Servicer,
as soon as reasonably practicable, shall provide the requesting
<PAGE> 105
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.
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 upon and pursuant to the
order of the Company upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be issuable in
Authorized Denominations evidencing Percentage Interests.
Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by authorized officers of the Trustee.
Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in
the form provided for herein executed by the Trustee or any
Authenticating Agent by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of
their authentication.
(b) The following definitions apply for purposes of this
Section 5.01: "Disqualified Organization" means any Person which
is not a Permitted Transferee, but does not include any "Pass-
Through Entity" which owns or holds a Residual Certificate and of
which a Disqualified Organization, directly or indirectly, may be
a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment
trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies;
"Ownership Interest" means, with respect to any Residual
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as
the Holder thereof and any other interest therein whether direct
or indirect, legal or beneficial, as owner or as pledgee;
"Transfer" means any direct or indirect transfer or sale of, or
<PAGE> 106
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 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
<PAGE> 107
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)
<PAGE> 108
or for making any payments due on such Certificate to the holder
thereof or for taking any other action with respect to such
holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
restrictions in this Section 5.01(c) and to the extent
that the retroactive restoration of the rights of the
Holder of such Residual Certificate as described in
clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Company shall have the right,
without notice to the Holder or any prior Holder of
such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Company on
such terms as the Company may choose. Such purported
Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the
instructions of the Company. Such purchaser may be the
Company itself or any affiliate of the Company. The
proceeds of such sale, net of the commissions (which
may include commissions payable to the Company or its
affiliates), expenses and taxes due, if any, shall be
remitted by the Company to such purported Transferee.
The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of
the Company, and the Company shall not be liable to any
Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such
discretion.
(iv) The Company, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary
to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is
not a Permitted Transferee, including the information regarding
"excess inclusions" of such Residual Certificates required to be
provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulation Section 1.860D-1(b)(5), 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
<PAGE> 109
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 or REMIC II to cease to qualify
as a REMIC and will not create a risk that (1) REMIC I
or 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.
(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-
1] [R-2] 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-1][R-2] 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
<PAGE> 110
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 Class B or Residual Certificates
presented for registration in the name of any Person, the Trustee
shall require either (i) 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 a Class B or
Residual 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 or (ii) only in the case of a Class B
Certificate, 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.
(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); provided that any
transfer, sale, pledge or other disposition of a Junior
Subordinate Certificate shall be exempt from the requirements of
this Section 5.01(e) and Section 5.01(f) if each of the
Certificateholder desiring to effect such transfer and such
Certificateholder's transferee are among the following: (i) DLJ
Mortgage Capital, Inc., (ii) Donaldson, Lufkin & Jenrette
Securities Corporation and (iii) DLJ Mortgage Acceptance Corp.
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, which establishes or establish to
the Trustee's satisfaction 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
<PAGE> 111
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
satisfactory to it 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.
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,
<PAGE> 112
other Certificates pursuant to Section 5.03. Such aggregate
principal amount shall be allocated among one or more Classes
having designations, types of interests, initial per annum
Certificate Interest Rates, initial Class Principal Balances and
Final Maturity Dates as specified in the Preliminary Statement to
this Agreement. The aggregate Percentage Interest of each Class
of Certificates of which the Class Principal Balance equals zero
as of the Cut-Off Date that may be authenticated and delivered
under this Agreement is limited to 100%. Certificates shall be
issued in Authorized Denominations.
Section 5.03. Registration of Transfer and Exchange of
Certificates. The Trustee shall cause to be maintained at one of
its offices or at its designated agent, a Certificate Register in
which there shall be recorded the name and address of each
Certificateholder. Subject to such reasonable rules and
regulations as the Trustee may prescribe, the Certificate
Register shall be amended from time to time by the Trustee or its
agent to reflect notice of any changes received by the Trustee or
its agent pursuant to Section 10.06. The Trustee hereby appoints
itself as the initial Certificate Registrar.
Upon surrender for registration of transfer of any
Certificate to the Trustee at the Corporate Trust Office of the
Trustee or at the office of State Street Bank and Trust Company,
N.A., 61 Broadway, New York, New York 10006, Attention: Corporate
Trust Window, or such other address or agency as may hereafter be
provided to the Master Servicer in writing by the Trustee, the
Trustee shall execute, and the Trustee or any Authenticating
Agent shall authenticate 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.
<PAGE> 113
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-1
Certificates, the residual ownership interests in the REMIC I
Trust Fund) as if originally issued, whether or not the lost or
stolen Certificate shall be found at any time.
Section 5.05. Persons Deemed Owners. The Company, the Master
Servicer, the Trustee and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions
pursuant to Section 4.01 and 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.
<PAGE> 114
If temporary Certificates are issued, the Trustee shall
cause definitive Certificates to be prepared within ten Business
Days of the Closing Date or as soon as practicable thereafter.
After preparation of definitive Certificates, the temporary
Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office or
agency of the Trustee to be maintained as provided in Section
5.10 hereof, without charge to the holder. Any tax or
governmental charge that may be imposed in connection with any
such exchange shall be borne by the Master Servicer. Upon
surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver in exchange
therefor a like principal amount of definitive Certificates of
Authorized Denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates.
Notwithstanding the foregoing, the Book-Entry Certificates, upon
original issuance, shall be issued in the form of one or more
typewritten Certificates of Authorized Denomination representing
the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Company. The Book-Entry
Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of DTC, as the
initial Clearing Agency, and no Beneficial Holder shall receive a
definitive certificate representing such Beneficial Holder's
interest in any Class of Book-Entry Certificate, except as
provided above and in Section 5.09. Each Book-Entry Certificate
shall bear the following legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New
York corporation ("DTC"), to the Company or its agent
for registration of transfer, exchange, or payment, and
any Certificate issued is registered in the name of
Cede & Co. or such other name as is requested by an
authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an
interest herein.
Unless and until definitive, fully registered Book-Entry
Certificates (the "Definitive Certificates") have been issued to
the Beneficial Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in
full force and effect with respect to the Book-Entry
<PAGE> 115
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 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
<PAGE> 116
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 Massachusetts and in New York, New York, an
office or agency where Certificates may be surrendered for
registration of transfer or exchange. The Corporate Trust Office
and State Street Bank and Trust Company, N.A., 61 Broadway, New
York, NY 10006, Attention: Corporate Trust Window are initially
designated for said purposes.
ARTICLE VI
The Company and the Master Servicer
Section 6.01. Liability of the Company and the Master Servicer.
The Company and the Master Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically
imposed upon and undertaken by the Company or the Master
Servicer, as applicable, herein.
Section 6.02. Merger or Consolidation of the Company, or the
Master Servicer. Any corporation into which the Company or the
Master Servicer may be merged or consolidated, or any corporation
<PAGE> 117
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.
<PAGE> 118
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 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 PNC Bank Corp., 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
<PAGE> 119
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 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,
<PAGE> 120
under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, if any. Such determination shall be final and
binding. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates or
the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section 7.01; and, without
limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the
Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee for administration by it
of all cash amounts which shall at the time be credited by the
Master Servicer to the Certificate Account or thereafter be
received with respect to the Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default
described in clause (vi) of this Section 7.01(a) shall occur, the
Trustee shall, by notice in writing to the Master Servicer, which
may be delivered by telecopy, immediately suspend all of the
rights and obligations of the Master Servicer thereafter arising
under this Agreement, but without prejudice to any rights it may
have as a Certificateholder or to reimbursement of Monthly P&I
Advances and other advances of its own funds, and the Trustee
shall act as provided in Section 7.02 to carry out the duties of
the Master Servicer, including the obligation to make any Monthly
P&I Advance the nonpayment of which was an Event of Default
described in clause (vi) of this Section 7.01(a). Any such action
taken by the Trustee must be prior to the distribution on the
relevant Distribution Date. If the Master Servicer shall within
two Business Days following such 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.
<PAGE> 121
(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
(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.
<PAGE> 122
Section 7.02. Trustee to Act; Appointment of Successor. On and
after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, 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
after the Master Servicer receives such notice of termination
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 at or
prior to the time the Master Servicer was terminated as Master
Servicer 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.
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
Certificateholders at their respective addresses appearing in the
Certificate Register.
ARTICLE VIII
<PAGE> 123
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 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
<PAGE> 124
trust or power conferred upon the Trustee under this Agreement.
(d) Within ten 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, 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
<PAGE> 125
require reasonable indemnity against such expense or liability as
a condition to proceeding;
(v) The Trustee may execute the trust or any of the powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys;
(vi) The Trustee shall not be deemed to have knowledge or notice
of any matter, including without limitation an Event of Default,
unless actually known by a Responsible Officer, or unless written
notice thereof referencing this Agreement or the Certificates is
received at the Corporate Trust Office at the address set forth
in Section 10.06; and
(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.
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 any 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
<PAGE> 126
herein, the Master Servicer shall pay or reimburse the Trustee
upon its 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 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
<PAGE> 127
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, 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.
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
<PAGE> 128
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
<PAGE> 129
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
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 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
<PAGE> 130
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 to the Master
Servicer. The Trustee may, upon prior written approval of the
Master Servicer, at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to
such Authenticating Agent and to the Master Servicer. Upon
receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of the first paragraph
of this Section 8.11, the Trustee may appoint, upon prior written
approval of the Master Servicer, a successor Authenticating
Agent, shall give written notice of such appointment to the
Master Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with
all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as
Authenticating Agent. Any reasonable compensation paid to an
Authenticating Agent shall be a reimbursable expense pursuant to
Section 8.05 if paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or more
Paying Agents which shall be authorized to act on behalf of the
Trustee in making withdrawals from the Certificate Account, and
distributions to Certificateholders as provided in Section 4.01,
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
<PAGE> 131
corporation 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.
ARTICLE IX
Termination
Section 9.01. Termination Upon Repurchase by the Company 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
<PAGE> 132
Company, the Master Servicer and the Trustee created hereby shall
terminate upon (i) the purchase or repurchase by the Company
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 or repurchase,
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 or repurchase by the Company 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 Company 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
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 Joseph P. Kennedy, the
late ambassador of the United States to the Court of St. James,
living on the date hereof.
The Company may purchase or repurchase the outstanding
Mortgage Loans and any Mortgaged Properties acquired by the Trust
Fund at the price stated in clause (i) of the preceding paragraph
provided that the aggregate Principal Balance of the Mortgage
Loans at the time of any such purchase or repurchase aggregates
less than five percent of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-Off Date. If such right is
exercised, the Company shall provide to the Trustee (and to the
Master Servicer, if the Company is no longer acting as Master
Servicer) the written certification of an officer of the Company
(which certification shall include a statement to the effect that
all amounts required to be paid in order to purchase or
repurchase 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
Company the Mortgage Files and any foreclosed Mortgaged Property
pertaining to the Trust Fund.
<PAGE> 133
In no event shall the Company 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
or repurchase the Mortgage Loans under this Section 9.01.
(b) Notice of any termination, specifying the date upon
which the Certificateholders may surrender their Certificates to
the Trustee for payment and cancellation, shall be given promptly
by letter from the Trustee to Certificateholders mailed not less
than 30 days prior to such final distribution, specifying (i) the
date upon which final payment of the Certificates will be made
upon presentation and surrender of Certificates at the office of
the Certificate Registrar therein designated (the "Termination
Date"), (ii) the amount of such final payment (the "Termination
Payment") and (iii) that the Record Date otherwise applicable to
the Distribution Date upon which the Termination Date occurs is
not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Certificate
Registrar therein specified. Upon any such notice, the
Certificate Account shall terminate subject to the Master
Servicer's obligation to hold all amounts payable to
Certificateholders in trust without interest pending such
payment.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months
after the Termination Date, the Company 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 Company 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 Company 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 Company, 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 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
<PAGE> 134
forth in the notice given by the Trustee under Section 9.01, the
Company, in its capacity as the Tax Matters Person or as agent
therefor, as applicable, shall prepare the documentation required
and 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 any
regulations thereunder, as evidenced by an Opinion of Counsel
obtained at the expense of the Company, 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 as agent of the Trustee shall sell all of the
assets of the REMIC I Trust Fund and the REMIC II Trust Fund to
the Company 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 Company to adopt
such a plan of complete liquidation upon the written request of
the Company and to take such other action in connection therewith
as may be reasonably requested by the Company.
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. 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.
<PAGE> 135
(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 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.
Without limiting the foregoing, the Trustee shall make the
filings required by Chapter 182 of the Massachusetts General
Laws.
Section 10.03. Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to
terminate this Agreement, the REMIC I Trust Fund or the REMIC II
<PAGE> 136
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 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
<PAGE> 137
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 shall be construed
in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws without giving effect
to conflict of laws principles.
Section 10.06. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by registered or
certified mail to (a) in the case of the Company, 75 North
Fairway Drive, Vernon Hills, Illinois 60061, Attention: General
Counsel (with a copy directed to the attention of the Master
Servicing Department) 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
<PAGE> 138
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, 26 Broadway, 15th
Floor, New York, New York 10004, Attention: Frank Raiter, 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
DCR, 55 E. Monroe Street, 38th floor, Chicago, Illinois 60603,
Attention: RMBS Monitoring, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in
writing by DCR. 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:
<PAGE> 139
(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;
(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 or repurchase of any Mortgage Loan pursuant to
a Purchase Obligation or the purchase or repurchase 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.
IN WITNESS WHEREOF, the Company and the Trustee have caused
their names to be signed hereto by their respective officers,
thereunto duly authorized, and their respective seals, duly
attested, to be hereunto affixed, all as of the day and year
first above written.
<PAGE> 140
PNC MORTGAGE SECURITIES CORP.
(SEAL)
By: /s/ Michael A. Aaknes
- - - - - - - - - - -
Its: Second Vice President
STATE STREET BANK AND TRUST
COMPANY,
as Trustee
(SEAL)
By: /s/ David Duclos
- - - - - - - - - - -
Its: Vice President
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 29th day of June 1999 before me, a Notary Public in
and for said State, personally appeared Michael A. Aaknes, known
to me to be the Second Vice President of PNC MORTGAGE SECURITIES
CORP., one of the corporations that executed the within
instrument, and also known to me to be the person who executed it
on behalf of said Corporation, and acknowledged to me that such
corporation executed the within instrument pursuant to its By-
Laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in the certificate first above
written.
/s/ Laura A. Kelsey
- - - - - - - - - -
Notary Public
(SEAL)
CERTIFICATE OF ACKNOWLEDGEMENT
<PAGE> 141
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 29th day of June 1999 before me, a Notary Public in
and for said State, personally appeared David Duclos, personally
known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the
person(s), or the entity on behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and affixed my official seal
Signature /s/ Craig D. Lange(SEAL)
- - - - - - - - - -
Exhibit A
CUSIP 69348R NE2
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999.
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
<PAGE> 142
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 1999-6 Portion of the Class I-A-1
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$150,000,000.00
Class I-A-1 Certificate Interest Rate: 7.250%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-1 Principal Balance
as of the Cut-Off Date: $150,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NF9
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-2
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. [Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
<PAGE> 143
rate based on the Standard Prepayment Assumption or any other
rate.]
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 1999-6 Portion of the Class I-A-2
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$22,447,000.00
Class I-A-2 Certificate Interest Rate: 7.250%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-2 Principal Balance
as of the Cut-Off Date: $22,447,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NG7
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-3
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Interest is not payable with
<PAGE> 144
respect to this Certificate. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee 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 1999-6 Portion of the Class I-A-3
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$11,111,111.00
Class I-A-3 Certificate Interest Rate: 0.000%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-3 Principal Balance
as of the Cut-Off Date: $11,111,111.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NH5
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-4
<PAGE> 145
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. [Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.]
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 1999-6 Portion of the Class I-A-4
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$20,550,142.00
Class I-A-4 Certificate Interest Rate: 6.750%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-4 Principal Balance
as of the Cut-Off Date: $20,550,142.00
<PAGE> 146
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NJ1
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-5
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999.
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 1999-6 Portion of the Class I-A-5
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$3,946,000.00
Class I-A-5 Certificate Interest Rate: 7.500%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-5 Principal Balance
as of the Cut-Off Date: $3,946,000.00
Cede & Co.
Registered Owner
<PAGE> 147
Exhibit A
CUSIP 69348R NK8
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-6
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999.
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 1999-6 Portion of the Class I-A-6
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$4,471,000.00
Class I-A-6 Certificate Interest Rate: 7.500%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-6 Principal Balance
as of the Cut-Off Date: $4,471,000.00
Cede & Co.
Registered Owner
Exhibit A
<PAGE> 148
CUSIP 69348R NL6
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-7
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999.
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 1999-6 Portion of the Class I-A-7
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$989,000.00
Class I-A-7 Certificate Interest Rate: 7.500%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-7 Principal Balance
as of the Cut-Off Date: $989,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NM4
<PAGE> 149
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-8
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Interest is not payable with
respect to this Certificate. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee 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 1999-6 Portion of the Class I-A-8
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$1,045,111.00
Class I-A-8 Certificate Interest Rate: 0.000%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
<PAGE> 150
Class I-A-8 Principal Balance
as of the Cut-Off Date: $1,045,111.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NN2
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-9
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Interest is not payable with
respect to this Certificate. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee 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
<PAGE> 151
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1999-6 Portion of the Class I-A-9
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$1,662,741.00
Class I-A-9 Certificate Interest Rate: 0.000%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-A-9 Principal Balance
as of the Cut-Off Date: $1,662,741.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NQ5
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial
Certificate Principal Balance, computed under the exact method.
<PAGE> 152
No representation is made that the Mortgage Loans will prepay at
a rate based on the Standard Prepayment Assumption or any other
rate.
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 1999-6 Portion of the Class I-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$3,664,971.00
Class I-X Certificate Interest
Rate: 6.750% applied to the
Class I-X Notional Amount
Cut-Off Date: June 1, 1999
First Distribution Date:
July 26, 1999
Last Scheduled Distribution
Date: July 25, 2029
Class I-X Principal Balance
as of the Cut-Off Date: $0.00
Class I-X Notional Amount
as of the Cut-Off Date:
$3,664,971.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R
NS1
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-P
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
<PAGE> 153
PNC 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 June 29, 1999. Interest is not payable with
respect to this Certificate. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not
more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.
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 1999-6 Portion of the Class I-P Principal
Balance as of the Cut-Off Date
evidenced by this Certificate:
$319,903.00
Class I-P Certificate Interest Rate: 0.00%
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class I-P Principal Balance as of the Cut-Off Date: $319,903.00
Cede & Co.
Registered Owner
<PAGE> 154
Exhibit A
CUSIP 69348R NP7
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. [Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is
not more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.]
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 1999-6 Portion of the Class II-A-1
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$42,069,787.00
Class II-A-1 Certificate Interest Rate: 6.500%
Cut-Off Date: June 1, 1999
<PAGE> 155
First Distribution Date:
July 26, 1999
Last Scheduled Distribution Date:
July 25, 2014
Class II-A-1 Principal Balance as of the Cut-Off Date:
$42,069,787.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R
NR3
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial
Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at
a rate based on the Standard Prepayment Assumption or any other
rate.
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
<PAGE> 156
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 1999-6 Portion of the Class II-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$306,423.00
Class II-X Certificate
Interest Rate: 6.500%
applied to the Class II-X
Notional Amount
Cut-Off Date: June 1, 1999
First Distribution Date:
July 26, 1999
Last Scheduled Distribution
Date: July 25, 2014
Class II-X Principal Balance
as of the Cut-Off Date:
$0.00
Class II-X Notional Amount
as of the Cut-Off Date:
$306,423.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R
NT9
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-P
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Interest is not payable with
<PAGE> 157
respect to this Certificate. Assuming that the Mortgage Loans
underlying the Certificates prepay at the prepayment assumption
used by the issuer in pricing this Certificate (i.e., 275% of the
Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not
more than $ per $100,000 of initial Certificate
Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a
rate based on the Standard Prepayment Assumption or any other
rate.
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 1999-6 Portion of the Class II-P Principal
Balance as of the Cut-Off Date
evidenced by this Certificate:
Class II-P Certificate Interest Rate: 0.00% $58,658.00
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2014
Class II-P Principal Balance as of the Cut-Off Date: $58,658.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R NU6
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
<PAGE> 158
PNC 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 June 29, 1999. [Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.]
IN THE CASE OF ANY CLASS C-B-1 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-1 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
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class C-B-1 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-6 Portion of the Class C-B-1
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_ __ __ __ _ __ __ __ __
Class C-B-1 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-1 Principal Balance
as of the Cut-Off Date: $4,703,100.00
DLJ Mortgage Capital, Inc.
<PAGE> 159
Registered Owner
Certificate No. _ __ __ _
Exhibit A
CUSIP 69348R NV4
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-2
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. [Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.]
IN THE CASE OF ANY CLASS C-B-2 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-2 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
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class C-B-2 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-6 Portion of the Class C-B-2
Principal Balance as of the
<PAGE> 160
Cut-Off Date Evidenced by this
Certificate:
$_ __ __ __ __ __ __ __ __ __
Class C-B-2 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-2 Principal Balance
as of the Cut-Off Date: $2,284,364.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No. _ __ __ _
Exhibit A
CUSIP 69348R NW2
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-3
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. [Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.]
IN THE CASE OF ANY CLASS C-B-3 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-3 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
<PAGE> 161
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 Class C-B-3 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-6 Portion of the Class C-B-3
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$940,620.00
Class C-B-3 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-3 Principal Balance
as of the Cut-Off Date: $940,620.00
DLJ Mortgage Capital, Inc.
Registered Owner
Exhibit A
CUSIP 69348R NZ5
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-4
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
<PAGE> 162
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.
IN THE CASE OF ANY CLASS C-B-4 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-4 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
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 C-B-4 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-6 Portion of the Class C-B-4
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$940,620.00
Class C-B-4 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-4 Principal Balance
as of the Cut-Off Date: $940,620.00
DLJ Mortgage Capital, Inc.
Registered Owner
Exhibit A
CUSIP 69348R PA8
MORTGAGE PASS-THROUGH CERTIFICATE
<PAGE> 163
Class C-B-5
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.
IN THE CASE OF ANY CLASS C-B-5 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-5 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
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 C-B-5 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
<PAGE> 164
Series 1999-6 Portion of the Class C-B-5
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$537,497.00
Class C-B-5 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-5 Principal Balance
as of the Cut-Off Date: $537,497.00
DLJ Mortgage Capital, Inc.
Registered Owner
Exhibit A
CUSIP 69348R PB6
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-6
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC 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 June 29, 1999. Assuming that the Mortgage
Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the
short period is not more than $ per $100,000 of
initial Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans will
prepay at a rate based on the Standard Prepayment Assumption or
any other rate.
IN THE CASE OF ANY CLASS C-B-6 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, 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 A CLASS
C-B-6 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
<PAGE> 165
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 C-B-6 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-6 Portion of the Class C-B-6
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$671,872.90
Class C-B-6 Certificate Interest Rate: Variable
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class C-B-6 Principal Balance
as of the Cut-Off Date: $671,872.90
DLJ Mortgage Capital, Inc.
Registered Owner
Exhibit A
CUSIP 69348R NY8
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-2
Evidencing a Percentage Interest in certain distributions with
respect to a pool of conventional one- to four-family mortgage
loans formed and administered by
PNC 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
<PAGE> 166
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-2 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-2
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-2 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE
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 A CLASS R-2 CERTIFICATE IS 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, THE REMIC I TRUST
FUND, THE REMIC II TRUST FUND OR THE COMPANY.
Solely for U.S. federal income tax purposes, this Certificate
represents a "residual 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.
Series 1999-6 Percentage Interest evidenced
by this Class R-2 Certificate
in the distributions to be
made with respect to the Class
R-2 Certificates:
%
<PAGE> 167
Class R-2 Certificate Interest
Rate: 6.750%. Additionally the
Class R-2 Certificates are
entitled to the Residual
Distribution Amount as defined
in the Pooling Agreement.
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
_ __ __ __ __ __ _
Registered Owner
Certificate No. _ __ __ _
Exhibit B
CUSIP 69348R NX1
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-1
Evidencing a Percentage Interest in certain distributions with
respect to a pool of conventional one- to four-family mortgage
loans formed and administered by
PNC 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-1 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-1
<PAGE> 168
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-1 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE
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 A CLASS R-1 CERTIFICATE IS 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, THE REMIC I TRUST
FUND, THE REMIC II TRUST FUND OR THE COMPANY.
Solely for U.S. federal income tax purposes, this Certificate
represents a "residual 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.
Series 1999-6 Percentage Interest evidenced
by this Class R-1 Certificate
in the distributions to be
made with respect to the Class
R-1 Certificates:
%
Class R-1 Certificate Interest
Rate: 6.750%. Additionally the
Class R-1 Certificates are
entitled to Excess Liquidation
Proceeds and the Residual
Distribution Amount as defined
in the Pooling Agreement.
Cut-Off Date: June 1, 1999
First Distribution Date: July 26, 1999
Last Scheduled Distribution Date: July 25, 2029
Class R-1 Principal Balance as of the Cut-Off Date: $50.00
_ __ __ __ __ __ _
Registered Owner
Certificate No. _ __ __ _
This Certificate does not represent an obligation of or
interest in PNC Mortgage Securities Corp. or any of its
affiliates, including PNC Bank Corp. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed by any agency or
instrumentality of the United States.
<PAGE> 169
This certifies that the above-named Registered Owner is the
registered owner of certain interests in a trust fund (the "REMIC
I Trust Fund") whose assets consist of, among other things, a
pool (the "Mortgage Pool") of conventional one- to four-family
mortgage loans (the "Mortgage Loans"), formed and administered by
PNC 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
State Street Bank and Trust Company, 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 I Available Distribution
Amount for such Distribution Date then distributable on the
Certificates of this Class, as specified in Section 4.01 of the
Pooling Agreement.
Distributions on this Certificate will be made by the
Trustee by wire transfer or check mailed to the address of the
Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by
the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate to the Certificate
Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
<PAGE> 170
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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of
the Series and Class specified hereon (herein called the
"Certificates") and representing certain interests in the REMIC I
Trust Fund.
The Certificates do not represent an obligation of, or an
interest in, the Company or any of its affiliates and are not
insured or guaranteed by any governmental agency. The
Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as
more specifically set forth herein and in the Pooling Agreement.
In the event funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer from
the related recoveries on such Mortgage Loan or from other cash
deposited in the Certificate Account to the extent that such
advance is not otherwise recoverable.
<PAGE> 171
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.
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 desiring to effect such transfer shall, and does
<PAGE> 172
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 I 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 repurchase by the
Company) 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 repurchases any Mortgage
Loan pursuant to the Pooling Agreement, such 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 accrued
interest at the applicable Pass-Through Rate to the next
scheduled Due Date for the Mortgage Loan. The Pooling Agreement
permits, but does not require, the Company to repurchase 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 Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the
Mortgage Loans at the time of repurchase being less than five
percent (5%) of the aggregate unpaid Principal Balance of the
Mortgage Loans as of the Cut-Off Date.
<PAGE> 173
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 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 PNC
Mortgage Securities Corp. or any of
its affiliates, including PNC Bank
Corp. Neither this Certificate nor
the underlying Mortgage Loans are
guaranteed by any agency or
instrumentality of the United States.
Exhibit D
MORTGAGE LOAN SCHEDULE
Copies of the Mortgage Loan Schedule (which has been
intentionally omitted from this filing) may be obtained from PNC
Mortgage Securities Corp. or State Street Bank and Trust Company
by contacting,
in the case of PNC Mortgage Securities Corp.,
Richie Moore
Master Servicing Department
PNC Mortgage Securities Corp.
75 N. Fairway Drive
Vernon Hills, Illinois 60061
Telephone: (847) 549-3683
<PAGE> 174
Facsimile: (847) 549-3681
in the case of State Street Bank and Trust Company
David Duclos
State Street Corporation
Global Investor Services Group
Corporate Trust
2 Avenue de Lafayette
Boston, MA 02111-1724
Telephone: (617) 664-5436
Facsimile: (617) 664-5368
Exhibit E
SELLING AND SERVICING
CONTRACT
This Selling and Servicing Contract (this "Agreement") is made
and entered into by PNC Mortgage Securities Corp. and its
successors and assigns ("PNC 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, PNC Mortgage; and
WHEREAS, the Company has submitted a Seller Application to
PNC Mortgage and has been approved by PNC Mortgage for
participation in the PNC Mortgage Purchase Programs; and
WHEREAS, the Company has received and reviewed the PNC
Mortgage Purchase Programs Seller Guide (the "Seller Guide"), as
well as the PNC 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, PNC Mortgage and the Company
hereby agree as follows:
1. Guides. The Guides, which set forth the terms and
conditions under which PNC Mortgage may elect to purchase
mortgage loans from the Company, and the Company shall service
mortgage loans on behalf of PNC Mortgage, are a supplement to
<PAGE> 175
this Agreement and such Guides, as may be amended or supplemented
from time to time by PNC 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 PNC 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 PNC Mortgage. With respect to each mortgage
loan sold by the Company to PNC 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, PNC 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 with respect to any mortgage loan
subject to this Agreement, as well as the remedies available to
PNC Mortgage upon the breach thereof, shall survive: (a) any
investigation regarding the mortgage loan conducted by PNC
Mortgage, its assignees or designees, (b) the liquidation of the
mortgage loan, (c) the purchase of the mortgage loan by PNC
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 PNC Mortgage.
The Company hereby consents to the assignment by PNC Mortgage of
all or any part of its rights and obligations under this
Agreement to any affiliate designated by PNC Mortgage. Any other
transfer by PNC Mortgage will be allowed and be effective upon
written notice by PNC Mortgage to the Company.
6. Prior Agreements. This Agreement supersedes any prior
<PAGE> 176
agreements and understandings between PNC 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 PNC 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 PNC
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 PNC 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 PNC 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
<PAGE> 177
may be executed in one 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 PNC Mortgage.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Name of the Company Company I.D. Number
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Type of organization Organized under laws of
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Principal place of business: street address, city, state, 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 PNC Mortgage Securities Corp.
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ ___
Typed name and title of authorized representative
_ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
Signature of authorized representative Date
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
<PAGE> 178
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-6
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates Series 1999-6, 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
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-6
PNC Mortgage Securities Corp.
75 N. Fairway Drive
Vernon Hills, Illinois 60061
The undersigned (the "Purchaser") proposes to purchase
Class [ ] Certificates evidencing an undivided interest in PNC
<PAGE> 179
Mortgage Securities Corp. Mortgage Pass-Through Certificates,
Series 1999-6 (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 June 1, 1999 (the "Pooling Agreement"), by and between PNC
Mortgage Securities Corp. ("PNC") and State Street Bank and Trust
Company, as trustee (the "Trustee"), of the PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series 1999-
6.
Section 2. Representations and Warranties of the
Purchaser. In connection with the proposed transfer, the
Purchaser represents and warrants to PNC and the Trustee that:
(a) The Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction in which
the Purchaser is organized, is authorized to invest in the
Purchased Certificates, and to enter into this Agreement, and
duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased
Certificates for its own account as principal and not with a view
to the distribution thereof, in whole or in part;
(c) The Purchaser is an "accredited investor" as such
term is defined in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or
(a)(8) of Section 501 of Regulation D under the Securities Act of
1933, as amended (the "Act"), has knowledge of financial and
business matters and is capable of evaluating the merits and
risks of an investment in the Purchased Certificates; the
Purchaser has sought such accounting, legal and tax advice as it
has considered necessary to make an informed investment decision;
and the Purchaser is able to bear the economic risk of an
investment in the Purchased Certificates and can afford a
complete loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available
to the Purchaser the opportunity to ask questions of, and receive
answers from PNC 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 PNC 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
<PAGE> 180
Thrift Bulletin 13a issued April 23, 1998, by the Office of
Regulatory Activities of the Federal Home Loan Bank System; and
(g) The Purchaser will provide the Trustee and the
Master Servicer with affidavits substantially in the form of
Exhibit A attached hereto.
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 PNC 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 PNC and the Trustee as to
the factual basis for the registration or qualification exemption
relied upon, and (ii) the Trustee or PNC 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 PNC. Any
such Certificateholder desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee and PNC 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 PNC and the Trustee with (i)
a Transferee's Agreement, substantially in the form of this
Agreement, and (ii) either (a) an affidavit substantially in the
form of Exhibit A hereto that the proposed transferee (x) is not
an employee benefit plan or other plan or arrangement subject to
the prohibited transaction provisions of ERISA or Section 4975 of
the Internal Revenue Code of 1986, as amended, or comparable
provisions of any subsequent enactments (a "Plan"), a trustee of
any Plan, or any other Person who is using the "plan assets" of
any Plan to effect such acquisition or (y) is an insurance
company, the source of funds to be used by it to purchase the
Purchased Certificates is an "insurance company general account"
(within the meaning of Department of Labor Prohibited Transaction
Class Exemption ("PTCE") 95-60), and the purchase is being made
in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60, or (b) a Benefit
Plan Opinion (as defined in Exhibit A hereto).
(c) The Purchaser acknowledges that its Purchased
<PAGE> 181
Certificates bear a legend setting forth the applicable
restrictions on transfer.
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:
Exhibit A to Form of Transferee Agreement (Exhibit G)
PNC MORTGAGE SECURITIES CORP.
BENEFIT PLAN AFFIDAVIT
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-6
(THE "TRUST") CLASS [ ] 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 (i) is not an employee benefit
plan or other plan or arrangement 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 (the "Code"), or
comparable provisions of any subsequent enactments (a "Plan"), a
trustee of any Plan, or any other Person who is using the "plan
assets" of any Plan to effect such acquisition, (ii) has provided
a "Benefit Plan Opinion" satisfactory to PNC Mortgage Securities
Corp. (the "Company") and the Trustee of the Trust Funds or (iii)
is an insurance company, the source of funds to be used by it to
purchase the Purchased Certificates is an "insurance company
general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the
purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60.
<PAGE> 182
A Benefit Plan Opinion is an opinion of counsel to the effect
that the proposed transfer (a) is permissible under applicable
law, (b) will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the
Code, and (c) 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 Benefit Plan Opinion shall not be an expense of
the Trustee, the Master Servicer or the Company.
IN WITNESS WHEREOF, the Purchaser has caused this
instrument to be duly executed on its behalf, by its duly
authorized officer this ____ day of ____________, 199__.
[Purchaser]
By:
Its:
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 _____
___, 19__.
Notary Public
Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE CERTIFICATES (OTHER THAN THE CLASS R-1
CERTIFICATES)
This Certificate does not represent an obligation of or
interest in PNC Mortgage Securities Corp. or any of its
affiliates, including PNC Bank Corp. 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, among other things, a
pool (the "Mortgage Pool") of conventional one- to four-family
mortgage loans (the "Mortgage Loans"), formed and administered by
PNC Mortgage Securities Corp. (the "Company"), which term
<PAGE> 183
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
State Street Bank and Trust Company, 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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
<PAGE> 184
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of
Certificates designated as 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.
<PAGE> 185
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.
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 desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company and the
<PAGE> 186
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 repurchase by the
Company) 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 repurchases any Mortgage
Loan pursuant to the Pooling Agreement, such 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 accrued
interest at the applicable Pass-Through Rate to the next
scheduled Due Date for the Mortgage Loan. The Pooling Agreement
permits, but does not require, the Company to repurchase 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 Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the
Mortgage Loans at the time of repurchase being less than five
percent (5%) of the aggregate unpaid Principal Balance of the
Mortgage Loans as of the Cut-Off Date.
<PAGE> 187
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 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 PNC
Mortgage Securities Corp. or any of
its affiliates, including PNC Bank
Corp. Neither this Certificate nor
the underlying Mortgage Loans are
guaranteed by any agency or
instrumentality of the United States.
Exhibit I
TRANSFEROR CERTIFICATE
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-6
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-6, Class [R-1] [R-2]
Ladies and Gentlemen:
<PAGE> 188
This letter is delivered to you in connection with the sale
from (the "Seller") to (the
"Purchaser") of $_ __ __ __ __ __ ___ initial Certificate
Principal Balance of Mortgage Pass-Through Certificates, Series
1999-6, Class [R-1][R-2] (the "Certificate"), pursuant to Section
5.01 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of June 1, 1999 among PNC Mortgage
Securities Corp., as depositor and master servicer (the
"Company") and State Street Bank and Trust Company, 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.
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:
<PAGE> 189
Title:
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-1][R-2] 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-1][R-2] Certificates, and (ii)
is acquiring the Class [R-1][R-2] 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-1][R-2] 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
<PAGE> 190
disqualified organization, on the agent; (iii) that the person
other-wise 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-1][R-2]
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-1][R-2] 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.)
5. That the Owner is aware that the Trustee will not
register the Transfer of the Class [R-1][R-2] 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-1][R-2] Certificates and the
provisions of Section 5.01 of the Pooling Agreement under which
the Class [R-1][R-2] 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-1][R-2] 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
_________________________.
<PAGE> 191
9. That no purpose of the Owner relating to the
purchase of the Class [R-1][R-2] Certificates by the Owner is or
will be to enable the transferor to impede the assessment or
collection of tax.
10. 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 Certificates remain outstanding.
11. 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 Certificates
remain outstanding.
12. That no purpose of the Owner relating to any sale
of the Class [R-1][R-2] Certificates by the Owner will be to
impede the assessment or collection of tax.
13. 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.
14. The Owner hereby agrees to cooperate with the
Company and to take any action required of it by the Code or
Treasury regulations thereunder (whether now or hereafter
promulgated) in order to create or maintain the REMIC status of
the REMIC I Trust Fund and the REMIC II Trust Fund (the "Trust
Funds").
15. 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.
16. The Owner as transferee of the Class [R-1][R-2]
Certificates has represented to their transferor that, if the
Class [R-1][R-2] 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-
1][R-2] Certificates as they become due.
IN WITNESS WHEREOF, the Owner has caused this
instrument to be executed on its behalf, pursuant to the
<PAGE> 192
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 , 19 __ .
[Name of Owner]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who
executed the foregoing instrument and to be the [Title of
Officer] of the Owner, and Acknowledged to me that he executed
the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this _ _ day of _ __ __ __ __
__ _, 19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ___
day of ________, 19___
Exhibit K
[Reserved]
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
<PAGE> 193
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
1933 Act.
2. The Buyer warrants and represents to, and covenants
with, the Seller, the Trustee and the Master Servicer (as defined
in the Pooling and Servicing Agreement (the "Agreement") dated as
of June 1, 1999 between PNC Mortgage Securities Corp., as
Depositor and Master Servicer and State Street Bank and Trust
Company, 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.
<PAGE> 194
c. The Buyer has received and reviewed the Private
Placement Memorandum dated as of June __, 1999 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.
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
<PAGE> 195
Regulatory Activities of the Federal Home Loan Bank System.
[Required only in the case of a transfer of a Class B
Certificate] [3. The Buyer warrants and represents to, and
covenants with, the Trustee, the Master Servicer and the Company
that (1) the Buyer is not an employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), subject to the
prohibited transaction provisions of ERISA ("Plan"), or a plan
(within the meaning of Section 4975(e)(1) of the Internal Revenue
Code of 1986 ("Code")) subject to Section 4975 of the Code (also
a "Plan"), and the Buyer is not directly or indirectly purchasing
the Rule 144A Securities on behalf of, as investment manager of,
as named fiduciary of, as trustee of, or with "plan assets" of
any Plan, (2) the Buyer's purchase of the Rule 144A Securities 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 and the Buyer has provided an Opinion of Counsel
to such effect in accordance with Section 5.01(d) of the
Agreement or (3) the Buyer is an insurance company, the source of
funds to be used by it to purchase the Rule 144A Securities is an
"insurance company general account" (within the meaning of
Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon
the availability of the exemptive relief afforded under Sections
I and III of PTCE 95-60.]
4. 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:
<PAGE> 196
Taxpayer Identification: Taxpayer
Identification:
No.: No.:
Date: Date:
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.
<PAGE> 197
___ 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.
___ 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
<PAGE> 198
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.
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.
<PAGE> 199
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:
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).
<PAGE> 200
_ __ 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 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
<PAGE> 201
By:
Name:
Title:
Date:
(SEAL)
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of June
1, 1999 by and between PNC Mortgage Securities
Corp., as Depositor and Master Servicer, and State
Street Bank and Trust Company, as Trustee,
relating to PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates, Series 1999-6
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned
Pooling and Servicing Agreement, the undersigned, as Trustee,
hereby certifies that, except as noted on the attachment hereto,
as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or listed on the
attachment hereto) it or the Custodian on its behalf has reviewed
the documents delivered to it or to the Custodian on its behalf
pursuant to Section 2.01 of the Pooling and Servicing Agreement
and has determined that (i) all documents required (in the case
of instruments described in clauses (X)(v) and (Y)(x) of the
definition of "Mortgage File," known by the Trustee to be
required) pursuant to the definition of "Mortgage File" and
Section 2.01 of the Pooling and Servicing Agreement have been
executed and received as of the date hereof are in its possession
or in the possession of the Custodian on its behalf and (ii) all
such documents have been executed and relate to the Mortgage
Loans identified in the Mortgage Loan Schedule. The Trustee has
made no independent examination of such documents beyond the
review specifically required in the above referenced Pooling and
Servicing Agreement and has relied upon the purported genuineness
and due execution of any such documents and upon the purported
genuineness of any signature thereon. The Trustee makes no
representations as to: (i) the validity, legality, enforceability
or genuineness of any of the documents contained in each Mortgage
File or any of the Mortgage Loans identified on the Mortgage Loan
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Schedule, or (ii) the collectability, insurability, effectiveness
or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned
Pooling and Servicing Agreement.
as Trustee
By:
Name:
Title:
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-6
PNC Mortgage Securities Corp.
75 North Fairway Drive
Vernon Hills, IL 60061
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-6
(THE "TRUST") CLASS [_-B-_] 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 is either:
(a) not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement
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Income Security Act of 1974, as amended ("ERISA") or Section 4975
of the Internal Revenue Code of 1986, as amended (the "Code") (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; or
(b) an insurance company, the source of funds to be used by
it to purchase the Purchased Certificates is an "insurance
company general account" (within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is
being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.
IN WITNESS WHEREOF, the Purchaser has caused this
instrument to be duly executed on its behalf, by its duly
authorized officer this ____ day of ___________, 199__.
[Purchaser]
By:
Its: 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 ______,
19__.
Notary Public
Exhibit O
FORM OF LOAN SALE AGREEMENT
CLIPPER RECEIVABLES CORPORATION,
as Seller
STATE STREET BANK AND TRUST COMPANY,
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as Trustee
LOAN SALE AGREEMENT
Dated as of June 1, 1999
This Loan Sale Agreement (this "Agreement") is dated as of
June 1, 1999, by and between Clipper Receivables Corporation
("Clipper"), as seller (the "Seller"), and State Street Bank and
Trust Company ("State Street"), as trustee (the "Trustee") under
a Pooling and Servicing Agreement, dated June 1, 1999 (the
"Pooling Agreement") by and between PNC Mortgage Securities Corp.
("PNC") and the Trustee. Pursuant to a Revolving Loan Purchase
Agreement, dated as of December 30, 1998 (the "Revolving Loan
Purchase Agreement"), among Fairway Drive Funding Corp.
("Fairway"), as seller, Clipper, as purchaser, State Street
Capital Corporation, as administrator, State Street, as
relationship bank, and PNC, as servicer, the Seller has purchased
the Conveyed Mortgage Loans (as defined herein) from Fairway. On
the terms and conditions set forth herein, the Seller desires to
sell and the Trustee desires to purchase the Conveyed Mortgage
Loans and certain related rights.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Seller and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
Whenever used in this Agreement, the following words and
phrases shall have the following meanings specified in this
Article:
Agreement: This Loan Sale Agreement, including all exhibits
and schedules hereto, amendments hereof and supplements hereto.
Clipper: The meaning given in the introductory paragraph
hereto.
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Closing Date: June [29], 1999.
Conveyance: The meaning given in Section 2.1.
Conveyed Assets: The meaning given in Section 2.1.
Conveyed Mortgage Loans: The Mortgage Loans sold,
transferred, assigned and conveyed to the Trustee by the Seller
pursuant to Section 2.1 and identified in the Mortgage Loan
Schedule.
Custodian: State Street, or any other party appointed as
Custodian under the Revolving Loan Purchase Agreement.
Cut-Off Date: June 1, 1999.
Fairway: The meaning given in the introductory paragraph
hereto.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note.
Mortgage Loan: An individual mortgage loan, including the
related Mortgage Note and Mortgage.
Mortgage Loan File: With respect to any Conveyed Mortgage
Loan, the documents described in the definition of "Mortgage Loan
File" in the Revolving Loan Purchase Agreement.
Mortgage Loan Schedule: The schedule of Mortgage Loans
attached hereto as Schedule I.
Mortgage Note: The note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
PNC: The meaning given in the introductory paragraph hereto.
Person: any individual, corporation, estate, partnership,
limited liability company, joint venture, association, joint
stock company, trust, unincorporated organization, or government
or any agency or political subdivision thereof.
Pooling Agreement: The meaning given in the introductory
paragraph hereto.
Purchase Price: The meaning given in Section 2.1.
Revolving Loan Purchase Agreement: The meaning given in the
introductory paragraph hereto.
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Seller: The meaning given in the introductory paragraph
hereto.
State Street: The meaning given in the introductory
paragraph hereto.
Trustee: The meaning given in the introductory paragraph
hereto.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Sale and Conveyance of Mortgage Loans
Concurrently with the execution and delivery hereof, the
Seller does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Trustee, without representation,
warranty or recourse, and the Trustee hereby accepts delivery of,
all the Seller's right, title and interest in and to (i) the
Conveyed Mortgage Loans and all rights pertaining thereto, (ii)
all scheduled payments of principal and interest due after the
Cut-Off Date and received by the Seller with respect to the
Conveyed Mortgage Loans at any time, (iii) all principal
prepayments received by the Seller after the Cut-Off Date with
respect to the Conveyed Mortgage Loans, and (iv) any property
which secured a Conveyed Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure after the
Cut-Off Date (such assets described in clauses (i) through (iv)
collectively referred to herein as the "Conveyed Assets," and the
transfer and assignment by the Seller thereof referred to herein
as the "Conveyance").
Notwithstanding anything herein to the contrary, the
transfer of the Conveyed Assets shall not constitute the Trustee
as an intended third-party beneficiary under the Revolving Loan
Purchase Agreement and nothing herein shall entitle the Trustee
to the benefit of any representation, warranty, covenant or
remedy contained therein or assigned thereby.
The price for the Conveyed Assets to be paid by the Trustee
on the Closing Date shall be an amount equal to $_ __ __ __ __
(the "Purchase Price").
Section 2.2 Custodial Agreement; Release of Mortgage Loan
Files
As of the Closing Date, the ownership of all records and
documents with respect to any Conveyed Mortgage Loan which come
into the possession of the Seller shall immediately vest in the
Trustee and shall be promptly forwarded to the Trustee.
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Concurrently herewith, the Seller shall notify the Custodian
of the Conveyance of the Conveyed Mortgage Loans and cause the
Custodian to release the related Mortgage Loan Files to or upon
the order of the Trustee by executing a Notice and Instruction to
Custodian in the form attached hereto as Exhibit A.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1 Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (including
Section 5-1401 of the New York General Obligations Law) 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 other than Section 5-1401 of the
New York General Obligations Law.
Section 3.2 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 (a) in the case of the Trustee, at 225 Franklin Street,
Boston, MA 02110, Attention: Corporate Trust Department, PNC
Series 1999-6, or such other address as may hereafter be
furnished to the Seller in writing by the Trustee, or (b) in the
case of the Seller, at 225 Franklin Street, 18th Floor, Boston,
MA 02110, Attention: Renata Merino, facsimile no.: (617) 350-
4020, with a copy to State Street Capital Corporation, 225
Franklin Street, Boston, MA 02110, Attention: Susan Beck Strader,
facsimile no.: (617) 350-4020, or such other address as may
hereafter be furnished to the Trustee in writing by the Seller.
Section 3.3 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.
Section 3.4 Waivers and Amendments, Non-contractual Remedies;
Preservation of Remedies
This Agreement may be amended, superseded, canceled, renewed
or extended and the terms hereof may be waived, only by a written
<PAGE> 208
instrument signed by authorized representatives of the parties
or, in the case of a waiver, by an authorized representative of
the party waiving compliance. No such written instrument shall
be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to
waive compliance with one or more of the terms hereof, as the
case may be. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any
such right, power or privilege, or any single or partial exercise
of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power
or privilege. The rights and remedies herein provided are
cumulative to, and not exclusive of, any rights or remedies that
any party may otherwise have at law or in equity.
Section 3.5 Captions
All section titles or captions contained in this Agreement
or in any Schedule or Exhibit annexed hereto or referred to
herein, and the table of contents to this Agreement, are for
convenience only, shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of this
Agreement.
Section 3.6 Counterparts
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
Section 3.7 Entire Agreement
This Agreement (including any Schedule or Exhibit annexed
hereto or referred to herein) between the parties hereto contains
the entire agreement between the parties with respect to the sale
of the Conveyed Assets and the transactions contemplated hereby
and supersedes all prior agreements, written or oral, with
respect thereto.
Section 3.8 Condition Precedent
The Trustee's obligation to purchase the Conveyed Assets
hereunder is conditioned upon and subject to the Trustee's
receipt of available funds from PNC pursuant to the Pooling
Agreement in an amount equal to the Purchase Price.
Section 3.9 No Recourse
No recourse under any obligation, covenant or agreement of
Clipper contained in this Agreement shall be had against J H
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Management Corporation ("JHM") or any incorporator, stockholder,
officer, director or employee of Clipper or JHM, by the
enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise, it being
expressly agreed and understood that this Agreement is solely a
corporate obligation of Clipper, and that no personal liability
whatever shall attach to or be incurred by the incorporators,
stockholders, officers, directors or employees of Clipper or JHM,
or any of them under or by reason of any of the obligations,
covenants or agreements of Clipper contained in this Agreement,
or implied therefrom. Trustee expressly waives, as a condition
of and in consideration for the execution of this Agreement, any
and all personal liability against JHM and every such
incorporator, stockholder, officer, director or employee arising
from breaches by Clipper of any such obligations, covenants or
agreements, either at common law or at equity, or by statute or
constitution.
Section 3.10 No Petition
The Trustee agrees that it shall not institute against, or
join any other Person in instituting against, the Seller any
bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after
the latest maturing Commercial Paper Note (as defined in the
Program Administration Agreement, dated as of September 24, 1992,
between Clipper and State Street Boston Capital Corporation, as
program administrator, as it may be amended from time to time) is
paid.
IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers thereunto
duly authorized as of the date first above written.
CLIPPER RECEIVABLES CORPORATION
By: STATE STREET CAPITAL
CORPORATION, as Program
Administrator
By:
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, solely in its capacity
as Trustee and not individually
<PAGE> 210
By:
Name:
Title:
CONSENTED TO BY:
STATE STREET CAPITAL
CORPORATION, as Program
Administrator
By:
Name:
Title:
Schedule I to Exhibit O
Mortgage Loan Schedule
Exhibit A to Exhibit O
FORM OF NOTICE AND INSTRUCTION TO CUSTODIAN
[Closing Date]
State Street Bank and Trust
Company, as Custodian
225 Franklin Street
Boston, MA 02110
Re: Revolving Loan Purchase Agreement, dated as of December
30, 1998 (the "Revolving Loan Purchase Agreement"),
among Fairway Drive Funding Corp., as seller, Clipper
Receivables Corporation, as purchaser, State Street
Capital Corporation, as administrator, State Street
Bank and Trust Company, as relationship bank, and PNC
Mortgage Securities Corp., as servicer
Ladies and Gentlemen:
We hereby advise you that the mortgage loans specified on
Schedule I hereto (the "Conveyed Mortgage Loans") have been
transferred and assigned, pursuant to a Loan Sale Agreement dated
as of June 1, 1999 between Clipper Receivables Corporation, as
seller (the "Seller"), and State Street Bank and Trust Company,
as trustee (the "Trustee") under a Pooling and Servicing
Agreement dated as of June 1, 1999 by and between PNC Mortgage
<PAGE> 211
Securities Corp. and the Trustee, by the Seller to the Trustee,
and you are hereby instructed to deliver the Mortgage Loan Files
(as defined in the Revolving Loan Purchase Agreement) relating to
such Conveyed Mortgage Loans to the Trustee pursuant to such
instructions as it may provide to you.
Very truly yours,
CLIPPER RECEIVABLES CORPORATION
By: STATE STREET CAPITAL
CORPORATION, as Program
Administrator
By:
Name:
Title:
ACKNOWLEDGED:
STATE STREET BANK AND TRUST
COMPANY, as Custodian
By:
Name:
Title:
Schedule I to Notice and Instruction to Custodian
Exhibit P
FORM OF PROTECTIVE TRANSFER AGREEMENT
This Protective Transfer Agreement (this "Agreement"), dated
as of June 1, 1999, is by and between Fairway Drive Funding Corp.
("Funding") and State Street Bank and Trust Company (the "Trustee
Bank"), as trustee (in such capacity, the "Trustee") under a
Pooling and Servicing Agreement dated June 1, 1999 by and between
PNC Mortgage Securities Corp. ("PNC") and the Trustee.
W I T N E S S E T H:
WHEREAS, Funding sold certain mortgage loans and related
property (as defined below, the "Conveyed Assets") to Clipper
Receivables Corporation ("Clipper") pursuant to a Revolving Loan
Purchase Agreement, dated as of December 30, 1998 (the "Funding
Sale Agreement"), among Funding, as Seller, Clipper, as
Purchaser, State Street Capital Corporation, as Administrator,
the Trustee Bank, as Relationship Bank and PNC, as Servicer;
<PAGE> 212
WHEREAS, pursuant to a Loan Sale Agreement (the "Clipper
Loan Sale Agreement"), dated as of June 1, 1999, between Clipper
and the Trustee, Clipper is selling all of its right, title and
interest in and to the Conveyed Assets to the Trustee;
WHEREAS, the Trustee requires assurance of good title to the
Conveyed Assets, and pursuant to Section 13.2(a) of the Funding
Sale Agreement, Funding is obligated to take any action necessary
to protect the interest of Clipper in the Conveyed Assets.
NOW, THEREFORE, in consideration of the covenants made
herein and for other good and valuable consideration the
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. The Funding Sale Agreement provides that it is the
express intent of the parties thereto that the sale, assignment
and transfer of the Conveyed Assets pursuant to the Funding Sale
Agreement constituted a sale of all of Fairway's right, title,
and interest in and to the Conveyed Assets to Clipper.
2. Notwithstanding the foregoing, to the extent that
Funding has retained any interest in the Conveyed Assets, Funding
hereby irrevocably sells, transfers, assigns, sets over and
otherwise conveys to the Trustee, without representation,
warranty or recourse, and the Trustee hereby accepts delivery of,
all of Funding's right, title and interest, if any, in and to (i)
the Mortgage Loans identified on the schedule of Mortgage Loans
attached as Schedule I to the Clipper Loan Sale Agreement (the
"Conveyed Mortgage Loans") and all rights pertaining thereto,
(ii) all scheduled payments of principal and interest due after
June 1, 1999 (the "Cut-Off Date") and received by Funding with
respect to the Conveyed Mortgage Loans at any time, (iii) all
principal prepayments received by Funding after the Cut-Off Date
with respect to the Conveyed Mortgage Loans, and (iv) any
property which secured a Conveyed Mortgage Loan and which has
been acquired by foreclosure or deed in lieu of foreclosure after
the Cut-Off Date (such assets described in clauses (i) through
(iv) collectively referred to herein as the "Conveyed Assets").
3. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (including
Section 5-1401 of the New York General Obligations Law) 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 other than Section 5-1401 of the
New York General Obligations Law.
4. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused their
names to be signed hereto by their respective officers thereunto
duly authorized as of the date first above written.
FAIRWAY DRIVE FUNDING CORP.
By:_ __ __ __ __ __ __ __ __
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, not in its individual
capacity, but solely as
Trustee
By:_ __ __ __ __ __ __ __ __
Name:
Title:
