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
July 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 July 1, 1999
providing for the issuance of
$893,289,975
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-8
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 July 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: August 4, 1999.
PNC MORTGAGE SECURITIES CORP.
(Registrant)
By: /s/ Richard Careaga
-----------------------------------
Richard Careaga
Second Vice President
(Authorized Officer)
<PAGE> 1
EXHIBIT 7.1
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$904,347,651.68
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1999-8
Cut-Off Date: July 1, 1999
This Pooling and Servicing Agreement, dated and effective as of
July 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 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
<PAGE> 2
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 July 27, 1999, and a Prospectus Supplement, dated
July 27, 1999, of the Company (together, the "Prospectus"). The Junior
Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated July 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
for each REMIC I
Regular Interest
and the Class R-1 Type of Remittance Initial Class Final Maturity
Certificates Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
Class U Regular 6.750% $ 383,526,479.54 August 2029
Class C-Y-1 Regular 7.000% 82,916.69 September 2029
Class C-Y-2 Regular 7.250% 35,242.90 September 2029
Class C-Y-3 Regular 7.500% 88,897.46 September 2029
Class C-Y-4 Regular 7.750% 50,462.27 September 2029
Class C-Z-1 Regular 7.000% 165,750,456.25 September 2029
Class C-Z-2 Regular 7.250% 70,450,566.02 September 2029
Class C-Z-3 Regular 7.500% 179,056,393.25 September 2029
Class C-Z-4 Regular 7.750% 101,640,599.30 September 2029
Class I-X-M Regular 6.750% (2) -- August 2029
Class C-X-1-M Regular 7.000% (2) -- September 2029
Class C-X-2-M Regular 7.000% (2) -- September 2029
Class I-P-M Regular (3) 2,248,980.00 August 2029
Class V-P-M Regular (3) 1,416,558.00 September 2029
Class R-1+ Residual 6.750% 50.00 September 2029
* The Distribution Date in the month following the month the latest
<PAGE> 3
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-M 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
Class Designation
for each REMIC II
Regular Interest
and the Class R-2 Type of Remittance Initial Class Final Maturity
Certificates Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
Class I-A-1 Regular 6.750% $ 17,080,000.00 August 2029
Class I-A-2 Regular 6.750% 40,430,000.00 August 2029
Class I-A-3 Regular 6.750% 24,255,000.00 August 2029
Class I-A-4 Regular 6.750% 33,349,283.00 August 2029
Class I-A-5 Regular 6.750% 25,000,000.00 August 2029
Class I-A-6 Regular 7.000% 5,000,000.00 August 2029
Class I-A-7 Regular 6.650% 12,500,000.00 August 2029
Class I-A-8 Regular 7.250% 5,707,000.00 August 2029
Class I-A-9 Regular 7.250% 1,783,000.00 August 2029
Class I-A-10 Regular (2) 554,815.00 August 2029
Class I-A-11 Regular 6.750% 705,000.00 August 2029
Class I-A-12 Regular 6.750% 16,920,000.00 August 2029
Class I-A-13 Regular 6.750% 80,000,000.00 August 2029
Class I-A-14 Regular 6.750% 62,000,000.00 August 2029
Class I-A-15 Regular 7.250% 38,063,000.00 August 2029
Class I-A-16 Regular (2) 2,819,481.00 August 2029
<PAGE> 4
Class II-A-1 Regular 7.250% 65,375,587.00 September 2029
Class III-A-1 Regular 7.500% 166,157,257.00 September 2029
Class IV-A-1 Regular 7.750% 94,318,459.00 September 2029
Class V-A-1 Regular 7.000% 153,707,752.00 September 2029
Class I-X Regular 6.750% (3) --- August 2029
Class C-X-1 Regular 7.000% (3) --- September 2029
Class C-X-2 Regular 7.000% (3) --- September 2029
Class I-P Regular (2) 2,248,980.00 August 2029
Class V-P Regular (2) 1,416,558.00 September 2029
Class I-B-1 Regular 6.750% 8,872,838.00 August 2029
Class I-B-2 Regular 6.750% 3,664,867.00 August 2029
Class I-B-3 Regular 6.750% 1,543,103.00 August 2029
Class I-B-4 Regular 6.750% 1,350,214.00 August 2029
Class I-B-5 Regular 6.750% 964,439.00 August 2029
Class I-B-6 Regular 6.750% 964,439.54 August 2029
Class C-B-1 Regular Variable (4) 16,853,593.00 September 2029
Class C-B-2 Regular Variable (4) 8,297,153.00 September 2029
Class C-B-3 Regular Variable (4) 4,667,149.00 September 2029
Class C-B-4 Regular Variable (4) 3,630,006.00 September 2029
Class C-B-5 Regular Variable (4) 1,296,429.00 September 2029
Class C-B-6 Regular Variable (4) 2,852,149.14 September 2029
Class R-2+ Residual 6.750% 50.00 September 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-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-10 and Class I-A-16 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-10 and Class I-A-16 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, Class C-Y-2, Class C-Y-3 and Class C-Y-4
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
<PAGE> 5
Loans have an aggregate Principal Balance of $904,347,652.47
and the Certificates have an Aggregate Certificate Principal
Balance of $904,347,651.68.
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;
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:
<PAGE> 6
Aggregate Certificate Principal Balance: At any given
time, the sum of the then current Class Principal Balances
of the Certificates.
Appraised Value: The amount set forth in an appraisal
made by or for (a) the mortgage originator in connection
with its origination of each Mortgage Loan (b) with respect
to a Mortgage Loan originated to refinance mortgage debt,
the originator of such mortgage debt or (c) the Servicer, at
any time, in accordance with the Selling and Servicing
Contract.
Assignment of Proprietary Lease: With respect to a
Cooperative Loan, the assignment or mortgage of the related
Cooperative Lease from the Mortgagor to the originator of
the Cooperative Loan.
Authenticating Agent: Any authenticating agent
appointed by the Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the
Certificates (other than the Class X, Class I-A-2, Class I-A-
3, Class I-A-6, Class I-A-8, Class I-A-9, Class I-A-12,
Class I-A-15 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 an integral multiple of $1. With
respect to the Class I-A-2, Class I-A-3, Class I-A-6, Class
I-A-8, Class I-A-9, Class I-A-12 and Class I-A-15
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: With respect to Loan Group I,
$124,247 less (a) any scheduled or permissible reduction in
the amount of Bankruptcy Coverage for Loan Group I pursuant
to this definition and (b) Bankruptcy Losses allocated to
the Group I and Residual Certificates.
With respect to Loan Group II, Loan Group III, Loan
Group IV and Loan Group V, collectively, $199,082 less (a)
any scheduled or permissible reduction in the amount of
Bankruptcy Coverage for such Loan Groups pursuant to this
definition and (b) Bankruptcy Losses allocated to the Group
<PAGE> 7
II, Group III, Group IV, Group V, Group C-B and Group C-X
Certificates.
The Bankruptcy Coverage for Loan Group I and the
Bankruptcy Coverage for Loan Group II, Loan Group III, Loan
Group IV and Loan Group V 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 (other than Class
I-A-11), 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.
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
<PAGE> 8
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
III, Group IV, Group V, Group C-B, Group C-X 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 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)
<PAGE> 9
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, Group III,
Group IV or Group V 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
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
<PAGE> 10
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, Class II-A-1,
Class III-A-1, Class IV-A-1 and Class V-A-1 Certificates.
Class B Certificates: The Group I-B and 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-X-1 Certificates: The Certificates designated
as "Class C-X-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-X-1 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
<PAGE> 11
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
Class C-X-1 Premium Rate Mortgage Loans and (y) a fraction,
the numerator of which is the weighted average of the
Stripped Interest Rates for the Class C-X-1 Premium Rate
Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
Class C-X-1 Premium Rate Mortgage Loan: A Group II,
Group III, Group IV or Group V Loan that has a Mortgage
Interest Rate less than or equal to 8.500% per annum and, in
the case of a Group V Loan, a Pass-Through Rate in excess of
7.000% per annum.
Class C-X-1-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 C-X-2 Certificates: The Certificates designated
as "Class C-X-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-X-2 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
Class C-X-2 Premium Rate Mortgage Loans and (y) a fraction,
the numerator of which is the weighted average of the
Stripped Interest Rates for the Class C-X-2 Premium Rate
Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
Class C-X-2 Premium Rate Mortgage Loan: A Group II,
Group III, Group IV or Group V Loan that has a Mortgage
Interest Rate greater than 8.500% per annum and, in the case
of a Group V Loan, a Pass-Through Rate in excess of 7.000%
per annum.
Class C-X-2-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 C-Y Regular Interests: The Class C-Y-1, Class C-Y-
2, Class C-Y-3 and Class C-Y-4 Regular Interests.
<PAGE> 12
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.
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-3 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-3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Y-3
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class C-Y-3 Regular Interest on such Distribution Date.
Class C-Y-4 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-4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Y-4
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class C-Y-4 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, Class C-Y-2, Class C-Y-3 and
Class C-Y-4 Regular Interests, respectively, will be reduced
on such Distribution Date by the allocation of Realized
Losses and the distribution of principal, determined as
follows:
<PAGE> 13
For purposes of the succeeding formulas the following
symbols shall have the meanings set forth below:
PVB = the Group V 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.
PIIIB = the Group III Subordinate Balance after the
allocation of Realized Losses and distributions of
principal on such Distribution Date.
PIVB = the Group IV Subordinate Balance after the
allocation of Realized Losses and distributions of
principal on such Distribution Date.
R = the Class C-B Certificate Interest Rate
= (7.00%PVB + 7.25%PIIB + 7.50%PIIIB + 7.75%PIVB)/( PVB +
PIIB + PIIIB + PIVB)
R1 = the weighted average of the Class C-Y-1, Class C-Z-1,
Class C-Y-2, Class C-Z-2, Class C-Y-3 and Class C-Z-3
Certificate Interest Rates
= (7.00%(P1 - DELTAP1) + 7.25%(P2 - DELTA
P2) + 7.75%(P3 - DELTAP3))/(P1 - DELTAP1 + P2 - DELTAP2
+ P3 - DELTAP3)
R2 = the weighted average of the Class C-Y-2, Class C-Z-2,
Class C-Y-3, Class C-Z-3, Class C-Y-4 and Class C-Z-4
Certificate Interest Rates
=
(7.25%(P2 - DELTAP2) + 7.50%(P3 - DELTAP3) + 7.75%(P4 -
DELTAP4))/(P2 - DELTAP2 + P3 - DELTAP3 + P4 - DELTAP4)
R3 = the weighted average of the Class C-Y-1, Class C-Z-1,
Class C-Y-2 and Class C-Z-2 Certificate Interest Rates
=
(7.00%(P1 - DELTAP1) + 7.25%(P2 - DELTAP2))/(P1 - DELTA
P1 + P2 - DELTAP2)
R4 = the weighted average of the Class C-Y-3, Class C-Z-3,
Class C-Y-4 and Class C-Z-4 Certificate Interest Rates
=
(7.50%(P3 - DELTAP3) + 7.75%(P4 - DELTAP4))/(P3 - DELTA
P3 + P4 - DELTAP4)
r1 = the weighted average of the Class C-Y-1, Class C-Y-2
and Class C-Y-3 Certificate Interest Rates
= (7.00% Y1 + 7.25% Y2 + 7.50% Y3)/(Y1 + Y2 + Y3)
<PAGE> 14
r2 = the weighted average of the Class C-Y-2, Class C-Y-3
and Class C-Y-4 Certificate Interest Rates
= (7.25% Y2 + 7.50% Y3 + 7.75% Y4)/(Y2 + Y3 + Y4)
r3 = the weighted average of the Class C-Y-1 and Class C-Y-2
Certificate Interest Rates
= (7.00% Y1 + 7.25% Y2)/(Y1 + Y2)
r4 = the weighted average of the Class C-Y-3 and Class C-Y-4
Certificate Interest Rates
= (7.50% Y3 + 7.75% Y4)/(Y3 + Y4)
Y1 = the Class C-Y-1 Principal Balance after
distributions on the prior Distribution Date.
Y2 = the Class C-Y-2 Principal Balance after
distributions on the prior Distribution Date.
Y3 = the Class C-Y-3 Principal Balance after
distributions on the prior Distribution Date.
Y4 = the Class C-Y-4 Principal Balance after
distributions on the prior Distribution Date.
DELTAY1 = the Class C-Y-1 Principal Reduction Amount.
DELTAY2 = the Class C-Y-2 Principal Reduction Amount.
DELTAY3 = the Class C-Y-3 Principal Reduction Amount.
DELTAY4 = the Class C-Y-4 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.
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.
P3 = the aggregate Class Principal Balance of the Class
C-Y-3 and Class C-Z-3 Regular Interests after
distributions on the prior Distribution Date.
P4 = the aggregate Class Principal Balance of the Class
C-Y-4 and Class C-Z-4 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
<PAGE> 15
Principal Reduction Amounts.
DELTAP3 = the aggregate of the Class C-Y-3 and Class C-Z-3
Principal Reduction Amounts.
DELTAP4 = the aggregate of the Class C-Y-4 and Class C-Z-4
Principal Reduction Amounts.
Alpha = .0005
Gamma1 = (R - R1)/(7.75% - R). If R GTE 7.50%, Gamma1 is a
non-negative number unless its denominator is zero, in
which event it is undefined.
Gamma2 = (R - 7.00%)/(R2 - R). If R<7.25%, Gamma2 is a non-
negative number.
Gamma3 = (R - R3)/(R4 - R). If 7.25% LTE R LTE 7.50%,
Gamma2 is a non-negative number unless its denominator
is zero, in which case it is undefined.
If Gamma1 is undefined, DELTAY1 = Y1, DELTAY2 = Y2, DELTAY3
= Y3, and DELTAY4 = (Y4/P4)DELTAP4.
If Gamma2 is zero, DELTAY1 = (Y1/P1)DELTAP1, DELTAY2 = Y2,
DELTAY3 = Y3 and DELTAY4 = Y4.
If 7.25% LTE R LTE 7.50% and Gamma3 is undefined, DELTAY1 =
Y1, DELTAY2 = Y2, DELTAY4 = Y4, and DELTAY3 =
(Y3/P3)DELTAP3.
If 7.25% LTE R LTE 7.50% and Gamma3 is zero, DELTAY2 =
(Y2/P2)DELTAP2, DELTAY1 = Y1, DELTAY3 = Y3 and DELTAY4
= Y4.
In the remaining situations, DELTAY1, DELTAY2, DELTAY3 and
DELTAY4 shall be defined as follows:
I. If R GTE 7.50%, make the following additional
definitions:
SigmaY1 = 0, if R1< r1;(R1- r1)( Y1 + Y2 + Y3)Y1/((R1 -
7.00%)Y1 + (R1 - 7.25%)Y2), if R1 GTE r1 and R1 GTE 7.25%;
and (R1- r1)( Y1 + Y2 + Y3)/(R1 - 7.00%), if R1 GTE r1 and
R1<7.25%;
SigmaY2 = 0, if R1< r1 and R1 GTE 7.25%; (R1- r1)( Y1 + Y2 +
Y3)Y2/((R1 - 7.25%)Y2 + (R1 - 7.50%)Y3), if R1< r1 and
R1<7.25%; (R1- r1)( Y1 + Y2 + Y3)Y2/((R1 - 7.00%)Y1 + (R1 -
7.25%)Y2), if R1 GTE r1 and R1 GTE 7.25%; and 0, if R1 GTE
r1 and R1<7.25%; and
<PAGE> 16
SigmaY3 = (R1- r1)( Y1 + Y2 + Y3)/(R1 - 7.50%), if R1< r1
and R1 GTE 7.25%; (R1- r1)( Y1 + Y2 + Y3)Y3/((R1 - 7.25%)Y2
+ (R1 - 7.50%)Y3), if R1< r1 and R1<7.25%; and 0, if R1 GTE
r1.
SigmaY1, SigmaY2, and SigmaY3 are numbers between Y1 and 0,
Y2 and 0, and Y3 and 0, respectively, such that
(7.00%(Y1 - SigmaY1) + 7.25%( Y2.- SigmaY2) + 7.50%(
Y3.- SigmaY3))/(Y1 - SigmaY1 + Y2.- SigmaY2 + Y3.-
SigmaY3) = R1.
Y5 = Y1 - SigmaY1 + Y2.- SigmaY2 + Y3.- SigmaY3
P5 = P1 + P2 + P3.
DELTAP5 = DELTAP1 + DELTAP2 + DELTAP3.
DELTA Y5 = DELTAY1 - SigmaY1 + DELTAY2.- SigmaY2 + DELTAY3.-
SigmaY3
1.If Y4 - Alpha(P4 - DELTAP4) GTE 0, Y5- Alpha(P5 -
DELTAP5) GTE 0, and Gamma1(P5 - DELTAP5) < (P4 -
DELTAP4), DELTAY4 = Y4 - AlphaGamma1(P5 - DELTAP5) and
DELTAY5 = Y5 - Alpha(P5 - DELTAP5).
2.If Y4 - Alpha(P4 - DELTAP4) GTE 0,
Y5 - Alpha(P5 - DELTAP5) GTE 0, and Gamma1(P5 - DELTAP5)
GTE (P4 - DELTAP4), DELTAY4 = Y4 - Alpha(P4 - DELTAP4)
and DELTAY5 = Y5 - (Alpha/Gamma1)(P4 - DELTAP4).
3.If Y4 - Alpha(P4 - DELTAP4) < 0, Y5 - Alpha(P5 - DELTAP5)
GTE 0, and Y5 - Alpha(P5 - DELTAP5) GTE Y5 - (Y4/Gamma1),
DELTAY4 = Y4 - AlphaGamma1(P5 - DELTAP5) and
DELTAY5 = Y5 - Alpha(P5 - DELTAP5).
4.If Y4 - Alpha(P4 - DELTAP4) < 0, Y5 - (Y4/Gamma1) GTE 0,
and Y5 - Alpha(P5 - DELTAP5) LTE Y5 - (Y4/Gamma1),
DELTAY4 = 0 and DELTAY5 = Y5 - (Y4/Gamma1).
5.If Y5 - Alpha(P5 - DELTAP5) < 0, Y5 - (Y4/Gamma1) < 0,
and Y4 - Alpha(P4 - DELTAP4) LTE Y4 - (Gamma1Y5),
DELTAY4 = Y4 - (Gamma1Y5) and DELTAY5 = 0.
6.If Y5 - Alpha(P5 - DELTAP5) < 0, Y4 - Alpha(P4 - DELTAP4)
GTE 0, and Y4 - Alpha(P4 - DELTAP4) GTE Y4 - (Gamma1Y5),
DELTAY4 = Y4 - Alpha(P4 - DELTAP4) and
DELTAY5 = Y5 - (Alpha/Gamma1)(P4 - DELTAP4).
DELTAY1 = SigmaY1 + [(Y1 - SigmaY1)/(Y1 - SigmaY1 + Y2 -
SigmaY2 + Y3 - SigmaY3)]DELTAY5
<PAGE> 17
DELTAY2 = SigmaY2 + [(Y2 - SigmaY2)/(Y1 - SigmaY1 + Y2 -
SigmaY2 + Y3 - SigmaY3)]DELTAY5
DELTAY3 = SigmaY3 + [(Y3 - SigmaY3)/(Y1 - SigmaY1 + Y2 -
SigmaY2 + Y3 - SigmaY3)]DELTAY5
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 Y4 to Y5 equal to Gamma1 after
taking account of the allocation 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-Y-3, Class C-Y-
4, Class C-Z-1, Class C-Z-2, Class C-Z-3 and Class C-Z-
4 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, 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, the
Class C-Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class C-Y-3 and Class C-Z-3
Principal Balances and the Class C-Y-4 Principal
Balance less than or equal to 0.0005 of the sum of the
Class C-Y-4 and Class C-Z-4 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 Y4 and whose denominator is the sum of Y4 and the
Class C-Z-4 Principal Balance and (b) the fraction
whose numerator is Y5 and whose denominator is the sum
of Y5, the Class C-Z-1 Principal Balance, the Class C-Z-
2 Principal Balance and the Class C-Z-3 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
<PAGE> 18
the allocation of such Realized Losses to the related Class
P-M Regular Interest (if any) 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 (if any), (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. If the formula allocation of
DELTAY5 among DELTAY1, DELTAY2 and DELTAY3 cannot be
achieved because either DELTAY1 as so defined is greater
than DELTAP1, DELTAY2 as so defined is greater than DELTAP2
or DELTAY3 as so defined is greater than DELTAP3, such an
allocation shall be made as close as possible to the formula
allocation within the requirement that DELTAY1 < DELTAP1,
DELTAY2 < DELTAP2 and DELTAY3 < DELTAP3.
II. If R LTE 7.25%, make the following additional
definitions:
SigmaY2 = 0, if R2< r2; (R2- r2)( Y2 + Y3 + Y4)Y2/((R2 -
7.25%)Y2 + (R2 - 7.50%)Y3), if R2 GTE r2 and R2 GTE 7.50%;
and (R2- r2)( Y2 + Y3 + Y4)/(R2 - 7.25%), if R2 GTE r2 and
R2<7.50%;
SigmaY3 = 0, if R2< r2 and R2 GTE 7.50%; (R2- r2)( Y2 + Y3 +
Y4)Y3/((R2 - 7.50%)Y3 + (R2 - 7.75%)Y4), if R2< r2 and
R2<7.50%; (R2- r2)( Y2 + Y3 + Y4)Y3/((R2 - 7.25%)Y2 + (R2 -
7.50%)Y3),
if R2 GTE r2 and R2 GTE 7.50%; and 0, if R2 GTE r2 and
R2<7.50%; and
SigmaY4 = (R2- r2)( Y2 + Y3 + Y4)/(R2 - 7.75%), if R2< r2
and R2 GTE 7.50%; R2- r2)( Y2 + Y3 + Y4)Y4/((R2 - 7.50%)Y3 +
(R2 - 7.75%)Y4), if R2< r2 and R2<7.50%; and 0, if R2 GTE
r2.
SigmaY2, SigmaY3, and SigmaY4 are numbers between Y2 and 0,
Y3 and 0, and Y4 and 0, respectively, such that
(7.25%(Y2 - SigmaY2) + 7.50%( Y3.- SigmaY3) + 7.75%(
Y4.- SigmaY4))/(Y2 - SigmaY2 + Y3.- SigmaY3 + Y4.-
SigmaY4) = R2.
Y6 = Y2 - SigmaY2 + Y3.- SigmaY3 + Y4.- SigmaY4
<PAGE> 19
P6 = P2 + P3 + P4.
DELTAP6 = DELTAP2 + DELTAP3 + DELTAP4.
DELTAY6 = DELTAY2 - SigmaY2 + DELTAY3.- SigmaY3 +
DELTAY4.- SigmaY4
1.If Y6 - Alpha(P6 - DELTAP6) GTE 0, Y1- Alpha(P1 -
DELTAP1) GTE 0, and Gamma2(P1 - DELTAP1) < (P6 -
DELTAP6), DELTAY6 = Y6 - AlphaGamma2(P1 - DELTAP1) and
DELTAY1 = Y1 - Alpha(P1 - DELTAP1).
2.If Y6 - Alpha(P6 - DELTAP6) GTE 0,
Y1 - Alpha(P1 - DELTAP1) GTE 0, and Gamma2(P1 - DELTAP1)
GTE (P6 - DELTAP6), DELTAY6 = Y6 - Alpha(P6 - DELTAP6)
and DELTAY1 = Y1 - (Alpha/Gamma2)(P6 - DELTAP6).
3.If Y6 - Alpha(P6 - DELTAP6) < 0, Y1 - Alpha(P1 - DELTAP1)
GTE 0, and Y1 - Alpha(P1 - DELTAP1) GTE Y1 - (Y6/Gamma2),
DELTAY6 = Y6 - AlphaGamma2(P1 - DELTAP1) and
DELTAY1 = Y1 - Alpha(P1 - DELTAP1).
4.If Y6 - Alpha(P6 - DELTAP6) < 0, Y1 - (Y6/Gamma2) GTE 0,
and Y1 - Alpha(P1 - DELTAP1) LTE Y1 - (Y6/Gamma2),
DELTAY6 = 0 and DELTAY1 = Y1 - (Y6/Gamma2).
5.If Y1 - Alpha(P1 - DELTAP1) < 0, Y1 - (Y6/Gamma2) < 0,
and Y6 - Alpha(P6 - DELTAP6) LTE Y6 - (Gamma2Y1),
DELTAY6 = Y6 - (Gamma2Y1) and DELTAY1 = 0.
6.If Y1 - Alpha(P1 - DELTAP1) < 0, Y6 - Alpha(P6 - DELTAP6)
GTE 0, and Y6 - Alpha(P6 - DELTAP6) GTE Y6 - (Gamma2Y1),
DELTAY6 = Y6 - Alpha(P6 - DELTAP6) and
DELTAY1 = Y1 - (Alpha/Gamma2)(P6 - DELTAP6).
DELTAY2 = SigmaY2 + [(Y2 - SigmaY2)/(Y2 - SigmaY2 + Y3 -
SigmaY3 + Y4 - SigmaY4)]DELTAY6
DELTAY3 = SigmaY3 + [(Y3 - SigmaY3)/(Y2 - SigmaY2 + Y3 -
SigmaY3 + Y4 - SigmaY4)]DELTAY6
DELTAY4 = SigmaY4 + [(Y4 - SigmaY4)/(Y2 - SigmaY2 + Y3 -
SigmaY3 + Y4 - SigmaY4)]DELTAY6
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 Y6 to Y1 equal to Gamma2 after
<PAGE> 20
taking account of the allocation 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-Y-3, Class C-Y-
4, Class C-Z-1, Class C-Z-2, Class C-Z-3 and Class C-Z-
4 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, 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, the
Class C-Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class C-Y-3 and Class C-Z-3
Principal Balances and the Class C-Y-4 Principal
Balance less than or equal to 0.0005 of the sum of the
Class C-Y-4 and Class C-Z-4 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 Y1 and whose denominator is the sum of Y1 and Class
C-Z-1 Principal Balance and (b) the fraction whose
numerator is Y6 and whose denominator is the sum of Y6,
the Class C-Z-2 Principal Balance, the Class C-Z-3
Principal Balance and the Class C-Z-4 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 (if any) 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 (if any), (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
<PAGE> 21
shall be resolved on the basis of the goals and their
priorities set forth above within the requirement set forth
in the preceding sentence. If the formula allocation of
DELTAY6 among DELTAY2, DELTAY3 and DELTAY4 cannot be
achieved because either DELTAY2 as so defined is greater
than DELTAP2, DELTAY3 as so defined is greater than DELTAP3
or DELTAY4 as so defined is greater than DELTAP4, such an
allocation shall be made as close as possible to the formula
allocation within the requirement that DELTAY2 < DELTAP2,
DELTAY3 < DELTAP3 and DELTAY4 < DELTAP4.
III. If 7.25% LTE R LTE 7.50%, make the following additional
definitions:
SigmaY1 = 0, if R3< r3; and (R3- r3)( Y1 + Y2)/(R3 - 7.00%),
if R3 GTE r3;
SigmaY2 = 0, if R3 GTE r3; and (R3- r3)( Y1 + Y2)/(R3 -
7.25%), if R3< r3;
SigmaY3 = 0, if R4< r4; and (R4- r4)(Y3 + Y4)/(R4 - 7.50%),
if R4 GTE r4; and
SigmaY4 = (R4- r4)(Y3 + Y4)/(R4 - 7.75%), if R4< r4; and
0, if R4 GTE r4.
SigmaY1, SigmaY2, SigmaY3, and SigmaY4 are numbers between
Y1 and 0, Y2 and 0, Y3 and 0, and Y4 and 0,
respectively, such that
(7.00%(Y1 - SigmaY1) + 7.25%(Y2.- SigmaY2))/(Y1 -
SigmaY1 + Y2.- SigmaY2) = R3 and
(7.50%(Y3 - SigmaY3) + 7.75%(Y4.- SigmaY4))/(Y3 -
SigmaY3 + Y4.- SigmaY4) = R4.
Y7 = Y1 - SigmaY1 + Y2.- SigmaY2
P7 = P1 + P2.
DELTAP7 = DELTAP1 + DELTAP2.
DELTAY7 = DELTAY1 - SigmaY1 + DELTAY2.- SigmaY2.
Y8 = Y3.- SigmaY3 + Y4.- SigmaY4.
P8 = P3 + P4.
DELTAP8 = DELTAP3 + DELTAP4.
DELTAY8 = DELTAY3.- SigmaY3 + DELTAY4.- SigmaY4
<PAGE> 22
1.If Y8 - Alpha(P8 - DELTAP8) GTE 0, Y7- Alpha(P7 -
DELTAP7) GTE 0, and Gamma3(P7 - DELTAP7) < (P8 -
DELTAP8), DELTAY8 = Y8 - AlphaGamma3(P7 - DELTAP7) and
DELTAY7 = Y7 - Alpha(P7 - DELTAP7).
2.If Y8 - Alpha(P8 - DELTAP8) GTE 0,
Y7 - Alpha(P7 - DELTAP7) GTE 0, and Gamma3(P7 - DELTAP7)
GTE (P8 - DELTAP8), DELTAY8 = Y8 - Alpha(P8 - DELTAP8)
and DELTAY7 = Y7 - (Alpha/Gamma3)(P8 - DELTAP8).
3.If Y8 - Alpha(P8 - DELTAP8) < 0, Y7 - Alpha(P7 - DELTAP7)
GTE 0, and Y7 - Alpha(P7 - DELTAP7) GTE Y7 - (Y8/Gamma3),
DELTAY8 = Y8 - AlphaGamma3(P7 - DELTAP7) and
DELTAY7 = Y7 - Alpha(P7 - DELTAP7).
4.If Y8 - Alpha(P8 - DELTAP8) < 0, Y7 - (Y8/Gamma3) GTE 0,
and Y7 - Alpha(P7 - DELTAP7) LTE Y7 - (Y8/Gamma3),
DELTAY8 = 0 and DELTAY7 = Y7 - (Y8/Gamma3).
5.If Y7 - Alpha(P7 - DELTAP7) < 0, Y7 - (Y8/Gamma3) < 0,
and Y8 - Alpha(P8 - DELTAP8) LTE Y8 - (Gamma3Y7),
DELTAY8 = Y8 - (Gamma3Y7) and DELTAY7 = 0.
6.If Y7 - Alpha(P7 - DELTAP7) < 0, Y8 - Alpha(P8 - DELTAP8)
GTE 0, and Y8 - Alpha(P8 - DELTAP8) GTE Y8 - (Gamma3Y7),
DELTAY8 = Y8 - Alpha(P8 - DELTAP8) and
DELTAY7 = Y7 - (Alpha/Gamma3)(P8 - DELTAP8).
DELTAY1 = SigmaY1 + [(Y1 - SigmaY1)/(Y1 - SigmaY1 + Y2 -
SigmaY2)]DELTAY7
DELTAY2 = SigmaY2 + [(Y2 - SigmaY2)/( Y1 - SigmaY1 + Y2 -
SigmaY2)]DELTAY7
DELTAY3 = SigmaY3 + [(Y3 - SigmaY3)/(Y3 - SigmaY3 + Y4 -
SigmaY4)]DELTAY8
DELTAY4 = SigmaY4 + [(Y4 - SigmaY4)/(Y3 - SigmaY3 + Y4 -
SigmaY4)]DELTAY8
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 Y8 to Y7 equal to Gamma3 after
taking account of the allocation 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-Y-3, Class C-Y-
<PAGE> 23
4, Class C-Z-1, Class C-Z-2, Class C-Z-3 and Class C-Z-
4 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, 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, the
Class C-Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class C-Y-3 and Class C-Z-3
Principal Balances and the Class C-Y-4 Principal
Balance less than or equal to 0.0005 of the sum of the
Class C-Y-4 and Class C-Z-4 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 Y7 and whose denominator is the sum of Y7, the Class
C-Z-1 Principal Balance and the Class C-Z-2 Principal
Balance and (b) the fraction whose numerator is Y8 and
whose denominator is the sum of Y8, the Class C-Z-3
Principal Balance and the Class C-Z-4 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 (if any) 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 (if any), (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. If the formula allocation of
DELTAY7 between DELTAY1 and DELTAY2, or of DELTAY8 between
DELTAY3 and DELTAY4 cannot be achieved because either
<PAGE> 24
DELTAY1 as so defined is greater than DELTAP1, DELTAY2 as so
defined is greater than DELTAP2, DELTAY3 as so defined is
greater than DELTAP3 or DELTAY4 as so defined is greater
than DELTAP4, such an allocation shall be made as close as
possible to the formula allocation within the requirement
that DELTAY1 < DELTAP1, DELTAY2 < DELTAP2, DELTAY3 < DELTAP3
and DELTAY4 < DELTAP4.
In the execution copy of this Agreement, symbols are
represented by the following labels; in any conformed copy
of this Agreement, such symbols may be represented by
characters other than numerals and the upper and lower case
letters of the alphabet and standard punctuation, including,
without limitation, Greek letters and mathematical symbols.
Example:
Alpha Greek letter alpha
DELTA Greek letter delta
Gamma Greek letter gamma
GTE Mathematical symbol for greater than or equal
to
LTE Mathematical symbol for less than or equal to
The Class Principal Balances for the Class C-Y-1, Class
C-Y-2, Class C-Y-3 and Class C-Y-4 Regular Interests as of
the Cut-Off Date should be calculated as follows: First,
calculate the Cut-Off Date values for P1, P2, P3 and P4.
Then calculate the Cut-Off Date value of R using those
balances and the Group II Subordinate Balance, the Group III
Subordinate Balance, the Group IV Subordinate Balance and
the Group V Subordinate Balance.
If R GTE 7.5%, calculate R1 =
(7.0%P1 + 7.25%P2 + 7.5%P3)/(P1 + P2 + P3) and
Gamma1 = (R - R1)/(7.75% - R).
If P4 LTE Gamma1(P1 + P2 + P3), the Cut-Off Date
principal balance of the Class C-Y-4 Regular Interest (Y4)
equals 0.0005P4 and the Cut-Off Date principal balances of
the Class C-Y-1, Class C-Y-2 and Class C-Y-3 Regular
Interests (Y1, Y2 and Y3) equal 0.0005 P1P4/[Gamma1(P1 + P2
+ P3)], 0.0005 P2P4/[Gamma1(P1 + P2 + P3)] and
0.0005 P3P4/[Gamma1(P1 + P2 + P3)] respectively.
If P4 > Gamma1(P1 + P2 + P3), the Cut-Off Date
principal balances of the Class C-Y-1, Class C-Y-2 and Class
C-Y-3 Regular Interests (Y1, Y2 and Y3) equal 0.0005 P1,
0.0005 P2 and 0.0005 P3 respectively and the Cut-Off Date
principal balance of the Class C-Y-4 Regular Interest (Y4)
equals 0.0005Gamma1(P1 + P2 + P3).
<PAGE> 25
If R LTE 7.25%,calculate R2 =
(7.25%P2 + 7.5%P3 + 7.75%P4)/(P2 + P3 + P4) and
Gamma2 =(R - 7.25%)/(R2 - R).
If P2 + P3 + P4 LTE Gamma2P1, the Cut-Off Date
principal balances of the Class C-Y-2, Class C-Y-3 and Class
C-Y-3 Regular Interests (Y2, Y3 and Y4) equal 0.0005P2,
0.0005P3 and 0.0005P4, respectively, and the Cut-Off Date
principal balance of the Class C-Y-1 Regular Interest (Y1)
equals 0.0005(P2+P3+P4)/Gamma2.
If P2 + P3 + P4> Gamma2P1, the Cut-Off Date principal
balance of the Class C-Y-1 Regular Interest (Y1) equals
0.0005 P1 and the Cut-Off Date principal balances of the
Class C-Y-2, Class C-Y-3 and Class C-Y-4 Regular Interests
(Y2, Y3 and Y4) equal 0.0005Gamma2P1P2/(P2 + P3 + P4),
0.0005Gamma2P1P3/(P2 + P3 + P4) and 0.0005Gamma2P1P4/(P2 +
P3 + P4), respectively.
If 7.25%<R<7.5%,calculate R3 =
(7.0%P1 + 7.25%P2)/(P1 + P2),
R4 = (7.5%P3 + 7.75%P4)/(P3 + P4) and
Gamma3 =(R - R3)/(R4 - R).
If P3 + P4 LTE Gamma3(P1 + P2), the Cut-Off Date
principal balances of the Class C-Y-3 and Class C-Y-4
Regular Interests (Y3 and Y4) equal 0.0005P3 and 0.0005P4,
respectively, and the Cut-Off Date principal balances of the
Class C-Y-1 and Class C-Y-2 Regular Interests (Y1 and Y2)
equal 0.0005 P1 (P3+P4)/[Gamma3(P1 + P2)] and
0.0005 P2 (P3+P4)/[Gamma3(P1 + P2)], respectively.
If P3 + P4> Gamma3(P1 + P2), the Cut-Off Date principal
balances of the Class C-Y-1 and Class C-Y-2 Regular
Interests (Y1 and Y2) equal 0.0005 P1 and 0.0005 P2 and the
Cut-Off Date principal balances of the Class C-Y-3 and Class
C-Y-4 Regular Interests (Y3 and Y4) equal 0.0005Gamma3P3(P1
+ P2)/(P3 + P4) and 0.0005Gamma3P4(P1 + P2)/(P3 + P4),
respectively.
Class C-Z Regular Interests: The Class C-Z-1, Class C-Z-
2, Class C-Z-3 and Class C-Z-4 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, Class C-Z-2, Class C-Z-3 and
Class C-Z-4 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
<PAGE> 26
Regular Interest is Loan Group V, the "related Loan Group"
for the Class C-Z-2 Regular Interest is Loan Group II, the
"related Loan Group" for the Class C-Z-3 Regular Interest is
Loan Group III and the "related Loan Group" for the Class C-
Z-4 Regular Interest is Loan Group IV) over the sum of the
amounts thereof distributable (i) in the case of Loan Group
V, to the Class V-P-M Regular Interest, (ii) to the Class C-
X-M Regular Interests in respect of interest derived from
the Mortgage Loans in such Loan Group and (iii) in respect
of interest on the related Class C-Y and Class C-Z Regular
Interests and (y) the amount of Realized Losses allocable to
principal for the related Loan Group (or, in the case of
Loan Group V, the excess of such amount over the portion of
such amount allocable to the Class V-P-M Regular Interest)
over (B) the Class C-Y Principal Reduction Amount for the
related Loan Group.
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 C-Z-3 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-3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Z-3
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class C-Z-3 Regular Interest on such Distribution Date.
Class C-Z-4 Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
<PAGE> 27
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class C-Z-4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class C-Z-4
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class C-Z-4 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 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-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-A-10 Certificates: The Certificates designated
as "Class I-A-10" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-11 Certificates: The Certificates designated
as "Class I-A-11" on the face thereof in substantially the
form attached hereto as Exhibit A.
<PAGE> 28
Class I-A-12 Certificates: The Certificates designated
as "Class I-A-12" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-13 Certificates: The Certificates designated
as "Class I-A-13" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-14 Certificates: The Certificates designated
as "Class I-A-14" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-15 Certificates: The Certificates designated
as "Class I-A-15" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-16 Certificates: The Certificates designated
as "Class I-A-16" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-1 Certificates: The Certificates designated
as "Class I-B-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-2 Certificates: The Certificates designated
as "Class I-B-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-3 Certificates: The Certificates designated
as "Class I-B-3" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-4 Certificates: The Certificates designated
as "Class I-B-4" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-5 Certificates: The Certificates designated
as "Class I-B-5" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-6 Certificates: The Certificates designated
as "Class I-B-6" 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%.
<PAGE> 29
Class I-P Mortgage Loan: Any Group I Loan with a Pass-
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 III-A-1 Certificates: The Certificates designated
as "Class III-A-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class IV-A-1 Certificates: The Certificates designated
as "Class IV-A-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class V-A-1 Certificates: The Certificates designated
as "Class V-A-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class V-P Certificates: The Certificates designated as
"Class V-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class V-P Fraction: For each Class V-P Mortgage Loan, a
<PAGE> 30
fraction, the numerator of which is 7.000% less the Pass-
Through Rate on such Class V-P Mortgage Loan and the
denominator of which is 7.000%.
Class V-P Mortgage Loan: Any Group V Loan with a Pass-
Through Rate of less than 7.000% per annum.
Class V-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 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 V-P
Certificates.
Class P Fraction: The Class I-P or Class V-P Fraction,
as applicable.
Class P Mortgage Loan: Any of the Class I-P or Class V-
P Mortgage Loans.
Class P-M Regular Interests: The Class I-P-M and Class
V-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 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
<PAGE> 31
amounts distributed in respect of losses pursuant to
paragraph (I)(a)(v), (I)(a)(vi), (I)(f)(i) or (I)(f)(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)(a)(xxv) or
(I)(f)(xxi) of the definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the Class
Principal Balances of the Group I-B or Group C-B
Certificates, as applicable. 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, Class C-X-1 and
Class C-X-2 Certificates.
Class X-M Regular Interests: The Class I-X-M, Class C-X-
1-M and Class C-X-2-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 by Clipper to the Trustee pursuant to the Clipper
Loan Sale Agreement.
<PAGE> 32
Clipper Mortgage Loan Purchase Amount: The amount of
$336,577,247.53, 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: July 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, Washington or California
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
<PAGE> 33
statements and (v) a stock 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 1999-8.
Curtailment: Any payment (exclusive of any prepayment
penalty) 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
monitored by a Servicer or (c) in a separate non-trust
account without FDIC or other insurance in an Eligible
<PAGE> 34
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.
<PAGE> 35
Cut-Off Date: July 1, 1999.
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 July 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, as determined by the
Master Servicer.
Disqualified Organization: Any Person which is not a
Permitted Transferee, but does not include any Pass-Through
Entity which owns or holds a Residual Certificate and of
which a Disqualified Organization, directly or indirectly,
may be a stockholder, partner or beneficiary.
Distribution Date: With respect to distributions on the
REMIC I Regular Interests and the Certificates, the 25th day
(or, if such 25th day is not a Business Day, the Business
Day immediately succeeding such 25th day) of each month,
with the first such date being August 25, 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
<PAGE> 36
rating of at least one of the two highest unsecured long-
term debt ratings of the Rating Agencies, (iii) with respect
to any Buydown Fund Account or Custodial Account which also
serves as a Buydown Fund Account, the highest unsecured long-
term debt rating by the Rating Agencies, or (iv) the
approval of the Rating Agencies. Such institution may be the
Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with
written notice on the Business Day following the date on
which the Servicer determines that such Servicer's short-
term debt and unsecured long-term debt ratings fail to meet
the requirements of the prior sentence.
Eligible Investments: Any one or more of the
obligations or securities listed below in which funds
deposited in the Investment Account, the Certificate
Account, the Custodial Account for P&I and the Custodial
Account for Reserves may be invested:
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;
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;
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;
Obligations of, or obligations guaranteed by, any
state of the United States or the District of Columbia,
<PAGE> 37
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;
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;
Securities (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount that
are issued by any corporation incorporated under the
laws of the United States or any state thereof and have
the highest long-term unsecured rating available for
such securities from the Rating Agencies; provided,
however, that securities issued by any such corporation
will not be investments to the extent that investment
therein would cause the outstanding principal amount of
securities issued by such corporation that are then
held as part of the Investment Account or the
Certificate Account to exceed 20% of the aggregate
principal amount of all Eligible Investments then held
in the Investment Account and the Certificate Account;
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
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
<PAGE> 38
balance of such instrument.
ERISA: The Employee Retirement Income Security Act of
1974, as amended.
ERISA Restricted Certificate: Any Class B, Class I-A-11
or Residual Certificate.
Event of Default: Any event of default as specified in
Section 7.01.
Excess Liquidation Proceeds: With respect to any
Distribution Date, the excess, if any, of aggregate
Liquidation Proceeds received during the Prior Period over
the amount that would have been received if Payoffs had been
made with respect to such Mortgage Loans on the date such
Liquidation Proceeds were received.
FDIC: Federal Deposit Insurance Corporation, or any
successor thereto.
FHA: Federal Housing Administration, or any successor
thereto.
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
National Mortgage Association, or any successor thereto.
Fraud Coverage: During the period prior to the first
anniversary of the Cut-Off Date and for Loan Group I, 2.00%
of the aggregate principal balance of the Group I Loans as
of the Cut-Off Date (the "Initial Group I Fraud Coverage"),
reduced by Fraud Losses allocated to the Group I and
Residual 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 for Loan Group I 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 Group I and Residual 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 for Loan
Group I 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 Group I
Loans as of the Due Date in the preceding month and (ii) the
excess of the Initial Group I Fraud Coverage over cumulative
<PAGE> 39
Fraud Losses allocated to the Group I and Residual
Certificates.
During the period prior to the first anniversary of the
Cut-Off Date and for Loan Group II, Loan Group III, Loan
Group IV and Loan Group V, collectively, 2.00% of the
aggregate principal balance of the Group II, Group III,
Group IV and Group V Loans as of the Cut-Off Date (the
"Initial Group II, Group III, Group IV and Group V Fraud
Coverage"), reduced by Fraud Losses allocated to the Group
II, Group III, Group IV, Group V, Group C-B and Group C-X
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 for Loan Group II, Loan Group III, Loan Group IV
and Loan Group V 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 Group II, Group III, Group IV, Group V,
Group C-B and Group C-X 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 for Loan Group II, Loan Group III,
Loan Group IV and Loan Group V 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 Group II, Group III, Group IV and
Group V Loans as of the Due Date in the preceding month and
(ii) the excess of the Initial Group II, Group III, Group IV
and Group V Fraud Coverage over cumulative Fraud Losses
allocated to the Group II, Group III, Group IV, Group V,
Group C-B and Group C-X Certificates.
The Fraud Coverage for Loan Group I and the Fraud
Coverage for Loan Group II, Loan Group III, Loan Group IV
and Loan Group V 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.
<PAGE> 40
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 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.
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
Group II, Group III, Group IV and Group V Loans.
Group C-B Subordinate Liquidation Amount: The excess,
if any, of the aggregate of Liquidation Principal for all
Group II, Group III, Group IV and Group V Loans which became
Liquidated Mortgage Loans during the Prior Period, over the
sum of the Group II Senior Liquidation Amount, the Group III
Senior Liquidation Amount, the Group IV Senior Liquidation
Amount and the Group V Senior Liquidation Amount for such
Distribution Date.
Group C-B Subordinate Principal Distribution Amount: On
any Distribution Date, the excess of (A) the sum of (i) the
Group II Subordinate Percentage of the Principal Payment
Amount for Loan Group II, (ii) the Group III Subordinate
Percentage of the Principal Payment Amount for Loan Group
III, (iii) the Group IV Subordinate Percentage of the
Principal Payment Amount for Loan Group IV, (iv) the Group V
Subordinate Percentage of the Principal Payment Amount for
Loan Group V (exclusive of the portion thereof attributable
to principal distributions to the Class V-P Certificates
pursuant to clause (I)(e)(i) of the definition of "REMIC II
Distribution Amount"), (v) the Group C-B Subordinate
Principal Prepayments Distribution Amount (without regard to
the proviso in the definition thereof) and (vi) the Group C-
B Subordinate Liquidation Amount over (B) the sum of (x) the
amounts required to be distributed to the Class V-P
Certificates pursuant to clauses (I)(f)(i) and (I)(f)(ii) of
the definition of "REMIC II Distribution Amount" on such
Distribution Date, (y) in the event that any one or more of
the Class II-A-1, Class III-A-1, Class IV-A-1 or Class V-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, as set forth in clause (X) of the sentence
<PAGE> 41
immediately following paragraph (I)(f) 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 or Groups
related to an Overcollateralized Group or Groups to the
Class A Certificates related to an Undercollateralized Group
or Groups pursuant to clause (Y) of the sentence immediately
following paragraph (I)(f) of the definition of "REMIC II
Distribution Amount."
On any Distribution Date, the Group C-B 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)(f) of the definition of
"REMIC II Distribution Amount" except as otherwise stated in
such definition. Notwithstanding the foregoing, on any
Distribution Date prior to distributions on such date, if
the Subordination Level for any Class of Group C-B
Certificates is less than such Subordination Level as of the
Closing Date, the pro rata portion of the Group C-B
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 the Subordination Level 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.
Group C-B Subordinate Principal Prepayments
Distribution Amount: On any Distribution Date, the sum of
(i) the Group II Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group II, (ii) the
Group III Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group III, (iii) the Group IV
Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group IV and (iv) the Group V
Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group V (exclusive of the portion
thereof attributable to principal distributions to the Class
V-P Certificates pursuant to clause (I)(e)(i) of the
definition of "REMIC II Distribution Amount"); provided,
however, that if the amount specified in clause (B) of the
definition of "Group C-B Subordinate Principal Distribution
Amount" is greater than the sum of the amounts specified in
clauses (A)(i), (A)(ii), (A)(iii), (A)(iv) and (A)(vi) of
such definition, then the Group C-B Subordinate Principal
<PAGE> 42
Prepayments Distribution Amount shall be reduced by the
amount of such excess.
Group C-X Certificates: The Class C-X-1 and Class C-X-2
Certificates.
Group C-X-M Regular Interests: The Class C-X-1-M and
Class C-X-2-M Regular Interests.
Group I Certificates: The Group I-A, Class I-P, Class I-
X and Group I-B Certificates.
Group I Credit Support Depletion Date: The first
Distribution Date on which the aggregate Class Principal
Balance of the Group I-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.
Group I Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group I Loans.
Group I Premium Rate Mortgage Loans: The Group I Loans
having Pass-Through Rates 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 Class
Principal Balance of the Group I Certificates (less the
Class I-P Principal Balance), in each case immediately prior
to the Distribution Date.
Group I Senior Prepayment Percentage: On any
Distribution Date, 100%, unless (i) the Group I Senior
Percentage for such Distribution Date is less than or equal
to the Group I Senior Percentage as of the Closing Date,
(ii) such Distribution Date occurs on or after the fifth
anniversary of the first Distribution Date and (iii):
(a) the mean aggregate Principal Balance as of the
Distribution Date in each of the immediately
preceding six calendar months of the Group I Loans
<PAGE> 43
which were 60 or more days delinquent as of such
date (including loans in foreclosure and property
held by REMIC I) is less than or equal to 50% of
the aggregate Class Principal Balance of the Group
I-B Certificates as of the current Distribution
Date, and
(b) cumulative Realized Losses on the Group I Loans
allocated to the Group I-B Certificates, as a
percentage of the aggregate Class Principal
Balance of the Group I-B Certificates as of the
Closing Date, are less than or equal to, for any
Distribution Date (1) before the sixth anniversary
of the first Distribution Date, 30%, (2) on or
after the sixth anniversary but before the seventh
anniversary of the first Distribution Date, 35%,
(3) on or after the seventh anniversary but before
the eighth anniversary of the first Distribution
Date, 40%, (4) on or after the eighth anniversary
but before the ninth anniversary of the first
Distribution Date, 45%, and (5) on or after the
ninth anniversary of the first Distribution Date,
50%,
in which case the Group I Senior Prepayment Percentage shall
be calculated as follows: (1) for any such Distribution Date
on or after the fifth anniversary but before the sixth
anniversary of the first Distribution Date, the Group I
Senior Percentage for such Distribution Date plus 70% of the
Group I Subordinate Percentage for such Distribution Date;
(2) for any such Distribution Date on or after the sixth
anniversary but before the seventh anniversary of the first
Distribution Date, the Group I Senior Percentage for such
Distribution Date plus 60% of the Group I Subordinate
Percentage for such Distribution Date; (3) for any such
Distribution Date on or after the seventh anniversary but
before the eighth anniversary of the first Distribution
Date, the Group I Senior Percentage for such Distribution
Date plus 40% of the Group I Subordinate Percentage for such
Distribution Date; (4) for any such Distribution Date on or
after the eighth anniversary but before the ninth
anniversary of the first Distribution Date, the Group I
Senior Percentage for such Distribution Date plus 20% of the
Group I Subordinate Percentage for such Distribution Date;
and (5) for any such Distribution Date thereafter, the Group
I Senior Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Group
I-A Certificates of Principal Prepayments in the percentage
required would reduce the aggregate Class Principal Balance
of such Certificates below zero, the Group I Senior
Prepayment Percentage for such Distribution Date shall be
<PAGE> 44
limited to the percentage necessary to reduce the aggregate
Class Principal Balance of such Certificates 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.
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 Liquidation Amount: The excess, if
any, of the aggregate of Liquidation Principal for all Group
I Loans which became Liquidated Mortgage Loans during the
Prior Period, over the Group I Senior Liquidation Amount for
such Distribution Date.
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 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 I
Subordinate Principal Prepayments Distribution Amount
(without regard to the proviso in the definition thereof)
and (iii) the Group I Subordinate Liquidation Amount over
(B) the amounts required to be distributed to the Class I-P
Certificates pursuant to clauses (I)(a)(v) and (I)(a)(vi) of
<PAGE> 45
the definition of "REMIC II Distribution Amount" on such
Distribution Date.
On any Distribution Date, the Group I Subordinate
Principal Distribution Amount shall be allocated pro rata,
by Class Principal Balance, among the Classes of Group I-B
Certificates and paid in the order of distribution to such
Classes pursuant to clause (I)(a) of the definition of
"REMIC II Distribution Amount" except as otherwise stated in
such definition. Notwithstanding the foregoing, on any
Distribution Date prior to distributions on such date, if
the Subordination Level for any Class of Group I-B
Certificates is less than such Subordination Level as of the
Closing Date, the pro rata portion of the Group I
Subordinate Principal Prepayments Distribution Amount
otherwise allocable to the Class or Classes of Group I-B
Certificates junior to such Class will be distributed to the
most senior Class of Group I-B Certificates for which the
Subordination Level is less than the Subordination Level as
of the Closing Date, and to the Class or Classes of Group I-
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
I-B Certificates shall be as follows: Class I-B-1, Class I-B-
2, Class I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6.
Group I Subordinate Principal Prepayments Distribution
Amount: On any Distribution Date, 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"); provided, however, that if the amount
specified in clause (B) of the definition of "Group I
Subordinate Principal Distribution Amount" is greater than
the sum of the amounts specified in clauses (A)(i) and
(A)(iii) of such definition, then the Group I Subordinate
Principal Prepayments Distribution Amount shall be reduced
by the amount of such excess.
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, Class I-A-9, Class I-A-10, Class I-A-11,
Class I-A-12, Class I-A-13, Class I-A-14, Class I-A-15 and
Class I-A-16 Certificates.
Group I-B Certificates: The Class I-B-1, Class I-B-2,
Class I-B-3, Class I-B-4, Class I-B-5 and Class I-B-6
Certificates.
Group II Certificates: The Class II-A-1 Certificates.
<PAGE> 46
Group II Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group II Loans.
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 Percentage of the Principal Balance of such Mortgage
Loan and (ii) the Group II Senior Prepayment Percentage of
the Liquidation Principal with respect to such Mortgage
Loan.
Group II Senior Percentage: 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, in each case immediately
prior to the Distribution Date.
Group II Senior Prepayment Percentage, Group III Senior
Prepayment Percentage, Group IV Senior Prepayment Percentage
or Group V Senior Prepayment Percentage: On any Distribution
Date, each of the Group II Senior Prepayment Percentage, the
Group III Senior Prepayment Percentage, the Group IV Senior
Prepayment Percentage and the Group V Senior Prepayment
Percentage shall equal 100%, unless (i) the Group II Senior
Percentage for such Distribution Date is less than or equal
to the Group II Senior Percentage as of the Closing Date,
the Group III Senior Percentage for such Distribution Date
is less than or equal to the Group III Senior Percentage as
of the Closing Date, the Group IV Senior Percentage for such
Distribution Date is less than or equal to the Group IV
Senior Percentage as of the Closing Date and the Group V
Senior Percentage for such Distribution Date is less than or
equal to the Group V Senior Percentage as of the Closing
Date, (ii) such Distribution Date occurs on or after the
fifth anniversary of the first Distribution Date and (iii)
the following tests specified in clauses (a) through (h) are
met with respect to each of Loan Group II, Loan Group III,
Loan Group IV and Loan Group V:
(a) the mean aggregate Principal Balance as of the
Distribution Date in each of the immediately
preceding six calendar months of the Group II
Loans which were 60 or more days delinquent as of
such date (including loans in foreclosure and
property held by REMIC I) is less than or equal to
50% of the Subordinate Component Balance for Loan
Group II as of the current Distribution Date,
(b) the mean aggregate Principal Balance as of the
Distribution Date in each of the immediately
preceding six calendar months of the Group III
Loans which were 60 or more days delinquent as of
<PAGE> 47
such date (including loans in foreclosure and
property held by REMIC I) is less than or equal to
50% of the Subordinate Component Balance for Loan
Group III as of the current Distribution Date,
(c) the mean aggregate Principal Balance as of the
Distribution Date in each of the immediately
preceding six calendar months of the Group IV
Loans which were 60 or more days delinquent as of
such date (including loans in foreclosure and
property held by REMIC I) is less than or equal to
50% of the Subordinate Component Balance for Loan
Group IV as of the current Distribution Date,
(d) the mean aggregate Principal Balance as of the
Distribution Date in each of the immediately
preceding six calendar months of the Group V Loans
which were 60 or more days delinquent as of such
date (including loans in foreclosure and property
held by REMIC I) is less than or equal to 50% of
the Subordinate Component Balance for Loan Group V
as of the current Distribution Date,
(e) cumulative Realized Losses on the Group II Loans
allocated to the Group C-B Certificates, as a
percentage of the Subordinate Component Balance
for Loan Group II as of the Closing Date, are less
than or equal to, for any Distribution Date (1)
before the sixth anniversary of the first
Distribution Date, 30%, (2) on or after the sixth
anniversary but before the seventh anniversary of
the first Distribution Date, 35%, (3) on or after
the seventh anniversary but before the eighth
anniversary of the first Distribution Date, 40%,
(4) on or after the eighth anniversary but before
the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%,
(f) cumulative Realized Losses on the Group III Loans
allocated to the Group C-B Certificates, as a
percentage of the Subordinate Component Balance
for Loan Group III as of the Closing Date, are
less than or equal to, for any Distribution Date
(1) before the sixth anniversary of the first
Distribution Date, 30%, (2) on or after the sixth
anniversary but before the seventh anniversary of
the first Distribution Date, 35%, (3) on or after
the seventh anniversary but before the eighth
anniversary of the first Distribution Date, 40%,
(4) on or after the eighth anniversary but before
the ninth anniversary of the first Distribution
<PAGE> 48
Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%,
(g) cumulative Realized Losses on the Group IV Loans
allocated to the Group C-B Certificates, as a
percentage of the Subordinate Component Balance
for Loan Group IV as of the Closing Date, are less
than or equal to, for any Distribution Date (1)
before the sixth anniversary of the first
Distribution Date, 30%, (2) on or after the sixth
anniversary but before the seventh anniversary of
the first Distribution Date, 35%, (3) on or after
the seventh anniversary but before the eighth
anniversary of the first Distribution Date, 40%,
(4) on or after the eighth anniversary but before
the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%,
and
(h) cumulative Realized Losses on the Group V Loans
allocated to the Group C-B Certificates, as a
percentage of the Subordinate Component Balance
for Loan Group V as of the Closing Date, are less
than or equal to, for any Distribution Date (1)
before the sixth anniversary of the first
Distribution Date, 30%, (2) on or after the sixth
anniversary but before the seventh anniversary of
the first Distribution Date, 35%, (3) on or after
the seventh anniversary but before the eighth
anniversary of the first Distribution Date, 40%,
(4) on or after the eighth anniversary but before
the ninth anniversary of the first Distribution
Date, 45%, and (5) on or after the ninth
anniversary of the first Distribution Date, 50%,
in which case the Group II Senior Prepayment Percentage, the
Group III Senior Prepayment Percentage, the Group IV Senior
Prepayment Percentage and the Group V Senior Prepayment
Percentage shall be calculated as follows: (1) for any such
Distribution Date on or after the fifth anniversary but
before the sixth anniversary of the first Distribution Date,
the Group II Senior Percentage, the Group III Senior
Prepayment Percentage, the Group IV Senior Prepayment
Percentage or the Group V Senior Percentage, as applicable,
for such Distribution Date plus 70% of the Subordinate
Percentage for the related Loan Group for such Distribution
Date; (2) for any such Distribution Date on or after the
sixth anniversary but before the seventh anniversary of the
first Distribution Date, the Group II Senior Percentage, the
Group III Senior Prepayment Percentage, the Group IV Senior
Prepayment Percentage or the Group V Senior Percentage, as
<PAGE> 49
applicable, for such Distribution Date plus 60% of the
Subordinate Percentage for the related Loan Group for such
Distribution Date; (3) for any such Distribution Date on or
after the seventh anniversary but before the eighth
anniversary of the first Distribution Date, the Group II
Senior Percentage, the Group III Senior Prepayment
Percentage, the Group IV Senior Prepayment Percentage or the
Group V Senior Percentage, as applicable, for such
Distribution Date plus 40% of the Subordinate Percentage for
the related Loan Group for such Distribution Date; (4) for
any such Distribution Date on or after the eighth
anniversary but before the ninth anniversary of the first
Distribution Date, the Group II Senior Percentage, the Group
III Senior Prepayment Percentage, the Group IV Senior
Prepayment Percentage or the Group V 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 II Senior Percentage, the Group III
Senior Prepayment Percentage, the Group IV Senior Prepayment
Percentage or the Group V Senior Percentage, as applicable,
for such Distribution Date.
If on any Distribution Date the allocation to the Group
II, Group III, Group IV or Group V Certificates (other than
the Class V-P Certificates) of Principal Prepayments in the
percentage required would reduce the aggregate Class
Principal Balance of such Certificates below zero, the Group
II Senior Prepayment Percentage, the Group III Senior
Prepayment Percentage, the Group IV Senior Prepayment
Percentage or the Group V Senior Prepayment Percentage, as
applicable, for such Distribution Date shall be limited to
the percentage necessary to reduce the aggregate Class
Principal Balance of such Certificates to zero.
Notwithstanding the foregoing, however, on each Distribution
Date, the Class V-P Certificates will receive the applicable
Class V-P Fraction of all principal payments, including,
without limitation, Principal Prepayments, received in
respect of Class V-P Mortgage Loans.
Group II Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the
Group II Senior Percentage of the Principal Payment Amount
for Loan Group II, (b) the Group II Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group
II and (c) the Group II Senior Liquidation Amount.
Group II Subordinate Balance: For any date of
determination, an amount equal to the then outstanding
aggregate Principal Balance of the Group II Loans reduced by
the Class II-A-1 Principal Balance.
<PAGE> 50
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%.
Group III Certificates: The Class III-A-1 Certificates.
Group III Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group III Loans.
Group III Senior Liquidation Amount: The aggregate, for
each Group III Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Group III
Senior Percentage of the Principal Balance of such Mortgage
Loan and (ii) the Group III Senior Prepayment Percentage of
the Liquidation Principal with respect to such Mortgage
Loan.
Group III Senior Percentage: With respect to any
Distribution Date, the lesser of (i) 100% and (ii) the Class
III-A-1 Principal Balance divided by the aggregate Principal
Balance of the Group III Loans, in each case immediately
prior to the Distribution Date.
Group III Senior Prepayment Percentage: See the
definition of "Group II Senior Prepayment Percentage, Group
III Senior Prepayment Percentage, Group IV Senior Prepayment
Percentage or Group V Senior Prepayment Percentage."
Group III Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the
Group III Senior Percentage of the Principal Payment Amount
for Loan Group III, (b) the Group III Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group
III and (c) the Group III Senior Liquidation Amount.
Group III Subordinate Balance: For any date of
determination, an amount equal to the then outstanding
aggregate Principal Balance of the Group III Loans reduced
by the Class III-A-1 Principal Balance.
Group III Subordinate Percentage: With respect to any
Distribution Date, the excess of 100% over the Group III
Senior Percentage for such date.
Group III Subordinate Prepayment Percentage: On any
<PAGE> 51
Distribution Date, the excess of 100% over the Group III
Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the Class III-A-1 Principal
Balance has been reduced to zero, then the Group III
Subordinate Prepayment Percentage shall equal 100%.
Group IV Certificates: The Class IV-A-1 Certificates.
Group IV Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group IV Loans.
Group IV Senior Liquidation Amount: The aggregate, for
each Group IV Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Group IV
Senior Percentage of the Principal Balance of such Mortgage
Loan and (ii) the Group IV Senior Prepayment Percentage of
the Liquidation Principal with respect to such Mortgage
Loan.
Group IV Senior Percentage: With respect to any
Distribution Date, the lesser of (i) 100% and (ii) the Class
IV-A-1 Principal Balance divided by the aggregate Principal
Balance of the Group IV Loans, in each case immediately
prior to the Distribution Date.
Group IV Senior Prepayment Percentage: See the
definition of "Group II Senior Prepayment Percentage, Group
III Senior Prepayment Percentage, Group IV Senior Prepayment
Percentage or Group V Senior Prepayment Percentage."
Group IV Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the
Group IV Senior Percentage of the Principal Payment Amount
for Loan Group IV, (b) the Group IV Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group
IV and (c) the Group IV Senior Liquidation Amount.
Group IV Subordinate Balance: For any date of
determination, an amount equal to the then outstanding
aggregate Principal Balance of the Group IV Loans reduced by
the Class IV-A-1 Principal Balance.
Group IV Subordinate Percentage: With respect to any
Distribution Date, the excess of 100% over the Group IV
Senior Percentage for such date.
Group IV Subordinate Prepayment Percentage: On any
Distribution Date, the excess of 100% over the Group IV
Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the Class IV-A-1 Principal
Balance has been reduced to zero, then the Group IV
Subordinate Prepayment Percentage shall equal 100%.
<PAGE> 52
Group V Certificates: The Class V-A-1 and Class V-P
Certificates.
Group V Loans: The Mortgage Loans designated on the
Mortgage Loan Schedule as Group V Loans.
Group V Senior Liquidation Amount: The aggregate, for
each Group V Loan which became a Liquidated Mortgage Loan
during the Prior Period, of the lesser of: (i) the Group V
Senior Percentage of the Principal Balance of such Mortgage
Loan (exclusive of the Class V-P Fraction thereof, with
respect to any Class V-P Mortgage Loan) and (ii) the Group V
Senior Prepayment Percentage of the Liquidation Principal
with respect to such Mortgage Loan.
Group V Senior Percentage: With respect to any
Distribution Date, the lesser of (i) 100% and (ii) the Class
V-A-1 Principal Balance divided by the aggregate Principal
Balance of the Group V Loans (less the Class V-P Fraction of
each Class V-P Mortgage Loan), in each case immediately
prior to the Distribution Date.
Group V Senior Prepayment Percentage: See the
definition of "Group II Senior Prepayment Percentage, Group
III Senior Prepayment Percentage, Group IV Senior Prepayment
Percentage or Group V Senior Prepayment Percentage."
Group V Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the
Group V Senior Percentage of the Principal Payment Amount
for Loan Group V (exclusive of the portion thereof
attributable to principal distributions to the Class V-P
Certificates pursuant to clauses (I)(e)(i) and (II)(e)(i) of
the definition of "REMIC II Distribution Amount"), (b) the
Group V Senior Prepayment Percentage of the Principal
Prepayment Amount for Loan Group V (exclusive of the portion
thereof attributable to principal distributions to the Class
V-P Certificates pursuant to clauses (I)(e)(i) and
(II)(e)(i) of the definition of "REMIC II Distribution
Amount") and (c) the Group V Senior Liquidation Amount.
Group V Subordinate Balance: For any date of
determination, an amount equal to the then outstanding
aggregate Principal Balance of the Group V Loans reduced by
the aggregate Class Principal Balance of the Class V-A-1 and
Class V-P Certificates.
Group V Subordinate Percentage: With respect to any
Distribution Date, the excess of 100% over the Group V
Senior Percentage for such date.
Group V Subordinate Prepayment Percentage: On any
<PAGE> 53
Distribution Date, the excess of 100% over the Group V
Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the Class V-A-1 Principal Balance
has been reduced to zero, then the Group V 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.
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-
10 and Class I-A-16 Certificates and the Class P-M Regular
Interests shall equal zero.
Interest Transfer Amount: On any Distribution Date for
each Undercollateralized Group, an amount equal to one
month's interest on the applicable Principal Transfer Amount
at 7.250% per annum if the Undercollateralized Group is Loan
Group II, at 7.500% per annum if the Undercollateralized
Group is Loan Group III, at 7.750% per annum if the
Undercollateralized Group is Loan Group IV, or at 7.000% per
annum if the Undercollateralized Group is Loan Group V, 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
<PAGE> 54
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 I-B-4, Class
I-B-5, Class I-B-6, 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.
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)(e)(i),
(II)(a)(i) and (II)(e)(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, Loan Group II, Loan Group
III, Loan Group IV or Loan Group V, as applicable.
Loan Group I: The group of Mortgage Loans comprised of
<PAGE> 55
the Group I Loans.
Loan Group II: The group of Mortgage Loans comprised of
the Group II Loans.
Loan Group III: The group of Mortgage Loans comprised
of the Group III Loans.
Loan Group IV: The group of Mortgage Loans comprised of
the Group IV Loans.
Loan Group V: The group of Mortgage Loans comprised of
the Group V Loans.
Loan-to-Value Ratio: The original principal amount of a
Mortgage Loan divided by the Original Value; however,
references to "current Loan-to-Value Ratio" or "Loan-to-
Value Ratio as of the Cut-Off Date" in Section 2.03 shall be
deemed to mean the then current Principal Balance of a
Mortgage Loan divided by the Original Value.
Lockout Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in August 2004, 0%;
and for the Distribution Date occurring in August 2004 and
any Distribution Date thereafter, the Lockout Percentage.
Lockout 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 Lockout 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 Lockout Percentage of the
Liquidation Principal with respect to such Mortgage Loan.
Lockout Percentage: For any Distribution Date, the
aggregate Class Principal Balance of the Class I-A-4 and
Class I-A-11 Certificates divided by the aggregate Class
Principal Balance of the Group I and Residual Certificates
(less the Class I-P Principal Balance), in each case
immediately prior to such Distribution Date.
Lockout Prepayment Percentage: For any Distribution
Date, the product of the Lockout Percentage and the Step
Down Percentage.
Lockout Priority Amount: For any Distribution Date, the
sum of (i) the Lockout 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
<PAGE> 56
Lockout 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 Lockout
Liquidation Amount.
Lowest Class B Holder: An unaffiliated holder of (i) a
100% interest in the Class of Group I-B Certificates with
the lowest priority, (ii) a 100% interest in the Class of
Group C-B Certificates with the lowest priority or (iii) a
100% interest in a class of securities representing such
interest in either of such Class.
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 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
<PAGE> 57
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 1999-8, 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);
The Buydown Agreement, if applicable;
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 1999-8" 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
<PAGE> 58
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 1999-8" 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);
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
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 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 1999-8" 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;
A counterpart of the Cooperative Lease and the
Assignment of Proprietary Lease to the originator of
the Cooperative Loan with intervening assignments
<PAGE> 59
showing an unbroken chain of title from such originator
to the Trustee;
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;
The original recognition agreement by the
Cooperative of the interests of the mortgagee with
respect to the related Cooperative Loan;
The Security Agreement;
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;
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;
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;
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
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.
Mortgage Loan Schedule: The schedule, as amended from
time to time, of Mortgage Loans attached hereto as Exhibit
<PAGE> 60
D, which shall set forth as to each Mortgage Loan the
following, among other things:
(i) its loan number,
the address of the Mortgaged Property,
the name of the Mortgagor,
the Original Value of the property subject to the
Mortgage,
the Principal Balance as of the Cut-Off Date,
the Mortgage Interest Rate borne by the Mortgage
Note,
whether a Primary Insurance Policy is in effect as
of the Cut-Off Date,
the maturity of the Mortgage Note,
the Servicing Fee and the Master Servicing Fee,
its Loan Group, and
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
<PAGE> 61
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.
Opinion of Counsel: A written opinion of counsel, who
shall be reasonably acceptable to the Trustee and who may be
counsel (including in-house counsel) for the Company or the
Master Servicer.
Original Value: With respect to any Mortgage Loan other
than a Mortgage Loan originated for the purpose of
refinancing an existing mortgage debt, the lesser of (a) the
Appraised Value (if any) of the Mortgaged Property at the
time the Mortgage Loan was originated or (b) the purchase
price paid for the Mortgaged Property by the Mortgagor. With
respect to a Mortgage Loan originated for the purpose of
refinancing existing mortgage debt, the Original Value shall
be equal to the Appraised Value of the Mortgaged Property.
Overcollateralized Group: Any of Loan Group II, Loan
Group III, Loan Group IV or Loan Group V, if on any
Distribution Date such Loan Group is not an
Undercollateralized Group and one or more of 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
<PAGE> 62
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.
Paying Agent: Any paying agent appointed by the Trustee
pursuant to Section 8.12.
Payoff: Any Mortgagor payment (exclusive of any
prepayment penalty) 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 August 14,
1999, inclusive; and with respect to any Distribution Date
thereafter, the period from the 15th day of the Prior Period
<PAGE> 63
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;
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
with respect to the Residual Certificates, the
percentage set forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in
connection with Sections 5.09, 7.01, 8.01(c), 8.02, 8.07,
10.01 and 10.03, "Percentage Interest" shall mean the
percentage undivided beneficial interest evidenced by such
Certificate in REMIC II, which for purposes of such rights
only shall equal:
(i) with respect to any Certificate (other than the Class X
and Class R-2 Certificates), the product of (x) ninety-seven
(97%) 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);
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
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
<PAGE> 64
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 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
<PAGE> 65
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 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 any Loan Group, the sum with respect to the Mortgage
Loans in such Loan Group of (i) the scheduled principal
payments on the Mortgage Loans due on the related Due Date,
(ii) the principal portion of proceeds received with respect
to any Mortgage Loan which was purchased or repurchased 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
<PAGE> 66
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 any Loan Group, the sum with respect to the Mortgage
Loans in such Loan Group of (i) Curtailments received during
the Prior Period from such Mortgage Loans and (ii) Payoffs
received during the Payoff Period from such Mortgage Loans.
Principal Transfer Amount: For any Distribution Date
for each Undercollateralized Group, the excess, if any, of
the aggregate Class Principal Balance of the Class A
Certificates related to such Undercollateralized Group over
the aggregate Principal Balance of the Mortgage Loans in
such Loan Group (less, with respect to Loan Group V, the
applicable Class V-P Fraction of any Class V-P Mortgage
Loan), in each case immediately prior to such Distribution
Date.
Prior Period: The calendar month immediately preceding
any Distribution Date.
Pro Rata Allocation: (i) With respect to Realized
Losses on Group I Loans, the allocation of the principal
portion of such losses to all Classes of Group I
Certificates (other than the Class I-P Certificates) and the
Residual Certificates, pro rata according to their
respective Class Principal Balances in reduction thereof
(except if the loss is recognized with respect to a Class I-
P Mortgage Loan, in which case the applicable Class I-P
Fraction of such loss will first be allocated to the Class I-
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 Group I
Certificates (other than the Class I-P, Class I-A-10 and
Class I-A-16 Certificates) and the Residual 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 I-P, Class I-A-10, Class
I-A-16 and Class I-X Certificates) pro rata according to
their respective Class Principal Balances in reduction
thereof; provided, however, that until the Class I-A-11
Principal Balance has been reduced to zero, the principal
portion of Realized Losses that would otherwise be allocated
<PAGE> 67
to the Class I-A-2 Certificates pursuant to this clause (i)
shall instead be allocated to the Class I-A-11 Certificates,
in reduction of the Class I-A-11 Principal Balance, and the
interest portion of Realized Losses that would otherwise be
allocated to the Class I-A-2 Certificates pursuant to this
clause (i) shall instead be allocated to the Class I-A-11
Certificates, in reduction of accrued but unpaid interest
thereon, and then in reduction of the Class I-A-11 Principal
Balance; and (ii) with respect to Realized Losses on Group
II, Group III, Group IV and Group V Loans, the allocation of
the principal portion of such losses to all Classes of Group
II, Group III, Group IV, Group V and Group C-B Certificates
(other than the Class V-P Certificates), pro rata according
to their respective Class Principal Balances in reduction
thereof (except if the loss is recognized with respect to a
Class V-P Mortgage Loan, in which case the applicable Class
V-P Fraction of such loss will first be allocated to the
Class V-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 Group II,
Group III, Group IV, Group V, Group C-B and Group C-X
Certificates (other than the Class V-P 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 V-P and Group C-X
Certificates) pro rata according to their respective Class
Principal Balances in reduction thereof.
Prospectus: The Prospectus, dated July 27, 1999, and
the Prospectus Supplement, dated July 27, 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
<PAGE> 68
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
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, Group II, Group III, Group
IV and Group V 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 (or portions thereof,
in the case of the Group C-X-M Regular Interests) related to
each such Loan Group pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof
<PAGE> 69
(i.e. the "related" Loan Group for the Class U and Class I-X-
M Regular Interests is Loan Group I, the "related" Loan
Group for the Class C-Y-1 and Class C-Z-1 Regular Interests
and the portions of the Group C-X-M Regular Interests that
derive their interest from the Group V Loans is Loan Group
V, the "related" Loan Group for the Class C-Y-2 and Class C-
Z-2 Regular Interests and the portions of the Group C-X-M
Regular Interests that derive their interest from the Group
II Loans is Loan Group II, the "related" Loan Group for the
Class C-Y-3 and Class C-Z-3 Regular Interests and the
portions of the Group C-X-M Regular Interests that derive
their interest from the Group III Loans is Loan Group III,
and the "related" Loan Group for the Class C-Y-4 and Class C-
Z-4 Regular Interests and the portions of the Group C-X-M
Regular Interests that derive their interest from the Group
IV Loans is Loan Group IV). 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 shall be allocated to
the Class U Regular Interest in reduction of the Class
Principal Balance thereof. The remainder of the principal
portion of Realized Losses with respect to Loan Group II,
Loan Group III, Loan Group IV and Loan Group V 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 Hazard Coverage for Loan Group I, Fraud Losses in
excess of the Fraud Coverage for Loan Group I and Bankruptcy
Losses in excess of the Bankruptcy Coverage for Loan Group
I, Realized Losses with respect to the Group I Loans shall
be allocated among the Group I and Residual Certificates (i)
for Realized Losses allocable to principal (a) first, to the
Class I-B-6 Certificates, until the Class I-B-6 Principal
Balance has been reduced to zero, (b) second, to the Class I-
B-5 Certificates, until the Class I-B-5 Principal Balance
has been reduced to zero, (c) third, to the Class I-B-4
Certificates, until the Class I-B-4 Principal Balance has
been reduced to zero, (d) fourth, to the Class I-B-3
<PAGE> 70
Certificates, until the Class I-B-3 Principal Balance has
been reduced to zero, (e) fifth, to the Class I-B-2
Certificates, until the Class I-B-2 Principal Balance has
been reduced to zero, (f) sixth, to the Class I-B-1
Certificates, until the Class I-B-1 Principal Balance has
been reduced to zero, and (g) seventh, to the Group I-A and
Residual Certificates, pro rata according to the Class
Principal Balances thereof, in reduction thereof; provided,
however, that if the loss is recognized with respect to a
Class I-P Mortgage Loan, the applicable Class I-P Fraction
of such loss will first be allocated to the Class I-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 I-B-6 Certificates, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class I-B-6
Principal Balance, (b) second, to the Class I-B-5
Certificates, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class I-B-5 Principal
Balance, (c) third, to the Class I-B-4 Certificates, in
reduction of accrued but unpaid interest thereon and then in
reduction of the Class I-B-4 Principal Balance, (d) fourth,
to the Class I-B-3 Certificates, in reduction of accrued but
unpaid interest thereon and then in reduction of the Class I-
B-3 Principal Balance, (e) fifth, to the Class I-B-2
Certificates, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class I-B-2 Principal
Balance, (f) sixth, to the Class I-B-1 Certificates, in
reduction of accrued but unpaid interest thereon and then in
reduction of the Class I-B-1 Principal Balance, and (g)
seventh, to the Group I-A Certificates (other than the Class
I-A-10 and Class I-A-16 Certificates) and the Class I-X and
Residual Certificates, 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-
10 and Class I-A-16 Certificates) and the Residual
Certificates, pro rata according to the Class Principal
Balances thereof in reduction thereof; provided, however,
that until the Class I-A-11 Principal Balance has been
reduced to zero, all principal losses that would otherwise
be allocated to the Class I-A-2 Certificates pursuant to
clause (i) of this paragraph shall instead be allocated to
the Class I-A-11 Certificates, in reduction of the Class I-A-
11 Principal Balance, and all interest losses that would
otherwise be allocated to the Class I-A-2 Certificates
pursuant to clause (ii) of this paragraph shall instead be
allocated to the Class I-A-11 Certificates, in reduction of
accrued but unpaid interest on the Class I-A-11
Certificates, and then in reduction of the Class I-A-11
Principal Balance.
Except for Special Hazard Losses in excess of the
<PAGE> 71
Special Hazard Coverage for Loan Group II, Loan Group III,
Loan Group IV and Loan Group V, Fraud Losses in excess of
the Fraud Coverage for Loan Group II, Loan Group III, Loan
Group IV and Loan Group V and Bankruptcy Losses in excess of
the Bankruptcy Coverage for Loan Group II, Loan Group III,
Loan Group IV and Loan Group V, Realized Losses with respect
to the Group II, Group III, Group IV and Group V Loans shall
be allocated among the Group II, Group III, Group IV, Group
V, Group C-B and Group C-X 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 the Class A
Certificates of the related Certificate Group, in reduction
of the Class Principal Balance thereof; provided, however,
that if the loss is recognized with respect to a Class V-P
Mortgage Loan, the applicable Class V-P Fraction of such
loss will first be allocated to the Class V-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 the Class A
Certificates of the related Certificate Group and to the
portions of the Group C-X Certificates that derive their
interest from such Loan Group, pro rata according to accrued
but unpaid interest on such Classes or portions thereof, as
applicable, in reduction thereof, and then to the Class A
Certificates of the related Certificate Group, in reduction
<PAGE> 72
of the Class Principal Balance thereof; provided, however,
that in the case of clause (i)(g) and (ii)(g) of this
paragraph, (X) if such loss occurs in an Overcollateralized
Group and there is a single Undercollateralized Group, the
Senior Certificates related to such Undercollateralized
Group 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 V-P Fraction of any Class V-P Mortgage Loan
if such Overcollateralized Group is Loan Group V), and the
remainder of such loss will be allocated to the Senior
Certificates related to the Loan Group that suffered such
loss and (Y) if such loss occurs in an Overcollateralized
Group and there are two or more Undercollateralized Groups,
the Senior Certificates related to each Undercollateralized
Group will receive a portion of such loss (such portion
equal to the fraction described in the parenthetical in
clause (X) above, multiplied by a second fraction, the
numerator of which is the Principal Transfer Amount with
respect to such Undercollateralized Group and the
denominator of which is the sum of (1) the Principal
Transfer Amount with respect to such Undercollateralized
Group and (2) the Principal Transfer Amount with respect to
the other Undercollateralized Group or Groups), and the
remainder of such loss will be allocated to the Senior
Certificates related to the Loan Group that suffered such
loss; provided, further, that all such losses allocated to
the Senior Certificates related to a Loan Group pursuant to
clause (X) or (Y) of 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 on Group I Loans in excess of the
Special Hazard Coverage for Loan Group I, Fraud Losses on
Group I Loans in excess of the Fraud Coverage for Loan Group
I and Bankruptcy Losses on Group I Loans in excess of the
Bankruptcy Coverage for Loan Group I shall be allocated
among the Group I and Residual Certificates by Pro Rata
Allocation.
Special Hazard Losses on Group II, Group III, Group IV
and Group V Loans in excess of the Special Hazard Coverage
for Loan Group II, Loan Group III, Loan Group IV and Loan
Group V, Fraud Losses on Group II, Group III, Group IV and
Group V Loans in excess of the Fraud Coverage for Loan Group
II, Loan Group III, Loan Group IV and Loan Group V and
Bankruptcy Losses on Group II, Group III, Group IV and Group
V Loans in excess of the Bankruptcy Coverage for Loan Group
II, Loan Group III, Loan Group IV and Loan Group V shall be
<PAGE> 73
allocated among the Group II, Group III, Group IV, Group V,
Group C-B and Group C-X 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 Group I and Residual Certificates exceeds the
aggregate principal balance of the Group I 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 Amount for the Group I Certificates, and all
losses in respect of each such Mortgage Loan that have been
allocated to the Group I and Residual 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 I-B Certificates, in
reduction of the Class Principal Balance thereof.
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 Group II, Group III, Group IV, Group V and Group
C-B Certificates exceeds the aggregate principal balance of
the Group II, Group III, Group IV and Group V 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 II, Group III, Group IV
and Group V Certificates, and all losses in respect of each
such Mortgage Loan that have been allocated to the Group II,
Group III, Group IV, Group V and Group C-B 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,
<PAGE> 74
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 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;
(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
<PAGE> 75
received on such Mortgage Loans after the Prior Period;
(e) all amounts in the Certificate Account which
are due and reimbursable to a Servicer or the Master
Servicer pursuant to the terms of this Agreement;
(f) the sum of the Master Servicing Fee and the
Servicing Fee for each 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
<PAGE> 76
during the Payoff Period;
second, to the Class U 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 of such unpaid
amounts;
third, to the Class U 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;
fourth, to the Class R-1 Certificates, until the
Class Principal Balance thereof has been reduced to
zero;
fifth, to the Class U Regular Interest, until the
Class U Principal Balance has been reduced to zero; and
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 C-Y-2, Class C-Z-2 and Group C-X-M
Regular Interests, concurrently, the sum of (x) the Interest
Distribution Amounts for the Class C-Y-2 and Class C-Z-2
Regular Interests and (y) the portions of the Interest
Distribution Amounts for the Group C-X-M Regular Interests
derived from the Group II Loans, in each case remaining
unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
second, to the Class C-Y-2, Class C-Z-2 and Group
C-X-M Regular Interests, concurrently, the sum of (x)
the Interest Distribution Amounts for the Class C-Y-2
and Class C-Z-2 Regular Interests and (y) the portions
of the Interest Distribution Amounts for the Group C-X-
M Regular Interests derived from the Group II Loans, in
each case for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts or portions thereof, as applicable;
third, to the Class C-Y-2 and Class C-Z-2 Regular
Interests, the Class C-Y-2 Principal Distribution
<PAGE> 77
Amount and the Class C-Z-2 Principal Distribution
Amount, respectively; and
fourth, to the Class R-1 Certificates, the
Residual Distribution Amount for Loan Group II for such
Distribution Date.
(c) To the extent of the REMIC I Available
Distribution Amount for Loan Group III:
(i) first, to the Class C-Y-3, Class C-Z-3 and Group C-X-M
Regular Interests, concurrently, the sum of (x) the Interest
Distribution Amounts for the Class C-Y-3 and Class C-Z-3
Regular Interests and (y) the portions of the Interest
Distribution Amounts for the Group C-X-M Regular Interests
derived from the Group III Loans, in each case remaining
unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
second, to the Class C-Y-3, Class C-Z-3 and Group
C-X-M Regular Interests, concurrently, the sum of (x)
the Interest Distribution Amounts for the Class C-Y-3
and Class C-Z-3 Regular Interests and (y) the portions
of the Interest Distribution Amounts for the Group C-X-
M Regular Interests derived from the Group III Loans,
in each case for the current Distribution Date, pro
rata according to their respective Interest
Distribution Amounts or portions thereof, as
applicable;
third, to the Class C-Y-3 and Class C-Z-3 Regular
Interests, the Class C-Y-3 Principal Distribution
Amount and the Class C-Z-3 Principal Distribution
Amount, respectively; and
fourth, to the Class R-1 Certificates, the
Residual Distribution Amount for Loan Group III for
such Distribution Date.
(d) To the extent of the REMIC I Available
Distribution Amount for Loan Group IV:
(i) first, to the Class C-Y-4, Class C-Z-4 and Group C-X-M
Regular Interests, concurrently, the sum of (x) the Interest
Distribution Amounts for the Class C-Y-4 and Class C-Z-4
Regular Interests and (y) the portions of the Interest
Distribution Amounts for the Group C-X-M Regular Interests
derived from the Group IV Loans, in each case remaining
unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
second, to the Class C-Y-4, Class C-Z-4 and Group
<PAGE> 78
C-X-M Regular Interests, concurrently, the sum of (x)
the Interest Distribution Amounts for the Class C-Y-4
and Class C-Z-4 Regular Interests and (y) the portions
of the Interest Distribution Amounts for the Group C-X-
M Regular Interests derived from the Group IV Loans, in
each case for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts or portions thereof, as applicable;
third, to the Class C-Y-4 and Class C-Z-4 Regular
Interests, the Class C-Y-4 Principal Distribution
Amount and the Class C-Z-4 Principal Distribution
Amount, respectively; and
fourth, to the Class R-1 Certificates, the
Residual Distribution Amount for Loan Group IV for such
Distribution Date.
(e) To the extent of the REMIC I Available
Distribution Amount for Loan Group V:
(i) first, to the Class V-P-M Regular Interest, the
aggregate for all of the Class V-P Mortgage Loans of the
product for each Class V-P Mortgage Loan of the applicable
Class V-P Fraction and the sum of (x) scheduled payments of
principal on such Class V-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 V-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 V-P Mortgage Loan
during the Payoff Period;
second, to the Class C-Y-1, Class C-Z-1 and Group
C-X-M Regular Interests, concurrently, the sum of (x)
the Interest Distribution Amounts for the Class C-Y-1
and Class C-Z-1 Regular Interests and (y) the portions
of the Interest Distribution Amounts for the Group C-X-
M Regular Interests derived from the Group V Loans, in
each case remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of
such unpaid amounts;
third, to the Class C-Y-1, Class C-Z-1 and Group C-
X-M Regular Interests, concurrently, the sum of (x) the
<PAGE> 79
Interest Distribution Amounts for the Class C-Y-1 and
Class C-Z-1 Regular Interests and (y) the portions of
the Interest Distribution Amounts for the Group C-X-M
Regular Interests derived from the Group V Loans, in
each case for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts or portions thereof, as applicable;
fourth, to the Class C-Y-1 and Class C-Z-1 Regular
Interests, the Class C-Y-1 Principal Distribution
Amount and the Class C-Z-1 Principal Distribution
Amount, respectively; and
fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group V for such
Distribution Date.
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 and Class U
Regular Interests (which amount shall be available for
distributions to the Group I 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 C-Y-2 and Class C-Z-2 Regular Interests and the
portions of the distributions to the Group C-X-M Regular
Interests paid pursuant to clause (b) of the definition of
"REMIC I Distribution Amount" (which amount shall be
available for distributions to the Group II, Group C-B,
Group C-X and Class R-2 Certificates as provided herein).
For the Group III Certificates, on any Distribution Date,
the aggregate of all distributions to the Class C-Y-3 and
Class C-Z-3 Regular Interests and the portions of the
distributions to the Group C-X-M Regular Interests paid
pursuant to clause (c) of the definition of "REMIC I
Distribution Amount" (which amount shall be available for
distributions to the Group III, Group C-B, Group C-X and
<PAGE> 80
Class R-2 Certificates as provided herein). For the Group IV
Certificates, on any Distribution Date, the aggregate of all
distributions to the Class C-Y-4 and Class C-Z-4 Regular
Interests and the portions of the distributions to the Group
C-X-M Regular Interests paid pursuant to clause (d) of the
definition of "REMIC I Distribution Amount" (which amount
shall be available for distributions to the Group IV, Group
C-B, Group C-X and Class R-2 Certificates as provided
herein). For the Group V Certificates, on any Distribution
Date, the aggregate of all distributions to the Class V-P-M,
Class C-Y-1 and Class C-Z-1 Regular Interests and the
portions of the distributions to the Group C-X-M Regular
Interests paid pursuant to clause (e) of the definition of
"REMIC I Distribution Amount" (which amount shall be
available for distributions to the Group V, Group C-B, Group
C-X and Class R-2 Certificates as provided herein).
REMIC II Distribution Amount: (I) For any Distribution
Date prior to the Group I or Group C-B Credit Support
Depletion Date, as applicable, 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 Group I
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;
second, to the Group I-A, Class R-2 and Class I-X
Certificates, concurrently, the sum of the Interest
<PAGE> 81
Distribution Amounts for such Classes of Certificates
remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such
unpaid amounts;
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;
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 and Class I-A-
11 Certificates, pro rata, an amount, up to the
amount of the Lockout Priority Amount for such
Distribution Date, until their respective Class
Principal Balances have each 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, concurrently, until the Class I-A-
3 Principal Balance has been reduced to zero, as
follows:
(1) 81.6979357583 %, sequentially, as
follows:
(A) first, concurrently, until the
Class I-A-15 Principal Balance has been
reduced to zero, as follows:
(i) 15.4853738019%,
sequentially, as follows:
(a) first, to the Class
I-A-1 Certificates, until the
Class I-A-1 Principal Balance
has been reduced to zero; and
(b) second, to the Class
I-A-15 and Class I-A-16
Certificates, pro rata, until
their respective Class
Principal Balances have each
been reduced to zero;
(ii) 40.9151441714%,
<PAGE> 82
sequentially, as follows:
(a) first, to the Class
I-A-14 Certificates, until the
Class I-A-14 Principal Balance
has been reduced to zero;
(b) second, to the Class
I-A-1 Certificates, until the
Class I-A-1 Principal Balance
has been reduced to zero; and
(c) third, to the Class
I-A-15 and Class I-A-16
Certificates, pro rata, until
their respective Class
Principal Balances have each
been reduced to zero; and
(iii) 43.5994820267%,
sequentially, as follows:
(a) first, to the Class
I-A-13 Certificates, until the
Class I-A-13 Principal Balance
has been reduced to zero; and
(b) second, to the Class
I-A-12 Certificates; and
(B) second, concurrently,
76.7344743586 % to the Class I-A-3
Certificates and 23.2655256414% to the
Class I-A-2 Certificates; and
(2) 18.3020642417%, 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 and
Class I-A-7 Certificates, pro rata,
until their respective Class Principal
Balances have each been reduced to zero;
and
(C) third, concurrently, until the
Class I-A-10 Principal Balance has been
reduced to zero, as follows:
<PAGE> 83
(i) 4.5365772091% to the
Class I-A-10 Certificates;
(ii) 61.2437718804%,
sequentially, as follows:
(a) first, to the Class
I-A-8 Certificates, until the
Class I-A-8 Principal Balance
has been reduced to zero; and
(b) second, to the Class
I-A-9 Certificates, until the
Class I-A-9 Principal Balance
has been reduced to zero; and
(iii) 34.2196509105%, to
the Class I-A-12 Certificates,
until the Class I-A-12 Principal
Balance has been reduced to zero;
(d) fourth, to the Class I-A-2 Certificates,
until the Class I-A-2 Principal Balance has been
reduced to zero; and
(e) fifth, to the Class I-A-4 and Class I-A-
11 Certificates, pro rata, until their respective
Class Principal Balances have each been reduced to
zero;
fifth, to the Class I-P Certificates, to the
extent of amounts otherwise available to pay the Group
I Subordinate Principal Distribution Amount (without
regard to clause (B) of the definition thereof) on such
Distribution Date, the amount payable to such Class of
Certificates on previous Distribution Dates pursuant to
clause (I)(a)(vi) of this definition of "REMIC II
Distribution Amount" and remaining unpaid from such
previous Distribution Dates;
sixth, to the Class I-P Certificates, to the
extent of amounts otherwise available to pay the Group
I Subordinate Principal Distribution Amount (without
regard to clause (B) of the definition thereof) on such
Distribution Date, principal in an amount equal to the
Class I-P Fraction of any Realized Loss on a Class I-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)(a)(v) or this paragraph (I)(a)(vi) of
<PAGE> 84
this definition of "REMIC II Distribution Amount" shall
not cause a further reduction in the Class I-P
Principal Balance;
seventh, to the Class I-B-1 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
eighth, to the Class I-B-1 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
ninth, to the Class I-B-1 Certificates, the
portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-1 Principal Balance has been reduced to zero;
tenth, to the Class I-B-2 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
eleventh, to the Class I-B-2 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
twelfth, to the Class I-B-2 Certificates, the
portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-2 Principal Balance has been reduced to zero;
thirteenth, to the Class I-B-3 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
fourteenth, to the Class I-B-3 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
fifteenth, to the Class I-B-3 Certificates, the
portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-3 Principal Balance has been reduced to zero;
<PAGE> 85
sixteenth, to the Class I-B-4 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
seventeenth, to the Class I-B-4 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
eighteenth, to the Class I-B-4 Certificates, the
portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-4 Principal Balance has been reduced to zero;
nineteenth, to the Class I-B-5 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
twentieth, to the Class I-B-5 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
twenty-first, to the Class I-B-5 Certificates, the
portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-5 Principal Balance has been reduced to zero;
twenty-second, to the Class I-B-6 Certificates,
the Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
twenty-third, to the Class I-B-6 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
twenty-fourth, to the Class I-B-6 Certificates,
the portion of the Group I Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the
Class I-B-6 Principal Balance has been reduced to zero;
twenty-fifth, to each Class of Group I-B
Certificates in the order of seniority, the remaining
portion, if any, of the REMIC II Available Distribution
Amounts for the Group I Certificates, up to the amount
<PAGE> 86
of unreimbursed Realized Losses previously allocated to
such Class, if any; provided, however, that any amounts
distributed pursuant to this paragraph (I)(a)(xxv) of
this definition of "REMIC II Distribution Amount" shall
not cause a further reduction in the Class Principal
Balances of any of the Group I-B Certificates; and
twenty-sixth, to the Class R-2 Certificates, the
Residual Distribution Amount for the Group I
Certificates for such Distribution Date;
(b) With respect to the Group II and Group C-X
Certificates, on any Distribution Date prior to the Group C-
B 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-A-1 and Group C-X Certificates,
concurrently, the sum of (x) the Interest Distribution
Amount for the Class II-A-1 Certificates and (y) the
portions of the Interest Distribution Amounts for the Group
C-X Certificates derived from the Group II Loans, in each
case remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid
amounts;
second, to the Class II-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class II-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group II Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable; and
third, to the Class II-A-1 Certificates, as
principal, the Group II Senior Principal Distribution
Amount;
(c) With respect to the Group III and Group C-X
Certificates, on any Distribution Date prior to the Group C-
B Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group III
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class III-A-1 and Group C-X Certificates,
concurrently, the sum of (x) the Interest Distribution
Amount for the Class III-A-1 Certificates and (y) the
portions of the Interest Distribution Amounts for the Group
<PAGE> 87
C-X Certificates derived from the Group III Loans, in each
case remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid
amounts;
second, to the Class III-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class III-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group III Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable; and
third, to the Class III-A-1 Certificates, as
principal, the Group III Senior Principal Distribution
Amount;
(d) With respect to the Group IV and Group C-X
Certificates, on any Distribution Date prior to the Group C-
B Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group IV
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class IV-A-1 and Group C-X Certificates,
concurrently, the sum of (x) the Interest Distribution
Amount for the Class IV-A-1 Certificates and (y) the
portions of the Interest Distribution Amounts for the Group
C-X Certificates derived from the Group IV Loans, in each
case remaining unpaid from previous Distribution Dates, pro
rata according to their respective shares of such unpaid
amounts;
second, to the Class IV-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class IV-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group IV Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable; and
third, to the Class IV-A-1 Certificates, as
principal, the Group IV Senior Principal Distribution
Amount;
(e) With respect to the Group V and Group C-X
Certificates, on any Distribution Date prior to the Group C-
B Credit Support Depletion Date, to the extent of the REMIC
<PAGE> 88
II Available Distribution Amount for the Group V
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class V-P Certificates, the aggregate for
all Class V-P Mortgage Loans of the product for each Class V-
P Mortgage Loan of the applicable Class V-P Fraction and the
sum of (x) scheduled payments of principal on such Class V-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
V-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 V-P Mortgage Loan
during the Payoff Period;
second, to the Class V-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class V-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group V Loans, in each case remaining unpaid from
previous Distribution Dates, pro rata according to
their respective shares of such unpaid amounts;
third, to the Class V-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class V-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group V Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable; and
fourth, to the Class V-A-1 Certificates, as
principal, the Group V Senior Principal Distribution
Amount; and
(f) With respect to the Group C-B, Class V-P and Class
R-2 Certificates, on any Distribution Date prior to the
Group C-B Credit Support Depletion Date and subject to the
payment of the amounts pursuant to paragraphs (I)(b),
(I)(c), (I)(d) and (I)(e) of this definition of "REMIC II
Distribution Amount", and to the extent of the REMIC II
<PAGE> 89
Available Distribution Amounts for the Group II, Group III,
Group IV and Group V Certificates remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class V-P Certificates, to the extent of
amounts otherwise available to pay the Group C-B Subordinate
Principal Distribution Amount (without regard to clause
(B)(x) of the definition thereof) on such Distribution Date,
the amount payable to such Class of Certificates on previous
Distribution Dates pursuant to clause (I)(f)(ii) of this
definition of "REMIC II Distribution Amount" and remaining
unpaid from such previous Distribution Dates;
second, to the Class V-P Certificates, to the
extent of amounts otherwise available to pay the Group
C-B 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 applicable Class V-P Fraction of any Realized Loss
on a Class V-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)(f)(i) or this paragraph
(I)(f)(ii) of this definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the
Class V-P Principal Balance;
third, to the Class C-B-1 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
fourth, to the Class C-B-1 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
fifth, to the Class C-B-1 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-1 Principal Balance has been reduced to zero;
sixth, to the Class C-B-2 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
seventh, to the Class C-B-2 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
<PAGE> 90
eighth, to the Class C-B-2 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-2 Principal Balance has been reduced to zero;
ninth, to the Class C-B-3 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
tenth, to the Class C-B-3 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
eleventh, to the Class C-B-3 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-3 Principal Balance has been reduced to zero;
twelfth, to the Class C-B-4 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
thirteenth, to the Class C-B-4 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
fourteenth, to the Class C-B-4 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-4 Principal Balance has been reduced to zero;
fifteenth, to the Class C-B-5 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
sixteenth, to the Class C-B-5 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
seventeenth, to the Class C-B-5 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
<PAGE> 91
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-5 Principal Balance has been reduced to zero;
eighteenth, to the Class C-B-6 Certificates, the
Interest Distribution Amount for such Class of
Certificates remaining unpaid from previous
Distribution Dates;
nineteenth, to the Class C-B-6 Certificates, the
Interest Distribution Amount for such Class of
Certificates for the current Distribution Date;
twentieth, to the Class C-B-6 Certificates, the
portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of
Certificates pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the
Class C-B-6 Principal Balance has been reduced to zero;
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 II, Group III, Group IV and Group
V 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)(f)(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
twenty-second, to the Class R-2 Certificates, the
Residual Distribution Amounts for the Group II, Group
III, Group IV and Group V Certificates for such
Distribution Date.
Notwithstanding the foregoing paragraphs (I)(b),
(I)(c), (I)(d), (I)(e) and (I)(f) of this definition of
"REMIC II Distribution Amount,"
(X) on any Distribution Date occurring after the date
on which one or more of the Class II-A-1, Class III-A-1,
Class IV-A-1 or Class V-A-1 Principal Balance has been
reduced to zero, all principal received or advanced with
respect to the Mortgage Loans in the Loan Group or Groups
related to the Class A Certificates that have been paid in
full (after distributions of principal to the Class V-P
Certificates pursuant to paragraph (I)(e)(i) above, if the
Class V-A-1 Certificates have been paid in full) shall be
paid as principal to the remaining Class A Certificates of
such other Certificate Group or Groups in accordance with
<PAGE> 92
paragraph (I)(b)(iii), (I)(c)(iii), (I)(d)(iii) or
(I)(e)(iv) above (with such amounts being added to the Group
II, Group III, Group IV or Group V 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 V-P and Group C-
B Certificates pursuant to paragraph (I)(f) above; provided,
however, that if there are two or more Certificate Groups
with outstanding Class A Certificates, then such principal
will be distributed among those Class A Certificates pro
rata according to Class Principal Balance; provided,
further, 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
the Mortgage Loans in each of Loan Group II, Loan Group III,
Loan Group IV and Loan Group V 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 any of Loan Group II,
Loan Group III, Loan Group IV or Loan Group V is an
Undercollateralized Group and the other such Loan Group or
Loan Groups is an Overcollateralized Group, then the REMIC
II Available Distribution Amount or Amounts for the
Certificate Group or Groups related to the
Overcollateralized Group or Groups, to the extent remaining
following distributions of interest and principal to the
Group II, Group III, Group IV, Group V and Group C-X
Certificates pursuant to paragraphs (I)(b), (I)(c), (I)(d)
and (I)(e) above, as applicable, shall be paid in the
following priority: (1) first, such remaining amount, up to
an amount for each Undercollateralized Group (the "Total
Transfer Amount") equal to the sum of the Interest Transfer
Amount and the Principal Transfer Amount for such
Undercollateralized Group, pro rata according to Total
Transfer Amount, shall be distributed (a) first, to the
Class A Certificates related to each such
Undercollateralized Group and the Group C-X Certificates, in
payment of any portion of the Interest Distribution Amounts
for such Classes of Certificates (or, in the case of the
Group C-X Certificates, any portion of the portions of their
Interest Distribution Amounts derived from such
Undercollateralized Group) remaining unpaid from such
Distribution Date or previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts,
and (b) second, to the Class A Certificates related to each
such Undercollateralized Group, as principal, and (2)
<PAGE> 93
second, any remaining amount shall be distributed pursuant
to paragraph (I)(f) of this definition of "REMIC II
Distribution Amount."
(II) For any Distribution Date on or after the Group I
or Group C-B Credit Support Depletion Date, as applicable,
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
Group I 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";
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;
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;
fourth, to the Group I-A and Class R-2
Certificates, pro rata, the Group I Senior Principal
Distribution Amount; and
fifth, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I Certificates for
such Distribution Date;
(b) With respect to the Group II, Group C-X and Class
R-2 Certificates, on each Distribution Date on or after the
Group C-B 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:
<PAGE> 94
(i) first, to the Class II-A-1 and Group C-X Certificates,
the amount payable to each such Class of Certificates on
prior Distribution Dates pursuant to clause (I)(b)(ii) or
(II)(b)(ii) of this definition of "REMIC II Distribution
Amount", and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
second, to the Class II-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class II-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group II Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable;
third, to the Class II-A-1 Certificates, the Group
II Senior Principal Distribution Amount; and
fourth, after any payments to the Group III, Group
IV, Group V or Group C-X 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;
(c) With respect to the Group III, Group C-X and Class
R-2 Certificates, on each Distribution Date on or after the
Group C-B Credit Support Depletion Date, to the extent of
the REMIC II Available Distribution Amount for the Group III
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class III-A-1 and Group C-X Certificates,
the amount payable to each such Class of Certificates on
prior Distribution Dates pursuant to clause (I)(c)(ii) or
(II)(c)(ii) of this definition of "REMIC II Distribution
Amount", and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
second, to the Class III-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class III-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group III Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable;
third, to the Class III-A-1 Certificates, the
<PAGE> 95
Group III Senior Principal Distribution Amount; and
fourth, after any payments to the Group II, Group
IV, Group V or Group C-X 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 III
Certificates for such Distribution Date;
(d) With respect to the Group IV, Group C-X and Class
R-2 Certificates, on each Distribution Date on or after the
Group C-B Credit Support Depletion Date, to the extent of
the REMIC II Available Distribution Amount for the Group IV
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class IV-A-1 and Group C-X Certificates,
the amount payable to each such Class of Certificates on
prior Distribution Dates pursuant to clause (I)(d)(ii) or
(II)(d)(ii) of this definition of "REMIC II Distribution
Amount", and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
second, to the Class IV-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class IV-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group IV Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable;
third, to the Class IV-A-1 Certificates, the Group
IV Senior Principal Distribution Amount; and
fourth, after any payments to the Group II, Group
III, Group V or Group C-X 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 IV
Certificates for such Distribution Date; and
(e) With respect to the Group V, Group C-X and Class R-
2 Certificates, on each Distribution Date on or after the
Group C-B Credit Support Depletion Date, to the extent of
the REMIC II Available Distribution Amount for the Group V
Certificates remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class V-P Certificates, principal in the
amount that would otherwise be distributed to such Class on
<PAGE> 96
such Distribution Date pursuant to clause (I)(e)(i) of this
definition of "REMIC II Distribution Amount";
second, to the Class V-A-1 and Group C-X
Certificates, the amount payable to each such Class of
Certificates on prior Distribution Dates pursuant to
clause (I)(e)(iii) or (II)(e)(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;
third, to the Class V-A-1 and Group C-X
Certificates, concurrently, the sum of (x) the Interest
Distribution Amount for the Class V-A-1 Certificates
and (y) the portions of the Interest Distribution
Amounts for the Group C-X Certificates derived from the
Group V Loans, in each case for the current
Distribution Date, pro rata according to their
respective Interest Distribution Amounts or portions
thereof, as applicable;
fourth, to the Class V-A-1 Certificates, the Group
V Senior Principal Distribution Amount; and
fifth, after any payments to the Group II, Group
III, Group IV or Group C-X 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 V
Certificates for such Distribution Date.
Notwithstanding the foregoing paragraphs (II)(b),
(II)(c), (II)(d) and (II)(e) of this definition of "REMIC II
Distribution Amount" and prior to distributions pursuant to
paragraphs (II)(b)(iv), (II)(c)(iv), (II)(d)(iv) and
(II)(e)(v), if on any Distribution Date any of Loan Group
II, Loan Group III, Loan Group IV or Loan Group V is an
Undercollateralized Group and the other such Loan Group or
Groups is an Overcollateralized Group, then the REMIC II
Available Distribution Amount or Amounts for the Certificate
Group or Groups related to the Overcollateralized Group or
Groups, to the extent remaining following distributions of
interest and principal to the Group II, Group III, Group IV,
Group V and Group C-X Certificates pursuant to paragraph
(II)(b)(i) through (II)(b)(iii), paragraph (II)(c)(i)
through (II)(c)(iii), paragraph (II)(d)(i) through
(II)(d)(iii) and paragraph (II)(e)(i) through (II)(e)(iv),
as applicable, up to an amount for each Undercollateralized
Group (the "Total Transfer Amount") equal to the sum of the
Interest Transfer Amount and the Principal Transfer Amount
for such Undercollateralized Group, pro rata according to
Total Transfer Amount, will be distributed (a) first, to the
<PAGE> 97
Class A Certificates related to each such
Undercollateralized Group and the Group C-X Certificates, in
payment of any portion of the Interest Distribution Amounts
for such Classes of Certificates (or, in the case of the
Group C-X Certificates, any portion of the portions of their
Interest Distribution Amounts derived from such
Undercollateralized Group) remaining unpaid from such
Distribution Date or previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts,
and (b) second, to the Class A Certificates related to each
such Undercollateralized Group, as principal; provided that
if there are two or more Overcollateralized Groups and the
sum of the remaining REMIC II Available Distribution Amounts
for the Certificate Groups related to such
Overcollateralized Groups exceeds the sum of the Total
Transfer Amounts for the Undercollateralized Group or
Groups, then the sum of such remaining REMIC II Available
Distribution Amounts will be distributed to the Certificate
Group or Groups related to the Undercollateralized Group or
Groups in accordance with this paragraph pro rata according
to such remaining REMIC II Available Distribution Amounts.
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, Loan Group II, Loan Group III, Loan Group IV and
Loan Group V, any portion of the REMIC I Available
Distribution Amount for Loan Group I, Loan Group II, Loan
Group III, Loan Group IV and Loan Group V, respectively,
remaining after all distributions of such REMIC I Available
Distribution Amount pursuant to clauses (a)(i) through
(a)(v), (b)(i) through (b)(iii), (c)(i) through (c)(iii),
<PAGE> 98
(d)(i) through (d)(iii) and (e)(i) through (e)(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, Group II, Group III,
Group IV and Group V Certificates, any portion of the REMIC
II Available Distribution Amount for the Group I, Group II,
Group III, Group IV and Group V Certificates, respectively,
remaining after all distributions of such REMIC II Available
Distribution Amount pursuant to clauses (I)(a)(i) through
(I)(a)(xxv), (I)(b), (I)(c), (I)(d), (I)(e), (I)(f)(i)
through (I)(f)(xxi), (II)(a)(i) through (II)(a)(iv),
(II)(b)(i) through (II)(b)(iii), (II)(c)(i) through
(II)(c)(iii), (II)(d)(i) through (II)(d)(iii) and (II)(e)(i)
through (II)(e)(iv), as applicable, of the definition of
"REMIC II Distribution Amount." Upon termination of the
obligations created by this Agreement and the REMIC I Trust
Fund and the REMIC II Trust Fund created hereby, the amounts
which remain on deposit in the Certificate Account after
payment to the Holders of the REMIC I Regular Interests of
the amounts set forth in Section 9.01 of this Agreement, and
subject to the conditions set forth therein, shall be
distributed to the Class R-1 and Class R-2 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
<PAGE> 99
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 (other
than the Group I-B Certificates) and the Group II, Group
III, Group IV, Group V, Group C-X and Residual Certificates.
Senior Subordinate Certificates: The Subordinate
Certificates other than the Junior Subordinate Certificates.
Servicer: A mortgage loan servicing institution to
which the Master Servicer has assigned servicing duties with
respect to any Mortgage Loan under a Selling and Servicing
Contract; provided, however, the Master Servicer may
designate itself or one or more other mortgage loan
servicing institutions as Servicer upon termination of an
initial Servicer's servicing duties.
Servicing Fee: For each Mortgage Loan, the fee paid to
the Servicer thereof to perform primary servicing functions
for the Master Servicer with respect to such Mortgage Loan,
equal to the per annum rate set forth for each Mortgage Loan
in the Mortgage Loan Schedule on the outstanding Principal
Balance of such Mortgage Loan. In addition, any prepayment
penalty received on a Mortgage Loan will be paid as
additional servicing compensation to the Master Servicer or
the related Servicer.
Servicing Officer: Any officer of the Master Servicer
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: For Loan Group I, the Special
Hazard Coverage for Loan Group I 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, $3,857,755, in each case reduced
by Special Hazard Losses allocated to the Group I and
Residual 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 for Loan Group
I shall be reduced, but not increased, to an amount equal to
the lesser of (1) the greatest of (a) the aggregate
<PAGE> 100
principal balance of the Mortgage Loans in such Loan Group
located in the single California zip code area containing
the largest aggregate principal balance of such Mortgage
Loans, (b) 1.0% of the aggregate unpaid principal balance of
the Mortgage Loans in such Loan Group and (c) twice the
unpaid principal balance of the largest single Mortgage Loan
in such Loan Group, in each case calculated as of the Due
Date in the immediately preceding month, and (2) $3,857,755
as reduced by the Special Hazard Losses allocated to the
Group I and Residual Certificates since the Cut-Off Date.
For Loan Group II, Loan Group III, Loan Group IV and
Loan Group V, collectively, the Special Hazard Coverage for
Loan Group II, Loan Group III, Loan Group IV and Loan Group
V on the most recent anniversary of the Cut-Off Date
(calculated in accordance with the second sentence of this
paragraph) or, if prior to the first such anniversary,
$5,185,720, in each case reduced by Special Hazard Losses
allocated to the Group II, Group III, Group IV, Group V,
Group C-B and Group C-X 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
for Loan Group II, Loan Group III, Loan Group IV and Loan
Group V 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 in such Loan Groups
located in the single California zip code area containing
the largest aggregate principal balance of such Mortgage
Loans, (b) 1.0% of the aggregate unpaid principal balance of
the Mortgage Loans in such Loan Groups and (c) twice the
unpaid principal balance of the largest single Mortgage Loan
in such Loan Groups, in each case calculated as of the Due
Date in the immediately preceding month, and (2) $5,185,720
as reduced by the Special Hazard Losses allocated to the
Group II, Group III, Group IV, Group V, Group C-B and Group
C-X Certificates since the Cut-Off Date.
The Special Hazard Coverage for Loan Group I and the
Special Hazard Coverage for Loan Group II, Loan Group III,
Loan Group IV and Loan Group V 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
<PAGE> 101
extent of that portion of the loss which was uninsured
because of the application of a co-insurance clause of any
insurance policy covering these perils; (ii) normal wear and
tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design,
faulty workmanship or materials, unless the collapse of the
property or a part thereof ensues and then only for the
ensuing loss; (iv) nuclear reaction or nuclear radiation or
radioactive contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by,
contributed to or aggravated by a peril covered by this
definition of Special Hazard Loss; (v) hostile or warlike
action in time of peace or war, including action in
hindering, combating or defending against an actual,
impending or expected attack (a) by any government of
sovereign power (de jure or de facto), or by an authority
maintaining or using military, naval or air forces, (b) by
military, naval or air forces, or (c) by an agent of any
such government, power, authority or forces; (vi) any weapon
of war employing atomic fission or radioactive force whether
in time of peace or war; (vii) insurrection, rebellion,
revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending
against such occurrence; or (viii) seizure or destruction
under quarantine or customs regulations, or confiscation by
order of any government or public authority.
Step Down Percentage: For any Distribution Date, the
percentage indicated below:
Distribution Date Occurring In Step Down
Percentage
August 1999 through July 2004 0%
August 2004 through July 2005 30%
August 2005 through July 2006 40%
August 2006 through July 2007 60%
August 2007 through July 2008 80%
August 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 7.250% per annum. For each Group III Loan, the
excess, if any, of the Pass-Through Rate for such Mortgage
Loan over 7.500% per annum. For each Group IV Loan, the
excess, if any, of the Pass-Through Rate for such Mortgage
Loan over 7.750% per annum. For each Group V Loan, the
excess, if any, of the Pass-Through Rate for such Mortgage
Loan over 7.000% per annum.
<PAGE> 102
Subordinate Certificates: The Group I-B and Group C-B
Certificates.
Subordinate Component Balance: With respect to Loan
Group II at any time, the then outstanding aggregate
Principal Balance of the Group II Loans minus the then
outstanding Class II-A-1 Principal Balance. With respect to
Loan Group III at any time, the then outstanding aggregate
Principal Balance of the Group III Loans minus the then
outstanding Class III-A-1 Principal Balance. With respect to
Loan Group IV at any time, the then outstanding aggregate
Principal Balance of the Group IV Loans minus the then
outstanding Class IV-A-1 Principal Balance. With respect to
Loan Group V at any time, the then outstanding aggregate
Principal Balance of the Group V Loans (less the applicable
Class V-P Fraction of any Class V-P Mortgage Loan) minus the
then outstanding Class V-A-1 Principal Balance.
Subordinate Percentage: The Group I Subordinate
Percentage, Group II Subordinate Percentage, Group III
Subordinate Percentage, Group IV Subordinate Percentage or
Group V Subordinate Percentage, as applicable.
Subordination Level: On any specified date, with
respect to any Class of Group I-B Certificates, the
percentage obtained by dividing the sum of the Class
Principal Balances of the Classes of Group I-B Certificates
which are subordinate in right of payment to such Class by
the sum of the Class Principal Balances of the Group I and
Residual Certificates as of such date prior to giving effect
to distributions of principal or interest or allocations of
Realized Losses on the Group I Loans on such date. 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 the
Group II, Group III, Group IV, Group V and Group C-B
Certificates as of such date prior to giving effect to
distributions of principal or interest or allocations of
Realized Losses on the Group II, Group III, Group IV and
Group V 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
<PAGE> 103
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 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, so long as the Company is the Master
Servicer hereunder, 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. In the event that the
Company ceases to be the Master Servicer hereunder, the
successor Master Servicer is hereby appointed to act as
agent for the Tax Matters Person for REMIC I and REMIC II,
to perform the functions of such Tax Matters Person as
provided herein. If the Tax Matters Person for REMIC I 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
<PAGE> 104
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 $81,080.75 for the payment of
interest on Mortgage Loans which do not have Due Dates until
September 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 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, pro
<PAGE> 105
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
portions of the Group C-B and Group C-X Certificates that
derive their Interest Distribution Amounts from the Group II
Loans, pro rata according to the amount of the Interest
Distribution Amount or portion thereof to which each such
Class or portion thereof would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group III
shall be allocated to the Group III Certificates and the
portions of the Group C-B and Group C-X Certificates that
derive their Interest Distribution Amounts from the Group
III Loans, pro rata according to the amount of the Interest
Distribution Amount or portion thereof to which each such
Class or portion thereof would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV
shall be allocated to the Group IV Certificates and the
portions of the Group C-B and Group C-X Certificates that
derive their Interest Distribution Amounts from the Group IV
Loans, pro rata according to the amount of the Interest
Distribution Amount or portion thereof to which each such
Class or portion thereof would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group V shall
be allocated to the Group V Certificates and the portions of
the Group C-B and Group C-X Certificates that derive their
Interest Distribution Amounts from the Group V Loans, pro
rata according to the amount of the Interest Distribution
Amount or portion thereof to which each such Class or
portion thereof would otherwise be entitled in reduction
thereof.
Uncompensated Interest Shortfall for Loan Group I shall
be allocated to the Class I-X-M and Class U Regular
Interests, pro rata according to the amount of the Interest
Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II
shall be allocated to the Class C-Y-2 and Class C-Z-2
Regular Interests and the portions of the Group C-X-M
Regular Interests that derive their Interest Distribution
Amounts from the Group II Loans, pro rata according to the
amount of the Interest Distribution Amount or portion
<PAGE> 106
thereof to which each such Class of Regular Interests or
portion thereof would otherwise be entitled in reduction
thereof.
Uncompensated Interest Shortfall for Loan Group III
shall be allocated to the Class C-Y-3 and Class C-Z-3
Regular Interests and the portions of the Group C-X-M
Regular Interests that derive their Interest Distribution
Amounts from the Group III Loans, pro rata according to the
amount of the Interest Distribution Amount or portion
thereof to which each such Class of Regular Interests or
portion thereof would otherwise be entitled in reduction
thereof.
Uncompensated Interest Shortfall for Loan Group IV
shall be allocated to the Class C-Y-4 and Class C-Z-4
Regular Interests and the portions of the Group C-X-M
Regular Interests that derive their Interest Distribution
Amounts from the Group IV Loans, pro rata according to the
amount of the Interest Distribution Amount or portion
thereof to which each such Class of Regular Interests or
portion thereof would otherwise be entitled in reduction
thereof.
Uncompensated Interest Shortfall for Loan Group V shall
be allocated to the Class C-Y-1 and Class C-Z-1 Regular
Interests and the portions of the Group C-X-M Regular
Interests that derive their Interest Distribution Amounts
from the Group V Loans, pro rata according to the amount of
the Interest Distribution Amount or portion thereof to which
each such Class of Regular Interests or portion thereof
would otherwise be entitled in reduction thereof.
Undercollateralized Group: 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 Group II Loans; for any
Distribution Date, Loan Group III, if immediately prior to
such Distribution Date the Class III-A-1 Principal Balance
is greater than the aggregate Principal Balance of the Group
III Loans; for any Distribution Date, Loan Group IV, if
immediately prior to such Distribution Date the Class IV-A-1
Principal Balance is greater than the aggregate Principal
Balance of the Group IV Loans; and for any Distribution
Date, Loan Group V, if immediately prior to such
Distribution Date the Class V-A-1 Principal Balance is
greater than the aggregate Principal Balance of the Group V
Loans (less the applicable Class V-P Fraction of each Class
V-P Mortgage Loan).
Underwriting Standards: The underwriting standards of
the Company, Cendant Mortgage Corporation, Commerce Security
<PAGE> 107
Bank, Countrywide Home Loans, Inc., Crescent Mortgage
Services, Crossland Mortgage Corp., CTX Mortgage Company,
Downey Savings & Loan Association, F.A., Fairbank Mortgage,
First Chicago NBD Mortgage Company, First Republic Savings
Bank, GMAC Mortgage Corporation of Pennsylvania, Greenpoint
Mortgage Corp., Headlands Mortgage Company, HomeSide
Lending, Inc., Imperial Home Loans, Inc., IndyMac, Inc.,
Marine Midland Mortgage Company, Mortgage Network, Inc., Old
Kent Mortgage Company, PNC Mortgage Corp. of America, Prism
Mortgage Company, Provident Federal Bank, Suntrust Mortgage,
Inc. and Temple-Inland Mortgage Corporation.
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
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
<PAGE> 108
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
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
<PAGE> 109
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, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit,
<PAGE> 110
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
<PAGE> 111
in the name of the Trustee. In the event that the Mortgage
Files delivered or caused 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
<PAGE> 112
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
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
<PAGE> 113
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 Tax Matters Person shall, on behalf of the REMIC I
Trust Fund, elect to treat the REMIC I Trust Fund as a REMIC
within the meaning of Section 860D of the Code and, if
necessary, under applicable state laws. Such election shall
be included in the Form 1066 and any appropriate state
return to be filed on behalf of REMIC I for its first
taxable year.
The Closing Date is hereby designated as the "startup
day" of REMIC I within the meaning of Section 860G(a)(9) of
the Code.
The regular interests (as set forth in the table
contained in the Preliminary Statement hereto) relating to
the REMIC I Trust Fund are hereby designated as "regular
interests" for purposes of Section 860G(a)(1) of the Code.
The Class R-1 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 Tax Matters Person shall, on behalf
of the REMIC I Trust Fund: (a) prepare and file, or cause to
be prepared and filed, a federal tax return using a calendar
year as the taxable year and using an accrual method of
accounting for the REMIC I Trust Fund when and as required
by the REMIC Provisions and other applicable federal income
tax laws; (b) make an election, on behalf of the trust, for
the REMIC I Trust Fund to be treated as a REMIC on the
federal tax return of the REMIC I Trust Fund for its first
taxable year, in accordance with the REMIC Provisions; (c)
prepare and forward, or cause to be prepared and forwarded,
to the Holders of the REMIC I Regular Interests and the
Class R-1 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
<PAGE> 114
any action that would cause the termination of the REMIC
status of the REMIC I Trust Fund; and (f) pay the amount of
any federal prohibited transaction penalty taxes imposed on
the REMIC I Trust Fund when and as the same shall be due and
payable (but such obligation shall not prevent the Company
or any other appropriate person from contesting any such tax
in appropriate proceedings and shall not prevent the Company
from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the
Company shall be entitled to be indemnified by the REMIC I
Trust Fund for any such prohibited transaction penalty taxes
if the Company's failure to exercise reasonable care was not
the primary cause of the imposition of such prohibited
transaction penalty taxes.
The Trustee and the Master Servicer shall promptly
provide the Company with such information in the possession
of the Trustee or the Master Servicer, respectively, as the
Company may from time to time request for the purpose of
enabling the Company to prepare tax returns.
In the event that a Mortgage Loan is discovered to have
a defect which, had such defect been discovered before the
startup day, would have prevented such Mortgage Loan from
being a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, and the Company does not 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
Tax Matters Person (or any agent therefor appointed in
accordance with the definition of "Tax Matters Person"
herein, if applicable), for the payment of such tax (upon
the written request of the Tax Matters Person or its agent,
<PAGE> 115
to the extent reimbursable, and to the extent that the Tax
Matters Person or its agent has not been previously
reimbursed therefor).
Section 2.02. Acceptance by Trustee. The Trustee
acknowledges receipt (or with respect to any Mortgage Loan
subject to a Custodial Agreement, receipt by the Custodian
thereunder) of the documents (or certified copies thereof as
specified in Section 2.01) referred to in Section 2.01
above, but without having made the review required to be
made within 45 days pursuant to this Section 2.02, and
declares that as of the Closing Date it holds and 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 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
<PAGE> 116
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 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
<PAGE> 117
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;
As of the Closing Date, each Mortgage relating to
a Mortgage Loan that is not a Cooperative Loan is a
valid and enforceable (subject to Section 2.03(xvi))
first lien on an unencumbered estate in fee simple or
leasehold estate in the related Mortgaged Property
subject only to (a) liens for current real property
taxes and special assessments; (b) covenants,
conditions and restrictions, rights of way, easements
and other matters of public record as of the date of
recording such Mortgage, such exceptions appearing of
record being acceptable to mortgage lending
institutions generally or specifically reflected in the
appraisal obtained in connection with the origination
of the Mortgage Loan; (c) exceptions set forth in the
title insurance policy relating to such Mortgage, such
exceptions being acceptable to mortgage lending
institutions generally; and (d) other matters to which
like properties are commonly subject which do not
materially interfere with the benefits of the security
intended to be provided by the Mortgage;
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);
<PAGE> 118
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;
As of the Closing Date, there is no late
assessment for delinquent taxes outstanding against any
Mortgaged Property;
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;
As of the Closing Date, each Mortgaged Property is
free of damage and in good repair, ordinary wear and
tear excepted;
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;
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;
As of the Closing Date, each Mortgage Loan which
is not a Cooperative Loan is covered by an ALTA form or
CLTA form of mortgagee title insurance policy or other
form of policy of insurance which, 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
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
<PAGE> 119
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;
All of the Group I Loans, not less than
approximately 99.6% (by Principal Balance) of the Group
II Loans, not less than approximately 98.2% (by
Principal Balance) of the Group III Loans, not less
than approximately 97.8% (by Principal Balance) of the
Group IV Loans and not less than approximately 97.9%
(by Principal Balance) of the Group V 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;
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;
As of the Closing Date, each insurer issuing a
Primary Insurance Policy holds a rating acceptable to
the Rating Agencies;
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;
As of the Closing Date, the Mortgaged Property
securing each Mortgage relating to a Mortgage Loan that
is not a Cooperative Loan is improved with a one- to
four-family dwelling unit, including units in a duplex,
condominium project, townhouse, a planned unit
development or a de minimis planned unit development;
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;
<PAGE> 120
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;
None of the Mortgage Loans are Buydown Loans;
Based solely on representations of the Mortgagors
obtained at the origination of the related Mortgage
Loans, approximately 97.54% (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 1.70% (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 0.76% (by Principal Balance) of the Group
I Loans will be secured by Mortgaged Properties which
were investor properties of the related Mortgagors;
approximately 72.53% (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 7.62% (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 19.85% (by Principal Balance) of the
Group II Loans will be secured by Mortgaged Properties
which were investor properties of the related
Mortgagors; approximately 75.85% (by Principal Balance)
of the Group III Loans will be secured by owner
occupied Mortgaged Properties which are the primary
residences of the related Mortgagors, approximately
2.77% (by Principal Balance) of the Group III Loans
will be secured by owner occupied Mortgaged Properties
which were second or vacation homes of the Mortgagors
and approximately 21.37% (by Principal Balance) of the
Group III Loans will be secured by Mortgaged Properties
which were investor properties of the related
Mortgagors; approximately 67.81% (by Principal Balance)
of the Group IV Loans will be secured by owner occupied
Mortgaged Properties which are the primary residences
of the related Mortgagors, approximately 14.98% (by
Principal Balance) of the Group IV Loans will be
secured by owner occupied Mortgaged Properties which
were second or vacation homes of the Mortgagors and
approximately 17.21% (by Principal Balance) of the
Group IV Loans will be secured by Mortgaged Properties
<PAGE> 121
which were investor properties of the related
Mortgagors; approximately 84.81% (by Principal Balance)
of the Group V Loans will be secured by owner occupied
Mortgaged Properties which are the primary residences
of the related Mortgagors, approximately 7.40% (by
Principal Balance) of the Group V Loans will be secured
by owner occupied Mortgaged Properties which were
second or vacation homes of the Mortgagors and
approximately 7.78% (by Principal Balance) of the Group
V Loans will be secured by Mortgaged Properties which
were investor properties of the related Mortgagors;
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;
The Mortgage Loans have been underwritten
substantially in accordance with the applicable
Underwriting Standards;
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;
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;
With respect to each Cooperative Loan, the
Cooperative Stock that is pledged as security for the
Cooperative Loan is held by a person as a tenant-
stockholder (as defined in Section 216 of the Code) in
a cooperative housing corporation (as defined in
Section 216 of the Code);
Each Cooperative Loan is secured by a valid,
subsisting and enforceable (except as such enforcement
may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity)
perfected first lien and security interest in the
related Cooperative Stock securing the related Mortgage
Note, subject only to (a) liens of the Cooperative for
unpaid assessments representing the Mortgagor's pro
rata share of the Cooperative's payments for its
blanket mortgage, current and future real property
taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly
subject, and (b) other matters to which like collateral
is commonly subject which do not materially interfere
<PAGE> 122
with the benefits of the security intended to be
provided by the Security Agreement;
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;
Based upon an appraisal of the Mortgaged Property
securing each Mortgage Loan, approximately 91.08% (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%; approximately 83.68% (by Principal Balance) of the
Group II Loans had a current Loan-to-Value Ratio less
than or equal to 80%, approximately 16.17% (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 approximately 0.16% (by Principal
Balance) of the Group II Loans had a current Loan-to-
Value Ratio greater than 95%; approximately 69.41% (by
Principal Balance) of the Group III Loans had a current
Loan-to-Value Ratio less than or equal to 80%,
approximately 30.25% (by Principal Balance) of the
Group III Loans had a current Loan-to-Value Ratio
greater than 80% but less than or equal to 95% and
approximately 0.34% (by Principal Balance) of the Group
III Loans had a current Loan-to-Value Ratio greater
than 95%; approximately 72.13% (by Principal Balance)
of the Group IV Loans had a current Loan-to-Value Ratio
less than or equal to 80%, approximately 21.79% (by
Principal Balance) of the Group IV Loans had a current
Loan-to-Value Ratio greater than 80% but less than or
equal to 95% and approximately 6.08% (by Principal
Balance) of the Group IV Loans had a current Loan-to-
Value Ratio greater than 95%; and approximately 86.24%
(by Principal Balance) of the Group V Loans had a
current Loan-to-Value Ratio less than or equal to 80%,
approximately 13.38% (by Principal Balance) of the
Group V Loans had a current Loan-to-Value Ratio greater
than 80% but less than or equal to 95% and
approximately 0.39% (by Principal Balance) of the Group
V Loans had a current Loan-to-Value Ratio greater than
95%;
<PAGE> 123
Approximately 53.73% (by Principal Balance) of the
Group I Loans, approximately 56.16% (by Principal
Balance) of the Group II Loans, approximately 52.25%
(by Principal Balance) of the Group III Loans,
approximately 52.97% (by Principal Balance) of the
Group IV Loans and approximately 62.06% (by Principal
Balance) of the Group V Loans were originated for the
purpose of refinancing existing mortgage debt,
including cash-out refinancings; and approximately
46.27% (by Principal Balance) of the Group I Loans,
approximately 43.84% (by Principal Balance) of the
Group II Loans, approximately 47.75% (by Principal
Balance) of the Group III Loans, approximately 47.03%
(by Principal Balance) of the Group IV Loans and
approximately 37.95% (by Principal Balance) of the
Group V Loans were originated for the purpose of
purchasing the Mortgaged Property;
Not less than approximately 82.13%, 26.51%,
28.05%, 37.78% and 37.97% (by Principal Balance) of the
Group I Loans, Group II Loans, Group III Loans, Group
IV Loans and Group V Loans, respectively, were
originated under full documentation programs; and
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
<PAGE> 124
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.
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
<PAGE> 125
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 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
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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,
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
<PAGE> 127
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 Tax Matters Person shall, on behalf of the REMIC II
Trust Fund, elect to treat the REMIC II Trust Fund as a
REMIC within the meaning of Section 860D of the Code and, if
necessary, under applicable state laws. Such election shall
be included in the Form 1066 and any appropriate state
return to be filed on behalf of REMIC II for its first
taxable year.
The Closing Date is hereby designated as the "startup
day" of REMIC II within the meaning of Section 860G(a)(9) of
the Code.
The regular interests (as set forth in the table
contained in the Preliminary Statement hereto) relating to
the REMIC II Trust Fund are hereby designated as "regular
interests" for purposes of Section 860G(a)(1) of the Code.
The Class R-2 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
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to qualify it as, a REMIC. In furtherance of such intention,
the Tax Matters Person shall, on behalf of the REMIC II
Trust Fund: (a) prepare and file, or cause to be prepared
and filed, a federal tax return using a calendar year as the
taxable year for the REMIC II Trust Fund when and as
required by the REMIC provisions and other applicable
federal income tax laws; (b) make an election, on behalf of
the REMIC II Trust Fund, to be treated as a REMIC on the
federal tax return of the REMIC II Trust Fund for its first
taxable year, in accordance with the REMIC provisions; (c)
prepare and forward, or cause to be prepared and forwarded,
to the 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 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
<PAGE> 129
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.
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.
<PAGE> 130
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 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.
<PAGE> 131
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 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
<PAGE> 132
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 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.;
<PAGE> 133
(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:
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;
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
Curtailments received by the applicable Servicers
in the Prior Period.
At its option, the Master Servicer may invest funds
withdrawn from the Custodial Accounts for P&I, as well as
any Buydown Funds, Insurance Proceeds and Liquidation
Proceeds previously received by the Master Servicer
(including amounts paid by the Company in respect of any
Purchase Obligation or its substitution obligations set
forth in Section 2.02 or Section 2.03 or in connection with
the exercise of the option to terminate this Agreement
pursuant to Section 9.01) for its own account and at its own
risk, during any period prior to their deposit in the
Certificate Account. Such funds, as well as any funds which
<PAGE> 134
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 written direction of the Master Servicer in
(i) one or more Eligible Investments which shall in no event
mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may
mature on the Distribution Date), or (ii) such other
instruments as shall be required to maintain the Ratings.
The Master Servicer shall be entitled to receive any gains
<PAGE> 135
earned on such Eligible Investments and shall bear any
losses suffered in connection therewith. If the Trustee has
not received such written investment directions from the
Master Servicer, the Trustee shall not invest funds held in
the Certificate Account. The Trustee shall have no liability
for any losses on investments of funds held in the
Certificate Account.
Section 3.05. Permitted Withdrawals from the Certificate
Account, the Investment Account and Custodial Accounts for
P&I and of Buydown Funds from the Buydown Fund Accounts.
(a) The Master Servicer is authorized to make
withdrawals, 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:
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;
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;
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;
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;
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;
<PAGE> 136
To deposit to the Investment Account amounts in
the Certificate Account not required to be on deposit
therein at the time of such withdrawal;
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
after making or providing for the above withdrawals
To clear and terminate the Investment Account and
the Certificate Account following termination of this
Agreement pursuant to Section 9.01.
Since, in connection with withdrawals pursuant to
paragraphs (i) and (ii), the Master Servicer's entitlement
thereto is limited to collections or other recoveries on the
related Mortgage Loan, the Master Servicer or the applicable
Servicer shall keep and maintain separate accounting for
each Mortgage Loan, for the purpose of justifying any such
withdrawals.
(b) The Master Servicer (or the applicable Servicer,
if such Servicer holds and maintains a Buydown Fund Account)
is authorized to make withdrawals, from time to time, 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;
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);
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
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
<PAGE> 137
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 Appraised Value of the related Mortgaged
Property, unless required by applicable law.
Unless required by applicable law, the Master Servicer
shall not cancel or refuse to renew, or allow any Servicer
under its supervision to cancel or refuse to renew, any 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 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
<PAGE> 138
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 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
<PAGE> 139
becomes liable under the Mortgage Note. The Master Servicer
shall not enter into any substitution or assumption with
respect to a Mortgage Loan if such substitution or
assumption shall (i) both constitute a "significant
modification" effecting an exchange or reissuance of such
Mortgage Loan under the Code (or Treasury regulations
promulgated thereunder) and cause the REMICs to fail to
qualify as a REMIC under the REMIC Provisions or (ii) cause
the imposition of any tax on "prohibited transactions" or
"contributions" after the startup day under the REMIC
Provisions. The Master Servicer shall notify the Trustee
that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original copy of
such substitution or assumption agreement and other
documents and instruments constituting a part thereof. In
connection with any such assumption or substitution
agreement, the terms of the related Mortgage Note shall not
be changed. Any fee collected by the applicable Servicer for
entering into an assumption or substitution of liability
agreement shall be retained by such Servicer as additional
servicing compensation.
Notwithstanding the foregoing paragraph or any other
provision of this Agreement, the Master Servicer shall not
be deemed to be in default, breach or any other violation of
its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which
the Master Servicer may be restricted by law from
preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall foreclose upon or otherwise
comparably convert, or cause to be foreclosed upon or
comparably converted, the ownership of any Mortgaged
Property securing a Mortgage Loan which comes into and
continues in default and as to which no satisfactory
arrangements can be made for collection of delinquent
payments pursuant to Section 3.01. In lieu of such
foreclosure or other conversion, and taking into
consideration the desirability of maximizing net Liquidation
Proceeds after taking into account the effect of Insurance
Proceeds upon Liquidation Proceeds, the Master Servicer may,
to the extent consistent with prudent mortgage loan
servicing practices, accept a payment of less than the
outstanding Principal Balance of a delinquent Mortgage Loan
in full satisfaction of the indebtedness evidenced by the
related Mortgage Note and release the lien of the related
Mortgage upon receipt of such payment. The Master Servicer
shall not foreclose upon or otherwise comparably convert a
Mortgaged Property if the Master Servicer is aware of
evidence of toxic waste, other hazardous substances or other
evidence of environmental contamination thereon and the
<PAGE> 140
Master Servicer determines that it would be imprudent to do
so. In connection with such foreclosure or other conversion,
the Master Servicer shall cause to be followed such
practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in general
mortgage servicing activities. The foregoing is subject to
the provision that, in the case of damage to a Mortgaged
Property from an Uninsured Cause, the Master Servicer shall
not be required to advance its own funds towards the
restoration of the property unless it shall be determined in
the sole judgment of the Master Servicer, (i) that such
restoration will increase the proceeds of liquidation of the
Mortgage Loan to Certificateholders after reimbursement to
itself for such expenses, and (ii) that such expenses will
be recoverable to it through Liquidation Proceeds. The
Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof
(as well as its normal servicing compensation) as an
advance. The Master Servicer shall maintain information
required for tax reporting purposes regarding any Mortgaged
Property which is abandoned or which has been foreclosed or
otherwise comparably converted. The Master Servicer shall
report such information to the Internal Revenue Service and
the Mortgagor in the manner required by applicable law.
The Master Servicer may enter into one or more special
servicing agreements with a Lowest Class B Holder, subject
to each Rating Agency's acknowledgment that the Ratings of
the Certificates in effect immediately prior to the entering
into of such agreement would not be qualified, downgraded or
withdrawn and the Certificates would not be placed on credit
review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions
whereby such Lowest Class B 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 Lowest Class B
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
<PAGE> 141
Master Servicer has the right to transfer the servicing
rights and obligations of such Mortgage Loans to another
servicer and (ii) such Lowest Class B 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 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
<PAGE> 142
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 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
<PAGE> 143
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.
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
<PAGE> 144
of business on such Distribution Date and showing, for the
period covered by such statement, the aggregate of deposits
into and withdrawals from the Certificate Account for each
category of deposit specified in Section 3.04 and each
category of withdrawal specified in Section 3.05, and
stating that all distributions required by this Agreement
have been made (or if any required distribution has not been
made, specifying the nature and amount thereof). The Trustee
shall make available such statements to any
Certificateholder upon request at the expense of the Master
Servicer. Such statement shall also, to the extent
available, include information regarding delinquencies on
the Mortgage Loans, indicating the number and aggregate
Principal Balance of Mortgage Loans which are one, two,
three or more months delinquent, the number and aggregate
Principal Balance of Mortgage Loans with respect to which
foreclosure proceedings have been initiated and the book
value of any Mortgaged Property acquired by the REMIC I
Trust Fund through foreclosure, deed in lieu of foreclosure
or other exercise of the REMIC I Trust Fund's security
interest in the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master
Servicer shall deliver to the Trustee, on or before April 30
of each year, beginning with the first April 30 succeeding
the Cut-Off Date by at least six months, an Officer's
Certificate stating as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the
preceding calendar year and performance under this Agreement
has been made under such officer's supervision, and (ii) to
the best of such officer's knowledge, based on such review,
the Master Servicer has fulfilled all its obligations under
this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation,
specifying each such default known to such officer and the
nature and status thereof. Copies of such statement shall be
provided by the Master Servicer to Certificateholders upon
request or by the Trustee (solely to the extent that such
copies are available to the Trustee) at the expense of the
Master Servicer, should the Master Servicer fail to so
provide such copies.
Section 3.14. Access to Certain Documentation and
Information Regarding the Mortgage Loans. In the event that
the Certificates are legal for investment by federally-
insured savings associations, the Master Servicer shall
provide to the OTS, the FDIC and the supervisory agents and
examiners of the OTS and the FDIC access to the
documentation regarding the related Mortgage Loans required
by applicable regulations of the OTS or the FDIC, as
applicable, and shall in any event provide such access to
the documentation regarding such Mortgage Loans to the
<PAGE> 145
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
<PAGE> 146
Servicer's duties to be performed prior to its termination
hereunder.
The Master Servicer at its expense shall, upon request
of the Trustee, deliver to the assuming party all documents
and records relating to the Selling and Servicing Contracts
and the Mortgage Loans then being master serviced by the
Master Servicer and an accounting of amounts collected and
held by the Master Servicer and otherwise use its best
efforts to effect the orderly and efficient transfer of the
rights and duties under the related Selling and Servicing
Contracts relating to such Mortgage Loans to the assuming
party.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. Distributions to Holders of REMIC I Regular
Interests and Class R-1 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
<PAGE> 147
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 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
<PAGE> 148
and Servicing Contract, the Master Servicer is entitled to
receive from the Custodial Accounts for P&I established by
the Servicers amounts received by the applicable Servicers
on particular Mortgage Loans as late payments of principal
and interest or as Liquidation or Insurance Proceeds and
respecting which the Master Servicer has made an
unreimbursed advance of principal and interest. The Master
Servicer is also entitled to receive other amounts from the
related Custodial Accounts for P&I established by the
Servicers to reimburse itself for prior Nonrecoverable
Advances respecting Mortgage Loans serviced by such
Servicers. The Master Servicer shall deposit these amounts
in the Investment Account prior to withdrawal pursuant to
Section 3.05.
In accordance with Section 3.05, Monthly P&I Advances
are reimbursable to the Master Servicer from cash in the
Investment Account or the Certificate Account to the extent
that the Master Servicer shall determine that any such
advances previously made are Nonrecoverable Advances
pursuant to Section 4.03.
(b) Prior to noon New York City time two Business Days
prior to each Distribution Date, the Master Servicer shall
provide 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
<PAGE> 149
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 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
<PAGE> 150
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:
it is expected that funds sufficient to make such
final distribution will be available in the Certificate
Account on such Distribution Date, and
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 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 currently located at
"corporatetrust.statestreet.com". Mortgage-Backed Securities
information is currently available by clicking the "Investor
Information & Reporting" button and selecting the
appropriate transaction. The location of such web page and
the procedures used therein are subject to change from time
to time at the Trustee's discretion.
Upon request by any Certificateholder or Rating Agency
or the Trustee, the Master Servicer shall forward to such
Certificateholder or Rating Agency and the Trustee and the
Company (if the Company is no longer acting as Master
Servicer) an additional report which sets forth with respect
to the Mortgage Loans:
(a) The number and aggregate Principal Balance of
the Mortgage Loans delinquent one, two and three months
or more;
<PAGE> 151
(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 for
the related Loan Group or Loan Groups available to the
Senior Certificates remaining as of the close of
business on the applicable Determination Date;
(d) The amount of the Bankruptcy Coverage for the
related Loan Group or Loan Groups available to the
Senior Certificates remaining as of the close of
business on the applicable Determination Date;
(e) The amount of the Fraud Coverage for the
related Loan Group or Loan Groups 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 Certificateholder with such information as is
necessary and appropriate, in the Master Servicer's sole
discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A of the Securities Act.
The Company may make available any reports, statements
or other information to Certificateholders through the
Company's home page on the world wide web. Such web page is
located at "www.pncmsc.com" and information is available by
clicking on "Investor Information."
ARTICLE V
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the
<PAGE> 152
forms set forth in Exhibit A and B with the additional
insertion from Exhibit H attached hereto, and shall be
executed by the Trustee, authenticated by the Trustee (or
any duly appointed Authenticating Agent) and delivered (i)
upon and pursuant to the order of the Company and (ii) upon
receipt by the Trustee of the documents specified in Section
2.01. The Certificates shall be issuable in Authorized
Denominations evidencing Percentage Interests. Certificates
shall be executed by manual or facsimile signature on behalf
of the Trustee by authorized officers of the Trustee.
Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper
officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices
at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form
provided for herein executed by the Trustee or any
Authenticating Agent by manual signature, and such
certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their
authentication.
(b) The following definitions apply for purposes of
this Section 5.01: "Disqualified Organization" means any
Person which is not a Permitted Transferee, but does not
include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified
Organization, directly or indirectly, may be a stockholder,
partner or beneficiary; "Pass-Through Entity" means any
regulated investment company, real estate investment trust,
common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies;
"Ownership Interest" means, with respect to any Residual
Certificate, any ownership or security interest in such
Residual Certificate, including any interest in a Residual
Certificate as the Holder thereof and any other interest
therein whether direct or indirect, legal or beneficial, as
owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring
or selling any Ownership Interest in a Residual Certificate;
and "Transferee" means any Person who is acquiring by
Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual
Certificates to Disqualified Organizations are set forth in
this Section 5.01(c).
<PAGE> 153
Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by
the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the
Trustee or its designee under clause (iii)(A) below to
deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under
clause (iii)(B) below and to execute all instruments of
transfer and to do all other things necessary in
connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following
provisions:
(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer
of any Ownership Interest in a Residual
Certificate to a U.S. Person, the Trustee shall
require delivery to it, and shall not register the
Transfer of any Residual Certificate until its
receipt of (1) an affidavit and agreement (a
"Transferee Affidavit and Agreement") attached
hereto as Exhibit J from the proposed Transferee,
in form and substance satisfactory to the Company,
representing and warranting, among other things,
that it is not a Non-U.S. Person, that such
transferee is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the
Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent
for any Person who is not a Permitted Transferee,
that for so long as it retains its Ownership
Interest in a Residual Certificate, it will
endeavor to remain a Permitted Transferee, and
that it has reviewed the provisions of this
Section 5.01(c) and agrees to be bound by them,
and (2) a certificate, attached hereto as Exhibit
I, from the Holder wishing to transfer the
Residual Certificate, in form and substance
satisfactory to the Company, representing and
warranting, among other things, that no purpose of
the proposed Transfer is to allow such Holder to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a
Transferee Affidavit and Agreement by a proposed
<PAGE> 154
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.
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.
(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
<PAGE> 155
is in fact not permitted by this Section 5.01(c) or for
making any payments due on such Certificate to the
holder thereof or for taking any other action with
respect to such holder under the provisions of this
Agreement.
(B) If any purported Transferee shall become
a Holder of a Residual Certificate in violation of
the restrictions in this Section 5.01(c) and to
the extent that the retroactive restoration of the
rights of the Holder of such Residual Certificate
as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the
Company shall have the right, without notice to
the Holder or any prior Holder of such Residual
Certificate, to sell such Residual Certificate to
a purchaser selected by the Company on such terms
as the Company may choose. Such purported
Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the
instructions of the Company. Such purchaser may be
the Company itself or any affiliate of the
Company. The proceeds of such sale, net of the
commissions (which may include commissions payable
to the Company or its affiliates), expenses and
taxes due, if any, shall be remitted by the
Company to such purported Transferee. The terms
and conditions of any sale under this clause
(iii)(B) shall be determined in the sole
discretion of the Company, and the Company shall
not be liable to any Person having an Ownership
Interest in a Residual Certificate as a result of
its exercise of such discretion.
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.
<PAGE> 156
The provisions of this Section 5.01 set forth
prior to this Section (v) may be modified, added to or
eliminated by the Company and the Trustee, provided
that there shall have been delivered to the Trustee the
following:
(A) written notification from each of the
Rating Agencies to the effect that the
modification, addition to or elimination of such
provisions will not cause such Rating Agency to
downgrade its then-current Ratings of the
Certificates; and
(B) an Opinion of Counsel, in form and
substance satisfactory to the Company (as
evidenced by a certificate of the Company), to the
effect that such modification, addition to or
absence of such provisions will not cause REMIC I
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.
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
<PAGE> 157
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.
The Tax Matters Person for each of REMIC I and
REMIC II, while not a Disqualified Organization, shall
be the tax matters person for the related REMIC within
the meaning of Section 6231(a)(7) of the Code and
Treasury Regulation Section 1.860F-4(d).
(d) In the case of any ERISA Restricted Certificate
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 an ERISA Restricted 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 an ERISA Restricted Certificate that is not a Residual
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.,
<PAGE> 158
(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, to the effect that
such transfer is exempt from the registration requirements
under the Securities Act, as follows: In the event that a
transfer is to be made in reliance upon an exemption from
the Securities Act, the Trustee shall require, in order to
assure compliance with the Securities Act, that the
Certificateholder desiring to effect such transfer certify
to the Trustee in writing, in substantially the form
attached hereto as Exhibit F, the facts surrounding the
transfer, with such modifications to such Exhibit F as may
be appropriate to reflect the actual facts of the proposed
transfer, and that the Certificateholder's proposed
transferee certify to the Trustee in writing, in
substantially the form attached hereto as Exhibit G, the
facts surrounding the transfer, with such modifications to
such Exhibit G as may be appropriate to reflect the actual
facts of the proposed transfer. If such certificate of the
proposed transferee does not contain substantially the
substance of Exhibit G, the Trustee shall require an Opinion
of Counsel that such transfer may be made without
registration, which Opinion of Counsel shall not be obtained
at the expense of the Trustee, the REMIC I Trust Fund, the
REMIC II Trust Fund or the Company. Such Opinion of Counsel
shall allow for the forwarding, and the Trustee shall
forward, a copy thereof to the Rating Agencies.
Notwithstanding the foregoing, any Junior Subordinate
Certificate may be transferred, sold, pledged or otherwise
disposed of in accordance with the requirements set forth in
Section 5.01(f).
(f) To effectuate a Certificate transfer of a Junior
Subordinate Certificate in accordance with this Section
5.01(f), the proposed transferee of such Certificate must
provide the Trustee and the Company with an investment
letter substantially in the form of Exhibit L attached
hereto, which investment letter shall not be an expense of
the Trustee or the Company, and which investment letter
states that, among other things, such transferee (i) is a
"qualified institutional buyer" as defined under Rule 144A,
acting for its own account or the accounts of other
<PAGE> 159
"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, 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,
<PAGE> 160
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.
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
<PAGE> 161
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.
If temporary Certificates are issued, the Trustee shall
cause definitive Certificates to be prepared within ten
Business Days after the Closing Date or as soon as
practicable thereafter. After preparation of definitive
Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of
the temporary Certificates at the office or agency of the
Trustee to be maintained as provided in Section 5.10 hereof,
without charge to the holder. Any tax or governmental charge
that may be imposed in connection with any such exchange
shall be borne by the Master Servicer. Upon surrender for
cancellation of any one or more temporary Certificates, the
Trustee shall execute and the Trustee or any Authenticating
Agent shall authenticate and deliver in exchange therefor a
like principal amount of definitive Certificates of
Authorized Denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same
<PAGE> 162
benefits under this Agreement as definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates.
Notwithstanding the foregoing, the Book-Entry Certificates,
upon original issuance, shall be issued in the form of one
or more typewritten Certificates of Authorized Denomination
representing the Book-Entry Certificates, to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the
Company. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of Cede &
Co., the nominee of DTC, as the initial Clearing Agency, and
no Beneficial Holder shall receive a definitive certificate
representing such Beneficial Holder's interest in any Class
of Book-Entry Certificate, except as provided above and in
Section 5.09. Each Book-Entry Certificate shall bear the
following legend:
Unless this Certificate is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer,
exchange, or payment, and any Certificate issued
is registered in the name of Cede & Co. or such
other name as is requested by an authorized
representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested
by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an
interest herein.
Unless and until definitive, fully registered Book-Entry
Certificates (the "Definitive Certificates") have been
issued to the Beneficial Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be
in full force and effect with respect to the Book-Entry
Certificates;
(b) the Master Servicer and the Trustee may deal
with the Clearing Agency for all purposes with respect
to the Book-Entry Certificates (including the making of
distributions on the Book-Entry Certificates) as the
sole Certificateholder;
(c) to the extent that the provisions of this
Section 5.07 conflict with any other provisions of this
Agreement, the provisions of this Section 5.07 shall
control; and
(d) the rights of the Beneficial Holders shall be
<PAGE> 163
exercised only through the Clearing Agency and the DTC
Participants and shall be limited to those established
by law and agreements between such Beneficial Holders
and the Clearing Agency and/or the DTC Participants.
Pursuant to the Depositary Agreement, unless and until
Definitive Certificates are issued pursuant to Section
5.09, the initial Clearing Agency will make book-entry
transfers among the DTC Participants and receive and
transmit distributions of principal and interest on the
related Class of Book-Entry Certificates to such DTC
Participants.
For purposes of any provision of this Agreement
requiring or permitting actions with the consent of, or at
the direction of, Holders of Book-Entry Certificates
evidencing a specified Percentage Interest, such direction
or consent may be given by the Clearing Agency at the
direction of Beneficial Holders owning Book-Entry
Certificates evidencing the requisite Percentage Interest
represented by the Book-Entry Certificates. The Clearing
Agency may take conflicting actions with respect to the Book-
Entry Certificates to the extent that such actions are taken
on behalf of the Beneficial Holders.
Section 5.08. Notices to Clearing Agency. Whenever notice
or other communication to the Certificateholders is required
under this Agreement, unless and until Definitive
Certificates shall have been issued to the related
Certificateholders pursuant to Section 5.09, the Trustee
shall give all such notices and communications specified
herein to be given to Holders of the Book-Entry Certificates
to the Clearing Agency which shall give such notices and
communications to the related DTC Participants in accordance
with its applicable rules, regulations and procedures.
Section 5.09. Definitive Certificates. If (a) the Master
Servicer notifies the Trustee in writing that the Clearing
Agency is no longer willing or able to discharge properly
its responsibilities under the Depositary Agreement with
respect to the Book-Entry Certificates and the Trustee or
the Master Servicer is unable to locate a qualified
successor, (b) the Master Servicer, at its option, advises
the Trustee in writing that it elects to terminate the book-
entry system with respect to the Book-Entry Certificates
through the Clearing Agency or (c) after the occurrence of
an Event of Default, Certificateholders holding Book-Entry
Certificates evidencing Percentage Interests aggregating not
less than 66% of the aggregate Class Principal Balance of
such Certificates advise the Trustee and the Clearing Agency
through DTC Participants in writing that the continuation of
a book-entry system with respect to the Book-Entry
Certificates through the Clearing Agency is no longer in the
<PAGE> 164
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 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.
<PAGE> 165
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.
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
<PAGE> 166
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:
Any failure by the Master Servicer to deposit into
the Certificate Account any payment required to be
deposited therein by the Master Servicer under the
terms of this Agreement which continues unremedied for
a period of ten days after the date upon which written
<PAGE> 167
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
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
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
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
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
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
<PAGE> 168
such Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event
of Default shall not have been remedied, either the Trustee,
or the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the REMIC II
Trust Fund, by notice in writing to the Company and the
Master Servicer (and to the Trustee if given by the
Certificateholders, in which case such notice shall set
forth evidence reasonably satisfactory to the Trustee that
such Event of Default has occurred and shall not have been
remedied) may terminate all of the rights (other than its
right to reimbursement for advances) and obligations of the
Master Servicer, including its right to the Master Servicing
Fee, under this Agreement and in and to the Mortgage Loans
and the proceeds thereof, if any. Such determination shall
be final and binding. On or after the receipt by the Master
Servicer of such written notice, all authority and power of
the Master Servicer under this Agreement, whether with
respect to the Certificates or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee
pursuant to and under this Section 7.01; and, without
limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of
such notice of termination, whether to complete the transfer
and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer agrees
to cooperate with the Trustee in effecting the termination
of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to
the Trustee for 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
<PAGE> 169
be prior to the distribution on the relevant Distribution
Date. If the Master Servicer shall within two Business Days
following such suspension remit to the Trustee the amount of
any Monthly P&I Advance the nonpayment of which by the
Master Servicer was an Event of Default described in
clause (vi) of this Section 7.01(a), the Trustee, subject to
the last sentence of this paragraph, shall permit the Master
Servicer to resume its rights and obligations as Master
Servicer hereunder. The Master Servicer agrees that it will
reimburse the Trustee for actual, necessary and reasonable
costs incurred by the Trustee because of action taken
pursuant to clause (vi) of this Section 7.01(a). The Master
Servicer agrees that if an Event of Default as described in
clause (vi) of this Section 7.01(a) shall occur more than
two times in any twelve month period, the Trustee shall be
under no obligation to permit the Master Servicer to resume
its rights and obligations as Master Servicer hereunder.
(b) In case one or more of the following Events of
Default by the Company shall occur and be continuing, that
is to say:
(i) Failure on the part of the Company duly to observe or
perform in any material respect any of the covenants or
agreements on the part of the Company contained in the
Certificates or in this Agreement which continues unremedied
for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Trustee, or to
the Company and the Trustee by the Holders of Certificates
evidencing Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund; or
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
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
<PAGE> 170
The Company shall admit in writing its inability
to pay its debts generally as they become due, file a
petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make
an assignment for the benefit of creditors, or
voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as such Event
of Default shall not have been remedied, the Holders of
Certificates evidencing Percentage Interests aggregating not
less than 25% of the REMIC II Trust Fund, by notice in
writing to the Company and the Trustee, may direct the
Trustee in accordance with Section 10.03 to institute an
action, suit or proceeding in its own name as Trustee
hereunder to enforce the Company's obligations hereunder.
(c) In any circumstances in which this Agreement
states that Certificateholders owning Certificates
evidencing a certain percentage Percentage Interest in the
REMIC II Trust Fund may take certain action, such action
shall be taken by the Trustee, but only if the requisite
percentage of Certificateholders required under this
Agreement for taking like action or giving like instruction
to the Trustee under this Agreement shall have so directed
the Trustee in writing.
Section 7.02. Trustee to Act; Appointment of Successor. 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
<PAGE> 171
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
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
<PAGE> 172
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:
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,
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
The Trustee shall not be personally liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of
the Certificateholders holding Certificates which
evidence Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund relating to the time,
method and place of conducting any proceeding for any
remedy available to the Trustee, or relating to the
exercise of any trust or power conferred upon the
Trustee under this Agreement.
(d) Within ten 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
<PAGE> 173
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:
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;
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;
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;
Prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default
which may have occurred, the Trustee shall not be bound
to make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document,
unless requested in writing to do so by the Holders of
Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC II Trust
Fund; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the
security, if any, afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to
proceeding;
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;
<PAGE> 174
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
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
<PAGE> 175
time, and the Trustee shall be entitled to payment, for all
services rendered by it in the execution of the trust hereby
created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee. Except as
otherwise expressly provided herein, the Master Servicer
shall pay or reimburse the Trustee upon the Trustee's
request for all reasonable expenses and disbursements
incurred or made by the Trustee in accordance with any of
the provisions of this Agreement and indemnify the Trustee
from any loss, liability or expense incurred by it hereunder
(including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not
regularly in its employ) except any such expense or
disbursement as may arise from its negligence or bad faith.
Such obligation shall survive the termination of this
Agreement or resignation or removal of the Trustee. The
Company shall, at its expense, prepare or cause to be
prepared all federal and state income tax and franchise tax
and information returns relating to the REMIC I Trust Fund
or the REMIC II Trust Fund required to be prepared or filed
by the Trustee and shall indemnify the Trustee for any
liability of the Trustee arising from any error in such
returns.
Section 8.06. Eligibility Requirements for Trustee. The
Trustee hereunder shall at all times be (i) an institution
insured by the FDIC, (ii) a corporation or association
organized and doing business under the laws of the United
States of America or of any state, authorized under such
laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject
to supervision or examination by federal or state authority
and (iii) acceptable to the Rating Agencies. If such
corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of
any aforementioned supervising or examining authority, then
for the purposes of this Section 8.06, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as 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
<PAGE> 176
Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible
in accordance with the provisions of Section 8.06 and shall
fail to resign after written request therefor by the Master
Servicer, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge
or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then the Master Servicer may remove the Trustee and appoint
a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee
so removed, 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
<PAGE> 177
property held by it hereunder, and the Master Servicer and
the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept appointment as
provided in this Section 8.08 unless at the time of such
appointment such successor trustee shall be eligible under
the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee
as provided in this Section 8.08, the Master Servicer shall
mail notice of the succession of such trustee hereunder to
(i) all Certificateholders at their addresses as shown in
the Certificate Register and (ii) the Rating Agencies. If
the Master Servicer fails to mail such notice within ten
days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be
mailed.
Section 8.09. Merger or Consolidation of Trustee. Any
corporation or association into which the Trustee may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of
the Trustee, shall be the successor of the Trustee
hereunder, provided such resulting or successor corporation
shall be eligible under the provisions of Section 8.06,
without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate
Trustee. Notwithstanding any other provisions hereof, at any
time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the REMIC I Trust Fund
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
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remain liable for all of its obligations and duties under
this Agreement. If the Master Servicer shall not have joined
in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall
have occurred and be continuing, the Trustee alone shall
have the power to make such appointment; provided, that the
Trustee shall remain liable for all of its obligations and
duties under this Agreement. No co-trustee or separate
trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06
hereunder and no notice to Certificateholders of the
appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 8.10, all rights,
powers, duties and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-
trustee jointly and severally, except to the extent that
under any law of any jurisdiction in which any particular
act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of
title to the REMIC I Trust Fund or the REMIC II Trust 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
<PAGE> 179
trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties,
rights, remedies and the trust shall vest in and be
exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may
appoint one or more Authenticating Agents which shall be
authorized to act on behalf of the Trustee in authenticating
Certificates. Wherever reference is made in this Agreement
to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference
shall be deemed to include authentication on behalf of the
Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be
acceptable to the Master Servicer and must be a corporation,
trust company or banking association organized and doing
business under the laws of the United States of America or
of any state, having a principal office and place of
business in New York, New York or a principal office and
place of business in Boston, Massachusetts and a place of
business in New York, New York, having a combined capital
and surplus of at least $15,000,000, authorized under such
laws to do a trust business and subject to supervision or
examination by federal or state authorities.
Any corporation into which any Authenticating Agent may
be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a
party, or any corporation succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be
the Authenticating Agent so long as it shall be eligible in
accordance with the provisions of the first paragraph of
this Section 8.11 without the execution or filing of any
paper or any further act on the part of the Trustee or the
Authenticating Agent.
Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and 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
<PAGE> 180
appointment to the Master Servicer and shall mail notice of
such appointment to all Certificateholders. Any successor
Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers,
duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating
Agent. Any reasonable compensation paid to an Authenticating
Agent shall be a reimbursable expense pursuant to Section
8.05 if paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or
more Paying Agents which shall be authorized to act on
behalf of the Trustee in making withdrawals from the
Certificate Account, and distributions to Certificateholders
as provided in Section 4.01, Section 4.04(a) and Section
9.01(b) to the extent directed to do so by the Master
Servicer. Wherever reference is made in this Agreement to
the withdrawal from the Certificate Account by the Trustee,
such reference shall be deemed to include such a withdrawal
on behalf of the Trustee by a Paying Agent. Whenever
reference is made in this Agreement to a distribution by the
Trustee or the furnishing of a statement to
Certificateholders by the Trustee, such reference shall be
deemed to include such a distribution or furnishing on
behalf of the Trustee by a Paying Agent. Each Paying Agent
shall provide to the Trustee such information concerning the
Certificate Account as the Trustee shall request from time
to time. Each Paying Agent must be reasonably acceptable to
the Master Servicer and must be a corporation, trust company
or banking association organized and doing business under
the laws of the United States of America or of any state,
having a principal office and place of business in New York,
New York or a principal office and place of business in
Boston, Massachusetts and a place of business in New York,
New York, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust
business and subject to supervision or examination by
federal or state authorities.
Any corporation into which any Paying Agent may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which any Paying Agent shall be a party, or
any corporation succeeding to the corporate agency business
of any Paying Agent, shall continue to be the Paying Agent
provided that such corporation after the consummation of
such merger, conversion, consolidation or succession meets
the eligibility requirements of this Section 8.12.
Any Paying Agent may at any time resign by giving
written notice of resignation to the Trustee and to the
Master Servicer; provided, that the Paying Agent has
<PAGE> 181
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 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
<PAGE> 182
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.
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
<PAGE> 183
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:
Within 90 days prior to the final Distribution
Date set forth in the notice given by the Trustee under
Section 9.01, the Tax Matters Person shall prepare the
documentation required and the Tax Matters Person and
the Trustee shall adopt a plan of complete liquidation
on behalf of the REMIC I Trust Fund and the REMIC II
Trust Fund meeting the requirements of a qualified
liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of
Counsel obtained at the expense of the Company, on
<PAGE> 184
behalf of the REMIC I Trust Fund and the REMIC II Trust
Fund; and
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 Tax Matters
Person and the Trustee to adopt such a plan of complete
liquidation upon the written request of the Tax Matters
Person and the Trustee and to take such other action in
connection therewith as may be reasonably requested by the
Tax Matters Person or the Trustee.
Section 9.03. 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.
(b) This Agreement may also be amended from time to
<PAGE> 185
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.
<PAGE> 186
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement, the REMIC I Trust Fund
or the REMIC II Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim
an accounting or to take any action or proceeding in any
court for a partition or winding-up of the REMIC I Trust
Fund or the REMIC II Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or
any of them.
No Certificateholder shall have any right to vote or in
any manner otherwise to control the operation and management
of the REMIC I Trust Fund or the REMIC II Trust Fund or the
obligations of the parties hereto (except as provided in
Section 5.09, Section 7.01, Section 8.01, Section 8.02,
Section 8.07, Section 10.01 and this Section 10.03), nor
shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action
taken by the parties to this Agreement pursuant to any
provision hereof.
No Certificateholder shall have any right by virtue or
by availing of any provision of this Agreement to institute
any suit, action or proceeding in equity or at law upon or
under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates
evidencing Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund shall have made written
request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall
have offered to the 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
<PAGE> 187
or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing of any provision of
this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of such Certificates, or to obtain
or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For
the protection and enforcement of the provisions of this
Section 10.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given
either at law or in equity.
Section 10.04. Access to List of Certificateholders. The
Certificate Registrar shall furnish or cause to be furnished
to the Trustee, within 30 days after receipt of a request by
the Trustee in writing, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date for
payment of distributions to such Certificateholders.
If three or more Certificateholders (hereinafter
referred to as "applicants") apply in writing to the
Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the
communication which such applicants propose to transmit,
then the Trustee shall, within five Business Days after the
receipt of such list from the Certificate Registrar, afford
such applicants access during normal business hours to the
most recent list of Certificateholders held by the Trustee.
If such a list is as of a date more than 90 days prior to
the date of receipt of such applicants' request, the Trustee
shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such
applicants access to such list promptly upon receipt.
Every Certificateholder, by receiving and holding the
same, agrees with the Master Servicer and the Trustee that
neither the Master Servicer nor the Trustee shall be held
accountable by reason of the disclosure of any such
information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from
which such information was derived.
Section 10.05. Governing Law. This Agreement 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.
<PAGE> 188
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 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, 55 Water
Street, 41st Floor, New York, New York 10041-0003,
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
<PAGE> 189
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:
the occurrence of an Event of Default pursuant to
Section 7.01, subject to the provisions of Section
8.01(d);
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;
the appointment of a successor Trustee pursuant to
Section 8.08;
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;
any change in the location of the Certificate
Account, any Custodial Account for P&I or any Custodial
Account for Reserves;
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;
the occurrence of the final Distribution Date or
the termination of the trust pursuant to Section
9.01(a)(ii);
the failure of the Master Servicer to make a
<PAGE> 190
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
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.
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
<PAGE> 191
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 29th day of July 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
STATE OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 29th day of July, 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
upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
Signature /s/ Kim R. Holland (SEAL)
- - - - - - - - - -
(SEAL)
<PAGE> 192
Exhibit A
CUSIP 69348R PC4
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
1 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
<PAGE> 193
$17,080,000.00
Class I-A-1 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-1 Principal Balance
as of the Cut-Off Date: $17,080,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PD2
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 July 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., 250% 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
<PAGE> 194
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 1999-8 Portion of the Class I-A-
2 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$40,430,000.00
Class I-A-2 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-2 Principal Balance
as of the Cut-Off Date: $40,430,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PE0
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 July 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., 250% of the
Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued
<PAGE> 195
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 1999-8 Portion of the Class I-A-
3 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$24,255,000.00
Class I-A-3 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-3 Principal Balance
as of the Cut-Off Date: $24,255,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PF7
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-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
<PAGE> 196
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
4 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$33,349,283.00
Class I-A-4 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-4 Principal Balance
as of the Cut-Off Date: $33,349,283.00
Cede & Co.
Registered Owner
<PAGE> 197
Exhibit A
CUSIP 69348R PG5
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
5 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$25,000,000.00
<PAGE> 198
Class I-A-5 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-5 Principal Balance
as of the Cut-Off Date: $25,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PH3
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 July 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., 250% 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
<PAGE> 199
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 1999-8 Portion of the Class I-A-
6 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$5,000,000.00
Class I-A-6 Certificate Interest Rate: 7.000%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-6 Principal Balance
as of the Cut-Off Date: $5,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PJ9
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 July 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., 250% 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
<PAGE> 200
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 1999-8 Portion of the Class I-A-
7 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$12,500,000.00
Class I-A-7 Certificate Interest Rate: 6.650%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-7 Principal Balance
as of the Cut-Off Date: $12,500,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PK6
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.
<PAGE> 201
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
8 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$5,707,000.00
Class I-A-8 Certificate Interest Rate: 7.250%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-8 Principal Balance
as of the Cut-Off Date: $5,707,000.00
Cede & Co.
Registered Owner
Exhibit A
<PAGE> 202
CUSIP 69348R PL4
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
9 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$1,783,000.00
<PAGE> 203
Class I-A-9 Certificate Interest Rate: 7.250%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-9 Principal Balance
as of the Cut-Off Date: $1,783,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PM2
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-10
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 July 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., 250% 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.
<PAGE> 204
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 1999-8 Portion of the Class I-A-
10 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$554,815.00
Class I-A-10 Certificate Interest Rate: 0.000%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-10 Principal Balance
as of the Cut-Off Date: $554,815.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PN0
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-11
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 July 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., 250% of the
Standard Prepayment Assumption as described in the
<PAGE> 205
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 I-A-11 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 I-A-11 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 I-A-11 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 1999-8 Portion of the Class I-A-
11 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$705,000.00
Class I-A-11 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-11 Principal Balance
as of the Cut-Off Date: $705,000.00
Registered Owner
Exhibit A
CUSIP 69348R PP5
<PAGE> 206
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-12
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
12 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$16,920,000.00
Class I-A-12 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
<PAGE> 207
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-12 Principal Balance
as of the Cut-Off Date: $16,920,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PQ3
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-13
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 July 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., 250% 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
<PAGE> 208
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 1999-8 Portion of the Class I-A-
13 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$80,000,000.00
Class I-A-13 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-13 Principal Balance
as of the Cut-Off Date: $80,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PR1
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-14
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 July 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., 250% 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
<PAGE> 209
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 1999-8 Portion of the Class I-A-
14 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$62,000,000.00
Class I-A-14 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-14 Principal Balance
as of the Cut-Off Date: $62,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PS9
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-15
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
<PAGE> 210
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
15 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$38,063,000.00
Class I-A-15 Certificate Interest Rate: 7.250%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-15 Principal Balance
as of the Cut-Off Date: $38,063,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PT7
<PAGE> 211
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-16
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 July 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., 250% 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 1999-8 Portion of the Class I-A-
16 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$2,819,481.00
Class I-A-16 Certificate Interest Rate: 0.000%
<PAGE> 212
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-A-16 Principal Balance
as of the Cut-Off Date: $2,819,481.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PY6
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 July 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., 250% 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
<PAGE> 213
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 1999-8 Portion of the Class I-X
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$7,669,342.00
Class I-X Certificate
Interest Rate: 6.750%
applied to the Class I-X
Notional Amount
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled
Distribution Date: August
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:
$7,669,342.00
Cede & Co.
Registered Owner
Exhibit
A
CUSIP
69348R
QB5
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> 214
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 July 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., 250% 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 1999-8 Portion of the Class I-P
Principal Balance as of the
Cut-Off Date evidenced by this
Certificate:
Class I-P Certificate Interest Rate: 0.00% $2,248,980.00
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-P Principal Balance
as of the Cut-Off Date: $2,248,980.00
Cede & Co.
<PAGE> 215
Registered Owner
Exhibit A
CUSIP 69348R QG4
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
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
July 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., 250% 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 I-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 I-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 I-B-1 Certificates will be subordinate in right of
<PAGE> 216
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-8 Portion of the Class I-B-
1 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class I-B-1 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-1 Principal Balance
as of the Cut-Off Date: $8,872,838.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QH2
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
July 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., 250% 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 I-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)
<PAGE> 217
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 I-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 I-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 1999-8 Portion of the Class I-B-
2 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class I-B-2 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-2 Principal Balance
as of the Cut-Off Date: $3,664,867.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QJ8
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
<PAGE> 218
July 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., 250% 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 I-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 I-B-3 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 I-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 1999-8 Portion of the Class I-B-
3 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class I-B-3 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-3 Principal Balance
as of the Cut-Off Date: $1,543,103.00
Registered Owner
Certificate No.
<PAGE> 219
Exhibit A
CUSIP 69348R QQ2
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
July 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., 250% 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 I-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 I-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
<PAGE> 220
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 I-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 1999-8 Portion of the Class I-B-
4 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class I-B-4 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-4 Principal Balance
as of the Cut-Off Date: $1,350,214.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QR0
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
July 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., 250% of the
Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued
<PAGE> 221
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 I-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 I-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 I-B-5 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1999-8 Portion of the Class I-B-
5 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$964,439.00
Class I-B-5 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-5 Principal Balance
as of the Cut-Off Date: $964,439.00
Registered Owner
<PAGE> 222
Exhibit A
CUSIP 69348R QS8
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-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
July 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., 250% 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 I-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 I-B-6 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,
<PAGE> 223
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 I-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 1999-8 Portion of the Class I-B-
6 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$964,439.54
Class I-B-6 Certificate Interest Rate: 6.750%
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: August 25, 2029
Class I-B-6 Principal Balance
as of the Cut-Off Date: $964,439.54
Registered Owner
Exhibit A
CUSIP 69348R PU4
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 July 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., 100% of the Basic
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
<PAGE> 224
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 Basic 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 1999-8 Portion of the Class II-A-
1 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$65,375,587.00
Class II-A-1 Certificate Interest Rate: 7.250%
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled Distribution
Date: September 25, 2029
Class II-A-1 Principal Balance
as of the Cut-Off Date: $65,375,587.00
Cede & Co.
Registered Owner
Exhibit
A
CUSIP
69348R
PZ3
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-X-1
<PAGE> 225
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 July 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., 100% of the Basic
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 Basic 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 1999-8 Portion of the Class C-X-
1 Notional Amount as of
the
Cut-Off Date Evidenced by
this Certificate:
$3,314,237.00
Class C-X-1 Certificate
Interest Rate: 7.000%
applied to the Class C-X-
1 Notional Amount
<PAGE> 226
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled
Distribution Date:
September 25, 2029
Class C-X-1 Principal
Balance
as of the Cut-Off Date:
$0.00
Class C-X-1 Notional
Amount
as of the Cut-Off Date:
$3,314,237.00
Cede & Co.
Registered Owner
Exhibit
A
CUSIP
69348R
QA7
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-X-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 July 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., 100% of the Basic
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
<PAGE> 227
Certificate Principal Balance, computed under the exact
method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic 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 1999-8 Portion of the Class C-X-
2 Notional Amount as of
the
Cut-Off Date Evidenced by
this Certificate:
$10,017,330.00
Class C-X-2 Certificate
Interest Rate: 7.000%
applied to the Class C-X-
2 Notional Amount
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled
Distribution Date:
September 25, 2029
Class C-X-2 Principal
Balance
as of the Cut-Off Date:
$0.00
Class C-X-2 Notional
Amount
as of the Cut-Off Date:
$10,017,330.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PV2
<PAGE> 228
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 July 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., 100% of the Basic
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 Basic 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 1999-8 Portion of the Class III-
A-1 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$166,157,257.00
Class III-A-1 Certificate Interest Rate: 7.500%
<PAGE> 229
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled Distribution
Date: September 25, 2029
Class III-A-1 Principal Balance
as of the Cut-Off Date: $166,157,257.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PW0
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-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 July 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., 100% of the Basic
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 Basic Prepayment
Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
<PAGE> 230
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 1999-8 Portion of the Class IV-A-
1 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$94,318,459.00
Class IV-A-1 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled Distribution
Date: September 25, 2029
Class IV-A-1 Principal Balance
as of the Cut-Off Date: $94,318,459.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R PX8
MORTGAGE PASS-THROUGH CERTIFICATE
Class V-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,
<PAGE> 231
respectively, of the Internal Revenue Code of 1986, as
amended. The issue date of this Certificate is July 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., 100% of the Basic
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 Basic 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 1999-8 Portion of the Class V-A-
1 Principal Balance as of
the Cut-Off Date
Evidenced by this Certificate:
$153,707,752.00
Class V-A-1 Certificate Interest Rate: 7.000%
Cut-Off Date: July 1,
1999
First Distribution Date:
August 25, 1999
Last Scheduled Distribution
Date: September 25, 2029
Class V-A-1 Principal Balance
as of the Cut-Off Date: $153,707,752.00
Cede & Co.
Registered Owner
Exhibit
<PAGE> 232
A
CUSIP
69348R
QF6
MORTGAGE PASS-THROUGH CERTIFICATE
Class V-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 July 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., 100% of the Basic
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 Basic 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 1999-8 Portion of the Class V-P
Principal Balance as of the
<PAGE> 233
Cut-Off Date evidenced by this
Certificate:
Class V-P Certificate Interest Rate: 0.00% $1,416,558.00
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class V-P Principal Balance
as of the Cut-Off Date: $1,416,558.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R QK5
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
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
July 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., 100% of the
Basic 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 Basic 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
<PAGE> 234
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 1999-8 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: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-1 Principal Balance
as of the Cut-Off Date: $16,853,593.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QL3
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
July 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., 100% of the
<PAGE> 235
Basic 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 Basic 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 1999-8 Portion of the Class C-B-
2 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class C-B-2 Certificate Interest Rate: Variable
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-2 Principal Balance
as of the Cut-Off Date: $8,297,153.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QM1
<PAGE> 236
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
July 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., 100% of the
Basic 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 Basic 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 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 1999-8 Portion of the Class C-B-
3 Principal Balance as of
the Cut-Off Date
<PAGE> 237
Evidenced by this
Certificate:
$
Class C-B-3 Certificate Interest Rate: Variable
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-3 Principal Balance
as of the Cut-Off Date: $4,667,149.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QT6
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
July 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., 100% of the
Basic 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 Basic 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)
<PAGE> 238
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 1999-8 Portion of the Class C-B-
4 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class C-B-4 Certificate Interest Rate: Variable
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-4 Principal Balance
as of the Cut-Off Date: $3,630,006.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QU3
MORTGAGE PASS-THROUGH CERTIFICATE
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
<PAGE> 239
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
July 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., 100% of the
Basic 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 Basic 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> 240
Series 1999-8 Portion of the Class C-B-
5 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class C-B-5 Certificate Interest Rate: Variable
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-5 Principal Balance
as of the Cut-Off Date: $1,296,429.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QV1
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
July 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., 100% of the
Basic 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 Basic 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)
<PAGE> 241
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 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 1999-8 Portion of the Class C-B-
6 Principal Balance as of
the Cut-Off Date
Evidenced by this
Certificate:
$
Class C-B-6 Certificate Interest Rate: Variable
Cut-Off Date: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class C-B-6 Principal Balance
as of the Cut-Off Date: $2,852,149.14
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R QP4
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
<PAGE> 242
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-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
<PAGE> 243
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 1999-8 Percentage Interest
evidenced by this Class R-
2 Certificate in the
distributions to be made
with respect to the Class
R-2 Certificates:
%
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: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 25, 2029
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
Registered Owner
Certificate No.
Exhibit B
CUSIP 69348R QN9
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
<PAGE> 244
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 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 1999-8 Percentage Interest
evidenced by this Class R-
1 Certificate in the
distributions to be made
with respect to the Class
R-1 Certificates:
%
<PAGE> 245
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: July 1, 1999
First Distribution Date: August 25, 1999
Last Scheduled Distribution Date: September 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.
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
<PAGE> 246
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 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,
<PAGE> 247
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.
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
<PAGE> 248
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 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
<PAGE> 249
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.
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
<PAGE> 250
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
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
<PAGE> 251
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 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
<PAGE> 252
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 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
<PAGE> 253
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 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
<PAGE> 254
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
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-8
Re: Purchase of PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates Series 1999-8, Class [
<PAGE> 255
] (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 1999-8
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 Mortgage Securities Corp. Mortgage Pass-
Through Certificates, Series 1999-8 (the "Purchased
Certificates") in the principal amount of $ . In doing
so, the Purchaser hereby acknowledges and agrees as follows:
<PAGE> 256
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 July 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 1999-8.
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
<PAGE> 257
by 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-
<PAGE> 258
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
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 1999-8
(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
<PAGE> 259
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. 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
<PAGE> 260
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 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.
<PAGE> 261
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.
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
<PAGE> 262
collections and recoveries respecting the Mortgage Loans,
all as more specifically set forth herein and in the Pooling
Agreement. In the event funds are advanced with respect to
any Mortgage Loan, such advance is reimbursable to the
Master Servicer from the related recoveries on such Mortgage
Loan or from other cash deposited in the Certificate Account
to the extent that such advance is not otherwise
recoverable.
As provided in the Pooling Agreement, withdrawals from
the Certificate Account may be made from time to time for
purposes other than distributions to Certificateholders,
such purposes including reimbursement to the Master Servicer
of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Certificateholders under the Pooling Agreement at any
time by the Company, the Master Servicer and the Trustee
with the consent of the Holders of the Certificates
evidencing Percentage Interests aggregating not less than
66% of the REMIC II Trust Fund. Any such consent by the
Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate.
The Pooling Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to
certain limitations therein set forth, the transfer of this
Certificate is registrable in the Certificate Register upon
surrender of this Certificate for registration of transfer
at the offices of the Certificate Registrar or the office
maintained by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the
form below or other written instrument of transfer in form
satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new
Certificates of Authorized Denominations evidencing the same
Percentage Interest set forth hereinabove will be issued to
the designated transferee or transferees.
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
<PAGE> 263
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 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
<PAGE> 264
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.
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
<PAGE> 265
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 1999-8
Re: PNC Mortgage Securities Corp. Mortgage Pass-
Through
Certificates, Series 1999-8, Class [R-1] [R-2]
Ladies and Gentlemen:
This letter is delivered to you in connection with the
sale from (the "Seller") to
(the "Purchaser") of $ initial Certificate
Principal Balance of Mortgage Pass-Through Certificates,
Series 1999-8, Class [R-1][R-2] (the "Certificate"),
pursuant to Section 5.01 of the Pooling and Servicing
Agreement (the "Pooling Agreement"), dated as of July 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.
<PAGE> 266
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:
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
<PAGE> 267
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 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
<PAGE> 268
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
.
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.
<PAGE> 269
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
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]
<PAGE> 270
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:
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
<PAGE> 271
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 July 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.
c. The Buyer has received and reviewed the
Private Placement Memorandum dated as of July 29, 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
<PAGE> 272
interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the
Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or
otherwise approached or negotiated with respect to the
Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any
person in any manner, or made any general solicitation
by means of general advertising or in any other manner,
or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933
Act or that would render the disposition of the Rule
144A Securities a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Rule
144A Securities.
e. The Buyer is a "qualified institutional
buyer" as that term is defined in Rule 144A under the
1933 Act and has (1) completed either of the forms of
certification to that effect attached hereto as Annex 1
or Annex 2, or (2) obtained the waiver of the Company
with respect to Annex 1 and Annex 2 pursuant to Section
5.01(f) of the Agreement. The Buyer is aware that the
sale to it is being made in reliance on Rule 144A. The
Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified
institutional buyers, understands that such Rule 144A
Securities may be resold, pledged or transferred only
(i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account
or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or
(ii) pursuant to another exemption from registration
under the 1933 Act.
f. The Buyer is not affiliated with (i) the
Trustee or (ii) any Rating Agency that rated the Rule
144A Securities.
g. If applicable, the Buyer has complied, and
will continue to comply, with the guidelines
established by Thrift Bulletin 13a issued April 23,
1998, by the Office of Regulatory Activities of the
Federal Home Loan Bank System.
[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
<PAGE> 273
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:
Taxpayer Identification: Taxpayer
Identification:
No.: No.:
<PAGE> 274
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> 275
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
<PAGE> 276
political subdivisions, for the benefit of its
employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, but is not a trust fund that
includes as participants individual retirement accounts
or H.R. 10 plans.
3. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with
the Buyer, (ii) securities that are part of an unsold
allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a
repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount
of securities owned and/or invested on a discretionary basis
by the Buyer, the Buyer used the cost of such securities to
the Buyer and did not include any of the securities referred
to in the preceding paragraph. Further, in determining such
aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such
subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally
accepted accounting principles and if the investments of
such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with
Rule 144A and understands that the seller to it and other
parties related to the Certificates are relying and will
continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
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
<PAGE> 277
Buyer agrees that the Buyer will not purchase securities for
a third party unless the Buyer has obtained a current
representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that
such third party independently meets the definition of
"qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which
this certification is made of any changes in the information
and conclusions herein. Until such notice is given, the
Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
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
<PAGE> 278
below) as of the end of the Buyer's most recent fiscal year.
For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies,
the cost of such securities was used.
The Buyer owned $ in securities (other
than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
The Buyer is part of a Family of Investment
Companies which owned in the aggregate $ in
securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or
series thereof) that have the same investment adviser or
investment advisers that are affiliated (by virtue of being
majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the
other).
4. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with
the Buyer or are part of the Buyer's Family of Investment
Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase
agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and
understands that each of the parties to which this
certification is made are relying and will continue to rely
on the statements made herein because one or more sales to
the Buyer will be in reliance on Rule 144A. In addition, the
Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to
which this certification is made of any changes in the
information and conclusions herein. Until such notice, the
Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of
the date of such purchase.
Print Name of Buyer
<PAGE> 279
By:
Name:
Title:
Date:
IF AN ADVISER:
Print Name of Buyer
By:
Name:
Title:
Date:
(SEAL)
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of
July 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 1999-8
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)
<PAGE> 280
pursuant to the definition of "Mortgage File" and Section
2.01 of the Pooling and Servicing Agreement have been
executed and received as of the date hereof are in its
possession or in the possession of the Custodian on its
behalf and (ii) all such documents have been executed and
relate to the Mortgage Loans identified in the Mortgage Loan
Schedule. The Trustee has made no independent examination of
such documents beyond the review specifically required in
the above referenced Pooling and Servicing Agreement and has
relied upon the purported genuineness and due execution of
any such documents and upon the purported genuineness of any
signature thereon. The Trustee makes no representations as
to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each
Mortgage File or any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such
Mortgage Loan.
Capitalized words and phrases used herein shall have
the respective meanings assigned to them in the above-
captioned Pooling and Servicing Agreement.
as Trustee
By:
Name:
Title:
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-8
PNC Mortgage Securities Corp.
75 North Fairway Drive
Vernon Hills, IL 60061
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-8
(THE "TRUST") CLASS [ -B- ] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
<PAGE> 281
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 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 .
<PAGE> 282
Notary Public
Exhibit O
FORM OF LOAN SALE AGREEMENT
CLIPPER RECEIVABLES CORPORATION,
as Seller
STATE STREET BANK AND TRUST COMPANY,
as Trustee
LOAN SALE AGREEMENT
Dated as of July 1, 1999
This Loan Sale Agreement (this "Agreement") is dated as
of July 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 July 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
<PAGE> 283
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.
Closing Date: July 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: July 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.
<PAGE> 284
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.
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)
<PAGE> 285
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.
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
<PAGE> 286
Street, Boston, MA 02110, Attention: Corporate Trust
Department, PNC Series 1999-8, 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 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
<PAGE> 287
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 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,
<PAGE> 288
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
By:
Name:
Title:
CONSENTED TO BY:
STATE STREET CAPITAL
CORPORATION, as Program
Administrator
By:
Name:
<PAGE> 289
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 July 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 July 1,
1999 by and between PNC Mortgage 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:
<PAGE> 290
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 July 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
July 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;
WHEREAS, pursuant to a Loan Sale Agreement (the
"Clipper Loan Sale Agreement"), dated as of July 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
<PAGE> 291
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 July
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.
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.
<PAGE> 292
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:
