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
August 31, 1999
(date of earliest event reported)
PNC MORTGAGE SECURITIES CORP.
as Depositor and Master Servicer under a
Pooling and Servicing Agreement
dated as of August 1, 1999
providing for the issuance of
$1,006,840,170
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-9
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 August 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: September 14, 1999.
PNC MORTGAGE SECURITIES CORP.
(Registrant)
By: /s/ Thomas G. Lehmann
-----------------------------------
Thomas G. Lehmann
Vice President and General Counsel
(Authorized Officer)
EXHIBIT 7.1
<PAGE> 1
Pooling and Servicing Ageement, Series 1999-9
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$1,019,557,577.36
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1999-9
Cut-Off Date: August 1, 1999
This Pooling and Servicing Agreement, dated and effective as of
August 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
<PAGE> 2
the aggregate the entire beneficial ownership of REMIC I, (ii) the
conveyance to the Trustee of the Clipper Mortgage Loans pursuant to the
Clipper Loan Sale Agreement and (iii) the conveyance to the Trustee of
the REMIC I Regular Interests and the issuance to the Company of the
Certificates (other than the Class R-1 Certificates) representing in the
aggregate the entire beneficial interest of REMIC II. All covenants and
agreements made by the Company and the Trustee herein with respect to
the Mortgage Loans and the other property constituting the assets of
REMIC I are for the benefit of the Holders from time to time of the
REMIC I Regular Interests and the Class R-1 Certificates. All covenants
and agreements made by the Company and the Trustee herein with respect
to the REMIC I Regular Interests are for the benefit of the Holders from
time to time of the Certificates (other than the Class R-1
Certificates). The Company is entering into this Agreement, and the
Trustee is accepting the three separate trusts created hereby, for good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.
The Certificates issued hereunder, other than the Junior
Subordinate Certificates, have been offered for sale pursuant to a
Prospectus, dated July 27, 1999, and a Prospectus Supplement, dated
August 30, 1999, of the Company (together, the "Prospectus"). The Junior
Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated August 31, 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, Certificate Interest Rate, initial Class Principal Balance,
initial Component Principal Balance 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 I-A-1-M Regular 7.000% (2) $ 42,105,000.00 September 2029
Class I-A-2-M Regular 6.700% 48,604,000.00 September 2029
Class I-A-3-M Regular 6.750% 50,479,793.00 September 2029
Class I-A-4-M Regular 6.250% 73,683,000.00 September 2029
Class I-A-5-M Regular 7.000% (3) 8,039,000.00 September 2029
Class I-A-6-M Regular 7.000% 100,000,000.00 September 2029
Class C-Y-1 Regular 7.500% 46,812.93 September 2029
Class C-Y-2 Regular 7.250% 187,548.43 October 2029
Class C-Y-3 Regular 7.000% 101,880.29 September 2029
<PAGE> 3
Class C-Z-1 Regular 7.500% 93,579,046.82 September 2029
Class C-Z-2 Regular 7.250% 374,909,306.93 October 2029
Class C-Z-3 Regular 7.000% 203,720,314.90 September 2029
Class I-X-M Regular 7.000% (4) ------ September 2029
Class A-X-1-M Regular 7.500% (4) ------ October 2029
Class A-X-2-M Regular 7.500% (4) ------ October 2029
Class IV-X-1-M Regular 7.000% (4) ------ September 2029
Class IV-X-2-M Regular 7.000% (4) ------ September 2029
Class I-P-M Regular (5) 4,798,081.00 September 2029
Class D-P-M Regular (5) 1,145,676.00 October 2029
Class I-B-1-M Regular 7.000% 9,338,408.00 September 2029
Class I-B-2-M Regular 7.000% 3,804,537.00 September 2029
Class I-B-3-M Regular 7.000% 1,729,335.00 September 2029
Class I-B-4-M Regular 7.000% 1,556,402.00 September 2029
Class I-B-5-M Regular 7.000% 691,734.00 September 2029
Class I-B-6-M Regular 7.000% 1,037,601.06 September 2029
Class R-2-M Regular 7.000% 50.00 October 2029
Class R-1+ Residual 7.000% 50.00 October 2029
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group (or Loan Groups, as
applicable) matures.
+ The Class R-1 Certificates are entitled to receive the applicable
Residual Distribution Amount and any Excess Liquidation Proceeds.
(1) Interest distributed to the REMIC I Regular Interests (other than
the Class P-M Regular Interests, which shall not be entitled to receive
any distributions of interest) and the Class R-1 Certificates on each
Distribution Date will have accrued at the applicable per annum
Certificate Interest Rate on the Class Principal Balance or Class
Notional Amount outstanding following the immediately prior Distribution
Date (or with respect to the first Distribution Date, as of the Closing
Date).
(2) On each Distribution Date on or before the Component I-A-1-4
Accretion Termination Date, an amount equal to the Component I-A-1-4
Accrual Amount will be added to the Class I-A-1-M Principal Balance, and
such amount will be distributed as principal to certain Classes of Group
I-A-M Regular Interests as set forth herein and will not be distributed
as interest to the Class I-A-1-M Regular Interest.
(3) On each Distribution Date on or before the Class I-A-5 Accretion
Termination Date, an amount equal to the Class I-A-5 Accrual Amount will
be added to the Class I-A-5-M Principal Balance, and such amount will be
distributed as principal to certain Classes of Group I-A-M Regular
Interests and will not be distributed as interest to the Class I-A-5-M
Regular Interest.
(4) 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.
(5) The Class P-M Regular Interests will not be entitled to receive any
distributions of interest.
</TABLE>
<PAGE> 4
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>
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 (2) (2) September 2029
Class I-A-2 Regular 6.700% $ 48,604,000.00 September 2029
Class I-A-3 Regular 6.750% 50,479,793.00 September 2029
Class I-A-4 Regular 6.250% 73,683,000.00 September 2029
Class I-A-5 Regular 7.000% (3) 8,039,000.00 September 2029
Class I-A-6 Regular 7.000% 100,000,000.00 September 2029
Class II-A-1 Regular 7.500% 58,222,000.00 October 2029
Class II-A-2 Regular 7.500% 3,154,000.00 October 2029
Class II-A-3 Regular 7.500% 3,497,000.00 October 2029
Class II-A-4 Regular 7.500% 3,801,000.00 October 2029
Class II-A-5 Regular 7.500% 4,335,000.00 October 2029
Class II-A-6 Regular 7.500% 3,000,000.00 October 2029
Class II-A-7 Regular 7.500% 8,994,855.00 October 2029
Class II-A-8 Regular (4) 1,366,000.00 October 2029
Class III-A-1 Regular 7.220% 145,000,000.00 October 2029
Class III-A-2 Regular 7.250% 10,959,000.00 October 2029
Class III-A-3 Regular 7.250% 35,978,607.00 October 2029
Class III-A-4 Regular 7.250% 28,501,000.00 October 2029
Class III-A-5 Regular 7.250% 4,800,000.00 October 2029
Class III-A-6 Regular 7.250% 115,439,000.00 October 2029
Class III-A-7 Regular 7.250% 5,271,000.00 October 2029
Class IV-A-1 Regular 7.000% 74,856,000.00 October 2029
Class IV-A-2 Regular 7.500% 105,615,464.00 October 2029
Class IV-A-3 Regular (5) 7,543,962.00 October 2029
Class I-X Regular 7.000% (6) ------ September 2029
Class A-X-1 Regular 7.500% (6) ------ October 2029
Class A-X-2 Regular 7.500% (6) ------ October 2029
<PAGE> 5
Class IV-X-1 Regular 7.000% (6) ------ October 2029
Class IV-X-2 Regular 7.000% (6) ------ October 2029
Class I-P Regular (5) 4,798,081.00 September 2029
Class D-P Regular (5) 1,145,676.00 October 2029
Class I-B-1 Regular 7.000% 9,338,408.00 September 2029
Class I-B-2 Regular 7.000% 3,804,537.00 September 2029
Class I-B-3 Regular 7.000% 1,729,335.00 September 2029
Class I-B-4 Regular 7.000% 1,556,402.00 September 2029
Class I-B-5 Regular 7.000% 691,734.00 September 2029
Class I-B-6 Regular 7.000% 1,037,601.06 September 2029
Class C-B-1 Regular Variable (7) 26,610,778.00 October 2029
Class C-B-2 Regular Variable (7) 10,779,049.00 October 2029
Class C-B-3 Regular Variable (7) 5,389,525.00 October 2029
Class C-B-4 Regular Variable (7) 4,378,989.00 October 2029
Class C-B-5 Regular Variable (7) 1,684,227.00 October 2029
Class C-B-6 Regular Variable (7) 3,368,454.30 October 2029
Class R-2+ Residual 7.000% 50.00 October 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 and
Class IV-A-3 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, Class Notional Amount, Component Principal Balance or
Component Notional Amount outstanding following the immediately prior
Distribution Date (or, with respect to the first Distribution Date, as
of the Closing Date).
(2) For purposes of calculating distributions, Class I-A-1 will be
comprised of four Components having the designations, initial Component
Principal Balances and Certificate Interest Rates set forth below:
Initial Component Certificate
Designation Principal Balance Interest Rate
Component I-A-1-1 ----- 7.000% (A)
Component I-A-1-2 ----- 7.000% (A)
Component I-A-1-3 ----- 7.000% (A)
Component I-A-1-4 $ 42,105,000.00 7.000% (B)
Each of the Components listed here will be a regular interest in REMIC
II.
<PAGE> 6
(A) Each of Component I-A-1-1, Component I-A-1-2 and Component I-A-1-
3 shall accrue interest on the related Component Notional Amount. These
Components shall not be entitled to receive any distributions of
principal.
(B) On each Distribution Date on or before the Component I-A-1-4
Accretion Termination Date, an amount equal to the Component I-A-1-4
Accrual Amount will be added to the Component I-A-1-4 Principal Balance,
and such amount will be distributed as principal to certain Classes of
Group I-A Certificates or Components thereof as set forth herein and
will not be distributed as interest to Component I-A-1-4.
(3) On each Distribution Date on or before the Class I-A-5 Accretion
Termination Date, an amount equal to the Class I-A-5 Accrual Amount will
be added to the Class I-A-5 Principal Balance, and such amount will be
distributed as principal to certain Classes of Group I-A Certificates or
Components thereof and will not be distributed as interest to the Class
I-A-5 Certificates.
(4) The Certificate Interest Rate on the Class II-A-8 Certificates for
the first twenty-four Distribution Dates shall be 8.000% per annum.
Thereafter, the Certificate Interest Rate on the Class II-A-8
Certificates shall be 7.500% per annum. The Class II-A-8 Certificates
are comprised of (i) a REMIC II Regular Interest whose Class Principal
Balance is equal to the Class II-A-8 Principal Balance and which accrues
interest at a Certificate Interest Rate of 7.500% per annum and (ii) a
right to receive additional interest payments from the Class II-A-8
Interest Supplement Account.
(5) The Class P and Class IV-A-3 Certificates shall not be entitled to
receive any distributions of interest.
(6) 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.
(7) 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 and Class C-Y-3 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 II-A-8, Class R-1 and Class R-2 Certificates) and the portion of
the Class II-A-8 Certificates other than the right to receive interest
payments from the Class II-A-8 Interest Supplement Account will be
designated regular interests in REMIC II, and the Class R-2 Certificates
will be designated the sole class of residual interest in REMIC II, for
purposes of the REMIC Provisions. As of the Cut-Off Date, the Mortgage
Loans have an aggregate Principal Balance of $1,019,557,578.09 and the
Certificates have an Aggregate Certificate Principal Balance of
$1,019,557,577.36.
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
<PAGE> 7
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:
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
<PAGE> 8
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 II-A-2, Class II-A-3, Class II-A-4, Class II-A-
5, Class II-A-6, Class II-A-8, Class III-A-2, Class III-A-4, Class III-A-
5, Class III-A-7 and Residual Certificates), an initial Certificate
Principal Balance equal to $25,000 and multiples of $1 in excess
thereof, except that one Certificate of each Class of the Junior
Subordinate Certificates may be issued in an amount that is not an
integral multiple of $1. With respect to the Class II-A-2, Class II-A-
3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-8, Class III-A-
2, Class III-A-4, Class III-A-5, Class III-A-7 Certificates, an initial
Certificate Principal Balance equal to $1,000 and multiples of $1 in
excess thereof. With respect to the Class X Certificates, a Class
Notional Amount as of the Cut-Off Date equal to $100,000 and multiples
of $1 in excess thereof, except that one Certificate of each Class of
Class X Certificates may be offered in a different amount. With respect
to each Class of the Residual Certificates, one Certificate with a
Percentage Interest equal to 0.01% and one Certificate with a Percentage
Interest equal to 99.99%.
Bankruptcy Coverage: With respect to Loan Group I, $129,000 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-M and Residual Certificates.
With respect to Loan Group II, Loan Group III and Loan Group IV,
collectively, $272,549 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 II,
Group III, Group IV, Group C-B, Group A-X and Class D-P Certificates.
The Bankruptcy Coverage for Loan Group I and the Bankruptcy
Coverage for Loan Group II, Loan Group III and Loan Group IV 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 (determined in the case of the
Insured Certificates, without giving effect to the Certificate Insurance
Policy).
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
<PAGE> 9
outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect
DTC Participant or a Person holding a beneficial interest in any
Definitive Certificate.
Book-Entry Certificates: The Class A, Class X and Class P
Certificates, beneficial ownership and transfers of which shall be made
through book entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a day on
which the Certificate Insurer (with respect to matters hereunder
affecting the Certificate Insurer) or 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 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 C-B, Group A-X, Class D-P or Residual Certificates, issued
<PAGE> 10
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) 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 or Group IV
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. For so
long as no Certificate Insurer Default exists (and whether or not any
payments with respect to Deficiency Amounts or Preference Amounts have
been made), the Certificate Insurer shall be deemed to be the sole
Holder of all outstanding Insured Certificates, subject to Section 3.22;
provided, that the Certificate Insurer shall have no power without the
consent of the Owner of each Certificate affected thereby to: (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 the Insured Certificates;
(ii) reduce the percentage of Percentage Interests specified in 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
<PAGE> 11
the REMIC II Trust Fund; (iv) modify any provision in any way which
would permit an earlier retirement of the Certificates; or (v) amend
this definition of "Certificateholder or Holder." 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 Insurance Policy: The Certificate Guaranty Insurance
Policy No. 30075 issued by the Certificate Insurer in respect of the
Class III-A-1 Certificates, a copy of which is attached hereto as
Exhibit K.
Certificate Insurer: MBIA Insurance Corporation or its successors
in interest.
Certificate Insurer Default: The existence and continuance of any
of the following: (a) a failure by the Certificate Insurer to make a
payment required under the Certificate Insurance Policy in accordance
with its terms; (b) the entry of a decree or order of a court or agency
having jurisdiction in respect of the Certificate Insurer in an
involuntary case under any present or future Federal or state
bankruptcy, insolvency or similar law appointing a conservator or
receiver or liquidator or other similar official of the Certificate
Insurer or of any substantial part of its property, or the entering of
an order for the winding up or liquidation of the affairs of the
Certificate Insurer and the continuance of any such decree or order
undischarged or unstayed and in force for a period of 90 consecutive
days; (c) the Certificate Insurer shall consent to the appointment of a
conservator or receiver or liquidator or other similar official in any
insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Certificate Insurer or of
or relating to all or substantially all of its property; or (d) the
Certificate Insurer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
or otherwise voluntarily commence a case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar
statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations.
Certificate Insurer Premium: The "Premium," with respect to the
Class III-A-1 Certificates, as set forth in Section 3.03 of the
Insurance Agreement.
Certificate Interest Rate: For each Class of Certificates or
Component thereof and REMIC I Regular Interests, the per annum rate set
forth as the Certificate Interest Rate for such Class or Component 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
<PAGE> 12
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 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, Group II-A, Group III-A and
Group IV-A Certificates.
Class A-X-1 Certificates: The Certificates designated as "Class A-X-
1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class A-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 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 A-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 A-X-1 Premium Rate Mortgage Loans as of such Due
Date and the denominator of which is 7.500%.
Class A-X-1 Premium Rate Mortgage Loan: (i) A Group II Loan that
has a Pass-Through Rate in excess of 7.500% per annum and is not a Group
II Prepayment Penalty Loan or (ii) a Group III Loan that has a Pass-
Through Rate in excess of 7.250% per annum and is not a Group III
Prepayment Penalty Loan.
Class A-X-1-M Regular Interest: The uncertificated partial
<PAGE> 13
undivided beneficial ownership interest in REMIC I which constitutes a
REMIC I Regular Interest and is entitled to distributions as set forth
herein.
Class A-X-2 Certificates: The Certificates designated as "Class A-X-
2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class A-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 A-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 A-X-2 Premium Rate Mortgage Loans as of such Due
Date and the denominator of which is 7.500%.
Class A-X-2 Premium Rate Mortgage Loan: (i) A Group II Prepayment
Penalty Loan that has a Pass-Through Rate in excess of 7.500% per annum
or (ii) a Group III Prepayment Penalty Loan that has a Pass-Through Rate
in excess of 7.250% per annum.
Class A-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 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.
<PAGE> 14
Class C-B-6 Certificates: The Certificates designated as "Class C-B-
6" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-Y Regular Interests: The Class C-Y-1, Class C-Y-2 and Class
C-Y-3 Regular Interests.
Class C-Y-1 Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
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 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 and Class C-Y-3 Regular Interests, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses
and the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
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
<PAGE> 15
Realized Losses and distributions of principal on such Distribution
Date.
R = the Class C-B Certificate Interest Rate = (7.0%PIVB + 7.5%PIIB +
7.25%PIIIB)/DELTAPIVB + PIIB + PIIIB)
R1 = the weighted average of the Class C-Y-3, Class C-Z-3, Class C-Y-2
and Class C-Z-2 Certificate Interest Rates
= (7.0% DELTAP3 - DELTAP3) + 7.25%
DELTAP2 - DELTAP2))/DELTAP3 - DELTAP3 + P2 - DELTAP2)
R2 = 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
= (7.5% DELTAP1 - DELTAP1) + 7.25%
DELTAP2 - DELTAP2))/DELTAP1 - DELTAP1 + P2 - DELTAP2)
r1 = the weighted average of the Class C-Y-3 and Class C-Y-2 Certificate
Interest Rates
= (7.0% Y3 + 7.25% Y2)/(Y3 + Y2)
r2 = the weighted average of the Class C-Y-1 and Class C-Y-2 Certificate
Interest Rates
= (7.5% Y1 + 7.25% Y2)/(Y1 + Y2)
Y3 = the Class C-Y-3 Principal Balance after distributions on the
prior Distribution Date.
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.
DELTAY3 = the Class C-Y-3 Principal Reduction Amount.
DELTAY1 = the Class C-Y-1 Principal Reduction Amount.
DELTAY2 = the Class C-Y-2 Principal Reduction Amount.
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.
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.
DELTAP3 = the aggregate of the Class C-Y-3 and Class C-Z-3 Principal
<PAGE> 16
Reduction Amounts.
DELTAP1= the aggregate of the Class C-Y-1 and Class C-Z-1 Principal
Reduction Amounts.
DELTAP2 = the aggregate of the Class C-Y-2 and Class C-Z-2 Principal
Reduction Amounts.
Alpha= .0005
Gamma1 = (R - R1)/(7.5% - R). If R>= 7.25%, Gamma1 is a non-negative
number unless its denominator is zero, in which event it is
undefined.
Gamma2 = (R - 7.0%)/( R2 - R). If R<7.25%, Gamma2 is a non-negative
number.
If Gamma1 is undefined, DELTAY3 = Y3, DELTAY1 = (Y1/P1)DELTAP1, and
DELTAY2 = Y2.
If Gamma2 is zero, DELTAY1 = Y1, DELTAY3 = (Y3/P3)DELTAP3, and DELTAY2 =
Y2.
In the remaining situations, DELTAY3, DELTAY1 and DELTAY2 shall be
defined as follows:
I. If R >= 7.25% and r1>= R1, make the following additional
definitions:
SigmaY2 = ((7.0% - R1)/(7.25% - R1))Y3 + Y2
SigmaY2 is a number between Y2 and 0 such that (7.0%Y3 + 7.25%( Y2.-
SigmaY2))/(Y3 + Y2.- SigmaY2) = R1.
Y4 = Y3 + Y2.- SigmaY2
P4 = P3 + P2.
DELTAY4 = DELTAY3 + DELTAY2.- SigmaY2
1. If Y1 - alpha DELTAP1 - DELTAP1) >= 0, Y4- alphaDELTAP4 - DELTAP4)
>= 0, and Gamma1DELTAP4 - DELTAP4) < DELTAP1 - DELTAP1), DELTAY1 = Y1 -
alphaGamma1DELTAP4 - DELTAP4) and DELTAY4 = Y4 - alphaDELTAP4 -
DELTAP4).
2. If Y1 - alphaDELTAP1 - DELTAP1) >= 0, Y4 - alphaDELTAP4 - DELTAP4)
>= 0, and Gamma1DELTAP4 - DELTAP4) >= DELTAP1 - DELTAP1),
DELTAY1 = Y1 - alphaDELTAP1 - DELTAP1) and
DELTAY4 = Y4 - (alpha/Gamma1)DELTAP1 - DELTAP1).
3. If Y1 - alphaDELTAP1 - DELTAP1) < 0, Y4 - alphaDELTAP4 - DELTAP4)
<PAGE> 17
>= 0, and Y4 - alphaDELTAP4 - DELTAP4) >= Y4 - (Y1/Gamma1),
DELTAY1 = Y1 - alphaGamma1DELTAP4 - DELTAP4) and
DELTAY4 = Y4 - alphaDELTAP4 - DELTAP4).
4. If Y1 - alphaDELTAP1 - DELTAP1) < 0, Y4 - (Y1/Gamma1) >= 0, and
Y4 - alphaDELTAP4 - DELTAP4) Y4 - (Y1/Gamma1), DELTAY1 = 0 and
DELTAY4 = Y4 - (Y1/Gamma1).
5. If Y4 - alphaDELTAP4 - DELTAP4) < 0, Y4 - (Y1/Gamma1) < 0, and
Y1 - alphaDELTAP1 - DELTAP1) Y1 - (Gamma1Y4), DELTAY1 = Y1 - (Gamma1Y4)
and DELTAY4 = 0.
6. If Y4 - alphaDELTAP4 - DELTAP4) < 0, Y1 - alphaDELTAP1 - DELTAP1)
>= 0, and Y1 - alphaDELTAP1 - DELTAP1) >= Y1 - (Gamma1Y4),
DELTAY1 = Y1 - alphaDELTAP1 - DELTAP1) and
DELTAY4 = Y4 - (alpha/Gamma1)DELTAP1 - DELTAP1).
DELTAY3 = [Y3/(Y3 + Y2 - SigmaY2)]DELTAY4
DELTAY2 = SigmaY2 + [Y2/(Y3 + Y2 - SigmaY2)]DELTAY4
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 Y1 to Y4 equal to Gamma1 after taking account
of the allocation of Realized Losses and the distributions that will be
made through end of the Distribution Date to which such provisions
relate and assuring that the Principal Reduction Amount for each of the
Class C-Y-1, Class C-Y-2, Class C-Y-3, Class C-Z-1 Class C-Z-2 and Class
C-Z-3 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 and the Class
C-Y-3 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 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 the Class C-Z-1 Principal Balance
and (b) the fraction whose numerator is Y4 and whose denominator is the
sum of Y4, 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
<PAGE> 18
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 (if applicable) after the
allocation of such Realized Losses to the Class D-P-M Regular Interest
and (b) the remainder of the REMIC I Available Distribution Amount for
the related Loan Group after reduction thereof by the distributions to
be made on such Distribution Date (i) (if applicable) to the Class D-P-M
Regular Interest, (ii) to the related Class X-M Regular Interests 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 DELTAY4 between DELTAY3 and DELTAY2 cannot be achieved
because either DELTAY3 as so defined is greater than P3 or DELTAY2 as so
defined is greater than P2, such an allocation shall be made as close as
possible to the formula allocation within the requirement that DELTAY3 <
P3 and DELTAY2 < P2.
II. If R>= 7.25% and r1<R1, make the following additional definitions:
SigmaY3 = Y3 + ((R1 - 7.25%)/(R1 - 7.0%))Y2
SigmaY3 is a number between Y3 and 0 such that (7.0%(Y3 - SigmaY3) +
7.25%Y2)/(Y3 - SigmaY3 + Y2.) = R1.
Y5 = Y3 - SigmaY3 + Y2.
P5 = P3 + P2.
DELTAY5 = DELTAY3 - SigmaY3 + DELTAY2.
1. If Y1 - alphaDELTAP1 - DELTAP1) >= 0, Y5- alphaDELTAP5 - DELTAP5)
>= 0, and Gamma1DELTAP5 - DELTAP5) < DELTAP1 - DELTAP1), DELTAY1 = Y1 -
alphaGamma1DELTAP5 - DELTAP5) and DELTAY5 = Y5 - alphaDELTAP5 -
DELTAP5).
2. If Y1 - alphaDELTAP1 - DELTAP1) >= 0, Y5 - alphaDELTAP5 - DELTAP5)
>= 0, and Gamma1DELTAP5 - DELTAP5) >= DELTAP1 - DELTAP1),
DELTAY1 = Y1 - alphaDELTAP1 - DELTAP1) and
DELTAY5 = Y5 - (alpha/Gamma1)DELTAP1 - DELTAP1).
3. If Y1 - alphaDELTAP1 - DELTAP1) < 0, Y5 - alphaDELTAP5 - DELTAP5)
>= 0, and Y5 - alphaDELTAP5 - DELTAP5) >= Y5 - (Y1/Gamma1),
DELTAY1 = Y1 - alphaGamma1DELTAP5 - DELTAP5) and
DELTAY5 = Y5 - alphaDELTAP5 - DELTAP5).
4. If Y1 - alphaDELTAP1 - DELTAP1) < 0, Y5 - (Y1/Gamma1) >= 0, and
<PAGE> 19
Y5 - alphaDELTAP5 - DELTAP5) Y5 - (Y1/Gamma1), DELTAY1 = 0 and
DELTAY5 = Y5 - (Y1/Gamma1).
5. If Y5 - alphaDELTAP5 - DELTAP5) < 0, Y5 - (Y1/Gamma1) < 0, and
Y1 - alphaDELTAP1 - DELTAP1) Y1 - (Gamma1Y5), DELTAY1 = Y1 - (Gamma1Y5)
and DELTAY5 = 0.
6. If Y5 - alphaDELTAP5 - DELTAP5) < 0, Y1 - alphaDELTAP1 - DELTAP1)
>= 0, and Y1 - alphaDELTAP1 - DELTAP1) >= Y1 - (Gamma1Y5),
DELTAY1 = Y1 - alphaDELTAP1 - DELTAP1) and
DELTAY5 = Y5 - (alpha/Gamma1)DELTAP1 - DELTAP1).
DELTAY3 = SigmaY3 + [(Y3 - SigmaY3)/(Y3 - SigmaY3 + Y2)]DELTAY5
DELTAY2 = [Y2/(Y3 - SigmaY3 + Y2)]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 Y1 to Y5 equal to Gamma1 after taking account
of the allocation of Realized Losses and the distributions that will be
made through end of the Distribution Date to which such provisions
relate and assuring that the Principal Reduction Amount for each of the
Class C-Y-1, Class C-Y-2, Class C-Y-3, Class C-Z-1 Class C-Z-2 and Class
C-Z-3 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 and the Class
C-Y-3 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 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 the Class C-Z-1 Principal Balance
and (b) the fraction whose numerator is Y5 and whose denominator is the
sum of Y5, 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 (if applicable) after the
allocation of such Realized Losses to the Class D-P-M Regular Interest
<PAGE> 20
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) (if applicable) to the Class D-P-M
Regular Interest, (ii) to the related Class X-M Regular Interests 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 between DELTAY3 and DELTAY2 cannot be achieved
because either DELTAY3 as so defined is greater than P3 or DELTAY2 as so
defined is greater than P2, such an allocation shall be made as close as
possible to the formula allocation within the requirement that DELTAY3 <
P3 and DELTAY2 < P2.
III. If R7.25% and r2>= R2, make the following additional definitions:
SigmaY1 = ((7.25% - R2)/(7.5% - R2))Y2 + Y1
SigmaY1 is a number between Y1 and 0 such that (7.25%Y2 + 7.5%( Y1.-
SigmaY1))/(Y2 + Y1.- SigmaY1) = R2.
Make the following additional definitions:
Y6 = Y1 - SigmaY1 + Y2.
P6 = P1 + P2.
DELTAY6 = DELTAY1 - SigmaY1 + DELTAY2.
1. If Y6 - alphaDELTAP6 - DELTAP6) >= 0, Y3- alphaDELTAP3 - DELTAP3)
>= 0, and Gamma2DELTAP3 - DELTAP3) < DELTAP6 - DELTAP6), DELTAY6 = Y6 -
alphaGamma2DELTAP3 - DELTAP3) and DELTAY3 = Y3 - alphaDELTAP3 -
DELTAP3).
2. If Y6 - alphaDELTAP6 - DELTAP6) >= 0, Y3 - alphaDELTAP3 - DELTAP3)
>= 0, and Gamma2DELTAP3 - DELTAP3) >= DELTAP6 - DELTAP6),
DELTAY6 = Y6 - alphaDELTAP6 - DELTAP6) and
DELTAY3 = Y3 - (alpha/Gamma2)DELTAP6 - DELTAP6).
3. If Y6 - alphaDELTAP6 - DELTAP6) < 0, Y3 - alphaDELTAP3 - DELTAP3)
>= 0, and Y3 - alphaDELTAP3 - DELTAP3) >= Y3 - (Y6/Gamma2),
DELTAY6 = Y6 - alphaGamma2DELTAP3 - DELTAP3) and
DELTAY3 = Y3 - alphaDELTAP3 - DELTAP3).
4. If Y6 - alphaDELTAP6 - DELTAP6) < 0, Y3 - (Y6/Gamma2) >= 0, and
<PAGE> 21
Y3 - alphaDELTAP3 - DELTAP3) Y3 - (Y6/Gamma2), DELTAY6 = 0 and
DELTAY3 = Y3 - (Y6/Gamma2).
5. If Y3 - alphaDELTAP3 - DELTAP3) < 0, Y3 - (Y6/Gamma2) < 0, and
Y6 - alphaDELTAP6 - DELTAP6) Y6 - (Gamma2Y3), DELTAY6 = Y6 - (Gamma2Y3)
and DELTAY3 = 0.
6. If Y3 - alphaDELTAP3 - DELTAP3) < 0, Y6 - alphaDELTAP6 - DELTAP6)
>= 0, and Y6 - alphaDELTAP6 - DELTAP6) >= Y6 - (Gamma2Y3),
DELTAY6 = Y6 - alphaDELTAP6 - DELTAP6) and
DELTAY3 = Y3 - (alpha/Gamma2)DELTAP6 - DELTAP6).
DELTAY1 = SigmaY1 + [(Y1 - SigmaY1)/(Y1 - SigmaY1 + Y2)]DELTAY6
DELTAY2 = [Y2/(Y1 - SigmaY1 + Y2)]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 Y3 to Y6 equal to Gamma2 after taking account
of the allocation of Realized Losses and the distributions that
will be made through end of the Distribution Date to which such
provisions relate and assuring that the Principal Reduction Amount
for each of the Class C-Y-1, Class C-Y-2, Class C-Y-3, Class C-Z-1
Class C-Z-2 and Class C-Z-3 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 and the Class
C-Y-3 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 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 Y3 and
whose denominator is the sum of Y3 and the Class C-Z-3 Principal Balance
and (b) the fraction whose numerator is Y6 and whose denominator is the
sum of Y6, the Class C-Z-1 Principal Balance and the Class C-Z-2
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 (if applicable) after the
<PAGE> 22
allocation of such Realized Losses to the Class D-P-M Regular Interest
and (b) the remainder of the REMIC I Available Distribution Amount for
the related Loan Group after reduction thereof by the distributions to
be made on such Distribution Date (i) (if applicable) to the Class D-P-M
Regular Interest, (ii) to the related Class X-M Regular Interests 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 DELTAY6 between DELTAY1 and DELTAY2 cannot be achieved
because either DELTAY1 as so defined is greater than P1 or DELTAY2 as so
defined is greater than P2, such an allocation shall be made as close as
possible to the formula allocation within the requirement that DELTAY1 <
P1 and DELTAY2 < P2.
IV. If R<7.25% and r2<R2, make the following additional definitions:
SigmaY2 = Y2 + ((R2 - 7.5%)/(R2 - 7.25%))Y1
SigmaY2 is a number between Y2 and 0 such that (7.25%(Y2 - SigmaY2) +
7.5%Y1)/(Y2 - SigmaY2 + Y1.) = R2.
Y7 = Y2 - SigmaY2 + Y1.
P7 = P2 + P1.
DELTAY7 = DELTAY2 - SigmaY2 + DELTAY1.
1. If Y7 - alphaDELTAP7 - DELTAP7) >= 0, Y3- alphaDELTAP3 - DELTAP3)
>= 0, and Gamma2DELTAP3 - DELTAP3) < DELTAP7 - DELTAP7), DELTAY7 = Y7 -
alphaGamma2DELTAP3 - DELTAP3) and DELTAY3 = Y3 - alphaDELTAP3 -
DELTAP3).
2. If Y7 - alphaDELTAP7 - DELTAP7) >= 0, Y3 - alphaDELTAP3 - DELTAP3)
>= 0, and Gamma2DELTAP3 - DELTAP3) >= DELTAP7 - DELTAP7),
DELTAY7 = Y7 - alphaDELTAP7 - DELTAP7) and
DELTAY3 = Y3 - (alpha/Gamma2)DELTAP7 - DELTAP7).
3. If Y7 - alphaDELTAP7 - DELTAP7) < 0, Y3 - alphaDELTAP3 - DELTAP3)
>= 0, and Y3 - alphaDELTAP3 - DELTAP3) >= Y3 - (Y7/Gamma2),
DELTAY7 = Y7 - alphaGamma2DELTAP3 - DELTAP3) and
DELTAY3 = Y3 - alphaDELTAP3 - DELTAP3).
4. If Y7 - alphaDELTAP7 - DELTAP7) < 0, Y3 - (Y7/Gamma2) >= 0, and
Y3 - alphaDELTAP3 - DELTAP3) Y3 - (Y7/Gamma2), DELTAY7 = 0 and
DELTAY3 = Y3 - (Y7/Gamma2).
<PAGE> 23
5. If Y3 - alphaDELTAP3 - DELTAP3) < 0, Y3 - (Y7/Gamma2) < 0, and
Y7 - alphaDELTAP7 - DELTAP7) Y7 - (Gamma2Y3), DELTAY7 = Y7 - (Gamma2Y3)
and DELTAY3 = 0.
6. If Y3 - alphaDELTAP3 - DELTAP3) < 0, Y7 - alphaDELTAP7 - DELTAP7)
>= 0, and Y7 - alphaDELTAP7 - DELTAP7) >= Y7 - (Gamma2Y3),
DELTAY7 = Y7 - alphaDELTAP7 - DELTAP7) and
DELTAY3 = Y3 - (alpha/Gamma2)DELTAP7 - DELTAP7).
DELTAY1 = [(Y1/(Y1 + Y2 - SigmaY2)]DELTAY7
DELTAY2 = SigmaY2 + [(Y2 - SigmaY2)/(Y1 + Y2 - SigmaY2)]DELTAY7
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 Y3 to Y7 equal to Gamma2 after taking account
of the allocation of Realized Losses and the distributions that will be
made through end of the Distribution Date to which such provisions
relate and assuring that the Principal Reduction Amount for each of the
Class C-Y-1, Class C-Y-2, Class C-Y-3, Class C-Z-1 Class C-Z-2 and Class
C-Z-3 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 and the Class
C-Y-3 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 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 Y3 and
whose denominator is the sum of Y3 and the Class C-Z-3 Principal Balance
and (b) 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 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 (if applicable) after the
allocation of such Realized Losses to the Class D-P-M Regular Interest
and (b) the remainder of the REMIC I Available Distribution Amount for
the related Loan Group after reduction thereof by the distributions to
<PAGE> 24
be made on such Distribution Date (i) (if applicable) to the Class D-P-M
Regular Interest, (ii) to the related Class X-M Regular Interests 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 cannot be achieved
because either DELTAY1 as so defined is greater than P1 or DELTAY2 as so
defined is greater than P2, such an allocation shall be made as close as
possible to the formula allocation within the requirement that DELTAY1 <
P1 and DELTAY2 < P2.
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 alpha
DELTA delta
Gamma gamma
The Class Principal Balances for the Class C-Y-1, Class C-Y-2 and
Class C-Y-3 Regular Interests as of the Cut-Off Date should be
calculated as follows: First, calculate the Cut-Off Date values for P3,
P1 and P2. Then calculate the Cut-Off Date value of R using those
balances and the Senior Certificate balances.
If R>= 7.25%,calculate R1 = (7%P3 + 7.25%P2)/DELTAP3 + P2) and
Gamma1 =(R - R1)/(7.5% - R).
If P1 Gamma1DELTAP3 + P2), the Cut-Off Date principal balance of
the Class C-Y-1 Regular Interest (Y1) equals 0.0005P1 and the Cut-Off
Date principal balances of the Class C-Y-3 and Class C-Y-2 Regular
Interests (Y3 and Y2) equal 0.0005 P3P1/[Gamma1DELTAP3 + P2)] and 0.0005
P2P1/[Gamma1DELTAP3 + P2)], respectively.
If P1 > Gamma1DELTAP3 + P2), the Cut-Off Date principal balances of
the Class C-Y-3 and Class C-Y-2 Regular Interests (Y3 and Y2) equal
0.0005 P3 and 0.0005 P2, respectively, and the Cut-Off Date principal
balance of the Class C-Y-1 Regular Interest (Y1) equals
0.0005Gamma1DELTAP3 + P2).
If R<7.25%,calculate R2 = (7.5%P1 + 7.25%P2)/DELTAP1 + P2) and
Gamma2 =(R - 7%)/( R2 - R).
<PAGE> 25
If P1 + P2 Gamma2P3, the Cut-Off Date principal balances of the
Class C-Y-1 and Class C-Y-2 Regular Interests (Y1 and Y2) equal 0.0005P1
and 0.0005P2, respectively, and the Cut-Off Date principal balance of
the Class C-Y-3 Regular Interest (Y3) equals 0.0005 DELTAP1 +
P2)/Gamma2.
If P1 + P2> Gamma2P3, the Cut-Off Date principal balance of the
Class C-Y-3 Regular Interest (Y3) equals 0.0005 P3 and the Cut-Off Date
principal balances of the Class C-Y-1 and Class C-Y-2 Regular Interests
(Y1 and Y2) equal 0.0005Gamma2P3P1/DELTAP1 +P2) and
0.0005Gamma2P3P2/DELTAP1 +P2), respectively.
Class C-Z Regular Interests: The Class C-Z-1, Class C-Z-2 and Class
C-Z-3 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 and Class C-Z-3 Regular Interests, respectively, will be
reduced on such Distribution Date by the allocation of Realized Losses
and the distribution of principal, which shall be in each case the
excess of (A) the sum of (x) the excess of the REMIC I Available
Distribution Amount for the related Loan Group (i.e. the "related Loan
Group" for the Class C-Z-1 Regular Interest is Loan Group II, the
"related Loan Group" for the Class C-Z-2 Regular Interest is Loan Group
III and the "related Loan Group" for the Class C-Z-3 Regular Interest is
Loan Group IV) over the sum of the amounts thereof distributable (i) to
the Class D-P-M Regular Interest in respect of principal on related
Class P-M Mortgage Loans (in the case of Loan Group III and Loan Group
IV), (ii) to the related Class 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 III and Loan
Group IV, the excess of such amount over the portion of such amount
allocable to the Class D-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
<PAGE> 26
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 D-P Certificates: The Certificates designated as "Class D-P"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class D-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-A-1 Certificates: The Certificates designated as "Class I-A-
1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-1-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-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-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 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-3-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-A-4 Certificates: The Certificates designated as "Class I-A-
4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-4-M Regular Interest: The uncertificated partial
<PAGE> 27
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-A-5 Accretion Termination Date: The earlier to occur of (i)
the Distribution Date on which the Component I-A-1-4 Principal Balance
has been reduced to zero and (ii) the Group I Credit Support Depletion
Date.
Class I-A-5 Accrual Amount: On any Distribution Date, an amount
equal to the amount allocable to the Class I-A-5-M Regular Interest on
such Distribution Date pursuant to the definition of "Interest
Distribution Amount." Notwithstanding the foregoing, for any
Distribution Date after the Class I-A-5 Accretion Termination Date, the
Class I-A-5 Accrual Amount shall be zero.
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-5-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-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-6-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-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-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 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-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.
<PAGE> 28
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-3-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-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-4-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-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-5-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-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-B-6-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-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 7.000% less the Pass-Through Rate on such
Class I-P Mortgage Loan and the denominator of which is 7.000%.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate
of less than 7.000% 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"
<PAGE> 29
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 7.000%.
Class I-X-M Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-A-1 Certificates: The Certificates designated as "Class II-
A-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-2 Certificates: The Certificates designated as "Class II-
A-2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-3 Certificates: The Certificates designated as "Class II-
A-3" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-4 Certificates: The Certificates designated as "Class II-
A-4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-4 Rounding Account: The separate trust account
maintained with the Trustee pursuant to Section 3.21, 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 Class II-A-4 Certificateholders, or any other account serving a
similar function acceptable to the Rating Agencies, and which account
provides that the Trustee may make, or cause to be made, withdrawals as
provided in Section 3.21 hereof, to the extent of the amount then
remaining in the Class II-A-4 Rounding Account.
Class II-A-5 Certificates: The Certificates designated as "Class II-
A-5" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-6 Certificates: The Certificates designated as "Class II-
A-6" on the face thereof in substantially the form attached hereto as
Exhibit A.
<PAGE> 30
Class II-A-7 Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in September 2004, 0%; and for
the Distribution Date occurring in September 2004 and any Distribution
Date thereafter, the Class II-A-7 Percentage.
Class II-A-7 Certificates: The Certificates designated as "Class II-
A-7" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-7 Liquidation Amount: The aggregate, for each Group II
Loan which became a Liquidated Mortgage Loan during the calendar month
preceding the month of the Distribution Date, of the lesser of (i) the
Class II-A-7 Percentage of the Principal Balance of such Mortgage Loan
and (ii) the Class II-A-7 Percentage of the Liquidation Principal with
respect to such Mortgage Loan.
Class II-A-7 Percentage: For any Distribution Date, the lesser of
(i) 100% and (ii) the Class II-A-7 Principal Balance divided by the
aggregate Principal Balance of the Group II Loans, in each case
immediately prior to such Distribution Date.
Class II-A-7 Prepayment Percentage: For any Distribution Date, the
product of the Class II-A-7 Percentage and the Step Down Percentage.
Class II-A-7 Priority Amount: For any Distribution Date, the sum of
(i) the Class II-A-7 Adjusted Percentage of the Principal Payment Amount
for Loan Group II, (ii) the Class II-A-7 Prepayment Percentage of the
Principal Prepayment Amount for Loan Group II and (iii) the Class II-A-7
Liquidation Amount.
Class II-A-8 Certificates: The Certificates designated as "Class II-
A-8" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-8 Interest Supplement Account: The separate trust
account maintained by the Master Servicer and held by the Trustee, 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 Class II-A-8 Certificateholders, or any other account
serving a similar function acceptable to the Rating Agencies, and which
account provides that the Trustee may make, or cause to be made,
withdrawals therefrom in accordance with Section 3.16.
Class II-A-8 Interest Supplement Amount: For each of the first
twenty-four Distribution Dates, an amount equal to the Class II-A-8
Principal Balance on such Distribution Date (before giving effect to
allocations of Realized Losses for the Prior Period and distributions to
be made on such Distribution Date) multiplied by 1/12th of 0.500%.
Class II-A-8 Rounding Account: The separate trust account
maintained with the Trustee pursuant to Section 3.21, which account
shall bear a designation clearly indicating that the funds deposited
<PAGE> 31
therein are held in trust for the benefit of the Trustee on behalf of
the Class II-A-8 Certificateholders, or any other account serving a
similar function acceptable to the Rating Agencies, and which account
provides that the Trustee may make, or cause to be made, withdrawals as
provided in Section 3.21 hereof, to the extent of the amount then
remaining in the Class II-A-8 Rounding Account.
Class III-A-1 Certificates: The Certificates designated as "Class
III-A-1" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-1 Reimbursement Amount: The sum of (a) all amounts
previously paid by the Certificate Insurer under the Certificate
Insurance Policy which have not been previously reimbursed and (b)
interest on the foregoing at the Late Payment Rate from the date such
amount was paid by the Certificate Insurer until paid in full.
Class III-A-2 Certificates: The Certificates designated as "Class
III-A-2" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-3 Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in September 2004, 0%; and for
the Distribution Date occurring in September 2004 and any Distribution
Date thereafter, the Class III-A-3 Percentage.
Class III-A-3 Certificates: The Certificates designated as "Class
III-A-3" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-3 Liquidation Amount: The aggregate, for each Group III
Loan which became a Liquidated Mortgage Loan during the calendar month
preceding the month of the Distribution Date, of the lesser of (i) the
Class III-A-3 Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class III-P Fraction thereof, with respect to any
Class III-P Mortgage Loan) and (ii) the Class III-A-3 Percentage of the
Liquidation Principal with respect to such Mortgage Loan.
Class III-A-3 Percentage: For any Distribution Date, the lesser of
(i) 100% and (ii) the Class III-A-3 Principal Balance divided by the
aggregate Principal Balance of the Group III Loans (less the Class III-P
Fraction of each Class III-P Mortgage Loan), in each case immediately
prior to such Distribution Date.
Class III-A-3 Prepayment Percentage: For any Distribution Date, the
product of the Class III-A-3 Percentage and the Step Down Percentage.
Class III-A-3 Priority Amount: For any Distribution Date, the sum
of (i) the Class III-A-3 Adjusted Percentage of the Principal Payment
Amount for Loan Group III (exclusive of the portion thereof attributable
to principal distributions to the Class D-P Certificates in respect of
Class III-P Mortgage Loans pursuant to clause (I)(c)(i) of the
<PAGE> 32
definition of "REMIC II Distribution Amount"), (ii) the Class III-A-3
Prepayment Percentage of the Principal Prepayment Amount for Loan Group
III (exclusive of the portion thereof attributable to principal
distributions to the Class D-P Certificates in respect of Class III-P
Mortgage Loans pursuant to clause (I)(c)(i) of the definition of "REMIC
II Distribution Amount") and (iii) the Class III-A-3 Liquidation Amount.
Class III-A-4 Certificates: The Certificates designated as "Class
III-A-4" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-5 Certificates: The Certificates designated as "Class
III-A-5" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-5 Rounding Account: The separate trust account
maintained with the Trustee pursuant to Section 3.21, 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 Class III-A-5 Certificateholders, or any other account serving a
similar function acceptable to the Rating Agencies, and which account
provides that the Trustee may make, or cause to be made, withdrawals as
provided in Section 3.21 hereof, to the extent of the amount then
remaining in the Class III-A-5 Rounding Account.
Class III-A-6 Certificates: The Certificates designated as "Class
III-A-6" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-7 Certificates: The Certificates designated as "Class
III-A-7" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-P Fraction: For each Class III-P Mortgage Loan, a
fraction, the numerator of which is 7.250% less the Pass-Through Rate on
such Class III-P Mortgage Loan and the denominator of which is 7.250%.
Class III-P Mortgage Loan: Any Group III Loan with a Pass-Through
Rate of less than 7.250% per annum.
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 IV-A-2 Certificates: The Certificates designated as "Class IV-
A-2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-A-3 Certificates: The Certificates designated as "Class IV-
A-3" on the face thereof in substantially the form attached hereto as
Exhibit A.
<PAGE> 33
Class IV-P Fraction: For each Class IV-P Mortgage Loan, a fraction,
the numerator of which is 7.000% less the Pass-Through Rate on such
Class IV-P Mortgage Loan and the denominator of which is 7.000%.
Class IV-P Mortgage Loan: Any Group IV Loan with a Pass-Through
Rate of less than 7.000% per annum.
Class IV-X-1 Certificates: The Certificates designated as "Class IV-
X-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 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 IV-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 IV-X-1 Premium Rate Mortgage Loans as of
such Due Date and the denominator of which is 7.000%.
Class IV-X-1 Premium Rate Mortgage Loan: A Group IV Loan that has a
Mortgage Interest Rate less than or equal to 8.625% per annum and a Pass-
Through Rate in excess of 7.000% per annum.
Class IV-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 IV-X-2 Certificates: The Certificates designated as "Class IV-
X-2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 IV-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 IV-X-2 Premium Rate Mortgage Loans as of
such Due Date and the denominator of which is 7.000%.
Class IV-X-2 Premium Rate Mortgage Loan: A Group IV Loan that has a
Mortgage Interest Rate greater than 8.625% per annum and a Pass-Through
Rate in excess of 7.000% per annum.
<PAGE> 34
Class IV-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 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 D-P Certificates.
Class P Fraction: The Class I-P, Class III-P or Class IV-P
Fraction, as applicable.
Class P Mortgage Loan: Any of the Class I-P, Class III-P or Class
IV-P Mortgage Loans.
Class P-M Regular Interests: The Class I-P-M and Class D-P-M
Regular Interests.
Class Principal Balance: For any Class of Certificates (other than
the Class I-A-1 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 (including, with respect to
the Class I-A-4 and Class I-A-5 Certificates and the Class I-A-1-M,
Class I-A-4-M and Class I-A-5-M Regular Interests, the portion of the
Component I-A-1-4 Accrual Amount or Class I-A-5 Accrual Amount, as
applicable, distributed to such Classes) 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." In addition to the foregoing, (i) on
each Distribution Date on or before the Class I-A-5 Accretion
Termination Date, the Class I-A-5-M and Class I-A-5 Principal Balance
will each be increased by the Class I-A-5 Accrual Amount for such
Distribution Date and (ii) on each Distribution Date on or before the
Component I-A-1-4 Accretion Termination Date, the Class I-A-1-M
Principal Balance will be increased by the Component I-A-1-4 Accrual
Amount for such Distribution Date. Notwithstanding the foregoing, (a)
any amounts distributed in respect of losses pursuant to paragraph
<PAGE> 35
(a)(I)(v) or (a)(I)(vi) of the definition of "REMIC I Distribution
Amount" shall not cause a further reduction in the Class I-P-M Principal
Balance, (b) any amounts distributed in respect of losses pursuant to
paragraph (a)(I)(xxv) of the definition of "REMIC I Distribution Amount"
shall not cause a further reduction in the Class Principal Balances of
the Group I-B-M Regular Interests, (c) any amounts distributed in
respect of losses pursuant to paragraph (I)(e)(i) or (I)(e)(ii) of the
definition of "REMIC II Distribution Amount" shall not cause a further
reduction in the Class D-P Principal Balance and (d) any amounts
distributed in respect of losses pursuant to paragraph (I)(e)(xxii) of
the definition of "REMIC II Distribution Amount" shall not cause a
further reduction in the Class Principal Balances of the Group C-B
Certificates. The Class Principal Balance for the Class I-A-1
Certificates shall be referred to as the "Class I-A-1 Principal
Balance," the Class Principal Balance for the Class C-Y-1 Regular
Interest 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. The Class I-A-1
Principal Balance shall equal the Component I-A-1-4 Principal Balance.
Exclusively for the purpose of determining any subrogation rights of the
Certificate Insurer arising under Section 3.22 hereof, "Class Principal
Balance" of the Class III-A-1 Certificates shall not be reduced by the
amount of any payments made by the Certificate Insurer in respect of
principal on such Certificates under the Certificate Insurance Policy,
except to the extent such payments have been reimbursed to the
Certificate Insurer pursuant to the provisions of this Agreement.
Class X Certificates: The Class I-X, Class A-X-1, Class A-X-2,
Class IV-X-1 and Class IV-X-2 Certificates.
Class X-M Regular Interests: The Class I-X-M, Class A-X-1-M, Class
A-X-2-M, Class IV-X-1-M and Class IV-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.
Class R-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.
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.
<PAGE> 36
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.
Clipper Mortgage Loan Purchase Amount: The amount of
$432,590,543.67, 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: August 31, 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.
Component: A portion of the Class I-A-1 Certificates representing
part of the entitlement of such Class to principal and/or interest as
set forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-1: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-1 Notional Amount: For any Distribution Date, the
Class I-A-2 Principal Balance multiplied by 30/700.
Component I-A-1-2: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-2 Notional Amount: For any Distribution Date, the
Class I-A-3 Principal Balance multiplied by 25/700.
Component I-A-1-3: A portion of the Class I-A-1 Certificates
<PAGE> 37
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-3 Notional Amount: For any Distribution Date, the
Class I-A-4 Principal Balance multiplied by 75/700.
Component I-A-1-4: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to principal and
interest as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Component I-A-1-4 Accretion Termination Date: The earlier to occur
of (i) the Distribution Date on which the Class I-A-4 Principal Balance
has been reduced to zero and (ii) the Group I Credit Support Depletion
Date.
Component I-A-1-4 Accrual Amount: On any Distribution Date, an
amount equal to the amount allocable to the Class I-A-1-M Regular
Interest on such Distribution Date pursuant to the definition of
"Interest Distribution Amount." Notwithstanding the foregoing, for any
Distribution Date after the Component I-A-1-4 Accretion Termination
Date, the Component I-A-1-4 Accrual Amount shall be zero.
Component I-A-1-4 Principal Balance: The initial Component I-A-1-4
Principal Balance set forth in the Preliminary Statement hereto,
corresponding to the rights of Component I-A-1-4 in payments of
principal due to be passed through to the Certificateholders from
principal payments on the REMIC I Regular Interests, as reduced from
time to time by (x) distributions of principal to the Class I-A-1
Certificates in respect of Component I-A-1-4 (including the portions of
the Component I-A-1-4 Accrual Amount and Class I-A-5 Accrual Amount
distributed to Component I-A-1-4) and (y) the portion of Realized Losses
allocated to the Component I-A-1-4 Principal Balance pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date.
In addition to the foregoing, on each Distribution Date on or before the
Component I-A-1-4 Accretion Termination Date, the Component I-A-1-4
Principal Balance will be increased by the Component I-A-1-4 Accrual
Amount for such Distribution Date. For any Distribution Date, the
reduction of the Component I-A-1-4 Principal Balance pursuant to the
definition of "Realized Loss" shall be deemed effective prior to the
determination and distribution of principal on Component I-A-1-4
pursuant to the definition of "REMIC II Distribution Amount".
Component Notional Amount: With respect to Component I-A-1-1, the
Component I-A-1-1 Notional Amount, with respect to Component I-A-1-2,
the Component I-A-1-2 Notional Amount and with respect to Component I-A-
1-3, the Component I-A-1-3 Notional Amount.
Component Principal Balance: With respect to Component I-A-1-4,
the Component I-A-1-4 Principal Balance. With respect to Component I-A-1-
1, Component I-A-1-2 and Component I-A-1-3, zero.
<PAGE> 38
Cooperative: A private, cooperative housing corporation organized
under the laws of, and headquartered in, the State of New York, which
owns or leases land and all or part of a building or buildings located
in such state, including apartments, spaces used for commercial purposes
and common areas therein and whose board of directors authorizes, among
other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an
exclusive right to occupy pursuant to the terms of a proprietary lease
or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary lease or occupancy agreement with respect to the Cooperative
Apartment occupied by the Mortgagor and relating to the related
Cooperative Stock, which lease or agreement confers an exclusive right
to the holder of such Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate,
(iii) an assignment or mortgage of the Cooperative Lease, (iv) financing
statements and (v) a stock 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 1999-9.
Corresponding Class: With respect to the Group I and Class R-2
Certificates and the Group I-M Regular Interests, the "Corresponding
Class" shall be as indicated in the following table:
Class I-A-2-M Class I-A-2
Class I-A-3-M Class I-A-3
Class I-A-4-M Class I-A-4
Class I-A-5-M Class I-A-5
Class I-X-M Class I-X
<PAGE> 39
Class I-P-M Class I-P
Class I-B-1-M Class I-B-1
Class I-B-2-M Class I-B-2
Class I-B-3-M Class I-B-3
Class I-B-4-M Class I-B-4
Class I-B-5-M Class I-B-5
Class I-B-6-M Class I-B-6
Class R-2-M Class R-2
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 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
<PAGE> 40
any creditors or depositors of the institution in which such account is
maintained, (b) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to the Rating Agencies)
created, maintained and monitored by a Servicer or (c) in a separate non-
trust account without FDIC or other insurance in an Eligible
Institution. In the event that a Custodial Account for Reserves is
established pursuant to clause (b) of the preceding sentence, amounts
held in such Custodial Account for Reserves shall not exceed the level
of deposit insurance coverage on such account; accordingly, more than
one Custodial Account for Reserves may be established. Any amount that
is at any time not protected or insured in accordance with the first
sentence of this definition of "Custodial Account for Reserves" shall
promptly be withdrawn from such Custodial Account for Reserves and be
remitted to the Investment Account.
Custodial Agreement: The agreement, if any, among the Master
Servicer, the Trustee and a Custodian providing for the safekeeping of
the Mortgage Files on behalf of the Certificateholders.
Custodian: A custodian (other than the Trustee) which is not an
affiliate of the Master Servicer or the Company and which is appointed
pursuant to a Custodial Agreement. Any Custodian so appointed shall act
as agent on behalf of the Trustee, and shall be compensated by the
Trustee at no additional charge to the Master Servicer. The Trustee
shall remain at all times responsible under the terms of this Agreement,
notwithstanding the fact that certain duties have been assigned to a
Custodian.
Cut-Off Date: August 1, 1999.
DCR: Duff and Phelps Credit Rating Co., provided that at any time
it be a Rating Agency.
Deceased Holder: A Beneficial Holder of a Special Retail
Certificate who was living at the time such Certificate was acquired and
whose authorized personal representative, surviving tenant by the
entirety, surviving joint tenant or surviving tenant in common or other
person empowered to act on behalf of such Beneficial Holder causes to be
furnished to DTC evidence of such Beneficial Holder's death satisfactory
to the Trustee and any tax waivers requested by the Trustee.
Deficiency Amount: With respect to any Distribution Date and the
Class III-A-1 Certificates, the sum of (i) the amount, if any, by which
the Interest Distribution Amount available to be paid to the Class III-A-
1 Certificates, pursuant to the priority of payment set forth in the
definition of "REMIC II Distribution Amount", is less than (A) the
product of (1) 1/12 of the Certificate Interest Rate for the Class III-A-
1 Certificates and (2) the Class III-A-1 Principal Balance immediately
prior to such Distribution Date, minus (B) the sum of (1) the portion of
Uncompensated Interest Shortfall attributable to Curtailment Shortfalls
or Payoffs which is allocable to the Class III-A-1 Certificates and (2)
any interest shortfalls related to the Relief Act allocable to the Class
<PAGE> 41
III-A-1 Certificates, (ii) the principal portion of any Realized Losses
allocable to the Class III-A-1 Certificates on such Distribution Date
and (iii) to the extent unpaid on the Distribution Date in October 2029,
after payment of all other amounts due to the Class III-A-1
Certificates, any remaining Class III-A-1 Principal Balance.
Definitive Certificates: Certificates in definitive, fully
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated August
31, 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 September 27,
1999. The "related Due Date" for any Distribution Date is the Due Date
immediately preceding such Distribution Date.
DLJ: Donaldson, Lufkin & Jenrette Securities Corporation.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial
institution or other Person for whom DTC effects book-entry transfers
and pledges of securities deposited with DTC.
Due Date: The day on which the Monthly Payment for each Mortgage
Loan is due.
Eligible Institution: An institution having (i) the highest short-
term debt rating, and one of the two highest long-term debt ratings of
the Rating Agencies, (ii) with respect to any Custodial Account for P&I
and special Custodial Account for Reserves, an unsecured long-term debt
rating of at least one of the two highest unsecured long-term debt
ratings of the Rating Agencies, (iii) with respect to any Buydown Fund
Account or Custodial Account which also serves as a Buydown Fund
Account, the highest unsecured long-term debt rating by the Rating
Agencies, or (iv) the approval of the Rating Agencies. Such institution
may be the Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with written notice
<PAGE> 42
on the Business Day following the date on which the Servicer determines
that such Servicer's short-term debt and unsecured long-term debt
ratings fail to meet the requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or
securities listed below in which funds deposited in the Investment
Account, the Certificate Account, the Custodial Account for P&I and the
Custodial Account for Reserves may be invested:
(i) Obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) Repurchase agreements on obligations described in clause (i) of
this definition of "Eligible Investments", provided that the unsecured
obligations of the party (including the Trustee in its commercial
capacity) agreeing to repurchase such obligations have at the time one
of the two highest short term debt ratings of the Rating Agencies and
provided that such repurchaser's unsecured long term debt has one of the
two highest unsecured long term debt ratings of the Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits and
bankers' acceptances of any U.S. bank or trust company incorporated
under the laws of the United States or any state (including the Trustee
in its commercial capacity), provided that the debt obligations of such
bank or trust company (or, in the case of the principal bank in a bank
holding company system, debt obligations of the bank holding company) at
the date of acquisition thereof have one of the two highest short term
debt ratings of the Rating Agencies and unsecured long term debt has one
of the two highest unsecured long term debt ratings of the Rating
Agencies;
(iv) Obligations of, or obligations guaranteed by, any state of the
United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the highest
long-term debt ratings available for such securities from the Rating
Agencies;
(v) Commercial paper of any corporation incorporated under the laws
of the United States or any state thereof, which on the date of acquisition
has the highest commercial paper rating of the Rating Agencies, provided
that the corporation has unsecured long term debt that has one of the
two highest unsecured long term debt ratings of the Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States or any state thereof
and have the highest long-term unsecured rating available for such
securities from the Rating Agencies; provided, 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;
<PAGE> 43
(vii) Units of taxable money market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the Securities and
Exchange Commission under the Investment Company Act of 1940), which
funds have the highest rating available for such securities from the
Rating Agencies or which have been designated in writing by the Rating
Agencies as Eligible Investments; and
(viii) Such other investments the investment in which will not, as
evidenced by a letter from each of the Rating Agencies and with notice
to the Certificate Insurer, result in the downgrading or withdrawal of
the Ratings (determined in the case of the Insured Certificates, without
giving effect to the Certificate Insurance Policy);
provided, however, that such obligation or security is held for a
temporary period pursuant to Section 1.860G-2(g)(1) of the Treasury
Regulations, and that such period can in no event exceed thirteen
months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or (b) has been
purchased at a price greater than the outstanding principal balance of
such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificate: Any Class B 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-M
<PAGE> 44
Regular Interests and the Class R-1 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-M Regular
Interests and the Class R-1 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 Fraud Losses allocated to the Group I-M Regular
Interests and the Class R-1 Certificates.
During the period prior to the first anniversary of the Cut-Off
Date and for Loan Group II, Loan Group III and Loan Group IV,
collectively, 2.00% of the aggregate principal balance of the Group II,
Group III and Group IV Loans as of the Cut-Off Date (the "Initial Group
II, Group III and Group IV Fraud Coverage"), reduced by Fraud Losses
allocated to the Group II, Group III, Group IV, Group C-B, Group A-X and
Class D-P 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 and Loan Group IV 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 C-B, Group A-X and Class D-P 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 and Loan Group IV 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 and Group IV Loans as of the Due Date
in the preceding month and (ii) the excess of the Initial Group II,
Group III and Group IV Fraud Coverage over cumulative Fraud Losses
allocated to the Group II, Group III, Group IV, Group C-B, Group A-X and
Class D-P Certificates.
The Fraud Coverage for Loan Group I and the Fraud Coverage for Loan
Group II, Loan Group III and Loan Group IV 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 (determined in the case of the Insured
Certificates, without giving effect to the Certificate Insurance
Policy).
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
<PAGE> 45
omission by the Mortgagor, originator (or assignee thereof) of such
Mortgage Loan, Lender, a Servicer or the Master Servicer, would result
in an exclusion from, denial of, or defense to coverage which otherwise
would be provided by a Primary Insurance Policy previously issued with
respect to such Mortgage Loan.
Freddie Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
Group A-X Certificates: The Class A-X-1 and Class A-X-2
Certificates.
Group A-X-M Regular Interests: The Class A-X-1-M and Class A-X-2-M
Regular Interests.
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 and Group IV
Loans.
Group C-B Subordinate Liquidation Amount: The excess, if any, of
the aggregate of Liquidation Principal for all Group II, Group III and
Group IV 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 and the Group IV 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 (exclusive of the portion thereof attributable
to principal distributions to the Class D-P Certificates in respect of
Class III-P Mortgage Loans pursuant to clause (I)(c)(i) of the
definition of "REMIC II Distribution Amount"), (iii) the Group IV
Subordinate Percentage of the Principal Payment Amount for Loan Group IV
(exclusive of the portion thereof attributable to principal
distributions to the Class D-P Certificates in respect of Class IV-P
Mortgage Loans pursuant to clause (I)(d)(i) of the definition of "REMIC
II Distribution Amount"), (iv) the Group C-B Subordinate Principal
Prepayments Distribution Amount (without regard to the proviso in the
definition thereof) and (v) the Group C-B Subordinate Liquidation Amount
over (B) the sum of (x) the amounts required to be distributed to the
<PAGE> 46
Class D-P Certificates pursuant to clauses (I)(e)(i) and (I)(e)(ii) of
the definition of "REMIC II Distribution Amount" on such Distribution
Date, (y) in the event that one or more of the aggregate Class Principal
Balance of the Group II-A Certificates, the aggregate Class Principal
Balance of the Group III-A Certificates or the aggregate Class Principal
Balance of the Group IV-A Certificates has been reduced to zero,
principal paid from the REMIC II Available Distribution Amount related
to such Class A Certificates to the remaining Class A Certificates, as
set forth in clause (X) of the sentence immediately following paragraph
(I)(e) 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)(e) 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)(e) 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 (exclusive of the portion
thereof attributable to principal distributions to the Class D-P
Certificates in respect of Class III-P Mortgage Loans pursuant to clause
(I)(c)(i) of the definition of "REMIC II Distribution Amount") and (iii)
the Group IV Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group IV (exclusive of the portion thereof
attributable to principal distributions to the Class D-P Certificates in
respect of Class IV-P Mortgage Loans pursuant to clause (I)(d)(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
<PAGE> 47
Subordinate Principal Distribution Amount" is greater than the sum of
the amounts specified in clauses (A)(i), (A)(ii), (A)(iii) and (A)(v) of
such definition, then the Group C-B Subordinate Principal Prepayments
Distribution Amount shall be reduced by the amount of such excess.
Group I Certificates: The Group I-A, Class I-P, Class I-X and Group
I-B Certificates.
Group I-M Regular Interests: The Group I-A-M, Class I-P-M, Class I-
X-M, Class R-2-M and Group I-B-M 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 7.000% 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 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
<PAGE> 48
(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-M
Regular Interests of Principal Prepayments in the percentage required
would reduce the aggregate Class Principal Balance of such Regular
Interests below zero, the Group I Senior Prepayment Percentage for such
Distribution Date shall be limited to the percentage necessary to reduce
the aggregate Class Principal Balance of such Regular Interests to zero.
Notwithstanding the foregoing, however, on each Distribution Date, the
Class I-P-M Regular Interest 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-M
Regular Interest pursuant to clauses (a)(I)(i) and (a)(II)(i) of the
definition of "REMIC I Distribution Amount"), (b) the Group I Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group
<PAGE> 49
I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-M Regular Interest pursuant to clauses
(a)(I)(i) and (a)(II)(i) of the definition of "REMIC I 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-M Regular Interest pursuant to clause
(a)(I)(i) of the definition of "REMIC I 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-M Regular Interest pursuant to clauses
(a)(I)(v) and (a)(I)(vi) of the definition of "REMIC I 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-M Regular Interests and paid in
the order of distribution to such Classes pursuant to clause (a)(I) of
the definition of "REMIC I 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-M Regular Interests 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-M
Regular Interests junior to such Class will be distributed to the most
senior Class of Group I-B-M Regular Interests for which the
Subordination Level is less than the Subordination Level as of the
Closing Date, and to the Class or Classes of Group I-B-M Regular
Interests senior thereto, pro rata according to the Class Principal
Balances of such Classes. For purposes of this definition and the
definition of "Subordination Level," the relative seniority, from
<PAGE> 50
highest to lowest, of the Group I-B-M Regular Interests shall be as
follows: Class I-B-1-M, Class I-B-2-M, Class I-B-3-M, Class I-B-4-M,
Class I-B-5-M and Class I-B-6-M.
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-
M Regular Interest pursuant to clause (a)(I)(i) of the definition of
"REMIC I 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 and Class I-A-6 Certificates.
Group I-A-M Regular Interests: The Class I-A-1-M, Class I-A-2-M,
Class I-A-3-M, Class I-A-4-M, Class I-A-5-M and Class I-A-6-M Regular
Interests.
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 I-B-M Regular Interests: The Class I-B-1-M, Class I-B-2-M,
Class I-B-3-M, Class I-B-4-M, Class I-B-5-M and Class I-B-6-M Regular
Interests.
Group II Certificates: The Class II-A-1, Class II-A-2, Class II-A-
3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-A-7 and Class II-A-
8 Certificates.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group II Loans.
Group II Prepayment Penalty Loan: A Group II Loan that imposes
penalties for early prepayments.
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 aggregate Class Principal Balance of
the Group II-A Certificates divided by the aggregate Principal Balance
of the Group II Loans, in each case immediately prior to the
Distribution Date.
<PAGE> 51
Group II Senior Prepayment Percentage, Group III Senior Prepayment
Percentage or Group IV Senior Prepayment Percentage: On any Distribution
Date, each of the Group II Senior Prepayment Percentage, the Group III
Senior Prepayment Percentage and the Group IV 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 and 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, (ii) such Distribution Date occurs on
or after the fifth anniversary of the first Distribution Date and (iii)
the following tests specified in clauses (a) through (f) are met with
respect to each of Loan Group II, Loan Group III and Loan Group IV:
(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 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) 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%,
<PAGE> 52
(e) 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 Date, 45%, and (5) on or after the
ninth anniversary of the first Distribution Date, 50%, and
(f) 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%,
in which case the Group II Senior Prepayment Percentage, the Group III
Senior Prepayment Percentage and the Group IV 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 Percentage or the Group IV 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 Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus 60% of
the Subordinate Percentage for the related Loan Group for such
Distribution Date; (3) for any such Distribution Date on or after the
seventh anniversary but before the eighth anniversary of the first
Distribution Date, the Group II Senior Percentage, the Group III Senior
Percentage or the Group IV 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 Percentage or the Group IV 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 Percentage or the Group IV Senior
<PAGE> 53
Percentage, as applicable, for such Distribution Date.
If on any Distribution Date the allocation to the Group II, Group
III or Group IV 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 or the Group IV 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 D-P Certificates will
receive the applicable Class III-P and Class IV-P Fraction of all
principal payments, including, without limitation, Principal
Prepayments, received in respect of Class III-P and Class IV-P Mortgage
Loans, respectively.
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 sum of (i) the aggregate Class Principal
Balance of the Group II-A Certificates and (ii) the amount by which
$1,999.98 exceeds the aggregate amount on deposit in the Class II-A-4
and Class II-A-8 Rounding Accounts.
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 aggregate
Class Principal Balance of the Group II-A Certificates has been reduced
to zero, then the Group II Subordinate Prepayment Percentage shall equal
100%.
Group II-A Certificates: The Group II Certificates.
Group III Certificates: The Class III-A-1, Class III-A-2, Class III-
A-3, Class III-A-4, Class III-A-5, Class III-A-6 and Class III-A-7
Certificates.
Group III Loans: The Mortgage Loans designated on the Mortgage
Loan Schedule as Group III Loans.
Group III Prepayment Penalty Loan: A Group III Loan that imposes
penalties for early prepayments.
<PAGE> 54
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 (exclusive of the Class III-P
Fraction thereof, with respect to any Class III-P Mortgage Loan) and
(ii) the Group III Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan.
Group III Senior Percentage: With respect to any Distribution Date,
the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of
the Group III-A Certificates divided by the aggregate Principal Balance
of the Group III Loans (less the Class III-P Fraction of each Class III-
P Mortgage Loan), 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 or Group IV Senior Prepayment Percentage."
Group III Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the Group III
Senior Percentage of the Principal Payment Amount for Loan Group III
(exclusive of the portion thereof attributable to principal
distributions to the Class D-P Certificates in respect of Class III-P
Mortgage Loans pursuant to clauses (I)(c)(i) and (II)(c)(i) of the
definition of "REMIC II Distribution Amount"), (b) the Group III Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group
III (exclusive of the portion thereof attributable to principal
distributions to the Class D-P Certificates in respect of Class III-P
Mortgage Loans pursuant to clauses (I)(c)(i) and (II)(c)(i) of the
definition of "REMIC II Distribution Amount") and (c) the Group III
Senior Liquidation Amount.
Group III Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the
Group III Loans reduced by the sum of (i) the aggregate Class Principal
Balance of the Group III-A Certificates and (ii) the portion of the
Class D-P Principal Balance attributable to the Group III Loans and
(iii) the amount by which $999.99 exceeds the amount on deposit in the
Class III-A-5 Rounding Account.
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 Distribution
Date, the excess of 100% over the Group III Senior Prepayment Percentage
for such Distribution Date; provided, however, that if the aggregate
Class Principal Balance of the Group III-A Certificates has been reduced
to zero, then the Group III Subordinate Prepayment Percentage shall
equal 100%.
<PAGE> 55
Group III-A Certificates: The Group III Certificates.
Group IV Certificates: The Group IV-A and Group IV-X 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 (exclusive of the Class IV-P Fraction
thereof, with respect to any Class IV-P 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 aggregate Class Principal Balance of
the Group IV-A Certificates divided by the aggregate Principal Balance
of the Group IV Loans (less the Class IV-P Fraction of each Class IV-P
Mortgage Loan), 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
or Group IV 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 (exclusive of the
portion thereof attributable to principal distributions to the Class D-P
Certificates in respect of Class IV-P Mortgage Loans pursuant to clauses
(I)(d)(i) and (II)(d)(i) of the definition of "REMIC II Distribution
Amount"), (b) the Group IV Senior Prepayment Percentage of the Principal
Prepayment Amount for Loan Group IV (exclusive of the portion thereof
attributable to principal distributions to the Class D-P Certificates in
respect of Class IV-P Mortgage Loans pursuant to clauses (I)(d)(i) and
(II)(d)(i) of the definition of "REMIC II Distribution Amount") 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 sum of (i) the aggregate Class Principal
Balance of the Group IV-A Certificates and (ii) the portion of the Class
D-P Principal Balance attributable to the Group IV Loans.
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 aggregate
Class Principal Balance of the Group IV-A Certificates has been reduced
<PAGE> 56
to zero, then the Group IV Subordinate Prepayment Percentage shall equal
100%.
Group IV-A Certificates: The Class IV-A-1, Class IV-A-2 and Class
IV-A-3 Certificates.
Group IV-X Certificates: The Class IV-X-1 and Class IV-X-2
Certificates.
Group IV-X-M Regular Interests: The Class IV-X-1-M and Class IV-X-2-
M Regular Interests.
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.
Insured Certificates: The Class III-A-1 Certificates.
Insured Payment: With respect to the Insured Certificates, (i) as
of any Distribution Date, any Deficiency Amount and (ii) any Preference
Amount.
Insurance Agreement: The Insurance Agreement, dated as of August 1,
1999, among the Certificate Insurer, the Trustee and the Company.
Interest Distribution Amount: On any Distribution Date, for any
Class of the REMIC I Regular Interests and the Certificates (other than
the Group I 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 (or,
in the case of the Class II-A-8 Certificates, at a per annum rate equal
to 7.500%) 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 Amounts for
the Class P and Class IV-A-3 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 7.500% per annum if the
<PAGE> 57
Undercollateralized Group is Loan Group II, at 7.250% per annum if the
Undercollateralized Group is Loan Group III, or at 7.000% per annum if
the Undercollateralized Group is Loan Group IV, plus any interest
accrued on the Senior Certificates related to such Undercollateralized
Group remaining unpaid from prior Distribution Dates.
Investment Account: The commingled account (which shall be
commingled only with investment accounts related to series of pass-
through certificates with a class of certificates which has a rating
equal to the highest of the Ratings of the Certificates) maintained by
the Master Servicer in the trust department of the Investment Depository
pursuant to Section 3.03 and which bears a designation acceptable to the
Rating Agencies.
Investment Depository: The Chase Manhattan Bank, New York, New York
or another bank or trust company designated from time to time by the
Master Servicer. The Investment Depository shall at all times be an
Eligible Institution.
Junior Subordinate Certificates: The Class 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; provided, however,
that with respect to the Group II and Group IV Certificates, the "Last
Scheduled Distribution Date" shall be the Distribution Date in September
2029.
Late Payment Rate: The rate of interest publicly announced by
Citibank, N.A. at its principal office in New York, New York as its
prime rate (any change in such prime rate of interest to be effective on
the date such change is announced by Citibank, N.A.) plus two (2)
percentage points. The Late Payment Rate shall be computed on the basis
of a year of 365 days calculating the actual number of days elapsed. In
no event shall the Late Payment Rate exceed the maximum rate permissible
under law applicable to the Insurance Agreement limiting interest rates.
Lender: An institution from which the Company purchased any
Mortgage Loans pursuant to a Selling and Servicing Contract.
Living Holder: A Beneficial Holder of a Special Retail Certificate
other than a Deceased Holder.
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.
<PAGE> 58
Liquidation Principal: The principal portion of Liquidation
Proceeds received (exclusive of the portion thereof attributable to
distributions to the Class I-P-M Regular Interest pursuant to clauses
(a)(I)(i) and (a)(II)(i) of the definition of "REMIC I Distribution
Amount" and to the Class D-P Certificates pursuant to clauses (I)(c)(i),
(I)(d)(i), (II)(c)(i) and (II)(d)(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 or Loan
Group IV, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group
II Loans.
Loan Group III: The group of Mortgage Loans comprised of the Group
III Loans.
Loan Group IV: The group of Mortgage Loans comprised of the Group
IV Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage
Loan divided by the Original Value; however, references to "current Loan-
to-Value Ratio" or "Loan-to-Value Ratio as of the Cut-Off Date" in
Section 2.03 shall be deemed to mean the then current Principal Balance
of a Mortgage Loan divided by the Original Value.
Lowest Class B 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.
<PAGE> 59
Monthly P&I Advance: An advance of funds by the Master Servicer
pursuant to Section 4.02 or a Servicer pursuant to its Selling and
Servicing Contract to cover delinquent principal and interest
installments.
Monthly Payment: The scheduled payment of principal and interest on
a Mortgage Loan (including any amounts due from a Buydown Fund, if any)
which is due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note.
Mortgaged Property: With respect to any Mortgage Loan, other than a
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan, the related Cooperative Stock
and Cooperative Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
Mortgage File: The following documents or instruments with respect
to each PNC Mortgage Loan transferred and assigned by the Company
pursuant to Section 2.01 and each Clipper Mortgage Loan transferred and
assigned by Clipper pursuant to the Clipper Loan Sale Agreement, (X)
with respect to each Mortgage Loan that is not a Cooperative Loan:
(i) The original Mortgage Note endorsed to "State Street Bank and
Trust Company, as Custodian/Trustee, without recourse" or "State Street
Bank and Trust Company, as Trustee for the benefit of the Holders from time
to time of PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-9, without recourse" and all intervening
endorsements evidencing a complete chain of endorsements from the
originator to the Trustee, or, in the event of any Destroyed Mortgage
Note, a copy or a duplicate original of the Mortgage Note, together with
an original lost note affidavit from the originator of the related
Mortgage Loan or the Company or Clipper, as applicable, stating that the
original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note; in the event the Mortgage Notes are
endorsed in blank as of the Closing Date, the Company shall, within 45
days of the Closing Date, cause such Mortgage Notes to be endorsed
pursuant to the terms set forth herein; provided, that, with respect to
any Mortgage Note whereby the related Mortgaged Property is located in
California, such original Mortgage Note may be endorsed in blank and the
Company shall not be required to endorse such Mortgage Notes pursuant to
the terms otherwise set forth in this clause (i);
(ii) The Buydown Agreement, if applicable;
(iii) A Mortgage that is either
(1) the original recorded Mortgage with recording
information thereon for the jurisdiction in which the
Mortgaged Property is located and a Mortgage assignment
thereof in recordable form to "State Street Bank and Trust
Company, as Custodian/Trustee", or to "State Street Bank and
<PAGE> 60
Trust Company, as Trustee for the Holders of PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series
1999-9" and all intervening assignments evidencing a complete
chain of assignment, from the originator to the name holder or
the payee endorsing the related Mortgage Note; or
(2) a copy of the Mortgage which represents a true and
correct reproduction of the original Mortgage and which has
either been certified (i) on the face thereof by the public
recording office in the appropriate jurisdiction in which the
Mortgaged Property is located, or (ii) by the originator or
Lender as a true and correct copy the original of which has
been sent for recordation and an original Mortgage assignment
thereof duly executed and acknowledged in recordable form to
"State Street Bank and Trust Company, as Custodian/Trustee" or
to "State Street Bank and Trust Company, as Trustee for the
Holders of PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-9" and all intervening assignments
evidencing a complete chain of assignment from the originator
to the name holder or the payee endorsing the related Mortgage
Note; provided, that in the event the assignments are executed
in blank as of the Closing Date, the Company shall, within 45
days of the Closing Date, cause such assignments to be
executed pursuant to the terms set forth herein; provided,
that, with respect to any Mortgage whereby the related
Mortgaged Property is located in California, the Mortgage
assignment may be executed and acknowledged in blank and the
Company shall not be required to deliver such Mortgage
assignment in the form otherwise set forth in clause (iii)(1)
or this clause (iii)(2);
(iv) A copy of (a) the title insurance policy, or (b) in lieu
thereof, a title insurance binder, a copy of an attorney's title opinion,
certificate or other evidence of title acceptable to the Company; and
(v) For any Mortgage Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment;
and (Y) with respect to each Cooperative Loan:
(i) the original Mortgage Note endorsed to "State Street Bank 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 1999-9" 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;
<PAGE> 61
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from
the originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in
the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an
unbroken chain of title from the originator to the Trustee;
(ix) An executed UCC-1 financing statement showing the Company or
Clipper, as applicable, as debtor and the Trustee as secured party, each
in a form sufficient for filing, evidencing the interest of such debtors
in the Cooperative Loans; and
(x) For any Cooperative Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment.
Mortgage Interest Rate: For any Mortgage Loan, the per annum rate
at which interest accrues on such Mortgage Loan pursuant to the terms of
the related Mortgage Note.
Mortgage Loan Schedule: The schedule, as amended from time to time,
of Mortgage Loans attached hereto as Exhibit D, which shall set forth as
to each Mortgage Loan the following, among other things:
(i) its loan number,
(ii) the address of the Mortgaged Property,
(iii) the name of the Mortgagor,
(iv) the Original Value of the property subject to the Mortgage,
(v) the Principal Balance as of the Cut-Off Date,
(vi) the Mortgage Interest Rate borne by the Mortgage Note,
(vii) whether a Primary Insurance Policy is in effect as of the Cut-
Off Date,
(viii) the maturity of the Mortgage Note,
<PAGE> 62
(ix) the Servicing Fee and the Master Servicing Fee,
(x) its Loan Group, and
(xi) whether it is a PNC Mortgage Loan or a Clipper Mortgage Loan.
Mortgage Loans: With respect to each Cooperative Loan, the related
Mortgage Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock Certificate and Cooperative Lease, and, with respect
to each Mortgage Loan other than a Cooperative Loan, the Mortgages and
the related Mortgage Notes, each transferred and assigned to the Trustee
pursuant to the provisions hereof or of the Clipper Loan Sale Agreement
as from time to time are held as part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Mortgage Loan, any
advance which the Master Servicer shall determine to be a Nonrecoverable
Advance pursuant to Section 4.03 and which was, or is proposed to be,
made by (i) the Master Servicer or (ii) a Servicer pursuant to its
Selling and Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
Notice: With respect to the Insured Certificates, the telephonic or
telegraphic notice, promptly confirmed in writing by telecopy
substantially in the form of Exhibit A attached to the Certificate
Insurance Policy, the original of which is subsequently delivered by
registered or certified mail, from the Trustee specifying the Insured
Payment which shall be due and owing on the applicable Distribution
Date.
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
<PAGE> 63
the Appraised Value of the Mortgaged Property.
Overcollateralized Group: Any of Loan Group II, Loan Group III or
Loan Group IV, 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.
Owner: Each Holder of an Insured Certificate who, on the applicable
Distribution Date, is entitled under the terms of the Insured
Certificates to payment thereunder.
Ownership Interest: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including
any interest in a Residual Certificate as the Holder thereof and any
other interest therein whether direct or indirect, legal or beneficial,
as owner or as pledgee.
PNC Mortgage Loans: The Mortgage Loans identified as PNC Mortgage
Loans on the Mortgage Loan Schedule and conveyed by the Company to the
Trustee pursuant to Section 2.01.
Pass-Through Entity: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and
any organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a rate equal to the
Mortgage Interest Rate for such Mortgage Loan less the applicable per
annum percentage rates related to each of (i) the Servicing Fee and (ii)
the Master Servicing Fee. For each Mortgage Loan, any calculation of
monthly interest at such rate shall be based upon annual interest at
such rate (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid Principal Balance of the related Mortgage Loan
divided by twelve, and any calculation of interest at such rate by
reason of a Payoff shall be based upon annual interest at such rate on
the outstanding Principal Balance of the related Mortgage Loan
multiplied by a fraction, the numerator of which is the number of days
elapsed from the Due Date of the last scheduled payment of principal and
interest to, but not including, the date of such Payoff, and the
denominator of which is (a) for Payoffs received on a Due Date, 360, and
(b) for all other Payoffs, 365.
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
<PAGE> 64
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 September 14, 1999, inclusive; and
with respect to any Distribution Date thereafter, the period from the
15th day of the Prior Period through the 14th day of the month of such
Distribution Date, inclusive
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided
beneficial ownership interest evidenced by such Certificate of such
Class, which percentage shall equal:
(i) with respect to any Certificate (other than the Residual, Class
I-A-1 and Class X Certificates), its Certificate Principal Balance divided
by the applicable Class Principal Balance;
(ii) with respect to the Class X Certificates, the portion of the
respective Class Notional Amount evidenced by such Certificate divided
by the respective Class Notional Amount;
(iii) with respect to the Class I-A-1 Certificates, (A) if the Class
I-A-1 Principal Balance is greater than zero, its Certificate Principal
Balance divided by the Class I-A-1 Principal Balance and (B) if the
Class I-A-1 Principal Balance has been reduced to zero but the aggregate
Component Notional Amount of Component I-A-1-1, Component I-A-1-2 and
Component I-A-1-3 is greater than zero, the portion of such aggregate
Component Notional Amount evidenced by such Certificate divided by such
aggregate Component Notional Amount; and
(iv) 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:
<PAGE> 65
(A) if the Class I-A-1 Principal Balance is greater than zero or
if the Class I-A-1 Principal Balance and the Component Notional Amounts
of Component I-A-1-1, Component I-A-1-2 and Component I-A-1-3 have all
been reduced to zero:
(i) with respect to any Certificate (other than the Class X and
Class R-2 Certificates), the product of (x) ninety-five percent (95%)
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 the retirement of each Class of Class X
Certificates;
(ii) with respect to any of the Class X Certificates, one percent (1%)
of such Certificate's Percentage Interest as calculated by paragraph
(a)(ii) of this definition; and
(iii) with respect to the Class R-2 Certificates, zero; or
(B) if the Class I-A-1 Principal Balance has been reduced to zero
but the aggregate Component Notional Amount of Component I-A-1-1,
Component I-A-1-2 and Component I-A-1-3 is greater than zero:
(i) with respect to any Certificate (other than the Class X, Class
I-A-1 and Class R-2 Certificates), the product of (x) ninety-four percent
(94%) 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 the retirement of each Class of
Class X Certificates and the Class I-A-1 Certificates;
(ii) with respect to any Class of the Class X and Class I-A-1
Certificates, one percent (1%) of such Certificate's Percentage Interest
as calculated by paragraph (a)(ii) of this definition (with the "Class
Notional Amount" of the Class I-A-1 Certificates equal to the aggregate
Component Notional Amount of Component I-A-1-1, Component I-A-1-2 and
Component I-A-1-3); and
(iii) with respect to the Class R-2 Certificates, zero.
Permitted Transferee: With respect to the holding or ownership of
any Residual Certificate, any Person other than (i) the United States, a
State or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of
the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Code Section 521) which is exempt from the
taxes imposed by Chapter 1 of the Code (unless such organization is
subject to the tax imposed by Section 511 of the Code on unrelated
business taxable income), (iv) rural electric and telephone cooperatives
described in Code Section 1381(a)(2)(C), (v) any "electing large
partnership" as defined in Section 775(a) of the Code, (vi) any Person
from whom the Trustee has not received an affidavit to the effect that
it is not a "disqualified organization" within the meaning of Section
860E(e)(5) of the Code, and (vii) any other Person so designated by the
<PAGE> 66
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.
Planned Principal Balance: The aggregate amount set forth in the
table attached as Appendix C to the Prospectus, for the applicable
Distribution Date, for the Class I-A-2 and Class I-A-3 Certificates,
which amount shall also constitute the "Planned Principal Balance" for
the Corresponding Classes in the aggregate.
Preference Amount: Any amount previously distributed to an Owner on
the Insured Certificates that is recoverable and sought to be recovered
as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code (11 U.S.C.), as amended from time to time
in accordance with a final nonappealable order of a court having
competent jurisdiction.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Mortgage Loan
on its scheduled Due Date and held in the related Custodial Account for
P&I until the Withdrawal Date following its scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty insurance,
if any, on an individual Mortgage Loan or on pools of mortgage loans
that include an individual Mortgage Loan, providing coverage as required
by Section 2.03(xi).
Principal Balance: Except as used in Sections 2.02, 3.09 and 9.01
and for purposes of the definition of Purchase Price, at the time of any
determination, the principal balance of a Mortgage Loan remaining to be
paid at the close of business on the Cut-Off Date, after application of
all scheduled principal payments due on or before the Cut-Off Date,
whether or not received, reduced by all amounts distributed or (except
when such determination occurs earlier in the month than the
Distribution Date) to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used in
Sections 2.02, 3.09 and 9.01, at the time of any determination, the
<PAGE> 67
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 pursuant
to a Purchase Obligation or as permitted by this Agreement during the
Prior Period and (iii) any other unscheduled payments of principal which
were received with respect to any Mortgage Loan during the Prior Period,
other than Payoffs, Curtailments and Liquidation Principal. In
addition, in the event that all or a portion of the Clipper Mortgage
Loan Purchase Amount has not been applied to the purchase of Clipper
Mortgage Loans under the Clipper Loan Sale Agreement in accordance with
Section 2.01, such remaining portion shall on the first Distribution
Date be included in the Principal Payment Amount for each Loan Group,
pro rata according to the aggregate Principal Balance of the Clipper
Mortgage Loans not so purchased but intended for inclusion in such Loan
Group.
Principal Prepayment: Any payment of principal on a Mortgage Loan
which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On any Distribution Date and for any
Loan Group, the sum with respect to the Mortgage Loans in such Loan
<PAGE> 68
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, in the case of Loan Group III
and Loan Group IV, the applicable Class P Fraction of any Class P
Mortgage Loans in such Loan Group), in each case immediately prior to
such Distribution Date.
Prior Period: The calendar month immediately preceding any
Distribution Date.
Pro Rata Allocation: (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-M Regular Interests (other than the Class I-P-M
Regular Interest) and the Class R-1 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-M Regular Interest, 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-M Regular
Interests (other than the Class I-P-M Regular Interest) and the Class R-
1 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-M and Class I-X-M Regular Interests)
pro rata according to their respective Class Principal Balances in
reduction thereof; and (ii) with respect to Realized Losses on Group II,
Group III and Group IV Loans, the allocation of the principal portion of
such losses to all Classes of Group II, Group III, Group IV and Group C-
B Certificates, pro rata according to their respective Class Principal
Balances in reduction thereof (except if the loss is recognized with
respect to a Class III-P or Class IV-P Mortgage Loan, in which case the
applicable Class P Fraction of such loss will first be allocated to the
Class D-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 C-B and
Group A-X Certificates (other than the Class IV-A-3 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
Group A-X, Group IV-X and Class IV-A-3 Certificates) pro rata according
to their respective Class Principal Balances in reduction thereof.
Any losses allocated among the outstanding Classes of Group I-M
Regular Interests (other than the Class I-A-1-M Regular Interest)
pursuant to this definition of "Pro Rata Allocation" in reduction of the
Class Principal Balance thereof shall also be allocated to the
Corresponding Classes of Certificates in reduction of the Class
<PAGE> 69
Principal Balance thereof by the same amount, and such losses allocated
to the Class I-A-1-M Regular Interest in reduction of the Class
Principal Balance thereof shall also be allocated to Component I-A-1-4
in reduction of the Component Principal Balance thereof by the same
amount. With respect to the interest portion of losses allocated
pursuant to this definition of "Pro Rata Allocation," (i) such losses
allocated to the Class I-A-2-M Regular Interest and applied to reduce
the Interest Distribution Amount thereof shall be allocated to the Class
I-A-2 Certificates and Component I-A-1-1 in reduction of the
distribution of interest to such Certificates and Component pursuant to
the distributions set forth in clause (I)(a)(iii)(B) of the definition
of "REMIC II Distribution Amount", pro rata according to the allocation
set forth in such clause, (ii) such losses allocated to the Class I-A-3-
M Regular Interest and applied to reduce the Interest Distribution
Amount thereof shall be allocated to the Class I-A-3 Certificates and
Component I-A-1-2 in reduction of the distribution of interest to such
Certificates and Component pursuant to the distributions set forth in
clause (I)(a)(iii)(C) of the definition of "REMIC II Distribution
Amount", pro rata according to the allocation set forth in such clause,
and (iii) such losses allocated to the Class I-A-4-M Regular Interest
and applied to reduce the Interest Distribution Amount thereof shall be
allocated to the Class I-A-4 Certificates and Component I-A-1-3 in
reduction of the distribution of interest to such Certificates and
Component pursuant to the distributions set forth in clause
(I)(a)(iii)(D) of the definition of "REMIC II Distribution Amount", pro
rata according to the allocation set forth in such clause.
Prospectus: The Prospectus, dated July 27, 1999, and the
Prospectus Supplement, dated August 30, 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 or pursuant to Section 3.01, 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, reduced by any related unreimbursed
advances by the Master Servicer; provided, however, that no Mortgage
Loan shall be purchased or required to be purchased pursuant to Section
2.03, or more than two years after the Closing Date under Section 2.02,
unless (a) the Mortgage Loan to be purchased is in default, or default
is in the judgment of the Company reasonably imminent, or (b) the
Company, at its expense, delivers to the Trustee an Opinion of Counsel
to the effect that the purchase of such Mortgage Loan will not give rise
<PAGE> 70
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.
Random Lot: With respect to any Distribution Date on which a
mandatory distribution is to be made on the Special Retail Certificates
(as described in Section 4.06), the method by which DTC will determine
which Special Retail Certificates of each Class will be paid principal,
using its established random lot procedures or, if such Certificates are
no longer represented by a Book-Entry Certificate, using the Trustee's
procedures.
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 (determined in the
case of the Insured Certificates, without regard to the Certificate
Insurance Policy).
Realized Loss: For any Distribution Date, with respect to any
Mortgage Loan which became a Liquidated Mortgage Loan during the related
Prior Period, the sum of (i) the principal balance of such Mortgage Loan
remaining outstanding and the principal portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
principal portion of such Realized Loss), and (ii) the accrued interest
on such Mortgage Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such
Mortgage Loan (the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Mortgage Loan which is not a
Liquidated Mortgage Loan, the amount of the Bankruptcy Loss incurred
with respect to such Mortgage Loan as of the related Due Date.
Except for Special Hazard Losses in excess of the Special Hazard
Coverage 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-M Regular Interests and the
Class R-1 Certificates (i) for Realized Losses allocable to principal
(a) first, to the Class I-B-6-M Regular Interest, until the Class I-B-6-
M Principal Balance has been reduced to zero, (b) second, to the Class I-
B-5-M Regular Interest, until the Class I-B-5-M Principal Balance has
<PAGE> 71
been reduced to zero, (c) third, to the Class I-B-4-M Regular Interest,
until the Class I-B-4-M Principal Balance has been reduced to zero, (d)
fourth, to the Class I-B-3-M Regular Interest, until the Class I-B-3-M
Principal Balance has been reduced to zero, (e) fifth, to the Class I-B-
2-M Regular Interest, until the Class I-B-2-M Principal Balance has been
reduced to zero, (f) sixth, to the Class I-B-1-M Regular Interest, until
the Class I-B-1-M Principal Balance has been reduced to zero, and (g)
seventh, to the Group I-A-M Regular Interests and the Class R-1
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-
M Regular Interest, 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-M Regular Interest,
in reduction of accrued but unpaid interest thereon and then in
reduction of the Class I-B-6-M Principal Balance, (b) second, to the
Class I-B-5-M Regular Interest, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class I-B-5-M Principal
Balance, (c) third, to the Class I-B-4-M Regular Interest, in reduction
of accrued but unpaid interest thereon and then in reduction of the
Class I-B-4-M Principal Balance, (d) fourth, to the Class I-B-3-M
Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class I-B-3-M Principal Balance, (e) fifth,
to the Class I-B-2-M Regular Interest, in reduction of accrued but
unpaid interest thereon and then in reduction of the Class I-B-2-M
Principal Balance, (f) sixth, to the Class I-B-1-M Regular Interest, in
reduction of accrued but unpaid interest thereon and then in reduction
of the Class I-B-1-M Principal Balance, and (g) seventh, to the Group I-
A-M and Class I-X-M Regular Interests and the Class R-1 Certificates,
pro rata according to accrued but unpaid interest on such Classes, in
reduction thereof, and then to the Group I-A-M Regular Interests and the
Class R-1 Certificates, pro rata according to the Class Principal
Balances thereof in reduction thereof.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
Losses allocated to any Class of Group I-M Regular Interests (other than
the Class I-A-1-M Regular Interest) in reduction of the Class Principal
Balance thereof shall also be allocated to the Corresponding Class of
Certificates in reduction of the Class Principal Balance thereof by the
same amount, and such losses allocated to the Class I-A-1-M Regular
Interest in reduction of the Class Principal Balance thereof shall also
be allocated to Component I-A-1-4 in reduction of the Component
Principal Balance thereof by the same amount. The interest portion of
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
Losses allocated to the Class I-A-2-M, Class I-A-3-M and Class I-A-4-M
Regular Interests shall also be allocated to certain Group I
Certificates and Components thereof according to the allocation set
forth in the last sentence of the definition of "Pro Rata Allocation"
herein.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
<PAGE> 72
Losses on Group II, Group III and Group IV 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 A-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
(i.e. the "related" Loan Group for the Class C-Y-1 and Class C-Z-1
Regular Interests and the portions of the Group A-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-2 and Class C-Z-2 Regular
Interests and the portions of the Group A-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-3, Class C-Z-3 and Group IV-X-
M Regular Interests 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 Class D-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 II,
Loan Group III and Loan Group IV 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 II, Loan Group III and Loan Group IV, Fraud
Losses in excess of the Fraud Coverage for Loan Group II, Loan Group III
and Loan Group IV and Bankruptcy Losses in excess of the Bankruptcy
Coverage for Loan Group II, Loan Group III and Loan Group IV, Realized
Losses with respect to the Group II, Group III and Group IV Loans shall
be allocated among the Group II, Group III, Group IV, Group C-B, Group A-
X and Class D-P 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, 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 III-P or
Class IV-P Mortgage Loan, the applicable Class P Fraction of such loss
<PAGE> 73
will first be allocated to the Class D-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 (other than the Class IV-A-3 Certificates)
and to the portions of the Group A-X Certificates that derive their
interest from such Loan Group (in the case of Loan Group II or Loan
Group III) or the Group IV-X Certificates (in the case of Loan Group
IV), as applicable, 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
(other than the Class IV-A-3 Certificates), pro rata according to the
Class Principal Balances thereof, in reduction thereof; provided,
however, that in the case of clause (i)(g) and (ii)(g) of this
paragraph, (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 (if such Overcollateralized Group is Loan
Group III or Loan Group IV) the applicable Class P Fraction of any Class
P Mortgage Loan in such Overcollateralized Group), and the remainder of
such loss will be allocated to the Senior Certificates related to the
Loan Group that suffered such loss, and (Y) if such loss occurs in an
Overcollateralized Group and there are two 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), 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
<PAGE> 74
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-M Regular Interests and the Class R-
1 Certificates by Pro Rata Allocation.
Special Hazard Losses on Group II, Group III and Group IV Loans in
excess of the Special Hazard Coverage for Loan Group II, Loan Group III
and Loan Group IV, Fraud Losses on Group II, Group III and Group IV
Loans in excess of the Fraud Coverage for Loan Group II, Loan Group III
and Loan Group IV and Bankruptcy Losses on Group II, Group III and Group
IV Loans in excess of the Bankruptcy Coverage for Loan Group II, Loan
Group III and Loan Group IV shall be allocated among the Group II, Group
III, Group IV, Group C-B, Group A-X and Class D-P 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-M Regular Interests and the Class R-1
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 I Available
Distribution Amount for Loan Group I, and all losses in respect of each
such Mortgage Loan that have been allocated to the Group I-M Regular
Interests and the Class R-1 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-M
Regular Interests, 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 C-B and
Class D-P Certificates exceeds the aggregate principal balance of the
Group II, Group III and Group IV 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 and Group IV Certificates, and all losses in respect
of each such Mortgage Loan that have been allocated to the Group II,
Group III, Group IV, Group C-B and Class D-P Certificates on such
Distribution Date or prior Distribution Dates, then such excess will be
<PAGE> 75
deemed a principal loss and will be allocated to the most junior Class
of Group C-B Certificates, in reduction of the Class Principal Balance
thereof.
Record Date: The last Business Day of the month immediately
preceding the month of the related Distribution Date.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
Interests and (ii) with respect to REMIC II, the REMIC II Regular
Interests.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended. Interest shortfalls related to the Relief Act 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;
<PAGE> 76
(d) Insurance Proceeds and Liquidation Proceeds received on
such Mortgage Loans after the Prior Period;
(e) all amounts in the Certificate Account which are due and
reimbursable to a Servicer or the Master Servicer pursuant to the
terms of this Agreement;
(f) the sum of the Master Servicing Fee and the Servicing Fee
for each 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) (I) With respect to the Group I-M Regular Interests and the
Class R-1 Certificates, on any Distribution Date prior to the Group I
Credit Support Depletion Date, to the extent of the REMIC I Available
Distribution Amount for Loan Group I remaining following prior
distributions, if any, on such Distribution Date:
(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)
<PAGE> 77
the principal portion of Payoffs received in respect of such Class I-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Group I-A-M, Class I-X-M and Class R-2-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; provided,
however, that (A) on or before the Class I-A-5 Accretion Termination
Date, the amount that would otherwise be payable to the Class I-A-5-M
Regular Interest pursuant to this clause (a)(I)(ii) will be paid instead
as principal as set forth in clause (a)(I)(iii)(b) of this definition of
"REMIC I Distribution Amount" and (B) on or before the Component I-A-1-4
Accretion Termination Date, the amount that would otherwise be payable
to the Class I-A-1-M Regular Interest pursuant to this clause (a)(I)(ii)
will be paid instead as principal as set forth in clause (a)(I)(iii)(b)
of this definition of "REMIC I Distribution Amount";
(iii) third,
(a) to the Group I-A-M, Class I-X-M and Class R-2-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; provided, however,
that (A) on or before the Class I-A-5 Accretion Termination
Date, the amount that would otherwise be payable to the Class
I-A-5-M Regular Interest pursuant to this clause
(a)(I)(iii)(a) will be paid instead as principal as set forth
in clause (a)(I)(iii)(b) of this definition of "REMIC I
Distribution Amount" and (B) on or before the Component I-A-1-
4 Accretion Termination Date, the amount that would otherwise
be payable to the Class I-A-1-M Regular Interest pursuant to
this clause (a)(I)(iii)(a) will be paid instead as principal
as set forth in clause (a)(I)(iii)(b) of this definition of
"REMIC I Distribution Amount"; and
(b) on or before the Class I-A-5 Accretion Termination
Date, the Class I-A-5 Accrual Amount, and on or before the
Component I-A-1-4 Accretion Termination Date, the Component I-
A-1-4 Accrual Amount, as principal, sequentially, as follows:
(1) first, the Class I-A-5 Accrual Amount to the
Class I-A-4-M Regular Interest, until the Class I-A-4-M
Principal Balance has been reduced to zero;
(2) second, the Component I-A-1-4 Accrual Amount to
the Class I-A-4-M Regular Interest, until the Class I-A-4-
M Principal Balance has been reduced to zero;
(3) third, the Class I-A-5 Accrual Amount to the
Class I-A-1-M Regular Interest, until the Class I-A-1-M
<PAGE> 78
Principal Balance has been reduced to zero;
(4) fourth, the Component I-A-1-4 Accrual Amount to
the Class I-A-1-M Regular Interest, until the Class I-A-1-
M Principal Balance has been reduced to zero; and
(5) fifth, the Class I-A-5 Accrual Amount to the
Class I-A-5-M Regular Interest, until the Class I-A-5-M
Principal Balance has been reduced to zero;
(iv) fourth, to the Group I-A-M and Class R-2-M Regular Interests and
the Class R-1 Certificates, as principal, the Group I Senior Principal
Distribution Amount, concurrently, as follows:
(a) 30.9682956406% to the Class I-A-6-M Regular
Interest, until the Class I-A-6-M Principal Balance has been
reduced to zero; and
(b) 69.0317043594%, sequentially, as follows:
(1) first, sequentially, to the Class R-1
Certificates and the Class R-2-M Regular Interest, until
their respective Class Principal Balances have each been
reduced to zero;
(2) second, up to the amount necessary to reduce
the aggregate Class Principal Balance of the Class I-A-2-
M and Class I-A-3-M Regular Interests to the Planned
Principal Balance for such Distribution Date, such amount
to be distributed to the Class I-A-2-M and Class I-A-3-M
Regular Interests sequentially, as follows:
(A) first, to the Class I-A-2-M Regular
Interest, until the Class I-A-2-M Principal Balance
has been reduced to zero; and
(B) second, to the Class I-A-3-M Regular
Interest, until the Class I-A-3-M Principal Balance
has been reduced to zero;
(3) third, to the Class I-A-4-M Regular Interest,
to the extent necessary to reduce the Class I-A-4-M
Principal Balance to its Schedule 1 Targeted Principal
Balance for such Distribution Date;
(4) fourth, to the Class I-A-1-M Regular Interest,
to the extent necessary to reduce the Class I-A-1-M
Principal Balance to its Schedule 1 Targeted Principal
Balance for such Distribution Date;
(5) fifth, to the Class I-A-5-M Regular Interest,
until the Class I-A-5-M Principal Balance has been
<PAGE> 79
reduced to zero;
(6) sixth, to the Class I-A-4-M Regular Interest,
to the extent necessary to reduce the Class I-A-4-M
Principal Balance to its Schedule 2 Targeted Principal
Balance for such Distribution Date;
(7) seventh, to the Class I-A-1-M Regular Interest,
to the extent necessary to reduce the Class I-A-1-M
Principal Balance to its Schedule 2 Targeted Principal
Balance for such Distribution Date;
(8) eighth, to the Class I-A-4-M Regular Interest,
until the Class I-A-4-M Principal Balance has been
reduced to zero;
(9) ninth, to the Class I-A-1-M Regular Interest,
until the Class I-A-1-M Principal Balance has been
reduced to zero;
(10) tenth, to the Class I-A-2-M Regular Interest,
until the Class I-A-2-M Principal Balance has been
reduced to zero; and
(11) eleventh, to the Class I-A-3-M Regular
Interest, until the Class I-A-3-M Principal Balance has
been reduced to zero;
(v) fifth, to the Class I-P-M Regular Interest, 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
Regular Interests on previous Distribution Dates pursuant to clause
(a)(I)(vi) of this definition of "REMIC I Distribution Amount" and
remaining unpaid from such previous Distribution Dates;
(vi) sixth, to the Class I-P-M Regular Interest, 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
(a)(I)(v) or this paragraph (a)(I)(vi) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class I-
P-M Principal Balance;
(vii) seventh, to the Class I-B-1-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(viii) eighth, to the Class I-B-1-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
<PAGE> 80
Distribution Date;
(ix) ninth, to the Class I-B-1-M Regular Interest, the portion of the
Group I Subordinate Principal Distribution Amount allocable to such
Class of Regular Interests pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the Class I-B-1-M
Principal Balance has been reduced to zero;
(x) tenth, to the Class I-B-2-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xi) eleventh, to the Class I-B-2-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xii) twelfth, to the Class I-B-2-M Regular Interest, the portion of
the Group I Subordinate Principal Distribution Amount allocable to such
Class of Regular Interests pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the Class I-B-2-M
Principal Balance has been reduced to zero;
(xiii) thirteenth, to the Class I-B-3-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xiv) fourteenth, to the Class I-B-3-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xv) fifteenth, to the Class I-B-3-M Regular Interest, the portion of
the Group I Subordinate Principal Distribution Amount allocable to such
Class of Regular Interests pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the Class I-B-3-M
Principal Balance has been reduced to zero;
(xvi) sixteenth, to the Class I-B-4-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xvii) seventeenth, to the Class I-B-4-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xviii) eighteenth, to the Class I-B-4-M Regular Interest, the portion
of the Group I Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the Class I-B-4-M
Principal Balance has been reduced to zero;
(xix) nineteenth, to the Class I-B-5-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xx) twentieth, to the Class I-B-5-M Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xxi) twenty-first, to the Class I-B-5-M Regular Interest, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group I Subordinate Principal Distribution Amount", until the Class
I-B-5-M Principal Balance has been reduced to zero;
(xxii) twenty-second, to the Class I-B-6-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests
<PAGE> 81
remaining unpaid from previous Distribution Dates;
(xxiii) twenty-third, to the Class I-B-6-M Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xxiv) twenty-fourth, to the Class I-B-6-M Regular Interest, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group I Subordinate Principal Distribution Amount", until the Class
I-B-6-M Principal Balance has been reduced to zero;
(xxv) twenty-fifth, to each Class of Group I-B-M Regular Interests
in the order of seniority, the remaining portion, if any, of the REMIC I
Available Distribution Amount for Loan Group I, up to the amount of
unreimbursed Realized Losses previously allocated to such Class, if any,
provided that any amounts distributed pursuant to this paragraph
(a)(I)(xxv) of this definition of "REMIC I Distribution Amount" shall
not cause a further reduction in the Class Principal Balances of the
Group I-B-M Regular Interests; and
(xxvi) twenty-sixth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group I for such Distribution Date.
(II) With respect to the Group I-M Regular Interests and the Class
R-1 Certificates, on each Distribution Date on or after the Group I
Credit Support Depletion Date, to the extent of the REMIC I Available
Distribution Amount for Loan Group I remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class I-P-M Regular Interest, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (a)(I)(i) of this definition of
"REMIC I Distribution Amount";
(ii) second, to the Group I-A-M, Class I-X-M and Class R-2-M Regular
Interests and the Class R-1 Certificates, the amount payable to each
such Class of Regular Interests and Certificates on prior Distribution
Dates pursuant to clause (a)(I)(iii) or (a)(II)(iii) of this definition
of "REMIC I Distribution Amount", and remaining unpaid, pro rata
according to such amount payable to the extent of amounts available;
(iii) third, to the Group I-A-M, Class I-X-M and Class R-2-M Regular
Interests and the Class R-1 Certificates, the Interest Distribution
Amount for each such Class of Regular Interests and Certificates for the
current Distribution Date, pro rata according to their respective
Interest Distribution Amounts;
(iv) fourth, to the Group I-A-M and Class R-2-M Regular Interests and
the Class R-1 Certificates, pro rata according to Class Principal
Balance, the Group I Senior Principal Distribution Amount; and
(v) fifth, to the Class R-1 Certificates, the Residual Distribution
Amount for the Loan Group I for such Distribution Date.
(b) On any Distribution Date, to the extent of the REMIC I
Available Distribution Amount for Loan Group II:
(i) first, to the Class C-Y-1, Class C-Z-1 and Group A-X-M Regular
Interests, concurrently, the sum of (x) the Interest Distribution
<PAGE> 82
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 A-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;
(ii) second, to the Class C-Y-1, Class C-Z-1 and Group A-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 A-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;
(iii) third, 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
(iv) fourth, to the Class R-1 Certificates, the Residual Distribution
Amount for Loan Group II for such Distribution Date.
(c) On any Distribution Date, to the extent of the REMIC I
Available Distribution Amount for Loan Group III:
(i) first, to the Class D-P-M Regular Interest, the aggregate for all
of the Class III-P Mortgage Loans of the product for each Class III-P
Mortgage Loan of the applicable Class III-P Fraction and the sum of (x)
scheduled payments of principal on such Class III-P Mortgage Loan due on
or before the related Due Date in respect of which no distribution has
been made on any previous Distribution Date and which were received by
the Determination Date, or which have been advanced as part of a Monthly
P&I Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class III-P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the
amount, if any, of the principal portion of the Purchase Price paid
pursuant to a Purchase Obligation or any purchase 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 III-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Class C-Y-2, Class C-Z-2 and Group A-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 A-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;
(iii) third, to the Class C-Y-2, Class C-Z-2 and Group A-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 A-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;
<PAGE> 83
(iv) fourth, to the Class C-Y-2 and Class C-Z-2 Regular Interests, the
Class C-Y-2 Principal Distribution Amount and the Class C-Z-2 Principal
Distribution Amount, respectively; and
(v) fifth, to the Class R-1 Certificates, the Residual Distribution
Amount for Loan Group III for such Distribution Date.
(d) On any Distribution Date, to the extent of the REMIC I Available
Distribution Amount for Loan Group IV:
(i) first, to the Class D-P-M Regular Interest, the aggregate for all
of the Class IV-P Mortgage Loans of the product for each Class IV-P
Mortgage Loan of the applicable Class IV-P Fraction and the sum of (x)
scheduled payments of principal on such Class IV-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 IV-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 IV-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Class C-Y-3, Class C-Z-3 and Group IV-X-M Regular
Interests, concurrently, the sum of the Interest Distribution Amounts
for such Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class C-Y-3, Class C-Z-3 and Group IV-X-M
Regular Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests for the current
Distribution Date, pro rata according to their respective Interest
Distribution Amounts;
(iv) fourth, to the Class C-Y-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
(v) fifth, to the Class R-1 Certificates, the Residual Distribution
Amount for Loan Group IV 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 other than
the Rounding Accounts, the Class II-A-8 Interest Supplement Account and
the Certificate Insurance Policy.
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
<PAGE> 84
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 Group I-M 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-1 and Class C-
Z-1 Regular Interests and the portions of the distributions to the Group
A-X-M Regular Interests paid in respect of Group II Loans 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 A-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-2 and Class C-Z-2 Regular Interests and
the portions of the distributions to the Class D-P-M and Group A-X-M
Regular Interests paid in respect of Group III Loans pursuant to clause
(c) of the definition of "REMIC I Distribution Amount," reduced by the
Certificate Insurer Premium (which amount shall be available for
distributions to the Group III, Group C-B, Class D-P, Group A-X and
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-3, Class C-Z-3 and Group IV-X-M Regular
Interests and the portions of the distributions to the Class D-P-M
Regular Interest paid in respect of Group IV Loans 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, Class D-
P 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)
and the Certificate Insurer 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:
(i) to each Class of Group I Certificates (other than the Class
I-A-1, Class I-A-2, Class I-A-3 and Class I-A-4 Certificates) and the
Class R-2 Certificates, the amounts distributed to its Corresponding
Class on such Distribution Date;
(ii) to Component I-A-1-4, the amounts distributed to the Class
I-A-1-M Regular Interest on such Distribution Date;
(iii) (A) to each of the Class I-A-2, Class I-A-3 and Class I-A-4
Certificates, the amount distributed as principal to the Class I-A-2-M,
Class I-A-3-M and Class I-A-4-M Regular Interest, respectively, (B) to
<PAGE> 85
the Class I-A-2 Certificates and Component I-A-1-1, the amount
distributed as interest to the Class I-A-2-M Regular Interest on such
Distribution Date concurrently as follows: (I) to the Class I-A-2
Certificates, an amount equal to the product of 1/12 of the Class I-A-2
Certificate Interest Rate and the Class I-A-2 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such Distribution Date) and
(II) to Component I-A-1-1, an amount equal to the product of 1/12 of the
Component I-A-1-1 Certificate Interest Rate and the Component I-A-1-1
Notional Amount, (C) to the Class I-A-3 Certificates and Component I-A-1-
2, the amount distributed as interest to the Class I-A-3-M Regular
Interest on such Distribution Date concurrently as follows: (I) to the
Class I-A-3 Certificates, an amount equal to the product of 1/12 of the
Class I-A-3 Certificate Interest Rate and the Class I-A-3 Principal
Balance (before allocating Realized Losses of principal and giving
effect to distributions of principal, in each case, on such Distribution
Date) and (II) to Component I-A-1-2, an amount equal to the product of
1/12 of the Component I-A-1-2 Certificate Interest Rate and the
Component I-A-1-2 Notional Amount and (D) to the Class I-A-4
Certificates and Component I-A-1-3, the amount distributed as interest
to the Class I-A-4-M Regular Interest on such Distribution Date
concurrently as follows: (I) to the Class I-A-4 Certificates, an amount
equal to the product of 1/12 of the Class I-A-4 Certificate Interest
Rate and the Class I-A-4 Principal Balance (before allocating Realized
Losses of principal and giving effect to distributions of principal, in
each case, on such Distribution Date) and (II) to Component I-A-1-3, an
amount equal to the product of 1/12 of the Component I-A-1-3 Certificate
Interest Rate and the Component I-A-1-3 Notional Amount; and
(iv) fourth, 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 A-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 Group II-A and Group A-X Certificates,
concurrently, the sum of (x) the Interest Distribution Amounts for the
Group II-A Certificates and (y) the portions of the Interest Distribu-
tion Amounts for the Group A-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;
(ii) second, to the Group II-A and Group A-X Certificates, con-
currently, the sum of (x) the Interest Distribution Amounts for the Group
II-A Certificates and (y) the portions of the Interest Distribution Amounts
for the Group A-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
(iii) third, to the Group II-A Certificates, as principal, the Group
<PAGE> 86
II Senior Principal Distribution Amount, sequentially, as follows:
(a) first, to the Class II-A-7 Certificates, an amount,
up to the amount of the Class II-A-7 Priority Amount for such
Distribution Date, until the Class II-A-7 Principal Balance
has been reduced to zero;
(b) second, to the Class II-A-1 Certificates, until the
Class II-A-1 Principal Balance has been reduced to zero;
(c) third, concurrently, until the Class II-A-4
Principal Balance has been reduced to zero, as follows:
(1) 23.5312325884% to the Class II-A-4
Certificates;
(2) 26.8371200396% to the Class II-A-5
Certificates, until the Class II-A-5 Principal Balance
has been reduced to zero;
(3) 8.4566334427% to the Class II-A-8 Certificates,
until the Class II-A-8 Principal Balance has been reduced
to zero; and
(4) 41.1750139293%, sequentially, as follows:
(A) first, to the Class II-A-2 Certificates,
until the Class II-A-2 Principal Balance has been
reduced to zero; and
(B) second, to the Class II-A-3 Certificates,
until the Class II-A-3 Principal Balance has been
reduced to zero;
(d) fourth, to the Class II-A-6 Certificates, until the
Class II-A-6 Principal Balance has been reduced to zero; and
(e) fifth, to the Class II-A-7 Certificates, until the
Class II-A-7 Principal Balance has been reduced to zero;
(c) With respect to the Group III, Class D-P and Group A-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 D-P Certificates, the aggregate for all Class
III-P Mortgage Loans of the product for each Class III-P Mortgage Loan
of the applicable Class III-P Fraction and the sum of (x) scheduled
payments of principal on such Class III-P Mortgage Loan due on or before
the related Due Date in respect of which no distribution has been made
on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly P&I
<PAGE> 87
Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class III-P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the
amount, if any, of the principal portion of the Purchase Price paid
pursuant to a Purchase Obligation or any purchase 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 III-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Group III-A and Group A-X Certificates,
concurrently, the sum of (x) the Interest Distribution Amounts for the
Group III-A Certificates and (y) the portions of the Interest
Distribution Amounts for the Group A-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;
(iii) third, to the Group III-A and Group A-X Certificates,
concurrently, the sum of (x) the Interest Distribution Amounts for the
Group III-A Certificates and (y) the portions of the Interest
Distribution Amounts for the Group A-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
(iv) fourth, to the Group III-A Certificates, as principal, the Group
III Senior Principal Distribution Amount, sequentially, as follows:
(a) first, to the Class III-A-3 Certificates, an amount,
up to the amount of the Class III-A-3 Priority Amount for such
Distribution Date, until the Class III-A-3 Principal Balance
has been reduced to zero;
(b) second, concurrently, until the Class III-A-6
Principal Balance has been reduced to zero, as follows:
(1) 49.9593189825% to the Class III-A-6
Certificates; and
(2) 50.0406810175% to the Class III-A-1
Certificates;
(c) third, concurrently, until the Class III-A-4
Principal Balance has been reduced to zero, as follows:
(1) 41.9471631467% to the Class III-A-4
Certificates;
(2) 7.0645374936% to the Class III-A-5
Certificates; and
(3) 50.9882993597%, sequentially, as follows:
(A) first, to the Class III-A-1 Certificates,
<PAGE> 88
until the Class III-A-1 Principal Balance has been
reduced to zero; and
(B) second, to the Class III-A-7 Certificates,
until the Class III-A-7 Principal Balance has been
reduced to zero;
(d) fourth, to the Class III-A-2 Certificates, until the
Class III-A-2 Principal Balance has been reduced to zero; and
(e) fifth, to the Class III-A-3 Certificates, until the
Class III-A-3 Principal Balance has been reduced to zero;
(d) With respect to the Group IV and Class D-P 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 D-P Certificates, the aggregate for all Class
IV-P Mortgage Loans of the product for each Class IV-P Mortgage Loan of
the applicable Class IV-P Fraction and the sum of (x) scheduled payments
of principal on such Class IV-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 IV-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 IV-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Group IV-A and Group IV-X Certificates,
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Certificates remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of such unpaid
amounts;
(iii) third, to the Group IV-A and Group IV-X Certificates,
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Certificates for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts; and
(iv) fourth, to the Group IV-A Certificates, as principal, the Group IV
Senior Principal Distribution Amount, pro rata according to Class
Principal Balance; and
(e) With respect to the Group C-B, Class D-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) and (I)(d) of this definition of
<PAGE> 89
"REMIC II Distribution Amount", and to the extent of the REMIC II
Available Distribution Amounts for the Group II, Group III and Group IV
Certificates remaining following prior distributions, if any, on such
Distribution Date:
(i) first, to the Class D-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 on
previous Distribution Dates pursuant to clause (I)(e)(ii) of this
definition of "REMIC II Distribution Amount" and remaining unpaid from
such previous Distribution Dates;
(ii) second, to the Class D-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
sum of the Class III-P Fraction or Class IV-P Fraction, as applicable,
of any Realized Loss on a Class III-P or Class IV-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)(e)(i) or this
paragraph (I)(e)(ii) of this definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the Class D-P Principal
Balance;
(iii) third, to the Class C-B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid from
previous Distribution Dates;
(iv) fourth, to the Class C-B-1 Certificates, the Interest Distribution
Amount for such Class of Certificates for the current Distribution Date;
(v) fifth, to the Class C-B-1 Certificates, the portion of the 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;
(vi) sixth, to the Class C-B-2 Certificates, the Interest Distribution
Amount for such Class of Certificates remaining unpaid from previous
Distribution Dates;
(vii) seventh, to the Class C-B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(viii) eighth, to the Class C-B-2 Certificates, the portion of the
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;
(ix) ninth, to the Class C-B-3 Certificates, the Interest Distribution
Amount for such Class of Certificates remaining unpaid from previous
Distribution Dates;
(x) tenth, to the Class C-B-3 Certificates, the Interest Distribution
Amount for such Class of Certificates for the current Distribution Date;
<PAGE> 90
(xi) 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;
(xii) twelfth, to the Class C-B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid from
previous Distribution Dates;
(xiii) thirteenth, to the Class C-B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xiv) fourteenth, to the Class C-B-4 Certificates, the portion of
the 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;
(xv) fifteenth, to the Class C-B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid from
previous Distribution Dates;
(xvi) sixteenth, to the Class C-B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xvii) seventeenth, to the Class C-B-5 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-5
Principal Balance has been reduced to zero;
(xviii) eighteenth, to the Class C-B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid from
previous Distribution Dates;
(xix) nineteenth, to the Class C-B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
(xx) twentieth, to the Class C-B-6 Certificates, the portion of the
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;
(xxi) twenty-first, to the Certificate Insurer, the Class III-A-1
Reimbursement Amount;
(xxii) twenty-second, 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 and Group IV
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)(e)(xxii) 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
(xxiii) twenty-third, to the Class R-2 Certificates, the Residual
Distribution Amounts for the Group II, Group III and Group IV
Certificates for such Distribution Date.
<PAGE> 91
Notwithstanding the foregoing paragraphs (I)(b), (I)(c), (I)(d) and
(I)(e) of this definition of "REMIC II Distribution Amount,"
(X) on any Distribution Date occurring after the date on which one
or more of the aggregate Class Principal Balance of the Group II-A
Certificates, the aggregate Class Principal Balance of the Group III-A
Certificates or the aggregate Class Principal Balance of the Group IV-A
Certificates 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 D-P Certificates pursuant to
paragraph (I)(c)(i) or (I)(d)(i) above, if applicable) shall be paid as
principal to the remaining Class A Certificates of such other
Certificate Group or Groups to the extent of and in reduction of the
Class Principal Balances thereof (and, in the case of the Group II-A and
Group III-A Certificates, in the order of priority of paragraphs
(I)(b)(iii)(a) through (I)(b)(iii)(e) and (I)(c)(iv)(a) through
(I)(c)(iv)(e), respectively, above and, in the case of the Group IV-A
Certificates, pro rata according to Class Principal Balance), prior to
any distributions of principal to the Class D-P and Group C-B
Certificates pursuant to paragraph (I)(e) above; provided, however, that
if there are two Certificate Groups with outstanding Class A
Certificates, then such principal will be distributed between those two
Certificate Groups pro rata according to the aggregate Class Principal
Balance of the Class A Certificates of such Certificate Groups;
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 and Loan Group IV 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 or Loan Group IV is an Undercollateralized Group and the other such
Loan Group or Loan Groups is an Overcollateralized Group, then the REMIC
II Available Distribution Amount 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, Class D-P and Group A-X Certificates pursuant
to paragraphs (I)(b), (I)(c) and (I)(d) above, as applicable, shall be
paid in the following priority: (1) first, such remaining amount, up to
the Total Transfer Amount for each such Undercollateralized Group, pro
rata according to the Total Transfer Amount for each such
Undercollateralized Group, shall be distributed (a) first, to the Class
A Certificates related to each such Undercollateralized Group and the
Group A-X Certificates (if such Undercollateralized Group is Loan Group
II or Loan Group III) or the Group IV-X Certificates (if such
Undercollateralized Group is Loan Group IV), as applicable, in payment
<PAGE> 92
of any portion of the Interest Distribution Amounts for such Classes of
Certificates (or, in the case of the Group A-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, in the case of the Group II-A and Group III-A
Certificates, in the order of priority of paragraphs (I)(b)(iii)(a)
through (I)(b)(iii)(e) and (I)(c)(iv)(a) through (I)(c)(iv)(e),
respectively, above and, in the case of the Group IV-A Certificates, pro
rata according to Class Principal Balance), and (2) second, any
remaining amount shall be distributed pursuant to paragraph (I)(e)
above.
(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, in the amounts and priority provided in clauses (I)(a)(i) through
(I)(a)(iv) of this definition of "REMIC II Distribution Amount";
(b) With respect to the Group II, Group A-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:
(i) first, to the Group II-A and Group A-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;
(ii) second, to the Group II-A and Group A-X Certificates, con-
currently, the sum of (x) the Interest Distribution Amounts for the
Group II-A Certificates and (y) the portions of the Interest Distribution
Amounts for the Group A-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;
(iii) third, to the Group II-A Certificates, pro rata according to
Class Principal Balance, the Group II Senior Principal Distribution
Amount; and
(iv) fourth, after any payments to the Group III, Group IV or Group A-X
Certificates pursuant to the last paragraph of this definition of "REMIC
II Distribution Amount," to the Class R-2 Certificates, the Residual
<PAGE> 93
Distribution Amount for the Group II Certificates for such Distribution
Date;
(c) With respect to the Group III, Class D-P, Group A-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 D-P Certificates, principal in the amount
that would otherwise be distributed to such Class on such Distribution Date
pursuant to clause (I)(c)(i) of this definition of "REMIC II
Distribution Amount";
(ii) second, to the Group III-A and Group A-X Certificates, the amount
payable to each such Class of Certificates on prior Distribution Dates
pursuant to clause (I)(c)(iii) or (II)(c)(iii) of this definition of
"REMIC II Distribution Amount", and remaining unpaid, pro rata according
to such amount payable to the extent of amounts available;
(iii) third, to the Group III-A and Group A-X Certificates,
concurrently, the sum of (x) the Interest Distribution Amounts for the
Group III-A Certificates and (y) the portions of the Interest
Distribution Amounts for the Group A-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;
(iv) fourth, to the Group III-A Certificates, pro rata according to
Class Principal Balance, the Group III Senior Principal Distribution
Amount;
(v) fifth, after any payments to the Group II, Group IV or Group A-X
Certificates pursuant to the last paragraph of this definition of "REMIC
II Distribution Amount," to the Certificate Insurer, the Class III-A-1
Reimbursement Amount for such Distribution Date; and
(vi) sixth, to the Class R-2 Certificates, the Residual Distribution
Amount for the Group III Certificates for such Distribution Date; and
(d) With respect to the Group IV, Class D-P 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 D-P Certificates, principal in the amount
that would otherwise be distributed to such Class on such Distribution
Date pursuant to clause (I)(d)(i) of this definition of "REMIC II
Distribution Amount";
(ii) second, to the Group IV-A and Group IV-X Certificates, the amount
payable to each such Class of Certificates on prior Distribution Dates
pursuant to clause (I)(d)(iii) or (II)(d)(iii) of this definition of
"REMIC II Distribution Amount", and remaining unpaid, pro rata according
to such amount payable to the extent of amounts available;
(iii) third, to the Group IV-A and Group IV-X Certificates,
<PAGE> 94
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Certificates for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group IV-A Certificates, pro rata according to
Class Principal Balance, the Group IV Senior Principal Distribution Amount;
and
(v) fifth, after any payments to the Group II, Group III or Group A-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.
Notwithstanding the foregoing paragraphs (II)(b), (II)(c) and
(II)(d) of this definition of "REMIC II Distribution Amount," if on any
Distribution Date any of Loan Group II, Loan Group III or Loan Group IV
is an Undercollateralized Group and the other such Loan Group or Groups
is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the 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, Class D-P and Group A-X Certificates pursuant to paragraph
(II)(b)(i) through (II)(b)(iii), paragraph (II)(c)(i) through
(II)(c)(iv) and paragraph (II)(d)(i) through (II)(d)(iv), as applicable,
shall be paid in the following priority: (1) first, such remaining
amount, up to an amount equal to the Total Transfer Amount for each such
Undercollateralized Group, pro rata according to the Total Transfer
Amount for each such Undercollateralized Group, shall be distributed (a)
first, to the Class A Certificates related to each such
Undercollateralized Group and the Group A-X Certificates (if such
Undercollateralized Group is Loan Group II or Loan Group III) or the
Group IV-X Certificates (if such Undercollateralized Group is Loan Group
IV), as applicable, in payment of any portion of the Interest
Distribution Amounts for such Classes of Certificates (or, in the case
of the Group A-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, pro rata according
to Class Principal Balance, and (2) second, any remaining amount shall
be distributed pursuant to paragraphs (II)(b)(iv), (II)(c)(v) and
(II)(d)(v) above, as applicable; provided that if there are two
Overcollateralized Groups and the sum of the remaining REMIC II
Available Distribution Amounts for the Certificate Groups related to
such Overcollateralized Groups exceeds the Total Transfer Amount for the
Undercollateralized Group, then the sum of such remaining REMIC II
Available Distribution Amounts will be distributed to the Certificate
Group related to the Undercollateralized Group in accordance with clause
(1) of this paragraph pro rata according to such remaining REMIC II
Available Distribution Amounts.
REMIC II Regular Interests: The Classes of interests in the REMIC
<PAGE> 95
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 (i)
the REMIC I Regular Interests and (ii) the Rounding Accounts and such
assets as may be held from time to time therein, in each case, 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 and Loan Group IV, any portion of the REMIC I
Available Distribution Amount for Loan Group I, Loan Group II, Loan
Group III and Loan Group IV, respectively, remaining after all
distributions of such REMIC I Available Distribution Amount pursuant to
clauses (a)(I)(i) through (a)(I)(xxv), (a)(II)(i) through (a)(II)(iv),
(b)(i) through (b)(iii), (c)(i) through (c)(iv) and (d)(i) through
(d)(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 and Group IV
Certificates, any portion of the REMIC II Available Distribution Amount
for the Group I, Group II, Group III and Group IV Certificates,
respectively, remaining after all distributions of such REMIC II
Available Distribution Amount (and, with respect to the Group III
Certificates, after the payment of the Class III-A-1 Reimbursement
Amount) pursuant to clauses (I)(a)(i) through (I)(a)(iii), (I)(b),
(I)(c), (I)(d), (I)(e)(i) through (I)(e)(xxii), (II)(a) (other than the
distribution of the Residual Distribution Amount for the Group I
Certificates pursuant to such clause), (II)(b)(i) through (II)(b)(iii),
(II)(c)(i) through (II)(c)(v) and (II)(d)(i) through (II)(d)(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
<PAGE> 96
officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Rounding Account: The Class II-A-4, Class II-A-8 or Class III-A-5
Rounding Account, as applicable.
Rounding Amount: With respect to the Class II-A-4 Certificates, the
amount of funds, if any, needed to be withdrawn from the Class II-A-4
Rounding Account and used to round the amount of any distributions in
reduction of the Class II-A-4 Principal Balance on any Distribution Date
upward to the next higher integral multiple of $1,000. With respect to
the Class II-A-8 Certificates, the amount of funds, if any, needed to be
withdrawn from the Class II-A-8 Rounding Account and used to round the
amount of any distributions in reduction of the Class II-A-8 Principal
Balance on any Distribution Date upward to the next higher integral
multiple of $1,000. With respect to the Class III-A-5 Certificates, the
amount of funds, if any, needed to be withdrawn from the Class III-A-5
Rounding Account and used to round the amount of any distributions in
reduction of the Class III-A-5 Principal Balance on any Distribution
Date upward to the next higher integral multiple of $1,000.
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.
Schedule 1 Targeted Principal Balance: With respect to the Class I-
A-1-M Regular Interest or Component I-A-1-4, the amount set forth for
the applicable Distribution Date for Component I-A-1-4 under the heading
"Component I-A-1-4 Schedule 1 Targeted Principal Balance" in the table
attached as Appendix C to the Prospectus. With respect to the Class I-A-
4-M Regular Interest or the Class I-A-4 Certificates, the amount set
forth for the applicable Distribution Date for the Class I-A-4
Certificates under the heading "Class I-A-4 Schedule 1 Targeted
Principal Balance" in the table attached as Appendix C to the
Prospectus.
Schedule 2 Targeted Principal Balance: With respect to the Class I-
A-1-M Regular Interest or Component I-A-1-4, the amount set forth for
the applicable Distribution Date for Component I-A-1-4 under the heading
"Component I-A-1-4 Schedule 2 Targeted Principal Balance" in the table
attached as Appendix C to the Prospectus. With respect to the Class I-A-
4-M Regular Interest or the Class I-A-4 Certificates, the amount set
forth for the applicable Distribution Date for the Class I-A-4
Certificates under the heading "Class I-A-4 Schedule 2 Targeted
Principal Balance" in the table attached as Appendix C to the
Prospectus.
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.
<PAGE> 97
Selling and Servicing Contract: (a) The contract (including the PNC
Mortgage Securities Corp. Selling Guide and PNC Mortgage Securities
Corp. Servicing Guide to the extent incorporated by reference therein)
between the Company and a Person relating to the sale of the Mortgage
Loans to the Company and the servicing of such Mortgage Loans for the
benefit of the Certificateholders, which contract is substantially in
the form of Exhibit E hereto, as such contract may be amended or
modified from time to time; provided, however, that any such amendment
or modification shall not materially adversely affect the interests and
rights of Certificateholders and (b) any other similar contract
providing substantially similar rights and benefits as those provided by
the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Group I Certificates (other than the Group
I-B Certificates) and the Group II, Group III, Group IV, Class D-P,
Group A-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, $3,458,669, in
each case reduced by Special Hazard Losses allocated to the Group I-M
Regular Interests and the Class R-1 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,
<PAGE> 98
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 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) $3,458,669 as
reduced by the Special Hazard Losses allocated to the Group I-M Regular
Interests and the Class R-1 Certificates since the Cut-Off Date.
For Loan Group II, Loan Group III and Loan Group IV, collectively,
the Special Hazard Coverage for Loan Group II, Loan Group III and Loan
Group IV 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, $6,736,905, in each case reduced by
Special Hazard Losses allocated to the Group II, Group III, Group IV,
Class D-P, Group C-B and Group A-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
and Loan Group IV 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) $6,736,905 as reduced by the
Special Hazard Losses allocated to the Group II, Group III, Group IV,
Class D-P, Group C-B and Group A-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 and Loan Group IV 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 (determined in the case of the
Insured Certificates, without giving effect to the Certificate Insurance
Policy).
Special Hazard Loss: The occurrence of any direct physical loss or
damage to a Mortgaged Property not covered by a standard hazard
maintenance policy with extended coverage which is caused by or results
from any cause except: (i) fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, vandalism, aircraft,
vehicles, smoke, sprinkler leakage, except to the extent of that portion
of the loss which was uninsured because of the application of a co-
insurance clause of any insurance policy covering these perils; (ii)
normal wear and tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
<PAGE> 99
thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by, contributed to
or aggravated by a peril covered by this definition of Special Hazard
Loss; (v) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending
or expected attack (a) by any government of sovereign power (de jure or
de facto), or by an authority maintaining or using military, naval or
air forces, (b) by military, naval or air forces, or (c) by an agent of
any such government, power, authority or forces; (vi) any weapon of war
employing atomic fission or radioactive force whether in time of peace
or war; (vii) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such occurrence; or (viii) seizure or destruction
under quarantine or customs regulations, or confiscation by order of any
government or public authority.
Special Retail Certificates: The Class II-A-4, Class II-A-8 and
Class III-A-5 Certificates.
Step Down Percentage: For any Distribution Date, the percentage
indicated below:
Distribution Date Occurring In Step
Down Percentage
September 1999 through August 2004 0%
September 2004 through August 2005 30%
September 2005 through August 2006 40%
September 2006 through August 2007 60%
September 2007 through August 2008 80%
September 2008 and thereafter 100%
Stripped Interest Rate: For each Group I and Group IV Loan, the
excess, if any, of the Pass-Through Rate for such Mortgage Loan over
7.000% per annum. For each Group II Loan, the excess, if any, of the
Pass-Through Rate for such Mortgage Loan over 7.500% per annum. For each
Group III Loan, the excess, if any, of the Pass-Through Rate for such
Mortgage Loan over 7.250% per annum.
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 aggregate Class Principal Balance of
the Group II-A Certificates. With respect to Loan Group III at any time,
the then outstanding aggregate Principal Balance of the Group III Loans
(less the applicable Class III-P Fraction of any Class III-P Mortgage
Loan) minus the then outstanding aggregate Class Principal Balance of
the Group III-A Certificates. With respect to Loan Group IV at any time,
<PAGE> 100
the then outstanding aggregate Principal Balance of the Group IV Loans
(less the applicable Class IV-P Fraction of any Class IV-P Mortgage
Loan) minus the then outstanding aggregate Class Principal Balance of
the Group IV-A Certificates.
Subordinate Percentage: The Group I Subordinate Percentage, Group
II Subordinate Percentage, Group III Subordinate Percentage or Group IV
Subordinate Percentage, as applicable.
Subordination Level: On any specified date, with respect to any
Class of Group I-B-M Regular Interests, the percentage obtained by
dividing the sum of the Class Principal Balances of the Classes of Group
I-B-M Regular Interests which are subordinate in right of payment to
such Class by the sum of the Class Principal Balances of the Group I-M
Regular Interests and the Class R-1 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, Class D-P 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 and Group IV Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for
another Mortgage Loan pursuant to and in accordance with the provisions
of Section 2.02.
Tax Matters Person: A Holder of a Class R-1 Certificate, with
respect to REMIC I, and a Holder of a Class R-2 Certificate, with
respect to REMIC II, in each case with a Percentage Interest of at least
0.01% or any Permitted Transferee of such Class R-1 or Class R-2
Certificateholder designated as succeeding to the position of Tax
Matters Person with respect to the applicable trust fund in a notice to
the Trustee signed by authorized representatives of the transferor and
transferee of such Class R-1 or Class R-2 Certificate. The Company is
hereby appointed to act as the Tax Matters Person for REMIC I so long as
it holds a Class R-1 Certificate, and to act as the Tax Matters Person
for 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
<PAGE> 101
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).
Total Transfer Amount: For any Distribution Date and for any
Undercollateralized Group, an amount equal to the sum of the Interest
Transfer Amount and the Principal Transfer Amount for such
Undercollateralized Group.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
Transferee Affidavit and Agreement: An affidavit and agreement in
the form attached hereto as Exhibit J.
Trust: The pool of assets consisting of the Trust Fund conveyed
pursuant to Section 2.01 of this Agreement.
Trustee: State Street Bank and Trust Company, or its successor-in-
interest as provided in Section 8.09, or any successor trustee appointed
as herein provided.
Trust Fund: The corpus of the trust created pursuant to Section
2.01 of this Agreement. The Trust Fund consists of (i) the PNC Mortgage
Loans and (upon purchase thereof by the Trustee pursuant to Section
2.01) the Clipper Mortgage Loans and all rights pertaining thereto; (ii)
such assets as from time to time may be held by the Trustee (or its duly
appointed agent) in the Certificate Account (including (a) an initial
deposit therein on the Closing Date by the Company in the amount of
$2,185.71 for the payment of interest on a Mortgage Loan which does not
have a Due Date until October 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) or the Rounding Accounts or
the Class II-A-8 Interest Supplement Account; (iii) such assets as from
time to time may be held by Servicers in a Custodial Account for P&I or
<PAGE> 102
Custodial Account for Reserves or a Buydown Fund Account related to the
Mortgage Loans (except amounts representing the Master Servicing Fee or
the Servicing Fee); (iv) property which secured a Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure
or, in the case of a Cooperative Loan, a similar form of conversion,
after the Cut-Off Date; and (v) the Certificate Insurance Policy and
amounts paid or payable by the insurer under any FHA insurance policy or
any Primary Insurance Policy and proceeds of any VA guaranty and any
other insurance policy related to any Mortgage Loan or the Mortgage
Pool.
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-M Regular Interests and the Class R-1
Certificates, pro rata according to the amount of the Interest
Distribution Amount to which each such Class would otherwise be entitled
in reduction thereof. Any such Uncompensated Interest Shortfall (i)
allocated to the Class I-A-2-M Regular Interest shall be allocated to
the Class I-A-2 Certificates and Component I-A-1-1, (ii) allocated to
the Class I-A-3-M Regular Interest shall be allocated to the Class I-A-3
Certificates and Component I-A-1-2 and (iii) allocated to the Class I-A-
4-M Regular Interest shall be allocated to the Class I-A-4 Certificates
and Component I-A-1-3, in each case, according to the allocation set
forth in the last sentence of the definition of "Pro Rata Allocation.".
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 A-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 A-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
<PAGE> 103
thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be
allocated to the Group IV Certificates and the portions of the Group C-B
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 II shall be
allocated to the Class C-Y-1 and Class C-Z-1 Regular Interests and the
portions of the Group A-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 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-2 and Class C-Z-2 Regular Interests and the
portions of the Group A-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-3, Class C-Z-3 and Group IV-X-M Regular
Interests, pro rata according to the amount of the Interest Distribution
Amount to which each such Class of Regular Interests would otherwise be
entitled in reduction thereof.
Undercollateralized Group: For any Distribution Date, Loan Group
II, if immediately prior to such Distribution Date the aggregate Class
Principal Balance of the Group II-A Certificates 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
aggregate Class Principal Balance of the Group III-A Certificates is
greater than the aggregate Principal Balance of the Group III Loans
(less the applicable Class III-P Fraction of each Class III-P Mortgage
Loan); and for any Distribution Date, Loan Group IV, if immediately
prior to such Distribution Date the aggregate Class Principal Balance of
the Group IV-A Certificates is greater than the aggregate Principal
Balance of the Group IV Loans (less the applicable Class IV-P Fraction
of each Class IV-P Mortgage Loan).
Underwriting Standards: The underwriting standards of the Company,
Cendant Mortgage Corporation, Commerce Security Bank, Countrywide Home
Loans, Inc., 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.,
<PAGE> 104
Merrill Lynch Credit Corp., Old Kent Mortgage Company, PNC Mortgage
Corp. of America, Prism Mortgage Company, 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 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
<PAGE> 105
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 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,
<PAGE> 106
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, the Rounding Accounts, the Class II-A-8
Interest Supplement 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) the Certificate Insurance Policy and amounts paid or payable
by the insurer under any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage
Pool;
(II) All 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, 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.
<PAGE> 107
The Company and the Trustee at the direction of the Company shall,
to the extent consistent with this Agreement, take such actions as may
be necessary to ensure that, if this Agreement were deemed to create a
security interest in the PNC Conveyed Assets, such security interest
would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term
of the Agreement. In connection herewith, the Trustee shall have all of
the rights and remedies of a secured party and creditor under the
Uniform Commercial Code as in force in the relevant jurisdiction.
In connection with the sale, transfer and assignment referred to in
the third paragraph of this Section 2.01, the Company, concurrently with
the execution and delivery hereof, does deliver to, and deposit with, or
cause to be delivered to and deposited with, the Trustee or Custodian
the Mortgage Files for the PNC Mortgage Loans, which shall on original
issuance thereof and at all times be registered in the name of the
Trustee. In the event that the Mortgage Files delivered or caused 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
<PAGE> 108
the part of the recording office), the Company shall deliver to the
Trustee a fully legible reproduction of the original Mortgage or
intervening assignment provided that the related Lender or originator
certifies on the face of such reproduction(s) or copy as follows:
"Certified true and correct copy of original which has been transmitted
for recordation." For purposes hereof, transmitted for recordation means
having been mailed or otherwise delivered for recordation to the
appropriate authority. In all such instances, the Company shall transmit
the original recorded Mortgage and any intervening assignments with
evidence of recording thereon (or a copy of such original Mortgage or
intervening assignment certified by the applicable recording office)
(collectively, "Recording Documents") to the Trustee within 270 days
after the execution and delivery hereof. In instances where, due to a
delay on the part of the recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents
cannot be delivered to the Trustee within 270 days after execution and
delivery hereof, the Company shall deliver to the Trustee within such
time period a certificate (a "Company Officer's Certificate") signed by
the Chairman of the Board, President, any Vice President or Treasurer of
the Company stating the date by which the Company expects to receive
such Recording Documents from the applicable recording office. In the
event that Recording Documents have still not been received by the
Company and delivered to the Trustee by the date specified in its
previous Company Officer's Certificate delivered to the Trustee, the
Company shall deliver to the Trustee by such date an additional Company
Officer's Certificate stating a revised date by which the Company
expects to receive the applicable Recording Documents. This procedure
shall be repeated until the Recording Documents have been received by
the Company and delivered to the Trustee.
In instances where, due to a delay on the part of the title
insurer, a copy of the title insurance policy for a particular Mortgage
Loan is not included in the Mortgage File delivered to the Trustee prior
to or concurrently with the execution and delivery hereof or of the
Clipper Loan Sale Agreement, as applicable, the Company shall provide a
copy of such title insurance policy to the Trustee within 90 days after
the Company's receipt of the Recording Documents necessary to issue such
title insurance policy. In addition, the Company shall, subject to the
limitations set forth in the preceding sentence, provide to the Trustee
upon request therefor a duplicate title insurance policy for any
Mortgage Loan.
For Mortgage Loans for which the Company or Clipper, as applicable,
has received a Payoff after the Cut-Off Date and prior to the date of
execution and delivery hereof, the Company, in lieu of delivering the
above documents, herewith delivers to the Trustee a certification of a
Servicing Officer of the nature set forth in Section 3.10.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.01, and to enter into a
<PAGE> 109
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 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
<PAGE> 110
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, 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
<PAGE> 111
certification in the form attached as Exhibit M hereto, to the effect
that, except as noted, all documents required (in the case of
instruments described in clauses (X)(v) and (Y)(x) of the definition of
"Mortgage File", known by the Trustee to be required) pursuant to the
definition of "Mortgage File" and Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans
identified in the Mortgage Loan Schedule. In performing such review, the
Trustee may rely upon the purported genuineness and due execution of any
such document, and on the purported genuineness of any signature
thereon. The Trustee shall not be required to make any independent
examination of any documents contained in each Mortgage File beyond the
review specifically required herein. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any Mortgage Loan. If the Trustee finds any document or
documents constituting a part of a Mortgage File not to have been
executed or received, or to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, the Trustee shall promptly so
notify the Company. The Company hereby covenants and agrees that, if any
such defect cannot be corrected or cured, the Company shall, not later
than 60 days after the Trustee's notice to it respecting such defect,
within the three-month period commencing on the Closing Date (or within
the two-year period commencing on the Closing Date if the related
Mortgage Loan is a "defective obligation" within the meaning of Section
860G(a)(4)(B)(ii) of the Code and Treasury Regulation Section 1.860G-
2(f)), either (i) purchase or repurchase the related Mortgage Loan from
the Trustee at the Purchase Price, or (ii) substitute for any Mortgage
Loan to which such defect relates a different mortgage loan (a
"Substitute Mortgage Loan") which is a "qualified replacement mortgage"
(as defined in the Code) and, (iii) after such three-month or two-year
period, as applicable, the Company shall purchase or repurchase the
Mortgage Loan from the Trustee at the Purchase Price but only if the
Mortgage Loan is in default or default is, in the judgment of the
Company, reasonably imminent. If such defect would cause the Mortgage
Loan to be other than a "qualified mortgage" (as defined in the Code),
then notwithstanding the previous sentence, purchase, repurchase or
substitution must occur within the sooner of (i) 90 days from the date
the defect was discovered or (ii) in the case of substitution, two years
from the Closing Date.
Such Substitute Mortgage Loan shall mature no later than, and not
more than two years earlier than, have a principal balance and Loan-to-
Value Ratio equal to or less than, and have a 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.
<PAGE> 112
Furthermore, such Substitute Mortgage Loan shall otherwise have such
characteristics so that the representations and warranties of the
Company set forth in Section 2.03 hereof would not have been incorrect
had such Substitute Mortgage Loan originally been a Mortgage Loan, and
the Company shall be deemed to have made such representations and
warranties as to such Substitute Mortgage Loan. A Substitute Mortgage
Loan may be substituted for a defective Mortgage Loan whether or not
such defective Mortgage Loan is itself a Substitute Mortgage Loan.
Notwithstanding anything herein to the contrary, each Substitute
Mortgage Loan shall be deemed to have the same Pass-Through Rate as the
Mortgage Loan for which it was substituted.
The Purchase Price for each purchased or repurchased Mortgage Loan
shall be deposited by the Company in the Certificate Account and, upon
receipt by the Trustee of written notification of such deposit signed by
a Servicing Officer, the Trustee shall release to the Company the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be
necessary to vest in the Company or its designee or assignee title to
any Mortgage Loan released pursuant hereto. The obligation of the
Company to purchase or repurchase or substitute any Mortgage Loan as to
which such a defect in a constituent document exists shall constitute
the sole remedy respecting such defect available to the Holders of the
REMIC I Regular Interests or the Class R-1 Certificateholders or the
Trustee on behalf of the Holders of the REMIC I Regular Interests or the
Class R-1 Certificateholders.
Section 2.03. Representations and Warranties of the Company Concerning
the Mortgage Loans. With respect to the conveyance of the PNC Mortgage
Loans provided for in Section 2.01 herein and the conveyance of the
Clipper Mortgage Loans provided for in the Clipper Loan Sale Agreement,
the Company hereby represents and warrants to the Trustee that as of the
Cut-Off Date unless otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule was true
and correct in all material respects at the date or dates respecting
which such information is furnished;
(ii) As of the Closing Date, each Mortgage 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
<PAGE> 113
of the security intended to be provided by the Mortgage;
(iii) Immediately upon the transfer and assignment contemplated
herein and in the Clipper Loan Sale Agreement, the Trustee shall have
good title to, and will be the sole legal owner of, each PNC Mortgage
Loan and Clipper Mortgage Loan, respectively, free and clear of any
encumbrance or lien (other than any lien under this Agreement);
(iv) As of the day prior to the Cut-Off Date, all payments due on each
Mortgage Loan had been made and no Mortgage Loan had been delinquent
(i.e., was more than 30 days past due) more than once in the preceding
12 months and any such delinquency lasted for no more than 30 days;
(v) As of the Closing Date, there is no late assessment for delinquent
taxes outstanding against any Mortgaged Property;
(vi) As of the Closing Date, there is no offset, defense or counterclaim
to any Mortgage Note, including the obligation of the Mortgagor to pay
the unpaid principal or interest on such Mortgage Note except to the
extent that the Buydown Agreement for a Buydown Loan forgives certain
indebtedness of a Mortgagor;
(vii) As of the Closing Date, each Mortgaged Property is free of
damage and in good repair, ordinary wear and tear excepted;
(viii) Each Mortgage Loan at the time it was made complied with all
applicable state and federal laws, including, without limitation, usury,
equal credit opportunity, disclosure and recording laws;
(ix) Each Mortgage Loan was originated by a savings association, savings
bank, credit union, insurance company, or similar institution which is
supervised and examined by a federal or state authority or by a
mortgagee approved by the FHA and will be serviced by an institution
which meets the servicer eligibility requirements established by the
Company;
(x) As of the Closing Date, each Mortgage Loan 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 and will be in full force and effect and inure to the benefit of
the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders upon the consummation of the transactions
contemplated by this Agreement and no claims have been made under such
policy, and no prior holder of the related Mortgage, including the
Company, has done, by act or omission, anything which would impair the
coverage of such policy;
(xi) All of the Group I Loans, not less than approximately 89.1% (by
Principal Balance) of the Group II Loans, not less than approximately
92.1% (by Principal Balance) of the Group III Loans and not less than
approximately 93.5% (by Principal Balance) of the Group IV Loans with
<PAGE> 114
Loan-to-Value Ratios as of the Cut-Off Date in excess of 80% were
covered by a Primary Insurance Policy or an FHA insurance policy or a VA
guaranty, and such policy or guaranty is valid and remains in full force
and effect;
(xii) As of the Closing Date, all policies of insurance required by
this Agreement or by a Selling and Servicing Contract have been validly
issued and remain in full force and effect, including such policies
covering the Company, the Master Servicer or any Servicer;
(xiii) As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
(xiv) Each Mortgage was documented by appropriate Fannie Mae/Freddie
Mac mortgage instruments in effect at the time of origination, or other
instruments approved by the Company;
(xv) As of the Closing Date, the Mortgaged Property securing each
Mortgage 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;
(xvi) As of the Closing Date, each Mortgage and Mortgage Note is the
legal, valid and binding obligation of the maker thereof and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity;
(xvii) As of the date of origination, as to Mortgaged Properties
which are units in condominiums or planned unit developments, all of
such units met Fannie Mae or Freddie Mac requirements, are located in a
condominium or planned unit development projects which have received
Fannie Mae or Freddie Mac approval, or are approvable by Fannie Mae or
Freddie Mac or have otherwise been approved by the Company;
(xviii) One of the Group I Loans, one of the Group III Loans and none
of the Group II and Group IV Loans are Buydown Loans;
(xix) Based solely on representations of the Mortgagors obtained at
the origination of the related Mortgage Loans, approximately 97.01% (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 1.92% (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
1.07% (by Principal Balance) of the Group I Loans will be secured by
Mortgaged Properties which were investor properties of the related
Mortgagors; approximately 89.48% (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 1.05%
(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 9.48% (by Principal Balance) of the Group
II Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors; approximately 95.37% (by Principal
Balance) of the Group III Loans will be secured by owner occupied
Mortgaged Properties which are the primary residences of the related
Mortgagors, approximately 1.07% (by Principal Balance) of the Group III
Loans will be secured by owner occupied Mortgaged Properties which were
<PAGE> 115
second or vacation homes of the Mortgagors and approximately 3.56% (by
Principal Balance) of the Group III Loans will be secured by Mortgaged
Properties which were investor properties of the related Mortgagors; and
approximately 85.77% (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 4.64% (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 9.59% (by Principal Balance) of the Group
IV Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors;
(xx) Prior to origination or refinancing, an appraisal of each Mortgaged
Property was made by an appraiser on a form satisfactory to Fannie Mae
or Freddie Mac;
(xxi) The Mortgage Loans have been underwritten substantially in
accordance with the applicable Underwriting Standards;
(xxii) All of the Mortgage Loans have due-on-sale clauses; by the
terms of the Mortgage Notes, however, the due on sale provisions may not
be exercised at the time of a transfer if prohibited by law;
(xxiii) The Company used no adverse selection procedures in selecting
the Mortgage Loans from among the outstanding fixed-rate conventional
mortgage loans purchased by it which were available for inclusion in the
Mortgage Pool and as to which the representations and warranties in this
Section 2.03 could be made;
(xxiv) With respect to each Cooperative Loan, the Cooperative Stock
that is pledged as security for the Cooperative Loan is held by a person
as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(xxv) Each Cooperative Loan is secured by a valid, subsisting and
enforceable (except as such enforcement may be limited by laws affecting
the enforcement of creditors' rights generally and principles of equity)
perfected first lien and security interest in the related Cooperative
Stock securing the related Mortgage Note, subject only to (a) liens of
the Cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the Cooperative's payments for its blanket mortgage,
current and future real property taxes, insurance premiums, maintenance
fees and other assessments to which like collateral is commonly subject,
and (b) other matters to which like collateral is commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by the Security Agreement;
(xxvi) With respect to any Mortgage Loan as to which an affidavit has
been delivered to the Trustee certifying that the original Mortgage Note
is a Destroyed 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;
(xxvii) Based upon an appraisal of the Mortgaged Property securing
each Mortgage Loan, approximately 87.33% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio less than or equal to
80%, approximately 12.68% (by Principal Balance) of the Group I Loans
had a current Loan-to-Value Ratio greater than 80% but less than or
<PAGE> 116
equal to 95% and none of the Group I Loans had a current Loan-to-Value
Ratio greater than 95%; approximately 82.82% (by Principal Balance) of
the Group II Loans had a current Loan-to-Value Ratio less than or equal
to 80%, approximately 16.90% (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 0.29% (by Principal Balance) of the
Group II Loans had a current Loan-to-Value Ratio greater than 95%;
approximately 78.87% (by Principal Balance) of the Group III Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately
19.97% (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 1.16% (by Principal Balance) of the Group III Loans had a
current Loan-to-Value Ratio greater than 95%; and approximately 60.03%
(by Principal Balance) of the Group IV Loans had a current Loan-to-Value
Ratio less than or equal to 80%, approximately 39.84% (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 0.13% (by
Principal Balance) of the Group IV Loans had a current Loan-to-Value
Ratio greater than 95%;
(xxviii) Approximately 42.01% (by Principal Balance) of the Group I
Loans, approximately 37.74% (by Principal Balance) of the Group II
Loans, approximately 43.85% (by Principal Balance) of the Group III
Loans and approximately 44.03% (by Principal Balance) of the Group IV
Loans were originated for the purpose of refinancing existing mortgage
debt, including cash-out refinancings; and approximately 57.98% (by
Principal Balance) of the Group I Loans, approximately 62.26% (by
Principal Balance) of the Group II Loans, approximately 56.15% (by
Principal Balance) of the Group III Loans and approximately 55.97% (by
Principal Balance) of the Group IV Loans were originated for the purpose
of purchasing the Mortgaged Property;
(xxix) Not less than approximately 80.18%, 13.54%, 23.26% and 42.90%
(by Principal Balance) of the Group I Loans, Group II Loans, Group III
Loans and Group IV Loans, respectively, were originated under full
documentation programs; and
(xxx) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties
set forth in this Section 2.03 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
<PAGE> 117
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 and the
Certificate Insurer an Opinion of Counsel reasonably satisfactory to the
Trustee that each Substitute Mortgage Loan will be a "qualified
replacement mortgage" within the meaning of Section 860G(a)(4) of the
Code. Such substitution shall be made in the manner and within the time
limits set forth in Section 2.02. Any such purchase or repurchase by the
Company shall be accomplished in the manner and at the Purchase Price,
if applicable, but shall not be subject to the time limits, set forth in
Section 2.02. It is understood and agreed that the obligation of the
Company to provide such substitution or to make such purchase or
repurchase of any affected Mortgage Loan or Mortgage Loans or any
property acquired in respect thereof as to which a breach has occurred
and is continuing shall constitute the sole remedy respecting such
breach available to the Holders of the REMIC I Regular Interests and the
Class R-1 Certificateholders or the Trustee on behalf of the Holders of
the REMIC I Regular Interests and the Class R-1 Certificateholders.
Section 2.04. Acknowledgment of Transfer of Trust Fund; Authentication
of Class R-1 Certificates. The Trustee acknowledges the transfer and
assignment to it of the property constituting the Trust Fund, but
without having made the review required to be made within 45 days
pursuant to Section 2.02, and, as of the Closing Date, does hereby
convey to the Company the REMIC I Regular Interests, and shall cause to
be authenticated and delivered, upon and pursuant to the order of the
Company, the Class R-1 Certificates in Authorized Denominations
evidencing the residual beneficial ownership interest in the REMIC I
Trust Fund.
Section 2.05. Conveyance of REMIC II; REMIC Election and Designations.
A trust ("REMIC II") of which the Trustee is the trustee is hereby
created under the laws of the State of New York for the benefit of the
Holders of the REMIC II Regular Interests and the Class R-2
Certificates. The purpose of REMIC II is to hold the REMIC II Trust
Fund and provide for the issuance, execution and delivery of the REMIC
II Regular Interests and the Class R-2 Certificates. The assets of
REMIC II shall consist of the REMIC II Trust Fund. REMIC II shall be
irrevocable.
The assets of REMIC II shall remain in the custody of the Trustee,
on behalf of REMIC II, and shall be kept in REMIC II. Moneys to the
credit of REMIC II shall be held by the Trustee and invested as provided
herein. All assets received and held in REMIC II will not be subject to
any right, charge, security interest, lien or claim of any kind in favor
of State Street Bank and Trust Company in its own right, or any Person
claiming through it. The Trustee, on behalf of REMIC II, shall not have
the power or authority to transfer, assign, hypothecate, pledge or
otherwise dispose of any of the assets of REMIC II to any Person, except
as permitted herein. No creditor of a beneficiary of REMIC II, of the
Trustee, of the Master Servicer or of the Company shall have any right
to obtain possession of, or otherwise exercise legal or equitable
<PAGE> 118
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 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, the Rounding Accounts, the Class II-A-8
Interest Supplement 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) the Certificate
Insurance Policy and amounts paid or payable by the insurer under
any FHA insurance policy or any Primary Insurance Policy and
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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 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
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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 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
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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 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
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provisions of the Mortgage Loans and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and
provisions of any Primary Insurance Policy, any FHA insurance policy or
VA guaranty, any hazard insurance policy, and federal flood insurance,
cause to be followed such collection procedures as are followed with
respect to mortgage loans comparable to the Mortgage Loans and held in
portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-
sale" clauses with respect to the related Mortgage Loans, to the extent
permitted by law, subject to the provisions set forth in Section 3.08.
Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive or cause to be waived any assumption fee or late
payment charge in connection with the prepayment of any Mortgage Loan
and (ii) only upon determining that the coverage of any applicable
insurance policy or guaranty related to a Mortgage Loan will not be
materially adversely affected, arrange a schedule, running for no more
than 180 days after the first delinquent Due Date, for payment of any
delinquent installment on any Mortgage Note or for the liquidation of
delinquent items. The Master Servicer shall have the right, but not the
obligation, to purchase or repurchase any related delinquent Mortgage
Loan delinquent 90 consecutive days or more for an amount equal to its
Purchase Price; provided, however, that the aggregate Purchase Price of
Mortgage Loans so purchased 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. The Master Servicer shall also have the
right, but not the obligation, to direct the Trustee to sell, transfer
and assign any Mortgage Loan that has been delinquent for 90 consecutive
days or more to a third party designated by the Master Servicer as agent
for such third party, upon receipt by the Trustee of written
notification signed by a Servicing Officer of the deposit in the
Certificate Account of the Purchase Price for such delinquent Mortgage
Loan by the Master Servicer on behalf of such third party or by such
third party. For purposes of this paragraph, a Mortgage Loan is
considered delinquent for 90 consecutive days if a Monthly Payment is
not received by the first day of the third month following the month
during which such payment was due.
Consistent with the terms of this Section 3.01, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if it has determined,
exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected by such waiver, modification,
postponement or indulgence; provided, however, that (unless the
Mortgagor is in default with respect to the Mortgage Loan or in the
reasonable judgment of the Master Servicer such default is imminent) the
Master Servicer shall not permit any modification with respect to any
Mortgage Loan that would (i) change the applicable Mortgage Interest
Rate, defer or forgive the payment of any principal or interest, reduce
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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.
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
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Mortgaged Property or other similar matters if it has determined,
exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected thereby and that the applicable
trust fund would not fail to continue to qualify as a REMIC under the
Code as a result thereof and that no tax on "prohibited transactions" or
"contributions" after the startup day would be imposed on either REMIC
as a result thereof.
In connection with the servicing and administering of each Mortgage
Loan, the Master Servicer and any affiliate of the Master Servicer (i)
may perform services such as appraisals, default management and
brokerage services that are not customarily provided by servicers of
mortgage loans, and shall be entitled to reasonable compensation
therefor and (ii) may, at its own discretion and on behalf of the
Trustee, obtain credit information in the form of a "credit score" from
a credit repository.
Section 3.02. Custodial Accounts. The Master Servicer shall cause to be
established and maintained by each Servicer under the Master Servicer's
supervision the Custodial Account for P&I, Buydown Fund Accounts (if
any) and special Custodial Account for Reserves and shall deposit or
cause to be deposited therein daily the amounts related to the Mortgage
Loans required by the Selling and Servicing Contracts to be so
deposited. Proceeds received with respect to individual Mortgage Loans
from any title, hazard, or FHA insurance policy, VA guaranty, Primary
Insurance Policy or other insurance policy covering such Mortgage Loans
shall be deposited first in the Custodial Account for Reserves if
required for the restoration or repair of the related Mortgaged
Property. Proceeds from such insurance policies not so deposited in the
Custodial Account for Reserves shall be deposited in the Custodial
Account for P&I, and shall be applied to the balances of the related
Mortgage Loans as payments of interest and principal.
The Master Servicer is hereby authorized to make withdrawals from
and to issue drafts against the Custodial Accounts for P&I and the
Custodial Accounts for Reserves for the purposes required or permitted
by this Agreement. Each Custodial Account for P&I and each Custodial
Account for Reserves shall bear a designation clearly showing the
respective interests of the applicable Servicer, as trustee, and of the
Master Servicer, in substantially one of the following forms:
(a) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of principal and
interest custodial account for PNC Mortgage Securities Corp., its
successors and assigns, for various owners of interests in PNC
Mortgage Securities Corp. mortgage-backed pools or (ii) [Servicer's
Name] in trust for PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and
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insurance custodial account for PNC Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners
of interests in PNC Mortgage Securities Corp. mortgage-backed pools
or (ii) [Servicer's Name] in trust for PNC Mortgage Securities
Corp. and various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that
have been collected by any Servicer and are due to the Certificate
Account pursuant to Section 4.01 of this Agreement.
Section 3.03. The Investment Account; Eligible Investments.(a) Not
later than the Withdrawal Date, the Master Servicer shall withdraw or
direct the withdrawal of funds in the Custodial Accounts for P&I, for
deposit in the Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the Mortgage
Loans received or advanced by the applicable Servicers which were due on
the related Due Date, net of Servicing Fees due the applicable Servicers
and less any amounts to be withdrawn later by the applicable Servicers
from the applicable Buydown Fund Accounts;
(ii) Payoffs and the proceeds of other types of liquidations of the
Mortgage Loans received by the applicable Servicer for such Mortgage
Loans during the applicable Payoff Period, with interest to the date of
Payoff or liquidation less any amounts to be withdrawn later by the
applicable Servicers from the applicable Buydown Fund Accounts; and
(iii) Curtailments received by the applicable Servicers in the Prior
Period.
At its option, the Master Servicer may invest funds withdrawn from
the Custodial Accounts for P&I, as well as any Buydown Funds, Insurance
Proceeds and Liquidation Proceeds previously received by the Master
Servicer (including amounts paid by the Company in respect of any
Purchase Obligation or its substitution obligations set forth in Section
2.02 or Section 2.03 or in connection with the exercise of the option to
terminate this Agreement pursuant to Section 9.01) for its own account
and at its own risk, during any period prior to their deposit in the
Certificate Account. Such funds, as well as any funds which were
withdrawn from the Custodial Accounts for P&I on or before the
Withdrawal Date, but not yet deposited into the Certificate Account,
shall immediately be deposited by the Master Servicer with the
Investment Depository in an Investment Account in the name of the Master
Servicer and the Trustee for investment only as set forth in this
Section 3.03. The Master Servicer shall bear any and all losses incurred
on any investments made with such funds and shall be entitled to retain
all gains realized on such investments as additional servicing
compensation. Not later than the Business Day prior to the Distribution
Date, the Master Servicer shall deposit such funds, net of any gains
(except Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i)
one or more Eligible Investments which shall in no event mature later
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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, the Class R-1
Certificateholders and the Certificate Insurer 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) not
previously deposited in the Custodial Accounts for P&I or the Investment
Account, and any amounts paid by the Company in connection with the
exercise of its option to terminate this Agreement pursuant to Section
9.01 or any other purchase or repurchase of Mortgage Loans permitted by
this Agreement. The Trustee shall deposit into the Certificate Account
amounts received under the Certificate Insurance Policy in accordance
with Section 3.22(b) hereof.
(b) Funds held in the Certificate Account shall be invested at the
written direction of the Master Servicer in (i) one or more Eligible
Investments which shall in no event mature later than the Business Day
prior to the related Distribution Date (except if such Eligible
Investments are obligations of the Trustee, such Eligible Investments
may mature on the Distribution Date), or (ii) such other instruments as
shall be required to maintain the Ratings. The Master Servicer shall be
entitled to receive any gains earned on such Eligible Investments and
shall bear any losses suffered in connection therewith. If the Trustee
has not received such written investment directions from the Master
Servicer, the Trustee shall not invest funds held in the Certificate
Account. The Trustee shall have no liability for any losses on
investments of funds held in the Certificate Account.
Section 3.05. Permitted Withdrawals from the Certificate Account, the
Investment Account and Custodial Accounts for P&I and of Buydown Funds
from the Buydown Fund Accounts.
(a) The Master Servicer is authorized to make withdrawals, from
time to time, from the Investment Account, the Certificate Account or
the Custodial Accounts for P&I established by the Servicers of amounts
deposited therein in respect of the Certificates, as follows:
(i) To reimburse itself or the applicable Servicer for Monthly P&I
Advances made pursuant to Section 4.02 or a Selling and Servicing
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Contract, such right to reimbursement pursuant to this paragraph (i)
being limited to amounts received on particular Mortgage Loans
(including, for this purpose, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of principal and/or interest
respecting which any such Monthly P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for amounts expended
by or for the account of the Master Servicer pursuant to Section 3.09 or
amounts expended by such Servicer pursuant to the Selling and Servicing
Contracts in connection with the restoration of property damaged by an
Uninsured Cause or in connection with the liquidation of a Mortgage
Loan;
(iii) To pay to itself, with respect to the related Mortgage Loans,
the Master Servicing Fee (net of Compensating Interest reduced by Payoff
Earnings and Payoff Interest) as to which no prior withdrawals from
funds deposited by the Master Servicer have been made;
(iv) To reimburse itself or the applicable Servicer for advances made
with respect to related Mortgage Loans which the Master Servicer has
determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned in the
Investment Account and the Certificate Account to which it is entitled
and to reimburse itself for expenses incurred by and reimbursable to it
pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the Certificate
Account not required to be on deposit therein at the time of such
withdrawal;
(vii) To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts
specified in Section 3.04(a); and
after making or providing for the above withdrawals
(viii) 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;
(ii) In the event of a Payoff of any Mortgage Loan having a related
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Buydown Fund, to apply amounts remaining in Buydown Fund Accounts to
reduce the required amount of such principal Payoff (or, if the
Mortgagor has made a Payoff, to refund such remaining Buydown Fund
amounts to the Person entitled thereto);
(iii) In the event of foreclosure or liquidation of any Mortgage
Loan having a Buydown Fund, to deposit remaining Buydown Fund amounts in
the Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account representing
Buydown Funds following termination of this Agreement pursuant to
Section 9.01;
(c) The Trustee is authorized to make withdrawals from time to
time from the Certificate Account to reimburse itself for advances it
has made pursuant to Section 7.01(a) hereof that it has determined to be
Nonrecoverable Advances.
Section 3.06. Maintenance of Primary Insurance Policies; Collections
Thereunder. The Master Servicer shall use commercially reasonable
efforts to keep, and to cause the Servicers to keep, in full force and
effect each Primary Insurance Policy required with respect to a Mortgage
Loan, in the manner set forth in the applicable Selling and Servicing
Contract, until no longer required. Notwithstanding the foregoing, the
Master Servicer shall have no obligation to maintain any Primary
Insurance Policy for a Mortgage Loan for which the outstanding Principal
Balance thereof at any time subsequent to origination was 80% or less of
the 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
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this Section 3.07 shall be recoverable as an advance by the Master
Servicer from the Investment Account or the Certificate Account. Such
insurance shall be with insurers approved by the Master Servicer and
Fannie Mae or Freddie Mac. Other additional insurance may be required of
a Mortgagor, in addition to that required pursuant to such applicable
laws and regulations as shall at any time be in force and as shall
require such additional insurance. Where any part of any improvement to
the Mortgaged Property (other than a Mortgaged Property secured by a
Cooperative Loan) is located in a federally designated special flood
hazard area and in a community which participates in the National Flood
Insurance Program at the time of origination of the related Mortgage
Loan, the Master Servicer shall cause flood insurance to be provided.
The hazard insurance coverage required by this Section 3.07 may be met
with blanket policies providing protection equivalent to individual
policies otherwise required. The Master Servicer or the applicable
Servicer shall be responsible for paying any deductible amount on any
such blanket policy. The Master Servicer agrees to present, or cause to
be presented, on behalf of and for the benefit of the Trustee and
Certificateholders, claims under the hazard insurance policy respecting
any Mortgage Loan, and in this regard to take such reasonable actions as
shall be necessary to permit recovery under such policy.
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption
Agreements. When any Mortgaged Property is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such prospective conveyance and prior to the time of the consummation of
such conveyance, exercise on behalf of the Trustee the Trustee's rights
to accelerate the maturity of such Mortgage Loan, to the extent that
such acceleration is permitted by the terms of the related Mortgage
Note, under any "due-on-sale" clause applicable thereto; provided,
however, that the Master Servicer shall not exercise any such right if
the due-on-sale clause, in the reasonable belief of the Master Servicer,
is not enforceable under applicable law or if such exercise would result
in non-coverage of any resulting loss that would otherwise be covered
under any insurance policy. In the event the Master Servicer is
prohibited from exercising such right, the Master Servicer is authorized
to take or enter into an assumption and modification agreement from or
with the Person to whom a Mortgaged Property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law or unless
the Mortgage Note contains a provision allowing a qualified borrower to
assume the Mortgage Note, the Mortgagor remains liable thereon; provided
that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by any related Primary
Insurance Policy. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall not enter into any substitution or assumption
with respect to a Mortgage Loan if such substitution or assumption shall
(i) both constitute a "significant modification" effecting an exchange
or reissuance of such Mortgage Loan under the Code (or Treasury
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regulations promulgated thereunder) and cause the REMICs to fail to
qualify as a REMIC under the REMIC Provisions or (ii) cause the
imposition of any tax on "prohibited transactions" or "contributions"
after the startup day under the REMIC Provisions. The Master Servicer
shall notify the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Trustee the original
copy of such substitution or assumption agreement and other documents
and instruments constituting a part thereof. In connection with any such
assumption or substitution agreement, the terms of the related Mortgage
Note shall not be changed. Any fee collected by the applicable Servicer
for entering into an assumption or substitution of liability agreement
shall be retained by such Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by
reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Master Servicer may be restricted by law from
preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause
to be foreclosed upon or comparably converted, the ownership of any
Mortgaged Property securing a Mortgage Loan which comes into and
continues in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.01. In
lieu of such foreclosure or other conversion, and taking into
consideration the desirability of maximizing net Liquidation Proceeds
after taking into account the effect of Insurance Proceeds upon
Liquidation Proceeds, the Master Servicer may, to the extent consistent
with prudent mortgage loan servicing practices, accept a payment of less
than the outstanding Principal Balance of a delinquent Mortgage Loan in
full satisfaction of the indebtedness evidenced by the related Mortgage
Note and release the lien of the related Mortgage upon receipt of such
payment. The Master Servicer shall not foreclose upon or otherwise
comparably convert a Mortgaged Property if the Master Servicer is aware
of evidence of toxic waste, other hazardous substances or other evidence
of environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection with such
foreclosure or other conversion, the Master Servicer shall cause to be
followed such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in general mortgage servicing
activities. The foregoing is subject to the provision that, in the case
of damage to a Mortgaged Property from an Uninsured Cause, the Master
Servicer shall not be required to advance its own funds towards the
restoration of the property unless it shall be determined in the sole
judgment of the Master Servicer, (i) that such restoration will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders
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
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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 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 and the Certificate Insurer
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
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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 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
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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 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.
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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 and the Certificate Insurer setting forth the status of the
Certificate Account as of the close of business on such Distribution
Date and showing, for the period covered by such statement, the
aggregate of deposits into and withdrawals from the Certificate Account
for each category of deposit specified in Section 3.04 and each category
of withdrawal specified in Section 3.05, and stating that all
distributions required by this Agreement have been made (or if any
required distribution has not been made, specifying the nature and
amount thereof). The Trustee shall make available such statements to
any Certificateholder upon request at the expense of the Master
Servicer. Such statement shall also, to the extent available, include
information regarding delinquencies on the Mortgage Loans, indicating
the number and aggregate Principal Balance of Mortgage Loans which are
one, two, three or more months delinquent, the number and aggregate
Principal Balance of Mortgage Loans with respect to which foreclosure
proceedings have been initiated and the book value of any Mortgaged
Property acquired by the REMIC I Trust Fund through foreclosure, deed in
lieu of foreclosure or other exercise of the REMIC I Trust Fund's
security interest in the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master Servicer
shall deliver to the Trustee and the Certificate Insurer, on or before
April 30 of each year, beginning with the first April 30 succeeding the
Cut-Off Date by at least six months, an Officer's Certificate stating as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and performance under this
Agreement has been made under such officer's supervision, and (ii) to
the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment
of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of such statement
shall be provided by the Master Servicer to Certificateholders upon
request or by the Trustee (solely to the extent that such copies are
available to the Trustee) at the expense of the Master Servicer, should
the Master Servicer fail to so provide such copies.
Section 3.14. Access to Certain Documentation and Information Regarding
the Mortgage Loans. In the event that the Certificates are legal for
investment by federally-insured savings associations, the Master
Servicer shall provide to the OTS, the FDIC and the supervisory agents
and examiners of the OTS and the FDIC access to the documentation
regarding the related Mortgage Loans required by applicable regulations
of the OTS or the FDIC, as applicable, and shall in any event provide
such access to the documentation regarding such Mortgage Loans to the
Trustee and its representatives, such access being afforded without
charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer designated by it.
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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 and the Certificate Insurer 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. Maintenance of the Class II-A-8 Interest Supplement
Account. On or prior to the Closing Date, the Master Servicer shall
cause to be established and maintained the Class II-A-8 Interest
Supplement Account, into which an amount equal to $13,660 shall be
contributed by DLJ, to provide coverage with respect to the Class II-A-8
Interest Supplement Amount. For each of the first twenty-four
Distribution Dates, the Master Servicer shall calculate the Class II-A-8
Interest Supplement Amount, and shall notify the Trustee by noon New
York City time two Business Days prior to the Distribution Date of such
amount. On each such Distribution Date, the Trustee shall then withdraw
from the Class II-A-8 Interest Supplement Account, to the extent funds
are available therein, the Class II-A-8 Interest Supplement Amount, and
deposit such amount in the Certificate Account for payment to the Class
II-A-8 Certificateholders. After the twenty-fourth Distribution Date,
the Trustee shall withdraw from the Class II-A-8 Interest Supplement
Account and pay to DLJ any amounts then remaining therein.
Amounts on deposit in the Class II-A-8 Interest Supplement Account
shall not be invested and shall not be held in an interest-bearing
account.
To the extent that it constitutes a "reserve fund" for purposes of
the REMIC Provisions, the Class II-A-8 Interest Supplement Account
established hereunder shall be an "outside reserve fund" as defined in
Treasury Regulation 1.860G-2(h), and in that regard (i) such fund shall
be an outside reserve fund and not an asset of either REMIC, (ii) such
fund shall be owned for federal tax purposes by DLJ, and DLJ shall
report all amounts of income, deduction, gain or loss accruing
therefrom, and (iii) amounts transferred by the REMIC to the fund shall
be treated as distributed by the REMIC to DLJ.
Section 3.17. [Reserved.]
Section 3.18. [Reserved.]
Section 3.19. [Reserved.]
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Section 3.20. Assumption or Termination of Selling and Servicing
Contracts by Trustee. In the event the Master Servicer, or any successor
Master Servicer, shall for any reason no longer be the Master Servicer
(including by reason of an Event of Default), the Trustee as trustee
hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under the Selling and Servicing
Contracts with respect to the related Mortgage Loans unless the Trustee
elects to terminate the Selling and Servicing Contracts with respect to
such Mortgage Loans in accordance with the terms thereof. The Trustee,
its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein with
respect to the related Mortgage Loans and to have replaced the Master
Servicer as a party to the Selling and Servicing Contracts to the same
extent as if the rights and duties under the Selling and Servicing
Contracts relating to such Mortgage Loans had been assigned to the
assuming party, except that the Master Servicer shall not thereby be
relieved of any liability or obligations under the Selling and Servicing
Contracts with respect to the Master Servicer's duties to be performed
prior to its termination hereunder.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records
relating to the Selling and Servicing Contracts and the Mortgage Loans
then being master serviced by the Master Servicer and an accounting of
amounts collected and held by the Master Servicer and otherwise use its
best efforts to effect the orderly and efficient transfer of the rights
and duties under the related Selling and Servicing Contracts relating to
such Mortgage Loans to the assuming party.
Section 3.21. Maintenance of the Rounding Accounts; Collections
Thereunder. On or prior to the Closing Date, the Trustee shall establish
the Class II-A-4, Class II-A-8 and Class III-A-5 Rounding Accounts, and
DLJ shall deposit $999.99 in each such Rounding Account. The Master
Servicer shall maintain such accounts to provide, if needed, the
applicable Rounding Amount on any Distribution Date. For each Class of
Special Retail Certificates, on the first Distribution Date with respect
to which the Master Servicer determines that principal is required to be
distributed to such Class pursuant to Section 4.04(a)(ii), and the
aggregate amount of such principal is not an amount equal to an integral
multiple of $1,000, the Master Servicer shall notify the Trustee by Noon
New York City time two Business Days prior to such Distribution Date of
the applicable Rounding Amount, and the Trustee shall withdraw such
Rounding Amount from the applicable Rounding Account. On each
succeeding Distribution Date, prior to the earlier of (i) the Group C-B
Credit Support Depletion Date and (ii) the date on which any loss is
allocated to such Class of Special Retail Certificates by Pro Rata
Allocation, with respect to which the Master Servicer determines that
principal is required to be distributed to such Class pursuant to
Section 4.04(a)(ii), the aggregate amount of such principal will be
applied first to repay to the applicable Rounding Account any funds
withdrawn from such Rounding Account on prior Distribution Dates which
have not been repaid. If the remainder of such aggregate amount of
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principal is not an amount equal to an integral multiple of $1,000, the
Master Servicer shall notify the Trustee by Noon New York City time two
Business Days prior to such Distribution Date of the applicable Rounding
Amount, and the Trustee shall withdraw from the applicable Rounding
Account, to the extent funds are available therein, the amount so
notified by the Master Servicer.
Any amounts withdrawn by the Trustee from any Rounding Account
shall be deposited in the Certificate Account for distribution to the
Holders of the applicable Class of Special Retail Certificates as
described in the immediately preceding paragraph.
Amounts on deposit in the Rounding Accounts shall not be invested.
On the first Distribution Date after the earliest of (i) the Group
C-B Credit Support Depletion Date, (ii) the date on which any loss is
allocated to the Special Retail Certificates by Pro Rata Allocation and
(iii) the date on which the applicable Class Principal Balance of such
Class of Special Retail Certificates has been reduced to zero, the
Trustee shall remit any amounts then remaining on deposit in the
applicable Rounding Account or Accounts to the Holders of the Class R-2
Certificates.
Section 3.22. Maintenance of the Certificate Insurance Policy;
Collections Thereunder.
(a) Prior to noon New York City time on the third Business Day
prior to each Distribution Date, the Master Servicer shall, with respect
to the Insured Certificates, determine if a Deficiency Amount for such
Distribution Date exists and, if so, shall immediately notify the
Trustee in writing of such amount; the Trustee, upon receipt of such
notice, shall complete the Notice and submit such Notice in accordance
with the Certificate Insurance Policy to the Certificate Insurer no
later than noon, New York City time, on the second Business Day
immediately preceding such Distribution Date, as a claim for an Insured
Payment in an amount equal to such Deficiency Amount. If at any time the
Trustee receives a certified copy of an order of an appropriate court
that any payment of principal and interest on the Insured Certificates
constitutes a Preference Amount, the Trustee, at the expense of the
Trust, shall take the actions required on its part by the terms of the
Certificate Insurance Policy to obtain payment of such Preference Amount
by the Certificate Insurer.
(b) Upon receipt of an Insured Payment from the Certificate
Insurer on behalf of the Holders of the Insured Certificates, the
Trustee shall deposit such Insured Payment in the Certificate Account.
All such amounts on deposit in the Certificate Account shall remain
uninvested. The Trustee shall include on each Distribution Date any
amounts received by it from or on behalf of the Certificate Insurer with
respect to a Deficiency Amount for such Distribution Date in the amount
distributed to the Holders of the Insured Certificates pursuant to
Section 4.04. If on any Distribution Date the Trustee or the Master
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Servicer determines (the Master Servicer having notified the Trustee of
such determination) that the Certificate Insurer has paid more under the
Certificate Insurance Policy than is required by the terms thereof, the
Trustee shall promptly return the excess amount to the Certificate
Insurer.
(c) The Trustee shall (i) receive as attorney-in-fact of the
Holders of the Insured Certificates any Insured Payment delivered to it
by the Certificate Insurer for payment to such Class and (ii) distribute
such Insured Payment to such Holders as set forth in subsection (b)
above. Insured Payments disbursed by the Trustee from proceeds of the
Certificate Insurance Policy shall not be considered payment by the
Trust Fund with respect to the Insured Certificates, nor shall such
disbursement of Insured Payments discharge the obligations of the Trust
Fund with respect to the amounts thereof, and the Certificate Insurer
shall become owner of such amounts to the extent covered by such Insured
Payments as the deemed assignee of such Holders. The Trustee hereby
agrees on behalf of the Holders of the Insured Certificates (and each
such Holder, by its acceptance of its Insured Certificates, hereby
agrees) for the benefit of the Certificate Insurer that, to the extent
the Certificate Insurer makes Insured Payments, either directly or
indirectly (as by paying through the Trustee), to the Holder of an
Insured Certificate, the Certificate Insurer will be subrogated to the
rights of the Holder of such Insured Certificate to the extent of such
payments and the Trustee shall pay such amounts to the Certificate
Insurer to the extent included in the REMIC II Distribution Amount (as
notified to the Trustee by the Master Servicer in the written statement
required pursuant to Section 4.02(b)).
(d) On each Distribution Date and prior to making any
distributions on such Distribution Date pursuant to Section 4.04, the
Trustee shall withdraw from the Certificate Account and pay to the
Certificate Insurer the Certificate Insurer Premium as set forth in the
statement delivered to the Trustee pursuant to Section 4.02(b).
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
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the Class R-1 Certificateholder, or by any other means of payment
acceptable to each such Holder and the Class R-1 Certificateholder of
record on the immediately preceding Record Date (other than as provided
in Section 9.01 respecting the final distribution), as specified by each
such Certificateholder and at the address of such Holder appearing in
the Certificate Register. Notwithstanding any other provision of this
Agreement, no actual distributions pursuant to clause (i) of this
Section 4.01 shall be made on account of the deemed distributions
described in this paragraph except in the event of a liquidation of
REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution Reports to
the Trustee.
(a) To the extent described below, the Master Servicer is
obligated to advance its own funds to the Certificate Account to cover
any shortfall between (i) payments scheduled to be received in respect
of Mortgage Loans, and (ii) the amounts actually deposited in the
Certificate Account on account of such payments. The Master Servicer's
obligation to make any advance or advances described in this Section
4.02 is effective only to the extent that such advance is, in the good
faith judgment of the Master Servicer made on or before the Business Day
immediately following the Withdrawal Date, reimbursable from Insurance
Proceeds or 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
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(i) and (ii) aggregating the amount of such Monthly P&I Advance. Any
funds being held for future distribution to Certificateholders and so
used shall be replaced by the Master Servicer by deposit in the
Certificate Account on the Business Day immediately preceding any future
Distribution Date to the extent that funds in the Certificate Account on
such Distribution Date with respect to the Mortgage Loans shall be less
than payments to Certificateholders required to be made on such date
with respect to the Mortgage Loans. Under each Selling and Servicing
Contract, the Master Servicer is entitled to receive from the Custodial
Accounts for P&I established by the Servicers amounts received by the
applicable Servicers on particular Mortgage Loans as late payments of
principal and interest or as Liquidation or Insurance Proceeds and
respecting which the Master Servicer has made an unreimbursed advance of
principal and interest. The Master Servicer is also entitled to receive
other amounts from the related Custodial Accounts for P&I established by
the Servicers to reimburse itself for prior Nonrecoverable Advances
respecting Mortgage Loans serviced by such Servicers. The Master
Servicer shall deposit these amounts in the Investment Account prior to
withdrawal pursuant to Section 3.05.
In accordance with Section 3.05, Monthly P&I Advances are
reimbursable to the Master Servicer from cash in the Investment Account
or the Certificate Account to the extent that the Master Servicer shall
determine that any such advances previously made are Nonrecoverable
Advances pursuant to Section 4.03.
(b) Prior to noon New York City time two Business Days prior to
each Distribution Date, the Master Servicer shall provide the Trustee
and the Certificate Insurer with a statement in writing regarding (i)
the amount of the Certificate Insurer Premium for the Class III-A-1
Certificates, (ii) the amounts to be distributed to the Certificate
Insurer pursuant to the definition of REMIC II Distribution Amount,
(iii) the Deficiency Amount, if any, to be paid by the Certificate
Insurer, (iv) the amount, if any, to be withdrawn from the Class II-A-8
Interest Supplement Account pursuant to Section 3.16, (v) the Rounding
Amount or Amounts, if any, to be withdrawn from the Rounding Accounts
pursuant to Section 3.21, (vi) the amounts to be applied to repay any
funds withdrawn from the Rounding Accounts on prior Distribution Dates
pursuant to Section 3.21 and (vii) 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
<PAGE> 141
with respect to such Mortgage Loan shall be a Nonrecoverable Advance.
The determination by the Master Servicer that it or the applicable
Servicer has made a Nonrecoverable Advance or that any advance would
constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee on the
Determination Date and detailing the reasons for such determination.
Notwithstanding any other provision of this Agreement, any insurance
policy relating to the Mortgage Loans, or any other agreement relating
to the Mortgage Loans to which the Company or the Master Servicer is a
party, (a) the Master Servicer and each Servicer shall not be obligated
to, and shall not, make any advance that, after reasonable inquiry and
in its sole discretion, the Master Servicer or such Servicer shall
determine would be a Nonrecoverable Advance, and (b) the Master Servicer
and each Servicer shall be entitled to reimbursement for any advance as
provided in Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Distributions to Certificateholders.
(a) On each Distribution Date, the Trustee (or any duly appointed
paying agent) shall withdraw from the Certificate Account (i) the
Certificate Insurer Premium and pay such amount to the Certificate
Insurer, (ii) 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) DELTAProvided that any portion of such amount
distributable to any Class of Special Retail Certificates shall be used
first to pay any amount payable to the applicable Rounding Account
pursuant to Section 3.21) and to the Certificate Insurer in respect of
the Certificate Insurer's subrogation to certain rights to payment due
to the Holders of the Insured Certificates as set forth in Section 3.22,
(iii) the Deficiency Amount, if any, and distribute such amount to the
Holders of the Insured Certificates, (iv) the applicable Rounding Amount
or Amounts, if any, deposited therein for distribution on such date
pursuant to Section 3.21 and distribute the amounts so withdrawn to the
applicable Class of Special Retail Certificates in accordance with such
Section 3.21 and (v) the Class II-A-8 Interest Supplement Amount, if
any, deposited therein for distribution on such date pursuant to Section
3.16 and distribute the amount so withdrawn to the Class II-A-8
Certificates, all in accordance with written statements received from
the Master Servicer pursuant to Section 4.02(b), by (except with respect
to the Certificate Insurer) 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 and with respect to
payments to the Certificate Insurer, by means of payment acceptable to
the Certificate Insurer.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all allocations
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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, proceeds of
the Certificate Insurance Policy and Monthly Payments on the Mortgage
Loans and Insurance Proceeds and Liquidation Proceeds received and
expected to be received during the Payoff Period, the Master Servicer
has notified the Trustee that it believes that the entire remaining
unpaid Class Principal Balance of any Class of Certificates will become
distributable on the next Distribution Date, the Trustee shall, no later
than the 18th day of the month of such Distribution Date, mail or cause
to be mailed to each Person in whose name a Certificate to be so retired
is registered at the close of business on the Record Date and to the
Rating Agencies (with a copy to the Certificate Insurer) a notice to the
effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution will be
payable on such Distribution Date, but only upon presentation and
surrender of such Certificate at the office or agency of the Certificate
Registrar maintained for such purpose (the address of which shall be set
forth in such notice), and (B) no interest shall accrue on such
Certificate after such Distribution Date.
Section 4.05. Statements to Certificateholders. With each distribution
from the Certificate Account on a Distribution Date, the Master Servicer
shall prepare and forward to the Trustee (and to the Company if the
Company is no longer acting as Master Servicer), and the Trustee shall
send to each Rating Agency and shall make available to each
Certificateholder, a statement 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
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location of such web page and the procedures used therein are subject to
change from time to time at the Trustee's discretion.
Upon request by any Certificateholder or Rating Agency or the
Trustee, the Master Servicer shall forward to such Certificateholder or
Rating Agency and the Trustee and the Company (if the Company is no
longer acting as Master Servicer) an additional report which sets forth
with respect to the Mortgage Loans:
(a) The number and aggregate Principal Balance of the
Mortgage Loans delinquent one, two and three months or more;
(b) The (i) number and aggregate Principal Balance of
Mortgage Loans with respect to which foreclosure proceedings have
been initiated, and (ii) the number and aggregate book value of
Mortgaged Properties acquired through foreclosure, deed in lieu of
foreclosure or other exercise of rights respecting the Trustee's
security interest in the Mortgage Loans, 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;
(f) The amount of the Class III-A-1 Reimbursement Amount as
of the applicable Determination Date, the amount of any Preference
Amount and any amount payable to the Certificate Insurer pursuant
to its subrogation rights; and
(g) 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
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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."
Section 4.06. Section 4.06. Principal Distributions on the Special
Retail Certificates. With respect to each Class of Special Retail
Certificates, prior to the earlier of (i) the Group C-B Credit Support
Depletion Date and (ii) the date on which any loss is allocated to such
Class by Pro Rata Allocation, distributions in reduction of the Class
Principal Balance of such Class will be made in integral multiples of
$1,000 at the request of the appropriate representatives of Deceased
Holders of Certificates of such Class and at the request of Living
Holders of Certificates of such Class or by mandatory distributions,
pursuant to Section 4.06(a) and Section 4.06(d). On and after the
earlier of (i) the Group C-B Credit Support Depletion Date and (ii) the
date on which any loss is allocated to such Class of Special Retail
Certificates by Pro Rata Allocation, distributions in reduction of the
Class Principal Balance of such Class will be made on a pro rata basis
pursuant to Section 4.06(e).
(a) On each Distribution Date on which principal distributions to
a Class of Special Retail Certificates are made, such distributions will
be made in the following priority:
(i) first, to requesting Deceased Holders, in the order in
which such requests are received by DTC, but not exceeding an
aggregate amount of $25,000 for each requesting Deceased Holder;
and
(ii) second, to requesting Living Holders, in the order in
which such requests are received by DTC, but not exceeding an
aggregate amount of $10,000 for each requesting Living Holder.
Thereafter, distributions will be made, with respect to such Class of
Special Retail Certificates, as provided in clauses (i) and (ii) above
up to a second $25,000 and $10,000, respectively. This sequence of
priorities will be repeated until all requests for principal
distributions by Deceased Holders and Living Holders of such Class have
been honored, to the extent of amounts available for principal
distributions to such Class.
All requests for principal distributions to Special Retail
Certificates will be accepted in accordance with the provisions set
forth in Section 4.06(c). Requests for principal distributions that are
received by the Trustee after the related Record Date and requests for
principal distributions received in a timely manner but not accepted
with respect to any Distribution Date, will be treated as requests for
principal distributions to Special Retail Certificates on the next
succeeding Distribution Date, and each succeeding Distribution Date
thereafter, until each such request is accepted or is withdrawn as
provided in Section 4.06(c). Such requests as are not so withdrawn shall
retain their order of priority without the need for any further action
<PAGE> 145
on the part of the appropriate Holder of the related Special Retail
Certificate, all in accordance with the procedures of DTC and the
Trustee. Upon the transfer of beneficial ownership of any Special
Retail Certificate, any distribution request previously submitted with
respect to such Certificate will be deemed to have been withdrawn only
upon the receipt by the Trustee on or before the Record Date for such
Distribution Date of notification of such withdrawal in the manner set
forth in Section 4.06(c) using a form required by DTC.
Distributions in reduction of the Class Principal Balance of any
Class of Special Retail Certificates will be applied in an amount equal
to the portion of the Group II or Group III Senior Principal
Distribution Amount, as applicable, allocable to such Class pursuant to
Section 4.04, plus any amounts available for distribution from the
applicable Rounding Account established as provided in Section 3.21,
provided that the aggregate distribution of principal to such Class on
any Distribution Date shall be made in an integral multiple of $1,000.
To the extent that the portion of the Group II or Group III Senior
Principal Distribution Amount, as applicable, allocable to any Class of
Special Retail Certificates on any Distribution Date exceeds the
aggregate Certificate Principal Balance of Special Retail Certificates
of such Class with respect to which principal distribution requests, as
set forth above, have been received, principal distributions in
reduction of the Class Principal Balance of such Class will be made by
mandatory distribution pursuant to Section 4.06(d).
(b) A Special Retail Certificate shall be deemed to be held by a
Deceased Holder for purposes of this Section 4.06 if the death of the
Holder thereof is deemed to have occurred. Special Retail Certificates
beneficially owned by tenants by the entirety, joint tenants or tenants
in common will be considered to be beneficially owned by a single owner.
The death of a tenant by the entirety, joint tenant or tenant in common
will be deemed to be the death of the Holder, and the Special Retail
Certificates so beneficially owned will be eligible for priority with
respect to principal distributions, subject to the limitations stated
above. Special Retail Certificates beneficially owned by a trust will
be considered to be beneficially owned by each beneficiary of the trust
to the extent of such beneficiary's beneficial interest therein, but in
no event will a trust's beneficiaries collectively be deemed to be
Holders of a number of Special Retail Certificates greater than the
number of Special Retail Certificates of which such trust is the owner.
The death of a beneficiary of a trust will be deemed to be the death of
a Holder of the Special Retail Certificates beneficially owned by the
trust to the extent of such beneficiary's beneficial interest in such
trust. The death of an individual who was a tenant by the entirety,
joint tenant or tenant in common in a tenancy which is the beneficiary
of a trust will be deemed to be the death of the beneficiary of such
trust. The death of a person who, during his or her lifetime, was
entitled to substantially all of the beneficial ownership interests in a
Special Retail Certificate will be deemed to be the death of the Holder
of such Special Retail Certificate regardless of the registration of
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ownership, if such beneficial ownership interest can be established to
the satisfaction of the Trustee. Such beneficial interest will be
deemed to exist in typical cases of street name or nominee ownership,
ownership by a trustee, ownership under the Uniform Gifts to Minors Act
and community property or other joint ownership arrangements between a
husband and wife. Beneficial interest shall include the power to sell,
transfer or otherwise dispose of a Special Retail Certificate and the
right to receive the proceeds therefrom, as well as interest and
principal distributions, as applicable, payable with respect thereto.
The Trustee may rely entirely upon documentation delivered to it in
establishing beneficial ownership interests in Special Retail
Certificates. The Trustee shall not be under any duty to determine
independently the occurrence of the death of any deceased Holder. The
Trustee may rely entirely upon documentation delivered to it pursuant to
Section 4.06(c) in establishing the eligibility of any Holder to receive
the priority accorded Deceased Holders in Section 4.06(a).
(c) Requests for principal distributions to any Special Retail
Certificate must be made by delivering a written request therefor to the
DTC Participant or Indirect DTC Participant that maintains the account
evidencing such Holder's interest in such Certificate. In the case of a
request on behalf of a Deceased Holder, appropriate evidence of death
and any tax waivers are required to be forwarded to the Trustee under
separate cover. The DTC Participant should in turn make the request of
DTC (or, in the case of an Indirect DTC Participant, such Indirect DTC
Participant must notify the related DTC Participant of such request,
which DTC Participant should make the request of DTC) on a form required
by DTC and provided to the DTC Participant. Upon receipt of such
request, DTC will date and time stamp such request and forward such
request to the Trustee. DTC may establish such procedures as it deems
fair and equitable to establish the order of receipt of requests for
such distributions received by it on the same day. None of the Company,
the Master Servicer or the Trustee shall be liable for any delay in
delivery of requests for distributions or withdrawals of such requests
by DTC, a DTC Participant or any Indirect DTC Participant.
The Trustee shall maintain a list of those DTC Participants
representing the appropriate Holders of Special Retail Certificates that
have submitted requests for principal distributions, together with the
order of receipt and the amounts of such requests. Subject to the
priorities described in Section 4.06(a) above, DTC will honor requests
for distributions in the order of their receipt. The Trustee shall
notify DTC as to which requests should be honored on each Distribution
Date at least two Business Days prior to such Distribution Date and
shall notify DTC as to the portion of the Group II or Group III Senior
Principal Distribution Amount, as applicable (together with any amounts
available for distribution from the applicable Rounding Account), to be
distributed to the Special Retail Certificates by mandatory distribution
pursuant to Section 4.06(d). Requests shall be honored by DTC in
accordance with the procedures, and subject to the priorities and
limitations, described in this Section 4.06. The exact procedures to be
followed by the Trustee and DTC for purposes of determining such
<PAGE> 147
priorities and limitations will be those established from time to time
by the Trustee or DTC, as the case may be. The decisions of the Trustee
and DTC concerning such matters will be final and binding on all
affected persons.
Special Retail Certificates that have been accepted for a
distribution shall be due and payable on the applicable Distribution
Date. Such Certificates shall cease to bear interest after the last
calendar day of the month preceding the month in which such Distribution
Date occurs.
Any Holder of a Special Retail Certificate that has requested a
principal distribution may withdraw its request by so notifying in
writing the DTC Participant or Indirect DTC Participant that maintains
such Holder's account. In the event that such account is maintained by
an Indirect DTC Participant, such Indirect DTC Participant must notify
the related DTC Participant which in turn must forward the withdrawal of
such request, on a form required by DTC, to DTC to be forwarded to the
Trustee. If such notice of withdrawal of a request for distribution has
not been received by DTC and forwarded to the Trustee on or before the
Record Date for the next Distribution Date, the previously made request
for a principal distribution will be irrevocable with respect to the
making of principal distributions on such Distribution Date.
In the event any requests for principal distributions are rejected
by the Trustee for failure to comply with the requirements of this
Section 4.06, the Trustee shall return such request to the appropriate
DTC Participant with a copy to DTC with an explanation as to the reason
for such rejection.
(d) To the extent, if any, that principal distributions to be made
to any Class of Special Retail Certificates on a Distribution Date
exceed the aggregate amount of principal distribution requests for such
Class which have been received on or before the applicable Record Date,
as provided in Section 4.06(a) above, additional Special Retail
Certificates of such Class will be selected to receive mandatory
principal distributions in lots equal to $1,000 in accordance with the
then-applicable Random Lot procedures of DTC, and the then-applicable
procedures of the DTC Participants and Indirect DTC Participants
representing the Holders (which procedures may or may not be by random
lot). The Trustee shall notify DTC of the aggregate amount of the
mandatory principal distribution to be made on the next Distribution
Date. DTC shall then allocate such aggregate amount among the DTC
Participants on a Random Lot basis. Each DTC Participant and, in turn,
each Indirect DTC Participant will then select, in accordance with its
own procedures, Special Retail Certificates from among those held in its
accounts to receive mandatory principal distributions, such that the
total amount of principal distributed to the Special Retail Certificates
so selected is equal to the aggregate amount of such mandatory
distributions allocated to such DTC Participant by DTC and to such
Indirect DTC Participant by its related DTC Participant, as the case may
be. DTC Participants and Indirect DTC Participants that hold Special
<PAGE> 148
Retail Certificates selected for mandatory principal distributions are
required to provide notice of such mandatory distributions to the
affected Holders. The Master Servicer shall notify the Trustee of the
amount of principal distributions to be made on each Distribution Date
in a timely manner such that the Trustee may fulfill its obligations
under the Depositary Agreement.
(e) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the earlier of (i) the Group C-B Credit
Support Depletion Date and (ii) the date on which any loss is allocated
to a Class of Special Retail Certificates by Pro Rata Allocation,
distributions in reduction of the Class Principal Balance of such Class
will be made pro rata among the Holders of the Certificates of such
Class and will not be made in integral multiples of $1,000 nor pursuant
to requests for distribution as permitted by Section 4.06(a) or by
mandatory distributions as provided for by Section 4.06(d).
(f) In the event that Definitive Certificates representing Special
Retail Certificates are issued pursuant to Section 5.09, an amendment to
this Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in
which distributions in reduction of the Class Principal Balance of each
Class of Special Retail Certificates are to be made; provided that such
procedures shall be consistent, to the extent practicable and customary
for certificates similar to the Special Retail Certificates, with the
provisions of this Section 4.06.
ARTICLE V
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the forms set forth
in Exhibit A and B with the additional insertion from Exhibit H attached
hereto, and shall be executed by the Trustee, authenticated by the
Trustee (or any duly appointed Authenticating Agent) and delivered (i)
upon and pursuant to the order of the Company and (ii) upon receipt by
the Trustee of the documents specified in Section 2.01. The Certificates
shall be issuable in Authorized Denominations evidencing Percentage
Interests. Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by authorized officers of the
Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication
and delivery of such Certificates or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by the Trustee or
any Authenticating Agent by manual signature, and such certificate upon
<PAGE> 149
any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
(b) The following definitions apply for purposes of this Section
5.01: "Disqualified Organization" means any Person which is not a
Permitted Transferee, but does not include any "Pass-Through Entity"
which owns or holds a Residual Certificate and of which a Disqualified
Organization, directly or indirectly, may be a stockholder, partner or
beneficiary; "Pass-Through Entity" means any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust or estate, and any organization to which Section 1381 of the Code
applies; "Ownership Interest" means, with respect to any Residual
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the
Holder thereof and any other interest therein whether direct or
indirect, legal or beneficial, as owner or as pledgee; "Transfer" means
any direct or indirect transfer or sale of, or directly or indirectly
transferring or selling any Ownership Interest in a Residual
Certificate; and "Transferee" means any Person who is acquiring by
Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificates to
Disqualified Organizations are set forth in this Section 5.01(c).
(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee or its
designee under clause (iii)(A) below to deliver payments to a Person
other than such Person and to negotiate the terms of any mandatory sale
under clause (iii)(B) below and to execute all instruments of transfer
and to do all other things necessary in connection with any such sale.
The rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate to a U.S. Person,
the Trustee shall require delivery to it, and shall not
register the Transfer of any Residual Certificate until its
receipt of (1) an affidavit and agreement (a "Transferee
Affidavit and Agreement") attached hereto as Exhibit J from
the proposed Transferee, in form and substance satisfactory to
the Company, representing and warranting, among other things,
that it is not a Non-U.S. Person, that such transferee is a
Permitted Transferee, that it is not acquiring its Ownership
<PAGE> 150
Interest in the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee, that for so long as
it retains its Ownership Interest in a Residual Certificate,
it will endeavor to remain a Permitted Transferee, and that it
has reviewed the provisions of this Section 5.01(c) and agrees
to be bound by them, and (2) a certificate, attached hereto as
Exhibit I, from the Holder wishing to transfer the Residual
Certificate, in form and substance satisfactory to the
Company, representing and warranting, among other things, that
no purpose of the proposed Transfer is to allow such Holder to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee
Affidavit and Agreement by a proposed Transferee under clause
(B) above, if the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no Transfer
of an Ownership Interest in a Residual Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate agrees by holding or
acquiring such Ownership Interest (i) to require a Transferee
Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest and to
provide a certificate to the Trustee in the form attached
hereto as Exhibit J; (ii) to obtain the express written
consent of the Company prior to any transfer of such Ownership
Interest, which consent may be withheld in the Company's sole
discretion; and (iii) to provide a certificate to the Trustee
in the form attached hereto as Exhibit I.
(ii) The Trustee shall register the Transfer of any Residual Certifi-
cate only if it shall have received the Transferee Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit J and all of such other documents as shall
have been reasonably required by the Trustee as a condition to such
registration.
(iii) (A) If any "disqualified organization" (as defined in
Section 860E(e)(5) of the Code) shall become a holder of a Residual
Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. If any Non-U.S. Person shall
become a holder of a Residual Certificate, then the last preceding
holder which is a U.S. Person shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of the Transfer to such Non-U.S.
Person of such Residual Certificate. If a transfer of a Residual
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the last
preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations
<PAGE> 151
as Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 5.01(c) or for
making any payments due on such Certificate to the holder thereof or for
taking any other action with respect to such holder under the provisions
of this Agreement.
(B) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the restrictions in
this Section 5.01(c) and to the extent that the retroactive
restoration of the rights of the Holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Company shall have
the right, without notice to the Holder or any prior Holder of
such Residual Certificate, to sell such Residual Certificate
to a purchaser selected by the Company on such terms as the
Company may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance
with the instructions of the Company. Such purchaser may be
the Company itself or any affiliate of the Company. The
proceeds of such sale, net of the commissions (which may
include commissions payable to the Company or its affiliates),
expenses and taxes due, if any, shall be remitted by the
Company to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Company, and the Company shall not
be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
(iv) The Company, on behalf of the Trustee, shall make available, upon
written request from the Trustee, all information necessary to compute
any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is not a Permitted
Transferee, including the information regarding "excess inclusions" of
such Residual Certificates required to be provided to the Internal
Revenue Service and certain Persons as described in Treasury Regulation
Section 1.860D-1(b)(5), and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust, estate or organizations described in Section 1381 of the Code
having as among its record holders at any time any Person who is not a
Permitted Transferee. Reasonable compensation for providing such
information may be required by the Company from such Person.
(v) The provisions of this Section 5.01 set forth prior to this Section
(v) may be modified, added to or eliminated by the Company and the
Trustee, provided that there shall have been delivered to the Trustee
the following:
(A) written notification from each of the Rating
Agencies to the effect that the modification, addition to or
elimination of such provisions will not cause such Rating
Agency to downgrade its then-current Ratings of the
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Certificates (determined in the case of the Insured
Certificates, without giving effect to the Certificate
Insurance Policy); and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Company (as evidenced by a certificate of
the Company), to the effect that such modification, addition
to or absence of such provisions will not cause REMIC I or
REMIC II to cease to qualify as a REMIC and will not create a
risk that (1) REMIC I or REMIC II may be subject to an entity-
level tax caused by the Transfer of any Residual Certificate
to a Person which is not a Permitted Transferee or (2) a
Certificateholder or another Person will be subject to a REMIC-
related tax caused by the Transfer of a Residual Certificate
to a Person which is not a Permitted Transferee.
(vi) The following legend shall appear on all Residual Certificates:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER
AFFIDAVIT TO THE COMPANY AND THE TRUSTEE THAT (1) SUCH TRANSFEREE
IS NOT EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE
TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION
DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS
[R-1] [R-2] CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED
TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL
NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THE CLASS [R-1][R-2] CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO
THE PROVISIONS OF THIS PARAGRAPH.
(vii) The Tax Matters Person for each of REMIC I and REMIC II,
while not a Disqualified Organization, shall be the tax 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
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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., (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
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transfer may be made without registration, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the REMIC I Trust
Fund, the REMIC II Trust Fund or the Company. Such Opinion of Counsel
shall allow for the forwarding, and the Trustee shall forward, a copy
thereof to the Rating Agencies. Notwithstanding the foregoing, any
Junior Subordinate Certificate may be transferred, sold, pledged or
otherwise disposed of in accordance with the requirements set forth in
Section 5.01(f).
(f) To effectuate a Certificate transfer of a Junior Subordinate
Certificate in accordance with this Section 5.01(f), the proposed
transferee of such Certificate must provide the Trustee and the Company
with an investment letter substantially in the form of Exhibit L
attached hereto, which investment letter shall not be an expense of the
Trustee or the Company, and which investment letter states that, among
other things, such transferee (i) is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or the accounts
of other "qualified institutional buyers" as defined under Rule 144A,
and (ii) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the Securities Act
provided by Rule 144A. Notwithstanding the foregoing, the proposed
transferee of such Certificate shall not be required to provide the
Trustee or the Company with Annex 1 or Annex 2 to the form of Exhibit L
attached hereto if the Company so consents prior to each such transfer.
Such transfers shall be deemed to have complied with the requirements of
this Section 5.01(f). The Holder of a Certificate desiring to effect
such transfer does hereby agree to indemnify the Trustee, the Company,
and the Certificate Registrar against any liability that may result if
transfer is not made in accordance with this Agreement.
Section 5.02. Certificates Issuable in Classes; Distributions of
Principal and Interest; Authorized Denominations. The aggregate
principal amount of the Certificates that may be authenticated and
delivered under this Agreement is limited to the aggregate Principal
Balance of the Mortgage Loans as of the Cut-Off Date, as specified in
the Preliminary Statement to this Agreement, except for Certificates
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, 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
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reasonable rules and regulations as the Trustee may prescribe, the
Certificate Register shall be amended from time to time by the Trustee
or its agent to reflect notice of any changes received by the Trustee or
its agent pursuant to Section 10.06. The Trustee hereby appoints itself
as the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate to
the Trustee at the Corporate Trust Office of the Trustee or at the
office of State Street Bank and Trust Company, N.A., 61 Broadway, New
York, New York 10006, Attention: Corporate Trust Window, or such other
address or agency as may hereafter be provided to the Master Servicer in
writing by the Trustee, the Trustee shall execute, and the Trustee or
any Authenticating Agent shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates
of Authorized Denominations of like Percentage Interest. At the option
of the Certificateholders, Certificates may be exchanged for other
Certificates in Authorized Denominations of like Percentage Interest,
upon surrender of the Certificates to be exchanged at any such office or
agency. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute, and the Trustee, or any Authenticating Agent,
shall authenticate and deliver, the Certificates which the
Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer shall (if so required
by the Trustee or any Authenticating Agent) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to
the Trustee or any Authenticating Agent and duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any exchange or transfer of Certificates.
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 (and with respect to the Insured Certificates, the
Certificate Insurer) 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
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relation thereto and any other expenses (including the fees and expenses
of the Trustee or any Authenticating Agent) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in the REMIC
II Trust Fund (or with respect to the Class R-1 Certificates, the
residual ownership interests in the REMIC I Trust Fund) as if originally
issued, whether or not the lost or stolen Certificate shall be found at
any time.
Section 5.05. Persons Deemed Owners. The Company, the Master Servicer,
the Trustee, the Certificate Insurer (with respect to the Insured
Certificates) 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
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
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Company. The Book-Entry Certificates shall initially be registered on
the Certificate Register in the name of Cede & Co., the nominee of DTC,
as the initial Clearing Agency, and no Beneficial Holder shall receive a
definitive certificate representing such Beneficial Holder's interest in
any Class of Book-Entry Certificate, except as provided above and in
Section 5.09. Each Book-Entry Certificate shall bear the following
legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for
registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Unless and until definitive, fully registered Book-Entry Certificates
(the "Definitive Certificates") have been issued to the Beneficial
Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in full
force and effect with respect to the Book-Entry Certificates;
(b) the Master Servicer and the Trustee may deal with the
Clearing Agency for all purposes with respect to the Book-Entry
Certificates (including the making of distributions on the Book-
Entry Certificates) as the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.07
conflict with any other provisions of this Agreement, the
provisions of this Section 5.07 shall control; and
(d) the rights of the Beneficial Holders shall be exercised
only through the Clearing Agency and the DTC Participants and shall
be limited to those established by law and agreements between such
Beneficial Holders and the Clearing Agency and/or the DTC
Participants. Pursuant to the Depositary Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.09,
the initial Clearing Agency will make book-entry transfers among
the DTC Participants and receive and transmit distributions of
principal and interest on the related Class of Book-Entry
Certificates to such DTC Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders
of Book-Entry Certificates evidencing a specified Percentage Interest,
such direction or consent may be given by the Clearing Agency at the
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direction of Beneficial Holders owning Book-Entry Certificates
evidencing the requisite Percentage Interest represented by the Book-
Entry Certificates. The Clearing Agency may take conflicting actions
with respect to the Book-Entry Certificates to the extent that such
actions are taken on behalf of the Beneficial Holders.
Section 5.08. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been
issued to the related Certificateholders pursuant to Section 5.09, the
Trustee shall give all such notices and communications specified herein
to be given to Holders of the Book-Entry Certificates to the Clearing
Agency which shall give such notices and communications to the related
DTC Participants in accordance with its applicable rules, regulations
and procedures.
Section 5.09. Definitive Certificates. If (a) the Master Servicer
notifies the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
Depositary Agreement with respect to the Book-Entry Certificates and the
Trustee or the Master Servicer is unable to locate a qualified
successor, (b) the Master Servicer, at its option, advises the Trustee
in writing that it elects to terminate the book-entry system with
respect to the Book-Entry Certificates through the Clearing Agency or
(c) after the occurrence of an Event of Default, Certificateholders
holding Book-Entry Certificates evidencing Percentage Interests
aggregating not less than 66% of the aggregate Class Principal Balance
of such Certificates advise the Trustee and the Clearing Agency through
DTC Participants in writing that the continuation of a book-entry system
with respect to the Book-Entry Certificates through the Clearing Agency
is no longer in the best interests of the Certificateholders with
respect to such Certificates, the Trustee shall notify all
Certificateholders of Book-Entry Certificates of the occurrence of any
such event and of the availability of Definitive Certificates. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall execute and the Trustee or
any Authenticating Agent shall authenticate and deliver the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for all of
the Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon
and performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates, and the Trustee shall recognize the
Holders of Definitive Certificates as Certificateholders hereunder.
Section 5.10. Office for Transfer of Certificates. The Trustee shall
maintain in 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
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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.
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
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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 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
<PAGE> 161
Master Servicer shall occur and be continuing, that is to say:
(i) Any failure by the Master Servicer to deposit into the Certifi-
cate Account any payment required to be deposited therein by the Master
Servicer under the terms of this Agreement which continues unremedied
for a period of ten days after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee or to the Master Servicer and the
Trustee by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC II Trust Fund; or
(ii) Failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements
on the part of the Master Servicer contained in the Certificates or in
this Agreement which continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by the
Trustee, or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Master Servicer and
such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(iv) The Master Servicer shall consent to the appointment of a trustee
in bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) Any failure of the Master Servicer to make any Monthly P&I Advance
(other than a Nonrecoverable Advance) which continues unremedied at the
opening of business on the Distribution Date in respect of which such
Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, either the Trustee, or the Holders of
Certificates evidencing Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund, by notice in writing to the Company and
the Master Servicer (and to the Trustee if given by the
Certificateholders, in which case such notice shall set forth evidence
reasonably satisfactory to the Trustee that such Event of Default has
occurred and shall not have been remedied) may terminate all of the
rights (other than its right to reimbursement for advances) and
obligations of the Master Servicer, including its right to the Master
<PAGE> 162
Servicing Fee, under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, if any. Such determination shall be final and
binding. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section 7.01; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all documents
and other instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise.
The Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee
for administration by it of all cash amounts which shall at the time be
credited by the Master Servicer to the Certificate Account or thereafter
be received with respect to the Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 7.01(a) shall occur, the Trustee shall, by
notice in writing to the Master Servicer, which may be delivered by
telecopy, immediately suspend all of the rights and obligations of the
Master Servicer thereafter arising under this Agreement, but without
prejudice to any rights it may have as a Certificateholder or to
reimbursement of Monthly P&I Advances and other advances of its own
funds, and the Trustee shall act as provided in Section 7.02 to carry
out the duties of the Master Servicer, including the obligation to make
any Monthly P&I Advance the nonpayment of which was an Event of Default
described in clause (vi) of this Section 7.01(a). Any such action taken
by the Trustee must be prior to the distribution on the relevant
Distribution Date. If the Master Servicer shall within two Business Days
following such 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
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the Company contained in the Certificates or in this Agreement which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Trustee, or to the Company and the
Trustee by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC II Trust Fund; or
(ii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Company and such decree or
order shall have remained in force undischarged or unstayed for a period
of 60 days; or
(iii) The Company shall consent to the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Company or of or relating
to all or substantially all of its property; or
(iv) The Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of creditors, or voluntarily suspend payment
of its obligations;
then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II Trust
Fund, by notice in writing to the Company and the Trustee, may direct
the Trustee in accordance with Section 10.03 to institute an action,
suit or proceeding in its own name as Trustee hereunder to enforce the
Company's obligations hereunder.
(c) In any circumstances in which this Agreement states that
Certificateholders owning Certificates evidencing a certain percentage
Percentage Interest in the REMIC II Trust Fund may take certain action,
such action shall be taken by the Trustee, but only if the requisite
percentage of Certificateholders required under this Agreement for
taking like action or giving like instruction to the Trustee under this
Agreement shall have so directed the Trustee in writing.
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
<PAGE> 164
shall have the same limitations on liability herein granted to the
Master Servicer; provided, that the Trustee shall not under any
circumstances be responsible for any representations and warranties or
any Purchase Obligation of the Company or any liability incurred by the
Master Servicer at or prior to the time the Master Servicer was
terminated as Master Servicer and the Trustee shall not be obligated to
make a Monthly P&I Advance if it is prohibited by law from so doing. As
compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to retain or to withdraw from the Certificate Account if the
Master Servicer had continued to act hereunder, except for those amounts
due to the Master Servicer as reimbursement for advances previously made
or amounts previously expended and are otherwise reimbursable hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to
so act, or shall if it is unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established housing and home
finance institution having a net worth of not less than $10,000,000 as
the successor to the Master Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending any such appointment, the Trustee is
obligated to act in such capacity. In connection with such appointment
and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it
and such successor shall agree; provided, however, that no such
compensation shall, together with the compensation to the Trustee, be in
excess of that permitted the Master Servicer hereunder. The Trustee and
such successor shall take such actions, consistent with this Agreement,
as shall be necessary to effectuate any such succession.
Section 7.03. Notification to Certificateholders. Upon any such
termination or appointment of a successor to the Master Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
ARTICLE VIII
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
<PAGE> 165
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that the Trustee shall not be responsible for the
accuracy or content of any such certificate, statement, opinion, report,
or other order or instrument furnished by the Company or Master Servicer
to the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided,
however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the duties
and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement,
(ii) the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agree-
ment, no implied covenants or obligations shall be read into this Agree-
ment against the Trustee, and, in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement; and
(iii) The Trustee shall not be personally liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders holding Certificates which
evidence Percentage Interests aggregating not less than 25% of the REMIC
II Trust Fund relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or relating to the
exercise of any trust or power conferred upon the Trustee under this
Agreement.
(d) Within ten days after the occurrence of any Event of Default
known to the Trustee, the Trustee shall transmit by mail to the Rating
Agencies notice of each Event of Default. Within 90 days after the
occurrence of any Event of Default known to the Trustee, the Trustee
shall transmit by mail to all Certificateholders (with a copy to the
Rating Agencies) notice of each Event of Default, unless such Event of
Default shall have been cured or waived; provided, however, the Trustee
shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the best interests of the
Certificateholders; and provided, further, that in the case of any Event
of Default of the character specified in Section 7.01(i) and Section
7.01(ii) no such notice to Certificateholders or to the Rating Agencies
shall be given until at least 30 days after the occurrence thereof.
(e) Concurrently with the execution hereof, the Trustee shall
execute and deliver to the Certificate Insurer the Insurance Agreement
dated of even date herewith and shall perform its obligations thereunder
<PAGE> 166
in accordance with the terms thereof. The Trustee shall have no duty to
review or otherwise determine the adequacy of the Insurance Agreement on
behalf of the Certificateholders.
Section 8.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any action
taken or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(iv) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Holders of
Certificates (including the Certificate Insurer, with respect to the
Insured Certificates) evidencing Percentage Interests aggregating not
less than 25% of the REMIC II Trust Fund; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security, if any, afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to proceeding;
(v) The Trustee may execute the trust or any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys;
(vi) The Trustee shall not be deemed to have knowledge or notice of any
matter, including without limitation an Event of Default, unless
actually known by a Responsible Officer, or unless written notice
thereof referencing this Agreement or the Certificates is received at
the Corporate Trust Office at the address set forth in Section 10.06;
and
(vii) In no event shall the Trustee be held liable for acts or
omissions of the Master Servicer (excepting the Trustee's own actions as
Master Servicer). No provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (except for
the giving of required notices), or in the exercise of any of its rights
<PAGE> 167
or powers, if it shall have reasonable grounds for believing the
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein (other than those relating to the due
organization, power and authority of the Trustee) and in the
Certificates (other than the execution of, and certificate of
authentication on, the Certificates) shall be taken as the statements of
the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or any Mortgage
Loan. The Trustee shall not be accountable for the use or application by
the Company of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the
Master Servicer, the Servicers or the Company in respect of the Mortgage
Loans or deposited into the Custodial Accounts for P&I, any Buydown Fund
Account, or the Custodial Accounts for P&I by any Servicer or into the
Investment Account, or the Certificate Account by the Master Servicer or
the Company.
Section 8.04. Trustee May Own Certificates. The Trustee or any agent or
affiliate of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Certificates with the same rights it
would have if it were not Trustee.
Section 8.05. The Master Servicer to Pay Trustee's Fees and Expenses.
Subject to any separate written agreement with the Trustee, the Master
Servicer covenants and agrees to, and the Master Servicer shall, pay the
Trustee from time to time, and the Trustee shall be entitled to payment,
for all services rendered by it in the execution of the trust hereby
created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee. Except as otherwise expressly provided
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
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such laws to exercise corporate trust powers, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of
any aforementioned supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Master Servicer. Upon receiving
such notice of resignation, the Master Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Master Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Master Servicer may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Trustee so removed, 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.
<PAGE> 169
Section 8.08. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Master Servicer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein. The predecessor shall deliver to the successor trustee
all Mortgage Files, related documents, statements and all other property
held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such appointment such successor
trustee shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to (i) all Certificateholders at
their addresses as shown in the Certificate Register, (ii) the
Certificate Insurer and (iii) 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
<PAGE> 170
Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable;
provided, that the Trustee shall remain liable for all of its
obligations and duties under this Agreement. If the Master Servicer
shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment; provided, that the Trustee shall remain
liable for all of its obligations and duties under this Agreement. No co-
trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 hereunder
and no notice to Certificateholders of the appointment of co-trustee(s)
or separate trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly and severally, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the REMIC I Trust Fund or the REMIC II Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustee(s) and co-
trustee(s), as effectively as if given to each of them. Every instrument
appointing any separate trustee(s) or co-trustee(s) shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and the
trust shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or
<PAGE> 171
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 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
<PAGE> 172
Certificate Account by the Trustee, such reference shall be deemed to
include such a withdrawal on behalf of the Trustee by a Paying Agent.
Whenever reference is made in this Agreement to a distribution by the
Trustee or the furnishing of a statement to Certificateholders by the
Trustee, such reference shall be deemed to include such a distribution
or furnishing on behalf of the Trustee by a Paying Agent. Each Paying
Agent shall provide to the Trustee such information concerning the
Certificate Account as the Trustee shall request from time to time. Each
Paying Agent must be reasonably acceptable to the Master Servicer and
must be a corporation, trust company or banking association organized
and doing business under the laws of the United States of America or of
any state, having a principal office and place of business in New York,
New York or a principal office and place of business in Boston,
Massachusetts and a place of business in New York, New York, having a
combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or
examination by federal or state authorities.
Any corporation into which any Paying Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Paying Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Paying Agent, shall continue to be the
Paying Agent provided that such corporation after the consummation of
such merger, conversion, consolidation or succession meets the
eligibility requirements of this Section 8.12.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Master Servicer; provided, that
the Paying Agent has returned to the Certificate Account or otherwise
accounted, to the reasonable satisfaction of the Master Servicer, for
all amounts it has withdrawn from the Certificate Account. The Trustee
may, upon prior written approval of the Master Servicer, at any time
terminate the agency of any Paying Agent by giving written notice of
termination to such Paying Agent and to the Master Servicer. Upon
receiving a notice of resignation or upon such a termination, or in case
at any time any Paying Agent shall cease to be eligible in accordance
with the provisions of the first paragraph of this Section 8.12, the
Trustee may appoint, upon prior written approval of the Master Servicer,
a successor Paying Agent, shall give written notice of such appointment
to the Master Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Paying Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers,
duties 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
<PAGE> 173
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 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 the Certificateholders
and the Certificate Insurer 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 the Certificate Insurer (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
<PAGE> 174
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 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 and the Certificate Insurer an Opinion of Counsel to the effect
that the failure of the REMIC I Trust Fund and REMIC II Trust Fund to
comply with the requirements of this Section 9.02 will not (i) result in
the imposition of taxes on "prohibited transactions" of the REMIC I
Trust Fund and the REMIC II Trust Fund as described in Section 860F of
the Code, or (ii) cause the REMIC I Trust Fund or the REMIC II Trust
Fund to fail to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date set forth in
<PAGE> 175
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 behalf of the REMIC I Trust
Fund and the REMIC II Trust Fund; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Master
Servicer as agent of the Trustee shall sell all of the assets of the
REMIC I Trust Fund and the REMIC II Trust Fund to the Company for cash
in the amount specified in Section 9.01.
(b) By its acceptance of any Residual Certificate, the Holder
thereof hereby agrees to authorize the 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, but with the prior written consent of the
Certificate Insurer with respect to any amendment that adversely affects
the interests of any of the Holders of the Insured Certificates: (i) to
cure any ambiguity; (ii) to correct or supplement any provision herein
which may be defective or inconsistent with any other provisions herein;
(iii) to comply with any requirements imposed by the Code or any
regulations thereunder; (iv) to correct the description of any property
at any time included in the REMIC I Trust Fund or the REMIC II Trust
Fund, or to assure the conveyance to the Trustee of any property
included in the REMIC I Trust Fund or the REMIC II Trust Fund; and (v)
pursuant to Section 5.01(c)(v). No such amendment (other than one
entered into pursuant to clause (iii) of the preceding sentence) shall
adversely affect in any material respect the interest of any
Certificateholder. Prior to entering into any amendment without the
consent of Certificateholders pursuant to this paragraph, the Trustee
may require an Opinion of Counsel to the effect that such amendment is
permitted under this paragraph. The placement of an "original issue
discount" legend on, or any change required to correct any such legend
previously placed on a Certificate shall not be deemed any amendment to
this Agreement.
<PAGE> 176
(b) This Agreement may also be amended from time to time by the
Master Servicer, the Company and the Trustee with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not
less than 66% of the REMIC II Trust Fund for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the
provisions of, this Agreement or of modifying in any manner the rights
of the Certificateholders; provided, however, that no such amendment
shall, without the consent of the Holder of each Certificate affected
thereby (i) reduce in any manner the amount of, or delay the timing of,
distributions of principal or interest required to be made hereunder or
reduce the Certificateholder's Percentage Interest, the Certificate
Interest Rate or the Termination Payment with respect to any of the
Certificates, (ii) reduce the percentage of Percentage Interests
specified in this Section 10.01 which are required to amend this
Agreement, (iii) create or permit the creation of any lien against any
part of the REMIC I Trust Fund or the REMIC II Trust Fund, or (iv)
modify any provision in any way which would permit an earlier retirement
of the Certificates.
Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to
each Certificateholder. Any failure to provide such notice, or any
defect therein, shall not, however, in any way impair or affect the
validity of any such amendment.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 10.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all
appropriate public offices for real property records in all the counties
or the comparable jurisdictions in which any Mortgaged Property is
situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Company and at its
expense on direction by the Trustee, but only upon direction accompanied
by an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
Without limiting the foregoing, the Trustee shall make the filings
required by Chapter 182 of the Massachusetts General Laws.
Section 10.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, the REMIC I Trust Fund or the REMIC II 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
<PAGE> 177
the parties hereto or any of them.
No Certificateholder shall have any right to vote or in any manner
otherwise to control the operation and management of the REMIC I Trust
Fund or the REMIC II Trust Fund or the obligations of the parties hereto
(except as provided in Section 5.09, Section 7.01, Section 8.01, Section
8.02, Section 8.07, Section 10.01 and this Section 10.03), nor shall
anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders
from time to time as partners or members of an association; nor shall
any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
of any provision of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee
a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of the
REMIC II Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities
to be incurred therein or thereby, and the Trustee, for 60 days after
its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding.
However, the Trustee is under no obligation to exercise any of the
extraordinary trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby. It is understood and intended, and
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates,
or to obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Agreement, except in the
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.
For so long as no Certificate Insurer Default exists (and whether
or not any payments with respect to Deficiency Amounts or Preference
Amounts have been made), the Certificate Insurer shall be deemed to be
<PAGE> 178
the sole Holder of all outstanding Insured Certificates with respect to
any rights hereunder (other than the right to receive distributions on
such Insured Certificates, except as provided in Section 3.22); provided
that such rights may not be used to reduce the rights of the Holders of
the Insured Certificates to receive distributions or to otherwise impair
their rights under this Agreement as further described in the definition
of "Certificateholder."
Section 10.04. Access to List of Certificateholders. The Certificate
Registrar shall furnish or cause to be furnished to the Trustee, within
30 days after receipt of a request by the Trustee in writing, a list, in
such form as the Trustee may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date
for payment of distributions to such Certificateholders.
If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or
under the Certificates and is accompanied by a copy of the communication
which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such list from the
Certificate Registrar, afford such applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of a date more than 90 days prior to the
date of receipt of such applicants' request, the Trustee shall promptly
request from the Certificate Registrar a current list as provided above,
and shall afford such applicants access to such list promptly upon
receipt.
Every Certificateholder, by receiving and holding the same, agrees
with the Master Servicer and the Trustee that neither the Master
Servicer nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 10.05. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations,
rights and remedies of the parties hereunder shall be determined in
accordance with such laws without giving effect to conflict of laws
principles.
Section 10.06. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered at or mailed by registered or certified
mail to (a) in the case of the Company, 75 North Fairway Drive, Vernon
Hills, Illinois 60061, Attention: General Counsel (with a copy directed
to the attention of the Master Servicing Department) or such other
address as may hereafter be furnished to the Trustee in writing by the
Company, (b) in the case of the Trustee, at its Corporate Trust Office,
or such other address as may hereafter be furnished to the Master
<PAGE> 179
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, (e) in the case of DCR, 17 State Street, 12th floor,
New York, New York 10004, Attention: RMBS Monitoring, or such other
address as may hereafter be furnished to the Trustee and Master Servicer
in writing by DCR and (f) in the case of the Certificate Insurer, to
MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504,
Attn: Insured Portfolio Management - Structured Finance (IPM-SF), or
such other address as may hereafter be furnished to the Trustee and
Master Servicer in writing by the Certificate Insurer. Notices to the
Rating Agencies shall also be deemed to have been duly given if mailed
by first class mail, postage prepaid, to the above listed addresses of
the Rating Agencies. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 10.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders
thereof.
Section 10.08. Counterpart Signatures. For the purpose of facilitating
the recordation of this Agreement as herein provided and for other
purposes, this Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an
original, and such counterparts shall constitute but one and the same
instrument.
Section 10.09. Benefits of Agreement. Nothing in this Agreement or in
any Certificate, expressed or implied, shall give to any Person, other
than the parties hereto and their respective successors hereunder, any
separate trustee or co-trustee appointed under Section 8.10 and the
Certificateholders, any benefit or any legal or equitable right, remedy
or claim under this Agreement.
Section 10.10. Notices and Copies to Rating Agencies.
(a) The Trustee shall notify the Rating Agencies of the occurrence
of any of the following events, in the manner provided in Section 10.06:
(i) the occurrence of an Event of Default pursuant to Section 7.01,
<PAGE> 180
subject to the provisions of Section 8.01(d);
(ii) the appointment of a successor Master Servicer pursuant to Section
7.02;
(b) The Master Servicer shall notify the Rating Agencies of the
occurrence of any of the following events, or in the case of clauses
(iii), (iv), (vii) and (viii) promptly upon receiving notice thereof, in
the manner provided in Section 10.06:
(i) any amendment of this Agreement pursuant to Section 10.01;
(ii) the appointment of a successor Trustee pursuant to Section 8.08;
(iii) the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions coverage
pursuant to Section 3.01 and Section 3.06 with respect to the Master
Servicer or any Servicer;
(iv) any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
(v) the purchase or repurchase of any Mortgage Loan pursuant to a
Purchase Obligation or as permitted by this Agreement or the purchase or
repurchase of the outstanding Mortgage Loans pursuant to Section 9.01;
(vi) the occurrence of the final Distribution Date or the termination of
the trust pursuant to Section 9.01(a)(ii);
(vii) the failure of the Master Servicer to make a Monthly P&I
Advance following a determination on the Determination Date that the
Master Servicer would make such advance pursuant to Section 4.02; and
(viii) the failure of the Master Servicer to make a determination on
the Determination Date regarding whether it would make a Monthly P&I
Advance when a shortfall exists between (x) payments scheduled to be
received in respect of the Mortgage Loans and (y) the amounts actually
deposited in the Certificate Account on account of such payments,
pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements pursuant to
Section 4.02, Section 4.05, Section 3.12, Section 3.13 or Section 3.15
or any other statements or reports to the Rating Agencies (with a copy
to the Certificate Insurer) 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 (with a copy to the Certificate Insurer) 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)
<PAGE> 181
By: /s/ Michael E. Lash
Michael E. Lash
Its: Vice President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
(SEAL)
By: /s/ David Duclos
David Duclos
Its: Vice President
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF L AKE )
On this 31st day of August, 1999 before me, a Notary Public in and
for said State personally appeared Michael E. Lash, known to me to be
the Vice President of PNC MORTGAGE SECURITIES CORP., one of the
corporations that executed the within interest, 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.
Notary Public
(Seal)
CERTIFICATE OF ACKNOWLEDGEMENT
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 31st day of August, 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.
<PAGE> 182
WITNESS my hand and official seal.
Signature
(SEAL)
Exhibit A
CUSIP 69348R QW9
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 August 31, 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 1999-9 Portion of the Component I-A-1-1
Notional Amount as of
the Cut-Off Date Evidenced by this
Certificate:
$2,083,028.00
<PAGE> 183
Class I-A-1 Certificate Interest Rate: Based on the following Portion
of the Component I-A-1-2 Notional Amount as of
four Components: (i) Component I-A-1-1: 7.000% applied to the Cut-Off
Date Evidenced by this Certificate:
the Component I-A-1-1 Notional Amount; (ii) Component
$1,802,849.00
I-A-1-2: 7.000% applied to the Component I-A-1-2 Notional
Amount; (iii) Component I-A-1-3: 7.000% applied to the Portion of
the Component I-A-1-3 Notional Amount as of
Component I-A-1-3 Notional Amount; and (iv) Component the Cut-Off Date
Evidenced by this Certificate:
I-A-1-4: 7.000% applied to the Component I-A-1-4 Principal
$7,894,607.00
Balance
Portion of the Component I-A-1-4
Principal Balance as of
Cut-Off Date: August 1, 1999 the Cut-Off Date
Evidenced by this Certificate:
$42,105,000.00
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Component I-A-1-1 Principal Balance Component I-A-1-1 Notional
Amount
as of the Cut-Off Date: $0.00 as of the Cut-Off Date:
$2,083,028.00
Component I-A-1-2 Principal Balance Component I-A-1-2 Notional
Amount
as of the Cut-Off Date: $0.00 as of the Cut-Off Date:
$1,802,849.00
Component I-A-1-3 Principal Balance Component I-A-1-3 Notional
Amount
as of the Cut-Off Date: $0.00 as of the Cut-Off Date:
$7,894,607.00
Component I-A-1-4 Principal Balance
as of the Cut-Off Date:
$42,105,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R QX7
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
<PAGE> 184
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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class I-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$48,604,000.00
Class I-A-2 Certificate Interest Rate: 6.700%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-A-2 Principal Balance
as of the Cut-Off Date: $48,604,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R QY5
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
<PAGE> 185
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is August 31, 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 1999-9 Portion of the Class I-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$50,479,793.00
Class I-A-3 Certificate Interest Rate: 6.750%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-A-3 Principal Balance
as of the Cut-Off Date: $50,479,793.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R QZ2
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
<PAGE> 186
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 August 31, 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 1999-9 Portion of the Class I-A-4 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$73,683,000.00
Class I-A-4 Certificate Interest Rate: 6.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-A-4 Principal Balance
as of the Cut-Off Date: $73,683,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RA6
<PAGE> 187
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 August 31, 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 1999-9 Portion of the Class I-A-5 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$8,039,000.00
Class I-A-5 Certificate Interest Rate: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-A-5 Principal Balance
as of the Cut-Off Date: $8,039,000.00
<PAGE> 188
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RB4
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 August 31, 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 1999-9 Portion of the Class I-A-6 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$100,000,000.00
Class I-A-6 Certificate Interest Rate: 7.000%
<PAGE> 189
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-A-6 Principal Balance
as of the Cut-Off Date: $100,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RW8
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 August 31, 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.
<PAGE> 190
Series 1999-9 Portion of the Class I-X Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$5,752,430.00
Class I-X Certificate Interest Rate:
7.000% applied to the Class I-X
Notional Amount
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 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:
$5,752,430.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R SC1
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
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 August 31, 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.
<PAGE> 191
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 1999-9 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% $4,798,081.00
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-P Principal Balance
as of the Cut-Off Date: $4,798,081.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R SE7
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
August 31, 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
<PAGE> 192
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 payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-9 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: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-1 Principal Balance
as of the Cut-Off Date: $9,338,408.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SF4
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
August 31, 1999. [Assuming that the Mortgage Loans underlying the
<PAGE> 193
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) 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 1999-9 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: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-2 Principal Balance
as of the Cut-Off Date: $3,804,537.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SG2
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
<PAGE> 194
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
August 31, 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 1999-9 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: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-3 Principal Balance
as of the Cut-Off Date: $1,729,335.00
Registered Owner
Certificate No.
<PAGE> 195
Exhibit A
CUSIP 69348R SN7
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
August 31, 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 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
<PAGE> 196
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-9 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: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-4 Principal Balance
as of the Cut-Off Date: $1,556,402.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SP2
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
August 31, 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-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
<PAGE> 197
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 1999-9 Portion of the Class I-B-5 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$691,734.00
Class I-B-5 Certificate Interest Rate: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-5 Principal Balance
as of the Cut-Off Date: $691,734.00
Registered Owner
Exhibit A
CUSIP 69348R SQ0
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
August 31, 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
<PAGE> 198
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, 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 1999-9 Portion of the Class I-B-6 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
Class I-B-6 Certificate Interest Rate: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class I-B-6 Principal Balance
as of the Cut-Off Date: $1,037,601.06
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R RC2
MORTGAGE PASS-THROUGH CERTIFICATE
<PAGE> 199
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 August 31, 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 1999-9 Portion of the Class II-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$58,222,000.00
Class II-A-1 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-1 Principal Balance
as of the Cut-Off Date: $58,222,000.00
<PAGE> 200
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RD0
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class II-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$3,154,000.00
Class II-A-2 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-2 Principal Balance
as of the Cut-Off Date: $3,154,000.00
<PAGE> 201
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RE8
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class II-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$3,497,000.00
Class II-A-3 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-3 Principal Balance
as of the Cut-Off Date: $3,497,000.00
<PAGE> 202
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RF5
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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
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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class II-A-4 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$3,801,000.00
Class II-A-4 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-4 Principal Balance
as of the Cut-Off Date: $3,801,000.00
<PAGE> 203
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RG3
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class II-A-5 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$4,335,000.00
Class II-A-5 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-5 Principal Balance
as of the Cut-Off Date: $4,335,000.00
<PAGE> 204
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RH1
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 August 31, 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 1999-9 Portion of the Class II-A-6 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$3,000,000.00
<PAGE> 205
Class II-A-6 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-6 Principal Balance
as of the Cut-Off Date: $3,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RJ7
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 August 31, 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
<PAGE> 206
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 1999-9 Portion of the Class II-A-7 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$8,994,855.00
Class II-A-7 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-7 Principal Balance
as of the Cut-Off Date: $8,994,855.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RK4
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-8
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
<PAGE> 207
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 1999-9 Portion of the Class II-A-8 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$1,366,000.00
Class II-A-8 Certificate Interest Rate:
For the first twenty-four Distribution
Dates, 8.000%; and thereafter, 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class II-A-8 Principal Balance
as of the Cut-Off Date: $1,366,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R SD9
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-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 August 31, 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
<PAGE> 208
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 1999-9 Portion of the Class D-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate:
Class D-P Certificate Interest Rate: 0.00% $1,145,676.00
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class D-P Principal Balance
as of the Cut-Off Date: $1,145,676.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RX6
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-X-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
<PAGE> 209
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is August 31, 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 1999-9 Portion of the Class A-X-1 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$22,601,131.00
Class A-X-1 Certificate Interest
Rate: 7.500% applied to the Class A-
X-1 Notional Amount
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
October 25, 2029
Class A-X-1 Principal Balance
as of the Cut-Off Date: $0.00
Class A-X-1 Notional Amount
as of the Cut-Off Date:
$22,601,131.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RY4
<PAGE> 210
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-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 August 31, 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 1999-9 Portion of the Class A-X-2 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$1,594,690.00
Class A-X-2 Certificate Interest
Rate: 7.500% applied to the Class A-
X-2 Notional Amount
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
October 25, 2029
<PAGE> 211
Class A-X-2 Principal Balance
as of the Cut-Off Date: $0.00
Class A-X-2 Notional Amount
as of the Cut-Off Date:
$1,594,690.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RL2
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 August 31, 1999.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-9 Portion of the Class III-A-1
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$145,000,000.00
Class III-A-1 Certificate Interest Rate: 7.220%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
<PAGE> 212
25, 2029
Class III-A-1 Principal Balance
as of the Cut-Off Date: $145,000,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RM0
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 August 31, 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.
<PAGE> 213
Series 1999-9 Portion of the Class III-A-2
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$10,959,000.00
Class III-A-2 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-2 Principal Balance
as of the Cut-Off Date: $10,959,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RN8
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 August 31, 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.
<PAGE> 214
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 1999-9 Portion of the Class III-A-3
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$35,978,607.00
Class III-A-3 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-3 Principal Balance
as of the Cut-Off Date: $35,978,607.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RP3
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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
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 August 31, 1999.
<PAGE> 215
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 1999-9 Portion of the Class III-A-4
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$28,501,000.00
Class III-A-4 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-4 Principal Balance
as of the Cut-Off Date: $28,501,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RQ1
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 August 31, 1999.
<PAGE> 216
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 1999-9 Portion of the Class III-A-5
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$4,800,000.00
Class III-A-5 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-5 Principal Balance
as of the Cut-Off Date: $4,800,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RR9
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 August 31, 1999.
<PAGE> 217
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 1999-9 Portion of the Class III-A-6
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$115,439,000.00
Class III-A-6 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-6 Principal Balance
as of the Cut-Off Date: $115,439,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RS7
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-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 August 31, 1999.
<PAGE> 218
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 1999-9 Portion of the Class III-A-7
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$5,271,000.00
Class III-A-7 Certificate Interest Rate: 7.250%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date: October
25, 2029
Class III-A-7 Principal Balance
as of the Cut-Off Date: $5,271,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RT5
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 August 31, 1999.
<PAGE> 219
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 1999-9 Portion of the Class IV-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$74,856,000.00
Class IV-A-1 Certificate Interest Rate: 7.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class IV-A-1 Principal Balance
as of the Cut-Off Date: $74,856,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RU2
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-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 August 31, 1999.
<PAGE> 220
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 1999-9 Portion of the Class IV-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$105,615,464.00
Class IV-A-2 Certificate Interest Rate: 7.500%
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class IV-A-2 Principal Balance
as of the Cut-Off Date: $105,615,464.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R RV0
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-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 August 31, 1999.
Interest is not payable with respect to this Certificate. Assuming that
the Mortgage Loans underlying the Certificates prepay at the prepayment
<PAGE> 221
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
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 1999-9 Portion of the Class IV-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$7,543,962.00
Class IV-A-3 Certificate Interest Rate: 0.000%
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: September 25, 2029
Class IV-A-3 Principal Balance
as of the Cut-Off Date: $7,543,962.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R SA5
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-X-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
<PAGE> 222
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 August 31, 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 1999-9 Portion of the Class IV-X-1 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$8,899,859.00
Class IV-X-1 Certificate Interest
Rate: 7.000% applied to the Class
IV-X-1 Notional Amount
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class IV-X-1 Principal Balance
as of the Cut-Off Date: $0.00
Class IV-X-1 Notional Amount
as of the Cut-Off Date:
$8,899,859.00
Cede & Co.
<PAGE> 223
Registered Owner
Exhibit A
CUSIP 69348R SB3
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-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 August 31, 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 1999-9 Portion of the Class IV-X-2 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$12,528,268.00
Class IV-X-2 Certificate Interest
Rate: 7.000% applied to the Class
<PAGE> 224
IV-X-2 Notional Amount
Cut-Off Date: August 1, 1999
First Distribution Date: September
27, 1999
Last Scheduled Distribution Date:
September 25, 2029
Class IV-X-2 Principal Balance
as of the Cut-Off Date: $0.00
Class IV-X-2 Notional Amount
as of the Cut-Off Date:
$12,528,268.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R SH0
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
August 31, 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 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
<PAGE> 225
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 1999-9 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-1 Principal Balance
as of the Cut-Off Date: $26,610,778.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SJ6
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
August 31, 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-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
<PAGE> 226
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 1999-9 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-2 Principal Balance
as of the Cut-Off Date: $10,779,049.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SK3
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
August 31, 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
<PAGE> 227
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 1999-9 Portion of the Class C-B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
Class C-B-3 Certificate Interest Rate: Variable
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-3 Principal Balance
as of the Cut-Off Date: $5,389,525.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SR8
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
<PAGE> 228
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
August 31, 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) 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 1999-9 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-4 Principal Balance
as of the Cut-Off Date: $4,378,989.00
<PAGE> 229
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SS6
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 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
August 31, 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.
<PAGE> 230
The Class C-B-5 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-9 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-5 Principal Balance
as of the Cut-Off Date: $1,684,227.00
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R ST4
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
August 31, 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) 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
<PAGE> 231
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 1999-9 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 25, 2029
Class C-B-6 Principal Balance
as of the Cut-Off Date: $3,368,454.30
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R SM9
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-2
Evidencing a Percentage Interest in certain distributions with respect
to a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO
THE COMPANY AND THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS
NOT EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION
<PAGE> 232
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER
IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX.
SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CLASS R-2 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF A CLASS R-2 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R-2 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND
THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-2
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
MASTER SERVICER, THE REMIC I TRUST FUND, THE REMIC II TRUST FUND OR THE
COMPANY.
Solely for U.S. federal income tax purposes, this Certificate represents
a "residual interest" in a "real estate mortgage investment conduit," as
those terms are defined in Sections 860G and 860D, respectively, of the
Internal Revenue Code of 1986, as amended.
Series 1999-9 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:
7.000%. Additionally the Class R-2
Certificates are entitled to the
Residual Distribution Amount as defined
in the Pooling Agreement.
Cut-Off Date: August 1, 1999
First Distribution Date: September 27, 1999
<PAGE> 233
Last Scheduled Distribution Date: October 25, 2029
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
Registered Owner
Certificate No.
Exhibit B
CUSIP 69348R SL1
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-1
Evidencing a Percentage Interest in certain distributions with respect
to a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO
THE COMPANY AND THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS
NOT EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER
IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX.
SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CLASS R-1 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF A CLASS R-1 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
<PAGE> 234
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 1999-9 Percentage Interest evidenced by this
Class R-1 Certificate in the
distributions to be made with respect
to the Class R-1 Certificates:
%
Class R-1 Certificate Interest Rate:
7.000%. 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: August 1, 1999
First Distribution Date: September 27, 1999
Last Scheduled Distribution Date: October 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
<PAGE> 235
of any conflict between the Pooling Agreement and the terms of this
Certificate, the Pooling Agreement shall control. This Certificate is
issued under and is subject to the terms, provisions and conditions of
the Pooling Agreement, to which Pooling Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which
such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on
the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person
in whose name this Certificate is registered at the close of business on
the last day (or if such last day is not a Business Day, the Business
Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), to the
extent of such Certificateholder's Percentage Interest represented by
this Certificate in the portion of the REMIC I Available Distribution
Amount for such Distribution Date then distributable on the Certificates
of this Class, as specified in Section 4.01 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by
wire transfer or check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been 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)
<PAGE> 236
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC I Trust Fund.
The Certificates do not represent an obligation of, or an interest
in, the Company or any of its affiliates and are not insured or
guaranteed by any governmental agency. The Certificates are limited in
right of payment to certain collections and recoveries respecting the
Mortgage Loans, all as more specifically set forth herein and in the
Pooling Agreement. In the event funds are advanced with respect to any
Mortgage Loan, such advance is reimbursable to the Master Servicer from
the related recoveries on such Mortgage Loan or from other cash
deposited in the Certificate Account to the extent that such advance is
not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the
Certificate Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including
reimbursement to the Master Servicer of advances made, or certain
expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders
under the Pooling Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of the
Certificates evidencing Percentage Interests aggregating not less than
66% of the REMIC II Trust Fund. The Pooling Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent
of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
<PAGE> 237
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 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.
<PAGE> 238
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
DELTAPlease print or typewrite name and address, including postal zip
code of assignee. Please insert social security or other identifying
number of assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE:The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate
does not represent an obligation of or an
interest in PNC Mortgage Securities Corp. or
any of its affiliates, including PNC Bank
<PAGE> 239
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) 662-1314
Facsimile: (617) 662-1435
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:
<PAGE> 240
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 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
<PAGE> 241
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 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
<PAGE> 242
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 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
<PAGE> 243
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 1999-9
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates Series 1999-9, Class [ ] (the
"Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act") and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, and (b) we have not offered or sold any
certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By:
Authorized Officer
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
<PAGE> 244
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-9
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 1999-9 (the
"Purchased Certificates") in the principal amount of $ . In
doing so, the Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and
not otherwise defined herein shall have the meaning ascribed to it in
the Pooling and Servicing Agreement, dated as of August 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 1999-9.
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;
<PAGE> 245
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from
PNC concerning the trust funds created pursuant to the Pooling Agreement
(the "Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that PNC possesses or can
acquire without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will
continue to comply, with the guidelines established by 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
<PAGE> 246
Purchased Certificates is an "insurance company general account" (within
the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance
upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60, or (b) a Benefit Plan Opinion (as defined in
Exhibit A hereto).
(c) The Purchaser acknowledges that its Purchased
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 1999-9
(THE "TRUST") CLASS [ ] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, , declare that,
to the best of my knowledge and belief, the following representations
are true, correct and complete; and
1. That I am the of (the
"Purchaser"), whose taxpayer identification number is , and
on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser (i) is not an employee benefit plan or
other plan or arrangement subject to the prohibited transaction
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), or comparable provisions of any subsequent
enactments (a "Plan"), a trustee of any Plan, or any other Person who is
using the "plan assets" of any Plan to effect such acquisition, (ii) has
provided a "Benefit Plan Opinion" satisfactory to PNC Mortgage
Securities Corp. (the "Company") and the Trustee of the Trust Funds or
<PAGE> 247
(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 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
<PAGE> 248
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.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
<PAGE> 249
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC II Trust Fund.
The Certificates do not represent an obligation of, or an interest
in, the Company or any of its affiliates and are not insured or
guaranteed by any governmental agency. The Certificates are limited in
right of payment to certain collections and recoveries respecting the
Mortgage Loans, all as more specifically set forth herein and in the
Pooling Agreement. In the event funds are advanced with respect to any
Mortgage Loan, such advance is reimbursable to the Master Servicer from
the related recoveries on such Mortgage Loan or from other cash
deposited in the Certificate Account to the extent that such advance is
not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the
Certificate Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including
reimbursement to the Master Servicer of advances made, or certain
expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
<PAGE> 250
obligations of the Company and the rights of the Certificateholders
under the Pooling Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of the
Certificates evidencing Percentage Interests aggregating not less than
66% of the REMIC II Trust Fund. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Pooling
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
Certificate Registrar or the office maintained by the Trustee in the
City and State of New York, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth
hereinabove will be issued to the designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws. In the event that a transfer is to be
made without registration or qualification under applicable laws, (i) in
the event such transfer is made pursuant to Rule 144A under the
Securities Act, the Company and the Trustee shall require the transferee
to execute an investment letter in substantially the form attached as
Exhibit L to the Pooling Agreement, which investment letter shall not be
an expense of the Company, the Master Servicer or the Trustee and (ii)
in the event that such a transfer is not made pursuant to Rule 144A
under the Securities Act, the Company may require an Opinion of Counsel
satisfactory to the Company that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an
expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the
Securities Act, qualify the Certificate under any state securities law
or provide registration rights to any purchaser. Any Holder desiring to
effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company and the 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
<PAGE> 251
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.
[to be used only in the case of the Insured Certificates:] [Each
Holder of this Certificate hereby agrees for the benefit of the
Certificate Insurer that, to the extent the Certificate Insurer makes
Insured Payments, either directly or indirectly (as by paying through
the Trustee), to the Holders of the Insured Certificates, the
Certificate Insurer will be subrogated to the rights of such Holder to
the extent of such payments.]
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
<PAGE> 252
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
DELTAPlease print or typewrite name and address, including postal zip
code of assignee. Please insert social security or other identifying
number of assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE:The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate
does not represent an obligation of or an
interest in PNC Mortgage Securities Corp. or
any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed by
any agency or instrumentality of the United
States.
Exhibit I
TRANSFEROR CERTIFICATE
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 1999-9
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-9, 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
<PAGE> 253
Certificates, Series 1999-9, Class [R-1][R-2] (the "Certificate"),
pursuant to Section 5.01 of the Pooling and Servicing Agreement (the
"Pooling Agreement"), dated as of August 1, 1999 among PNC Mortgage
Securities Corp., as depositor and master servicer (the "Company") and
State Street Bank and Trust Company, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set
forth in the Pooling Agreement. The Seller hereby certifies, represents
and warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the sale of the
Certificate by the Seller to the Purchaser is or will be to enable the
Seller to impede the assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Company a transferee affidavit and agreement in the form
attached to the Pooling Agreement as Exhibit J. The Seller does not know
or believe that any representation contained therein is false.
3. The Seller has no actual knowledge that the proposed
Transferee is not a Permitted Transferee.
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. The Seller has conducted a reasonable investigation of the
financial condition of the Purchaser and, as a result of the
investigation, found that the Purchaser has historically paid its debts
as they came due, and found no significant evidence to indicate that the
Purchaser will not continue to pay its debts as they come due in the
future.
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i)
understands that as holder of a noneconomic residual interest it may
incur tax liabilities in excess of any cash flows generated by the
interest, and (ii) intends to pay taxes associated with its holding of
the Certificates as they become due.
Very truly yours,
[Seller]
By:
Name:
Title:
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
<PAGE> 254
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record
or beneficial owner of the Class [R-1][R-2] Certificate (the "Owner")),
a [savings institution] [corporation] duly organized and existing under
the laws of [the State of ] [the United States], on
behalf of which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code")
and will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class [R-1][R-2]
Certificates, and (ii) is acquiring the Class [R-1][R-2] Certificates
for its own account or for the account of another Owner from which it
has received an affidavit and agreement in substantially the same form
as this affidavit and agreement. (For this purpose, a disqualified
organization" means the United States, any state or political
subdivision thereof, or any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which
are subject to tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not selected by
any such governmental entity, or any foreign government or international
organization, or any agency or instrumentality of such foreign
government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is
generally exempt from federal income tax unless such organization is
subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of the Class [R-1][R-2] Certificates after March
31, 1988; (ii) that such tax would be on the transferor, or, if such
transfer is through an agent (which person includes a broker, nominee or
middle-man) for a 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
<PAGE> 255
purpose of the transfer was to enable the transferor to impede the
assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-
through entity" holding the Class [R-1][R-2] Certificates if at any time
during the taxable year of the pass-through entity a disqualified
organization is the record holder of an interest in such entity. (For
this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not
register the Transfer of the Class [R-1][R-2] Certificates unless the
transferee, or the transferees' agent, delivers to it an affidavit and
agreement, among other things, in substantially the same form as this
affidavit and agreement. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on
the face of the Class [R-1][R-2] Certificates and the provisions of
Section 5.01 of the Pooling Agreement under which the Class [R-1][R-2]
Certificates were issued (in particular, clauses (iii)(A) and (iii)(B)
of Section 5.01(c) which authorize the Trustee to deliver payments to a
person other than the Owner and negotiate a mandatory sale by the
Trustee in the event the Owner holds such Certificates in violation of
Section 5.01). The Owner expressly agrees to be bound by and to comply
with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class [R-1][R-2]
Certificates will only be owned, directly or indirectly, by an Owner
that is not a disqualified organization.
8. The Owner's Taxpayer Identification Number is
.
9. That no purpose of the Owner relating to the purchase of
the Class [R-1][R-2] Certificates by the Owner is or will be to enable
the transferor to impede the assessment or collection of tax.
10. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long
as any of the Certificates remain outstanding.
11. That the Owner has no present knowledge or expectation
that it will become insolvent or subject to a bankruptcy proceeding for
so long as any of the Certificates remain outstanding.
12. That no purpose of the Owner relating to any sale of the
Class [R-1][R-2] Certificates by the Owner will be to impede the
<PAGE> 256
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]
ATTEST:
[Assistant] Secretary
<PAGE> 257
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
Form of Certificate Insurance Policy
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the
undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Seller hereby certifies the following facts: Neither the Seller nor
anyone acting on its behalf has offered, transferred, pledged, sold or
otherwise disposed of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security to, or solicited any offer
<PAGE> 258
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 August 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 August , 1999 relating to the Rule 144A
Securities and has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the
Trustee, the Company or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
<PAGE> 259
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 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
<PAGE> 260
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.:
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
<PAGE> 261
case, the Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue
Code.
Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements.
Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State or
territory or the District of Columbia.
State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
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.
<PAGE> 262
SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer,
(ii) securities that are part of an unsold allotment to or subscription
by the Buyer, if the Buyer is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer
used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in
determining such aggregate amount, the Buyer may have included
securities owned by subsidiaries of the Buyer, but only if such
subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and
if the investments of such subsidiaries are managed under the Buyer's
direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange
Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer may be in reliance on
Rule 144A.
Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own
account?
<PAGE> 263
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the
Buyer for the account of a third party (including any separate account)
in reliance on Rule 144A, the Buyer will only purchase for the account
of a third party that at the time is a "qualified institutional buyer"
within the meaning of Rule 144A. In addition, the Buyer agrees that the
Buyer will not purchase securities for a third party unless the Buyer
has obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to conclude that
such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of
the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
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)
<PAGE> 264
the Buyer is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Buyer alone, or the
Buyer's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year. For purposes of
determining the amount of securities owned by the Buyer or the Buyer's
Family of Investment Companies, the cost of such securities was used.
The Buyer owned $ in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of
the Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement
and (vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales
to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification by the undersigned
as of the date of such purchase.
Print Name of Buyer
By:
<PAGE> 265
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 August 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 1999-9
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that,
except as noted on the attachment hereto, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it or the Custodian on its
behalf has reviewed the documents delivered to it or to the Custodian on
its behalf pursuant to Section 2.01 of the Pooling and Servicing
Agreement and has determined that (i) all documents required (in the
case of instruments described in clauses (X)(v) and (Y)(x) of the
definition of "Mortgage File," known by the Trustee to be required)
pursuant to the definition of "Mortgage File" and Section 2.01 of the
Pooling and Servicing Agreement have been executed and received as of
<PAGE> 266
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 1999-9
PNC Mortgage Securities Corp.
75 North Fairway Drive
Vernon Hills, IL 60061
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-9
(THE "TRUST") CLASS [ -B- ] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, , declare that,
to the best of my knowledge and belief, the following representations
are true, correct and complete; and
<PAGE> 267
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
.
Notary Public
Exhibit O
<PAGE> 268
FORM OF LOAN SALE AGREEMENT
CLIPPER RECEIVABLES CORPORATION,
as Seller
STATE STREET BANK AND TRUST COMPANY,
as Trustee
LOAN SALE AGREEMENT
Dated as of August 1, 1999
This Loan Sale Agreement (this "Agreement") is dated as of August
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 August 1, 1999 (the "Pooling Agreement") by and between
PNC Mortgage Securities Corp. ("PNC") and the Trustee. Pursuant to a
Revolving Loan Purchase Agreement, dated as of December 30, 1998 (the
"Revolving Loan Purchase Agreement"), among Fairway Drive Funding Corp.
("Fairway"), as seller, Clipper, as purchaser, State Street Capital
Corporation, as administrator, State Street, as relationship bank, and
PNC, as servicer, the Seller has purchased the Conveyed Mortgage Loans
(as defined herein) from Fairway. On the terms and conditions set forth
herein, the Seller desires to sell and the Trustee desires to purchase
the Conveyed Mortgage Loans and certain related rights.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
Whenever used in this Agreement, the following words and phrases
<PAGE> 269
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: August [30], 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: August 1, 1999.
Fairway: The meaning given in the introductory paragraph hereto.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note.
Mortgage Loan: An individual mortgage loan, including the related
Mortgage Note and Mortgage.
Mortgage Loan File: With respect to any Conveyed Mortgage Loan, the
documents described in the definition of "Mortgage Loan File" in the
Revolving Loan Purchase Agreement.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached
hereto as Schedule I.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
PNC: The meaning given in the introductory paragraph hereto.
Person: any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or
political subdivision thereof.
Pooling Agreement: The meaning given in the introductory paragraph
hereto.
<PAGE> 270
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) 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.
<PAGE> 271
Concurrently herewith, the Seller shall notify the Custodian of the
Conveyance of the Conveyed Mortgage Loans and cause the Custodian to
release the related Mortgage Loan Files to or upon the order of the
Trustee by executing a Notice and Instruction to Custodian in the form
attached hereto as Exhibit A.
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1 Governing Law
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York (including Section 5-1401 of the
New York General Obligations Law) and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with
such laws without giving effect to conflict of laws principles other
than Section 5-1401 of the New York General Obligations Law.
Section 3.2 Notices
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered or certified mail to (a) in the
case of the Trustee, at 225 Franklin Street, Boston, MA 02110,
Attention: Corporate Trust Department, PNC Series 1999-9, 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,
<PAGE> 272
cancel, renew or extend this Agreement or to waive compliance with one
or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, or any single or partial
exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative to,
and not exclusive of, any rights or remedies that any party may
otherwise have at law or in equity.
Section 3.5 Captions
All section titles or captions contained in this Agreement or in
any Schedule or Exhibit annexed hereto or referred to herein, and the
table of contents to this Agreement, are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.
Section 3.6 Counterparts
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and
the same instrument.
Section 3.7 Entire Agreement
This Agreement (including any Schedule or Exhibit annexed hereto or
referred to herein) between the parties hereto contains the entire
agreement between the parties with respect to the sale of the Conveyed
Assets and the transactions contemplated hereby and supersedes all prior
agreements, written or oral, with respect thereto.
Section 3.8 Condition Precedent
The Trustee's obligation to purchase the Conveyed Assets hereunder
is conditioned upon and subject to the Trustee's receipt of available
funds from PNC pursuant to the Pooling Agreement in an amount equal to
the Purchase Price.
Section 3.9 No Recourse
No recourse under any obligation, covenant or agreement of Clipper
contained in this Agreement shall be had against J H 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
<PAGE> 273
of them under or by reason of any of the obligations, covenants or
agreements of Clipper contained in this Agreement, or implied therefrom.
Trustee expressly waives, as a condition of and in consideration for the
execution of this Agreement, any and all personal liability against JHM
and every such incorporator, stockholder, officer, director or employee
arising from breaches by Clipper of any such obligations, covenants or
agreements, either at common law or at equity, or by statute or
constitution.
Section 3.10 No Petition
The Trustee agrees that it shall not institute against, or join any
other Person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy or similar law,
for one year and one day after the latest maturing Commercial Paper Note
(as defined in the Program Administration Agreement, dated as of
September 24, 1992, between Clipper and State Street Boston Capital
Corporation, as program administrator, as it may be amended from time to
time) is paid.
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
CLIPPER RECEIVABLES CORPORATION
By: STATE STREET CAPITAL CORPORATION,
as Program Administrator
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
solely in its capacity as Trustee and
not individually
By:
Name:
Title:
CONSENTED TO BY:
STATE STREET CAPITAL CORPORATION, as
<PAGE> 274
Program Administrator
By:
Name:
Title:
Schedule I to Exhibit O
Mortgage Loan Schedule
Exhibit A to Exhibit O
FORM OF NOTICE AND INSTRUCTION TO CUSTODIAN
[Closing Date]
State Street Bank and Trust
Company, as Custodian
225 Franklin Street
Boston, MA 02110
Re: Revolving Loan Purchase Agreement, dated as of December 30,
1998 (the "Revolving Loan Purchase Agreement"), among Fairway
Drive Funding Corp., as seller, Clipper Receivables
Corporation, as purchaser, State Street Capital Corporation,
as administrator, State Street Bank and Trust Company, as
relationship bank, and PNC Mortgage Securities Corp., as
servicer
Ladies and Gentlemen:
We hereby advise you that the mortgage loans specified on Schedule
I hereto (the "Conveyed Mortgage Loans") have been transferred and
assigned, pursuant to a Loan Sale Agreement dated as of August 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 August 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
<PAGE> 275
By:
Name:
Title:
ACKNOWLEDGED:
STATE STREET BANK AND TRUST
COMPANY, as Custodian
By:
Name:
Title:
Schedule I to Notice and Instruction to Custodian
Exhibit P
FORM OF PROTECTIVE TRANSFER AGREEMENT
This Protective Transfer Agreement (this "Agreement"), dated as of
August 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 August 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 August 1, 1999, between Clipper and the
Trustee, Clipper is selling all of its right, title and interest in and
to the Conveyed Assets to the Trustee;
WHEREAS, the Trustee requires assurance of good title to the
Conveyed Assets, and pursuant to Section 13.2(a) of the Funding Sale
Agreement, Funding is obligated to take any action necessary to protect
the interest of Clipper in the Conveyed Assets.
NOW, THEREFORE, in consideration of the covenants made herein
and for other good and valuable consideration the sufficiency of which
<PAGE> 276
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 August 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.
FAIRWAY DRIVE FUNDING CORP.
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity, but
<PAGE> 277
solely as Trustee
By:
Name:
Title:
