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Exhibit 7.1
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EXHIBIT 7.1
CONFORMED VERSION
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$379,514,761.24
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 2000-5
Cut-Off Date: July 1, 2000
This Pooling and Servicing Agreement, dated and effective as of
July 1, 2000 (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, a Massachusetts trust company with
a corporate trust office at 225 Franklin Street, Boston, MA 02110, 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 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 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 Certificates
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representing in the aggregate the entire beneficial ownership of REMIC I
and (ii) the conveyance to the Trustee of the Clipper Mortgage Loans
pursuant to the Clipper Loan Sale Agreement. All covenants and
agreements made by the Company and the Trustee herein with respect to
the Mortgage Loans and the other property constituting the assets of
REMIC I are for the benefit of the Holders from time to time of the
Certificates. The Company is entering into this Agreement, and the
Trustee is accepting the trust created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates issued hereunder, other than the Junior
Subordinate Certificates, have been offered for sale pursuant to a
Prospectus, dated July 26, 2000, and a Prospectus Supplement, dated July
26, 2000, of the Company (together, the "Prospectus"). The Junior
Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated July 28, 2000. The Trust Fund is
intended to be the "Trust" described in the Prospectus and the Private
Placement Memorandum and the Certificates are intended to be the
"Certificates" described therein. The following tables set forth the
designation, type of interest, Certificate Interest Rate, initial Class
Principal Balance and Final Maturity Date for the Certificates:
<TABLE>
<CAPTION>
REMIC I Interests
Class
Designation
for each Type Certificate Initial Class Final
Certificate of Interest Principal Maturity
Interest Rate (1) Balance Date*
----------- --------- ---------- ------------- ---------
<S> <C> <C> <C> <C>
Class A-1 Regular 7.750% $262,931,000.00 July 2030
Class A-2 Regular 7.750% 20,494,000.00 July 2030
Class A-3 Regular 7.750% 36,512,000.00 July 2030
Class A-4 Regular 7.750% 35,548,859.00 July 2030
Class X Regular 7.750% (2) ------ July 2030
Class P Regular (3) 5,053,114.00 July 2030
Class B-1 Regular 7.750% 7,590,295.00 July 2030
Class B-2 Regular 7.750% 4,933,692.00 July 2030
Class B-3 Regular 7.750% 2,466,846.00 July 2030
Class B-4 Regular 7.750% 1,707,816.00 July 2030
Class B-5 Regular 7.750% 948,787.00 July 2030
Class B-6 Regular 7.750% 1,328,302.24 July 2030
Class R+ Residual 7.750% 50.00 July 2030
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan matures.
+ The Class R Certificates are entitled to receive the Residual
Distribution Amount and any Excess Liquidation Proceeds.
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(1) Interest distributed to the Certificates (other than the Class P
Certificates, which shall not be entitled to receive any distributions
of interest) on each Distribution Date will have accrued at the
applicable per annum Certificate Interest Rate on the Class Principal
Balance or Class Notional Amount outstanding following the immediately
prior Distribution Date (or, with respect to the first Distribution
Date, as of the Closing Date).
(2) The Class X Certificates shall accrue interest on the Class X
Notional Amount. The Class X Certificates shall not be entitled to
receive any distributions of principal.
(3) The Class P Certificates shall not be entitled to receive any
distributions of interest.
</TABLE>
As provided herein, with respect to REMIC I, the Company will cause
an election to be made on behalf of REMIC I to be treated for federal
income tax purposes as a REMIC. The Certificates (other than the Class R
Certificates) will be designated regular interests in REMIC I and the
Class R Certificates will be designated the sole class of residual
interest in REMIC I, for purposes of the REMIC Provisions. As of the
Cut-Off Date, the Mortgage Loans have an aggregate Principal Balance of
$379,514,761.98 and the Certificates have an Aggregate Certificate
Principal Balance of $379,514,761.24.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized and existing
under and by virtue of the laws of the State of Delaware and has full
corporate power and authority to enter into this Agreement and to
undertake the obligations undertaken by it herein;
WHEREAS, the Company is the owner of the PNC Mortgage Loans
identified in the Mortgage Loan Schedule hereto having unpaid Principal
Balances on the Cut-Off Date as stated therein;
WHEREAS, the Company has been duly authorized to (i) create a trust
(the "Trust Fund") to hold the PNC Mortgage Loans, the Clipper Mortgage
Loans and certain other property and (ii) sell undivided beneficial
ownership interests in REMIC I and in order to do so is selling the
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
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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:
Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
Additional Collateral: Any real or personal property, securities,
cash, instruments, contracts (including any third-party guarantee) or
other documents constituting or evidencing collateral pledged as
additional security for a Mortgage Loan (other than the related
Mortgaged Property).
Additional Collateral Loan: A Mortgage Loan secured by, in addition
to the related Mortgaged Property, Additional Collateral.
Aggregate Certificate Principal Balance: At any given time, the sum
of the then current Class Principal Balances of the Certificates.
Appraised Value: The amount set forth in an appraisal made by or
for (a) the mortgage originator in connection with its origination of
each Mortgage Loan, (b) with respect to a Mortgage Loan originated to
refinance mortgage debt, the originator of such mortgage debt or (c) the
Servicer, at any time, in accordance with the Selling and Servicing
Contract.
Assignment of Proprietary Lease: With respect to a Cooperative
Loan, the assignment or mortgage of the related Cooperative Lease from
the Mortgagor to the originator of the Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates (other
than the Class X, Class A-2, Class A-3 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 A-2 and Class A-3
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. With respect to the
Residual Certificates, one Certificate with a Percentage Interest equal
to 0.01% and one Certificate with a Percentage Interest equal to 99.99%.
Available Distribution Amount: For any Distribution Date, the sum
of the following amounts with respect to the Mortgage Loans:
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(1) the total amount of all cash received by or on behalf of the
Master Servicer with respect to the 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 Distribution Date, which
interest shall not be included in the calculation of the Available
Distribution Amount for any Distribution Date;
(d) Insurance Proceeds and Liquidation Proceeds received on
the 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 any Special Primary Insurance Premiums
payable on such Distribution Date with respect to such Mortgage
Loan; and
(g) Excess Liquidation Proceeds;
(2) the sum, to the extent not previously distributed, of the
following amounts, to the extent advanced or received, as applicable, by
the Master Servicer:
(a) any Monthly P&I Advance made by the Master Servicer to
the Trustee with respect to such Distribution Date relating to the
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.
Bankruptcy Coverage: $429,021 less (a) any scheduled or permissible
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reduction in the amount of Bankruptcy Coverage pursuant to this
definition and (b) Bankruptcy Losses allocated to the Certificates.
The Bankruptcy Coverage may be reduced upon written confirmation
from the Rating Agencies that such reduction will not adversely affect
the then current ratings assigned to the Certificates by the Rating
Agencies.
Bankruptcy Loss: A loss on a Mortgage Loan arising out of (i) a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a
court of competent jurisdiction in a case under the United States
Bankruptcy Code, other than any such reduction that arises out of clause
(ii) of this definition of "Bankruptcy Loss", including, without
limitation, any such reduction that results in a permanent forgiveness
of principal, or (ii) with respect to any Mortgage Loan, a valuation, by
a court of competent jurisdiction in a case under such Bankruptcy Code,
of the related Mortgaged Property in an amount less than the then
outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect
DTC Participant or a Person holding a beneficial interest in any
Definitive Certificate.
Book-Entry Certificates: The Class A, Class X and Class P
Certificates, beneficial ownership and transfers of which shall be made
through book entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a day on
which banking institutions in Chicago, Illinois, Boston, Massachusetts
or New York, New York are authorized or obligated by law or executive
order to be closed.
Buydown Agreement: An agreement between a Person and a Mortgagor
pursuant to which such Person has provided a Buydown Fund.
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
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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 Certificates issued pursuant to this
Agreement, executed by the Trustee and authenticated by or on behalf of
the Trustee hereunder in substantially one of the forms set forth in
Exhibit A hereto. The additional matter appearing in Exhibit H shall be
deemed incorporated into Exhibit A as though set forth at the end of
such Exhibit.
Certificate Account: The separate trust account created and
maintained with the Trustee, the Investment Depository or any other bank
or trust company acceptable to the Rating Agencies which is incorporated
under the laws of the United States or any state thereof pursuant to
Section 3.04, which account shall bear a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of
the Trustee on behalf of the Certificateholders or any other account
serving a similar function acceptable to the Rating Agencies. Funds in
the Certificate Account may be invested in Eligible Investments pursuant
to Section 3.04(b) and reinvestment earnings thereon shall be paid to
the Master Servicer as additional servicing compensation. Funds
deposited in the Certificate Account (exclusive of the Master Servicing
Fee) shall be held in trust for the Certificateholders and for the uses
and purposes set forth in Section 2.01, Section 3.04, Section 3.05 and
Section 4.01.
Certificateholder or Holder: With respect to the Certificates, the
person in whose name a Certificate is registered in the Certificate
Register, except that, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name of
the Company, the Master Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Percentage Interest evidenced
thereby shall not be taken into account in determining whether the
requisite percentage of Percentage Interests necessary to effect any
such consent has been obtained; provided, that the Trustee may
conclusively rely upon an Officer's Certificate to determine whether any
Person is an affiliate of the Company or the Master Servicer.
Certificate Interest Rate: For each Class of Certificates, the per
annum rate set forth as the Certificate Interest Rate for such Class in
the Preliminary Statement hereto.
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Certificate Principal Balance: For each Certificate of any Class,
the portion of the related Class Principal Balance, if any, represented
by such Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed, respectively, pursuant to
Section 5.03.
Class: All Certificates having the same priority and rights to
payments on the Mortgage Loans from the Available Distribution Amount,
which Certificates shall be designated as a separate Class, and which
shall be set forth in the applicable forms of Certificates attached
hereto as Exhibit A. Each Class of Certificates shall be entitled to
receive the amounts allocated to such Class pursuant to the definition
of "Distribution Amount" only to the extent of the Available
Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of
"Distribution Amount."
Class A Certificates: The Class A-1, Class A-2, Class A-3 Class A-4
Certificates.
Class A-1 Certificates: The Certificates designated as "Class A-1"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class A-2 Certificates: The Certificates designated as "Class A-2"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class A-3 Certificates: The Certificates designated as "Class A-3"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class A-4 Adjusted Percentage: For any Distribution Date occurring
prior to the Distribution Date in August 2005, 0%; and for the
Distribution Date occurring in August 2005 and any Distribution Date
thereafter, the Class A-4 Percentage.
Class A-4 Certificates: The Certificates designated as "Class A-4"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class A-4 Liquidation Amount: For any Distribution Date, the
aggregate, for each Mortgage Loan which became a Liquidated Mortgage
Loan during the Prior Period, of the lesser of (i) the Class A-4
Percentage of the Principal Balance of such Mortgage Loan (exclusive of
the Class P Fraction thereof, with respect to any Class P Mortgage Loan)
and (ii) the Class A-4 Percentage of the Liquidation Principal with
respect to such Mortgage Loan.
Class A-4 Percentage: For any Distribution Date, the Class A-4
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Principal Balance divided by the aggregate Class Principal Balance of
the Class A, Class B and Residual Certificates, in each case immediately
after any allocations of Realized Losses but before any distributions on
such Distribution Date.
Class A-4 Prepayment Percentage: For any Distribution Date, the
product of (i) the Class A-4 Percentage and (ii) the Step Down
Percentage.
Class A-4 Priority Amount: For any Distribution Date, the sum of
(i) the Class A-4 Adjusted Percentage of the Principal Payment Amount
(exclusive of the portion thereof attributable to principal
distributions to the Class P Certificates pursuant to clause (I)(i) of
the definition of "Distribution Amount"), (ii) the Class A-4 Prepayment
Percentage of the Principal Prepayment Amount (exclusive of the portion
thereof attributable to principal distributions to the Class P
Certificates pursuant to clause (I)(i) of the definition of
"Distribution Amount") and (iii) the Class A-4 Liquidation Amount.
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-
4, Class B-5 and Class B-6 Certificates.
Class B-1 Certificates: The Certificates designated as "Class B-1"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class B-2 Certificates: The Certificates designated as "Class B-2"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class B-3 Certificates: The Certificates designated as "Class B-3"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class B-4 Certificates: The Certificates designated as "Class B-4"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class B-5 Certificates: The Certificates designated as "Class B-5"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class B-6 Certificates: The Certificates designated as "Class B-6"
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class P Certificates: The Certificates designated as "Class P" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class P Fraction: For each Class P Mortgage Loan, a fraction, the
numerator of which is 7.750% less the Pass-Through Rate on such Class P
Mortgage Loan and the denominator of which is 7.750%.
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Class P Mortgage Loan: Any Mortgage Loan with a Pass-Through Rate
of less than 7.750% per annum.
Class Principal Balance: For any Class of Certificates, the
applicable initial Class Principal Balance therefor set forth in the
Preliminary Statement hereto, corresponding to the rights of such Class
in payments of principal due to be passed through to the
Certificateholders from principal payments on the Mortgage Loans, as
reduced from time to time by (x) distributions of principal to the
Certificateholders of such Class and (y) the portion of Realized Losses
allocated to the Class Principal Balance of such Class pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date.
For any Distribution Date, the reduction of the Class Principal Balance
of any Class of Certificates pursuant to the definition of "Realized
Loss" shall be deemed effective prior to the determination and
distribution of principal on such Class pursuant to the definition of
"Distribution Amount." Notwithstanding the foregoing, any amounts
distributed in respect of losses pursuant to paragraph (I)(v) or (I)(vi)
of the definition of "Distribution Amount" shall not cause a further
reduction in the Class P Principal Balance and any amounts distributed
in respect of losses pursuant to paragraph (I)(xxv) of the definition of
"Distribution Amount" shall not cause a further reduction in the Class
Principal Balances of the Class B Certificates. The Class Principal
Balance for the Class A-1 Certificates shall be referred to as the
"Class A-1 Principal Balance" and so on. The Class X Principal Balance
shall be zero.
Class R Certificates: The Certificates designated as "Class R" on
the face thereof in substantially the form attached hereto as Exhibit A,
which have been designated as the single class of "residual interest" in
REMIC I pursuant to Section 2.01.
Class X Certificates: The Certificates designated as "Class X" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class 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 Premium Rate Mortgage Loans and (y) a fraction, the numerator of
which is the weighted average of the Stripped Interest Rates for the
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 7.750%.
Clean-Up Call Percentage: 10%.
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.
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Clipper: Clipper Receivables Corporation, a Delaware corporation.
Clipper Loan Sale Agreement: The Loan Sale Agreement, substantially
in the form of Exhibit O hereto, to be entered into between Clipper and
the Trustee pursuant to Section 2.01.
Clipper Mortgage Loans: The Mortgage Loans identified as Clipper
Mortgage Loans on the Mortgage Loan Schedule and conveyed by Clipper to
the Trustee pursuant to the Clipper Loan Sale Agreement.
Clipper Mortgage Loan Purchase Amount: The amount of
$201,194,678.77, which shall be deposited by the Company into the
Certificate Account on the Closing Date and withdrawn therefrom and
applied by the Trustee in payment of the purchase price for the Clipper
Mortgage Loans pursuant to Section 2.01.
Closing Date: July 28, 2000, 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 the lesser of (i)
the sum of (a) the aggregate Master Servicing Fee payable on such
Distribution Date, (b) the aggregate Payoff Earnings and (c) the
aggregate Payoff Interest and (ii) the aggregate Uncollected Interest.
Cooperative: A private, cooperative housing corporation organized
under the laws of, and headquartered in, the State of New York or New
Jersey which owns or leases land and all or part of a building or
buildings located in any such state, including apartments, spaces used
for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an
exclusive right to occupy pursuant to the terms of a proprietary lease
or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary lease or occupancy agreement with respect to the Cooperative
Apartment occupied by the Mortgagor and relating to the related
Cooperative Stock, which lease or agreement confers an exclusive right
to the holder of such Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate,
(iii) an assignment or mortgage of the Cooperative Lease, (iv) financing
statements and (v) a stock power (or other similar instrument), and
<PAGE> 12
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 2000-5.
Credit Support Depletion Date: The first Distribution Date on which
the aggregate Class Principal Balance of the Class B Certificates has
been or will be reduced to zero as a result of principal distributions
thereon and the allocation of Realized Losses on such Distribution Date.
Curtailment: Any payment (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
<PAGE> 13
deposit insurance coverage on such account; accordingly, more than one
Custodial Account for P&I may be established. Any amount that is at any
time not protected or insured in accordance with the first sentence of
this definition of "Custodial Account for P&I" shall promptly be
withdrawn from such Custodial Account for P&I and be remitted to the
Investment Account.
Custodial Account for Reserves: The Custodial Account for Reserves
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established
and maintained pursuant to Section 3.02 (a) with the corporate trust
department of the Trustee or another financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the
Trustee and the Certificateholders thereto shall be fully protected
against the claims of any creditors of the applicable Servicer and of
any creditors or depositors of the institution in which such account is
maintained, (b) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to the Rating Agencies)
created, maintained and monitored by a Servicer or (c) in a separate non-
trust account without FDIC or other insurance in an Eligible
Institution. In the event that a Custodial Account for Reserves is
established pursuant to clause (b) of the preceding sentence, amounts
held in such Custodial Account for Reserves shall not exceed the level
of deposit insurance coverage on such account; accordingly, more than
one Custodial Account for Reserves may be established. Any amount that
is at any time not protected or insured in accordance with the first
sentence of this definition of "Custodial Account for Reserves" shall
promptly be withdrawn from such Custodial Account for Reserves and be
remitted to the Investment Account.
Custodial Agreement: The agreement, if any, among the Master
Servicer, the Trustee and a Custodian providing for the safekeeping of
the Mortgage Files on behalf of the Certificateholders.
Custodian: A custodian (other than the Trustee) which is not an
affiliate of the Master Servicer or the Company and which is appointed
pursuant to a Custodial Agreement. Any Custodian so appointed shall act
as agent on behalf of the Trustee, and shall be compensated by the
Trustee at no additional charge to the Master Servicer. The Trustee
shall remain at all times responsible under the terms of this Agreement,
notwithstanding the fact that certain duties have been assigned to a
Custodian.
Cut-Off Date: July 1, 2000.
Definitive Certificates: Certificates in definitive, fully
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated July 27,
2000 by and among DTC, the Company and the Trustee.
Destroyed Mortgage Note: A Mortgage Note the original of which was
<PAGE> 14
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 Amount:
(I) For any Distribution Date prior to the Credit Support
Depletion Date, the Available Distribution Amount for such Distribution
Date shall be distributed to the Certificates in the following amounts
and priority, to the extent of the Available Distribution Amount for
such Distribution Date remaining following prior distributions, if any,
on such Distribution Date:
(i) first, to the Class P Certificates, the aggregate for all Class P
Mortgage Loans of the product for each Class P Mortgage Loan of the
applicable Class P Fraction and the sum of (x) scheduled payments of
principal on such Class 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 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 P Mortgage Loan during the
Payoff Period;
second, to the Class A, Class X and Class R 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;
third, to the Class A, Class X and Class R Certificates,
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Certificates for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
fourth, to the Class A and Class R Certificates, as principal,
the Senior Principal Distribution Amount, sequentially, as follows:
(a) first, to the Class A-4 Certificates, an amount, up
to the amount of the Class A-4 Priority Amount for that
Distribution Date, until the Class A-4 Principal Balance has
<PAGE> 15
been reduced to zero;
(b) second, to the Class R Certificates, until the Class
R Principal Balance has been reduced to zero;
(c) third, to the Class A-1 Certificates, until the
Class A-1 Principal Balance has been reduced to zero;
(d) fourth, to the Class A-2 Certificates, until the
Class A-2 Principal Balance has been reduced to zero;
(e) fifth, to the Class A-3 Certificates, until the
Class A-3 Principal Balance has been reduced to zero; and
(f) sixth, to the Class A-4 Certificates, until the
Class A-4 Principal Balance has been reduced to zero;
fifth, to the Class P Certificates, to the extent of amounts
otherwise available to pay the Subordinate Principal Distribution
Amount (without regard to clause (B) of the definition thereof) on
such Distribution Date, the amount payable to such Class of
Certificates on previous Distribution Dates pursuant to clause
(I)(vi) of this definition of "Distribution Amount" and remaining
unpaid from such previous Distribution Dates;
sixth, to the Class P Certificates, to the extent of amounts
otherwise available to pay the Subordinate Principal Distribution
Amount (without regard to clause (B) of the definition thereof) on
such Distribution Date, principal in an amount equal to the
applicable Class P Fraction of any Realized Loss on a Class P
Mortgage Loan incurred in the Prior Period (in each case, 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)(v) or this paragraph (I)(vi) of this definition of
"Distribution Amount" shall not cause a further reduction in the
Class P Principal Balance;
seventh, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
eighth, to the Class B-1 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
ninth, to the Class B-1 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-1 Principal
Balance has been reduced to zero;
<PAGE> 16
tenth, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
eleventh, to the Class B-2 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
twelfth, to the Class B-2 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-2 Principal
Balance has been reduced to zero;
thirteenth, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
fourteenth, to the Class B-3 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
fifteenth, to the Class B-3 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-3 Principal
Balance has been reduced to zero;
sixteenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
seventeenth, to the Class B-4 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
eighteenth, to the Class B-4 Certificates, the portion of the
Subordinate Principal Distribution Amount allocable to such Class
of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-4 Principal
Balance has been reduced to zero;
nineteenth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
twentieth, to the Class B-5 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
twenty-first, to the Class B-5 Certificates, the portion of
the Subordinate Principal Distribution Amount allocable to such
<PAGE> 17
Class of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-5 Principal
Balance has been reduced to zero;
twenty-second, to the Class B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates remaining unpaid
from previous Distribution Dates;
twenty-third, to the Class B-6 Certificates, the Interest
Distribution Amount for such Class of Certificates for the current
Distribution Date;
twenty-fourth, to the Class B-6 Certificates, the portion of
the Subordinate Principal Distribution Amount allocable to such
Class of Certificates pursuant to the definition of "Subordinate
Principal Distribution Amount", until the Class B-6 Principal
Balance has been reduced to zero;
twenty-fifth, to each Class of Class B Certificates in order
of seniority, the remaining portion, if any, of the Available
Distribution Amount, 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)(xxv) of this definition of "Distribution Amount" shall not
cause a further reduction in the Class Principal Balances of any of
the Class B Certificates; and
twenty-sixth, to the Class R Certificates, the Residual
Distribution Amount for such Distribution Date.
(II) For any Distribution Date on or after the Credit Support
Depletion Date, the Available Distribution Amount for such Distribution
Date shall be distributed to the outstanding Classes of Certificates in
the following amounts and priority, to the extent of the Available
Distribution Amount for such Distribution Date remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class P Certificates, principal in the amount that
would otherwise be distributed to such Class on such Distribution Date
pursuant to clause (I)(i) of this definition of "Distribution Amount";
second, to the Class A, Class X and Class R Certificates, the
amount payable to each such Class of Certificates on prior
Distribution Dates pursuant to clause (I)(iii) or (II)(iii) of this
definition of "Distribution Amount", and remaining unpaid, pro rata
according to such amount payable to the extent of amounts
available;
third, to the Class A, Class X and Class R 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;
<PAGE> 18
fourth, to the Class A and Class R Certificates, pro rata
according to Class Principal Balance, as principal, the Senior
Principal Distribution Amount; and
fifth, to the Class R Certificates, the Residual Distribution
Amount for such Distribution Date.
Distribution Date: With respect to distributions on the
Certificates, the 25th day (or, if such 25th day is not a Business Day,
the Business Day immediately succeeding such 25th day) of each month,
with the first such date being August 25, 2000. The "related Due Date"
for any Distribution Date is the Due Date immediately preceding such
Distribution Date.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial
institution or other Person for whom DTC effects book-entry transfers
and pledges of securities deposited with DTC.
Due Date: The day on which the Monthly Payment for each Mortgage
Loan is due.
Eligible Institution: An institution having (i) the highest short-
term debt rating, and one of the two highest long-term debt ratings of
the Rating Agencies, (ii) with respect to any Custodial Account for P&I
and special Custodial Account for Reserves, an unsecured long-term debt
rating of at least one of the two highest unsecured long-term debt
ratings of the Rating Agencies, (iii) with respect to any Buydown Fund
Account or Custodial Account which also serves as a Buydown Fund
Account, the highest unsecured long-term debt rating by the Rating
Agencies, or (iv) the approval of the Rating Agencies. Such institution
may be the Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with written notice
on the Business Day following the date on which the Servicer determines
that such Servicer's short-term debt and unsecured long-term debt
ratings fail to meet the requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or
securities listed below in which funds deposited in the Investment
Account, the Certificate Account, the Custodial Account for P&I and the
Custodial Account for Reserves may be invested:
(i) Obligations of, or guaranteed as to principal and interest by,
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
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
<PAGE> 19
commercial capacity) agreeing to repurchase such obligations have
at the time one of the two highest short term debt ratings of the
Rating Agencies and provided that such repurchaser's unsecured long
term debt has one of the two highest unsecured long term debt
ratings of the Rating Agencies;
Federal funds, certificates of deposit, time deposits and
bankers' acceptances of any U.S. bank or trust company incorporated
under the laws of the United States or any state (including the
Trustee in its commercial capacity), provided that the debt
obligations of such bank or trust company (or, in the case of the
principal bank in a bank holding company system, debt obligations
of the bank holding company) at the date of acquisition thereof
have one of the two highest short term debt ratings of the Rating
Agencies and unsecured long term debt has one of the two highest
unsecured long term debt ratings of the Rating Agencies;
Obligations of, or obligations guaranteed by, any state of the
United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the
highest long-term debt ratings available for such securities from
the Rating Agencies;
Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date
of acquisition has the highest commercial paper rating of the
Rating Agencies, provided that the corporation has unsecured long
term debt that has one of the two highest unsecured long term debt
ratings of the Rating Agencies;
Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States or any
state thereof and have the highest long-term unsecured rating
available for such securities from the Rating Agencies; provided,
however, that securities issued by any such corporation will not be
investments to the extent that investment therein would cause the
outstanding principal amount of securities issued by such
corporation that are then held as part of the Investment Account or
the Certificate Account to exceed 20% of the aggregate principal
amount of all Eligible Investments then held in the Investment
Account and the Certificate Account;
Units of taxable money market funds (which may be 12b-1 funds,
as contemplated under the rules promulgated by the Securities and
Exchange Commission under the Investment Company Act of 1940),
which funds have the highest rating available for such securities
from the Rating Agencies or which have been designated in writing
by the Rating Agencies as Eligible Investments; and
Such other investments the investment in which will not, as
evidenced by a letter from each of the Rating Agencies, result in
<PAGE> 20
the downgrading or withdrawal of the Ratings;
provided, however, that such obligation or security is held for a
temporary period pursuant to Section 1.860G-2(g)(1) of the Treasury
Regulations, and that such period can in no event exceed thirteen
months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or (b) has been
purchased at a price greater than the outstanding principal balance of
such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
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.
Fannie Mae: The entity formerly known as the Federal National
Mortgage Association, or any successor thereto.
Final Maturity Date: With respect to each Class of Certificates,
the date set forth in the table contained in the Preliminary Statement
hereto.
Fitch: Fitch, Inc., provided that at any time it be a Rating
Agency.
Fraud Coverage: During the period prior to the first anniversary of
the Cut-Off Date, 1.00% of the aggregate principal balance of the
Mortgage Loans as of the Cut-Off Date (the "Initial Fraud Coverage"),
reduced by Fraud Losses allocated to the Certificates since the Cut-Off
Date; during the period from the first anniversary of the Cut-Off Date
to (but not including) the fifth anniversary of the Cut-Off Date, the
amount of the Fraud Coverage on the most recent previous anniversary of
the Cut-Off Date (calculated in accordance with the second sentence of
this paragraph) reduced by Fraud Losses allocated to the Certificates
since such anniversary; and during the period on and after the fifth
<PAGE> 21
anniversary of the Cut-Off Date, zero. On each anniversary of the Cut-
Off Date, the Fraud Coverage shall be reduced to the lesser of (i) on
the first and second anniversaries of the Cut-Off Date, 1.00%, and on
the third and fourth anniversaries of the Cut-Off Date, 0.50%, of the
aggregate principal balance of the Mortgage Loans as of the Due Date in
the preceding month and (ii) the excess of the Initial Fraud Coverage
over cumulative Fraud Losses allocated to the Certificates since the Cut-
Off Date.
The Fraud Coverage may be reduced upon written confirmation from
the Rating Agencies that such reduction will not adversely affect the
then current ratings assigned to the Certificates by the Rating
Agencies.
Fraud Loss: A Realized Loss (or portion thereof) with respect to a
Mortgage Loan arising from any action, event or state of facts with
respect to such Mortgage Loan which, because it involved or arose out of
any dishonest, fraudulent, criminal, negligent or knowingly wrongful
act, error or omission by the Mortgagor, originator (or assignee
thereof) of such Mortgage Loan, 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.
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
the Surety Bonds (with respect to any Additional Collateral Loan), any
Primary Insurance Policy or any other insurance policy (including any
replacement policy permitted under this Agreement) covering any Mortgage
Loan or Mortgaged Property, including, without limitation, any hazard
insurance policy required pursuant to Section 3.07, any title insurance
policy required pursuant to Section 2.03 and any FHA insurance policy or
VA guaranty.
Interest Distribution Amount: On any Distribution Date, for any
Class of Certificates, the amount of interest accrued on the respective
Class Principal Balance or Class Notional Amount, as applicable, in each
case at the related Certificate Interest Rate for such Class during the
Prior Period, in each case before giving effect to allocations of
Realized Losses for the Prior Period or distributions to be made on such
Distribution Date, reduced by Uncompensated Interest Shortfall, interest
shortfalls related to the Relief Act and the interest portion of
Realized Losses allocated to such Class pursuant to the definitions of
"Uncompensated Interest Shortfall", "Relief Act" and "Realized Loss",
respectively. The Interest Distribution Amount for the Class P
Certificates shall equal zero.
<PAGE> 22
Investment Account: The commingled account (which shall be
commingled only with investment accounts related to series of pass-
through certificates with a class of certificates which has a rating
equal to the highest of the Ratings of the Certificates) maintained by
the Master Servicer in the trust department of the Investment Depository
pursuant to Section 3.03 and which bears a designation acceptable to the
Rating Agencies.
Investment Depository: The Chase Manhattan Bank, New York, New York
or another bank or trust company designated from time to time by the
Master Servicer. The Investment Depository shall at all times be an
Eligible Institution.
Junior Subordinate Certificates: The Class B-4, Class B-5 and Class
B-6 Certificates.
Last Scheduled Distribution Date: With respect to any Class of
Certificates, the Final Maturity Date for such Class.
Lender: An institution from which the Company purchased any
Mortgage Loans pursuant to a Selling and Servicing Contract.
Liquidated Mortgage Loan: A Mortgage Loan for which the Master
Servicer or the applicable Servicer has determined in accordance with
its customary servicing practices that it has received all amounts which
it expects to recover from or on account of such Mortgage Loan, whether
from Insurance Proceeds, Liquidation Proceeds or otherwise. For purposes
of this definition, acquisition of a Mortgaged Property by the Trust
Fund shall not constitute final liquidation of the related Mortgage
Loan.
Liquidation Principal: The principal portion of Liquidation
Proceeds received (exclusive of the portion thereof attributable to
distributions to the Class P Certificates pursuant to clauses (I)(i) and
(II)(i) of the definition of "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, including, in the case of Additional
Collateral Loans, any proceeds realized with respect to any Additional
Collateral, including any payment under the Surety Bonds.
Loan-to-Value Ratio: The original principal amount of a Mortgage
Loan divided by the Original Value; however, references to "current Loan-
to-Value Ratio" or "Loan-to-Value Ratio as of the Cut-Off Date" in
Section 2.03 shall be deemed to mean the then current Principal Balance
of a Mortgage Loan divided by the Original Value.
Lowest Class B Owner: An owner unaffiliated with the Company or the
<PAGE> 23
Master Servicer of (i) a 100% interest in the Class of Class B
Certificates with the lowest priority or (ii) a 100% interest in a class
of securities representing such interest in such Class.
Master Servicer: The Company, or any successor thereto appointed
as provided pursuant to Section 7.02, acting to service and administer
the Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer for
supervising the mortgage servicing and advancing certain expenses, equal
to a per annum rate set forth for each Mortgage Loan in Exhibit D on the
outstanding Principal Balance of such Mortgage Loan, payable monthly
from the Certificate Account, the Investment Account or the Custodial
Account for P&I.
Monthly P&I Advance: An advance of funds by the Master Servicer
pursuant to Section 4.02 or a Servicer pursuant to its Selling and
Servicing Contract to cover delinquent principal and interest
installments.
Monthly Payment: The scheduled payment of principal and interest on
a Mortgage Loan (including any amounts due from a Buydown Fund, if any)
which is due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note.
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 2000-5, 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);
<PAGE> 24
The Buydown Agreement, if applicable;
A Mortgage that is either
(1) the original recorded Mortgage with recording
information thereon for the jurisdiction in which the
Mortgaged Property is located and a Mortgage assignment
thereof in recordable form to "State Street Bank and Trust
Company, as Custodian/Trustee", or to "State Street Bank and
Trust Company, as Trustee for the Holders of PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series
2000-5" 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 2000-5" and true and correct copies,
certified by the applicable county recorder or by the
originator or Lender as described above, of all intervening
assignments evidencing a complete chain of assignment from the
originator to the name holder or the payee endorsing the
related Mortgage Note; provided, that in the event the
assignments are executed in blank as of the Closing Date, the
Company shall, within 45 days of the Closing Date, cause such
assignments to be executed pursuant to the terms set forth
herein; provided, that, with respect to any Mortgage whereby
the related Mortgaged Property is located in California, the
Mortgage assignment may be executed and acknowledged in blank
and the Company shall not be required to deliver such Mortgage
assignment in the form otherwise set forth in clause (iii)(1)
or this clause (iii)(2);
A copy of (a) the title insurance policy, or (b) in lieu
thereof, a title insurance binder, a copy of an attorney's title
opinion, certificate or other evidence of title acceptable to the
Company;
For any Mortgage Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment; and
<PAGE> 25
For each Additional Collateral Loan, a copy of the security
agreement or guaranty constituting part of the related Additional
Collateral;
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 2000-5" and all intervening
endorsements evidencing a complete chain of endorsements, from the
originator to the Trustee, or, in the event of any Destroyed Mortgage
Note, a copy or a duplicate original of the Mortgage Note, together with
an original lost note affidavit from the originator of the related
Mortgage Loan or the Company or Clipper, as applicable, stating that the
original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note;
A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from
such originator to the Trustee;
The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative
Loan, together with an undated stock power (or other similar
instrument) executed in blank;
The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative
Loan;
The Security Agreement;
Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such
Cooperative Loan as secured party, each with evidence of recording
thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title
from the originator to the Trustee, each with evidence of recording
thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
An executed assignment of the interest of the originator in
the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an
unbroken chain of title from the originator to the Trustee;
An executed UCC-1 financing statement showing the Company or
<PAGE> 26
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;
For any Cooperative Loan that has been modified or amended,
the original instrument or instruments effecting such modification
or amendment; and
For each Additional Collateral Loan, a copy of the security
agreement or guaranty constituting part of the related Additional
Collateral.
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,
the address of the Mortgaged Property,
the name of the Mortgagor,
the Original Value of the property subject to the Mortgage,
the Principal Balance as of the Cut-Off Date,
the Mortgage Interest Rate borne by the Mortgage Note,
whether a Primary Insurance Policy is in effect as of the Cut-
Off Date, and, if so, whether such Primary Insurance Policy is a
Special Primary Insurance Policy,
the maturity of the Mortgage Note,
the Servicing Fee and the Master Servicing Fee,
whether it is a PNC Mortgage Loan or a Clipper Mortgage Loan,
and
whether it is an Additional Collateral 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, the
related Mortgage Notes and (with respect to each Additional Collateral
Loan) the security agreements and guaranties constituting part of the
related Additional Collateral, each transferred and assigned to the
<PAGE> 27
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.
Mortgaged Property: With respect to any Mortgage Loan, other than a
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan, the related Cooperative Stock
and Cooperative Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan. "Mortgaged Property" shall also refer to
property which once secured the indebtedness of a Mortgagor under the
related Mortgage Loan but which was acquired by the Trust upon
foreclosure or other liquidation of such Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Mortgage Loan, any
advance which the Master Servicer shall determine to be a Nonrecoverable
Advance pursuant to Section 4.03 and which was, or is proposed to be,
made by (i) the Master Servicer or (ii) a Servicer pursuant to its
Selling and Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
OTS: The Office of Thrift Supervision, or any successor thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the President, a Vice President, or the Treasurer of the Master
Servicer and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who shall be
reasonably acceptable to the Trustee and who may be counsel (including
in-house counsel) for the Company or the Master Servicer.
Original Value: With respect to any Mortgage Loan other than a
Mortgage Loan originated for the purpose of refinancing an existing
mortgage debt, the lesser of (a) the Appraised Value (if any) of the
Mortgaged Property at the time the Mortgage Loan was originated or (b)
the purchase price paid for the Mortgaged Property by the Mortgagor.
With respect to a Mortgage Loan originated for the purpose of
refinancing existing mortgage debt, the Original Value shall be equal to
the Appraised Value of the Mortgaged Property. "Original Value" shall
exclude the value of any Additional Collateral.
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,
<PAGE> 28
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 per annum rate equal
to the Mortgage Interest Rate for such Mortgage Loan less the per annum
percentage rates related to each of (i) the Servicing Fee for such
Mortgage Loan, (ii) the Master Servicing Fee for such Mortgage Loan and
(iii) if such Mortgage Loan was covered by a Special Primary Insurance
Policy on the Closing Date (even if no longer so covered), the
applicable Special Primary Insurance Premium. For each Mortgage Loan,
any calculation of monthly interest at such rate shall be based upon
annual interest at such rate (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid Principal Balance of the related
Mortgage Loan divided by twelve, and any calculation of interest at such
rate by reason of a Payoff shall be based upon annual interest at such
rate on the outstanding Principal Balance of the related Mortgage Loan
multiplied by a fraction, the numerator of which is the number of days
elapsed from the Due Date of the last scheduled payment of principal and
interest to, but not including, the date of such Payoff, and the
denominator of which is (a) for Payoffs received on a Due Date, 360, and
(b) for all other Payoffs, 365.
Paying Agent: Any paying agent appointed by the Trustee pursuant to
Section 8.12.
Payoff: Any Mortgagor payment (exclusive of any prepayment penalty)
of principal on a Mortgage Loan equal to the entire outstanding
Principal Balance of such Mortgage Loan, if received in advance of the
last scheduled Due Date for such Mortgage Loan and accompanied by an
amount of interest equal to accrued unpaid interest on the Mortgage Loan
to the date of such payment-in-full.
Payoff Earnings: For any Distribution Date with respect to each
Mortgage Loan on which a Payoff was received by the Master Servicer
during the Payoff Period, the aggregate of the interest earned by the
Master Servicer from investment of each such Payoff from the date of
receipt of such Payoff until the Business Day immediately preceding the
related Distribution Date (net of investment losses).
Payoff Interest: For any Distribution Date with respect to a
Mortgage Loan for which a Payoff was received on or after the first
calendar day of the month of such Distribution Date and before the 15th
calendar day of such month, an amount of interest thereon at the
applicable Pass-Through Rate from the first day of the month of
distribution through the day of receipt thereof; to the extent (together
<PAGE> 29
with Payoff Earnings and the aggregate Master Servicing Fee) not
required to be distributed as Compensating Interest on such Distribution
Date, Payoff Interest shall be payable to the Master Servicer as
additional servicing compensation.
Payoff Period: With respect to the first Distribution Date, the
period from the Cut-Off Date through August 14, 2000, inclusive; and
with respect to any Distribution Date thereafter, the period from the
15th day of the Prior Period through the 14th day of the month of such
Distribution Date, inclusive.
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided
beneficial ownership interest evidenced by such Certificate of such
Class, which percentage shall equal:
(i) with respect to any Certificate (other than the Residual and
Class X Certificates), its Certificate Principal Balance divided by the
applicable Class Principal Balance;
with respect to any Class X Certificate, the portion of the
Class X Notional Amount evidenced by such Certificate divided by
the Class X Notional Amount; and
with respect to any Residual Certificate, the percentage set
forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection
with Sections 5.09, 7.01, 8.01(c), 8.02, 8.07, 10.01 and 10.03,
"Percentage Interest" shall mean the percentage undivided beneficial
interest evidenced by such Certificate in REMIC I, which for purposes of
such rights only shall equal:
(i) with respect to any Certificate (other than the Class X and
Residual Certificates), the product of (x) ninety-nine percent (99%) 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 clause (x) above
shall be increased by one percent (1%) upon the retirement of the Class
X Certificates;
with respect to any Class X Certificate, one percent (1%) of
such Certificate's Percentage Interest as calculated by paragraph
(a)(ii) of this definition; and
with respect to any Residual Certificate, 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,
<PAGE> 30
International Organization or any agency or instrumentality of either of
the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Code Section 521) which is exempt from the
taxes imposed by Chapter 1 of the Code (unless such organization is
subject to the tax imposed by Section 511 of the Code on unrelated
business taxable income), (iv) rural electric and telephone cooperatives
described in Code Section 1381(a)(2)(C), (v) any "electing large
partnership" as defined in Section 775(a) of the Code, (vi) any Person
from whom the Trustee has not received an affidavit to the effect that
it is not a "disqualified organization" within the meaning of Section
860E(e)(5) of the Code, and (vii) any other Person so designated by the
Company based upon an Opinion of Counsel that the transfer of an
Ownership Interest in a Residual Certificate to such Person may cause
REMIC I to fail to qualify as a REMIC at any time that the Certificates
are outstanding. The terms "United States", "State" and "International
Organization" shall have the meanings set forth in Code Section 7701 or
successor provisions. A corporation shall not be treated as an
instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and,
with the exception of the 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.
Premium Rate Mortgage Loans: The Mortgage Loans having Pass-Through
Rates in excess of 7.750% per annum.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Mortgage Loan
on its scheduled Due Date and held in the related Custodial Account for
P&I until the Withdrawal Date following its scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty insurance,
if any, on an individual Mortgage Loan or on pools of mortgage loans
that include an individual Mortgage Loan, providing coverage as required
by Section 2.03(xi) (including any Special Primary Insurance Policy).
Principal Balance: Except as used in Sections 2.02, 3.09 and 9.01
and for purposes of the definition of Purchase Price, at the time of any
determination, the principal balance of a Mortgage Loan remaining to be
paid at the close of business on the Cut-Off Date, after application of
all scheduled principal payments due on or before the Cut-Off Date,
whether or not received, reduced by all amounts distributed or (except
when such determination occurs earlier in the month than the
Distribution Date) to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used in
<PAGE> 31
Sections 2.02, 3.09 and 9.01, at the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid at the close
of business on the Cut-Off Date, after deduction of all scheduled
principal payments due on or before the Cut-Off Date, whether or not
received, reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
Mortgage Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance"
shall mean, at the time of any determination, the principal balance of
such Substitute Mortgage Loan transferred to the Trust Fund, on the date
of substitution, reduced by all amounts distributed or to be distributed
to Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
Substitute Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a Substitute
Mortgage Loan) shall not be adjusted solely by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period. Whenever a Realized Loss has been incurred with respect to a
Mortgage Loan during a calendar month, the Principal Balance of such
Mortgage Loan shall be reduced by the amount of such Realized Loss as of
the Distribution Date next following the end of such calendar month
after giving effect to the allocation of Realized Losses and
distributions of principal to the Certificates.
Principal Payment: Any payment of principal on a Mortgage Loan
other than a Principal Prepayment.
Principal Payment Amount: For any Distribution Date, the sum with
respect to the Mortgage Loans 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.
Principal Prepayment: Any payment of principal on a Mortgage Loan
which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: For any Distribution Date, the sum
with respect to the Mortgage Loans of (i) Curtailments received during
the Prior Period and (ii) Payoffs received during the Payoff Period.
<PAGE> 32
Prior Period: The calendar month immediately preceding any
Distribution Date.
Pro Rata Allocation: With respect to Realized Losses on Mortgage
Loans, the allocation of the principal portion of such losses to all
Classes of Certificates (other than the Class P Certificates) pro rata
according to their respective Class Principal Balances in reduction
thereof (except if the loss is recognized with respect to a Class P
Mortgage Loan, in which case the applicable Class P Fraction of such
loss will first be allocated to the Class P Certificates, and the
remainder of such loss will be allocated as set forth above), and the
allocation of the interest portion of such losses to all Classes of
Certificates (other than the Class P Certificates) pro rata according to
the amount of interest accrued but unpaid on each such Class, in
reduction thereof, and then to such Classes (other than the Class P and
Class X Certificates) pro rata according to their respective Class
Principal Balances in reduction thereof.
Prospectus: The Prospectus, dated July 26, 2000, and the
Prospectus Supplement, dated July 26, 2000, 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 (i) the Principal Balance thereof, (ii) unpaid
accrued interest thereon, if any, during the calendar month in which the
date of purchase or repurchase occurs to the last day of such month at a
rate equal to the applicable Pass-Through Rate and (iii) (in the case of
a purchase pursuant to the fourth sentence of the third paragraph of
Section 3.01 only) the amount of 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 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
<PAGE> 33
the insurance provided by the Primary Insurance Policies and approved as
an insurer by Freddie Mac or Fannie Mae and the Master Servicer. A
Qualified Insurer must have the rating required by the Rating Agencies.
Rating Agency: Initially, each of S&P and Fitch and thereafter,
each nationally recognized statistical rating organization that has
rated the Certificates at the request of the Company, or their
respective successors in interest.
Ratings: As of any date of determination, the ratings, if any, of
the Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to any
Mortgage Loan which became a Liquidated Mortgage Loan during the related
Prior Period, the sum of (i) the principal balance of such Mortgage Loan
remaining outstanding and the principal portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
principal portion of such Realized Loss), and (ii) the accrued interest
on such Mortgage Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such
Mortgage Loan (the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Mortgage Loan which is not a
Liquidated Mortgage Loan, the amount of the Bankruptcy Loss incurred
with respect to such Mortgage Loan as of the related Due Date.
Except for Special Hazard Losses in excess of the Special Hazard
Coverage, Fraud Losses in excess of the Fraud Coverage and Bankruptcy
Losses in excess of the Bankruptcy Coverage, Realized Losses shall be
allocated among the Certificates (i) for Realized Losses allocable to
principal (a) first, to the Class B-6 Certificates, until the Class B-6
Principal Balance has been reduced to zero, (b) second, to the Class B-5
Certificates, until the Class B-5 Principal Balance has been reduced to
zero, (c) third, to the Class B-4 Certificates, until the Class B-4
Principal Balance has been reduced to zero, (d) fourth, to the Class B-3
Certificates, until the Class B-3 Principal Balance has been reduced to
zero, (e) fifth, to the Class B-2 Certificates, until the Class B-2
Principal Balance has been reduced to zero, (f) sixth, to the Class B-1
Certificates, until the Class B-1 Principal Balance has been reduced to
zero, and (g) seventh, to the Class A Certificates, 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 P
Mortgage Loan, the applicable Class P Fraction of such loss will first
be allocated to the Class P Certificates and the remainder of such loss
will be allocated as set forth above in this clause (i); and (ii) for
Realized Losses allocable to interest (a) first, to the Class B-6
Certificates, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class B-6 Principal Balance, (b) second, to the
Class B-5 Certificates, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class B-5 Principal Balance, (c)
third, to the Class B-4 Certificates, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class B-4 Principal
Balance, (d) fourth, to the Class B-3 Certificates, in reduction of
<PAGE> 34
accrued but unpaid interest thereon and then in reduction of the Class B-
3 Principal Balance, (e) fifth, to the Class B-2 Certificates, in
reduction of accrued but unpaid interest thereon and then in reduction
of the Class B-2 Principal Balance, (f) sixth, to the Class B-1
Certificates, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class B-1 Principal Balance, and (g) seventh,
to the Class A and Class X Certificates, pro rata according to accrued
but unpaid interest on such Classes, in reduction thereof, and then to
the Class A Certificates, pro rata according to the Class Principal
Balances thereof, in reduction thereof.
Special Hazard Losses in excess of the Special Hazard Coverage,
Fraud Losses in excess of the Fraud Coverage and Bankruptcy Losses in
excess of the Bankruptcy Coverage shall be allocated among the
Certificates by Pro Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Certificates exceeds the aggregate principal
balance of the Mortgage Loans remaining to be paid at the close of
business on the Cut-Off Date, after deduction of (i) all principal
payments due on or before the Cut-Off Date in respect of each Mortgage
Loan whether or not paid and (ii) all amounts of principal in respect of
each Mortgage Loan that have been received or advanced and included in
the Available Distribution Amount, and all losses in respect of each
Mortgage Loan that have been allocated to the Certificates on such
Distribution Date or prior Distribution Dates, then such excess will be
deemed a principal loss and will be allocated to the most junior Class
of Class B Certificates, in reduction of the Class Principal Balance
thereof.
Record Date: The last Business Day of the month immediately
preceding the month of the related Distribution Date.
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 conveyed in trust to the Trustee for the benefit of the
Certificateholders pursuant to Section 2.01, with respect to which a
REMIC election is to be made.
<PAGE> 35
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.
Residual Certificates: The Class R Certificates, which are being
issued in a single class. The Class R Certificates are hereby designated
the sole Class of "residual interests" in REMIC I for purposes of
Section 860G(a)(2) of the Code.
Residual Distribution Amount: For any Distribution Date, any
portion of the Available Distribution Amount remaining after all
distributions of the Available Distribution Amount pursuant to the
definition of "Distribution Amount" (other than the distribution
pursuant to the last subparagraph of paragraph (I) or (II), as
applicable, thereof).
Upon termination of the obligations created by this Agreement and
the REMIC I Trust Fund created hereby, the amounts which remain on
deposit in the Certificate Account after payment to the Holders of the
REMIC I Regular Interests of the amounts set forth in Section 9.01 of
this Agreement, and subject to the conditions set forth therein, shall
be distributed to the Class R Certificates in accordance with the
preceding sentence of this definition as if the date of such
distribution were a Distribution Date.
Responsible Officer: When used with respect to the Trustee, any
officer assigned to and working in its Corporate Trust Department or
similar group and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
S&P: Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc., provided that at any time it be a Rating Agency.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the
agreement or mortgage creating a security interest in favor of the
originator of the Cooperative Loan in the related Cooperative Stock.
Selling and Servicing Contract: (a) The contract (including the PNC
Mortgage Securities Corp. Selling Guide and PNC Mortgage Securities
Corp. Servicing Guide to the extent incorporated by reference therein)
between the Company and a Person relating to the sale of the Mortgage
Loans to the Company and the servicing of such Mortgage Loans for the
benefit of the Certificateholders, which contract is substantially in
the form of Exhibit E hereto, as such contract may be amended or
modified from time to time; provided, however, that any such amendment
or modification shall not materially adversely affect the interests and
rights of Certificateholders and (b) any other similar contract
<PAGE> 36
providing substantially similar rights and benefits as those provided by
the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Class A, Class P, Class X and Residual
Certificates.
Senior Liquidation Amount: For any Distribution Date, the
aggregate, for each Mortgage Loan which became a Liquidated Mortgage
Loan during the Prior Period, of the lesser of: (i) the Senior
Percentage of the Principal Balance of such Mortgage Loan (exclusive of
the Class P Fraction thereof, with respect to any Class P Mortgage Loan)
and (ii) the Senior Prepayment Percentage of the Liquidation Principal
with respect to such Mortgage Loan.
Senior Percentage: For any Distribution Date, the aggregate Class
Principal Balance of the Class A and Residual Certificates divided by
the aggregate Class Principal Balance of the Class A, Class B and
Residual Certificates, in each case immediately after any allocations of
Realized Losses but before any distributions on such Distribution Date.
Senior Prepayment Percentage: For any Distribution Date, the Senior
Prepayment Percentage shall equal 100%, unless (i) the Senior Percentage
for such Distribution Date is less than or equal to the 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) and (b) are met with
respect to the Mortgage Loans:
(a) the mean aggregate Principal Balance as of the Distribution
Date in each of the immediately preceding six calendar months
of the Mortgage Loans which were 60 or more days delinquent as
of such date (including loans in foreclosure and mortgaged
property held by REMIC I) is less than or equal to 50% of the
Subordinate Component Balance as of the current Distribution
Date, and
(b) cumulative Realized Losses on the Mortgage Loans allocated to
the Class B Certificates, as a percentage of the Subordinate
Component Balance 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 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
<PAGE> 37
Date, the Senior Percentage for such Distribution Date plus 70% of the
Subordinate Percentage for such Distribution Date; (2) for any such
Distribution Date on or after the sixth anniversary but before the
seventh anniversary of the first Distribution Date, the Senior
Percentage for such Distribution Date plus 60% of the Subordinate
Percentage for such Distribution Date; (3) for any such Distribution
Date on or after the seventh anniversary but before the eighth
anniversary of the first Distribution Date, the Senior Percentage for
such Distribution Date plus 40% of the Subordinate Percentage for such
Distribution Date; (4) for any such Distribution Date on or after the
eighth anniversary but before the ninth anniversary of the first
Distribution Date, the Senior Percentage for such Distribution Date plus
20% of the Subordinate Percentage for such Distribution Date; and (5)
for any such Distribution Date thereafter, the Senior Percentage for
such Distribution Date.
If on any Distribution Date the allocation to the Certificates
(other than the Class P Certificates) of Principal Prepayments in the
percentage required would reduce the aggregate Class Principal Balance
of such Certificates below zero, the Senior Prepayment Percentage for
such Distribution Date shall be limited to the percentage necessary to
reduce the aggregate Class Principal Balance of such Certificates to
zero. Notwithstanding the foregoing, however, on each Distribution
Date, the Class P Certificates shall receive the applicable Class P
Fraction of all principal payments, including, without limitation,
Principal Prepayments, received in respect of Mortgage Loans.
Senior Principal Distribution Amount: For any Distribution Date, an
amount equal to the sum of (a) the Senior Percentage of the Principal
Payment Amount (exclusive of the portion thereof attributable to
principal distributions to the Class P Certificates pursuant to clause
(I)(i) or (II)(i) of the definition of "Distribution Amount"), (b) the
Senior Prepayment Percentage of the Principal Prepayment Amount
(exclusive of the portion thereof attributable to principal
distributions to the Class P Certificates pursuant to clause (I)(i) or
(II)(i) of the definition of "Distribution Amount") and (c) the Senior
Liquidation Amount.
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
<PAGE> 38
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: The Special Hazard Coverage on the most
recent anniversary of the Cut-Off Date (calculated in accordance with
the second sentence of this paragraph) or, if prior to the first such
anniversary, $3,795,147, in each case reduced by Special Hazard Losses
allocated to the Certificates since the most recent anniversary of the
Cut-Off Date (or, if prior to the first such anniversary, since the Cut-
Off Date). On each anniversary of the Cut-Off Date, the Special Hazard
Coverage shall be reduced, but not increased, to an amount equal to the
lesser of (1) the greatest of (a) the aggregate principal balance of the
Mortgage Loans located in the single California zip code area containing
the largest aggregate principal balance of Mortgage Loans, (b) 1.0% of
the aggregate unpaid principal balance of the Mortgage Loans and (c)
twice the unpaid principal balance of the largest single Mortgage Loan,
in each case calculated as of the Due Date in the immediately preceding
month, and (2) $3,795,147 as reduced by the Special Hazard Losses
allocated to the Certificates since the Cut-Off Date.
The Special Hazard Coverage may be reduced upon written
confirmation from the Rating Agencies that such reduction will not
adversely affect the then current ratings assigned to the Certificates
by the Rating Agencies.
Special Hazard Loss: A Realized Loss (or portion thereof) with
respect to a Mortgage Loan arising from any direct physical loss or
damage to a Mortgaged Property not covered by a standard hazard
maintenance policy with extended coverage which is caused by or results
from any cause except: (i) fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, vandalism, aircraft,
vehicles, smoke, sprinkler leakage, except to the extent of that portion
of the loss which was uninsured because of the application of a co-
insurance clause of any insurance policy covering these perils; (ii)
normal wear and tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by, contributed to
or aggravated by a peril covered by this definition of Special Hazard
Loss; (v) hostile or warlike action in time of peace or war, including
<PAGE> 39
action in hindering, combating or defending against an actual, impending
or expected attack (a) by any government of sovereign power (de jure or
de facto), or by an authority maintaining or using military, naval or
air forces, (b) by military, naval or air forces, or (c) by an agent of
any such government, power, authority or forces; (vi) any weapon of war
employing atomic fission or radioactive force whether in time of peace
or war; (vii) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such occurrence; or (viii) seizure or destruction
under quarantine or customs regulations, or confiscation by order of any
government or public authority.
Special Primary Insurance Policy: Any Primary Insurance Policy
covering a Mortgage Loan the premium of which is payable by the Trustee
pursuant to Section 4.01(a), if so identified in the Mortgage Loan
Schedule.
Special Primary Insurance Premium: With respect to any Special
Primary Insurance Policy, the monthly premium payable thereunder.
Step Down Percentage: For any Distribution Date, the percentage
indicated below:
Distribution Date Occurring In
Step Down Percentage
August 2000 through July 2005 0%
August 2005 through July 2006 30%
August 2006 through July 2007 40%
August 2007 through July 2008 60%
August 2008 through July 2009 80%
August 2009 and thereafter 100%
Stripped Interest Rate: For each Mortgage Loan, the excess, if any,
of the Pass-Through Rate for such Mortgage Loan over 7.750% per annum.
Subordinate Certificates: The Class B Certificates.
Subordinate Component Balance: For any date of determination, the
then outstanding aggregate Principal Balance of the Mortgage Loans (less
the applicable Class P Fraction thereof with respect to any Class P
Mortgage Loan) minus the then outstanding aggregate Class Principal
Balance of the Class A and Residual Certificates.
Subordinate Liquidation Amount: For any Distribution Date, the
excess, if any, of the aggregate of Liquidation Principal for all
Mortgage Loans which became Liquidated Mortgage Loans during the Prior
Period, over the Senior Liquidation Amount for such Distribution Date.
Subordinate Percentage: For any Distribution Date, the excess of
100% over the Senior Percentage for such date.
<PAGE> 40
Subordinate Prepayment Percentage: For any Distribution Date, the
excess of 100% over the Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class
Principal Balance of the Class A and Residual Certificates has been
reduced to zero, then the Subordinate Prepayment Percentage shall equal
100%.
Subordinate Principal Distribution Amount: For any Distribution
Date, the excess of (A) the sum of (i) the Subordinate Percentage of the
Principal Payment Amount (exclusive of the portion thereof attributable
to principal distributions to the Class P Certificates pursuant to
clause (I)(i) of the definition of "Distribution Amount"), (ii) the
Subordinate Principal Prepayments Distribution Amount (without regard to
the proviso in the definition thereof) and (iii) the Subordinate
Liquidation Amount over (B) the amounts required to be distributed to
the Class P Certificates pursuant to clause (I)(v) and (I)(vi) of the
definition of "Distribution Amount" on such Distribution Date.
On any Distribution Date, the Subordinate Principal Distribution
Amount shall be allocated pro rata, by Class Principal Balance, among
the Classes of Class B Certificates and paid in the order of
distribution to such Classes pursuant to clause (I) of the definition of
"Distribution Amount" except as otherwise stated in such definition.
Notwithstanding the foregoing, on any Distribution Date prior to
distributions on such date, if the Subordination Level for any Class of
Class B Certificates is less than such Subordination Level as of the
Closing Date, the pro rata portion of the Subordinate Principal
Prepayments Distribution Amount otherwise allocable to the Class or
Classes of Class B Certificates junior to such Class will be distributed
to the most senior Class of Class B Certificates for which the
Subordination Level is less than the Subordination Level as of the
Closing Date, and to the Class or Classes of Class B Certificates senior
thereto, pro rata according to the Class Principal Balances of such
Classes. For purposes of this definition and the definition of
"Subordination Level," the relative seniority, from highest to lowest,
of the Class B Certificates shall be as follows: Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6.
Subordinate Principal Prepayments Distribution Amount: For any
Distribution Date, the Subordinate Prepayment Percentage of the
Principal Prepayment Amount (exclusive of the portion thereof
attributable to principal distributions to the Class P Certificates
pursuant to clause (I)(i) of the definition of "Distribution Amount");
provided, however, that if the amount specified in clause (B) of the
definition of "Subordinate Principal Distribution Amount" is greater
than the sum of the amounts specified in clauses (A)(i) and (A)(iii) of
such definition, then the Subordinate Principal Prepayments Distribution
Amount shall be reduced by the amount of such excess.
Subordination Level: On any specified date, with respect to any
Class of Class B Certificates, the percentage obtained by dividing the
aggregate Class Principal Balance of the Classes of Class B Certificates
<PAGE> 41
which are subordinate in right of payment to such Class by the aggregate
Class Principal Balance of the Certificates as of such date prior to
giving effect to distributions of principal or interest or allocations
of Realized Losses on the Mortgage Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for
another Mortgage Loan pursuant to and in accordance with the provisions
of Section 2.02.
Surety: Ambac Assurance Corporation, or its successors in interest.
Surety Bonds: The Limited Purpose Surety Bonds, Policy No. AB0039BE
and Policy No. AB0240BE, issued by Ambac Assurance Corporation for the
benefit of certain beneficiaries, including, with respect to the
Additional Collateral Loans, the Trustee for the benefit of the
Certificateholders.
Tax Matters Person: A Holder of a Class R Certificate with a
Percentage Interest of at least 0.01% or any Permitted Transferee of
such Class R Certificateholder designated as succeeding to the position
of Tax Matters Person in a notice to the Trustee signed by authorized
representatives of the transferor and transferee of such Class R
Certificate. The Company is hereby appointed to act as the Tax Matters
Person for REMIC I so long as it holds a Class R Certificate with a
Percentage Interest of at least 0.01%. The Company is hereby appointed
to act as agent for the Tax Matters Person for REMIC I, to perform the
functions of the Tax Matters Person as provided herein, so long as the
Company is the Master Servicer hereunder, in the event that the Company
ceases to hold a Class R Certificate with the required Percentage
Interest. In the event that the Company ceases to be the Master Servicer
hereunder, the successor Master Servicer is hereby appointed to act as
agent for the Tax Matters Person for REMIC I, to perform the functions
of such Tax Matters Person as provided herein. If the Tax Matters Person
becomes a Disqualified Organization, the last preceding Holder, that is
not a Disqualified Organization, of the Class R Certificate held by the
Disqualified Organization shall be Tax Matters Person pursuant to and as
permitted by Section 5.01(c). If any Person is appointed as tax matters
person by the Internal Revenue Service pursuant to the Code, such Person
shall be Tax Matters Person.
Termination Date: The date upon which final payment of the
Certificates will be made pursuant to the procedures set forth in
Section 9.01(b).
Termination Payment: The final payment delivered to the
Certificateholders on the Termination Date pursuant to the procedures
set forth in Section 9.01(b).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
<PAGE> 42
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.
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 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
deposit shall be irrevocable) or the Investment Account (except amounts
representing the Master Servicing Fee or the Servicing Fee); (iii) such
assets as from time to time may be held by Servicers in a Custodial
Account for P&I or Custodial Account for Reserves or a Buydown Fund
Account related to the Mortgage Loans (except amounts representing the
Master Servicing Fee or the Servicing Fee); (iv) property which secured
a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure or, in the case of a Cooperative Loan, a similar
form of conversion, after the Cut-Off Date; and (v) amounts paid or
payable by the insurer under the Surety Bonds (with respect to the
Additional Collateral Loans), any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any other insurance
policy related to any Mortgage Loan or the Mortgage Pool.
Trustee: 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.
Uncollected Interest: With respect to any Distribution Date for any
Mortgage Loan on which a Payoff was made by a Mortgagor during the
related Payoff Period, except for Payoffs received during the period
from the first through the 14th day of the month of such Distribution
Date, an amount equal to one month's interest at the applicable Pass-
Through Rate on such Mortgage Loan less the amount of interest actually
paid by the Mortgagor with respect to such Payoff.
Uncompensated Interest Shortfall: For any Distribution Date, the
excess, if any, of (i) the sum of (a) aggregate Uncollected Interest
with respect to the Mortgage Loans and (b) aggregate Curtailment
Shortfall with respect to the Mortgage Loans over (ii) Compensating
Interest with respect to the Mortgage Loans.
Uncompensated Interest Shortfall shall be allocated to the Classes
of Certificates pro rata according to the amount of the Interest
Distribution Amount to which each such Class would otherwise be entitled
<PAGE> 43
in reduction thereof.
Underwriting Standards: The underwriting standards of the Company,
Old Kent Mortgage Company, First Chicago NBD Mortgage Company, GMAC
Mortgage Corporation, HomeSide Lending, Inc., Countrywide Home Loans,
Inc., National City Mortgage Company, Merrill Lynch Credit Corporation,
Banc One Mortgage Corp., Downey Savings & Loan Association, F.A., GN
Mortgage Corp., SunTrust Mortgage, Inc., GreenPoint Mortgage Funding,
Inc., First Republic Savings Bank, Cendant Mortgage Corp., Associated
Mortgage Inc., Flagstar Bank, FSB, Ohio Savings Bank, PNC Mortgage Corp.
of America, Novus Financial Corporation, Imperial Home Loans, Inc.,
Dovenmuehle Mortgage, Inc., North American Mortgage Company, and Taylor
Bean & Whitaker.
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 Fund; 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 Certificates. The purpose of the Trust is to hold the
Trust Fund and provide for the issuance, execution and delivery of the
Certificates. The assets of the Trust shall consist of the Trust Fund.
The Trust shall be irrevocable.
The assets of the Trust shall remain in the custody of the Trustee,
on behalf of the Trust, and shall be kept in the Trust except as
otherwise expressly set forth herein. Moneys to the credit of the Trust
shall be held by the Trustee and invested as provided herein. All
<PAGE> 44
assets received and held in the Trust will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of State
Street Bank and Trust Company in its own right, or any Person claiming
through it. The Trustee, on behalf of the Trust, shall not have the
power or authority to transfer, assign, hypothecate, pledge or otherwise
dispose of any of the assets of the Trust to any Person, except as
permitted herein. No creditor of a beneficiary of the Trust, of the
Trustee, of the Master Servicer or of the Company shall have any right
to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the Trust, except in
accordance with the terms of this Agreement.
Concurrently with the execution and delivery hereof, the Company
(i) does hereby irrevocably sell, transfer, assign, set over and
otherwise convey to the Trustee, in trust for the benefit of the Holders
of the 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 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 the grant of a security interest in 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
<PAGE> 45
(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, to secure all of the
Company's obligations hereunder, of a security interest in all of the
Company's right, title, and interest, whether now owned or hereafter
acquired, in and to:
(I) (i) the PNC Mortgage Loans identified on the Mortgage Loan
Schedule, including the related Mortgage Notes, Mortgages,
Cooperative Stock Certificates, and Cooperative Leases, the
security agreements and guaranties constituting part of the related
Additional Collateral, all related Substitute Mortgage Loans and
all distributions with respect to such PNC Mortgage Loans and
related Substitute Mortgage Loans payable on and after the Cut-Off
Date; (ii) the Certificate Account, the Investment Account and all
money or other property held therein, and the Custodial Accounts
for P&I and the Custodial Accounts for Reserves (to the extent of
the amounts on deposit or other property therein attributable to
the Mortgage Loans); and (iii) amounts paid or payable by the
insurer under the Surety Bonds (with respect to the Additional
Collateral Loans), any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage
Pool;
(II) All rights arising from or by virtue of the disposition
of, or collections with respect to, or insurance proceeds payable
with respect to, or claims against other persons with respect to,
all or any part of the collateral described in (I) above (including
any accrued discount realized on liquidation of any investment
purchased at a discount);
(III) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and investment
property consisting of, arising from or relating to any of the
foregoing; and
(IV) All proceeds of the foregoing;
(c) the possession by the Trustee of any of the foregoing property
shall be deemed to be possession by the secured party or possession by a
purchaser for purposes of perfecting the security interest pursuant to
the Uniform Commercial Code (including, without limitation, Sections 9-
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
<PAGE> 46
purpose of perfecting such security interest under applicable law.
The Company and the Trustee at the direction of the Company shall,
to the extent consistent with this Agreement, take such actions as may
be necessary to ensure that, if this Agreement were deemed to create a
security interest in the PNC Conveyed Assets, such security interest
would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term
of the Agreement. In connection herewith, the Trustee shall have all of
the rights and remedies of a secured party and creditor under the
Uniform Commercial Code as in force in the relevant jurisdiction.
In connection with the sale, transfer and assignment referred to in
the third paragraph of this Section 2.01, the Company, concurrently with
the execution and delivery hereof, does deliver to, and deposit with, or
cause to be delivered to and deposited with, the Trustee or Custodian
the Mortgage Files for the PNC Mortgage Loans, which shall on original
issuance thereof and at all times be registered in the name of the
Trustee. In the event that the Mortgage Files delivered or caused 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
<PAGE> 47
Trustee prior to or concurrently with the execution and delivery hereof
or of the Clipper Loan Sale Agreement, as applicable (due to a delay on
the part of the recording office), the Company shall deliver to the
Trustee a fully legible reproduction of the original Mortgage or
intervening assignment provided that the related Lender or originator
certifies on the face of such reproduction(s) or copy as follows:
"Certified true and correct copy of original which has been transmitted
for recordation." For purposes hereof, transmitted for recordation means
having been mailed or otherwise delivered for recordation to the
appropriate authority. In all such instances, the Company shall transmit
the original recorded Mortgage and any intervening assignments with
evidence of recording thereon (or a copy of such original Mortgage or
intervening assignment certified by the applicable recording office)
(collectively, "Recording Documents") to the Trustee 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
<PAGE> 48
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.01, and to enter into a
Custodial Agreement for such purpose, provided, however, that the
Trustee shall be and remain liable for the acts of any such Custodian
only to the extent that it is responsible for its own acts hereunder.
The Tax Matters Person, shall, on behalf of the REMIC I Trust Fund,
elect to treat the REMIC I Trust Fund as a REMIC within the meaning of
Section 860D of the Code and, if necessary, under applicable state laws.
Such election shall be included in the Form 1066 and any appropriate
state return to be filed on behalf of REMIC I for its first taxable
year.
The Closing Date is hereby designated as the "startup day" of REMIC
I within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC I Trust Fund are
hereby designated as "regular interests" for purposes of Section
860G(a)(1) of the Code. The Class R Certificates are 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 Certificateholders 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
<PAGE> 49
entitled to be indemnified by the REMIC I Trust Fund for any such
prohibited transaction penalty taxes if the Company's failure to
exercise reasonable care was not the primary cause of the imposition of
such prohibited transaction penalty taxes.
The Trustee and the Master Servicer shall promptly provide the
Company with such information in the possession of the Trustee or the
Master Servicer, respectively, as the Company may from time to time
request for the purpose of enabling the Company to prepare tax returns.
In the event that a Mortgage Loan is discovered to have a defect
which, had such defect been discovered before the startup day, would
have prevented such Mortgage Loan from being a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, and the Company
does not purchase or repurchase such Mortgage Loan within 90 days of
such date, the Master Servicer, on behalf of the Trustee, shall within
90 days of the date such defect is discovered sell such Mortgage Loan at
such price as the Master Servicer in its sole discretion, determines to
be the greatest price that will result in the purchase thereof within 90
days of such date, unless the Master Servicer delivers to the Trustee an
Opinion of Counsel to the effect that continuing to hold such Mortgage
Loan will not adversely affect the status of the electing portion of the
REMIC I Trust Fund as a REMIC for federal income tax purposes.
In the event that any tax is imposed on "prohibited transactions"
of the REMIC I Trust Fund as defined in Section 860F of the Code and not
paid by the Company pursuant to clause (f) of the third preceding
paragraph, such tax shall be charged against amounts otherwise
distributable to the Class R Certificateholders. Notwithstanding
anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Class R
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 Certificates. The
Trustee agrees, for the benefit of the Holders of the Certificates, to
review or cause the Custodian to review each Mortgage File within 45
days after the Closing Date and deliver to the Company a certification
<PAGE> 50
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.
Furthermore, such Substitute Mortgage Loan shall otherwise have such
<PAGE> 51
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
Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.03. Representations and Warranties of the Company Concerning
the Mortgage Loans. With respect to the conveyance of the PNC Mortgage
Loans provided for in Section 2.01 herein and the conveyance of the
Clipper Mortgage Loans provided for in the Clipper Loan Sale Agreement,
the Company hereby represents and warrants to the Trustee that as of the
Cut-Off Date unless otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule was true
and correct in all material respects at the date or dates respecting
which such information is furnished;
As of the Closing Date, each Mortgage is a valid and
enforceable (subject to Section 2.03(xvi)) first lien on an
unencumbered estate in fee simple or leasehold estate in the
related Mortgaged Property subject only to (a) liens for current
real property taxes and special assessments; (b) covenants,
conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording such Mortgage,
such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the
appraisal obtained in connection with the origination of the
Mortgage Loan; (c) exceptions set forth in the title insurance
policy relating to such Mortgage, such exceptions being acceptable
to mortgage lending institutions generally; and (d) other matters
to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be provided by the Mortgage;
<PAGE> 52
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);
As of the day prior to the Cut-Off Date, all payments due on
each Mortgage Loan had been made and no Mortgage Loan had been
delinquent (i.e., was more than 30 days past due) more than once in
the preceding 12 months and any such delinquency lasted for no more
than 30 days;
As of the Closing Date, there is no late assessment for
delinquent taxes outstanding against any Mortgaged Property;
As of the Closing Date, there is no offset, defense or
counterclaim to any Mortgage Note, including the obligation of the
Mortgagor to pay the unpaid principal or interest on such Mortgage
Note except to the extent that the Buydown Agreement for a Buydown
Loan forgives certain indebtedness of a Mortgagor;
As of the Closing Date, each Mortgaged Property is free of
damage and in good repair, ordinary wear and tear excepted;
Each Mortgage Loan at the time it was made complied with all
applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, disclosure and recording laws;
Each Mortgage Loan was originated by a savings association,
savings bank, credit union, insurance company, or similar
institution which is supervised and examined by a federal or state
authority or by a mortgagee approved by the FHA and will be
serviced by an institution which meets the servicer eligibility
requirements established by the Company;
As of the Closing Date, each Mortgage Loan 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 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
<PAGE> 53
the related Mortgage, including the Company, has done, by act or
omission, anything which would impair the coverage of such policy;
All of the Mortgage Loans (other than the Additional
Collateral Loans) with Loan-to-Value Ratios as of the Cut-Off Date
in excess of 80% were covered by a Primary Insurance Policy or an
FHA insurance policy or a VA guaranty, and such policy or guaranty
is valid and remains in full force and effect;
As of the Closing Date, all policies of insurance required by
this Agreement or by a Selling and Servicing Contract have been
validly issued and remain in full force and effect, including such
policies covering the Company, the Master Servicer or any Servicer;
As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
Each Mortgage (exclusive of any riders thereto) was documented
by appropriate Fannie Mae/Freddie Mac mortgage instruments in
effect at the time of origination, or other instruments approved by
the Company;
As of the Closing Date, the Mortgaged Property securing each
Mortgage is improved with a one- to four-family dwelling unit,
including units in a duplex, condominium project, townhouse, a
planned unit development or a de minimis planned unit development;
As of the Closing Date, each Mortgage and Mortgage Note is the
legal, valid and binding obligation of the maker thereof and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity;
As of the date of origination, as to Mortgaged Properties
which are units in condominiums or planned unit developments, all
of such units met Fannie Mae or Freddie Mac requirements, are
located in a condominium or planned unit development projects which
have received Fannie Mae or Freddie Mac approval, or are approvable
by Fannie Mae or Freddie Mac or have otherwise been approved by the
Company;
None of the Mortgage Loans is a Buydown Loan;
Based solely on representations of the Mortgagors obtained at
the origination of the related Mortgage Loans, approximately 95.25%
(by Principal Balance) of the Mortgage Loans will be secured by
owner occupied Mortgaged Properties which are the primary
residences of the related Mortgagors, approximately 3.13% (by
Principal Balance) of the Mortgage Loans will be secured by owner
occupied Mortgaged Properties which were second or vacation homes
of the Mortgagors and approximately 1.61% (by Principal Balance) of
the Mortgage Loans will be secured by Mortgaged Properties which
<PAGE> 54
were investor properties of the related Mortgagors;
Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form satisfactory
to Fannie Mae or Freddie Mac;
The Mortgage Loans have been underwritten substantially in
accordance with the applicable Underwriting Standards;
All of the Mortgage Loans have due-on-sale clauses; however,
the due on sale provisions may not be exercised at the time of a
transfer if prohibited by law;
The Company used no adverse selection procedures in selecting
the Mortgage Loans from among the outstanding fixed-rate
conventional mortgage loans purchased by it which were available
for inclusion in the Mortgage Pool and as to which the
representations and warranties in this Section 2.03 could be made;
With respect to any Mortgage Loan as to which an affidavit has
been delivered to the Trustee certifying that the original Mortgage
Note is a Destroyed Mortgage Note, if such Mortgage Loan is
subsequently in default, the enforcement of such Mortgage Loan or
of the related Mortgage by or on behalf of the Trustee will not be
materially adversely affected by the absence of the original
Mortgage Note;
Based upon an appraisal of the Mortgaged Property securing
each Mortgage Loan, approximately 87.03% (by Principal Balance) of
the Mortgage Loans had a current Loan-to-Value Ratio less than or
equal to 80%, approximately 10.16% (by Principal Balance) of the
Mortgage Loans had a current Loan-to-Value Ratio greater than 80%
but less than or equal to 95% and approximately 2.82% (by Principal
Balance) of the Mortgage Loans had a current Loan-to-Value Ratio
greater than 95%;
Approximately 30.14% (by Principal Balance) of the Mortgage
Loans were originated for the purpose of refinancing existing
mortgage debt, including cash-out refinancings; and approximately
69.87% (by Principal Balance) of the Mortgage Loans were originated
for the purpose of purchasing the Mortgaged Property;
Not less than approximately 64.80% (by Principal Balance) of
the Mortgage Loans were originated under full documentation
programs;
Each Additional Collateral Loans is covered by a Surety Bond;
Each Additional Collateral Loan is secured solely by the
related Mortgaged Property and by a securities account owned by the
related Mortgagor or a guarantor; and
<PAGE> 55
Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties
set forth in this Section 2.03 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian, as the case may be, and
shall continue throughout the term of this Agreement. Upon discovery by
any of the Company, the Master Servicer, the Trustee or the Custodian of
a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of the related Mortgage Loans
or the interests of the Certificateholders in the related Mortgage
Loans, the Company, the Master Servicer, the Trustee or the Custodian,
as the case may be, discovering such breach shall give prompt written
notice to the others. Within 90 days of its discovery or its receipt of
notice of breach, the Company shall purchase or repurchase, subject to
the limitations set forth in the definition of "Purchase Price", or
substitute for the affected Mortgage Loan or Mortgage Loans or any
property acquired in respect thereof from the Trustee, unless it has
cured such breach in all material respects. After the end of the three-
month period beginning on the "start-up day", any such substitution
shall be made only if the Company provides to the Trustee an Opinion of
Counsel reasonably satisfactory to the Trustee that each Substitute
Mortgage Loan will be a "qualified replacement mortgage" within the
meaning of Section 860G(a)(4) of the Code. Such substitution shall be
made in the manner and within the time limits set forth in Section 2.02.
Any such purchase or repurchase by the Company shall be accomplished in
the manner and at the Purchase Price, if applicable, but shall not be
subject to the time limits, set forth in Section 2.02. It is understood
and agreed that the obligation of the Company to provide such
substitution or to make such purchase or repurchase of any affected
Mortgage Loan or Mortgage Loans or any property acquired in respect
thereof as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
Section 2.04. Acknowledgment of Transfer of Trust Fund; Authentication
of 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, shall cause to be authenticated and
delivered, upon and pursuant to the order of the Company, the
Certificates in Authorized Denominations evidencing the entire ownership
of the Trust Fund.
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
<PAGE> 56
accordance with the terms hereof and in the same manner in which, and
with the same care, skill, prudence and diligence with which, it
services and administers similar mortgage loans for other portfolios,
and shall have full power and authority to do or cause to be done any
and all things in connection with such servicing and administration
which it may deem necessary or desirable, including, without limitation,
the power and authority to bring actions and defend the Trust Fund on
behalf of the Trustee in order to enforce the terms of the Mortgage
Notes. The Master Servicer may perform its master servicing
responsibilities through agents or independent contractors, but shall
not thereby be released from any of its responsibilities hereunder and
the Master Servicer shall diligently pursue all of its rights against
such agents or independent contractors.
The Master Servicer shall make reasonable efforts to collect or
cause to be collected all payments called for under the terms and
provisions of the Mortgage Loans and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and
provisions of any Primary Insurance Policy, any FHA insurance policy or
VA guaranty, any hazard insurance policy, and federal flood insurance,
cause to be followed such collection procedures as are followed with
respect to mortgage loans comparable to the Mortgage Loans and held in
portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-
sale" clauses with respect to the related Mortgage Loans, to the extent
permitted by law, subject to the provisions set forth in Section 3.08.
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 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 pursuant to this sentence
shall not exceed one-half of one percent (0.50%) of the aggregate
Principal Balance, as of the Cut-Off Date, of all Mortgage Loans. The
Master Servicer shall also have the right, but not the obligation, to
purchase or repurchase, for an amount equal to its Purchase Price, any
Mortgage Loan either (i) delinquent 90 consecutive days or more, (ii)
delinquent one or more but less than 90 consecutive days with respect to
which the Master Servicer has determined, in its reasonable judgment,
that a default is expected to occur or (iii) with respect to which the
Mortgage was fraudulently procured by the Mortgagor, in the case of each
of (i), (ii) and (iii) above, for the purpose of requiring the Person
who sold such Mortgage Loan to the Company to repurchase such Mortgage
Loan based on a breach of a representation or warranty made by such
<PAGE> 57
Person in connection with the Company's purchase or acquisition of such
Mortgage Loan. 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; provided, however,
that if the Purchase Price is deposited in the Certificate Account by
the Master Servicer on behalf of such third party, the Master Servicer
shall be entitled to retain from the Purchase Price the amount of any
unreimbursed advances made by the Master Servicer with respect to such
Mortgage Loan, and if the Purchase Price is deposited in the Certificate
Account directly by such third party, the Master Servicer shall be
entitled to reimburse itself for such unreimbursed advances pursuant to
Section 3.05(a)(iv). For purposes of this paragraph, a Mortgage Loan is
considered delinquent for 90 consecutive days if a Monthly Payment is
not received by the first day of the third month following the month
during which such payment was due.
Consistent with the terms of this Section 3.01, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if it has determined,
exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected by such waiver, modification,
postponement or indulgence; provided, however, that (unless the
Mortgagor is in default with respect to the Mortgage Loan or in the
reasonable judgment of the Master Servicer such default is imminent) the
Master Servicer shall not permit any modification with respect to any
Mortgage Loan that would (i) change the applicable Mortgage Interest
Rate, defer or forgive the payment of any principal or interest, reduce
the outstanding principal balance (except for actual payments of
principal) or extend the final maturity date with respect to such
Mortgage Loan, or (ii) be inconsistent with the terms of any applicable
Primary Insurance Policy, FHA insurance policy, VA guaranty, hazard
insurance policy or federal flood insurance policy. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would both constitute a sale or
exchange of such Mortgage Loan within the meaning of Section 1001 of the
Code (including any proposed, temporary or final regulations promulgated
thereunder) (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal
Prepayment or in a default situation) and cause REMIC I to fail to
qualify as a REMIC 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 Certificateholders, and the Trustee or any of them, any
<PAGE> 58
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 REMIC I to fail to
qualify as a REMIC under the Code. The Master Servicer shall be entitled
to approve a request from a Mortgagor for a partial release of the
related Mortgaged Property, the granting of an easement thereon in favor
of another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters if it has determined, exercising its
good faith business judgment in the same manner as it would if it were
the owner of the related Mortgage Loan, that the security for, and the
timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and that REMIC I 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 REMIC I 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.
<PAGE> 59
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 (other than any Special
Primary 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. Otherwise,
Insurance Proceeds (other than proceeds from any Special Primary
Insurance Policy) 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
insurance custodial account for PNC Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners
of interests in PNC Mortgage Securities Corp. mortgage-backed pools
or (ii) [Servicer's Name] in trust for PNC Mortgage Securities
Corp. and various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that
have been collected by any Servicer and are due to the Certificate
Account pursuant to Section 4.01 of this Agreement.
Section 3.03. The Investment Account; Eligible Investments.(a) Not
later than the Withdrawal Date, the Master Servicer shall withdraw or
direct the withdrawal of funds in the Custodial Accounts for P&I, for
deposit in the Investment Account, in an amount representing:
Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers
<PAGE> 60
which were due on the related Due Date, net of Servicing Fees due
the applicable Servicers and less any amounts to be withdrawn later
by the applicable Servicers from the applicable Buydown Fund
Accounts;
Payoffs and the proceeds of other types of liquidations of the
Mortgage Loans received by the applicable Servicer for such
Mortgage Loans during the applicable Payoff Period, with interest
to the date of Payoff or liquidation less any amounts to be
withdrawn later by the applicable Servicers from the applicable
Buydown Fund Accounts; and
Curtailments received by the applicable Servicers in the Prior
Period.
At its option, the Master Servicer may invest funds withdrawn from
the Custodial Accounts for P&I, as well as any Buydown Funds, Insurance
Proceeds and Liquidation Proceeds previously received by the Master
Servicer (including amounts paid by the Company in respect of any
Purchase Obligation or its substitution obligations set forth in Section
2.02 or Section 2.03 or in connection with the exercise of the option to
terminate this Agreement pursuant to Section 9.01) for its own account
and at its own risk, during any period prior to their deposit in the
Certificate Account. Such funds, as well as any funds which were
withdrawn from the Custodial Accounts for P&I on or before the
Withdrawal Date, but not yet deposited into the Certificate Account,
shall immediately be deposited by the Master Servicer with the
Investment Depository in an Investment Account in the name of the Master
Servicer and the Trustee for investment only as set forth in this
Section 3.03. The Master Servicer shall bear any and all losses incurred
on any investments made with such funds and shall be entitled to retain
all gains realized on such investments as additional servicing
compensation. Not later than the Business Day prior to the Distribution
Date, the Master Servicer shall deposit such funds, net of any gains
(except Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i)
one or more Eligible Investments which shall in no event mature later
than the Business Day prior to the related Distribution Date (except if
such Eligible Investments are obligations of the Trustee, such Eligible
Investments may mature on the Distribution Date), or (ii) such other
instruments as shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
(a) Not later than the Business Day prior to the related
Distribution Date, the Master Servicer shall direct the Investment
Depository to deposit into the Certificate Account the amounts
previously deposited into the Investment Account (which may include a
deposit of Eligible Investments) to which the Certificateholders are
entitled or which are necessary for payment of any Special Primary
Insurance Premiums. In addition, not later than the Business Day prior
<PAGE> 61
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.
(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:
To reimburse itself or the applicable Servicer for Monthly P&I
Advances made pursuant to Section 4.02 or a Selling and Servicing
Contract, such right to reimbursement pursuant to this paragraph
(i) being limited to amounts received on particular Mortgage Loans
(including, for this purpose, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of principal and/or
interest respecting which any such Monthly P&I Advance was made;
To reimburse itself or the applicable Servicer for amounts
expended by or for the account of the Master Servicer pursuant to
Section 3.09 or amounts expended by such Servicer pursuant to the
Selling and Servicing Contracts in connection with the restoration
of property damaged by an Uninsured Cause or in connection with the
liquidation of a Mortgage Loan;
To pay to itself, with respect to the related Mortgage Loans,
the Master Servicing Fee (net of Compensating Interest reduced by
Payoff Earnings and Payoff Interest) as to which no prior
<PAGE> 62
withdrawals from funds deposited by the Master Servicer have been
made;
To reimburse itself or the applicable Servicer for advances
made with respect to related Mortgage Loans (except for Mortgage
Loans purchased pursuant to a Purchase Obligation or pursuant to
the second sentence of the third paragraph of Section 3.01) which
the Master Servicer has determined to be Nonrecoverable Advances;
To pay to itself reinvestment earnings deposited or earned in
the Investment Account and the Certificate Account to which it is
entitled and to reimburse itself for expenses incurred by and
reimbursable to it pursuant to Section 6.03;
To deposit to the Investment Account amounts in the
Certificate Account not required to be on deposit therein at the
time of such withdrawal;
To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts
specified in Section 3.04(a);
To pay on behalf of the Trustee any Special Primary Insurance
Premium payable by the Trustee pursuant to Section 4.01(a);
provided, the Master Servicer shall give written notice thereof to
the Trustee prior to noon New York City time two Business Days
prior to the applicable Distribution Date; and
after making or providing for the above withdrawals
To clear and terminate the Investment Account and the
Certificate Account following termination of this Agreement
pursuant to Section 9.01.
Since, in connection with withdrawals pursuant to paragraphs (i)
and (ii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer or the applicable Servicer shall keep and maintain separate
accounting for each Mortgage Loan, for the purpose of justifying any
such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such
Servicer holds and maintains a Buydown Fund Account) is authorized to
make withdrawals, from time to time, from the Buydown Fund Account or
Custodial Account for P&I established by any Servicer under its
supervision of the following amounts of Buydown Funds:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
In the event of a Payoff of any Mortgage Loan having a related
Buydown Fund, to apply amounts remaining in Buydown Fund Accounts
<PAGE> 63
to reduce the required amount of such principal Payoff (or, if the
Mortgagor has made a Payoff, to refund such remaining Buydown Fund
amounts to the Person entitled thereto);
In the event of foreclosure or liquidation of any Mortgage
Loan having a Buydown Fund, to deposit remaining Buydown Fund
amounts in the Investment Account as Liquidation Proceeds; and
To clear and terminate the portion of any account representing
Buydown Funds following termination of this Agreement pursuant to
Section 9.01;
(c) The Trustee is authorized to make withdrawals from time to
time from the Certificate Account to reimburse 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 (except any Special Primary
Insurance Policy) required with respect to a Mortgage Loan, in the
manner set forth in the applicable Selling and Servicing Contract, until
no longer required, and the Master Servicer shall use commercially
reasonable efforts to keep in full force and effect each Special Primary
Insurance Policy, if any. Notwithstanding the foregoing, the Master
Servicer shall have no obligation to maintain any Primary Insurance
Policy for a Mortgage Loan for which the outstanding Principal Balance
thereof at any time subsequent to origination was 80% or less of the
Appraised Value of the related Mortgaged Property, unless required by
applicable law.
Unless required by applicable law, the Master Servicer shall not
cancel or refuse to renew, or allow any Servicer under its supervision
to cancel or refuse to renew, any Primary Insurance Policy in effect at
the date of the initial issuance of the Certificates that is required to
be kept in force hereunder; provided, however, that neither the Master
Servicer nor any Servicer shall advance funds for the payment of any
premium due under (i) any Primary Insurance Policy (other than a Special
Primary Insurance Policy) if it shall determine that such an advance
would be a Nonrecoverable Advance or (ii) any Special Primary Insurance
Policy.
Section 3.07. Maintenance of Hazard Insurance. The Master Servicer
shall cause to be maintained for each Mortgage Loan (other than a
Cooperative Loan) fire insurance with extended coverage in an amount
which is not less than the original principal balance of such Mortgage
Loan, except in cases approved by the Master Servicer in which such
amount exceeds the value of the improvements to the Mortgaged Property.
The Master Servicer shall also require fire insurance with extended
coverage in a comparable amount on property acquired upon foreclosure,
or deed in lieu of foreclosure, of any Mortgage Loan (other than a
<PAGE> 64
Cooperative Loan). Any amounts collected under any such policies (other
than amounts to be applied to the restoration or repair of the related
Mortgaged Property) shall be deposited into the Custodial Account for
P&I, subject to withdrawal pursuant to the applicable Selling and
Servicing Contract and pursuant to Section 3.03 and Section 3.05. Any
unreimbursed costs incurred in maintaining any insurance described in
this Section 3.07 shall be recoverable as an advance by the Master
Servicer from the Investment Account or the Certificate Account. Such
insurance shall be with insurers approved by the Master Servicer and
Fannie Mae or Freddie Mac. Other additional insurance may be required of
a Mortgagor, in addition to that required pursuant to such applicable
laws and regulations as shall at any time be in force and as shall
require such additional insurance. Where any part of any improvement to
the Mortgaged Property (other than a Mortgaged Property secured by a
Cooperative Loan) is located in a federally designated special flood
hazard area and in a community which participates in the National Flood
Insurance Program at the time of origination of the related Mortgage
Loan, the Master Servicer shall cause flood insurance to be provided.
The hazard insurance coverage required by this Section 3.07 may be met
with blanket policies providing protection equivalent to individual
policies otherwise required. The Master Servicer or the applicable
Servicer shall be responsible for paying any deductible amount on any
such blanket policy. The Master Servicer agrees to present, or cause to
be presented, on behalf of and for the benefit of the Trustee and
Certificateholders, claims under the hazard insurance policy respecting
any Mortgage Loan, and in this regard to take such reasonable actions as
shall be necessary to permit recovery under such policy.
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption
Agreements. When any Mortgaged Property is about to be conveyed by the
Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such prospective conveyance and prior to the time of the consummation of
such conveyance, exercise on behalf of the Trustee the Trustee's rights
to accelerate the maturity of such Mortgage Loan, to the extent that
such acceleration is permitted 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
<PAGE> 65
the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall not enter into any substitution or assumption
with respect to a Mortgage Loan if such substitution or assumption shall
(i) both constitute a "significant modification" effecting an exchange
or reissuance of such Mortgage Loan under the Code (or Treasury
regulations promulgated thereunder) and cause REMIC I to fail to qualify
as a REMIC under the REMIC Provisions or (ii) cause the imposition of
any tax on "prohibited transactions" or "contributions" after the
startup day under the REMIC Provisions. The Master Servicer shall
notify the Trustee that any such substitution or assumption agreement
has been completed by forwarding to the Trustee the original copy of
such substitution or assumption agreement and other documents and
instruments constituting a part thereof. In connection with any such
assumption or substitution agreement, the terms of the related Mortgage
Note shall not be changed. Any fee collected by the applicable Servicer
for entering into an assumption or substitution of liability agreement
shall be retained by such Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by
reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Master Servicer may be restricted by law from
preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause
to be foreclosed upon or comparably converted, the ownership of any
Mortgaged Property securing a Mortgage Loan which comes into and
continues in default and as to which no satisfactory arrangements can be
made for 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
<PAGE> 66
judgment of the Master Servicer, (i) that such restoration will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders
after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable to it through Liquidation Proceeds. The
Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall
be entitled to reimbursement thereof (as well as its normal servicing
compensation) as an advance. The Master Servicer shall maintain
information required for tax reporting purposes regarding any Mortgaged
Property which is abandoned or which has been foreclosed or otherwise
comparably converted. The Master Servicer shall report such information
to the Internal Revenue Service and the Mortgagor in the manner required
by applicable law.
In addition to the foregoing, the Master Servicer shall use its
reasonable efforts to realize upon, or to cause the Servicers to realize
upon, any Additional Collateral for such of the Additional Collateral
Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.01; provided, however, that (i) the
Master Servicer shall not proceed with respect to such Additional
Collateral in any manner that would impair the ability to recover
against the related Mortgaged Property and (ii) the Master Servicer
shall proceed with any acquisition of the related Mortgaged Property
through foreclosure, deed in lieu of foreclosure or otherwise in a
manner that preserves the ability to apply the proceeds of such
Additional Collateral against amounts owed under the defaulted
Additional Collateral Loan.
The Master Servicer may enter into one or more special servicing
agreements with a Lowest Class B Owner, subject to each Rating Agency's
acknowledgment that the Ratings of the Certificates in effect
immediately prior to the entering into of such agreement would not be
qualified, downgraded or withdrawn and the Certificates would not be
placed on credit review status (except for possible upgrading) as a
result of such agreement. Any such agreement may contain provisions
whereby such Lowest Class B Owner may (a) instruct the Master Servicer
to instruct a Servicer to the extent provided in the applicable Selling
and Servicing Contract to commence or delay foreclosure proceedings with
respect to related delinquent Mortgage Loans, provided that the Lowest
Class B Owner deposits a specified amount of cash with the Master
Servicer that will be available for distribution to Certificateholders
if Liquidation Proceeds are less than they otherwise may have been had
the Servicer acted pursuant to its normal servicing procedures, (b)
purchase such delinquent Mortgage Loans from the REMIC I Trust Fund
immediately prior to the commencement of foreclosure proceedings at a
price equal to the aggregate outstanding Principal Balance of such
Mortgage Loans plus accrued interest thereon at the applicable Mortgage
Interest Rate through the last day of the month in which such Mortgage
Loans are purchased and/or (c) assume all of the servicing rights and
obligations with respect to such delinquent Mortgage Loans so long as
(i) the Master Servicer has the right to transfer the servicing rights
<PAGE> 67
and obligations of such Mortgage Loans to another servicer and (ii) such
Lowest Class B Owner will service such Mortgage Loans in accordance with
the applicable Selling and Servicing Contract.
REMIC I shall not acquire any real property (or personal property
incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. In the event that REMIC I acquires
any real property (or personal property incident to such real property)
in connection with a default or imminent default of a Mortgage Loan,
such property shall be disposed of by the Master Servicer within three
years after its acquisition by the Master Servicer for REMIC I, unless
the Master Servicer provides to the Trustee an Opinion of Counsel to the
effect that the holding by REMIC I of such Mortgaged Property subsequent
to three years after its acquisition will not result in the imposition
of taxes on "prohibited transactions" of REMIC I as defined in Section
860F of the Code or under the law of any state in which real property
securing a Mortgage Loan owned by REMIC I is located or cause REMIC I to
fail to qualify as a REMIC for federal income tax purposes or for state
tax purposes under the laws of any state in which real property securing
a Mortgage Loan owned by REMIC I is located at any time that any
Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each such property for the
Certificateholders solely for the purpose of its prompt disposition and
sale in a manner which does not cause such property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) or
result in the receipt by the REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code or any
"net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell such
property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such property in
the same manner and to such extent as is customary in the locality where
such property is located and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or
any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the
period prior to the sale of such property. Additionally, the Master
Servicer shall perform the tax withholding and shall file information
returns with respect to the receipt of mortgage interests received in a
trade or business, the reports of foreclosures and abandonments of any
Mortgaged Property and the information returns relating to cancellation
of indebtedness income with respect to any Mortgaged Property 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
<PAGE> 68
Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for any such withholding.
Without limiting the foregoing, the Master Servicer agrees that it will
not withhold with respect to payments of interest or original issue
discount in the case of a Certificateholder that has furnished or caused
to be furnished an effective Form W-8 or an acceptable substitute form
or a successor form and who is not a "10 percent shareholder" within the
meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect to
REMIC I or the Depositor. In the event the Trustee withholds any
amount from interest or original issue discount payments or advances
thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholder.
Section 3.10. Trustee to Cooperate; Release of Mortgage Files. Upon the
Payoff or scheduled maturity of any Mortgage Loan, the Master Servicer
shall cause such final payment to be immediately deposited in the
related Custodial Account for P&I or the Investment Account. Upon notice
thereof, the Master Servicer shall promptly notify the Trustee by a
certification (which certification shall include a statement to the
effect that all amounts received in connection with such payment which
are required to be deposited in either such account have been so
deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the
Trustee shall, not later than the fifth succeeding Business Day, release
the related Mortgage File to the Master Servicer or the applicable
Servicer indicated in such request. With any such Payoff or other final
payment, the Master Servicer is authorized to prepare for and procure
from the trustee or mortgagee under the Mortgage which secured the
Mortgage Note a deed of full reconveyance or other form of satisfaction
or assignment of Mortgage and endorsement of Mortgage Note in connection
with a refinancing covering the Mortgaged Property, which satisfaction,
endorsed Mortgage Note or 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
<PAGE> 69
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, other
than Special Primary Insurance Policies, if required) and shall not be
entitled to reimbursement therefor except as specifically provided in
such Selling and Servicing Contract and not inconsistent with this
Agreement.
Section 3.12. Reports to the Trustee; Certificate Account Statement.
Not later than 15 days after each Distribution Date, the Master Servicer
shall forward a statement, certified by a Servicing Officer, to the
Trustee setting forth the status of the Certificate Account as of the
close of business on such Distribution Date and showing, for the period
covered by such statement, the aggregate of deposits into and
withdrawals from the Certificate Account for each category of deposit
specified in Section 3.04 and each category of withdrawal specified in
Section 3.05, and stating that all distributions required by this
Agreement have been made (or if any required distribution has not been
made, specifying the nature and amount thereof). The Trustee shall make
available such statements to any Certificateholder upon request at the
expense of the Master Servicer. Such statement shall also, to the
extent available, include information regarding delinquencies on the
Mortgage Loans, indicating the number and aggregate Principal Balance of
Mortgage Loans which are one, two, three or more months delinquent, the
number and aggregate Principal Balance of Mortgage Loans with respect to
which foreclosure proceedings have been initiated and the book value of
any Mortgaged Property acquired by the REMIC I Trust Fund through
foreclosure, deed in lieu of foreclosure or other exercise of the REMIC
I Trust Fund's security interest in the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master Servicer
shall deliver to the Trustee, on or before April 30 of each year,
beginning with the first April 30 succeeding the Cut-Off Date by at
least six months, an Officer's Certificate stating as to the signer
thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year and performance under this Agreement
has been made under such officer's supervision, and (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
<PAGE> 70
fulfilled all its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of such statement shall be provided by
the Master Servicer to Certificateholders upon request or by the Trustee
(solely to the extent that such copies are available to the Trustee) at
the expense of the Master Servicer, should the Master Servicer fail to
so provide such copies.
Section 3.14. Access to Certain Documentation and Information Regarding
the Mortgage Loans. In the event that the Certificates are legal for
investment by federally-insured savings associations, the Master
Servicer shall provide to the OTS, the FDIC and the supervisory agents
and examiners of the OTS and the FDIC access to the documentation
regarding the related Mortgage Loans required by applicable regulations
of the OTS or the FDIC, as applicable, and shall in any event provide
such access to the documentation regarding such Mortgage Loans to the
Trustee and its representatives, such access being afforded without
charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer designated by it.
Section 3.15. Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning with the first April 30
succeeding the Cut-Off Date by at least six months, the Master Servicer,
at its expense, shall cause a firm of independent public accountants to
furnish a statement to the Trustee to the effect that, in connection
with the firm's examination of the financial statements as of the
previous December 31 of the Master Servicer's parent corporation (which
shall include a limited examination of the Master Servicer's financial
statements), nothing came to their attention that indicated that the
Master Servicer was not in compliance with Section 3.02, Section 3.03,
Section 3.04, Section 3.05, Section 3.11, Section 3.12 and Section 3.13
of this Agreement, except for (i) such exceptions as such firm believes
to be immaterial, and (ii) such other exceptions as are set forth in
such statement.
Section 3.16. Surety Bonds. In connection with its activities
hereunder, the Master Servicer agrees to present, on behalf of the
Trustee and the Certificateholders, claims to the Surety under the
Surety Bonds, and, in this regard, to take such commercially reasonable
actions as shall be necessary to permit recovery under the Surety Bonds;
provided, however, that nothing in this Section 3.16 shall require the
Master Servicer to make a Nonrecoverable Advance. Promptly after the
Closing Date, the Master Servicer shall make application to the Surety
to provide the Trustee with written confirmation from the Surety that a
beneficial interest in each Surety Bond with respect to the Additional
Collateral Loans has been assigned to the Trustee.
Section 3.17. [Reserved.]
Section 3.18. [Reserved.]
<PAGE> 71
Section 3.19. [Reserved.]
Section 3.20. Assumption or Termination of Selling and Servicing
Contracts by Trustee. In the event the Master Servicer, or any successor
Master Servicer, shall for any reason no longer be the Master Servicer
(including by reason of an Event of Default), the Trustee as trustee
hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under the Selling and Servicing
Contracts with respect to the related Mortgage Loans unless the Trustee
elects to terminate the Selling and Servicing Contracts with respect to
such Mortgage Loans in accordance with the terms thereof. The Trustee,
its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein with
respect to the related Mortgage Loans and to have replaced the Master
Servicer as a party to the Selling and Servicing Contracts to the same
extent as if the rights and duties under the Selling and Servicing
Contracts relating to such Mortgage Loans had been assigned to the
assuming party, except that the Master Servicer shall not thereby be
relieved of any liability or obligations under the Selling and Servicing
Contracts with respect to the Master Servicer's duties to be performed
prior to its termination hereunder.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records
relating to the Selling and Servicing Contracts and the Mortgage Loans
then being master serviced by the Master Servicer and an accounting of
amounts collected and held by the Master Servicer and otherwise use its
best efforts to effect the orderly and efficient transfer of the rights
and duties under the related Selling and Servicing Contracts relating to
such Mortgage Loans to the assuming party.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. Distributions to Certificateholders; Payment of Special
Primary Insurance Premiums.
(a) On each Distribution Date, the Trustee (or any duly appointed
paying agent) shall (i) subject to Section 3.05(a)(viii), withdraw from
the Certificate Account any Special Primary Insurance Premium payable on
such Distribution Date and pay such amount to the insurer under the
applicable Special Primary Insurance Policy and (ii) withdraw from the
Certificate Account (A) the Excess Liquidation Proceeds for such
Distribution Date and distribute such amounts to the Class R
Certificateholders and (B) the Available Distribution Amount for such
Distribution Date and distribute, from the amount so withdrawn, to the
extent of the Available Distribution Amount, the Distribution Amount for
such Distribution Date to the Certificates pursuant to the definition of
"Distribution Amount", all in accordance with the written statement
received from the Master Servicer pursuant to Section 4.02(b), by
(except with respect to any Special Primary Insurance Premiums) wire
<PAGE> 72
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 any Special Primary Insurance Premiums, by means of
payment acceptable to the insurer under the respective Special Primary
Insurance Policy.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all allocations
of Realized Losses made on any Distribution Date shall be binding upon
all Holders of such Certificates and of any Certificates issued upon the
registration of transfer or exchange therefor or in lieu thereof,
whether or not such distribution is noted on such Certificate. The final
distribution of principal of each Certificate (and the final
distribution upon the Class R Certificates upon the termination of REMIC
I) shall be payable in the manner provided above only upon presentation
and surrender thereof on or after the Distribution Date therefor at the
office or agency of the Certificate Registrar specified in the notice
delivered pursuant to Section 4.01(c)(ii) and Section 9.01(b).
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Mortgage Loans and Insurance Proceeds and Liquidation
Proceeds received and expected to be received during the Payoff Period,
the Master Servicer has notified the Trustee that it believes that the
entire remaining unpaid Class Principal Balance of any Class of
Certificates will become distributable on the next Distribution Date,
the Trustee shall, no later than the 18th day of the month of such
Distribution Date, mail or cause to be mailed to each Person in whose
name a Certificate to be so retired is registered at the close of
business on the Record Date and to the Rating Agencies a notice to the
effect that:
it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
if such funds are available, (A) such final distribution will
be payable on such Distribution Date, but only upon presentation
and surrender of such Certificate at the office or agency of the
Certificate Registrar maintained for such purpose (the address of
which shall be set forth in such notice), and (B) no interest shall
accrue on such Certificate after such Distribution Date.
Section 4.02. 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
<PAGE> 73
Certificate Account on account of such payments. The Master Servicer's
obligation to make any advance or advances described in this Section
4.02 is effective only to the extent that such advance is, in the good
faith judgment of the Master Servicer made on or before the Business Day
immediately following the Withdrawal Date, reimbursable from Insurance
Proceeds or Liquidation Proceeds of the related Mortgage Loans or
recoverable as late Monthly Payments with respect to the related
Mortgage Loans or otherwise.
Prior to the close of business on the Business Day immediately
following each Withdrawal Date, the Master Servicer shall determine
whether or not it will make a Monthly P&I Advance on the Business Day
prior to the next succeeding Distribution Date (in the event that the
applicable Servicer fails to make such advances) and shall furnish a
written statement to the Trustee, the Paying Agent, if any, and to any
Certificateholder requesting the same, setting forth the aggregate
amount to be distributed on the next succeeding Distribution Date on
account of principal and interest in respect of the Mortgage Loans,
stated separately. In the event that full scheduled amounts of principal
and interest in respect of the Mortgage Loans shall not have been
received by or on behalf of the Master Servicer prior to such
Determination Date and the Master Servicer shall have determined that a
Monthly P&I Advance shall be made in accordance with this Section 4.02,
the Master Servicer shall so specify and shall specify the aggregate
amount of such advance.
In the event that the Master Servicer shall be required to make a
Monthly P&I Advance, it shall on the Business Day prior to the related
Distribution Date either (i) deposit in the Certificate Account an
amount equal to such Monthly P&I Advance, (ii) make an appropriate entry
in the records of the Certificate Account that funds in such account
being held for future distribution or withdrawal have been, as permitted
by this Section 4.02, used by the Master Servicer to make such Monthly
P&I Advance, or (iii) make advances in the form of any combination of
(i) and (ii) aggregating the amount of such Monthly P&I Advance. Any
funds being held for future distribution to Certificateholders and so
used shall be replaced by the Master Servicer by deposit in the
Certificate Account on the Business Day immediately preceding any future
Distribution Date to the extent that funds in the Certificate Account on
such Distribution Date with respect to the Mortgage Loans shall be less
than payments to Certificateholders required to be made on such date
with respect to the Mortgage Loans. Under each Selling 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
<PAGE> 74
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 Company if the Company is no longer acting as Master Servicer)
with a statement in writing of (1) the amount, as applicable, of (i)
interest, (ii) the interest portion, if any, of Realized Losses, (iii)
Uncompensated Interest Shortfall, (iv) scheduled principal, (v)
Principal Prepayments, (vi) the principal portion of Realized Losses,
(vii) the Residual Distribution Amount and (viii) the Excess Liquidation
Proceeds to be distributed to each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definition of "Distribution Amount," Section 4.01 hereof and other
related definitions set forth in Article I hereof); (2) the applicable
Class Principal Balance after giving effect to such distributions; and
(3) the amount of any Special Primary Insurance Premium payable on such
Distribution Date.
Section 4.03. Nonrecoverable Advances. Any advance previously made by a
Servicer pursuant to its Selling and Servicing Contract with respect to
a Mortgage Loan or by the Master Servicer that the Master Servicer shall
determine in its good faith judgment not to be ultimately recoverable
from Insurance Proceeds or Liquidation Proceeds or otherwise with
respect to such Mortgage Loan or recoverable as late Monthly Payments
with respect to such Mortgage Loan shall be a Nonrecoverable Advance.
The determination by the Master Servicer that it or the applicable
Servicer has made a Nonrecoverable Advance or that any advance would
constitute a Nonrecoverable Advance, shall be evidenced by an Officer's
Certificate of the Master Servicer delivered to the Trustee on the
Determination Date and detailing the reasons for such determination.
Notwithstanding any other provision of this Agreement, any insurance
policy relating to the Mortgage Loans, or any other agreement relating
to the Mortgage Loans to which the Company or the Master Servicer is a
party, (a) the Master Servicer and each Servicer shall not be obligated
to, and shall not, make any advance that, after reasonable inquiry and
in its sole discretion, the Master Servicer or such Servicer shall
determine would be a Nonrecoverable Advance, and (b) the Master Servicer
and each Servicer shall be entitled to reimbursement for any advance as
provided in Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Statements to Certificateholders. With each distribution
from the Certificate Account on a Distribution Date, the Trustee shall
send to each Rating Agency and shall make available to each
Certificateholder the statement required by Section 4.02(b). The Trustee
may make available such statement and certain other information,
including, without limitation, information required to be provided by
<PAGE> 75
the Trustee pursuant to Sections 3.12 and 3.13, to Certificateholders
through the Trustee's Corporate Trust home page on the world wide web.
Such web page is currently located at "corporatetrust.statestreet.com".
Mortgage-Backed Securities information is currently available by
clicking the "Investor Information & Reporting" button and selecting the
appropriate transaction. The location of such web page and the
procedures used therein are subject to change from time to time at the
Trustee's discretion.
Upon request by any Certificateholder or Rating Agency or the
Trustee, the Master Servicer shall forward to such Certificateholder or
Rating Agency and the Trustee and the Company (if the Company is no
longer acting as Master Servicer) an additional report which sets forth
with respect to the Mortgage Loans:
(a) The number and aggregate Principal Balance of the
Mortgage Loans delinquent one, two and three months or more;
(b) The (i) number and aggregate Principal Balance of
Mortgage Loans with respect to which foreclosure proceedings have
been initiated, and (ii) the number and aggregate book value of
Mortgaged Properties acquired through foreclosure, deed in lieu of
foreclosure or other exercise of rights respecting the Trustee's
security interest in the Mortgage Loans;
(c) The amount of the Special Hazard Coverage available to
the Senior Certificates remaining as of the close of business on
the applicable Determination Date;
(d) The amount of the Bankruptcy Coverage available to the
Senior Certificates remaining as of the close of business on the
applicable Determination Date;
(e) The amount of the Fraud Coverage available to the Senior
Certificates remaining as of the close of business on the
applicable Determination Date; and
(f) The cumulative amount of Realized Losses allocated to the
Certificates since the Cut-Off Date.
Upon request by any Certificateholder, the Master Servicer, as soon
as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and appropriate,
in the Master Servicer's sole discretion, for purposes of satisfying
applicable reporting requirements under Rule 144A of the Securities Act.
The Company may make available any reports, statements or other
information to Certificateholders through the Company's home page on the
world wide web. Such web page is located at "www.pncmsc.com" and
information is available by clicking on "Investor Information."
ARTICLE V
<PAGE> 76
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the forms set forth
in Exhibit A with the additional insertion from Exhibit H attached
hereto, and shall be executed by the Trustee, authenticated by the
Trustee (or any duly appointed Authenticating Agent) and delivered (i)
upon and pursuant to the order of the Company and (ii) upon receipt by
the Trustee of the documents specified in Section 2.01. The Certificates
shall be issuable in Authorized Denominations evidencing Percentage
Interests. Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by authorized officers of the
Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication
and delivery of such Certificates or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by the Trustee or
any Authenticating Agent by manual signature, and such certificate upon
any Certificate shall be conclusive evidence, and the only evidence,
that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
(b) The following definitions apply for purposes of this Section
5.01: "Disqualified Organization" means any Person which is not a
Permitted Transferee, but does not include any "Pass-Through Entity"
which owns or holds a Residual Certificate and of which a Disqualified
Organization, directly or indirectly, may be a stockholder, partner or
beneficiary; "Pass-Through Entity" means any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust or estate, and any organization to which Section 1381 of the Code
applies; "Ownership Interest" means, with respect to any Residual
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the
Holder thereof and any other interest therein whether direct or
indirect, legal or beneficial, as owner or as pledgee; "Transfer" means
any direct or indirect transfer or sale of, or directly or indirectly
transferring or selling any Ownership Interest in a Residual
Certificate; and "Transferee" means any Person who is acquiring by
Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificates to
Disqualified Organizations are set forth in this Section 5.01(c).
Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or
<PAGE> 77
acquisition of such Ownership Interest to have agreed to be bound
by the following provisions and to have irrevocably authorized the
Trustee or its designee under clause (iii)(A) below to deliver
payments to a Person other than such Person and to negotiate the
terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of transfer and to do all other things
necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Residual Certificate
are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate to a U.S. Person,
the Trustee shall require delivery to it, and shall not
register the Transfer of any Residual Certificate until its
receipt of (1) an affidavit and agreement (a "Transferee
Affidavit and Agreement") attached hereto as Exhibit J from
the proposed Transferee, in form and substance satisfactory to
the Company, representing and warranting, among other things,
that it is not a Non-U.S. Person, that such transferee is a
Permitted Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of
the proposed Transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee, that for so long as
it retains its Ownership Interest in a Residual Certificate,
it will endeavor to remain a Permitted Transferee, and that it
has reviewed the provisions of this Section 5.01(c) and agrees
to be bound by them, and (2) a certificate, attached hereto as
Exhibit I, from the Holder wishing to transfer the Residual
Certificate, in form and substance satisfactory to the
Company, representing and warranting, among other things, that
no purpose of the proposed Transfer is to allow such Holder to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee
Affidavit and Agreement by a proposed 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
<PAGE> 78
consent of the Company prior to any transfer of such Ownership
Interest, which consent may be withheld in the Company's sole
discretion; and (iii) to provide a certificate to the Trustee
in the form attached hereto as Exhibit I.
The Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit
and Agreement, a certificate of the Holder requesting such transfer
in the form attached hereto as Exhibit J and all of such other
documents as shall have been reasonably required by the Trustee as
a condition to such registration.
(A) If any "disqualified organization" (as defined in Section
860E(e)(5) of the Code) shall become a holder of a Residual
Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Residual
Certificate. If any Non-U.S. Person shall become a holder of a
Residual Certificate, then the last preceding holder which is
a U.S. Person shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof
retroactive to the date of registration of the Transfer to
such Non-U.S. Person of such Residual Certificate. If a
transfer of a Residual Certificate is disregarded pursuant to
the provisions of Treasury Regulations Section 1.860E-1 or
Section 1.860G-3, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Residual
Certificate. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual
Certificate that 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),
<PAGE> 79
expenses and taxes due, if any, shall be remitted by the
Company to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Company, and the Company shall not
be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
The Company, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary to
compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is
not a Permitted Transferee, including the information regarding
"excess inclusions" of such Residual Certificates required to be
provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulation Section 1.860D-1(b)(5), and (B) as
a result of any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate or
organizations described in Section 1381 of the Code having as among
its record holders at any time any Person who is not a Permitted
Transferee. Reasonable compensation for providing such information
may be required by the Company from such Person.
The provisions of this Section 5.01 set forth prior to this
Section (v) may be modified, added to or eliminated by the Company
and the Trustee, provided that there shall have been delivered to
the Trustee the following:
(A) written notification from each of the Rating
Agencies to the effect that the modification, addition to or
elimination of such provisions will not cause such Rating
Agency to downgrade its then-current Ratings of the
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Company (as evidenced by a certificate of
the Company), to the effect that such modification, addition
to or absence of such provisions will not cause REMIC I to
cease to qualify as a REMIC and will not create a risk that
(1) REMIC I may be subject to an entity-level tax caused by
the Transfer of any Residual Certificate to a Person which is
not a Permitted Transferee or (2) a Certificateholder or
another Person will be subject to a REMIC-related tax caused
by the Transfer of a Residual Certificate to a Person which is
not a Permitted Transferee.
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
<PAGE> 80
IS NOT EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE
TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION
DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
The Tax Matters Person for REMIC I, while not a Disqualified
Organization, shall be the tax matters person for REMIC I within
the meaning of Section 6231(a)(7) of the Code and Treasury
Regulation Section 1.860F-4(d).
(d) In the case of any ERISA Restricted Certificate presented for
registration in the name of any Person, the Trustee shall require either
(i) an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company to the effect that the
purchase or holding of an ERISA Restricted Certificate is permissible
under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code, and will not subject the Trustee, the Master Servicer or the
Company to any obligation or liability (including obligations or
liabilities under Section 406 of ERISA or Section 4975 of the Code) in
addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Master Servicer or the
Company or (ii) only in the case of an ERISA Restricted Certificate that
is not a Residual Certificate, an officer's certificate substantially in
the form of Exhibit N attached hereto acceptable to and in form and
substance satisfactory to the Trustee and the Company, which officer's
certificate shall not be an expense of the Trustee, the Master Servicer
or the Company.
(e) No transfer, sale, pledge or other disposition of a Junior
Subordinate Certificate shall be made unless such transfer, sale, pledge
or other disposition is made in accordance with this Section 5.01(e) or
<PAGE> 81
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
transfer may be made without registration, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the REMIC I Trust
Fund or the Company. Such Opinion of Counsel shall allow for the
forwarding, and the Trustee shall forward, a copy thereof to the 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
<PAGE> 82
Trustee or the Company with Annex 1 or Annex 2 to the form of Exhibit L
attached hereto if the Company so consents prior to each such transfer.
Such transfers shall be deemed to have complied with the requirements of
this Section 5.01(f). The Holder of a Certificate desiring to effect
such transfer does hereby agree to indemnify the Trustee, the Company,
and the Certificate Registrar against any liability that may result if
transfer is not made in accordance with this Agreement.
Section 5.02. Certificates Issuable in Classes; Distributions of
Principal and Interest; Authorized Denominations. The aggregate
principal amount of the Certificates that may be authenticated and
delivered under this Agreement is limited to the aggregate Principal
Balance of the Mortgage Loans as of the Cut-Off Date, as specified in
the Preliminary Statement to this Agreement, except for Certificates
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section
5.03. Such aggregate principal amount shall be allocated among one or
more Classes having designations, types of interests, initial per annum
Certificate Interest Rates, initial Class Principal Balances and Final
Maturity Dates as specified in the Preliminary Statement to this
Agreement. The aggregate Percentage Interest of each Class of
Certificates of which the Class Principal Balance equals zero as of the
Cut-Off Date that may be authenticated and delivered under this
Agreement is limited to 100%. Certificates shall be issued in Authorized
Denominations.
Section 5.03. Registration of Transfer and Exchange of Certificates.
The Trustee shall cause to be maintained at one of its offices or at its
designated agent, a Certificate Register in which there shall be
recorded the name and address of each Certificateholder. Subject to such
reasonable rules and regulations as the Trustee may prescribe, the
Certificate Register shall be amended from time to time by the Trustee
or its agent to reflect notice of any changes received by the Trustee or
its agent pursuant to Section 10.06. The Trustee hereby appoints itself
as the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate to
the Trustee at the Corporate Trust Office of the Trustee or at the
office of State Street Bank and Trust Company, N.A., 61 Broadway, New
York, New York 10006, 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
<PAGE> 83
Certificate presented or surrendered for transfer shall (if so required
by the Trustee or any Authenticating Agent) be duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to
the Trustee or any Authenticating Agent and duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be
cancelled by the Trustee or any Authenticating Agent.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate is surrendered to the Trustee or any
Authenticating Agent, or (ii) the Trustee or any Authenticating Agent
receives evidence to their satisfaction of the destruction, loss or
theft of any Certificate, and there is delivered to the Trustee or any
Authenticating Agent such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to
the Trustee or any Authenticating Agent that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.04, the Trustee or
any Authenticating Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses
of the Trustee or any Authenticating Agent) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in the REMIC
I Trust Fund as if originally issued, whether or not the lost or stolen
Certificate shall be found at any time.
Section 5.05. Persons Deemed Owners. The Company, the Master Servicer,
the Trustee and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.01 and for
all other purposes whatsoever, and neither the Company, the Master
Servicer, the Trustee, the Certificate Registrar nor any agent of the
Company, the Master Servicer or the Trustee shall be affected by notice
to the contrary.
Section 5.06. Temporary Certificates. Upon the initial issuance of the
Certificates, the Trustee may execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver, temporary
Certificates which are printed, lithographed, typewritten or otherwise
produced, in any Authorized Denomination, of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations
in form from the forms of the Certificates set forth as Exhibits A and H
<PAGE> 84
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
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
<PAGE> 85
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
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
<PAGE> 86
aggregating not less than 66% of the aggregate Class Principal Balance
of such Certificates advise the Trustee and the Clearing Agency through
DTC Participants in writing that the continuation of a book-entry system
with respect to the Book-Entry Certificates through the Clearing Agency
is no longer in the best interests of the Certificateholders with
respect to such Certificates, the Trustee shall notify all
Certificateholders of Book-Entry Certificates of the occurrence of any
such event and of the availability of Definitive Certificates. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall execute and the Trustee or
any Authenticating Agent shall authenticate and deliver the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for all of
the Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon
and performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates, and the Trustee shall recognize the
Holders of Definitive Certificates as Certificateholders hereunder.
Section 5.10. Office for Transfer of Certificates. The Trustee shall
maintain in Massachusetts and in New York, New York, an office or agency
where Certificates may be surrendered for registration of transfer or
exchange. The Corporate Trust Office and State Street Bank and Trust
Company, N.A., 61 Broadway, New York, NY 10006, Attention: Corporate
Trust Window are initially designated for said purposes.
ARTICLE VI
The Company and the Master Servicer
Section 6.01. Liability of the Company and the Master Servicer. The
Company and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and
undertaken by the Company or the Master Servicer, as applicable, herein.
Section 6.02. Merger or Consolidation of the Company, or the Master
Servicer. Any corporation into which the Company or the Master Servicer
may be merged or consolidated, or any corporation 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
<PAGE> 87
REMIC I Trust Fund or the Certificateholders for any action taken by
such Person or by a Servicer or for such Person's or Servicer's
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company, the Master Servicer or any such
Person against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of duties and obligations
hereunder. The Company, the Master Servicer and any director, officer,
employee or agent of the Company or the Master Servicer may rely in good
faith on any document of any kind properly executed and submitted by any
Person respecting any matters arising hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the Company or
the Master Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense relating to any Mortgage Loan
(other than as otherwise permitted in this Agreement) or incurred by
reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. The Company and the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability; provided, however,
that the Company or the Master Servicer may in its discretion undertake
any such action which it may deem necessary or desirable with respect to
the Mortgage Loans, this Agreement, the Certificates or the rights and
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
<PAGE> 88
Company of any information received by such successor Master Servicer
which affects or relates to an ongoing obligation or right of the
Company under this Agreement.
Section 6.05. Trustee Access. The Master Servicer shall afford the
Company and the Trustee, upon reasonable notice, during normal business
hours access to all records maintained by the Master Servicer, in
respect of its rights and obligations hereunder and access to such of
its officers as are responsible for such obligations. Upon reasonable
request, the Master Servicer, shall furnish the Company and the Trustee
with its most recent financial statements (or, for so long as the
Company is the Master Servicer, the most recent consolidated financial
statements for the Company appearing in the audited financial statements
of PNC Bank Corp., or the entity with whose financial statements the
financial statements of the Company are consolidated) and such other
information as it possesses, and which it is not prohibited by law or,
to the extent applicable, binding obligations to third parties with
respect to confidentiality from disclosing, regarding its business,
affairs, property and condition, financial or otherwise.
ARTICLE VII
Default
Section 7.01. Events of Default. (a) In case one or more of the
following Events of Default by the Master Servicer or by a successor
Master Servicer shall occur and be continuing, that is to say:
Any failure by the Master Servicer to deposit into the
Certificate Account any payment required to be deposited therein by
the Master Servicer under the terms of this Agreement which
continues unremedied for a period of ten days after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Percentage Interests aggregating not less
than 25% of the REMIC I Trust Fund; or
Failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Master Servicer contained in the
Certificates or in this Agreement which continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Trustee, or to the Master Servicer
and the Trustee by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC I
Trust Fund; or
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
<PAGE> 89
in any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days;
or
The Master Servicer shall consent to the appointment of a
trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its
property; or
The Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
Any failure of the Master Servicer to make any Monthly P&I
Advance (other than a Nonrecoverable Advance) which continues
unremedied at the opening of business on the Distribution Date in
respect of which such Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, either the Trustee, or the Holders of
Certificates evidencing Percentage Interests aggregating not less than
25% of the REMIC I Trust Fund, by notice in writing to the Company and
the Master Servicer (and to the Trustee if given by the
Certificateholders, in which case such notice shall set forth evidence
reasonably satisfactory to the Trustee that such Event of Default has
occurred and shall not have been remedied) may terminate all of the
rights (other than its right to reimbursement for advances) and
obligations of the Master Servicer, including its right to the Master
Servicing Fee, under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, if any. Such determination shall be final and
binding. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section 7.01; and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all documents
and other 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
<PAGE> 90
credited by the Master Servicer to the Certificate Account or thereafter
be received with respect to the Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default described in
clause (vi) of this Section 7.01(a) shall occur, the Trustee shall, by
notice in writing to the Master Servicer, which may be delivered by
telecopy, immediately suspend all of the rights and obligations of the
Master Servicer thereafter arising under this Agreement, but without
prejudice to any rights it may have as a Certificateholder or to
reimbursement of Monthly P&I Advances and other advances of its own
funds, and the Trustee shall act as provided in Section 7.02 to carry
out the duties of the Master Servicer, including the obligation to make
any Monthly P&I Advance the nonpayment of which was an Event of Default
described in clause (vi) of this Section 7.01(a). Any such action taken
by the Trustee must be prior to the distribution on the relevant
Distribution Date. If the Master Servicer shall within two Business Days
following such suspension remit to the Trustee the amount of any Monthly
P&I Advance the nonpayment of which by the Master Servicer was an Event
of Default described in clause (vi) of this Section 7.01(a), the
Trustee, subject to the last sentence of this paragraph, shall permit
the Master Servicer to resume its rights and obligations as Master
Servicer hereunder. The Master Servicer agrees that it will reimburse
the Trustee for actual, necessary and reasonable costs incurred by the
Trustee because of action taken pursuant to clause (vi) of this Section
7.01(a). The Master Servicer agrees that if an Event of Default as
described in clause (vi) of this Section 7.01(a) shall occur more than
two times in any twelve month period, the Trustee shall be under no
obligation to permit the Master Servicer to resume its rights and
obligations as Master Servicer hereunder.
(b) In case one or more of the following Events of Default by the
Company shall occur and be continuing, that is to say:
(i) Failure on the part of the Company duly to observe or perform in
any material respect any of the covenants or agreements on the part of
the Company contained in the Certificates or in this Agreement which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Trustee, or to the Company and the
Trustee by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC I Trust Fund; or
A decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment
of a trustee in bankruptcy, conservator or receiver or liquidator
in any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Company and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
The Company shall consent to the appointment of a trustee in
<PAGE> 91
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
The Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of
creditors, or voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC I Trust
Fund, by notice in writing to the Company and the Trustee, may direct
the Trustee in accordance with Section 10.03 to institute an action,
suit or proceeding in its own name as Trustee hereunder to enforce the
Company's obligations hereunder.
(c) In any circumstances in which this Agreement states that
Certificateholders owning Certificates evidencing a certain percentage
Percentage Interest in the REMIC I Trust Fund may take certain action,
such action shall be taken by the Trustee, but only if the requisite
percentage of Certificateholders required under this Agreement for
taking like action or giving like instruction to the Trustee under this
Agreement shall have so directed the Trustee in writing.
Section 7.02. Trustee to Act; Appointment of Successor. On and after
the time the Master Servicer receives a notice of termination pursuant
to Section 7.01, the Trustee shall be the successor in all respects to
the Master Servicer under this Agreement and under the Selling and
Servicing Contracts with respect to the Mortgage Loans in the Mortgage
Pool and with respect to the transactions set forth or provided for
herein and shall have all the rights and powers and be subject to all
the responsibilities, duties and liabilities relating thereto arising
after the Master Servicer receives such notice of termination placed on
the Master Servicer by the terms and provisions hereof and thereof, and
shall have the same limitations on liability herein granted to the
Master Servicer; provided, that the Trustee shall not under any
circumstances be responsible for any representations and warranties or
any Purchase Obligation of the Company or any liability incurred by the
Master Servicer at or prior to the time the Master Servicer was
terminated as Master Servicer and the Trustee shall not be obligated to
make a Monthly P&I Advance if it is prohibited by law from so doing. As
compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to retain or to withdraw from the Certificate Account if the
Master Servicer had continued to act hereunder, except for those amounts
due to the Master Servicer as reimbursement for advances previously made
or amounts previously expended and are otherwise reimbursable hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to
<PAGE> 92
so act, or shall if it is unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established housing and home
finance institution having a net worth of not less than $10,000,000 as
the successor to the Master Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending any such appointment, the Trustee is
obligated to act in such capacity. In connection with such appointment
and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it
and such successor shall agree; provided, however, that no such
compensation shall, together with the compensation to the Trustee, be in
excess of that permitted the Master Servicer hereunder. The Trustee and
such successor shall take such actions, consistent with this Agreement,
as shall be necessary to effectuate any such succession.
Section 7.03. Notification to Certificateholders. Upon any such
termination or appointment of a successor to the Master Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
ARTICLE VIII
Concerning the Trustee
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default
has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Agreement,
and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that the Trustee shall not be responsible for the
accuracy or content of any such certificate, statement, opinion, report,
or other order or instrument furnished by the Company or Master Servicer
to the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided,
however, that:
Prior to the occurrence of an Event of Default and after the
<PAGE> 93
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement,
the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement; and
The Trustee shall not be personally liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence Percentage Interests aggregating not
less than 25% of the REMIC I Trust Fund relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or relating to the exercise of any trust
or power conferred upon the Trustee under this Agreement.
(d) Within ten 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) The Trustee acknowledges that it is named as the "insured"
under the Surety Bonds and acknowledges that the Master Servicer has
agreed, pursuant to Section 3.16 hereof, to perform the obligations of
the Trustee under the Surety Bonds on behalf of the Trustee. Each of
the Trustee and the Master Servicer hereby covenants not to cancel the
Surety Bonds until the Trust Fund is terminated in accordance with the
provisions hereof.
Section 8.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
The Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
<PAGE> 94
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party
or parties;
The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel;
The Trustee shall not be personally liable for any action
taken or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred,
the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in
writing to do so by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC I
Trust Fund; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security, if any, afforded to it by
the terms of this Agreement, the Trustee may require reasonable
indemnity against such expense or liability as a condition to
proceeding;
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;
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;
In no event shall the Trustee be held liable for acts or
omissions of the Master Servicer (excepting the Trustee's own
actions as Master Servicer). No provision of this Agreement shall
require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder (except for the giving of required notices), or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
<PAGE> 95
assured to it; and
When the Trustee is acting as Master Servicer pursuant to
Section 7.02, and to the extent permitted under applicable law, the
Trustee is hereby authorized, in making or disposing of any
investment permitted hereunder, to deal with itself (in its
individual capacity) or with any one or more of its affiliates,
whether it or its affiliate is acting as an agent of the Trustee or
of any third person or dealing as principal for its own account.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein (other than those relating to the due
organization, power and authority of the Trustee) and in the
Certificates (other than the execution of, and certificate of
authentication on, the Certificates) shall be taken as the statements of
the Company and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or any Mortgage
Loan. The Trustee shall not be accountable for the use or application by
the Company of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the
Master Servicer, the Servicers or the Company in respect of the Mortgage
Loans or deposited into the Custodial Accounts for P&I, any Buydown Fund
Account, or the Custodial Accounts for P&I by any Servicer or into the
Investment Account, or the Certificate Account by the Master Servicer or
the Company.
Section 8.04. Trustee May Own Certificates. The Trustee or any agent or
affiliate of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Certificates with the same rights it
would have if it were not Trustee.
Section 8.05. The Master Servicer to Pay Trustee's Fees and Expenses.
Subject to 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 required to be
prepared or filed by the Trustee and shall indemnify the Trustee for any
<PAGE> 96
liability of the Trustee arising from any error in such returns.
Section 8.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC,
(ii) a corporation or association organized and doing business under the
laws of the United States of America or of any state, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of
any aforementioned supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Master Servicer. Upon receiving
such notice of resignation, the Master Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Master Servicer, or 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 I Trust Fund may at any time
remove the Trustee and appoint a successor trustee by written instrument
or instruments, in triplicate, signed by such Holders or their attorneys
in-fact duly authorized, one complete set of which instruments shall be
delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a
<PAGE> 97
successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08. Any expenses associated with the
resignation of the Trustee shall be borne by the Trustee, and any
expenses associated with the removal of the Trustee shall be borne by
the Master Servicer.
Section 8.08. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Master Servicer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein. The predecessor shall deliver to the successor trustee
all Mortgage Files, related documents, statements and all other property
held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such appointment such successor
trustee shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to (i) all Certificateholders at
their addresses as shown in the Certificate Register and (ii) the Rating
Agencies. If the Master Servicer fails to mail such notice within ten
days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed.
Section 8.09. Merger or Consolidation of Trustee. Any corporation or
association into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided
such resulting or successor corporation shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which
any part of the REMIC I Trust Fund may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
<PAGE> 98
approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or
any part of the REMIC I Trust Fund and to vest in such Person or
Persons, in such capacity, such title to the REMIC I Trust Fund, or any
part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable; provided,
that the Trustee shall remain liable for all of its obligations and
duties under this Agreement. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default shall have occurred and
be continuing, the Trustee alone shall have the power to make such
appointment; provided, that the Trustee shall remain liable for all of
its obligations and duties under this Agreement. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no
notice to Certificateholders of the appointment of co-trustee(s) or
separate trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly and severally, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the REMIC I Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee
or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustee(s) and co-
trustee(s), as effectively as if given to each of them. Every instrument
appointing any separate trustee(s) or co-trustee(s) shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and the
<PAGE> 99
trust shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or
more Authenticating Agents which shall be authorized to act on behalf of
the Trustee in authenticating Certificates. Wherever reference is made
in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent must be acceptable to the Master Servicer and must be a
corporation, trust company or banking association organized and doing
business under the laws of the United States of America or of any state,
having a principal office and place of business in New York, New York or
a principal office and place of business in Boston, Massachusetts and a
place of business in New York, New York, having a combined capital and
surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by federal or
state authorities.
Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency business of any Authenticating Agent, shall
continue to be the Authenticating Agent so long as it shall be eligible
in accordance with the provisions of the first paragraph of this Section
8.11 without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Master Servicer. The
Trustee may, upon prior written approval of the Master Servicer, at any
time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Master
Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease
to be eligible in accordance with the provisions of the first paragraph
of this Section 8.11, the Trustee may appoint, upon prior written
approval of the Master Servicer, a successor Authenticating Agent, shall
give written notice of such 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
<PAGE> 100
making withdrawals from the Certificate Account, and distributions to
Certificateholders as provided in Section 4.01(a) and Section 9.01(b) to
the extent directed to do so by the Master Servicer. Wherever reference
is made in this Agreement to the withdrawal from the Certificate Account
by the Trustee, such reference shall be deemed to include such a
withdrawal on behalf of the Trustee by a Paying Agent. Whenever
reference is made in this Agreement to a distribution by the Trustee or
the furnishing of a statement to Certificateholders by the Trustee, such
reference shall be deemed to include such a distribution or furnishing
on behalf of the Trustee by a Paying Agent. Each Paying Agent shall
provide to the Trustee such information concerning the Certificate
Account as the Trustee shall request from time to time. Each Paying
Agent must be reasonably acceptable to the Master Servicer and must be a
corporation, trust company or banking association organized and doing
business under the laws of the United States of America or of any state,
having a principal office and place of business in New York, New York 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.
<PAGE> 101
ARTICLE IX
Termination
Section 9.01. Termination Upon Repurchase by the Company or Liquidation
of All Mortgage Loans.
(a) Except as otherwise set forth in this Article IX, including,
without limitation, the obligation of the Master Servicer to make
payments to Certificateholders as hereafter set forth, the respective
obligations and responsibilities of the Company, the Master Servicer and
the Trustee created hereby shall terminate upon (i) the purchase or
repurchase by the Company pursuant to the following paragraph of this
Section 9.01(a) of all Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund at a price
equal, after the deduction of related advances, to the sum of (x) the
excess of (A) 100% of the aggregate outstanding Principal Balance of
such Mortgage Loans (other than Liquidated Mortgage Loans) plus accrued
interest at the applicable Pass-Through Rate with respect to such
Mortgage Loan (other than a Liquidated Mortgage Loan) through the last
day of the month of such purchase or repurchase, over (B) with respect
to any Mortgage Loan which is not a Liquidated Mortgage Loan, the amount
of the Bankruptcy Loss incurred with respect to such Mortgage Loan as of
the date of such purchase or repurchase by the Company to the extent
that the Principal Balance of such Mortgage Loan has not been previously
reduced by such Bankruptcy Loss, and (y) the appraised fair market value
as of the 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
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.
On any Distribution Date after the first date on which the
aggregate Principal Balance of the Mortgage Loans is less than the Clean-
Up Call Percentage of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date, the 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.
If such right is exercised, the Company shall provide to the Trustee
(and to the Master Servicer, if the Company is no longer acting as
Master Servicer) the written certification of an officer of the Company
(which certification shall include a statement to the effect that all
<PAGE> 102
amounts required to be paid in order to purchase or repurchase the
Mortgage Loans have been deposited in the Certificate Account) and the
Trustee shall promptly execute all instruments as may be necessary to
release and assign to the Company the Mortgage Files and any foreclosed
Mortgaged Property pertaining to the Trust Fund.
In no event shall the Company be required to expend any amounts
other than those described in the first paragraph of this Section
9.01(a) in order to terminate the Trust Fund or purchase or repurchase
the Mortgage Loans under this Section 9.01.
(b) Notice of any termination, specifying the date upon which the
Certificateholders may surrender their Certificates to the Trustee for
payment and cancellation, shall be given promptly by letter from the
Trustee to Certificateholders mailed not less than 30 days prior to such
final distribution, specifying (i) the date upon which final payment of
the Certificates will be made upon presentation and surrender of
Certificates at the office of 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 shall be terminated in
accordance with the following additional requirements, unless the
Company, at its own expense, obtains for the Trustee an Opinion of
Counsel to the effect that the failure of the REMIC I Trust Fund to
comply with the requirements of this Section 9.02 will not (i) result in
the imposition of taxes on "prohibited transactions" of the REMIC I
Trust Fund as described in Section 860F of the Code, or (ii) cause the
REMIC I Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
<PAGE> 103
Within 90 days prior to the final Distribution Date set forth
in the notice given by the Trustee under Section 9.01, the Tax
Matters Person shall prepare the documentation required and the Tax
Matters Person and the Trustee shall adopt a plan of complete
liquidation on behalf of the REMIC I Trust Fund meeting the
requirements of a qualified liquidation under Section 860F of the
Code and any regulations thereunder, as evidenced by an Opinion of
Counsel obtained at the expense of the Company, on behalf of the
REMIC I Trust Fund; and
At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the
Master Servicer as agent of the Trustee shall sell all of the
assets of the REMIC I Trust Fund to the Company for cash in the
amount specified in Section 9.01.
(b) By its acceptance of any Residual Certificate, the Holder
thereof hereby agrees to authorize the Tax Matters Person and the
Trustee to adopt such a plan of complete liquidation upon the written
request of the Tax Matters Person and the Trustee and to take such other
action in connection therewith as may be reasonably requested by the Tax
Matters Person or the Trustee.
Section 9.03. Trusts Irrevocable. Except as expressly provided herein,
the trusts created hereby are irrevocable.
ARTICLE X
Miscellaneous Provisions
Section 10.01. Amendment.
(a) This Agreement may be amended from time to time by the Master
Servicer, the Company and the Trustee, without the consent of any of the
Certificateholders: (i) to cure any ambiguity; (ii) to correct or
supplement any provision herein which may be defective or inconsistent
with any other provisions herein; (iii) to comply with any requirements
imposed by the Code or any regulations thereunder; (iv) to correct the
description of any property at any time included in the REMIC I Trust
Fund, or to assure the conveyance to the Trustee of any property
included in the REMIC I Trust Fund; and (v) pursuant to Section
5.01(c)(v). No such amendment (other than one entered into pursuant to
clause (iii) of the preceding sentence) shall adversely affect in any
material respect the interest of any Certificateholder. Prior to
entering into any amendment without the consent of Certificateholders
pursuant to this paragraph, the Trustee may require an Opinion of
Counsel to the effect that such amendment is permitted under this
paragraph. The placement of an "original issue discount" legend on, or
any change required to correct any such legend previously placed on a
Certificate shall not be deemed any amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
<PAGE> 104
Master Servicer, the Company and the Trustee with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not
less than 66% of the REMIC I Trust Fund for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the
provisions of, this Agreement or of modifying in any manner the rights
of the Certificateholders; provided, however, that no such amendment
shall, without the consent of the Holder of each Certificate affected
thereby (i) reduce in any manner the amount of, or delay the timing of,
distributions of principal or interest required to be made hereunder or
reduce the Certificateholder's Percentage Interest, the Certificate
Interest Rate or the Termination Payment with respect to any of the
Certificates, (ii) reduce the percentage of Percentage Interests
specified in this Section 10.01 which are required to amend this
Agreement, (iii) create or permit the creation of any lien against any
part of the REMIC I Trust Fund, or (iv) modify any provision in any way
which would permit an earlier retirement of the Certificates.
Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to
each Certificateholder. Any failure to provide such notice, or any
defect therein, shall not, however, in any way impair or affect the
validity of any such amendment.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 10.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all
appropriate public offices for real property records in all the counties
or the comparable jurisdictions in which any Mortgaged Property is
situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Company and at its
expense on direction by the Trustee, but only upon direction accompanied
by an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
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 or the REMIC I Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a
partition or winding-up of the REMIC I Trust Fund, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of
them.
<PAGE> 105
No Certificateholder shall have any right to vote or in any manner
otherwise to control the operation and management of the REMIC I Trust
Fund or the obligations of the parties hereto (except as provided in
Section 5.09, Section 7.01, Section 8.01, Section 8.02, Section 8.07,
Section 10.01 and this Section 10.03), nor shall anything herein set
forth, or contained in the terms of the Certificates, be construed so as
to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
of any provision of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee
a written notice of default and of the continuance thereof, as
hereinbefore provided, and unless also the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of the
REMIC I Trust Fund shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities
to be incurred therein or thereby, and the Trustee, for 60 days after
its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding.
However, the Trustee is under no obligation to exercise any of the
extraordinary trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby. It is understood and intended, and
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates,
or to obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at
law or in equity.
Section 10.04. Access to List of Certificateholders. The Certificate
Registrar shall furnish or cause to be furnished to the Trustee, within
30 days after receipt of a request by the Trustee in writing, a list, in
such form as the Trustee may reasonably require, of the names and
addresses of the Certificateholders as of the most recent Record Date
for payment of distributions to such Certificateholders.
<PAGE> 106
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
Servicer in writing by the Trustee, (c) in the case of the Certificate
Registrar, at its Corporate Trust Office, or such other address as may
hereafter be furnished to the Trustee in writing by the Certificate
Registrar, (d) in the case of S&P, 55 Water Street, 41st Floor, New
York, New York 10041-0003, Attention: Frank Raiter, or such other
address as may hereafter be furnished to the Trustee and Master Servicer
in writing by S&P and (e) in the case of Fitch, 1 State Street Plaza,
New York, New York 10004, Attention: Glenn Costello, or such other
address as may hereafter be furnished to the Trustee and Master Servicer
in writing by Fitch. 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
<PAGE> 107
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:
the occurrence of an Event of Default pursuant to Section
7.01, subject to the provisions of Section 8.01(d);
the appointment of a successor Master Servicer pursuant to
Section 7.02;
(b) The Master Servicer shall notify the Rating Agencies of the
occurrence of any of the following events, or in the case of clauses
(iii), (iv), (vii) and (viii) promptly upon receiving notice thereof, in
the manner provided in Section 10.06:
(i) any amendment of this Agreement pursuant to Section 10.01;
the appointment of a successor Trustee pursuant to Section
8.08;
the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions coverage
pursuant to Section 3.01 and Section 3.06 with respect to the
Master Servicer or any Servicer;
<PAGE> 108
any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
the purchase or repurchase of any Mortgage Loan pursuant to a
Purchase Obligation or as permitted by this Agreement or the
purchase or repurchase of the outstanding Mortgage Loans pursuant
to Section 9.01;
the occurrence of the final Distribution Date or the
termination of the trust pursuant to Section 9.01(a)(ii);
the failure of the Master Servicer to make a Monthly P&I
Advance following a determination on the Determination Date that
the Master Servicer would make such advance pursuant to Section
4.02; and
the failure of the Master Servicer to make a determination on
the Determination Date regarding whether it would make a Monthly
P&I Advance when a shortfall exists between (x) payments scheduled
to be received in respect of the Mortgage Loans and (y) the amounts
actually deposited in the Certificate Account on account of such
payments, pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements pursuant to
Section 4.02, Section 4.06, Section 3.12, Section 3.13 or Section 3.15
or any other statements or reports to the Rating Agencies in such time
and manner that such statements or determinations are required to be
provided to Certificateholders. With respect to the reports described in
the second paragraph of Section 4.05, the Master Servicer shall provide
such reports to the Rating Agencies in respect of each Distribution
Date, without regard to whether any Certificateholder or the Trustee has
requested such report for such Distribution Date.
IN WITNESS WHEREOF1, the Company and the Trustee have caused their
names to be signed hereto by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
PNC MORTGAGE SECURITIES CORP.
By: /s/ Michael A. Aaknes
---------------------
Michael A. Aaknes
Its: Vice President
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ David Duclos
----------------
<PAGE> 109
David Duclos
Its: Vice President
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 28th ay of July, 2000 before me, a Notary Public in and for
said State personally appeared Michael A. Aaknes, 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.
/s/Laura A. Kelsey
--------------------
Notary Public
(Seal)
CERTIFICATE OF ACKNOWLEDGEMENT
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 28th day of July, 2000, before me, a Notary Public in and
for said State, personally appeared David Duclos, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/Kim R. Holland (SEAL)
------------------
Exhibit A
CUSIP 69348R ZA7
<PAGE> 110
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-1
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
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 2000-5 Portion of the Class A-1
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$262,931,000.00
Class A-1 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class A-1 Principal Balance
as of the Cut-Off Date: $262,931,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZB5
<PAGE> 111
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-2
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
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 2000-5 Portion of the Class A-2 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$20,494,000.00
Class A-2 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class A-2 Principal Balance
as of the Cut-Off Date: $20,494,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZC3
<PAGE> 112
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-3
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
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 2000-5 Portion of the Class A-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$36,512,000.00
Class A-3 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class A-3 Principal Balance
as of the Cut-Off Date: $36,512,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZD1
<PAGE> 113
MORTGAGE PASS-THROUGH CERTIFICATE
Class A-4
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
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 2000-5 Portion of the Class A-4 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$35,548,859.00
Class A-4 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class A-4 Principal Balance
as of the Cut-Off Date: $35,548,859.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZE9
<PAGE> 114
MORTGAGE PASS-THROUGH CERTIFICATE
Class X
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
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 2000-5 Portion of the Class X Notional
Amount as of the Cut-Off Date
Evidenced by this Certificate:
$10,663,804.00
Class X Certificate Interest Rate:
7.750% applied to the Class X Notional Amount
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class X Principal Balance as of the Cut-Off Date: $0.00
Class X Notional Amount as of the Cut-Off Date: $10,663,804.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZF6
MORTGAGE PASS-THROUGH CERTIFICATE
<PAGE> 115
Class P
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is July 28, 2000.
Interest is not payable with respect to this Certificate.
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 2000-5 Portion of the Class P Principal
Balance as of the Cut-Off
Date Evidenced by this Certificate:
$5,053,114.00
Class P Certificate Interest Rate: 0.00%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class P Principal Balance as of the Cut-Off Date: $5,053,114.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R ZH2
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-1
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
<PAGE> 116
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 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 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 2000-5 Portion of the Class B-1 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$---------------
Class B-1 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-1 Principal Balance as of the Cut-Off Date: $7,590,295.00
----------------------
Registered Owner
Certificate No. ----
Exhibit A
CUSIP 69348R ZJ8
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-2
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
<PAGE> 117
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 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 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 2000-5 Portion of the Class B-2 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$---------------
Class B-2 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-2 Principal Balance as of the Cut-Off Date: $4,933,692.00
--------------------
Registered Owner
Certificate No. -----
Exhibit A
CUSIP 69348R ZK5
MORTGAGE PASS-THROUGH CERTIFICATE
<PAGE> 118
Class B-3
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 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 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 2000-5 Portion of the Class B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$---------------
Class B-3 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-3 Principal Balance as of the Cut-Off Date: $2,466,846.00
--------------------
Registered Owner
Certificate No. -----
<PAGE> 119
Exhibit A
CUSIP 69348R ZL3
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-4
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 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 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 2000-5 Portion of the Class B-4 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$---------------
Class B-4 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
<PAGE> 120
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-4 Principal Balance as of the Cut-Off Date: $1,707,816.00
--------------------
Registered Owner
Certificate No. -----
Exhibit A
CUSIP 69348R ZM1
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-5
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 B-5 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION
5.01(e) OF THE POOLING AGREEMENT.
The Class B-5 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
<PAGE> 121
described in the Pooling Agreement.
Series 2000-5 Portion of the Class B-5 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$948,787.00
Class B-5 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-5 Principal Balance as of the Cut-Off Date: $948,787.00
--------------------
Registered Owner
Exhibit A
CUSIP 69348R ZN9
MORTGAGE PASS-THROUGH CERTIFICATE
Class B-6
Evidencing a Percentage Interest in a trust fund whose assets consist
of, among other things, a pool of conventional one- to four-family
mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
July 28, 2000.
IN THE CASE OF ANY CLASS 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 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.
<PAGE> 122
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION
5.01(e) OF THE POOLING AGREEMENT.
The Class B-6 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 2000-5 Portion of the Class B-6 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$---------------
Class B-6 Certificate Interest Rate: 7.750%
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
Last Scheduled Distribution Date: July 25, 2030
Class B-6 Principal Balance as of the Cut-Off Date: $1,328,302.24
--------------------
Registered Owner
Certificate No. -----
Exhibit A
CUSIP 69348R ZG4
MORTGAGE PASS-THROUGH CERTIFICATE
Class R
Evidencing a Percentage Interest in certain distributions with respect
to a pool of conventional one- to four-family mortgage loans formed and
administered by
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,
<PAGE> 123
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER
IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX.
SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF A CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE 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
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 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 2000-5 Percentage Interest evidenced by this
Class R Certificate in the
distributions to be made with respect
to the Class R Certificates:
%---------
Class R Certificate Interest Rate:
7.750%. Additionally, the Class R
Certificates are entitled to Excess
Liquidation Proceeds and the Residual
Distribution Amount as defined in the
Pooling Agreement.
Cut-Off Date: July 1, 2000
First Distribution Date: August 25, 2000
<PAGE> 124
Last Scheduled Distribution Date: July 25, 2030
Class R Principal Balance as of the Cut-Off Date: $50.00
---------------
Registered Owner
Certificate No. -----
Exhibit B
[Reserved]
Exhibit C
[Reserved]
Exhibit D
Mortgage Loan Schedule
Copies of the Mortgage Loan Schedules (which have 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
Global Investor Services Group
Corporate Trust
State Street Bank and Trust Company
2 Avenue De Lafayette
Boston, Massachusetts 02111-1724
Telephone: (617) 662-1314
Facsimile: (617) 662-1435
<PAGE> 125
Exhibit E
SELLING AND SERVICING
CONTRACT
This Selling and Servicing Contract (this "Agreement") is made and
entered into by PNC Mortgage Securities Corp. and its successors and
assigns ("PNC Mortgage") and the entity identified below and its
successors and assigns (the "Company").
WITNESSETH:
WHEREAS, this Company wishes to sell first lien residential
mortgage loans to, and service first lien residential mortgage loans on
behalf of, PNC Mortgage; and
WHEREAS, the Company has submitted a Seller Application to PNC
Mortgage and has been approved by PNC Mortgage for participation in the
PNC Mortgage Purchase Programs; and
WHEREAS, the Company has received and reviewed the PNC Mortgage
Purchase Programs Seller Guide (the "Seller Guide"), as well as the PNC
Mortgage Servicing Guide (the "Servicing Guide" and, together with the
Seller Guide, the "Guides"), and understands each and every provision
thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, PNC Mortgage and the Company hereby agree
as follows:
1. Guides. The Guides, which set forth the terms and conditions
under which PNC Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of PNC
Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by PNC Mortgage, are
incorporated into this Agreement in full by reference and made a part
hereof as fully as if set forth at length herein. All capitalized terms
used and not defined herein have the meanings ascribed to them in the
Guides.
2. Company's Duties. The Company shall diligently perform all
duties incident to the origination, sale and servicing of the mortgage
loans subject to this Agreement. In the performance of its servicing
<PAGE> 126
duties, the Company shall exercise the same degree of care it exercises
when servicing mortgage loans for its own account, but in no event shall
the Company exercise less care than a reasonable prudent servicer would
exercise under similar circumstances. In addition, the Company shall
comply with all of the provisions of the Guides and with all other
requirements and instructions of PNC Mortgage. The Company shall
perform such duties at its sole expense, except as otherwise expressly
provided in the Guides.
3. Representations, Warranties and Covenants of the Company;
Remedies of PNC Mortgage. With respect to each mortgage loan sold by
the Company to PNC Mortgage pursuant to the terms of this Agreement, the
Company shall make all of the representations, warranties and covenants
set forth in the Guide and, in the event of the breach of any of such
representations, warranties and covenants, PNC Mortgage shall have all
of the remedies available at law or in equity, as well as all of the
remedies set forth in the Guide, including, but not limited to,
repurchase and indemnification. The representations and warranties made
by the Company with respect to any mortgage loan subject to this
Agreement, as well as the remedies available to PNC Mortgage upon the
breach thereof, shall survive: (a) any investigation regarding the
mortgage loan conducted by PNC Mortgage, its assignees or designees, (b)
the liquidation of the mortgage loan, (c) the purchase of the mortgage
loan by PNC Mortgage, its assignee or designee, (d) the repurchase of
the mortgage loan by the Company and (e) the termination of this
Agreement.
4. Compensation. The Company shall be compensated for its
services hereunder as specified in the Guides.
5. No Assignment. This Agreement may not be assigned by the
Company without the prior written consent of PNC Mortgage. The Company
hereby consents to the assignment by PNC Mortgage of all or any part of
its rights and obligations under this Agreement to any affiliate
designated by PNC Mortgage. Any other transfer by PNC Mortgage will be
allowed and be effective upon written notice by PNC Mortgage to the
Company.
6. Prior Agreements. This Agreement supersedes any prior
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
<PAGE> 127
Company, at the address below and, if to PNC Mortgage, to the
appropriate address or facsimile number specified in the Guides. Any
such notice, request, demand or other communication shall be deemed
effective upon receipt.
9. Independent Contractor. At no time shall the Company
represent that it is acting as an agent, partner or joint venturer of
PNC Mortgage. The Company shall at all times act as an independent
contracting party.
10. Amendment. This Agreement may not be amended or modified
orally, and no provision of this Agreement may be waived or amended,
except in writing signed by the party against whom enforcement is
sought. Such a written waiver or amendment must expressly reference
this Agreement. However, by their terms the Guides may be amended or
supplemented by PNC Mortgage from time to time. Any such amendment(s)
to the Guides shall be in writing and be binding upon the parties hereto
on and after the effective date specified therein.
11. Miscellaneous. This Agreement, including all documents
incorporated by reference herein, constitutes the entire understanding
between the parties hereto and supersedes all other agreements,
covenants, representations, warranties, understandings and
communications between the parties, whether written or oral, with
respect to the transactions contemplated by this Agreement. All section
headings contained herein are for convenience only and shall not be
construed as part of this Agreement. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall as to such
jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction, and to this end, the provisions hereof are severable.
This Agreement shall be governed by, and construed and enforced in
accordance with, applicable federal laws and laws of the State of
Illinois, without reference to conflict of laws principles. This
Agreement may be executed in one or more counterparts, each of which
shall constitute an original and all of which shall constitute the same
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by
proper officials duly authorized on the dates 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
<PAGE> 128
----------------------------------------------------------------
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 Date
officer
Agreed to and accepted by PNC Mortgage Securities Corp.
------------------------------------------------------------
Typed name and title of authorized representative
--------------------------------------- ---------------
Signature of authorized representative Date
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 2000-5
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates Series 2000-5, 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
<PAGE> 129
requirements of the Act, and (b) we have not offered or sold any
certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By:
Authorized Officer
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 2000-5
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 2000-5 (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 July 1, 2000 (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 2000-5.
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:
<PAGE> 130
(a) The Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the Purchaser
is organized, is authorized to invest in the Purchased Certificates, and
to enter into this Agreement, and duly executed and delivered this
Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for
its own account as principal and not with a view to the distribution
thereof, in whole or in part;
(c) The Purchaser is an "accredited investor" as such term is
defined in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section
501 of Regulation D under the Securities Act of 1933, as amended (the
"Act"), has knowledge of financial and business matters and is capable
of evaluating the merits and risks of an investment in the Purchased
Certificates; the Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment
decision; and the Purchaser is able to bear the economic risk of an
investment in the Purchased Certificates and can afford a complete loss
of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from
PNC concerning the trust funds created pursuant to the Pooling Agreement
(the "Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that PNC possesses or can
acquire without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will
continue to comply, with the guidelines established by 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
<PAGE> 131
prospective transferee each certify to PNC and the Trustee as to the
factual basis for the registration or qualification exemption relied
upon, and (ii) the Trustee or PNC may require an Opinion of Counsel that
such transfer may be made pursuant to an exemption from the Act and
state securities laws, which Opinion of Counsel shall not be an expense
of the Trustee or PNC. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee and
PNC against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
(b) No transfer of a Purchased Certificate shall be made
unless the transferee provides PNC and the Trustee with (i) a
Transferee's Agreement, substantially in the form of this Agreement, and
(ii) either (a) an affidavit substantially in the form of Exhibit A
hereto that the proposed transferee (x) is not an employee benefit plan
or other plan or arrangement subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, or comparable provisions of any subsequent enactments
(a "Plan"), a trustee of any Plan, or any other Person who is using the
"plan assets" of any Plan to effect such acquisition or (y) is an
insurance company, the source of funds to be used by it to purchase the
Purchased Certificates is an "insurance company general account" (within
the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance
upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60, or (b) a Benefit Plan Opinion (as defined in
Exhibit A hereto).
(c) The Purchaser acknowledges that its Purchased
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 2000-5
(THE "TRUST") CLASS [ ] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
<PAGE> 132
Under penalties of perjury, I, --------------------, declare that,
to the best of my knowledge and belief, the following representations
are true, correct and complete; and
1. That I am the --------------- of --------------- (the
"Purchaser"), whose taxpayer identification number is ----------, and
on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser (i) is not an employee benefit plan or
other plan or arrangement subject to the prohibited transaction
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code"), or comparable provisions of any subsequent
enactments (a "Plan"), a trustee of any Plan, or any other Person who is
using the "plan assets" of any Plan to effect such acquisition, (ii) has
provided a "Benefit Plan Opinion" satisfactory to PNC Mortgage
Securities Corp. (the "Company") and the Trustee of the Trust Funds or
(iii) is an insurance company, the source of funds to be used by it to
purchase the Purchased Certificates is an "insurance company general
account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is being
made in reliance upon the availability of the exemptive relief afforded
under Sections I and III of PTCE 95-60. 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 ---------------, 20__.
[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 ----------,
<PAGE> 133
20__.
Notary Public
Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE 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 I
Trust Fund") whose assets consist of, among other things, a pool (the
"Mortgage Pool") of conventional one- to four-family mortgage loans (the
"Mortgage Loans"), formed and administered by PNC Mortgage Securities
Corp. (the "Company"), which term includes any successor entity under
the Pooling Agreement referred to below. The Mortgage Pool was created
pursuant to a Pooling and Servicing Agreement, dated as of the Cut-Off
Date stated above (the "Pooling Agreement"), between the Company and
State Street Bank and Trust Company, as Trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing
herein shall be deemed inconsistent with such meanings, and in the event
of any conflict between the Pooling Agreement and the terms of this
Certificate, the Pooling Agreement shall control. This Certificate is
issued under and is subject to the terms, provisions and conditions of
the Pooling Agreement, to which Pooling Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which
such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on
the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified above, to the Person
in whose name this Certificate is registered at the close of business on
the last day (or if such last day is not a Business Day, the Business
Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), to the
extent of such Certificateholder's Percentage Interest represented by
this Certificate in the portion of the 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.
<PAGE> 134
Distributions on this Certificate will be made by the Trustee by
wire transfer or check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
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.
<PAGE> 135
The Certificates do not represent an obligation of, or an interest
in, the Company or any of its affiliates and are not insured or
guaranteed by any governmental agency. The Certificates are limited in
right of payment to certain collections and recoveries respecting the
Mortgage Loans, all as more specifically set forth herein and in the
Pooling Agreement. In the event funds are advanced with respect to any
Mortgage Loan, such advance is reimbursable to the Master Servicer from
the related recoveries on such Mortgage Loan or from other cash
deposited in the Certificate Account to the extent that such advance is
not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the
Certificate Account may be made from time to time for purposes other
than distributions to Certificateholders, such purposes including
reimbursement to the Master Servicer of advances made, or certain
expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders
under the Pooling Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of the
Certificates evidencing Percentage Interests aggregating not less than
66% of the REMIC I Trust Fund. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Pooling
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
Certificate Registrar or the office maintained by the Trustee in the
City and State of New York, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth
hereinabove will be issued to the designated transferee or transferees.
[to be used only in the case of the Junior Subordinate
Certificates:] [No transfer of a Certificate will be made unless such
transfer is exempt from or is made in accordance with the registration
requirements of the Securities Act of 1933, as amended (the "Securities
Act") and any applicable state securities laws. In the event that a
transfer is to be made without registration or qualification under
applicable laws, (i) in the event such transfer is made pursuant to Rule
<PAGE> 136
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 Available Distribution Amount
distributable on this Class of Certificate, as requested by the Holder
surrendering the same.
A reasonable service charge may be made for any such registration
of transfer or exchange, and the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and the Certificate Registrar and any
agent of the Company, the Trustee or the Certificate Registrar may treat
the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Company, the Trustee, the
Certificate Registrar nor any such agent shall be affected by notice to
the contrary.
The obligations created by the Pooling Agreement and the trust
funds created thereby shall terminate upon (i) the later of the maturity
or other liquidation (including repurchase by the Company) of the last
Mortgage Loan remaining in the REMIC I Trust Fund or the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure of
any Mortgage Loan, and (ii) the payment to Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to
the Pooling Agreement. In the event that the Company repurchases any
Mortgage Loan pursuant to the Pooling Agreement, the Pooling Agreement
generally requires that the Trustee distribute to the Certificateholders
in the aggregate an amount equal to 100% of the unpaid Principal Balance
of such Mortgage Loan, plus unpaid accrued interest thereon at the
applicable Pass-Through Rate to the last day of the month in which such
repurchase occurs. The Pooling Agreement permits, but does not require,
<PAGE> 137
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 Principal Balance of the
Mortgage Loans at the time of repurchase being less than ten percent
(10%) of the aggregate Principal Balance of the Mortgage Loans as of the
Cut-Off Date.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto -----------------------------------------------------
(Please print or typewrite name and address, including postal zip code
of assignee. Please insert social security or other identifying number
of assignee.)
--------------------------------------------------------------------
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
----------------------------------------------------------------------
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE:The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate
does not represent an obligation of 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]
<PAGE> 138
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 2000-5
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 2000-5, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale from
(the "Seller") to (the "Purchaser") of $---------------
----- initial Certificate Principal Balance of Mortgage Pass-Through
Certificates, Series 2000-5, Class R (the "Certificate"), pursuant to
Section 5.01 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of July 1, 2000 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.
<PAGE> 139
Very truly yours,
[Seller]
By:
Name:
Title:
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record
or beneficial owner of the Class R Certificate (the "Owner")), a
[savings institution] [corporation] duly organized and existing under
the laws of [the State of ] [the United States], on
behalf of which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code")
and will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class R
Certificates, and (ii) is acquiring the Class R Certificates for its own
account or for the account of another Owner from which it has received
an affidavit and agreement in substantially the same form as this
affidavit and agreement. (For this purpose, a disqualified organization"
means the United States, any state or political subdivision thereof, or
any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and,
except for the Federal Home Loan Mortgage Corporation, a majority of
whose board of directors is not selected by any such governmental
entity), or any foreign government or international organization, or any
agency or instrumentality of such foreign government or organization,
any rural electric or telephone cooperative, or any organization (other
than certain farmers' cooperatives) that is generally exempt from
federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be
<PAGE> 140
imposed on transfers of the Class R Certificates after March 31, 1988;
(ii) that such tax would be on the transferor, or, if such transfer is
through an agent (which person includes a broker, nominee or middle-man)
for a disqualified organization, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability for the tax
if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of
transfer, such person does not have actual knowledge that the affidavit
is false; and (iv) that the Class R Certificates may be a "noneconomic
residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, if a significant
purpose of the transfer was to enable the transferor to impede the
assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-
through entity" holding the Class R Certificates if at any time during
the taxable year of the pass-through entity a disqualified organization
is the record holder of an interest in such entity. (For this purpose, a
"pass through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not
register the Transfer of the Class R Certificates unless the transferee,
or the transferees' agent, delivers to it an affidavit and agreement,
among other things, in substantially the same form as this affidavit and
agreement. The Owner expressly agrees that it will not consummate any
such transfer if it knows or believes that any of the representations
contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of Section 5.01
of the Pooling Agreement under which the Class R Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.01(c)
which authorize the Trustee to deliver payments to a person other than
the Owner and negotiate a mandatory sale by the Trustee in the event the
Owner holds such Certificates in violation of Section 5.01). The Owner
expressly agrees to be bound by and to comply with such restrictions and
provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class R
Certificates will only be owned, directly or indirectly, by an Owner
that is not a disqualified organization.
8. The Owner's Taxpayer Identification Number is
--------------------.
9. That no purpose of the Owner relating to the purchase of
<PAGE> 141
the Class R Certificates by the Owner is or will be to enable the
transferor to impede the assessment or collection of tax.
10. That the Owner anticipates that it will, so long as it
holds the Class R Certificates, have sufficient assets to pay any taxes
owed by the holder of such Certificates, and hereby represents to and
for the benefit of the person from whom it acquired the Class R
Certificates that the Owner intends to pay taxes associated with holding
such Certificates as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class
R Certificates. That the Owner has provided financial statements or
other financial information requested by the transferor in connection
with the transfer of the Class R Certificates to permit the transferor
to assess the financial capability of the Owner to pay such taxes.
11. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long
as any of the Class R Certificates remain outstanding.
12. That the Owner has no present knowledge or expectation
that it will become insolvent or subject to a bankruptcy proceeding for
so long as any of the Class R Certificates remain outstanding.
13. That no purpose of the Owner relating to any sale of the
Class R Certificates by the Owner will be to impede the assessment or
collection of tax.
14. The Owner is a citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision
thereof, or an estate or trust whose income from sources without the
United States is includible in gross income for United States federal
income tax purposes regardless of its connection with the conduct of a
trade or business within the United States.
15. The Owner hereby agrees to cooperate with the Company and
to take any action required of it by the Code or Treasury regulations
thereunder (whether now or hereafter promulgated) in order to create or
maintain the REMIC status of the REMIC I Trust Fund (the "Trust Fund").
16. The Owner hereby agrees that it will not take any action
that could endanger the REMIC status of the Trust Fund or result in the
imposition of tax on the Trust Fund unless counsel for, or acceptable
to, the Company has provided an opinion that such action will not result
in the loss of such REMIC status or the imposition of such tax, as
applicable.
17. The Owner as transferee of the Class R Certificates has
represented to their transferor that, if the Class R Certificates
constitute a noneconomic residual interest, the Owner (i) understands
that as holder of a noneconomic residual interest it may incur tax
liabilities in excess of any cash flows generated by the interest, and
<PAGE> 142
(ii) intends to pay taxes associated with its holding of the Class R
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 , 20 __ .
[Name of Owner]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and
Acknowledged to me that he executed the same as his free act and deed
and the free act and deed of the Owner.
Subscribed and sworn before me this ___ day of ---------------,
20__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the
day
of , 20
Exhibit K
[Reserved]
<PAGE> 143
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the
undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Seller hereby certifies the following facts: Neither the Seller nor
anyone acting on its behalf has offered, transferred, pledged, sold or
otherwise disposed of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in
any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the Securities Act of
1933, as amended (the "1933 Act"), or that would render the disposition
of the Rule 144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, and that the Seller has not
offered the Rule 144A Securities to any person other than the Buyer or
another "qualified institutional buyer" as defined in Rule 144A under
the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling
and Servicing Agreement (the "Agreement") dated as of July 1, 2000
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
<PAGE> 144
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has received and reviewed the Private Placement
Memorandum dated as of July 28, 2000 relating to the Rule 144A
Securities and has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the
Trustee, the Company or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner
with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has (1)
completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2, or (2) obtained the waiver
of the Company with respect to Annex 1 and Annex 2 pursuant to
Section 5.01(f) of the Agreement. The Buyer is aware that the sale
to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the
accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on
Rule 144A, or (ii) pursuant to another exemption from registration
under the 1933 Act.
f. The Buyer is not affiliated with (i) the Trustee or
(ii) any Rating Agency that rated the Rule 144A Securities.
g. If applicable, the Buyer has complied, and will continue
to comply, with the guidelines established by Thrift Bulletin 13a
issued April 23, 1998, by the Office of Regulatory Activities of
the Federal Home Loan Bank System.
<PAGE> 145
[Required only in the case of a transfer of a Class B Certificate]
[3. The Buyer warrants and represents to, and covenants with, the
Trustee, the Master Servicer and the Company that (1) the Buyer is not
an employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
subject to the prohibited transaction provisions of ERISA ("Plan"), or a
plan (within the meaning of Section 4975(e)(1) of the Internal Revenue
Code of 1986 ("Code")) subject to Section 4975 of the Code (also a
"Plan"), and the Buyer is not directly or indirectly purchasing the Rule
144A Securities on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with "plan assets" of any Plan, (2) the
Buyer's purchase of the Rule 144A Securities is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and
will not subject the Trustee, the Master Servicer or the Company to any
obligation or liability (including obligations or liabilities under
Section 406 of ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement and the Buyer has provided an Opinion of
Counsel to such effect in accordance with Section 5.01(d) of the
Agreement or (3) the Buyer is an insurance company, the source of funds
to be used by it to purchase the Rule 144A Securities is an "insurance
company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase
is being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.: No.:
Date: Date:
<PAGE> 146
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of
the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933 ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis $--------------------__
(the Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless the Buyer is a dealer, and, in that
case, the Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities) in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue
Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
<PAGE> 147
financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State or
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and is subject to the fiduciary
responsibility provisions of ERISA.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income 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
<PAGE> 148
owned and/or invested on a discretionary basis by the Buyer, the Buyer
used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in
determining such aggregate amount, the Buyer may have included
securities owned by subsidiaries of the Buyer, but only if such
subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and
if the investments of such subsidiaries are managed under the Buyer's
direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange
Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer may be in reliance on
Rule 144A.
Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own
account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the
Buyer for the account of a third party (including any separate account)
in reliance on Rule 144A, the Buyer will only purchase for the account
of a third party that at the time is a "qualified institutional buyer"
within the meaning of Rule 144A. In addition, the Buyer agrees that the
Buyer will not purchase securities for a third party unless the Buyer
has obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to conclude that
such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
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:
<PAGE> 149
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i)
the Buyer is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Buyer alone, or the
Buyer's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of
the end of the Buyer's most recent fiscal year. For purposes of
determining the amount of securities owned by the Buyer or the Buyer's
Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $--------------- in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $---------- in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of
<PAGE> 150
the Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement
and (vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales
to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification by the undersigned
as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
IF AN ADVISER:
Print Name of Buyer
By:
Name:
Title:
Date:
(SEAL)
Exhibit M
[Date]
<PAGE> 151
[Company]
Re: Pooling and Servicing Agreement dated as of July 1, 2000
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 2000-5
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that,
except as noted on the attachment hereto, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it or the Custodian on its
behalf has reviewed the documents delivered to it or to the Custodian on
its behalf pursuant to Section 2.01 of the Pooling and Servicing
Agreement and has determined that (i) all documents required (in the
case of instruments described in clauses (X)(v) and (Y)(x) of the
definition of "Mortgage File," known by the Trustee to be required)
pursuant to the definition of "Mortgage File" and Section 2.01 of the
Pooling and Servicing Agreement have been executed and received as of
the date hereof are in its possession or in the possession of the
Custodian on its behalf and (ii) all such documents have been executed
and relate to the Mortgage Loans identified in the Mortgage Loan
Schedule. The Trustee has made no independent examination of such
documents beyond the review specifically required in the above
referenced Pooling and Servicing Agreement and has relied upon the
purported genuineness and due execution of any such documents and upon
the purported genuineness of any signature thereon. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File or
any of the Mortgage Loans identified on the Mortgage Loan 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:
<PAGE> 152
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee
225 Franklin Street
Boston, MA 02110
Attn: Corporate Trust Department, PNC 2000-5
PNC Mortgage Securities Corp.
75 North Fairway Drive
Vernon Hills, IL 60061
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-5
(THE "TRUST") CLASS [B-_] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, --------------------, declare that,
to the best of my knowledge and belief, the following representations
are true, correct and complete; and
1. That I am the --------------- of -------------- (the
"Purchaser"), whose taxpayer identification number is ----------, and
on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser is either:
(a) not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement 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 -
<PAGE> 153
---- day of ---------------, 20__.
[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 ----------,
20__.
Notary Public
Exhibit O
FORM OF LOAN SALE AGREEMENT
CLIPPER RECEIVABLES CORPORATION,
as Seller
STATE STREET BANK AND TRUST COMPANY,
as Trustee
LOAN SALE AGREEMENT
Dated as of July 1, 2000
This Loan Sale Agreement (this "Agreement") is dated as of July 1,
<PAGE> 154
2000, by and between Clipper Receivables Corporation ("Clipper"), as
seller (the "Seller"), and State Street Bank and Trust Company ("State
Street"), as trustee (the "Trustee") under a Pooling and Servicing
Agreement, dated July 1, 2000 (the "Pooling Agreement") by and between
PNC Mortgage Securities Corp. ("PNC") and the Trustee. Pursuant to a
Revolving Loan Purchase Agreement, dated as of December 30, 1998 (the
"Revolving Loan Purchase Agreement"), among Fairway Drive Funding Corp.
("Fairway"), as seller, Clipper, as purchaser, State Street Capital
Corporation, as administrator, State Street, as relationship bank, and
PNC, as servicer, the Seller has purchased the Conveyed Mortgage Loans
(as defined herein) from Fairway. On the terms and conditions set forth
herein, the Seller desires to sell and the Trustee desires to purchase
the Conveyed Mortgage Loans and certain related rights.
In consideration of the premises and the mutual agreements
hereinafter set forth, the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
Whenever used in this Agreement, the following words and phrases
shall have the following meanings specified in this Article:
Agreement: This Loan Sale Agreement, including all exhibits and
schedules hereto, amendments hereof and supplements hereto.
Clipper: The meaning given in the introductory paragraph hereto.
Closing Date: July 28, 2000.
Conveyance: The meaning given in Section 2.1.
Conveyed Assets: The meaning given in Section 2.1.
Conveyed Mortgage Loans: The Mortgage Loans sold, transferred,
assigned and conveyed to the Trustee by the Seller pursuant to Section
2.1 and identified in the Mortgage Loan Schedule.
Custodian: State Street, or any other party appointed as Custodian
under the Revolving Loan Purchase Agreement.
Cut-Off Date: July 1, 2000.
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
<PAGE> 155
Mortgage Note and Mortgage.
Mortgage Loan File: With respect to any Conveyed Mortgage Loan, the
documents described in the definition of "Mortgage Loan File" in the
Revolving Loan Purchase Agreement.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached
hereto as Schedule I.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
PNC: The meaning given in the introductory paragraph hereto.
Person: any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or
political subdivision thereof.
Pooling Agreement: The meaning given in the introductory paragraph
hereto.
Purchase Price: The meaning given in Section 2.1.
Revolving Loan Purchase Agreement: The meaning given in the
introductory paragraph hereto.
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
<PAGE> 156
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.
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 2000-5, 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
<PAGE> 157
Floor, Boston, MA 02110, Attention: Susan Beck Strader, facsimile no.:
(617) 350-4020, with a copy to State Street Capital Corporation, 225
Franklin Street, Boston, MA 02110, Attention: Susan Beck Strader,
facsimile no.: (617) 350-4020, or such other address as may hereafter be
furnished to the Trustee in writing by the Seller.
Section 3.3 Severability of Provisions
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 3.4 Waivers and Amendments, Non-contractual Remedies;
Preservation of Remedies
This Agreement may be amended, superseded, canceled, renewed or
extended and the terms hereof may be waived, only by a written
instrument signed by authorized representatives of the parties or, in
the case of a waiver, by an authorized representative of the party
waiving compliance. No such written instrument shall be effective
unless it expressly recites that it is intended to amend, supersede,
cancel, renew or extend this Agreement or to waive compliance with one
or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, or any single or partial
exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative to,
and not exclusive of, any rights or remedies that any party may
otherwise have at law or in equity.
Section 3.5 Captions
All section titles or captions contained in this Agreement or in
any Schedule or Exhibit annexed hereto or referred to herein, and the
table of contents to this Agreement, are for convenience only, shall not
be deemed a part of this Agreement and shall not affect the meaning or
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
<PAGE> 158
This Agreement (including any Schedule or Exhibit annexed hereto or
referred to herein) between the parties hereto contains the entire
agreement between the parties with respect to the sale of the Conveyed
Assets and the transactions contemplated hereby and supersedes all prior
agreements, written or oral, with respect thereto.
Section 3.8 Condition Precedent
The Trustee's obligation to purchase the Conveyed Assets hereunder
is conditioned upon and subject to the Trustee's receipt of available
funds from PNC pursuant to the Pooling Agreement in an amount equal to
the Purchase Price.
Section 3.9 No Recourse
No recourse under any obligation, covenant or agreement of Clipper
contained in this Agreement shall be had against J H Management
Corporation ("JHM") or any incorporator, stockholder, officer, director
or employee of Clipper or JHM, by the enforcement of any assessment or
by any legal or equitable proceeding, by virtue of any statute or
otherwise, it being expressly agreed and understood that this Agreement
is solely a corporate obligation of Clipper, and that no personal
liability whatever shall attach to or be incurred by the incorporators,
stockholders, officers, directors or employees of Clipper or JHM, or any
of them under or by reason of any of the obligations, covenants or
agreements of Clipper contained in this Agreement, or implied therefrom.
Trustee expressly waives, as a condition of and in consideration for the
execution of this Agreement, any and all personal liability against JHM
and every such incorporator, stockholder, officer, director or employee
arising from breaches by Clipper of any such obligations, covenants or
agreements, either at common law or at equity, or by statute or
constitution.
Section 3.10 No Petition
The Trustee agrees that it shall not institute against, 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
<PAGE> 159
By: STATE STREET CAPITAL CORPORATION,
as Program Administrator
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
solely in its capacity as Trustee and
not individually
By:
Name:
Title:
CONSENTED TO BY:
STATE STREET CAPITAL CORPORATION, as
Program Administrator
By:
Name:
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
<PAGE> 160
servicer
Ladies and Gentlemen:
We hereby advise you that the mortgage loans specified on Schedule
I hereto (the "Conveyed Mortgage Loans") have been transferred and
assigned, pursuant to a Loan Sale Agreement dated as of July 1, 2000
between Clipper Receivables Corporation, as seller (the "Seller"), and
State Street Bank and Trust Company, as trustee (the "Trustee") under a
Pooling and Servicing Agreement dated as of July 1, 2000 by and between
PNC Mortgage Securities Corp. and the Trustee, by the Seller to the
Trustee, and you are hereby instructed to deliver the Mortgage Loan
Files (as defined in the Revolving Loan Purchase Agreement) relating to
such Conveyed Mortgage Loans to the Trustee pursuant to such
instructions as it may provide to you.
Very truly yours,
CLIPPER RECEIVABLES CORPORATION
By: STATE STREET CAPITAL CORPORATION,
as Program Administrator
By:
Name:
Title:
ACKNOWLEDGED:
STATE STREET BANK AND TRUST
COMPANY, as Custodian
By:
Name:
Title:
Schedule I to Notice and Instruction to Custodian
Exhibit P
FORM OF PROTECTIVE TRANSFER AGREEMENT
This Protective Transfer Agreement (this "Agreement"), dated as of
July 1, 2000, is by and between Fairway Drive Funding Corp. ("Funding")
and State Street Bank and Trust Company (the "Trustee Bank"), as trustee
(in such capacity, the "Trustee") under a Pooling and Servicing
Agreement dated July 1, 2000 by and between PNC Mortgage Securities
Corp. ("PNC") and the Trustee.
<PAGE> 161
W I T N E S S E T H:
WHEREAS, Funding sold certain mortgage loans and related property
(as defined below, the "Conveyed Assets") to Clipper Receivables
Corporation ("Clipper") pursuant to a Revolving Loan Purchase Agreement,
dated as of December 30, 1998 (the "Funding Sale Agreement"), among
Funding, as Seller, Clipper, as Purchaser, State Street Capital
Corporation, as Administrator, the Trustee Bank, as Relationship Bank
and PNC, as Servicer;
WHEREAS, pursuant to a Loan Sale Agreement (the "Clipper Loan Sale
Agreement"), dated as of July 1, 2000, between Clipper and the Trustee,
Clipper is selling all of its right, title and interest in and to the
Conveyed Assets to the Trustee;
WHEREAS, the Trustee requires assurance of good title to the
Conveyed Assets, and pursuant to Section 13.2(a) of the Funding Sale
Agreement, Funding is obligated to take any action necessary to protect
the interest of Clipper in the Conveyed Assets.
NOW, THEREFORE, in consideration of the covenants made herein
and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. The Funding Sale Agreement provides that it is the express
intent of the parties thereto that the sale, assignment and transfer of
the Conveyed Assets pursuant to the Funding Sale Agreement constituted a
sale of all of Fairway's right, title, and interest in and to the
Conveyed Assets to Clipper.
2. Notwithstanding the foregoing, to the extent that Funding has
retained any interest in the Conveyed Assets, Funding hereby irrevocably
sells, transfers, assigns, sets over and otherwise conveys to the
Trustee, without representation, warranty or recourse, and the Trustee
hereby accepts delivery of, all of Funding's right, title and interest,
if any, in and to (i) the Mortgage Loans identified on the schedule of
Mortgage Loans attached as Schedule I to the Clipper Loan Sale Agreement
(the "Conveyed Mortgage Loans") and all rights pertaining thereto, (ii)
all scheduled payments of principal and interest due after July 1, 2000
(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
<PAGE> 162
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
solely as Trustee
By:------------------------------
Name:
Title:
