SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
October 30, 1998
(date of earliest event reported)
PNC MORTGAGE SECURITIES CORP.
as Depositor and Master Servicer under a
Pooling and Servicing Agreement
dated as of October 1, 1998
providing for the issuance of
$1,688,837,275
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-10
Delaware 333-50053 T/B/D
(State or other (Commission (IRS Employer
jurisdiction of File Number)
Incorporation) Identification
Number)
75 NORTH FAIRWAY DRIVE
VERNON HILLS, ILLINOIS 60061
(Address of principal executive offices)
Registrant's telephone number, including area code:
(847) 549-6500
<PAGE>
Item 1. Changes in Control of Registrant. Not applicable.
Item 2. Acquisition or Disposition of Assets. Not applicable.
Item 3. Bankruptcy or Receivership. Not applicable.
Item 4. Changes in Registrant's Certifying Accountant. Not
applicable.
Item 5. Other Events. Not applicable.
Item 6. Resignation of Registrant's Directors. Not applicable.
Item 7. Financial Statements and Exhibits.
The following exhibit is furnished herewith:
7.1 Pooling and Servicing Agreement between
PNC Mortgage Securities Corp., Depositor and
Master Servicer, and State Street Bank and Trust
Company, Trustee, dated as of October 1, 1998.
Item 8. Change in Fiscal Year. Not applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not applicable.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Dated: November 16, 1998.
PNC MORTGAGE SECURITIES
CORP.
(Registrant)
By: \s\Thomas G. Lehmann
----------------------------
Thomas G. Lehmann
Vice President
(Authorized Officer)
<PAGE>
<PAGE> 1
EXHIBIT 7.1
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$1,688,837,275
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1998-10
Cut-Off Date: October 1, 1998
This Pooling and Servicing Agreement, dated and effective as of
October 1, 1998 (this "Agreement"), is executed by and between PNC Mortgage
Securities Corp., as Depositor and Master Servicer (the "Company") and
State Street Bank and Trust Company, as Trustee (the "Trustee").
Capitalized terms used in this Agreement and not otherwise defined have the
meanings ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Company at the Closing Date is the owner of the Mortgage Loans and
the other property being conveyed by it to the Trustee for inclusion in the
Trust Fund. On the Closing Date, the Company will acquire the REMIC I
Regular Interests and the Class R-1 Certificates from the Trust Fund as
consideration for its transfer to the Trust Fund of the Mortgage Loans and
certain other assets and will be the owner of the REMIC I Regular Interests
and the Class R-1 Certificates. Thereafter on the Closing Date, the Company
will acquire the Certificates (other than the Class R-1 Certificates) from
REMIC II as consideration for its transfer to REMIC II of the REMIC I
Regular Interests and will be the owner of the Certificates. The Company
has duly authorized the execution and delivery of this Agreement to provide
for (i) the conveyance to the Trustee of the Mortgage Loans and the
issuance to the Company of the REMIC I Regular Interests and the Class R-1
Certificates representing in the aggregate the entire beneficial ownership
of REMIC I, (ii) the conveyance to the Trustee of the REMIC I Regular
Interests and the issuance to the Company of the REMIC II Regular Interests
and the Class R-2 Certificates representing in the aggregate the entire
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beneficial interest of REMIC II. All covenants and agreements made by the
Company and the Trustee herein with respect to the Mortgage Loans and the
other property constituting the assets of REMIC I are for the benefit of
the Holders from time to time of the REMIC I Regular Interests and the
Class R-1 Certificates. All covenants and agreements made by the Company
and the Trustee herein with respect to the REMIC I Regular Interests are
for the benefit of the Holders from time to time of the REMIC II Regular
Interests and the Class R-2 Certificates. The Company is entering into this
Agreement, and the Trustee is accepting the two separate trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
The Certificates issued hereunder, other than the Group I Junior
Subordinate Certificates, have been offered for sale pursuant to a
Prospectus, dated October 23, 1998, and a Prospectus Supplement, dated
October 28, 1998, of the Company (together, the "Prospectus"). The Group I
Junior Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated October 30, 1998. The Trust Fund and
the REMIC II Trust Fund created hereunder are collectively intended to be
the "Trust" described in the Prospectus and the Private Placement
Memorandum and the Certificates are intended to be the "Certificates"
described therein. The following tables set forth the designation, type of
interest, initial Certificate Interest Rate, initial Class Principal
Balance, initial Class Notional Amount and Final Maturity Date for the
REMIC I Regular Interests and the Certificates:
<TABLE>
<CAPTION>
REMIC I
Class Designation
for each REMIC I
Regular Interest
and the Class R-1 Type of Remittance Initial Class Final Maturity
Certificates Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
Class I-A-1-L Regular 6.750% 97,818,645.00 December 2028
Class I-A-2-L Regular 6.750% 3,744,145.00 December 2028
Class I-A-3-L Regular 6.750% 21,709,234.00 December 2028
Class I-A-4-L Regular 6.750% 74,239,428.00 December 2028
Class I-A-5-L Regular 6.850% 17,045,038.00 December 2028
Class I-A-6-L Regular 6.500% 39,890,952.00 December 2028
Class I-A-7-L Regular 6.500% 21,000,000.00 December 2028
Class I-A-8-L Regular 6.500% 195,000,000.00 December 2028
Class I-A-9-L Regular 6.500% 43,943,553.00 December 2028
Class I-A-10-L Regular (2) 8,349,706.00 December 2028
Class I-A-11-L Regular (2) 252,520.00 December 2028
Class I-A-12-L Regular (2) 33,333.00 December 2028
Class I-A-13-L Regular 6.9299972% 1,250,000.00 December 2028
Class I-A-14-L Regular 7.000% 500,000.00 December 2028
Class I-A-15-L Regular 6.500% 500,000.00 December 2028
Class I-A-16-L Regular 6.500% 3,000,000.00 December 2028
Class I-A-17-L Regular 6.500% 44,936,981.00 December 2028
<PAGE>
<PAGE> 3
Class I-A-18-L Regular 6.500% 500,000.00 December 2028
Class I-A-19-L Regular 6.500% 52,359,102.00 December 2028
Class I-A-20-L Regular 6.500% 195,916,801.00 December 2028
Class I-A-21-L Regular 6.500% 29,104,843.00 December 2028
Class I-A-22-L Regular 6.500% 9,200,000.00 December 2028
Class I-A-23-L Regular 6.500% 500,000.00 December 2028
Class II-A-1-L Regular 7.000% 564,411,343.00 November 2028
Class II-A-2-L Regular (2) 45,207,600.00 November 2028
Class III-A-1-L Regular 7.000% 73,711,589.00 November 2013
Class III-A-2-L Regular (2) 5,904,070.00 November 2013
Class IV-A-1-L Regular 6.250% 77,196,297.00 November 2013
Class IV-AM-L Regular 6.250% 3,099,579.00 November 2013
Class II-M-L Regular 6.4809% 17,267,167.19 November 2028
Class III-M-L Regular 6.4809% 1,426,108.79 November 2013
Class IV-M-L Regular 6.250% 2,066,386.01 November 2013
Class I-X-L Regular 6.500% (3) ------ December 2028
Class II-X-1-L Regular 7.000% (3) ------ November 2028
Class II-X-2-L Regular 7.000% (3) ------ November 2028
Class II-X-3-L Regular 7.000% (3) ------ November 2028
Class III-X-L Regular 7.000% (3) ------ November 2013
Class IV-X-L Regular 6.250% (3) ------ November 2013
Class I-P-L Regular (2) 723,832.00 December 2028
Class II-P-L Regular (2) 1,010,848.00 November 2028
Class III-P-L Regular (2) 450,142.00 November 2013
Class IV-P-L Regular (2) 293,172.00 November 2013
Class I-B-1-L Regular 6.500% 22,612,026.00 December 2028
Class I-B-2-L Regular 6.500% 8,592,571.00 December 2028
Class I-B-3-L Regular 6.500% 4,070,164.00 December 2028
Class I-B-4-L Regular 6.500% 2,713,443.00 December 2028
Class I-B-5-L Regular 6.500% 2,261,202.00 December 2028
Class I-B-6-L Regular 6.500% 2,713,444.98 December 2028
Excess Amount (4) Regular ------ ------ November 2028
Class R-1+ Residual 6.500% 50.00 December 2028
</TABLE>
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group matures.
+ The Class R-1 Certificates are entitled to receive the applicable
Residual Distribution Amount and Excess Liquidation Proceeds.
(1) Interest distributed to the REMIC I Regular Interests (other than the
Class I-A-10-L, Class I-A-11-L, Class I-A-12-L, Class II-A-2-L, Class III-A-
2-L and Class P-L Regular Interests, which will not be entitled to receive
any distributions of interest) and the Class R-1 Certificates on each
Distribution Date will have accrued at the applicable per annum Certificate
Interest Rate on the Class Principal Balance or Class Notional Amount
outstanding following the immediately prior Distribution Date (or with
respect to the first Distribution Date, as of the Closing Date).
(2) The Class I-A-10-L, Class I-A-11-L, Class I-A-12-L, Class II-A-2-L,
Class III-A-2-L and Class P-L Regular Interests shall not be entitled to
receive any distributions of interest.
(3) Each of the Class X-L Regular Interests shall accrue interest on the
related Class Notional Amount. The Class X-L Regular Interests shall not
be entitled to receive any distributions of principal.
<PAGE>
<PAGE> 4
(4) The Excess Amount will accrue interest at a per annum rate of 0.5191%
on the outstanding Principal Balance of each Group II, Group III and Group
IV Loan in the Trust Fund.
As provided herein, with respect to REMIC I, the Company will cause an
election to be made on behalf of REMIC I to be treated for federal income
tax purposes as a REMIC. The REMIC I Regular Interests will be designated
regular interests in REMIC I and the Class R-1 Certificates will be
designated the sole class of residual interest in REMIC I, for purposes of
the REMIC Provisions.
<TABLE>
<CAPTION>
REMIC II
Class Designation
for each REMIC I
Regular Interest
and the Class R-1 Type of Remittance Initial Class Final Maturity
Certificates Interest Rate (1) Principal Balance Date*
- ----------------- -------- ------------- ----------------- --------------
<S> <C> <C> <C> <C>
Class I-A-1 Regular 6.750% 97,818,645.00 December 2028
Class I-A-2 Regular 6.750% 3,744,145.00 December 2028
Class I-A-3 Regular 6.750% 21,709,234.00 December 2028
Class I-A-4 Regular 6.750% 74,239,428.00 December 2028
Class I-A-5 Regular 6.850% 17,045,038.00 December 2028
Class I-A-6 Regular 6.500% 39,890,952.00 December 2028
Class I-A-7 Regular 6.500% 21,000,000.00 December 2028
Class I-A-8 Regular 6.500% 195,000,000.00 December 2028
Class I-A-9 Regular 6.500% 43,943,553.00 December 2028
Class I-A-10 Regular (2) 8,349,706.00 December 2028
Class I-A-11 Regular (2) 252,520.00 December 2028
Class I-A-12 (5) 10.500% (5) 33,333.00 December 2028
Class I-A-13 Regular 6.650% 1,250,000.00 December 2028
Class I-A-14 Regular 7.000% 500,000.00 December 2028
Class I-A-15 Regular 6.500% 500,000.00 December 2028
Class I-A-16 Regular 6.500% 3,000,000.00 December 2028
Class I-A-17 Regular 6.500% 44,936,981.00 December 2028
Class I-A-18 (3) (3) 500,000.00 December 2028
Class I-A-19 Regular 6.500% 52,359,102.00 December 2028
Class I-A-20 Regular 6.320% 195,916,801.00 December 2028
Class I-A-21 Regular 6.500% 29,104,843.00 December 2028
Class I-A-22 Regular 6.500% 9,200,000.00 December 2028
Class I-A-23 Regular 6.500% 500,000.00 December 2028
Class I-A-24 Regular 6.500% (4) --------- December 2028
Class II-A-1 Regular 7.000% 564,411,343.00 November 2028
Class II-A-2 Regular (2) 45,207,600.00 November 2028
Class III-A-1 Regular 7.000% 73,711,589.00 November 2013
Class III-A-2 Regular (2) 5,904,070.00 November 2013
Class IV-A-1 Regular 6.250% 77,196,297.00 November 2013
<PAGE>
<PAGE> 5
Class IV-AM Regular 6.250% 3,099,579.00 November 2013
Class II-M Regular 6.4809% 17,267,167.19 November 2028
Class III-M Regular 6.4809% 1,426,108.79 November 2013
Class IV-M Regular 6.250% 2,066,386.01 November 2013
Class I-X Regular 6.500% (4) ------ December 2028
Class II-X-1 Regular 7.000% (4) ------ November 2028
Class II-X-2 Regular 7.000% (4) ------ November 2028
Class II-X-3 Regular 7.000% (4) ------ November 2028
Class III-X Regular 7.000% (4) ------ November 2013
Class IV-X Regular 6.250% (4) ------ November 2013
Class I-P Regular (2) 723,832.00 December 2028
Class II-P Regular (2) 1,010,848.00 November 2028
Class III-P Regular (2) 450,142.00 November 2013
Class IV-P Regular (2) 293,172.00 November 2013
Class I-B-1 Regular 6.500% 22,612,026.00 December 2028
Class I-B-2 Regular 6.500% 8,592,571.00 December 2028
Class I-B-3 Regular 6.500% 4,070,164.00 December 2028
Class I-B-4 Regular 6.500% 2,713,443.00 December 2028
Class I-B-5 Regular 6.500% 2,261,202.00 December 2028
Class I-B-6 Regular 6.500% 2,713,444.98 December 2028
Class R-2+ Residual 6.500% 50.00 December 2028
</TABLE>
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group matures.
+ The Class R-2 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1) Interest distributed to the Certificates (other than the Class I-A-10,
Class I-A-11, Class II-A-2, Class III-A-2 and Class P Certificates, which
will not be entitled to receive any distributions of interest) on each
Distribution Date will have accrued at the applicable per annum Certificate
Interest Rate on the Class Principal Balance or Class Notional Amount
outstanding following the immediately prior Distribution Date (or with
respect to the first Distribution Date, as of the Closing Date).
(2) The Class I-A-10, Class I-A-11, Class II-A-2, Class III-A-2 and Class
P Certificates shall not be entitled to receive any distributions of
interest.
(3) The Certificate Interest Rate on the Class I-A-18 Certificates for the
first twelve Distribution Dates shall be 7.500% per annum. Thereafter, the
Certificate Interest Rate on the Class I-A-18 Certificates shall be 6.500%
per annum. The Class I-A-18 Certificates are comprised of (i) the Class I-A-
18 REMIC II Regular Interest whose Class Principal Balance is equal to the
Class I-A-18 Principal Balance and which accrue interest at a Certificate
Interest Rate of 6.500% per annum and (ii) a right to receive additional
interest payments from the Class I-A-18 Interest Supplement Account.
(4) Each of the Class X and Class I-A-24 Certificates shall accrue
interest on the related Class Notional Amount. The Class X and Class I-A-
24 Certificates shall not be entitled to receive any distributions of
principal.
(5) The Class I-A-12 Certificates will be comprised of two REMIC
II Regular Interests: REMIC II Regular Interest I-A-12-PO, which is
entitled to the principal distributions received by REMIC II attributable
to the Class I-A-12-L Regular Interests; and REMIC II Regular Interest
I-A-12-IO, which is entitled to that portion of the interest payable on the
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<PAGE> 6
Class I-A-13-L Regular Interests corresponding to interest at a rate equal
to the excess of 6.9299972% over 6.65%.
As provided herein, with respect to REMIC II, the Company will cause
an election to be made on behalf of REMIC II to be treated for federal
income tax purposes as a REMIC. The Certificates (other than the Class I-A-
12, Class I-A-18, Class R-1 and Class R-2 Certificates), REMIC II Regular
Interest I-A-12-PO, REMIC II Regular Interest I-A-12-IO and the portion of
the Class I-A-18 Certificates other than the right to receive interest
payments from the Class I-A-18 Interest Supplement Account will be
designated regular interests in REMIC II, and the Class R-2 Certificates
will be designated the sole class of residual interest in REMIC II, for
purposes of the REMIC Provisions. As of the Cut-Off Date, the Mortgage
Loans have an aggregate Principal Balance of $1,688,837,275 and the
Certificates have an Aggregate Certificate Principal Balance of
$1,688,837,275.
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 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 Mortgage Loans and certain other property
and (ii) sell undivided beneficial ownership interests in REMIC I and in
order to do so is selling the REMIC I Regular Interests issued hereunder as
hereinafter provided;
WHEREAS, the Company has been duly authorized to (i) create a trust
("REMIC II") to hold the REMIC I Regular Interests and (ii) sell undivided
beneficial ownership interests in REMIC II and in order to do so is selling
the Certificates issued hereunder as hereinafter provided; and
WHEREAS, the Trustee is a Massachusetts trust company duly organized
and existing under the laws of The Commonwealth of Massachusetts and has
full power and authority to enter into this Agreement.
NOW, THEREFORE, in order to declare the terms and conditions upon
which the Certificates are, and are to be, authenticated, issued and
delivered, and in consideration of the premises and of the purchase and
acceptance of the Certificates by the Holders thereof, the Company
covenants and agrees with the Trustee, for the equal and proportionate
benefit of the respective Holders from time to time of the Certificates, as
follows:
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<PAGE> 7
ARTICLE I
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Aggregate Certificate Principal Balance: At any given time, the sum of
the then current Class Principal Balances of the Certificates.
Appraised Value: The amount set forth in an appraisal made by or for
the mortgage originator in connection with its origination of each Mortgage
Loan, or with respect to certain Mortgage Loans originated to refinance
mortgage debt, the appraisal made by or for the mortgage originator in
connection with the origination of such mortgage debt.
Assignment of Proprietary Lease: With respect to a Cooperative Loan,
the assignment or mortgage of the related Cooperative Lease from the
Mortgagor to the originator of the Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates (other than
the Class I-A-2, Class I-A-12, Class I-A-13, Class I-A-14, Class I-A-15,
Class I-A-16, Class I-A-18, Class I-A-23, Class I-A-24, Class X and
Residual Certificates), an initial Certificate Principal Balance equal to
$25,000 and integral multiples of $1 in excess thereof, except that one
Certificate of each such Class may be issued in a different amount. With
respect to the Class I-A-2, Class I-A-12, Class I-A-13, Class I-A-14, Class
I-A-15, Class I-A-16, Class I-A-18 and Class I-A-23 Certificates, an
initial Certificate Principal Balance equal to $1,000 and integral
multiples of $1 in excess thereof. With respect to the Class X and Class I-
A-24 Certificates, a Class Notional Amount as of the Cut-Off Date equal to
$100,000 and multiples of $1 in excess thereof, except that one Certificate
of each such Class may be offered in a different amount. With respect to
each Class of the Residual Certificates, one Certificate with a Percentage
Interest equal to 0.01% and one Certificate with a Percentage Interest
equal to 99.99%.
Balloon Loan: Any Mortgage Loan which, by its terms, does not fully
amortize the principal balance thereof by its stated maturity and thus
requires a payment at the stated maturity larger than the monthly payments
due thereunder.
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
<PAGE>
<PAGE> 8
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. Notwithstanding the foregoing, no
such occurrence shall be considered a Bankruptcy Loss so long as the Master
Servicer or the related Servicer is pursuing any other remedies that may be
available with respect to the related Mortgage Loan and (i) such Mortgage
Loan is not in default with respect to payments due thereunder or (ii)
scheduled monthly payments of principal and interest are being advanced by
the Master Servicer or the related Servicer without giving effect to any
reduction in the scheduled Monthly Payment referred to in clause (i) of the
preceding sentence.
Bankruptcy and Extraordinary Expense Reserve Fund: The separate trust
account held by the Trustee in accordance with Section 3.18, 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 and the Trustee, and which account
provides that the Trustee may make, or cause to be made, withdrawals
therefrom in accordance with Section 3.18.
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
<PAGE>
<PAGE> 9
of the Trustee or another financial institution approved by the Master
Servicer, (b) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to the Rating Agencies) created,
maintained and monitored by a Servicer or (c) in a separate non-trust
account without FDIC or other insurance in an Eligible Institution. Such
account or accounts may be non-interest bearing or may bear interest. In
the event that a Buydown Fund Account is established pursuant to clause (b)
of the preceding sentence, amounts held in such Buydown Fund Account shall
not exceed the level of deposit insurance coverage on such account;
accordingly, more than one Buydown Fund Account may be established.
Buydown Loan: A Mortgage Loan for which the Mortgage Interest Rate has
been subsidized through a Buydown Fund provided at the time of origination
of such Mortgage Loan.
Certificate: Any one of the Group I, Group II, Group III, Group IV or
Residual Certificates, issued pursuant to this Agreement, executed by the
Trustee and authenticated by or on behalf of the Trustee hereunder in
substantially one of the forms set forth in Exhibit A and B hereto. The
additional matter appearing in Exhibit H shall be deemed incorporated into
Exhibits A as though set forth at the end of such Exhibits.
Certificate Account: The separate trust account created and maintained
with the Trustee, the Investment Depository or any other bank or trust
company acceptable to the Rating Agencies which is incorporated under the
laws of the United States or any state thereof pursuant to Section 3.04,
which account shall bear a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Trustee on
behalf of the Certificateholders or any other account serving a similar
function acceptable to the Rating Agencies. Funds in the Certificate
Account in respect of the Mortgage Loans in each of the Loan Groups and
amounts withdrawn from the Certificate Account attributable to each of such
Loan Groups shall be accounted for separately. Funds in the Certificate
Account may be invested in Eligible Investments pursuant to Section 3.04(b)
and reinvestment earnings thereon shall be paid to the Master Servicer as
additional servicing compensation. Funds deposited in the Certificate
Account (exclusive of the Master Servicing Fee) shall be held in trust for
the Certificateholders and for the uses and purposes set forth in Section
3.04, Section 3.05, Section 4.01 and Section 4.04.
Certificateholder or Holder: With respect to the Certificates, the
person in whose name a Certificate is registered in the Certificate
Register, except that, solely for the purposes of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Company, the Master Servicer or any affiliate thereof shall be deemed not
to be outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite percentage of
Percentage Interests necessary to effect any such consent has been
obtained; provided, that the Trustee may conclusively rely upon an
Officer's Certificate to determine whether any Person is an affiliate of
the Company or the Master Servicer. With respect to the REMIC I Regular
Interests, the owner of the REMIC I Regular Interests, which as of the
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<PAGE> 10
Closing Date shall be the Trustee.
Certificate Group: The Group I, Group II, Group III and Group IV
Certificates, as applicable.
Certificate Interest Rate: For each Class of Certificates and REMIC I
Regular Interests, the per annum rate set forth as the Certificate Interest
Rate for such Class in the Preliminary Statement hereto.
Certificate Principal Balance: For each Certificate of any Class, the
portion of the related Class Principal Balance, if any, represented by such
Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed, respectively, pursuant to Section
5.03.
Class: All REMIC I Regular Interests or the Class R-1 Certificates
having the same priority and rights to payments on the Mortgage Loans from
the REMIC I Available Distribution Amount, all REMIC II Regular Interests
or the Class R-2 Certificates having the same priority and rights to
payments on the REMIC I Regular Interests from the REMIC II Available
Distribution Amount, as applicable, which REMIC I Regular Interests and
REMIC II Regular Interests, as applicable, shall be designated as a
separate Class, and which, in the case of the Certificates, shall be set
forth in the applicable forms of Certificates attached hereto as Exhibits A
and B. Each Class of REMIC I Regular Interests and the Class R-1
Certificates shall be entitled to receive the amounts allocated to such
Class pursuant to the definition of "REMIC I Distribution Amount" only to
the extent of the REMIC I Available Distribution Amount for such
Distribution Date remaining after distributions in accordance with prior
clauses of the definition of "REMIC I Distribution Amount" and each Class
of Certificates (other than the Class R-1 Certificates) shall be entitled
to receive the amounts allocated to such Class pursuant to the definition
of "REMIC II Distribution Amount" only to the extent of the REMIC II
Available Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of "REMIC
II Distribution Amount".
Class A Certificates: The Group I-A, Group II-A, Group III-A and Class
IV-A-1 Certificates.
Class A-L Regular Interests: The Group I-A-L, Group II-A-L, Group III-
A-L and Class IV-A-1-L Regular Interests.
Class B Certificates: The Group I-B Certificates.
Class B-L Regular Interests : The Group I-B-L Regular Interests.
Class M Certificates: The Class II-M, Class III-M and Class IV-M
Certificates.
<PAGE>
<PAGE> 11
Class M-L Regular Interests: The Class II-M-L, Class III-M-L and Class
IV-M-L Regular Interests.
Class P Certificates: The Class I-P, Class II-P, Class III-P and Class
IV-P Certificates.
Class P-L Regular Interests: The Class I-P-L, Class II-P-L, Class III-
P-L and Class IV-P-L Regular Interests.
Class P Fraction: Any of the Class I-P, Class II-P, Class III-P or
Class IV-P Fractions, as applicable.
Class P Mortgage Loan: Any of the Class I-P, Class II-P, Class III-P
or the Class IV-P Mortgage Loans.
Class X Certificates: The Class I-X, Class II-X-1, Class II-X-2, Class
II-X-3, Class III-X and Class IV-X Certificates.
Class X-L Regular Interests: The Class I-X-L, Class II-X-1-L, Class II-
X-2-L, Class II-X-3-L, Class III-X-L and Class IV-X-L Regular Interests.
Class I-A-1 Certificates: The Certificates designated as "Class I-A-1"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-2 Certificates: The Certificates designated as "Class I-A-2"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-3 Adjusted Percentage: For any Distribution Date occurring
prior to the Distribution Date in November 2003, 0%, and for the November
2003 Distribution Date and any Distribution Date thereafter, the Class I-A-
3 Percentage.
Class I-A-3 Certificates: The Certificates designated as "Class I-A-3"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-3 Liquidation Amount: The aggregate, for each Group I Loan
which became a Liquidated Mortgage Loan during the calendar month preceding
the month of the Distribution Date, of the lesser of (i) the Class I-A-3
Percentage of the Principal Balance of such Mortgage Loan (exclusive of the
Class I-P Fraction thereof, with respect to any Class I-P Mortgage Loan)
and (ii) the Class I-A-3 Percentage on any Distribution Date occurring
prior to the fifth anniversary of the first Distribution Date, and the
Class I-A-3 Prepayment Percentage on the fifth anniversary of the first
Distribution Date and each Distribution Date thereafter, in each case, of
<PAGE>
<PAGE> 12
the Liquidation Principal with respect to such Mortgage Loan.
Class I-A-3 Priority Amount: For any Distribution Date, the sum of
(i) the Class I-A-3 Adjusted Percentage of the Principal Payment Amount for
Loan Group I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC I Distribution Amount"), (ii) the
Class I-A-3 Prepayment Percentage of the Principal Prepayment Amount for
Loan Group I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC I Distribution Amount") and (iii) the
Class I-A-3 Liquidation Amount.
Class I-A-3 Percentage: For any Distribution Date, the Class I-A-3
Principal Balance divided by the aggregate Class Principal Balance of the
Group I Certificates (less the Class I-P Principal Balance) and the
Residual Certificates, in each case immediately prior to such Distribution
Date.
Class I-A-3 Prepayment Percentage: For any Distribution Date, the
product of the Class I-A-3 Percentage and the Step Down Percentage.
Class I-A-3-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-4 Certificates: The Certificates designated as "Class I-A-4"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-4-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-5 Certificates: The Certificates designated as "Class I-A-5"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-5-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-6 Certificates: The Certificates designated as "Class I-A-6"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-6-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-7 Certificates: The Certificates designated as "Class I-A-7"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-7-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
<PAGE>
<PAGE> 13
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-8 Certificates: The Certificates designated as "Class I-A-8"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-8-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-9 Adjusted Percentage: For any Distribution Date occurring
prior to the Distribution Date in November 2003, 0%, and for the November
2003 Distribution Date and any Distribution Date thereafter, the Class I-A-
9 Percentage.
Class I-A-9 Certificates: The Certificates designated as "Class I-A-9"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-A-9 Liquidation Amount: The aggregate, for each Group I Loan
which became a Liquidated Mortgage Loan during the calendar month preceding
the month of the Distribution Date, of the lesser of (i) the Class I-A-9
Percentage of the Principal Balance of such Mortgage Loan (exclusive of the
Class I-P Fraction thereof, with respect to any Class I-P Mortgage Loan)
and (ii) the Class I-A-9 Percentage on any Distribution Date occurring
prior to the fifth anniversary of the first Distribution Date, and the
Class I-A-9 Prepayment Percentage on the fifth anniversary of the first
Distribution Date and each Distribution Date thereafter, in each case, of
the Liquidation Principal with respect to such Mortgage Loan.
Class I-A-9 Priority Amount: For any Distribution Date, the sum of
(i) the Class I-A-9 Adjusted Percentage of the Principal Payment Amount for
Loan Group I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC I Distribution Amount"), (ii) the
Class I-A-9 Prepayment Percentage of the Principal Prepayment Amount for
Loan Group I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC I Distribution Amount") and (iii) the
Class I-A-9 Liquidation Amount.
Class I-A-9 Percentage: For any Distribution Date, the Class I-A-9
Principal Balance divided by the aggregate Class Principal Balance of the
Group I Certificates (less the Class I-P Principal Balance) and the
Residual Certificates, in each case immediately prior to such Distribution
Date.
Class I-A-9 Prepayment Percentage: For any Distribution Date, the
product of the Class I-A-9 Percentage and the Step Down Percentage.
Class I-A-9-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
<PAGE>
<PAGE> 14
Class I-A-10 Certificates: The Certificates designated as "Class I-A-
10" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-10-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-11 Certificates: The Certificates designated as "Class I-A-
11" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-11-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-12 Certificates: The Certificates designated as "Class I-A-
12" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-12-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-12-IO REMIC II Regular Interest: The Class of REMIC II
Regular Interest which is entitled to that portion of the interest payable
on the Class I-A-13-L Regular Interests corresponding to interest at a rate
equal to the excess of 6.9299972% over 6.65%, as specified in the table
entitled "REMIC II" in the Preliminary Statement hereto.
Class I-A-12-PO REMIC II Regular Interest: The Class of REMIC II
Regular Interest which is entitled to the principal distributions received
by REMIC II attributable to the Class I-A-12-L Regular Interests, as
specified in the table entitled "REMIC II" in the Preliminary Statement
hereto.
Class I-A-13 Certificates: The Certificates designated as "Class I-A-
13" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-13-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-14 Certificates: The Certificates designated as "Class I-A-
14" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-14-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
<PAGE>
<PAGE> 15
Class I-A-15 Certificates: The Certificates designated as "Class I-A-
15" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-15-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-16 Certificates: The Certificates designated as "Class I-A-
16" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-16-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-17 Certificates: The Certificates designated as "Class I-A-
17" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-17-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-18 Certificates: The Certificates designated as "Class I-A-
18" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-18 Interest Supplement Amount: For each of the first twelve
Distribution Dates, an amount equal to the excess of (i) the Interest
Distribution Amount for the Class I-A-18-L Regular Interests over (ii) such
amount calculated as if the Certificate Interest Rate for the Class I-A-18-
L Regular Interests is 6.500% per annum.
Class I-A-18 Interest Supplement Account : The separate trust account
maintained by the Master Servicer and held by the Trustee, which account
shall bear a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Trustee on behalf of the
Certificateholders, or any other account serving a similar function
acceptable to the Rating Agencies and the Trustee, and which account
provides that the Trustee may make, or cause to be made, withdrawals
therefrom in accordance with Section 3.22.
Class I-A-18-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-18 REMIC II Regular Interest: The Class of REMIC II Regular
Interest whose Class Principal Balance is equal to the Class I-A-18
Principal Balance and which accrue interest at a Certificate Interest Rate
of 6.500% per annum, as specified in the table entitled "REMIC II" in the
Preliminary Statement hereto.
<PAGE>
<PAGE> 16
Class I-A-19 Certificates: The Certificates designated as "Class I-A-
19" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-19-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-20 Certificates: The Certificates designated as "Class I-A-
20" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-20-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-21 Certificates: The Certificates designated as "Class I-A-
21" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-21-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-22 Certificates: The Certificates designated as "Class I-A-
22" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-22-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-23 Certificates: The Certificates designated as "Class I-A-
23" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-23-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-23 Rounding Account: The separate trust account established
by DLJ by deposit as of the Closing Date of $999.99 and maintained by the
Master Servicer 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 3.21, which account shall bear a designation clearly
indicating that the funds deposited therein are held in trust for the
benefit of the Trustee on behalf of the Class I-A-23 Certificateholders or
any other account serving a similar function acceptable to the Rating
Agencies, and which account provides that the Trustee may make, or cause to
be made, withdrawals as provided in Section 3.21 hereof. Funds in the
Certificate Account may be invested in Eligible Investments and
<PAGE>
<PAGE> 17
reinvestment earnings thereon shall be paid to the Master Servicer as
additional servicing compensation.
Class I-A-24 Certificates: The Certificates designated as "Class I-A-
24" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-24 Notional Amount: For any Distribution Date, the Class I-A-
20 Principal Balance immediately prior to such Distribution Date multiplied
by 18/650.
Class I-B-1 Certificates: The Certificates designated as "Class I-B-1"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-B-2 Certificates: The Certificates designated as "Class I-B-2"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-B-3 Certificates: The Certificates designated as "Class I-B-3"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-3-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-B-4 Certificates: The Certificates designated as "Class I-B-4"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-4-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-B-5 Certificates: The Certificates designated as "Class I-B-5"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-5-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-B-6 Certificates: The Certificates designated as "Class I-B-6"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class I-B-6-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
<PAGE>
<PAGE> 18
Class I-P Certificates: The Certificates designated as "Class I-P" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class I-P Fraction: For each Class I-P Mortgage Loan, a fraction, the
numerator of which is 6.500% less the Pass-Through Rate on such Class I-P
Mortgage Loan and the denominator of which is 6.500%.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate of
less than 6.500% per annum.
Class I-P-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-X Certificates: The Certificates designated as "Class I-X" on
the face thereof in substantially the form attached hereto as Exhibit A.
Class I-X Notional Amount: With respect to any Distribution Date, the
product of (x) the aggregate scheduled principal balance, as of the second
preceding Due Date after giving effect to payments scheduled to be received
as of such Due Date, whether or not received, or with respect to the
initial Distribution Date, as of the Cut-Off Date, of the Group I Premium
Rate Mortgage Loans and (y) a fraction, the numerator of which is the
weighted average of the Stripped Interest Rates for the Group I Premium
Rate Mortgage Loans as of such Due Date and the denominator of which is
6.500%.
Class I-X-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-A-1 Certificates: The Certificates designated as "Class II-A-
1" on the face thereof in substantially the form attached hereto as Exhibit
A.
Class II-A-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-A-2 Certificates: The Certificates designated as "Class II-A-
2" on the face thereof in substantially the form attached hereto as Exhibit
A.
Class II-A-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-M Certificates: The Certificates designated as "Class II-M"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class II-M-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
<PAGE>
<PAGE> 19
Regular Interest and is entitled to distributions as set forth herein.
Class II-M Liquidation Amount: The excess, if any, of the aggregate of
Liquidation Principal for all Group II Loans which became Liquidated
Mortgage Loans during the Prior Period over the Group II Senior Liquidation
Amount for such Distribution Date.
Class II-M Percentage: With respect to any Distribution Date, the
excess of 100% over the Group II Senior Percentage for such date.
Class II-M Prepayment Percentage: On any Distribution Date, the excess
of 100% over the Group II Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Group II-A Certificates has been reduced to zero, then the
Class II-M Prepayment Percentage shall equal 100%.
Class II-M Principal Distribution Amount: On any Distribution Date,
the excess of (A) the sum of (i) the Class II-M Percentage of the Principal
Payment Amount for Loan Group II (exclusive of the portion thereof
attributable to principal distributions to the Class II-P-L Regular
Interests pursuant to clause (I)(b)(i) of the definition of "REMIC I
Distribution Amount"), (ii) the Class II-M Prepayment Percentage of the
Principal Prepayment Amount for Loan Group II (exclusive of the portion
thereof attributable to principal distributions to the Class II-P-L Regular
Interests pursuant to clause (I)(b)(i) of the definition of "REMIC I
Distribution Amount") and (iii) the Class II-M Liquidation Amount over (B)
the amounts required to be distributed to the Class II-P-L Regular
Interests pursuant to clauses (I)(b)(v) and (I)(b)(vi) of the definition of
"REMIC I Distribution Amount" on such Distribution Date, as applicable.
Class II-P Certificates: The Certificates designated as "Class II-P"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class II-P Fraction: For each Class II-P Mortgage Loan, a fraction,
the numerator of which is 6.4809% less the Pass-Through Rate on such Class
II-P Mortgage Loan and the denominator of which is 6.4809%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-Through Rate
of less than 6.4809% per annum.
Class II-P-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-X Certificates: The Class II-X-1, Class II-X-2 and Class II-X-
3 Certificates.
Class II-X-L Regular Interests: The Class II-X-1-L, Class II-X-2-L and
Class II-X-3-L Regular Interests.
Class II-X-1 Certificates: The Certificates designated as "Class II-X-
1" on the face thereof in substantially the form attached hereto as Exhibit
<PAGE>
<PAGE> 20
A.
Class II-X-1 Notional Amount: With respect to any Distribution Date,
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Class II-X-1
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Class II-X-1
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
Class II-X-1 Premium Rate Mortgage Loans: The Subgroup II-1 Loans
having Pass-Through Rates in excess of 6.4809% per annum.
Class II-X-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-X-2 Certificates: The Certificates designated as "Class II-X-
2" on the face thereof in substantially the form attached hereto as Exhibit
A.
Class II-X-2 Notional Amount: With respect to any Distribution Date,
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Class II-X-2
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Class II-X-2
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
Class II-X-2 Premium Rate Mortgage Loans: The Subgroup II-2 Loans
having Pass-Through Rates in excess of 6.4809% per annum.
Class II-X-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-X-3 Certificates: The Certificates designated as "Class II-X-
3" on the face thereof in substantially the form attached hereto as Exhibit
A.
Class II-X-3 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, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Class II-X-3
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Class II-X-3
Premium Rate Mortgage Loans as of such Due Date and the denominator of
<PAGE>
<PAGE> 21
which is 7.000%.
Class II-X-3 Premium Rate Mortgage Loans: The Subgroup II-3 Loans
having Pass-Through Rates in excess of 6.4809% per annum.
Class II-X-3-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class III-A-1 Certificates: The Certificates designated as "Class III-
A-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class III-A-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class III-A-2 Certificates: The Certificates designated as "Class III-
A-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class III-A-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class III-M Certificates: The Certificates designated as "Class III-M"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class III-M-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class III-M Liquidation Amount: The excess, if any, of the aggregate
of Liquidation Principal for all Group III Loans which became Liquidated
Mortgage Loans during the Prior Period over the Group III Senior
Liquidation Amount for such Distribution Date.
Class III-M Percentage: With respect to any Distribution Date, the
excess of 100% over the Group III Senior Percentage for such date.
Class III-M Prepayment Percentage: On any Distribution Date, the
excess of 100% over the Group III Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class Principal
Balance of the Group III-A Certificates has been reduced to zero, then the
Class III-M Prepayment Percentage shall equal 100%.
Class III-M Principal Distribution Amount: On any Distribution Date,
the excess of (A) the sum of (i) the Class III-M Percentage of the
Principal Payment Amount for Loan Group III (exclusive of the portion
thereof attributable to principal distributions to the Class III-P-L
Regular Interests pursuant to clause (I)(c)(i) of the definition of "REMIC
I Distribution Amount"), (ii) the Class III-M Prepayment Percentage of the
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<PAGE> 22
Principal Prepayment Amount for Loan Group III (exclusive of the portion
thereof attributable to principal distributions to the Class III-P-L
Regular Interests pursuant to clause (I)(c)(i) of the definition of "REMIC
I Distribution Amount") and (iii) the Class III-M Liquidation Amount over
(B) the amounts required to be distributed to the Class III-P-L Regular
Interests pursuant to clauses (I)(c)(v) and (I)(c)(vi) of the definition of
"REMIC I Distribution Amount" on such Distribution Date, as applicable.
Class III-P Certificates: The Certificates designated as "Class III-P"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class III-P Fraction: For each Class III-P Mortgage Loan, a fraction,
the numerator of which is 6.4809% less the Pass-Through Rate on such Class
III-P Mortgage Loan and the denominator of which is 6.4809%.
Class III-P Mortgage Loan: Any Group III Loan with a Pass-Through Rate
of less than 6.4809% per annum.
Class III-P-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class III-X Certificates: The Certificates designated as "Class III-X"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class III-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, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Group III
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Group III
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
Class III-X-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class IV-A-1 Certificates: The Certificates designated as "Class IV-A-
1" on the face thereof in substantially the form attached hereto as Exhibit
A.
Class IV-A-1-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class IV-AM Certificates: The Certificates designated as "Class IV-AM"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class IV-AM-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
<PAGE>
<PAGE> 23
Regular Interest and is entitled to distributions as set forth herein.
Class IV-M Certificates: The Certificates designated as "Class IV-M"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class IV-M-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class IV-P Certificates: The Certificates designated as "Class IV-P"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class IV-P-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class IV-P Fraction: For each Class IV-P Mortgage Loan, a fraction,
the numerator of which is 6.250% less the Pass-Through Rate on such Class
IV-P Mortgage Loan and the denominator of which is 6.250%.
Class IV-P Mortgage Loan: Any Group IV Loan with a Pass-Through Rate
of less than 6.250% per annum.
Class IV-X Certificates: The Certificates designated as "Class IV-X"
on the face thereof in substantially the form attached hereto as Exhibit A.
Class IV-X-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class IV-X 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, or with respect to the
initial Distribution Date, as of the Cut-Off Date, of the Group IV Premium
Rate Mortgage Loans and (y) a fraction, the numerator of which is the
weighted average of the Stripped Interest Rates for the Group IV Premium
Rate Mortgage Loans as of such Due Date and the denominator of which is
6.250%.
Class Notional Amount: With respect to any of the Class X
Certificates, the Class X-L Regular Interests and the Class I-A-24
Certificates, the related notional amount for any such Class, as specified
herein (i.e. the "Class Notional Amount" for the Class I-X Certificates and
the Class I-X-L Regular Interests is the Class I-X Notional Amount).
Class Principal Balance: For any Class of Certificates and for any
Class of Regular Interests, the applicable initial Class Principal Balance
therefor set forth in the Preliminary Statement hereto, corresponding to
the rights of such Class in payments of principal due to be passed through
to Certificateholders or the Holders of the Regular Interests from
principal payments on the Mortgage Loans or the REMIC I Regular Interests,
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<PAGE> 24
as applicable, as reduced from time to time by (x) distributions of
principal to Certificateholders or the Holders of the Regular Interests of
such Class and (y) the portion of Realized Losses allocated to the Class
Principal Balance of such Class pursuant to the definition of "Realized
Loss" with respect to a given Distribution Date. For any Distribution Date,
the reduction of the Class Principal Balance of any Class of Certificates
and Regular Interests pursuant to the definition of "Realized Loss" shall
be deemed effective prior to the determination and distribution of
principal on such Class pursuant to the definition of "REMIC I Distribution
Amount" and "REMIC II Distribution Amount". Notwithstanding the foregoing,
any amounts distributed in respect of losses pursuant to paragraph
(I)(a)(vi), (I)(b)(vi), (I)(c)(vi) or (I)(d)(vi) of the definition of
"REMIC I Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of the Class P-L Regular Interests. The Class
Principal Balance for the Class I-A-1 Certificates shall be referred to as
the "Class I-A-1 Principal Balance", the Class Principal Balance for the
Class I-A-1-L Regular Interests shall be referred to as the "Class I-A-1-L
Principal Balance" and so on. The Class Principal Balances for the Class X
Certificates, the Class X-L Regular Interests and the Class I-A-24
Certificates shall each be zero.
Class R-1 Certificates: The Certificates designated as "Class R-1" on
the face thereof in substantially the form attached hereto as Exhibit B,
which have been designated as the single class of "residual interest" in
REMIC I pursuant to Section 2.01.
Class R-2 Certificates: The Certificates designated as "Class R-2" on
the face thereof in substantially the form attached hereto as Exhibit A,
which have been designated as the single class of "residual interest" in
REMIC II pursuant to Section 2.05.
Class R-2-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended,
which initially shall be DTC.
Closing Date: October 30, 1998, which is the date of settlement of the
sale of the Certificates to the original purchasers thereof.
Code: The Internal Revenue Code of 1986, as amended.
Company: PNC Mortgage Securities Corp., a Delaware corporation, or its
successor-in-interest.
Compensating Interest: For any Distribution Date with respect to each
Loan Group and the Mortgage Loans contained therein, the lesser of (i) the
sum of (a) the aggregate Master Servicing Fee payable with respect to such
Loan Group on such Distribution Date, (b) the aggregate Payoff Earnings
with respect to such Loan Group and (c) the aggregate Payoff Interest with
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<PAGE> 25
respect to such Loan Group and (ii) the aggregate Uncollected Interest with
respect to such Loan Group.
Cooperative: A private, cooperative housing corporation organized
under the laws of, and headquartered in, the States of New York or New
Jersey which owns or leases land and all or part of a building or buildings
located in such states, including apartments, spaces used for commercial
purposes and common areas therein and whose board of directors authorizes,
among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an exclusive
right to occupy pursuant to the terms of a proprietary lease or occupancy
agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment
occupied by the Mortgagor and relating to the related Cooperative Stock,
which lease or agreement confers an exclusive right to the holder of such
Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii)
an assignment or mortgage of the Cooperative Lease, (iv) financing
statements and (v) a stock power (or other similar instrument), and
ancillary thereto, a recognition agreement between the Cooperative and the
originator of the Cooperative Loan, each of which was transferred and
assigned to the Trustee pursuant to Section 2.01 and are from time to time
held as part of the Trust Fund created hereunder.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership
instrument in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan,
the stock certificate or other instrument evidencing the related
Cooperative Stock.
Corporate Trust Office: The corporate trust office of the Trustee in
the Commonwealth of Massachusetts, at which at any particular time its
corporate trust business with respect to this Agreement shall be
administered, which office at the date of the execution of this Agreement
is located at Two International Place, Boston, MA 02110, Attention:
Corporate Trust PNC 1998-10.
Corresponding Class: With respect to the Group I and Class R-2
Certificates and the Group I-L Regular Interests, the "Corresponding Class"
shall be as indicated in the following table.
Class I-A-1-L Class I-A-1
Class I-A-2-L Class I-A-2
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<PAGE> 26
Class I-A-3-L Class I-A-3
Class I-A-4-L Class I-A-4
Class I-A-5-L Class I-A-5
Class I-A-6-L Class I-A-6
Class I-A-7-L Class I-A-7
Class I-A-8-L Class I-A-8
Class I-A-9-L Class I-A-9
Class I-A-10-L Class I-A-10
Class I-A-11-L Class I-A-11
Class I-A-12-L Class I-A-12
Class I-A-13-L Class I-A-13
Class I-A-14-L Class I-A-14
Class I-A-15-L Class I-A-15
Class I-A-16-L Class I-A-16
Class I-A-17-L Class I-A-17
Class I-A-18-L Class I-A-18
Class I-A-19-L Class I-A-19
Class I-A-20-L Class I-A-20
Class I-A-21-L Class I-A-21
Class I-A-22-L Class I-A-22
Class I-A-23-L Class I-A-23
Class I-X-L Class I-X
Class I-P-L Class I-P
Class I-B-1-L Class I-B-1
Class I-B-2-L Class I-B-2
Class I-B-3-L Class I-B-3
Class I-B-4-L Class I-B-4
Class I-B-5-L Class I-B-5
Class I-B-6-L Class I-B-6
Class R-2-L Class R-2
With respect to the Group II Certificates and the Group II-L Regular
Interests, the "Corresponding Class" shall be as indicated in the following
table.
Class II-A-1-L Class II-A-1
Class II-A-2-L Class II-A-2
Class II-X-1-L Class II-X-1
Class II-X-2-L Class II-X-2
Class II-X-3-L Class II-X-3
Class II-M-L Class II-M
Class II-P-L Class II-P
With respect to the Group III Certificates and the Group III-L Regular
Interests, the "Corresponding Class" shall be as indicated in the following
table.
Class III-A-1-L Class III-A-1
Class III-A-2-L Class III-A-2
Class III-X-L Class III-X
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<PAGE> 27
Class III-M-L Class III-M
Class III-P-L Class III-P
With respect to the Group IV Certificates and the Group IV-L Regular
Interests, the "Corresponding Class" shall be as indicated in the following
table.
Class IV-A-1-L Class IV-A-1
Class IV-X-L Class IV-X
Class IV-P-L Class IV-P
Class IV-M-L Class IV-M
Class IV-AM-L Class IV-AM
Curtailment: Any payment of principal on a Mortgage Loan, made by or
on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid
Monthly Payment or a Payoff, which is applied to reduce the outstanding
principal balance of the Mortgage Loan.
Curtailment Shortfall: With respect to any Curtailment applied with a
Monthly Payment other than a Prepaid Monthly Payment, an amount equal to
one month's interest on such Curtailment at the applicable Pass-Through
Rate on such Mortgage Loan.
Custodial Account for P&I: The Custodial Account for principal and
interest established and maintained by each Servicer pursuant to its
Selling and Servicing Contract and caused by the Master Servicer to be
established and maintained pursuant to Section 3.02 (a) with the corporate
trust department of the Trustee or another financial institution approved
by the Master Servicer such that the rights of the Master Servicer, the
Trustee and the Certificateholders thereto shall be fully protected against
the claims of any creditors of the applicable Servicer and of any creditors
or depositors of the institution in which such account is maintained, (b)
within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to the Rating Agencies) created, maintained and
monitored by a Servicer or (c) in a separate non-trust account without FDIC
or other insurance in an Eligible Institution. In the event that a
Custodial Account for P&I is established pursuant to clause (b) of the
preceding sentence, amounts held in such Custodial Account for P&I shall
not exceed the level of deposit insurance coverage on such account;
accordingly, more than one Custodial Account for P&I may be established.
Any amount that is at any time not protected or insured in accordance with
the first sentence of this definition of "Custodial Account for P&I" shall
promptly be withdrawn from such Custodial Account for P&I and be remitted
to the Investment Account.
Custodial Account for Reserves: The Custodial Account for Reserves
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established and
maintained pursuant to Section 3.02 (a) with the corporate trust department
of the Trustee or another financial institution approved by the Master
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<PAGE> 28
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: October 1, 1998.
Deceased Holder: A Beneficial Holder of a Class I-A-23 Certificate who
was living at the time such Class I-A-23 Certificate was acquired and whose
authorized personal representative, surviving tenant by the entirety,
surviving joint tenant or surviving tenant in common or other person
empowered to act on behalf of such Beneficial Holder causes to be furnished
to DTC evidence of such Beneficial Holder's death satisfactory to the
Trustee and any tax waivers requested by the Trustee.
Definitive Certificates: Certificates in definitive, fully registered
and certificated form.
Depositary Agreement: The Letter of Representations, dated October 29,
1998 by and among DTC, the Company and the Trustee.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: A day not later than the 10th day preceding a
related Distribution Date.
Disqualified Organization: Any Person which is not a Permitted
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<PAGE> 29
Transferee, but does not include any Pass-Through Entity which owns or
holds a Residual Certificate and of which a Disqualified Organization,
directly or indirectly, may be a stockholder, partner or beneficiary.
Distribution Date: With respect to distributions on the REMIC I
Regular Interests and the Certificates, the 25th day (or, if such 25th day
is not a Business Day, the Business Day immediately succeeding such 25th
day) of each month, with the first such date being November 25, 1998.
DLJ: Donaldson, Lufkin & Jenrette Securities Corporation.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial institution
or other Person for whom DTC effects book-entry transfers and pledges of
securities deposited with DTC.
Due Date: The first day of each calendar month, which is 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, the Custodial Account
for Reserves, the Bankruptcy and Extraordinary Expense Reserve Fund and the
Expense Account may be invested:
(i) Obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(ii) Repurchase agreements on obligations described in clause (i)
of this definition of "Eligible Investments", provided that the
unsecured obligations of the party (including the Trustee in its
commercial capacity) agreeing to repurchase such obligations have at
the time one of the two highest short term debt ratings of the Rating
Agencies and provided that such repurchaser's unsecured long term debt
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<PAGE> 30
has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits
and bankers' acceptances of any U.S. bank or trust company
incorporated under the laws of the United States or any state
(including the Trustee in its commercial capacity), provided that the
debt obligations of such bank or trust company (or, in the case of the
principal bank in a bank holding company system, debt obligations of
the bank holding company) at the date of acquisition thereof have one
of the two highest short term debt ratings of the Rating Agencies and
unsecured long term debt has one of the two highest unsecured long
term debt ratings of the Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state of
the United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the highest
long-term debt ratings available for such securities from the Rating
Agencies;
(v) Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date of
acquisition has the highest commercial paper rating of the Rating
Agencies, provided that the corporation has unsecured long term debt
that has one of the two highest unsecured long term debt ratings of
the Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States or any
state thereof and have the highest long-term unsecured rating
available for such securities from the Rating Agencies; provided,
however, that securities issued by any such corporation will not be
investments to the extent that investment therein would cause the
outstanding principal amount of securities issued by such corporation
that are then held as part of the Investment Account or the
Certificate Account to exceed 20% of the aggregate principal amount of
all Eligible Investments then held in the Investment Account and the
Certificate Account;
(vii) Units of taxable money market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the Securities
and Exchange Commission under the Investment Company Act of 1940),
which funds have the highest rating available for such securities from
the Rating Agencies or which have been designated in writing by the
Rating Agencies as Eligible Investments; and
(viii) Such other investments the investment in which will
not, as evidenced by a letter from each of the Rating Agencies, result
in the downgrading or withdrawal of the Ratings;
provided, however, that such obligation or security is held for a temporary
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<PAGE> 31
period pursuant to Section 1.860G-2(g)(1) of the Treasury Regulations, and
that such period can in no event exceed thirteen months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or (b) has been
purchased at a price greater than the outstanding principal balance of such
instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: Any event of default as specified in Section 7.01.
Excess Amount : The uncertificated partial undivided beneficial
ownership interest in REMIC I which constitutes a REMIC I Regular Interest
and is entitled to distributions as set forth herein. The Excess Amount
will accrue interest at a per annum rate of 0.5191% on the outstanding
Principal Balance of each Group II, Group III and Group IV Loan in the
Trust Fund.
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.
Expense Account <*> : The separate trust account created by the
Trustee 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 3.19, 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
deposited in the Expense Account shall be held in trust for the
Certificateholders and the beneficial owners of the Expense Account as set
forth in Section 3.19.
Extraordinary Loss: The occurrence of a loss on a Mortgage Loan, with
respect to which standard hazard insurance coverage has expired or been
terminated or otherwise is no longer in effect, but which loss would have
been covered by standard hazard insurance of the type required pursuant to
Section 3.07 has such standard hazard insurance been in effect, including
without limitation losses relating to vandalism and property restoration of
the related Mortgaged Properties.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
FHA: Federal Housing Administration, or any successor thereto.
FHLMC: Federal Home Loan Mortgage Corporation, or any successor
<PAGE>
<PAGE> 32
thereto.
Final Maturity Date: With respect to each Class of the REMIC I
Regular Interests and the Certificates, the date set forth in the table
contained in the Preliminary Statement hereto.
Fitch: Fitch IBCA, Inc., provided that at any time it be a Rating
Agency.
FNMA: Federal National Mortgage Association, or any successor thereto.
Fraud Loss: With respect to any Group I Loan, the occurrence of a loss
on a Mortgage Loan arising from any action, event or state of facts with
respect to such Mortgage Loan which, because it involved or arose out of
any dishonest, fraudulent, criminal, negligent or knowingly wrongful act,
error or omission by the Mortgagor, originator (or assignee thereof) of
such Mortgage Loan, Lender, a Servicer or the Master Servicer, would result
in an exclusion from, denial of, or defense to coverage which otherwise
would be provided by a Primary Insurance Policy previously issued with
respect to such Mortgage Loan and with respect to any Group II, Group III
or Group IV Loan, a loss on such Mortgage Loan (i) with respect to which
coverage is denied under the Mortgage Pool Insurance Policy due to fraud,
dishonesty or misrepresentation in connection with the origination of such
Mortgage Loan or (ii) with respect to which there would have occurred a
denial of coverage under the Mortgage Pool Insurance Policy but for the
applicability of the Fraud Waiver.
Fraud Waiver: With respect to the Mortgage Pool Insurance Policy, a
limited waiver of the Mortgage Pool Insurer's right to deny or reduce a
claim under the Mortgage Pool Insurance Policy by reason of fraud,
dishonesty or misrepresentation in connection with the origination of any
Mortgage Loan covered by such Mortgage Pool Insurance Policy. The Fraud
Waiver shall be provided in an endorsement to the Mortgage Pool Insurance
Policy.
Group I Bankruptcy Coverage: With respect to Loan Group I, $254,805
less (a) any scheduled or permissible reduction in the amount of the Group
I Bankruptcy Coverage pursuant to this definition and (b) Bankruptcy Losses
allocated to the Group I Certificates. The Group I 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.
Group I Certificates: The Group I-A, Class I-P, Class I-X and Group I-
B Certificates.
Group I-L Regular Interests: The Group I-A-L, Class I-P-L, Class I-X-
L, Group I-B-L and Class R-2-L Regular Interests.
Group I Credit Support Depletion Date: The first Distribution Date on
which the aggregate Class Principal Balance of the Group I-B Certificates
has been or will be reduced to zero as a result of principal distributions
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<PAGE> 33
thereon and the allocation of Realized Losses on such Distribution Date.
Group I Fraud Coverage: During the period prior to the first
anniversary of the Cut-Off Date and with respect to Loan Group I,
$18,089,621 reduced by Fraud Losses allocated to the Group I Certificates,
and 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 Group I Fraud Coverage on the most recent previous anniversary of
the Cut-Off Date (calculated in accordance with the second sentence of this
definition) reduced by Fraud Losses allocated to the Group I Certificates
since such anniversary; and during the period on and after the fifth
anniversary of the Cut-Off Date, the Group I Fraud Coverage shall be zero.
On each anniversary of the Cut-Off Date, the Group I Fraud Coverage shall
be reduced to the lesser of (i) on the first, second, third and fourth
anniversaries of the Cut-Off Date, 1.00% of the aggregate principal balance
of the Group I Loans as of the Due Date in the preceding month and (ii)
$18,089,621 as reduced by cumulative Fraud Losses allocated to the Group I
Certificates to date. The Group I 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 Group I
Certificates by the Rating Agencies.
Group I Junior Subordinate Certificates: The Class I-B-4, Class I-B-5
and Class I-B-6 Certificates.
Group I-L Junior Subordinate Regular Interests: The Class I-B-4-L,
Class I-B-5-L and Class I-B-6-L Regular Interests.
Group I Senior Certificates: The Group I-A, Class I-X and Class I-P
Certificates.
Group I Senior Subordinate Certificates: The Class I-B-1, Class I-B-2
and Class I-B-3 Certificates.
Group I-L Senior Subordinate Regular Interests: The Class I-B-1-L,
Class I-B-2-L and Class I-B-3-L Regular Interests.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group I Premium Rate Mortgage Loans: The Group I Loans having Pass-
Through Rates in excess of 6.500% per annum.
Group I Senior Liquidation Amount: The aggregate, for each Group I
Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group I Senior Percentage of the Principal Balance
of such Mortgage Loan (exclusive of the Class I-P Fraction thereof, with
respect to any Class I-P Mortgage Loan) and (ii) the Group I Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
Group I Senior Percentage: With respect to any Distribution Date, the
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aggregate Class Principal Balance of the Group I-A Certificates and the
Residual Certificates divided by the aggregate Class Principal Balance of
the Group I Certificates (less the Class I-P Principal Balance) and the
Residual Certificates, in each case immediately prior to the Distribution
Date.
Group I Senior Prepayment Percentage: (i) On any Distribution Date
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, 100%; (ii) on any other
Distribution Date on which the Group I Senior Percentage for such
Distribution Date exceeds the Group I Senior Percentage as of the Closing
Date, 100%; and (iii) on any other Distribution Date in each of the months
of the fifth anniversary of the first Distribution Date and thereafter,
100%, unless:
(a) the mean aggregate Principal Balance of Group I Loans which are
60 or more days delinquent (including loans in foreclosure and
property held by the Trust Fund) for each of the immediately
preceding six calendar months is less than or equal to 50% of the
aggregate Class Principal Balances of the Group I-B Certificates
as of such Distribution Date; and
(b) cumulative Realized Losses on the Group I Loans allocated to the
Group I-B Certificates are less than or equal to (1) for any
Distribution Date before the month of the sixth anniversary of
the month of the first Distribution Date, 30% of the sum of the
Class Principal Balances of the Group I-B Certificates as of the
Cut-Off Date, (2) for any Distribution Date in or after the month
of the sixth anniversary of the month of the first Distribution
Date but before the seventh anniversary of the month of the first
Distribution Date, 35% of the sum of the Class Principal Balances
of the Group I-B Certificates as of the Cut-Off Date, (3) for any
Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date but
before the eighth anniversary of the month of the first
Distribution Date, 40% of the sum of the Class Principal Balances
of the Group I-B Certificates as of the Cut-Off Date, (4) for any
Distribution Date in or after the month of the eighth anniversary
of the month of the first Distribution Date but before the ninth
anniversary of the month of the first Distribution Date, 45% of
the sum of the Class Principal Balances of the Group I-B
Certificates as of the Cut-Off Date, and (5) for any Distribution
Date in or after the month of the ninth anniversary of the month
of the first Distribution Date, 50% of the sum of the Class
Principal Balances of the Group I-B Certificates as of the Cut-
Off Date,
in which case, as follows: (1) for any such Distribution Date in or after
the month of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month of the first
Distribution Date, the Group I Senior Percentage for such Distribution Date
plus 70% of the Group I Subordinate Percentage for such Distribution Date;
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<PAGE> 35
(2) for any such Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but before the
seventh anniversary of the month of the first Distribution Date, the Group
I Senior Percentage for such Distribution Date plus 60% of the Group I
Subordinate Percentage for such Distribution Date; (3) for any such
Distribution Date in or after the month of the seventh anniversary of the
month of the first Distribution Date but before the eighth anniversary of
the month of the first Distribution Date, the Group I Senior Percentage for
such Distribution Date plus 40% of the Group I Subordinate Percentage for
such Distribution Date; (4) for any such Distribution Date in or after the
month of the eighth anniversary of the month of the first Distribution Date
but before the ninth anniversary of the month of the first Distribution
Date, the Group I Senior Percentage for such Distribution Date plus 20% of
the Group I Subordinate Percentage for such Distribution Date; and (5) for
any such Distribution Date thereafter, the Group I Senior Percentage for
such Distribution Date.
If on any Distribution Date the allocation to the Group I-A-L Regular
Interests of Principal Prepayments in the percentage required would reduce
the sum of the Class Principal Balances of such Regular Interests below
zero, the Group I Senior Prepayment Percentage for such Distribution Date
shall be limited to the percentage necessary to reduce such sum to zero.
Notwithstanding the foregoing, however, on each Distribution Date, the
Class I-P-L Regular Interests will receive the Class I-P Fraction of all
principal payments, including, without limitation, Principal Prepayments,
received in respect of each Class I-P Mortgage Loan.
Group I Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group I Senior Percentage of
the Principal Payment Amount for Loan Group I (exclusive of the portion
thereof attributable to principal distributions to the Class I-P-L Regular
Interests pursuant to clauses (I)(a)(i) and (II)(a)(i) of the definition of
"REMIC I Distribution Amount"), (b) the Group I Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group I (exclusive
of the portion thereof attributable to principal distributions to the Class
I-P-L Regular Interests pursuant to clauses (I)(a)(i) and (II)(a)(i) of the
definition of "REMIC I Distribution Amount") and (c) the Group I Senior
Liquidation Amount.
Group I Special Hazard Coverage: With respect to Loan Group I,
$9,044,810 less Special Hazard Losses allocated to the Group I
Certificates, and the amount of any scheduled reduction in the amount of
Group I Special Hazard Coverage as follows: on each anniversary of the Cut-
Off Date, the Group I 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 in Loan Group I located
in the single California zip code area containing the largest aggregate
principal balance of such Mortgage Loans, (b) 1% of the aggregate unpaid
principal balance of the Mortgage Loans in Loan Group I and (c) twice the
unpaid principal balance of the largest single Mortgage Loan in Loan Group
I, in each case calculated as of the Due Date in the immediately preceding
month, and (2) $9,044,810 as reduced by the Special Hazard Losses allocated
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<PAGE> 36
to the Group I-L Regular Interests since the Cut-Off Date. The Group I
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.
Group I Subordinate Liquidation Amount: The excess, if any, of the
aggregate of Liquidation Principal for all Group I Loans which became
Liquidated Mortgage Loans during the Prior Period, over the related Group I
Senior Liquidation Amount for such Distribution Date.
Group I Subordinate Percentage: With respect to any Distribution Date,
the excess of 100% over the Group I Senior Percentage for such date.
Group I Subordinate Prepayment Percentage: On any Distribution Date
for Loan Group I, the excess of 100% over the Group I Senior Prepayment
Percentage for such Distribution Date; provided, however, that if the
aggregate Class Principal Balance of the Group I-A and Residual
Certificates has been reduced to zero, then the Group I Subordinate
Prepayment Percentage shall equal 100%.
Group I Subordinate Principal Distribution Amount: On any Distribution
Date, the excess of (A) the sum of (i) the Group I Subordinate Percentage
of the Principal Payment Amount for Loan Group I (exclusive of the portion
thereof attributable to principal distributions to the Class I-P-L Regular
Interests pursuant to clause (I)(a)(i) of the definition of "REMIC I
Distribution Amount"), (ii) the Group I Subordinate Principal Prepayments
Distribution Amount and (iii) the Group I Subordinate Liquidation Amount
over (B) the amounts required to be distributed to the Class I-P-L Regular
Interests pursuant to clauses (I)(a)(v) and (I)(a)(vi) of the definition of
"REMIC I Distribution Amount" on such Distribution Date, as applicable.
Any reduction in the Group I Subordinate Principal Distribution Amount
pursuant to clause (B) of this definition shall offset: (i) first, the
amount calculated pursuant to clause (A)(i) of this definition, (ii)
second, the amount calculated pursuant to clause (A)(iii) of this
definition and (iii) third, the amount calculated pursuant to clause
(A)(ii) of this definition. On any Distribution Date, the Group I
Subordinate Principal Distribution Amount shall be allocated pro rata, by
Class Principal Balance, among the Classes of Group I-B-L Regular
Interests, and paid in the order of distribution to such Classes pursuant
to clause (I)(a) of the definition of "REMIC I Distribution Amount", except
as otherwise stated in such definition. Notwithstanding the foregoing, on
any Distribution Date prior to distributions on such date, if the
Subordination Level for any Class of Group I-B-L Regular Interests is less
than such percentage as of the Closing Date, the pro rata portion of the
Group I Subordinate Principal Prepayments Distribution Amount otherwise
allocable to the Class or Classes junior to such Class will be distributed
to the most senior Class of the Group I-B-L Regular Interests for which the
Subordination Level is less than such percentage as of the Closing Date,
and to the Classes of Group I-B-L Regular Interests senior thereto, pro
rata according to the Class Principal Balances of such Classes. For
purposes of this definition and the definition of "Subordination Level",
the relative seniority, from highest to lowest, of the Group I-B-L Regular
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<PAGE> 37
Interests shall be as follows: Class I-B-1-L, Class I-B-2-L, Class I-B-3-L,
Class I-B-4-L, Class I-B-5-L and Class I-B-6-L.
Group I Subordinate Principal Prepayments Distribution Amount: On any
Distribution Date, the Group I Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group I (exclusive of the portion
thereof attributable to principal distributions to the Class I-P-L Regular
Interests pursuant to clause (I)(a)(i) of the definition of "REMIC I
Distribution Amount").
Group I-A Certificates: The Class I-A-1, Class I-A-2, Class I-A-3,
Class I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class I-A-8, Class I-A-
9, Class I-A-10, Class I-A-11, Class I-A-12, Class I-A-13, Class I-A-14,
Class I-A-15, Class I-A-16, Class I-A-17, Class I-A-18, Class I-A-19, Class
I-A-20, Class I-A-21, Class I-A-22, Class I-A-23 and Class I-A-24
Certificates.
Group I-A-L Regular Interests: The Class I-A-1-L, Class I-A-2-L, Class
I-A-3-L, Class I-A-4-L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L, Class
I-A-8-L, Class I-A-9-L, Class I-A-10-L, Class I-A-11-L, Class I-A-12-L,
Class I-A-13-L, Class I-A-14-L, Class I-A-15-L, Class I-A-16-L, Class I-A-
17-L, Class I-A-18-L, Class I-A-19-L, Class I-A-20-L, Class I-A-21-L, Class
I-A-22-L and Class I-A-23-L Regular Interests.
Group I-B Certificates: The Class I-B-1, Class I-B-2, Class I-B-3,
Class I-B-4, Class I-B-5 and Class I-B-6 Certificates.
Group I-B-L Regular Interests: The Class I-B-1-L, Class I-B-2-L, Class
I-B-3-L, Class I-B-4-L, Class I-B-5-L and Class I-B-6-L Regular Interests.
Group II Certificates: The Group II-A, Class II-M, Class II-P and
Class II-X Certificates.
Group II-A Certificates: The Class II-A-1 and Class II-A-2
Certificates.
Group II-A-L Regular Interests: The Class II-A-1-L and Class II-A-2-L
Regular Interests.
Group II-L Regular Interests: The Group II-A-L, Class II-M-L, Class II-
P-L and Class II-X-L Regular Interests.
Group II Credit Support Depletion Date: The later of (i) the first
Distribution Date on which the Class II-M Principal Balance 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 and (ii) the
date upon which coverage under the Mortgage Pool Insurance Policy has been
exhausted.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group II Loans.
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<PAGE> 38
Group II Premium Rate Mortgage Loans: The Group II Loans having Pass-
Through Rates in excess of 6.4809% per annum.
Group II Senior Certificates: The Group II-A, Class II-X and Class II-
P Certificates.
Group II Senior Liquidation Amount: The aggregate, for each Group II
Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group II Senior Percentage of the Principal Balance
of such Mortgage Loan (exclusive of the Class II-P Fraction thereof, with
respect to any Class II-P Mortgage Loan), and (ii) the Group II Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
Group II Senior Percentage: With respect to any Distribution Date, the
aggregate Class Principal Balance of the Group II-A Certificates divided by
the aggregate Class Principal Balance of the Group II Certificates (less
the Class II-P Principal Balance), in each case immediately prior to the
Distribution Date.
Group II Senior Prepayment Percentage: (i) On any Distribution Date
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, the Group II Senior Prepayment
Percentage shall equal 100%; (ii) on any other Distribution Date on which
the Group II Senior Percentage for such Distribution Date exceeds the Group
II Senior Percentage as of the Closing Date, then the Group II Senior
Prepayment Percentage shall equal 100%; and (iii) on any other Distribution
Date in each of the months of the fifth anniversary of the first
Distribution Date and thereafter, the Group II Senior Prepayment
Percentage shall equal 100%, unless each of the following tests specified
in clauses (a) and (b) are met:
(a) the mean aggregate Principal Balance of the Group II Loans which
are 60 or more days delinquent (including loans in foreclosure
and property held by the Trust Fund) for each of the immediately
preceding six calendar months is less than or equal to 50% of the
Class II-M Principal Balance as of such Distribution Date,
(b) cumulative Realized Losses on the Group II Loans allocated to the
Class II-M-L Regular Interests or covered under the Mortgage Pool
Insurance Policy, the Special Hazard Insurance Policy or the
Bankruptcy and Extraordinary Expense Reserve Fund is less than or
equal to (1) for any Distribution Date before the month of the
sixth anniversary of the month of the first Distribution Date,
30% of the Class II-M Principal Balance as of the Closing Date,
(2) for any Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but
before the seventh anniversary of the month of the first
Distribution Date, 35% of the Class II-M Principal Balance as of
the Closing Date, (3) for any Distribution Date in or after the
month of the seventh anniversary of the month of the first
Distribution Date but before the eighth anniversary of the month
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<PAGE> 39
of the first Distribution Date, 40% of the Class II-M Principal
Balance as of the Closing Date, (4) for any Distribution Date in
or after the month of the eighth anniversary of the month of the
first Distribution Date but before the ninth anniversary of the
month of the first Distribution Date, 45% of the Class II-M
Principal Balance as of the Closing Date, and (5) for any
Distribution Date in or after the month of the ninth anniversary
of the month of the first Distribution Date, 50% of the Class II-
M Principal Balance as of the Closing Date,
in which case, as follows: (1) for any such Distribution Date in or after
the month of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month of the first
Distribution Date, the Group II Senior Percentage for such Distribution
Date plus 70% of the Class II-M Percentage for such Distribution Date; (2)
for any such Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but before the
seventh anniversary of the month of the first Distribution Date, the Group
II Senior Percentage for such Distribution Date plus 60% of the Class II-M
Percentage for the related Loan Group for such Distribution Date; (3) for
any such Distribution Date in or after the month of the seventh anniversary
of the month of the first Distribution Date but before the eighth
anniversary of the month of the first Distribution Date, the Group II
Senior Percentage for such Distribution Date plus 40% of the Class II-M
Percentage for such Distribution Date; (4) for any such Distribution Date
in or after the month of the eighth anniversary of the month of the first
Distribution Date but before the ninth anniversary of the month of the
first Distribution Date, the Group II Senior Percentage for such
Distribution Date plus 20% of the Class II-M Percentage for such
Distribution Date; and (5) for any such Distribution Date thereafter, the
Group II Senior Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Group II-A-L Regular
Interests of Principal Prepayments in the percentage required would reduce
the sum of the Class Principal Balances of such Regular Interests below
zero, the Group II Senior Prepayment Percentage for such Distribution Date
shall be limited to the percentage necessary to reduce such sum to zero.
Notwithstanding the foregoing, however, on each Distribution Date, the
Class II-P-L Regular Interests will receive the applicable Class P Fraction
of all principal payments, including, without limitation, Principal
Prepayments, received in respect of each Class II-P Mortgage Loan.
Group II Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group II Senior Percentage of
the Principal Payment Amount for Loan Group II (exclusive of the portion
thereof attributable to principal distributions to the Class II-P-L Regular
Interests pursuant to clauses (I)(b)(i) and (II)(b)(i) of the definition of
"REMIC I Distribution Amount"), (b) the Group II Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group II (exclusive
of the portion thereof attributable to principal distributions to the Class
II-P-L Regular Interests pursuant to clauses (I)(b)(i) and (II)(b)(i) of
the definition of "REMIC I Distribution Amount") and (c) the Group II
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Senior Liquidation Amount.
Group III Certificates: The Group III-A, Class III-M, Class III-P and
Class III-X Certificates.
Group III-A Certificates: The Class III-A-1 and Class III-A-2
Certificates.
Group III-A-L Regular Interests : The Class III-A-1-L and Class III-A-
2-L Regular Interests.
Group III-L Regular Interests: The Group III-A-L, Class III-M-L, Class
III-P-L and Class III-X-L Regular Interests.
Group III Credit Support Depletion Date: The later of (i) the first
Distribution Date on which the Class III-M Principal Balance 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 and (ii) the
date upon which coverage under the Mortgage Pool Insurance Policy has been
exhausted.
Group III Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group III Loans.
Group III Premium Rate Mortgage Loans: The Group III Loans having Pass-
Through Rates in excess of 6.4809% per annum.
Group III Senior Certificates: The Group III-A, Class III-X and Class
III-P Certificates.
Group III Senior Liquidation Amount: The aggregate, for each Group III
Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group III Senior Percentage of the Principal Balance
of such Mortgage Loan, and (ii) the Group III Senior Prepayment Percentage
of the Liquidation Principal with respect to such Mortgage Loan.
Group III Senior Percentage: With respect to any Distribution Date,
the aggregate Class Principal Balance of the Group III-A Certificates
divided by the aggregate Class Principal Balance of the Group III
Certificates (less the Class III-P Principal Balance), in each case
immediately prior to the Distribution Date.
Group III Senior Prepayment Percentage: (i) On any Distribution Date
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, the Group III Senior Prepayment
Percentage shall equal 100%; (ii) on any other Distribution Date on which
the Group III Senior Percentage for such Distribution Date exceeds the
Group III Senior Percentage as of the Closing Date, then the Group III
Senior Prepayment Percentage shall equal 100%; and (iii) on any other
Distribution Date in each of the months of the fifth anniversary of the
first Distribution Date and thereafter, the Group III Senior Prepayment
Percentage shall equal 100%, unless each of the following tests specified
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<PAGE> 41
in clauses (a) and (b) are met:
(a) the mean aggregate Principal Balance of the Group III Loans which
are 60 or more days delinquent (including loans in foreclosure
and property held by the Trust Fund) for each of the immediately
preceding six calendar months is less than or equal to 50% of the
Class III-M Principal Balance as of such Distribution Date,
(b) cumulative Realized Losses on the Group III Loans allocated to
the Class III-M-L Regular Interests or covered under the Mortgage
Pool Insurance Policy, the Special Hazard Insurance Policy or the
Bankruptcy and Extraordinary Expense Reserve Fund is less than or
equal to (1) for any Distribution Date before the month of the
sixth anniversary of the month of the first Distribution Date,
30% of the Class III-M Principal Balance as of the Closing Date,
(2) for any Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but
before the seventh anniversary of the month of the first
Distribution Date, 35% of the Class III-M Principal Balance as of
the Closing Date, (3) for any Distribution Date in or after the
month of the seventh anniversary of the month of the first
Distribution Date but before the eighth anniversary of the month
of the first Distribution Date, 40% of the Class III-M Principal
Balance as of the Closing Date, (4) for any Distribution Date in
or after the month of the eighth anniversary of the month of the
first Distribution Date but before the ninth anniversary of the
month of the first Distribution Date, 45% of the Class III-M
Principal Balance as of the Closing Date, and (5) for any
Distribution Date in or after the month of the ninth anniversary
of the month of the first Distribution Date, 50% of the Class III-
M Principal Balance as of the Closing Date,
in which case, as follows: (1) for any such Distribution Date in or after
the month of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month of the first
Distribution Date, the Group III Senior Percentage for such Distribution
Date plus 70% of the Class III-M Percentage for such Distribution Date; (2)
for any such Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but before the
seventh anniversary of the month of the first Distribution Date, the Group
III Senior Percentage for such Distribution Date plus 60% of the Class III-
M Percentage for the related Loan Group for such Distribution Date; (3) for
any such Distribution Date in or after the month of the seventh anniversary
of the month of the first Distribution Date but before the eighth
anniversary of the month of the first Distribution Date, the Group III
Senior Percentage for such Distribution Date plus 40% of the Class III-M
Percentage for such Distribution Date; (4) for any such Distribution Date
in or after the month of the eighth anniversary of the month of the first
Distribution Date but before the ninth anniversary of the month of the
first Distribution Date, the Group III Senior Percentage for such
Distribution Date plus 20% of the Class III-M Percentage for such
Distribution Date; and (5) for any such Distribution Date thereafter, the
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<PAGE> 42
Group III Senior Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Group III-A-L
Regular Interests of Principal Prepayments in the percentage required would
reduce the sum of the Class Principal Balances of such Regular Interests
below zero, the Group III Senior Prepayment Percentage for such
Distribution Date shall be limited to the percentage necessary to reduce
such sum to zero. Notwithstanding the foregoing, however, on each
Distribution Date, the Class III-P-L Regular Interests will receive the
applicable Class P Fraction of all principal payments, including, without
limitation, Principal Prepayments, received in respect of each Class III-P
Mortgage Loan.
Group III Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group III Senior Percentage of
the Principal Payment Amount for Loan Group III (exclusive of the portion
thereof attributable to principal distributions to the Class III-P-L
Regular Interests pursuant to clauses (I)(c)(i) and (II)(c)(i) of the
definition of "REMIC I Distribution Amount"), (b) the Group III Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group III
(exclusive of the portion thereof attributable to principal distributions
to the Class III-P-L Regular Interests pursuant to clauses (I)(c)(i) and
(II)(c)(i) of the definition of "REMIC I Distribution Amount") and (c) the
Group III Senior Liquidation Amount.
Group IV Certificates: The Class IV-A-1, Class IV-AM, Class IV-M,
Class IV-P and Class IV-X Certificates.
Group IV-L Regular Interests: The Class IV-A-1-L, Class IV-AM-L, Class
IV-M-L, Class IV-P-L and Class IV-X-L Certificates.
Group IV Credit Support Depletion Date: The later of (i) the first
Distribution Date on which the aggregate Class Principal Balance of the
Class IV-AM and Class IV-M Certificates have been or will be reduced to
zero as a result of principal distributions thereon and the allocation of
Realized Losses on such Distribution Date and (ii) the date upon which
coverage under the Mortgage Pool Insurance Policy has been exhausted.
Group IV Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group IV Loans.
Group IV Mezzanine Liquidation Amount: The excess, if any, of the
aggregate of Liquidation Principal for all Group IV Loans which became
Liquidated Mortgage Loans during the Prior Period, over the Group IV Senior
Liquidation Amount for such Distribution Date.
Group IV Mezzanine Percentage: With respect to any Distribution Date,
the excess of 100% over the Group IV Senior Percentage for such date.
Group IV Mezzanine Prepayment Percentage: On any Distribution Date,
the excess of 100% over the Group IV Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the Class IV-A-1 Principal
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<PAGE> 43
Balance has been reduced to zero, then the Group IV Mezzanine Prepayment
Percentage shall equal 100%.
Group IV Mezzanine Principal Distribution Amount: On any Distribution
Date, the excess of (A) the sum of (i) the Group IV Mezzanine Percentage of
the Principal Payment Amount for Loan Group IV (exclusive of the portion
thereof attributable to principal distributions to the Class IV-P-L Regular
Interests pursuant to clause (I)(d)(i) of the definition of "REMIC I
Distribution Amount"), (ii) the Group IV Mezzanine Prepayment Percentage of
the Principal Prepayment Amount for Loan Group IV (exclusive of the portion
thereof attributable to principal distributions to the Class IV-P-L Regular
Interests pursuant to clause (I)(d)(i) of the definition of "REMIC I
Distribution Amount") and (iii) the Group IV Mezzanine Liquidation Amount
over (B) the amounts required to be distributed to the Class IV-P-L Regular
Interests pursuant to clauses (I)(d)(v) and (I)(d)(vi) of the definition of
"REMIC I Distribution Amount" on such Distribution Date. Any reduction in
the Group IV Mezzanine Principal Distribution Amount pursuant to clause (B)
of this definition shall offset: (i) first, the amount calculated pursuant
to clause (A)(i) of this definition, (ii) second, the amount calculated
pursuant to clause (A)(iii) of this definition and (iii) third, the amount
calculated pursuant to clause (A)(ii) of this definition. On any
Distribution Date, the Group IV Mezzanine Principal Distribution Amount
shall be allocated pro rata, by Class Principal Balance, between the Class
IV-AM-L and IV-M-L Regular Interests, and paid in the order of distribution
to such Classes pursuant to clause (I)(d) of the definition of "REMIC I
Distribution Amount", except as otherwise stated in such definition.
Notwithstanding the foregoing, on any Distribution Date prior to
distributions on such date, if the Subordination Level for the Class IV-M-L
Regular Interests is less than such percentage as of the Closing Date, the
pro rata portion of the Group IV Mezzanine Principal Prepayments
Distribution Amount otherwise allocable to the Class IV-M-L Regular
Interests will be distributed to the Class IV-AM-L Regular Interests.
Group IV Mezzanine Principal Prepayments Distribution Amount: On any
Distribution Date, the Group IV Mezzanine Prepayment Percentage of the
Principal Prepayment Amount for Loan Group IV (exclusive of the portion
thereof attributable to principal distributions to the Class IV-P-L Regular
Interests pursuant to clause (I)(d)(i) of the definition of "REMIC I
Distribution Amount").
Group IV Premium Rate Mortgage Loans: The Group IV Loans having Pass-
Through Rates in excess of 6.250% per annum.
Group IV Senior Certificates: The Class IV-A-1, Class IV-X and Class
IV-P Certificates.
Group IV Senior Liquidation Amount: The aggregate, for each Group IV
Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group IV Senior Percentage of the Principal Balance
of such Mortgage Loan (exclusive of the Class IV-P Fraction thereof, with
respect to any Class IV-P Mortgage Loan), and (ii) the Group IV Senior
Prepayment Percentage of the Liquidation Principal with respect to such
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Mortgage Loan.
Group IV Senior Percentage: With respect to any Distribution Date, the
Class IV-A-1 Principal Balance divided by the aggregate Principal Balances
of the Group IV Certificates (less the Class IV-P Principal Balance), in
each case immediately prior to the Distribution Date.
Group IV Senior Prepayment Percentage: (i) On any Distribution Date
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, the Group IV Senior Prepayment
Percentage shall equal 100%; (ii) on any other Distribution Date on which
the Group IV Senior Percentage for such Distribution Date exceeds the Group
IV Senior Percentage as of the Closing Date, then the Group IV Senior
Prepayment Percentage shall equal 100%; and (iii) on any other Distribution
Date in each of the months of the fifth anniversary of the first
Distribution Date and thereafter, the Group IV Senior Prepayment Percentage
shall equal 100%, unless each of the following tests specified in clauses
(a) and (b) are met:
(a) the mean aggregate Principal Balance of the Group IV Loans which
are 60 or more days delinquent (including loans in foreclosure
and property held by the Trust Fund) for each of the immediately
preceding six calendar months is less than or equal to 50% of the
aggregate Class Principal Balance of the Class IV-AM and Class IV-
M Certificates as of such Distribution Date,
(b) cumulative Realized Losses on the Group IV Loans allocated to the
Class IV-M-L or Class IV-AM-L Regular Interests or covered under
the Mortgage Pool Insurance Policy, the Special Hazard Insurance
Policy or the Bankruptcy and Extraordinary Expense Reserve Fund
is less than or equal to (1) for any Distribution Date before the
month of the sixth anniversary of the month of the first
Distribution Date, 30% of the aggregate Class Principal Balance
of the Class IV-AM and Class IV-M Certificates as of the Closing
Date, (2) for any Distribution Date in or after the month of the
sixth anniversary of the month of the first Distribution Date but
before the seventh anniversary of the month of the first
Distribution Date, 35% of the aggregate Class Principal Balance
of the Class IV-AM and Class IV-M Certificates as of the Closing
Date, (3) for any Distribution Date in or after the month of the
seventh anniversary of the month of the first Distribution Date
but before the eighth anniversary of the month of the first
Distribution Date, 40% of the aggregate Class Principal Balance
of the Class IV-AM and Class IV-M Certificates as of the Closing
Date, (4) for any Distribution Date in or after the month of the
eighth anniversary of the month of the first Distribution Date
but before the ninth anniversary of the month of the first
Distribution Date, 45% of the aggregate Class Principal Balance
of the Class IV-AM and Class IV-M Certificates as of the Closing
Date, and (5) for any Distribution Date in or after the month of
the ninth anniversary of the month of the first Distribution
Date, 50% of the aggregate Class Principal Balance of the Class
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<PAGE> 45
IV-AM and Class IV-M Certificates as of the Closing Date,
in which case, as follows: (1) for any such Distribution Date in or after
the month of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month of the first
Distribution Date, the Group IV Senior Percentage for such Distribution
Date plus 70% of the Group IV Mezzanine Percentage for such Distribution
Date; (2) for any such Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date but before the
seventh anniversary of the month of the first Distribution Date, the Group
IV Senior Percentage for such Distribution Date plus 60% of the Group IV
Mezzanine Percentage for such Distribution Date; (3) for any such
Distribution Date in or after the month of the seventh anniversary of the
month of the first Distribution Date but before the eighth anniversary of
the month of the first Distribution Date, the Group IV Senior Percentage
for such Distribution Date plus 40% of the Group IV Mezzanine Percentage
for such Distribution Date; (4) for any such Distribution Date in or after
the month of the eighth anniversary of the month of the first Distribution
Date but before the ninth anniversary of the month of the first
Distribution Date, the Group IV Senior Percentage for such Distribution
Date plus 20% of the Group IV Mezzanine Percentage for such Distribution
Date; and (5) for any such Distribution Date thereafter, the Group IV
Senior Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Class IV-A-1-L
Regular Interests of Principal Prepayments in the percentage required would
reduce the Class Principal Balance thereof below zero, the Group IV Senior
Prepayment Percentage for such Distribution Date shall be limited to the
percentage necessary to reduce such sum to zero. Notwithstanding the
foregoing, however, on each Distribution Date, the Class IV-P-L Regular
Interests will receive the applicable Class P Fraction of all principal
payments, including, without limitation, Principal Prepayments, received in
respect of each Class IV-P Mortgage Loan.
Group IV Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group IV Senior Percentage of
the Principal Payment Amount for Loan Group IV (exclusive of the portion
thereof attributable to principal distributions to the Class IV-P-L Regular
Interests pursuant to clauses (I)(d)(i) and (II)(d)(i) of the definition of
"REMIC I Distribution Amount"), (b) the Group IV Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group IV (exclusive
of the portion thereof attributable to principal distributions to the Class
IV-P-L Regular Interests pursuant to clauses (I)(d)(i) and (II)(d)(i) of
the definition of "REMIC I Distribution Amount") and (c) the Group IV
Senior Liquidation Amount.
Indirect DTC Participants: Entities such as banks, brokers, dealers or
trust companies, that clear through or maintain a custodial relationship
with a DTC Participant, either directly or indirectly.
Insurance Proceeds: Amounts paid or payable by the insurer under any
Primary Insurance Policy or any other insurance policy (including any
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<PAGE> 46
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; provided that proceeds received pursuant to the Mortgage Pool
Insurance Policy, the Special Hazard Insurance Policy and the Bankruptcy
and Extraordinary Expense Fund shall not constitute "Insurance Proceeds".
Interest Distribution Amount: On any Distribution Date, for any Class
of the REMIC I Regular Interests and the Class R-1 Certificates, the amount
of interest accrued on the respective Class Principal Balance or Class
Notional Amount, as applicable, at the related Certificate Interest Rate
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 I-A-10-L,
Class I-A-11-L, Class II-A-2-L, Class III-A-2-L and Class P-L Regular
Interests and their Corresponding Classes shall equal zero. The Interest
Distribution Amount for the Class I-A-12-L Regular Interests shall equal
zero.
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: Chemical 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.
Lender: An institution from which the Company purchased any Mortgage
Loans pursuant to a Selling and Servicing Contract.
Living Holder: A Beneficial Holder of a Class I-A-23 Certificate other
than a Deceased Holder.
Liquidated Mortgage Loan: A Mortgage Loan as to which the Master
Servicer or the applicable Servicer has determined in accordance with its
customary servicing practices that all amounts which it expects to recover
from or on account of such Mortgage Loan, whether from Insurance Proceeds,
Liquidation Proceeds or otherwise, have been recovered. For purposes of
this definition, acquisition of a Mortgaged Property by the Trust Fund
shall not constitute final liquidation of the related Mortgage Loan.
Liquidation Principal: The principal portion of Liquidation Proceeds
received (exclusive of the portion thereof attributable to distributions to
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<PAGE> 47
the Class P-L Regular Interests pursuant to clauses (I)(a)(i), (I)(b)(i),
(I)(c)(i), (I)(d)(i), (II)(a)(i), (II)(b)(i), (II)(c)(i) and (II)(d)(i) of
the definition of "REMIC I 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, without limitation, proceeds received on Group II,
Group III and Group IV Loans pursuant to the Mortgage Pool Insurance
Policy, the Special Hazard Insurance Policy and the Bankruptcy and
Extraordinary Expense Fund.
Loan Group: Loan Group I, Loan Group II, Loan Group III or Loan Group
IV, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
Loans.
Loan Group III: The group of Mortgage Loans comprised of the Group III
Loans.
Loan Group IV: The group of Mortgage Loans comprised of the Group IV
Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage Loan
divided by the Original Value; however, references to "current Loan-to-
Value Ratio" shall mean the then current Principal Balance of a Mortgage
Loan divided by the Original Value.
Master Servicer: The Company, or any successor thereto appointed as
provided pursuant to Section 7.02, acting to service and administer the
Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer for
supervising the mortgage servicing and advancing certain expenses, equal to
a per annum rate set forth for each Mortgage Loan in Exhibit D on the
outstanding Principal Balance of such Mortgage Loan, payable monthly from
the Certificate Account, the 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.
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Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
Mortgaged Property: With respect to any Mortgage Loan, other than a
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan, the related Cooperative Stock
and Cooperative Lease, securing the indebtedness of the Mortgagor under the
related Mortgage Loan.
Mortgage File: The following documents or instruments with respect to
each Mortgage Loan transferred and assigned pursuant to Section 2.01, (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 1998-10, 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 stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy
of the related Mortgage Note; in the event the Mortgage Notes are
endorsed in blank as of the Closing Date, the Company shall, within 45
days of the Closing Date, cause such Mortgage Notes to be endorsed
pursuant to the terms set forth herein; provided, that, with respect
to any Mortgage Note whereby the related Mortgaged Property is located
in California, such original Mortgage Note may be endorsed in blank
and the Company shall not be required to endorse such Mortgage Notes
pursuant to the terms otherwise set forth in this clause (i);
(ii) The Buydown Agreement, if applicable;
(iii) A Mortgage that is either
(1) the original recorded Mortgage with recording information
thereon for the jurisdiction in which the Mortgaged Property is
located and a Mortgage assignment thereof in recordable form to "State
Street Bank and Trust Company, as Custodian/Trustee", or to "State
Street Bank and Trust Company, as Trustee for the Holders of PNC
Mortgage Securities Corp. Mortgage Pass-Through Certificates, Series
1998-10" 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
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<PAGE> 49
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 1998-10" and all intervening assignments
evidencing a complete chain of assignment from the originator to the
name holder or the payee endorsing the related Mortgage Note;
provided, that in the event the assignments are executed in blank as
of the Closing Date, the Company shall, within 45 days of the Closing
Date, cause such assignments to be executed pursuant to the terms set
forth herein; provided, that, with respect to any Mortgage whereby the
related Mortgaged Property is located in California, the Mortgage
assignment may be executed and acknowledged in blank and the Company
shall not be required to deliver such Mortgage assignment in the form
otherwise set forth in this clause (iii)(1) or clause (iii)(2);
(iv) A copy of (a) the title insurance policy, or (b) in
lieu thereof, a title insurance binder, a copy of an attorney's title
opinion, certificate or other evidence of title acceptable to the
Company; and
(v) For any Mortgage Loan that has been modified or amended, the
original instrument or instruments effecting such modification or
amendment;
and (Y) with respect to each Cooperative Loan:
(i) the original Mortgage Note endorsed to "State Street Bank
and Trust Company, as Custodian/Trustee", or to "State Street Bank and
Trust Company, as Trustee for the Holders of PNC Mortgage Securities
Corp. Mortgage Pass-Through Certificates, Series 1998-10" 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 stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy
of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the
Assignment of Proprietary Lease to the originator of the Cooperative
Loan with intervening assignments showing an unbroken chain of title
from such originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing
the related Cooperative Stock pledged with respect to such Cooperative
Loan, together with an undated stock power (or other similar
instrument) executed in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative
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Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of
title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of Proprietary Lease
and the recognition agreement referenced in clause (iv) above, showing
an unbroken chain of title from the originator to the Trustee;
(ix) An executed UCC-1 financing statement showing the Company as
debtor and the Trustee as secured party, each in a form sufficient for
filing, evidencing the interest of such debtors in the Cooperative
Loans; and
(x) For any Cooperative Loan that has been modified or amended,
the original instrument or instruments effecting such modification or
amendment.
Mortgage Interest Rate: For any Mortgage Loan, the per annum rate at
which interest accrues on such Mortgage Loan pursuant to the terms of the
related Mortgage Note.
Mortgage Loan Schedule: The schedule, as amended from time to time, of
Mortgage Loans attached hereto as Exhibit D, which shall set forth as to
each Mortgage Loan the following, among other things:
(i) its loan number,
(ii) the address of the Mortgaged Property,
(iii) the name of the Mortgagor,
(iv) the Original Value of the property subject to the Mortgage,
(v) the Principal Balance as of the Cut-Off Date,
(vi) the Mortgage Interest Rate borne by the Mortgage Note,
(vii) whether a Primary Insurance Policy is in effect as of
the Cut-Off Date,
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(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee, and
(x) its Loan Group and Subgroup, if applicable.
Mortgage Loans: With respect to each Cooperative Loan, the related
Mortgage Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock Certificate and Cooperative Lease, and, with respect to
each Mortgage Loan other than a Cooperative Loan, the Mortgages and the
related Mortgage Notes, each transferred and assigned to the Trustee
pursuant to the provisions hereof 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.
Mortgage Pool Insurance Policy <*> : The mortgage pool insurance
policy, a form of which is attached as Exhibit O to this Agreement, and the
Fraud Waiver and Ninety-Seven Percent Loan-to-Value Program Endorsement
relating thereto, in the total initial amount equal to 4.75% of the
aggregate unpaid principal balance of the Group II, Group III and Group IV
Loans as of the Cut-Off Date, or any replacement insurance policy obtained
by the Master Servicer pursuant to Section 3.16.
Mortgage Pool Insurer <*> : Amerin Guaranty Corporation, or any
successor thereto or the named insurer in any replacement policy obtained
by the Master Servicer pursuant to Section 3.16.
Mortgage Pool Insurance Premium Sub-Account <*> : An administrative
subaccount established and maintained by the Trustee within the Expense
Account for the payment of the Premiums with respect to the Mortgage Pool
Insurance Policy.
Mortgagor: The obligor on a Mortgage Note.
Ninety-Seven Percent Loan-to-Value Program Endorsement: With respect
to the Mortgage Pool Insurance Policy, an endorsement pursuant to which the
Mortgage Pool Insurer will cover Mortgage Loans with loan-to-value ratios
of up to ninety-seven percent (97%) at the time of origination. The Ninety-
Seven Percent Loan-to-Value Program Endorsement shall be provided in an
endorsement to the Mortgage Pool Insurance Policy.
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.
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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 at the time the Mortgage Loan was
originated or the appraised value at the time the refinanced mortgage debt
was incurred.
Ownership Interest: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other
interest therein whether direct or indirect, legal or beneficial, as owner
or as pledgee.
Pass-Through Entity: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a rate equal to the
Mortgage Interest Rate for such Mortgage Loan less the applicable per annum
percentage rates related to each of (i) the Servicing Fee, (ii) the Master
Servicing Fee and (iii) with respect to each Group II, Group III and Group
IV Loan, the Excess Amount. 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.
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Payoff: Any Mortgagor payment of principal on a Mortgage Loan equal to
the entire outstanding Principal Balance of such Mortgage Loan, if received
in advance of the last scheduled Due Date for such Mortgage Loan and
accompanied by an amount of interest equal to accrued unpaid interest on
the Mortgage Loan to the date of such payment-in-full.
Payoff Earnings: For any Distribution Date with respect to each
Mortgage Loan on which a Payoff was received by the Master Servicer during
the Payoff Period, the aggregate of the interest earned by the Master
Servicer from investment of each such Payoff from the date of receipt of
such Payoff until the Business Day immediately preceding the related
Distribution Date (net of investment losses).
Payoff Interest: For any Distribution Date with respect to a Mortgage
Loan for which a Payoff was received on or after the first calendar day of
the month of such Distribution Date and before the 15th calendar day of
such month, an amount of interest thereon at the applicable Pass-Through
Rate from the first day of the month of distribution through the day of
receipt thereof; to the extent (together with Payoff Earnings and the
aggregate Master Servicing Fee) not required to be distributed as
Compensating Interest on such Distribution Date, Payoff Interest shall be
payable to the Master Servicer as additional servicing compensation.
Payoff Period: With respect to the first Distribution Date, the period
from the Cut-Off Date through November 14, 1998, inclusive; and with
respect to any Distribution Date thereafter, the period from the 15th day
of the Prior Period through the 14th day of the month of such Distribution
Date, inclusive.
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided beneficial
ownership interest evidenced by such Certificate of such Class, which
percentage shall equal:
(i) with respect to any Certificate (other than the Residual,
Class I-A-24 and Class X Certificates), its Certificate Principal
Balance divided by the applicable Class Principal Balance;
(ii) with respect to the Class X and Class I-A-24 Certificates,
the portion of the respective Class Notional Amount evidenced by such
Certificate divided by the respective Class Notional Amount; and
(iii) with respect to the Residual Certificates, the
percentage set forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection with
Sections 5.09, 7.01, 8.01(c), 8.02, 8.07, 10.01 and 10.03, "Percentage
Interest" shall mean the percentage undivided beneficial interest evidenced
by such Certificate in REMIC II, which for purposes of such rights only
shall equal:
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(i) with respect to any Certificate (other than the Class X,
Class I-A-24 and Class R-2 Certificates), the product of (x) ninety-
three percent (93%) and (y) the percentage calculated by dividing its
Certificate Principal Balance by the Aggregate Certificate Principal
Balance of the Certificates; provided, however, that the percentage in
(x) above shall be increased by one percent (1%) upon each retirement
of the Classes of Certificates referenced in the parenthetical above
(other than the Class R-2 Certificates);
(ii) with respect to any of the Class X and Class I-A-24
Certificates, one percent (1%) of such Certificate's Percentage
Interest as calculated by paragraph (a)(ii) of this definition; and
(iii) with respect to the Class R-2 Certificates, zero.
Permitted Transferee: With respect to the holding or ownership of any
Residual Certificate, any Person other than (i) the United States, a State
or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Code
Section 521) which is exempt from the taxes imposed by Chapter 1 of the
Code (unless such organization is subject to the tax imposed by Section 511
of the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Code Section 1381(a)(2)(C), (v) any
"electing large partnership" as defined in Section 775(a) of the Code, (vi)
any Person from whom the Trustee has not received an affidavit to the
effect that it is not a "disqualified organization" within the meaning of
Section 860E(e)(5) of the Code, and (vii) any other Person so designated by
the Company based upon an Opinion of Counsel that the transfer of an
Ownership Interest in a Residual Certificate to such Person may cause REMIC
I or REMIC II, as applicable, to fail to qualify as a REMIC at any time
that the Certificates are outstanding. The terms "United States", "State"
and "International Organization" shall have the meanings set forth in Code
Section 7701 or successor provisions. A corporation shall not be treated as
an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with
the exception of the FHLMC, 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 <*> : With respect to each of the Mortgage Pool Insurance
Policy and the Special Hazard Insurance Policy, the amount that is due and
payable to maintain each such policy in full force and effect pursuant to
the terms of the Mortgage Pool Insurance Policy or the Special Hazard
Insurance Policy, as applicable.
Premium Payment Amount <*> : With respect to the Mortgage Pool
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Insurance Policy, for any Distribution Date, an amount equal to the
aggregate, for each Mortgage Loan, of the product of (a) 1/12th of the
applicable Premium Payment Rate for such Mortgage Loan and (b) the
outstanding principal balance of such Mortgage Loan on the first day of the
month of such Distribution Date. With respect to the Special Hazard
Insurance Policy, for any Distribution Date, an amount equal to the
aggregate, for each Mortgage Loan, of the product of (a) 1/12th of the
applicable Premium Payment Rate for such Mortgage Loan and (b) the
outstanding principal balance of such Mortgage Loan on the first day of the
month of such Distribution Date.
Premium Payment Rate <*> : For each Group II, Group III and Group IV
Loan and with respect to each of the Mortgage Pool Insurance Policy and the
Special Hazard Insurance Policy, 0.45% per annum and 0.0691% per annum,
respectively.
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, providing coverage as required by
Section 2.03(xi).
Principal Balance: Except as used in Sections 2.02, 3.09 and 9.01 and
for purposes of the definition of Purchase Price, at the time of any
determination, the principal balance of a Mortgage Loan remaining to be
paid at the close of business on the Cut-Off Date, after application of all
scheduled principal payments due on or before the Cut-Off Date, whether or
not received, reduced by all amounts distributed or (except when such
determination occurs earlier in the month than the Distribution Date) to be
distributed to Certificateholders through the Distribution Date in the
month of determination that are reported as allocable to principal of such
Mortgage Loan.
For purposes of the definition of Purchase Price and as used in
Sections 2.02, 3.09 and 9.01, at the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid at the close of
business on the Cut-Off Date, after deduction of all scheduled principal
payments due on or before the Cut-Off Date, whether or not received,
reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such Mortgage
Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance" shall
mean, at the time of any determination, the principal balance of such
Substitute Mortgage Loan transferred to the Trust Fund, on the date of
substitution, reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
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Substitute Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a Substitute
Mortgage Loan) shall not be adjusted solely by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace period.
Whenever a Realized Loss has been incurred with respect to a Mortgage Loan
during a calendar month, the Principal Balance of such Mortgage Loan shall
be reduced by the amount of such Realized Loss as of the Distribution Date
next following the end of such calendar month after giving effect to the
allocation of Realized Losses and distributions of principal to the
Certificates.
Principal Payment: Any payment of principal on a Mortgage Loan other
than a Principal Prepayment.
Principal Payment Amount: On any Distribution Date and for any Loan
Group, the sum with respect to the Mortgage Loans in such Loan Group of (i)
the scheduled principal payments on the Mortgage Loans due on the related
Due Date, (ii) the principal portion of repurchase proceeds received with
respect to any Mortgage Loan which was repurchased by the Company pursuant
to a Purchase Obligation or as permitted by this Agreement during the Prior
Period and (iii) any other unscheduled payments of principal which were
received with respect to any Mortgage Loan during the Prior Period, other
than Payoffs, Curtailments and Liquidation Principal.
Principal Prepayment: Any payment of principal on a Mortgage Loan
which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On any Distribution Date and for any Loan
Group, the sum with respect to the Mortgage Loans in such Loan Group of (i)
Curtailments received during the Prior Period from such Mortgage Loans and
(ii) Payoffs received during the Payoff Period from such Mortgage Loans.
Prior Period: The calendar month immediately preceding any
Distribution Date.
Pro Rata Allocation: (i) With respect to losses on Group I Loans, the
allocation of the principal portion of Realized Losses to the outstanding
Group I-L Regular Interests (other than the Class I-P-L Regular Interests),
pro rata according to their respective Class Principal Balances, in
reduction of their respective Class Principal Balances (except if the loss
is recognized with respect to a Class I-P Mortgage Loan, in which case the
Class I-P Fraction of such loss will first be allocated to the Class I-P-L
Regular Interests, and the remainder of such loss will be allocated as set
forth above), and the allocation of the interest portion of Realized Losses
to the outstanding Group I-L Regular Interests, pro rata according to the
amount of interest accrued but unpaid on each such Class in reduction
thereof, and then in reduction of their respective Class Principal Balances
(other than the Class I-A-10-L, Class I-A-11-L, Class I-A-12-L and Class I-
P-L Regular Interests); (ii) with respect to losses on Group II Loans, the
allocation of the principal portion of Realized Losses to the outstanding
Group II-L Regular Interests (other than the Class II-P-L Regular
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Interests), pro rata according to their respective Class Principal
Balances, in reduction of their respective Class Principal Balances (except
if the loss is recognized with respect to a Class II-P Mortgage Loan, in
which case the Class II-P Fraction of such loss will first be allocated to
the Class II-P-L Regular Interests, and the remainder of such loss will be
allocated as set forth above), and the allocation of the interest portion
of Realized Losses to the outstanding Group II-L Regular Interests, pro
rata according to the amount of interest accrued but unpaid on each such
Class in reduction thereof, and then in reduction of their respective Class
Principal Balances (other than the Class II-A-2-L and Class II-P-L Regular
Interests); (iii) with respect to losses on Group III Loans, the allocation
of the principal portion of Realized Losses to the outstanding Group III-L
Regular Interests (other than the Class III-P-L Regular Interests), pro
rata according to their respective Class Principal Balances, in reduction
of their respective Class Principal Balances (except if the loss is
recognized with respect to a Class III-P Mortgage Loan, in which case the
Class III-P Fraction of such loss will first be allocated to the Class III-
P-L Regular Interests, and the remainder of such loss will be allocated as
set forth above), and the allocation of the interest portion of Realized
Losses to the outstanding Group III-L Regular Interests, pro rata according
to the amount of interest accrued but unpaid on each such Class in
reduction thereof, and then in reduction of their respective Class
Principal Balances (other than the Class III-A-2-L and Class III-P-L
Regular Interests); and (iv) with respect to losses on Group IV Loans, the
allocation of the principal portion of Realized Losses to the outstanding
Group IV-L Regular Interests (other than the Class IV-P-L Regular
Interests), pro rata according to their respective Class Principal
Balances, in reduction of their respective Class Principal Balances (except
if the loss is recognized with respect to a Class IV-P Mortgage Loan, in
which case the Class IV-P Fraction of such loss will first be allocated to
the Class IV-P-L Regular Interests, and the remainder of such loss will be
allocated as set forth above), and the allocation of the interest portion
of Realized Losses to the outstanding Group IV-L Regular Interests, pro
rata according to the amount of interest accrued but unpaid on each such
Class in reduction thereof, and then in reduction of their respective Class
Principal Balances (other than the Class IV-P-L Regular Interests). Any
losses allocated among the outstanding Classes of REMIC I Regular Interests
pursuant to this definition of "Pro Rata Allocation" shall also be
allocated to the Corresponding Classes of Certificates in the same manner
and amounts as they reduce such attributes of such Classes of REMIC I
Regular Interests; provided, however, that (a) the interest portion of such
losses allocated to the Class I-A-20-L Regular Interests and applied to
reduce the Interest Distribution Amount thereof shall be allocated to the
Class I-A-20 and Class I-A-24 Certificates in reduction of the distribution
of interest to such Certificates pursuant to the distributions set forth in
clause (a)(ii) of the definition of "REMIC II Distribution Amount", pro
rata according to the allocation set forth in such clause and (b) the
interest portion of such losses allocated to the Class I-A-13-L Regular
Interests and applied to reduce the Interest Distribution Amount thereof
shall be allocated to the Class I-A-12 and Class I-A-13 Certificates in
reduction of the distribution of interest to such Certificates pursuant to
the distributions set forth in clause (a)(iii) of the definition of "REMIC
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II Distribution Amount", pro rata according to the allocation set forth in
such clause.
Prospectus: The Prospectus, dated October 23, 1998, and the
Prospectus Supplement, dated October 28, 1998, of the Company.
Purchase Obligation: An obligation of the Company to repurchase
Mortgage Loans under the circumstances and in the manner provided in
Section 2.02 or Section 2.03.
Purchase Price: With respect to any Mortgage Loan to be purchased
pursuant to a Purchase Obligation, an amount equal to the sum of the
Principal Balance thereof, and unpaid accrued interest thereon, if any, to
the last day of the calendar month in which the date of repurchase occurs
at a rate equal to the applicable Pass-Through Rate; provided, however,
that no Mortgage Loan shall be purchased or required to be purchased
pursuant to Section 2.03, or more than two years after the Closing Date
under Section 2.02, unless (a) the Mortgage Loan to be purchased is in
default, or default is in the judgment of the Company reasonably imminent,
or (b) the Company, at its expense, delivers to the Trustee an Opinion of
Counsel to the effect that the purchase of such Mortgage Loan will not give
rise to a tax on a prohibited transaction, as defined in Section 860F(a) of
the Code.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the states in which the Mortgaged
Properties are located if such qualification is necessary to issue the
applicable insurance policy or bond, duly authorized and licensed in such
states to transact the applicable insurance business and to write the
insurance provided by the Primary Insurance Policies and approved as an
insurer by FHLMC or FNMA and the Master Servicer. A Qualified Insurer must
have the rating required by the Rating Agencies.
Random Lot: With respect to any Distribution Date on which a mandatory
distribution is to be made on the Class I-A-23 Certificates (as described
in Section 4.06), the method by which DTC will determine which Class I-A-23
Certificates will be paid principal, using its established random lot
procedures or, if the such Certificates are no longer represented by a Book-
Entry Certificate, using the Trustee's procedures.
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
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actually reimbursed with respect to such Mortgage Loan (the principal
portion of such Realized Loss), and (ii) the accrued interest on such
Mortgage Loan remaining unpaid and the interest portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
interest portion of such Realized Loss). For any Distribution Date, with
respect to any Mortgage Loan which is not a Liquidated Mortgage Loan, the
amount of the Bankruptcy Loss incurred with respect to such Mortgage Loan
as of the related Due Date.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
and Extraordinary Losses allocated to any Class of REMIC I Regular
Interests shall also be allocated to the Corresponding Class of
Certificates thereof and applied to reduce the Class Principal Balance of
such Corresponding Class in the same manner and amounts as they reduce such
attributes of such Class of REMIC I Regular Interests; provided, however,
that the allocation of the interest portion of such losses is subject to
the proviso contained in the last sentence of the definition of "Pro Rata
Allocation" herein.
Except for Special Hazard Losses in excess of Group I Special Hazard
Coverage, Fraud Losses in excess of Group I Fraud Coverage and Bankruptcy
Losses in excess of Group I Bankruptcy Coverage, Realized Losses with
respect to the Group I Loans shall be allocated among the Group I-L Regular
Interests (i) for Realized Losses allocable to principal (a) first, to the
Class I-B-6-L Regular Interests, until the Class I-B-6-L Principal Balance
has been reduced to zero, (b) second, to the Class I-B-5-L Regular
Interests, until the Class I-B-5-L Principal Balance has been reduced to
zero, (c) third, to the Class I-B-4-L Regular Interests, until the Class I-
B-4-L Principal Balance has been reduced to zero, (d) fourth, to the Class
I-B-3-L Regular Interests, until the Class I-B-3-L Principal Balance has
been reduced to zero, (e) fifth, to the Class I-B-2-L Regular Interests,
until the Class I-B-2-L Principal Balance has been reduced to zero, (f)
sixth, to the Class I-B-1-L Regular Interests, until the Class I-B-1-L
Principal Balance has been reduced to zero, and (g) seventh, to the Group I-
A-L and Class R-2-L Regular Interests and the Class R-1 Certificates, pro
rata according to their Class Principal Balances in reduction of their
respective Class Principal Balances, as applicable; provided, however, that
if the loss is recognized with respect to a Class I-P Mortgage Loan, the
Class I-P Fraction of such loss will first be allocated to the Class I-P-L
Regular Interests and the remainder of such loss will be allocated as set
forth above in this clause (i); and (ii) for Realized Losses allocable to
interest (a) first, to the Class I-B-6-L Regular Interests, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class I-B-
6-L Principal Balance, (b) second, to the Class I-B-5-L Regular Interests,
in reduction of accrued but unpaid interest thereon and then in reduction
of the Class I-B-5-L Principal Balance, (c) third, to the Class I-B-4-L
Regular Interests, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class I-B-4-L Principal Balance, (d) fourth, to
the Class I-B-3-L Regular Interests, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class I-B-3-L Principal
Balance, (e) fifth, to the Class I-B-2-L Regular Interests, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class I-B-
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2-L Principal Balance, (f) sixth, to the Class I-B-1-L Regular Interests,
in reduction of accrued but unpaid interest thereon and then in reduction
of the Class I-B-1-L Principal Balance, and (g) seventh, to the Group I-A-L
Regular Interests (other than the Class I-A-10-L, Class I-A-11-L and Class
I-A-12-L Regular Interests), the Class I-X-L Regular Interests, the Class R-
2-L and Class R-1 Certificates pro rata according to accrued but unpaid
interest on such Classes and then pro rata according to their Class
Principal Balances in reduction of their respective Class Principal
Balances.
Except for Special Hazard Losses in excess of the coverage provided by
the Special Hazard Insurance Policy, Fraud Losses in excess of the coverage
provided by the Fraud Waiver and Bankruptcy and Extraordinary Losses in
excess of the coverage provided by the Bankruptcy and Extraordinary Expense
Reserve Fund, Realized Losses with respect to the Group II Loans (to the
extent such loss is not covered by the Mortgage Pool Insurance Policy, the
Special Hazard Insurance Policy or the Bankruptcy and Extraordinary Expense
Reserve Fund, such coverage applicable to such loss has been exhausted
through the payment of claims or the Mortgage Pool Insurer or the Special
Hazard Insurer defaults on a valid claim for such loss) shall be allocated
among the Group II-L Regular Interests (i) for Realized Losses allocable to
principal (a) first, to the Class II-M-L Regular Interests, until the Class
II-M-L Principal Balance has been reduced to zero and (b) second, to the
Group II-A-L Regular Interests in reduction of the Class Principal Balance
thereof; provided, however, that if the loss is recognized with respect to
a Class II-P Mortgage Loan, the Class II-P Fraction of such loss will first
be allocated to the Class II-P-L Regular Interests 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 II-M-L
Regular Interests, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class II-M-L Principal Balance and (b) second, to
the Class II-A-1-L and Class II-X-L Regular Interests, pro rata according
to accrued but unpaid interest on such Classes and then to the Class II-A-1-
L Regular Interests in reduction of the Class Principal Balance thereof.
Except for Special Hazard Losses in excess of the coverage provided by
the Special Hazard Insurance Policy, Fraud Losses in excess of the coverage
provided by the Fraud Waiver and Bankruptcy and Extraordinary Losses in
excess of the coverage provided by the Bankruptcy and Extraordinary Expense
Reserve Fund, Realized Losses with respect to the Group III Loans (to the
extent such loss is not covered by the Mortgage Pool Insurance Policy, the
Special Hazard Insurance Policy or the Bankruptcy and Extraordinary Expense
Reserve Fund, such coverage applicable to such loss has been exhausted
through the payment of claims or the Mortgage Pool Insurer or the Special
Hazard Insurer defaults on a valid claim for such loss) shall be allocated
among the Group III-L Regular Interests (i) for Realized Losses allocable
to principal (a) first, to the Class III-M-L Regular Interests, until the
Class III-M-L Principal Balance has been reduced to zero and (b) second, to
the Group III-A-L Regular Interests in reduction of the Class Principal
Balance thereof; provided, however, that if the loss is recognized with
respect to a Class III-P Mortgage Loan, the Class III-P Fraction of such
loss will first be allocated to the Class III-P-L Regular Interests and the
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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 III-M-L Regular Interests, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class III-M-L Principal
Balance and (b) second, to the Class III-A-1-L and Class III-X-L Regular
Interests, pro rata according to accrued but unpaid interest on such
Classes and then to the Class III-A-1-L Regular Interests in reduction of
the Class Principal Balance thereof.
Except for Special Hazard Losses in excess of the coverage provided by
the Special Hazard Insurance Policy, Fraud Losses in excess of the coverage
provided by the Fraud Waiver and Bankruptcy and Extraordinary Losses in
excess of the coverage provided by the Bankruptcy and Extraordinary Expense
Reserve Fund, Realized Losses with respect to the Group IV Loans (to the
extent such loss is not covered by the Mortgage Pool Insurance Policy, the
Special Hazard Insurance Policy or the Bankruptcy and Extraordinary Expense
Reserve Fund, such coverage applicable to such loss has been exhausted
through the payment of claims or the Mortgage Pool Insurer or the Special
Hazard Insurer defaults on a valid claim for such loss) shall be allocated
among the Group IV-L Regular Interests (i) for Realized Losses allocable to
principal (a) first, to the Class IV-M-L Regular Interests, until the Class
IV-M-L Principal Balance has been reduced to zero, (b) second, to the Class
IV-AM-L Regular Interests, until the Class IV-AM-L Principal Balance has
been reduced to zero, and (c) third, to the Class IV-A-1-L Regular
Interests in reduction of the Class Principal Balance thereof; provided,
however, that if the loss is recognized with respect to a Class IV-P
Mortgage Loan, the Class IV-P Fraction of such loss will first be allocated
to the Class IV-P-L Regular Interests 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 IV-M-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class IV-M-L Principal Balance, (b) second, to the Class
IV-AM-L Regular Interests, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class IV-AM-L Principal Balance and
(c) third, to the Class IV-A-1-L and Class IV-X-L Regular Interests, pro
rata according to accrued but unpaid interest on such Classes and then to
the Class IV-A-1-L Regular Interests in reduction of the Class Principal
Balance thereof.
Special Hazard Losses on Group I Loans in excess of the Group I
Special Hazard Coverage, Fraud Losses on Group I Loans in excess of the
Group I Fraud Coverage, and Bankruptcy Losses on Group I Loans in excess of
the Group I Bankruptcy Coverage shall be allocated among the Group I
Certificates by Pro Rata Allocation.
Special Hazard Losses on Group II Loans in excess of the coverage
provided by the Special Hazard Insurance Policy, Fraud Losses on Group II
Loans in excess of the coverage provided by the Fraud Waiver, and
Bankruptcy and Extraordinary Losses on Group II Loans in excess of the
coverage provided by the Bankruptcy and Extraordinary Expense Reserve Fund
shall be allocated among the Group II-L Regular Interests by Pro Rata
Allocation.
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Special Hazard Losses on Group III Loans in excess of the coverage
provided by the Special Hazard Insurance Policy, Fraud Losses on Group III
Loans in excess of the coverage provided by the Fraud Waiver, and
Bankruptcy and Extraordinary Losses on Group III Loans in excess of the
coverage provided by the Bankruptcy and Extraordinary Expense Reserve Fund
shall be allocated among the Group III-L Regular Interests by Pro Rata
Allocation.
Special Hazard Losses on Group IV Loans in excess of the coverage
provided by the Special Hazard Insurance Policy, Fraud Losses on Group IV
Loans in excess of the coverage provided by the Fraud Waiver, and
Bankruptcy and Extraordinary Losses on Group IV Loans in excess of the
coverage provided by the Bankruptcy and Extraordinary Expense Reserve Fund
shall be allocated among the Group IV-L Regular Interests by Pro Rata
Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group I-L Regular Interests exceeds the
aggregate principal balance of the Group I Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal in
respect of each such Mortgage Loan that have been received or advanced and
included in the REMIC I Available Distribution Amount for the Group I
Loans, and all losses in respect of each such Mortgage Loans that have been
allocated to the Group I-L Regular Interests on such Distribution Date or
prior Distribution Dates, then such excess will be deemed a principal loss
and will be allocated to the most junior Class of Group I-B-L Regular
Interests, in reduction of the Class Principal Balance thereof.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group II-L Regular Interests exceeds the
aggregate principal balance of the Group II Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal in
respect of each such Mortgage Loan that have been received or advanced and
included in the REMIC I Available Distribution Amount for the Group II-L
Regular Interests, and all losses in respect of each such Mortgage Loan
that have been allocated to the REMIC I Regular Interests, on such
Distribution Date or prior Distribution Dates, then such excess will be
deemed a principal loss and will be allocated to the Class II-M-L Regular
Interests, in reduction of the Class Principal Balance thereof.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group III-L Regular Interests exceeds the
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aggregate principal balance of the Group III Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal in
respect of each such Mortgage Loan that have been received or advanced and
included in the REMIC I Available Distribution Amount for the Group III-L
Regular Interests, and all losses in respect of each such Mortgage Loan
that have been allocated to the REMIC I Regular Interests, on such
Distribution Date or prior Distribution Dates, then such excess will be
deemed a principal loss and will be allocated to the Class III-M-L Regular
Interests, in reduction of the Class Principal Balance thereof.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group IV-L Regular Interests exceeds the
aggregate principal balance of the Group IV Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal in
respect of each such Mortgage Loan that have been received or advanced and
included in the REMIC I Available Distribution Amount for the Group IV-L
Regular Interests, and all losses in respect of each such Mortgage Loan
that have been allocated to the REMIC I Regular Interests, on such
Distribution Date or prior Distribution Dates, then such excess will be
deemed a principal loss and will be allocated first to the Class IV-M-L
Regular Interests and then to the Class IV-AM-L Regular Interests, in
reduction of the Class Principal Balances thereof.
Record Date: The last Business Day of the month immediately preceding
the month of the related Distribution Date.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
Interests and (ii) with respect to REMIC II, the REMIC II Regular
Interests.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Interest shortfalls related to the Relief Act for Loan Group I shall
be allocated to the Group I-L Regular Interests pro rata according to the
amount of the Interest Distribution Amount to which each such Class would
otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group II shall
be allocated to the Group II-L Regular Interests pro rata according to the
amount of the Interest Distribution Amount to which each such Class would
otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group III shall
be allocated to the Group III-L Regular Interests pro rata according to the
amount of the Interest Distribution Amount to which each such Class would
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otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group IV shall
be allocated to the Group IV-L Regular Interests pro rata according to the
amount of the Interest Distribution Amount to which each such Class would
otherwise be entitled in reduction thereof.
REMIC: A real estate mortgage investment conduit, as such term is
defined in the Code.
REMIC Provisions: Sections 860A through 860G of the Code, related Code
provisions and regulations promulgated thereunder, as the foregoing may be
in effect from time to time.
REMIC I: The segregated pool of assets consisting of the REMIC I Trust
Fund, with respect to which a separate REMIC election is to be made.
REMIC I Available Distribution Amount: With respect to each Loan
Group on any Distribution Date, the sum of the following amounts with
respect to the Mortgage Loans in such Loan Group:
(1) the total amount of all cash received by or on behalf of the
Master Servicer with respect to such Mortgage Loans by the
Determination Date for such Distribution Date and not previously
distributed, including Monthly P&I Advances made by Servicers,
Liquidation Proceeds (including with respect to the Group II, Group
III and Group IV Loans, amounts available under the Mortgage Pool
Insurance Policy, the Special Hazard Insurance Policy and the
Bankruptcy and Extraordinary Expense Reserve Fund) 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 a date subsequent to the related Due Date;
(b) all Curtailments received after the Prior Period
(together with any interest payment received with such
prepayments to the extent that it represents the payment of
interest accrued on a related Mortgage Loan subsequent to the
Prior Period);
(c) all Payoffs received after the Payoff Period
immediately preceding such Distribution Date (together with any
interest payment received with such Payoffs to the extent that it
represents the payment of interest accrued on the Mortgage Loans
for the period subsequent to the Prior Period), and interest
which was accrued and received on Payoffs received during the
period from the 1st to the 14th day of the month of such
Determination Date, which interest shall not be included in the
calculation of the REMIC I Available Distribution Amount for any
Distribution Date;
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(d) Insurance Proceeds and Liquidation Proceeds received
on such Mortgage Loans after the Prior Period;
(e) all amounts in the Certificate Account which are due
and reimbursable to a Servicer or the Master Servicer pursuant to
the terms of this Agreement;
(f) the sum of the Master Servicing Fee and the Servicing
Fee for each such Mortgage Loan and with respect to the Group II,
Group III and Group IV Loans, the Excess Amount; and
(g) Excess Liquidation Proceeds;
(2) the sum, to the extent not previously distributed, of the
following amounts, to the extent advanced or received, as applicable,
by the Master Servicer:
(a) any Monthly P&I Advance made by the Master Servicer to
the Trustee with respect to such Distribution Date relating to
such Mortgage Loans; and
(b) Compensating Interest; and
(3) the total amount, to the extent not previously distributed,
of all cash received by the Distribution Date by the Trustee or the
Master Servicer, in respect of a Purchase Obligation under Section
2.02 and Section 2.03 or any permitted repurchase of a Mortgage Loan.
REMIC I Distribution Amount: (I) For any Distribution Date prior to
the Group I, Group II, Group III or Group IV Credit Support Depletion Date,
as applicable, the REMIC I Available Distribution Amount shall be
distributed to the REMIC I Regular Interests and the Class R-1 Certificates
in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests and the Class R-
1 Certificates, on any Distribution Date prior to the Group I Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for Loan Group I remaining following prior distributions, if any, on
such Distribution Date:
(i) first, to the Class I-P-L Regular Interests, the aggregate
for all Class I-P Mortgage Loans of the product for each Class I-P
Mortgage Loan of the applicable Class I-P Fraction and the sum of (x)
scheduled payments of principal on such Class I-P Mortgage Loan due on
or before the related Due Date in respect of which no distribution has
been made on any previous Distribution Date and which were received by
the Determination Date, or which have been advanced as part of a
Monthly P&I Advance with respect to such Distribution Date, (y) the
principal portion received in respect of such Class I-P Mortgage Loan
during the Prior Period of (1) Curtailments, (2) Insurance Proceeds,
(3) the amount, if any, of the principal portion of the Purchase Price
paid pursuant to a Purchase Obligation or any repurchase of a Mortgage
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<PAGE> 66
Loan permitted hereunder and (4) Liquidation Proceeds and (z) the
principal portion of Payoffs received in respect of such Class I-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Group I-A-L, Class I-X-L and Class R-2-L
Regular Interests and the Class R-1 Certificates, the sum of the
Interest Distribution Amounts for such Classes of Regular Interests
and Certificates remaining unpaid from previous Distribution Dates,
pro rata according to their respective shares of such unpaid amounts;
(iii) third, to the Group I-A-L, Class I-X-L and Class R-2-L
Regular Interests and the Class R-1 Certificates, the sum of the
Interest Distribution Amounts for such Classes of Regular Interests
and Certificates for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Group I-A-L and Class R-2-L Regular Interests
and the Class R-1 Certificates, as principal, the Group I Senior
Principal Distribution Amount, as follows:
(a) 25.2200000130%, sequentially, as follows:
(1) first, to the Class I-A-3-L Regular Interests, an
amount, up to the amount of the Class I-A-3 Priority Amount
for such Distribution Date, until the Class I-A-3-L
Principal Balance has been reduced to zero; and
(2) second, until the Class I-A-2-L Principal Balance
has been reduced to zero, concurrently, as follows:
(A) 46.8499997101%, sequentially, as follows:
(I) first, to the Class I-A-4-L Regular
Interests, until the Class I-A-4-L Principal
Balance has been reduced to zero; and
(II) second, to the Class I-A-5-L and Class I-
A-11-L Regular Interests, pro rata, until their
respective Class Principal Balances have each been
reduced to zero;
(B) 53.1500002899%, sequentially, as follows:
(I) first, to the Class I-A-1-L Regular
Interests, until the Class I-A-1-L Principal
Balance has been reduced to zero;
(II) second, to the Class I-A-2-L, Class
I-A-12-L, Class I-A-13-L, Class I-A-14-L and Class
I-A-15-L Regular Interests, pro rata, until their
respective Class Principal Balances have each been
reduced to zero; and
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<PAGE> 67
(3) third, to the Class I-A-3-L Regular Interests,
until the Class I-A-3-L Principal Balance has been reduced
to zero;
(b) 51.0499999419%, sequentially, as follows:
(1) first, to the Class I-A-9-L Regular Interests, an
amount, up to the amount of the Class I-A-9 Priority Amount
for such Distribution Date, until the Class I-A-9-L
Principal Balance has been reduced to zero;
(2) second, sequentially, to the Class R-1
Certificates and Class R-2-L Regular Interests, until the
Class Principal Balance of each has been reduced to zero;
(3) third, until the Class I-A-8-L Principal Balance
has been reduced to zero, concurrently, as follows:
(A) 52.1698128800%, to the Class I-A-8-L Regular
Interests; and
(B) 47.8301871200%, sequentially, as follows:
(I) first, until the Class I-A-17-L
Principal Balance has been reduced to zero,
concurrently, as follows:
(x) 30.0125939230% to the Class I-A-17-L
Regular Interests; and
(y) 69.9874060770%, sequentially, as
follows:
(a) first, concurrently, until the
Class I-A-19-L Principal Balance has
been reduced to zero, as follows:
(1) 48.8644253075%, to the
Class I-A-19-L Regular Interests;
(2) 18.1072407281%, to the
Class I-A-7-L Regular Interests;
and
(3) 33.0283339644%,
sequentially, to the Class I-A-22-L
and Class I-A-21-L Regular
Interests, in that order, until
their respective Class Principal
Balances have each been reduced to
zero; and
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<PAGE> 68
(b) second, concurrently, until the
Class I-A-7-L Principal Balance has been
reduced to zero, as follows:
(1) 35.4102615195%, to the
Class I-A-7-L Regular Interests;
and
(2) 64.5897384805%,
sequentially, to the Class I-A-22-L
and Class I-A-21-L Regular
Interests, in that order, until
their respective Class Principal
Balances have each been reduced to
zero;
(II) second, concurrently, until the Class I-
A-19-L Principal Balance has been reduced to zero,
as follows:
(x) 48.8644253075% to the Class I-A-19-L
Regular Interests;
(y) 18.1072407281% to the Class I-A-7-L
Regular Interests; and
(z) 33.0283339644%, sequentially, to the
Class I-A-22-L and Class I-A-21-L Regular
Interests, in that order, until their
respective Class Principal Balances have each
been reduced to zero;
(III) third, concurrently, until the
Class I-A-7-L Principal Balance has been reduced
to zero, as follows:
(x) 35.4102615195% to the Class I-A-7-L
Regular Interests; and
(y) 64.5897384805%, sequentially, to the
Class I-A-22-L and Class I-A-21-L Regular
Interests, in that order, until their
respective Class Principal Balances have each
been reduced to zero;
(IV) fourth, to the Class I-A-6-L Regular
Interests;
(4) fourth, to the Class I-A-6-L, Class I-A-16-L,
Class I-A-18-L and Class I-A-23-L Regular Interests, pro
rata, until their respective Class Principal Balances have
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<PAGE> 69
each been reduced to zero; and
(5) fifth, to the Class I-A-9-L Regular Interests,
until the Class I-A-9-L Principal Balance has been reduced
to zero;
(c) 0.9700000586% to the Class I-A-10-L Regular Interests,
until the Class I-A-10-L Principal Balance has been reduced to
zero; and
(d) 22.7599999866% to the Class I-A-20-L Regular Interests,
until the Class I-A-20-L Principal Balance has been reduced to
zero;
(v) fifth, to the Class I-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Group I Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, the amount payable to
the Class I-P-L Regular Interests on previous Distribution Dates
pursuant to clause (I)(a)(vi) of this definition of "REMIC I
Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(vi) sixth, to the Class I-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Group I Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, an amount equal to the
Class I-P Fraction of any Realized Loss on a Class I-P Mortgage Loan
allocated to the Class I-P-L Regular Interests (other than a Realized
Loss that is allocated by Pro Rata Allocation) provided that any
amounts distributed in respect of losses pursuant to paragraph
(I)(a)(v) or this paragraph (I)(a)(vi) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class
I-P-L Principal Balance;
(vii) seventh, to the Class I-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class I-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(ix) ninth, to the Class I-B-1-L Regular Interests, the portion
of the Group I Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group I
Subordinate Principal Distribution Amount", until the Class I-B-1-L
Principal Balance has been reduced to zero;
(x) tenth, to the Class I-B-2-L Regular Interests, the Interest
Distribution Amount for such Class of Regular Interests remaining
unpaid from previous Distribution Dates;
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<PAGE> 70
(xi) eleventh, to the Class I-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xii) twelfth, to the Class I-B-2-L Regular Interests, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-2-L Principal Balance has been reduced to zero;
(xiii) thirteenth, to the Class I-B-3-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xiv) fourteenth, to the Class I-B-3-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xv) fifteenth, to the Class I-B-3-L Regular Interests, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-3-L Principal Balance has been reduced to zero;
(xvi) sixteenth, to the Class I-B-4-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xvii) seventeenth, to the Class I-B-4-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
for the current Distribution Date;
(xviii) eighteenth, to the Class I-B-4-L Regular Interests, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-4-L Principal Balance has been reduced to zero;
(xix) nineteenth, to the Class I-B-5-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xx) twentieth, to the Class I-B-5-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xxi) twenty-first, to the Class I-B-5-L Regular Interests,
the portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-5-L Principal Balance has been reduced to zero;
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<PAGE> 71
(xxii) twenty-second, to the Class I-B-6-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xxiii) twenty-third, to the Class I-B-6-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
for the current Distribution Date;
(xxiv) twenty-fourth, to the Class I-B-6-L Regular Interests,
the portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-6-L Principal Balance has been reduced to zero;
(xxv) twenty-fifth, to each Class of Group I-B-L Regular
Interests in the order of seniority, the remaining portion, if any, of
the REMIC I Available Distribution Amount for the Group I Loans, up to
the amount of unreimbursed Realized Losses previously allocated to
such Class, if any, provided that any amounts distributed pursuant to
this paragraph (I)(a)(xxv) of this definition of "REMIC I Distribution
Amount" shall not cause a further reduction in the Class Principal
Balances of the Group I-B-L Regular Interests; and
(xxvi) twenty-sixth, to the Class R-1 Certificates, the
Residual Distribution Amount for the Group I Loans for such
Distribution Date;
(b) With respect to the Group II-L Regular Interests and the Class R-
1 Certificates on any Distribution Date prior to the Group II Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group II Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class II-P-L Regular Interests, the aggregate
for all Class II-P Mortgage Loans of the product for each Class II-P
Mortgage Loan of the applicable Class II-P Fraction and the sum of (x)
scheduled payments of principal on such Class II-P Mortgage Loan due
on or before the related Due Date in respect of which no distribution
has been made on any previous Distribution Date and which were
received by the Determination Date, or which have been advanced as
part of a Monthly P&I Advance with respect to such Distribution Date,
(y) the principal portion received in respect of such Class II-P
Mortgage Loan during the Prior Period of (1) Curtailments, (2)
Insurance Proceeds, (3) the amount, if any, of the principal portion
of the Purchase Price paid pursuant to a Purchase Obligation or any
repurchase of a Mortgage Loan permitted hereunder and (4) Liquidation
Proceeds and (z) the principal portion of Payoffs received in respect
of such Class II-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
<PAGE>
<PAGE> 72
Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group II-A-L Regular Interests, pro rata, as
principal, the Group II Senior Principal Distribution Amount;
(v) fifth, to the Class II-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Class II-M Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, the amount payable to the Class II-
P-L Regular Interests on previous Distribution Dates pursuant to
clause (I)(b)(vi) of this definition of "REMIC I Distribution Amount"
and remaining unpaid from such previous Distribution Dates;
(vi) sixth, to the Class II-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Class II-M Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, an amount equal to the Class II-P
Fraction of any Realized Loss on a Class II-P Mortgage Loan allocated
to the Class II-P-L Regular Interests (other than a Realized Loss that
is allocated by Pro Rata Allocation) provided that any amounts
distributed in respect of losses pursuant to paragraph (I)(b)(v) or
this paragraph (I)(b)(vi) of this definition of "REMIC I Distribution
Amount" shall not cause a further reduction in the Class II-P-L
Principal Balance;
(vii) seventh, to the Class II-M-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class II-M-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(ix) ninth, to the Class II-M-L Regular Interests, the Class II-M
Principal Distribution Amount;
(x) tenth, to the Class II-M-L Regular Interests, the remaining
portion, if any, of the REMIC I Available Distribution Amount for Loan
Group II, up to the amount of unreimbursed Realized Losses previously
allocated to such Class, if any, provided that any amounts distributed
pursuant to this paragraph (I)(b)(x) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class
II-M-L Principal Balance; and
(xi) eleventh, to the Class R-1 Certificates, the Residual
<PAGE>
<PAGE> 73
Distribution Amount for Loan Group II for such Distribution Date;
(c) With respect to the Group III-L Regular Interests and the Class
R-1 Certificates on any Distribution Date prior to the Group III Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group III Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class III-P-L Regular Interests, the aggregate
for all Class III-P Mortgage Loans of the product for each Class III-P
Mortgage Loan of the applicable Class III-P Fraction and the sum of
(x) scheduled payments of principal on such Class III-P Mortgage Loan
due on or before the related Due Date in respect of which no
distribution has been made on any previous Distribution Date and which
were received by the Determination Date, or which have been advanced
as part of a Monthly P&I Advance with respect to such Distribution
Date, (y) the principal portion received in respect of such Class III-
P Mortgage Loan during the Prior Period of (1) Curtailments, (2)
Insurance Proceeds, (3) the amount, if any, of the principal portion
of the Purchase Price paid pursuant to a Purchase Obligation or any
repurchase of a Mortgage Loan permitted hereunder and (4) Liquidation
Proceeds and (z) the principal portion of Payoffs received in respect
of such Class III-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class III-A-1-L and Class III-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class III-A-1-L and Class III-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group III-A-L Regular Interests, pro rata, as
principal, the Group III Senior Principal Distribution Amount;
(v) fifth, to the Class III-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Class III-M Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, the amount payable to the Class
III-P-L Regular Interests on previous Distribution Dates pursuant to
clause (I)(c)(vi) of this definition of "REMIC I Distribution Amount"
and remaining unpaid from such previous Distribution Dates;
(vi) sixth, to the Class III-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Class III-M Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, an amount equal to the Class III-P
Fraction of any Realized Loss on a Class III-P Mortgage Loan allocated
to the Class III-P-L Regular Interests (other than a Realized Loss
<PAGE>
<PAGE> 74
that is allocated by Pro Rata Allocation) provided that any amounts
distributed in respect of losses pursuant to paragraph (I)(c)(v) or
this paragraph (I)(c)(vi) of this definition of "REMIC I Distribution
Amount" shall not cause a further reduction in the Class III-P-L
Principal Balance;
(vii) seventh, to the Class III-M-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class III-M-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(ix) ninth, to the Class III-M-L Regular Interests, the Class III-
M Principal Distribution Amount;
(x) tenth, to the Class III-M-L Regular Interests, the remaining
portion, if any, of the REMIC I Available Distribution Amount for Loan
Group III, up to the amount of unreimbursed Realized Losses previously
allocated to such Class, if any, provided that any amounts distributed
pursuant to this paragraph (I)(c)(x) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class
III-M-L Principal Balance; and
(xi) eleventh, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group III for such Distribution Date;
(d) With respect to the Group IV-L Regular Interests on any
Distribution Date prior to the Group IV Credit Support Depletion Date, to
the extent of the REMIC I Available Distribution Amount for the Group IV
Loans remaining following prior distributions, if any, on such Distribution
Date:
(i) first, to the Class IV-P-L Regular Interests, the aggregate
for all Class IV-P Mortgage Loans of the product for each Class IV-P
Mortgage Loan of the applicable Class IV-P Fraction and the sum of (x)
scheduled payments of principal on such Class IV-P Mortgage Loan due
on or before the related Due Date in respect of which no distribution
has been made on any previous Distribution Date and which were
received by the Determination Date, or which have been advanced as
part of a Monthly P&I Advance with respect to such Distribution Date,
(y) the principal portion received in respect of such Class IV-P
Mortgage Loan during the Prior Period of (1) Curtailments, (2)
Insurance Proceeds, (3) the amount, if any, of the principal portion
of the Purchase Price paid pursuant to a Purchase Obligation or any
repurchase of a Mortgage Loan permitted hereunder and (4) Liquidation
Proceeds and (z) the principal portion of Payoffs received in respect
of such Class IV-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class IV-A-1-L and Class IV-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
<PAGE>
<PAGE> 75
Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class IV-A-1-L and Class IV-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts;
(iv) fourth, to the Class IV-A-1-L Regular Interests, as
principal, the Group IV Senior Principal Distribution Amount;
(v) fifth, to the Class IV-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Group IV Mezzanine Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, the amount payable to the Class IV-
P-L Regular Interests on previous Distribution Dates pursuant to
clause (I)(d)(vi) of this definition of "REMIC I Distribution Amount"
and remaining unpaid from such previous Distribution Dates;
(vi) sixth, to the Class IV-P-L Regular Interests, to the extent
of amounts otherwise available to pay the Group IV Mezzanine Principal
Distribution Amount (without regard to clause (B) of the definition
thereof) on such Distribution Date, an amount equal to the Class IV-P
Fraction of any Realized Loss on a Class IV-P Mortgage Loan allocated
to the Class IV-P-L Regular Interests (other than a Realized Loss that
is allocated by Pro Rata Allocation) provided that any amounts
distributed in respect of losses pursuant to paragraph (I)(d)(v) or
this paragraph (I)(d)(vi) of this definition of "REMIC I Distribution
Amount" shall not cause a further reduction in the Class IV-P-L
Principal Balance;
(vii) seventh, to the Class IV-AM-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class IV-AM-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(ix) ninth, to the Class IV-AM-L Regular Interests, their pro
rata share of the Group IV Mezzanine Principal Distribution Amount;
(x) tenth, to the Class IV-M-L Regular Interests, the Interest
Distribution Amount for such Class of Regular Interests remaining
unpaid from previous Distribution Dates;
(xi) eleventh, to the Class IV-M-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xii) twelfth, to the Class IV-M-L Regular Interests, their
<PAGE>
<PAGE> 76
pro rata share of the Group IV Mezzanine Principal Distribution
Amount;
(xiii) thirteenth, sequentially, to the Class IV-AM-L and
Class IV-M-L Regular Interests, in that order, the remaining portion,
if any, of the REMIC I Available Distribution Amount for Loan Group
IV, up to the amount of unreimbursed Realized Losses previously
allocated to such Class, if any, provided that any amounts distributed
pursuant to this paragraph (I)(d)(xiii) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class
IV-AM-L or Class IV-M-L Principal Balance; and
(xiv) fourteenth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group IV for such Distribution Date;
(II) For any Distribution Date on or after the Group I, Group II,
Group III or Group IV Credit Support Depletion Date, as applicable, the
REMIC I Available Distribution Amount shall be distributed to the
outstanding Classes of REMIC I Regular Interests and the Class R-1
Certificates in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests and the Class R-1
Certificates, on each Distribution Date on or after the Group I Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group I Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class I-P-L Regular Interests, principal in
the amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(a)(i) of this definition of
"REMIC I Distribution Amount";
(ii) second, to the Group I-A-L, Class I-X-L and Class R-2-L
Regular Interests and the Class R-1 Certificates, the amount payable
to each such Class of Regular Interests and Certificates on prior
Distribution Dates pursuant to clause (I)(a)(ii) or (II)(a)(iii) of
this definition of "REMIC I Distribution Amount", and remaining
unpaid, pro rata according to such amount payable to the extent of
amounts available;
(iii) third, to the Group I-A-L, Class I-X-L and Class R-2-L
Regular Interests and the Class R-1 Certificates, the sum of the
Interest Distribution Amounts for such Classes of Regular Interests
and Certificates for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Group I-A-L and Class R-2-L Regular Interests
and the Class R-1 Certificates, pro rata, the Group I Senior Principal
Distribution Amount; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group I Loans for such Distribution Date;
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<PAGE> 77
(b) With respect to the Group II-L Regular Interests and the Class R-
1 Certificates, on each Distribution Date on or after the Group II Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group II Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class II-P-L Regular Interests, principal in
the amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(b)(i) of this definition of
"REMIC I Distribution Amount";
(ii) second, to the Class II-A-1-L and Class II-X-L Regular
Interests, the amount payable to each such Class of Regular Interests
on prior Distribution Dates pursuant to clause (I)(b)(ii) or
(II)(b)(iii) of this definition of "REMIC I Distribution Amount", and
remaining unpaid, pro rata according to such amount;
(iii) third, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for each such
Class of Regular Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group II-A-L Regular Interests, pro rata, the
Group II Senior Principal Distribution Amount; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group II Loans for such Distribution Date;
(c) With respect to the Group III-L Regular Interests and the Class R-
1 Certificates, on each Distribution Date on or after the Group III Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group III Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class III-P-L Regular Interests, principal in
the amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(c)(i) of this definition of
"REMIC I Distribution Amount";
(ii) second, to the Class III-A-1-L and Class III-X-L Regular
Interests, the amount payable to each such Class of Regular Interests
on prior Distribution Dates pursuant to clause (I)(c)(ii) or
(II)(c)(iii) of this definition of "REMIC I Distribution Amount", and
remaining unpaid, pro rata according to such amount payable to the
extent of amounts available;
(iii) third, to the Class III-A-1-L and Class III-X-L Regular
Interests, the Interest Distribution Amount for each such Class of
Regular Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
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(iv) fourth, to the Group III-A-L Regular Interests, pro rata,
the Group III Senior Principal Distribution Amount; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group III Loans for such Distribution
Date.
(d) With respect to the Group IV-L Regular Interests and the Class R-
1 Certificates, on each Distribution Date on or after the Group IV Credit
Support Depletion Date, to the extent of the REMIC I Available Distribution
Amount for the Group IV Loans remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class IV-P-L Regular Interests, principal in
the amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(d)(i) of this definition of
"REMIC I Distribution Amount";
(ii) second, to the Class IV-A-1-L and Class IV-X-L Regular
Interests, the amount payable to each such Class of Regular Interests
on prior Distribution Dates pursuant to clause (I)(d)(ii) or
(II)(d)(iii) of this definition of "REMIC I Distribution Amount", and
remaining unpaid, pro rata according to such amount payable to the
extent of amounts available;
(iii) third, to the Class IV-A-1-L and Class IV-X-L Regular
Interests, the Interest Distribution Amount for each such Class of
Regular Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
(iv) fourth, to the Class IV-A-1-L Regular Interests, the Group
IV Senior Principal Distribution Amount; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group IV Loans for such Distribution Date.
REMIC I Regular Interest: The Classes of Regular Interests in the
REMIC I Trust Fund designated as "regular interests" in the table titled
"REMIC I Trust Fund" in the Preliminary Statement hereto.
REMIC I Trust Fund: All of the assets in the Trust Fund other than the
Class I-A-18 Interest Supplement Account, the Bankruptcy and Extraordinary
Expense Reserve Fund and the Expense Account.
REMIC II: The segregated pool of assets consisting of the REMIC II
Trust Fund conveyed in trust to the Trustee for the benefit of the Holders
of the REMIC II Regular Interests and the Class R-2 Certificateholders
pursuant to Section 2.05, with respect to which a separate REMIC election
is to be made.
REMIC II Available Distribution Amount: With respect to the Group I
Certificates, on any Distribution Date, the aggregate of all distributions
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with respect to the Group I-L Regular Interests. With respect to the Group
II Certificates, on any Distribution Date, the aggregate of all
distributions with respect to the Group II-L Regular Interests. With
respect to the Group III Certificates, on any Distribution Date, the
aggregate of all distributions with respect to the Group III-L Regular
Interests. With respect to the Group IV Certificates, on any Distribution
Date, the aggregate of all distributions with respect to the Group IV-L
Regular Interests.
REMIC II Distribution Amount: The REMIC II Available Distribution
Amount shall be distributed to the Certificates (other than the Class R-1
Certificates) in the following amounts and priority:
(a) With respect to the Group I and Class R-2 Certificates, to the
extent of the REMIC II Available Distribution Amount for the Group I
Certificates:
(i) to the Class R-2 Certificates and each Class of Group I
Certificates other than the Class I-A-12, Class I-A-13, Class I-A-20
and Class I-A-24 Certificates, the amounts distributed to its
Corresponding Class on such Distribution Date;
(ii) (A) to the Class I-A-20 Certificates, the amount distributed
as principal to the Class I-A-20-L Regular Interests on such
Distribution Date and (B) to the Class I-A-20 and Class I-A-24
Certificates, the amount distributed as interest to the Class I-A-20-L
Regular Interests on such Distribution Date concurrently as follows:
(I) to the Class I-A-20 Certificates, an amount equal to the product
of 1/12 of the Class I-A-20 Certificate Interest Rate and the Class I-
A-20 Principal Balance (before allocating Realized Losses of principal
and giving effect to distributions of principal, in each case, on such
Distribution Date) and (II) to the Class I-A-24 Certificates, an
amount equal to the product of 1/12 of the Class I-A-24 Certificate
Interest Rate and the Class I-A-24 Notional Amount;
(iii) (A) to the Class I-A-12 and Class I-A-13 Certificates,
the amount distributed as principal their Corresponding Classes on
such Distribution Date and (B) to the Class I-A-12 and Class I-A-13
Certificates, the amount distributed as interest to the Class I-A-13-L
Regular Interests on such Distribution Date concurrently as follows:
(I) to the Class I-A-12 Certificates, an amount equal to the product
of 1/12 of the Class I-A-12 Certificate Interest Rate and the Class I-
A-12 Principal Balance (before allocating Realized Losses of principal
and giving effect to distributions of principal, in each case, on such
Distribution Date) and (II) to the Class I-A-13 Certificates, an
amount equal to the product of 1/12 of the Class I-A-13 Certificate
Interest Rate and the Class I-A-13 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such Distribution Date);
and
(iv) to the Class R-2 Certificates, the applicable Residual
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Distribution Amount, if any.
(b) With respect to the Group II and Class R-2 Certificates, to the
extent of the REMIC II Available Distribution Amount for the Group II
Certificates:
(i) to each Class of Group II Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-2 Certificates, the applicable Residual
Distribution Amount, if any.
(c) With respect to the Group III and Class R-2 Certificates, to the
extent of the REMIC II Available Distribution Amount for the Group III
Certificates:
(i) to each Class of Group III Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-2 Certificates, the applicable Residual
Distribution Amount, if any.
(d) With respect to the Group IV and Class R-2 Certificates, to the
extent of the REMIC II Available Distribution Amount for the Group IV
Certificates:
(i) to each Class of Group IV Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-2 Certificates, the applicable Residual
Distribution Amount, if any.
In each case where a distribution is required to be made concurrently
to two or more Classes of Certificates pursuant to this definition of
"REMIC II Distribution Amount", if the portion of the REMIC II Available
Distribution Amount from which such deemed distribution is required to be
made is insufficient to make such distribution in full to such Classes of
Certificates, such distribution shall be allocated between such Classes of
Certificates pro rata according to the respective amounts to which they are
otherwise entitled from such distribution.
REMIC II Regular Interest: The Classes of Regular Interests in the
REMIC II Trust Fund designated as "regular interests" in the table titled
"REMIC II Trust Fund" in the Preliminary Statement hereto, including the
Class I-A-12-IO REMIC II Regular Interest, the Class I-A-12-PO REMIC II
Regular Interest and the Class I-A-18 REMIC II Regular Interest.
REMIC II Trust Fund: The REMIC II Trust Fund created pursuant to
Section 2.05 of this Agreement. The REMIC II Trust Fund consists of the
REMIC I Regular Interests to be held by the Trustee for the benefit of the
Holders from time to time of the REMIC II Regular Interests and Class R-2
Certificates issued hereunder.
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Residual Certificates: With respect to REMIC I, the Class R-1
Certificates, which are being issued in a single class and with respect to
REMIC II, the Class R-2 Certificates, which are being issued in a single
class. The Class R-1 and Class R-2 Certificates are hereby designated the
sole Class of "residual interests" in REMIC I and REMIC II, respectively,
for purposes of Section 860G(a)(2) of the Code.
Residual Distribution Amount: On any Distribution Date, with respect
to the Class R-1 Certificates, any portion of the REMIC I Available
Distribution Amount remaining after all distributions to the REMIC I
Regular Interests and the Class R-1 Certificates pursuant to clauses
(I)(a)(i) through (I)(a)(xxv), (I)(b)(i) through (I)(b)(x), (I)(c)(i)
through (I)(c)(x), (I)(d)(i) through (I)(d)(xiii), (II)(a)(i) through
(II)(a)(iv), (II)(b)(i) through (II)(b)(iv), (II)(c)(i) through (II)(c)(iv)
or (II)(d)(i) through (II)(d)(iv), as applicable, of the definition of
"REMIC I Distribution Amount" and with respect to the Class R-2
Certificates, any portion of the REMIC II Available Distribution Amount
remaining after all distributions to the Certificates pursuant to clauses
(a)(i) through (a)(iii), (b)(i), (c)(i) or (d)(i), as applicable, of the
definition of "REMIC II Distribution Amount". Upon termination of the
obligations created by this Agreement and the REMIC I Trust Fund and REMIC
II Trust Fund created hereby, the amounts which remain on deposit in the
Certificate Account after payment to the Holders of the REMIC I Regular
Interests of the amounts set forth in Section 9.01 of this Agreement, and
subject to the conditions set forth therein, shall be distributed to the
Class R-1 and Class R-2 Certificates in accordance with the preceding
sentence of this definition as if the date of such distribution were a
Distribution Date.
Responsible Officer: When used with respect to the Trustee, any
officer assigned to and working in its Corporate Trust Department or
similar group and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge
of and familiarity with the particular subject.
Rounding Amount: With respect to the Class I-A-23 Rounding Account,
the amount of funds, if any, needed to be withdrawn from such account and
used to round the amount of any distributions in reduction of the Class I-A-
23 Principal Balance on any Distribution Date upward to the next higher
integral multiple of $1,000.
S&P: Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., provided that at any time it be a Rating Agency.
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.
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Servicing Guide to the extent incorporated by reference therein) between
the Company and a Person relating to the sale of the Mortgage Loans to the
Company and the servicing of such Mortgage Loans for the benefit of the
Certificateholders, which contract is substantially in the form of Exhibit
E hereto, as such contract may be amended or modified from time to time;
provided, however, that any such amendment or modification shall not
materially adversely affect the interests and rights of Certificateholders
and (b) any other similar contract providing substantially similar rights
and benefits as those provided by the forms of contract attached as Exhibit
E hereto.
Senior Certificates: The Group I Senior, Group II Senior, Group III
Senior and Group IV Senior Certificates and the Residual Certificates.
Servicer: A mortgage loan servicing institution to which the Master
Servicer has assigned servicing duties with respect to any Mortgage Loan
under a Selling and Servicing Contract; provided, however, the Master
Servicer may designate itself or one or more other mortgage loan servicing
institutions as Servicer upon termination of an initial Servicer's
servicing duties.
Servicing Fee: For each Mortgage Loan, the fee paid to the Servicer
thereof to perform primary servicing functions for the Master Servicer with
respect to such Mortgage Loan, equal to the per annum rate set forth for
each Mortgage Loan in the Mortgage Loan Schedule on the outstanding
Principal Balance of such Mortgage Loan.
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 Insurance Policy <*> : The special hazard insurance
policy, a form of which is attached as Exhibit P to this Agreement, or any
replacement insurance policy obtained by the Master Servicer pursuant to
Section 3.17, in the total initial amount of $7,920,443. The initial
Special Hazard Insurance Policy shall be issued by Travelers.
Special Hazard Insurance Premium Sub-Account <*> : An administrative
subaccount established and maintained by the Trustee within the Expense
Account for the payment of the Premiums with respect to the Special Hazard
Insurance Policy.
Special Hazard Insurer <*> : Initially, Travelers, or any successor
thereto or the named insurer in any replacement policy obtained by the
Master Servicer pursuant to Section 3.17.
Special Hazard Loss: With respect to any Group I Loan, the occurrence
of any direct physical loss or damage to a Mortgaged Property not covered
by a standard hazard maintenance policy with extended coverage which is
caused by or results from any cause except: (i) fire, lightning, windstorm,
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hail, explosion, riot, riot attending a strike, civil commotion, vandalism,
aircraft, vehicles, smoke, sprinkler leakage, except to the extent of that
portion of the loss which was uninsured because of the application of a co-
insurance clause of any insurance policy covering these perils; (ii) normal
wear and tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
thereof ensues and then only for the ensuing loss; (iv) nuclear reaction or
nuclear radiation or radioactive contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or aggravated by
a peril covered by this definition of Special Hazard Loss; (v) hostile or
warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack (a)
by any government of sovereign power (de jure or de facto), or by an
authority maintaining or using military, naval or air forces, (b) by
military, naval or air forces, or (c) by an agent of any such government,
power, authority or forces; (vi) any weapon of war employing atomic fission
or radioactive force whether in time of peace or war; (vii) insurrection,
rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such
occurrence; or (viii) seizure or destruction under quarantine or customs
regulations, or confiscation by order of any government or public
authority, and with respect to any Group II, Group III or Group IV Loan,
any loss covered by the Special Hazard Insurance Policy (without regard to
the limitation on aggregate claims thereunder).
Step Down Percentage: For any Distribution Date, the percentage
indicated below:
Distribution Date Occurring Step Down Percentage
In
November 1998 through October 0%
2003
November 2003 through October 30%
2004
November 2004 through October 40%
2005
November 2005 through October 60%
2006
November 2006 through October 80%
2007
November 2007 and thereafter 100%
Stripped Interest Rate: For each Group I Loan, the excess, if any, of
the Pass-Through Rate for such Mortgage Loan over 6.500%. For each Group II
Loan and Group III Loan, the excess, if any, of the Pass-Through Rate for
such Mortgage Loan over 6.4809%. For each Group IV Loan, the excess, if
any, of the Pass-Through Rate for such Mortgage Loan over 6.250%.
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Subgroup: Subgroup II-1, Subgroup II-2 and Subgroup II-3.
Subgroup II-1 Loan: Any Group II Loan which is designated as such on
the Mortgage Loan Schedule.
Subgroup II-2 Loan: Any Group II Loan which is designated as such on
the Mortgage Loan Schedule.
Subgroup II-3 Loan: Any Group II Loan which is designated as such on
the Mortgage Loan Schedule.
Subordinate Certificates: The Group I-B, Class IV-AM and Class M
Certificates.
Subordination Level: On any specified date, with respect to any of the
Group I-B-L Regular Interests, the percentage obtained by dividing the sum
of the Class Principal Balances of the Classes of Group I-B-L Regular
Interests which are subordinate in right of payment to such Class by the
aggregate Class Principal Balances of the Group I-L Regular Interests as of
such date prior to giving effect to distributions of principal or interest
or allocations of Realized Losses on the Group I Loans on such date. On any
specified date, with respect to the Class IV-M-L Regular Interests, the
percentage obtained by dividing the Class IV-M-L Principal Balance by the
aggregate Class Principal Balances of the Group IV-L Regular Interests as
of such date prior to giving effect to distributions of principal or
interest or allocations of Realized Losses on the Group IV Loans on such
date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for
another Mortgage Loan pursuant to and in accordance with the provisions of
Section 2.02.
Tax Matters Person: A Holder of the Class R-1 Certificate, with
respect to REMIC I and a Holder of the Class R-2 Certificate, with respect
to REMIC II, in each case holding a Certificate having an Authorized
Denomination of at least 0.01% or any Permitted Transferee of such Class R-
1 or Class R-2 Certificateholder designated as succeeding to the position
of Tax Matters Person with respect to the applicable trust fund in a notice
to the Trustee signed by authorized representatives of the transferor and
transferee of such Class R-1 or Class R-2 Certificate. If the Tax Matters
Person for REMIC I or REMIC II becomes a Disqualified Organization, the
last preceding Holder of such Authorized Denomination of the Class R-1 or
Class R-2 Certificate, as applicable, that is not a Disqualified
Organization shall be Tax Matters Person for such trust pursuant to 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).
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Termination Payment: The final payment delivered to the
Certificateholders on the Termination Date pursuant to the procedures set
forth in Section 9.01(b).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
Transferee Affidavit and Agreement: An affidavit and agreement in the
form attached hereto as Exhibit J.
Travelers: Travelers Casualty and Surety Company.
Trust: The pool of assets consisting of the Trust Fund conveyed
pursuant to Section 2.01 of this Agreement.
Trustee: State Street Bank and Trust Company, or its successor-in-
interest as provided in Section 8.09, or any successor trustee appointed as
herein provided.
Trust Fund: The corpus of the trust created pursuant to Section 2.01
of this Agreement. The Trust Fund consists of (i) the 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 $16,029.12 for the payment of interest on 2
Mortgage Loans which do not begin accruing interest until December 1998,
which initial deposit shall be irrevocable) and the Investment Account
(except amounts representing the Master Servicing Fee or the Servicing Fee)
and in the Expense Account, the Class I-A-23 Rounding Account and the Class
I-A-18 Interest Supplement Account; (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 related to the Mortgage Loans (except amounts
representing the Master Servicing Fee or the Servicing Fee); (iv) property
which secured a Mortgage Loan and which has been acquired by foreclosure or
deed in lieu of foreclosure or, in the case of a Cooperative Loan, a
similar form of conversion, after the Cut-Off Date; and (v) the Mortgage
Pool Insurance Policy (including the Fraud Waiver and the Ninety-Seven
Percent Loan-to-Value Program Endorsement), the Special Hazard Insurance
Policy, the Bankruptcy and Extraordinary Expense Reserve Fund and amounts
paid or payable by the insurer under any FHA insurance policy or any
Primary Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage Pool.
Uncollected Interest: With respect to any Distribution Date for any
Mortgage Loan on which a Payoff was made by a Mortgagor during the related
Payoff Period, except for Payoffs received during the period from the first
through the 14th day of the month of such Distribution Date, an amount
equal to one month's interest at the applicable Pass-Through Rate on such
Mortgage Loan less the amount of interest actually paid by the Mortgagor
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<PAGE> 86
with respect to such Payoff.
Uncompensated Interest Shortfall: With respect to a Loan Group, for
any Distribution Date, the excess, if any, of (i) the sum of (a) aggregate
Uncollected Interest with respect to the Mortgage Loans in the related Loan
Group and (b) aggregate Curtailment Shortfall with respect to the Mortgage
Loans in the related Loan Group over (ii) Compensating Interest with
respect to such Loan Group.
Uncompensated Interest Shortfall for Loan Group I shall be allocated
to the Group I-L Regular Interests pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be allocated
to the Group II-L Regular Interests pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be allocated
to the Group III-L Regular Interests pro rata according to the amount of
the Interest Distribution Amount to which each such Class would otherwise
be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be allocated
to the Group IV-L Regular Interests pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Underwriting Standards: The underwriting standards of CTX Mortgage
Company, HomeSide Lending, Inc., Prism Mortgage Company, Old Kent Mortgage
Company, Washington Mutual Savings Bank, First Republic Savings Bank of
Nevada, PHH Mortgage Services Corporation, Commerce Security Bank,
Headlands Mortgage Company, Temple-Inland Mortgage Corporation, PNC
Mortgage Securities Corp., Crestar Mortgage Corporation, Western Financial
Savings Bank, FSB, FT Mortgage Companies, SunTrust Mortgage, Inc., Flagstar
Bank, FSB, Chase Manhattan Mortgage Corporation, Imperial Home Loans, Inc.,
Provident Funding Associates, L.P., Indymac, Inc. and Bank United, FSB.
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.
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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.
ARTICLE II
Conveyance of the Trust Funds; REMIC Election and Designations; Original
Issuance of Certificates
Section 2.01. Conveyance of the Trust Fund; REMIC Election and
Designations. The Trust of which the Trustee is the trustee is hereby
created under the laws of the State of New York for the benefit of the
Holders of the REMIC I Regular Interests and the Class R-1 Certificates.
The purpose of Trust is to hold the Trust Fund and provide for the
issuance, execution and delivery of the Class R-1 Certificates. The assets
of the Trust shall consist of the Trust Fund. The Trust shall be
irrevocable.
The assets of the Trust shall remain in the custody of the Trustee, on
behalf of the Trust, and shall be kept in the Trust. Moneys to the credit
of the Trust shall be held by the Trustee and invested as provided herein.
All assets received and held in the Trust will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of State
Street Bank and Trust Company in its own right, or any Person claiming
through it. The Trustee, on behalf of the Trust, shall not have the power
or authority to transfer, assign, hypothecate, pledge or otherwise dispose
of any of the assets of the Trust to any Person, except as permitted
herein. No creditor of a beneficiary of the Trust, of the Trustee, of the
Master Servicer or of the Company shall have any right to obtain possession
of, or otherwise exercise legal or equitable remedies with respect to, the
property of the Trust, except in accordance with the terms of this
Agreement.
Concurrently with the execution and delivery hereof, the Company does
hereby irrevocably sell, transfer, assign, set over and otherwise convey to
the Trustee, in trust for the benefit of the Holders of REMIC I Regular
Interests and the Class R-1 Certificates and the owners of the Bankruptcy
and Extraordinary Expense Reserve Fund and the Expense Account, without
recourse, all the Company's right, title and interest in and to the Trust
Fund, including but not limited to all scheduled payments of principal and
interest due after the Cut-Off Date and received by the Company with
respect to the Mortgage Loans at any time, and all Principal Prepayments
received by the Company after the Cut-Off Date with respect to the Mortgage
Loans (such transfer and assignment by the Company to be referred to herein
as the "Conveyance"). The Trustee hereby accepts the Trust created hereby
and accepts delivery of the Trust Fund on behalf of the Trust and
acknowledges that it holds the Mortgage Loans for the benefit of the
Holders of the REMIC I Regular Interests and the Class R-1 Certificates
issued pursuant to this Agreement. It is the express intent of the parties
hereto that the Conveyance of the Trust Fund to the Trustee by the Company
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<PAGE> 88
as provided in this Section 2.01 be, and be construed as, an absolute sale
of the Trust Fund. It is, further, not the intention of the parties that
such Conveyance be deemed a pledge of the Trust Fund by the Company to the
Trustee to secure a debt or other obligation of the Company. However, in
the event that, notwithstanding the intent of the parties, the Trust Fund
is held to be the property of the Company, or if for any other reason this
Agreement is held or deemed to create a security interest in the Trust
Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the Conveyance provided for in this Section 2.01 shall be deemed
to be a grant by the Company to the Trustee of a security interest in all
of the Company's right, title, and interest, whether now owned or hereafter
acquired, in and to:
(I) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters
of credit, advices of credit and investment property consisting of, arising
from or relating to any of the property described in (i), (ii) and (iii)
below: (i) the Mortgage Loans identified on the Mortgage Loan Schedule,
including the related Mortgage Notes, Mortgages, Cooperative Stock
Certificates, and Cooperative Leases, all Substitute Mortgage Loans and all
distributions with respect to such Mortgage Loans and Substitute Mortgage
Loans payable on and after the Cut-Off Date; (ii) the Certificate Account,
the Expense Account, the Class I-A-23 Rounding Account, the Class I-A-18
Interest Supplement Account and 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) the
Mortgage Pool Insurance Policy (including the Fraud Waiver and the Ninety-
Seven Percent Loan-to-Value Program Endorsement), the Special Hazard
Insurance Policy, the Bankruptcy and Extraordinary Expense Reserve Fund and
amounts paid or payable by the insurer under any FHA insurance policy or
any Primary Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage Pool;
(II) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters
of credit, advices of credit, investment property, and other rights arising
from or by virtue of the disposition of, or collections with respect to, or
insurance proceeds payable with respect to, or claims against other persons
with respect to, all or any part of the collateral described in (I) above
(including any accrued discount realized on liquidation of any investment
purchased at a discount); and
(III) All cash and non-cash proceeds of the collateral described in
(I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes, the
Mortgages, the Security Agreements, Assignments of Proprietary Lease,
Cooperative Stock Certificates, Cooperative Leases and such other goods,
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letters of credit, advices of credit, instruments, money, documents,
chattel paper or certificated securities shall be deemed to be possession
by the secured party or possession by a purchaser for purposes of
perfecting the security interest pursuant to the Uniform Commercial Code
(including, without limitation, Sections 9-305 and 9-115 thereof) as in
force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed to be notifications to, or acknowledgments,
receipts or confirmations from, securities intermediaries, bailees or
agents of, or persons holding for, the Trustee, as applicable for the
purpose of perfecting such security interest under applicable law.
The Company and the Trustee at the direction of the Company shall, to
the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a
security interest in the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law
and will be maintained as such throughout the term of 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 first 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 Mortgage Loans, which shall on original issuance
thereof and at all times be registered in the name of the Trustee.
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, 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." 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 cannot be delivered by the Company to the Trustee prior to or
concurrently with the execution and delivery hereof (due to a delay on the
part of the recording office), the Company may, in lieu of delivering such
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original documents, 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 cannot be
delivered to the Trustee prior to or concurrently with the execution and
delivery hereof, 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 has received a Payoff after
the Cut-Off Date and prior to the date of execution and delivery hereof,
the Company, in lieu of delivering the above documents, herewith delivers
to the Trustee a certification of a Servicing Officer of the nature set
forth in Section 3.10.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each of
the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.01, and to enter into a
Custodial Agreement for such purpose, provided, however, that the Trustee
shall be and remain liable for the acts of any such Custodian only to the
extent that it is responsible for its own acts hereunder.
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The Company and the Trustee agree that the Company, as agent for the
Tax Matters Person, shall, on behalf of the REMIC I Trust Fund, elect to
treat the REMIC I Trust Fund as a REMIC within the meaning of Section 860D
of the Code and, if necessary, under applicable state laws. Such election
shall be included in the Form 1066 and any appropriate state return to be
filed on behalf of REMIC I for its first taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC I
within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC I Trust Fund are hereby
designated as "regular interests" for purposes of Section 860G(a)(1) of the
Code. The Class R-1 Certificates are being issued in a single Class, which
is hereby designated as the sole class of "residual interest" in the REMIC
I Trust Fund for purposes of Section 860G(a)(2) of the Code.
The parties intend that the affairs of the REMIC I Trust Fund formed
hereunder shall constitute, and that the affairs of the REMIC I Trust Fund
shall be conducted so as to qualify the REMIC I Trust Fund as a REMIC. In
furtherance of such intention, the Company covenants and agrees that it
shall act as agent for the Tax Matters Person (and the Company is hereby
appointed to act as agent for such Tax Matters Person) on behalf of the
REMIC I Trust Fund and that in such capacity it shall: (a) prepare and
file, or cause to be prepared and filed, a federal tax return using a
calendar year as the taxable year and using an accrual method of accounting
for the REMIC I Trust Fund when and as required by the REMIC Provisions and
other applicable federal income tax laws; (b) make an election, on behalf
of the trust, for the REMIC I Trust Fund to be treated as a REMIC on the
federal tax return of the REMIC I Trust Fund for its first taxable year, in
accordance with the REMIC Provisions; (c) prepare and forward, or cause to
be prepared and forwarded, to the Holders of the REMIC I Regular Interests
and the Class R-1 Certificates and the Trustee, all information reports as
and when required to be provided to them in accordance with the REMIC
Provisions, and make available the information necessary for the
application of Section 860E(e) of the Code; (d) conduct the affairs of the
REMIC I Trust Fund at all times that any REMIC I Regular Interests are
outstanding so as to maintain the status of the REMIC I Trust Fund as a
REMIC under the REMIC Provisions; (e) not knowingly or intentionally take
any action or omit to take any action that would cause the termination of
the REMIC status of the REMIC I Trust Fund; and (f) pay the amount of any
federal prohibited transaction penalty taxes imposed on the REMIC I Trust
Fund when and as the same shall be due and payable (but such obligation
shall not prevent the Company or any other appropriate person from
contesting any such tax in appropriate proceedings and shall not prevent
the Company from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the Company shall
be entitled to be indemnified by the REMIC I Trust Fund for any such
prohibited 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.
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The Trustee and the Master Servicer shall promptly provide the Company
with such information as the Company may from time to time request for the
purpose of enabling the Company to prepare tax returns.
In the event that a Mortgage Loan is discovered to have a defect
which, had such defect been discovered before the startup day, would have
prevented such Mortgage Loan from being a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, and the Company does not
repurchase such Mortgage Loan within 90 days of such date, the Master
Servicer, on behalf of the Trustee, shall within 90 days of the date such
defect is discovered sell such Mortgage Loan at such price as the Master
Servicer in its sole discretion, determines to be the greatest price that
will result in the purchase thereof within 90 days of such date, unless the
Master Servicer delivers to the Trustee an Opinion of Counsel to the effect
that continuing to hold such Mortgage Loan will not adversely affect the
status of the electing portion of the REMIC I Trust Fund as a REMIC for
federal income tax purposes.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC I Trust Fund as defined in Section 860F of the Code and not paid
by the Company pursuant to clause (f) of the third preceding paragraph,
such tax shall be charged against amounts otherwise distributable to the
Class R-1 Certificateholders. Notwithstanding anything to the contrary
contained herein, the Trustee is hereby authorized to retain from amounts
otherwise distributable to the Class R-1 Certificateholders on any
Distribution Date sufficient funds to reimburse the Company in its capacity
as agent for the Tax Matters Person for the payment of such tax (upon the
written request of the Company, to the extent reimbursable, and to the
extent that the Company has not been previously reimbursed therefor).
Section 2.02. Acceptance by Trustee. The Trustee acknowledges receipt
(or with respect to any Mortgage Loan subject to a Custodial Agreement,
receipt by the Custodian thereunder) of the documents (or certified copies
thereof as specified in Section 2.01) referred to in Section 2.01 above,
but without having made the review required to be made within 45 days
pursuant to this Section 2.02, and declares that as of the Closing Date it
holds and will hold such documents and the other documents constituting a
part of the Mortgage Files delivered to it, and the Trust Fund, as Trustee
in trust, upon the trusts herein set forth, for the use and benefit of the
Holders from time to time of the REMIC I Regular Interests and Class R-1
Certificates. The Trustee agrees, for the benefit of the Holders of the
REMIC I Regular Interests and Class R-1 Certificates, to review or cause
the Custodian to review each Mortgage File within 45 days after the Closing
Date and deliver to the Company a certification in the form attached as
Exhibit M hereto, to the effect that 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 third
paragraph of 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
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required to make any independent examination of any documents contained in
each Mortgage File beyond the review specifically required herein. The
Trustee makes no representations as to: (i) the validity, legality,
enforceability or genuineness of any of the Mortgage Loans identified on
the Mortgage Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any Mortgage Loan. If the Trustee finds any
document or documents constituting a part of a Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule, the Trustee shall promptly so
notify the Company. The Company hereby covenants and agrees that, if any
such defect cannot be corrected or cured, the Company shall, not later than
60 days after the Trustee's notice to it respecting such defect, within the
three-month period commencing on the Closing Date (or within the two-year
period commencing on the Closing Date if the related Mortgage Loan is a
"defective obligation" within the meaning of Section 860G(a)(4)(B)(ii) of
the Code and Treasury Regulation Section 1.860G-2(f)), either (i)
repurchase the related Mortgage Loan from the Trustee at the Purchase
Price, or (ii) substitute for any Mortgage Loan to which such defect
relates a different mortgage loan (a "Substitute Mortgage Loan") which is a
"qualified replacement mortgage" (as defined in the Code) and, (iii) after
such three-month or two-year period, as applicable, the Company shall
repurchase the Mortgage Loan from the Trustee at the Purchase Price but
only if the Mortgage Loan is in default or default is, in the judgment of
the Company, reasonably imminent. If such defect would cause the Mortgage
Loan to be other than a "qualified mortgage" (as defined in the Code), then
notwithstanding the previous sentence, 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 repurchase by the Company of a Mortgage Loan pursuant to
this Section 2.02. Furthermore, such Substitute Mortgage Loan shall
otherwise have such characteristics so that the representations and
warranties of the Company set forth in Section 2.03 hereof would not have
been incorrect had such Substitute Mortgage Loan originally been a Mortgage
Loan, and the Company shall be deemed to have made such representations and
warranties as to such Substitute Mortgage Loan. A Substitute Mortgage Loan
may be substituted for a defective Mortgage Loan whether or not such
defective Mortgage Loan is itself a Substitute Mortgage Loan.
The Purchase Price for each 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
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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 repurchase or substitute any
Mortgage Loan as to which such a defect in a constituent document exists
shall constitute the sole remedy respecting such defect available to the
Holders of the REMIC I Regular Interests or the Class R-1
Certificateholders or the Trustee on behalf of the Holders of the REMIC I
Regular Interests or the Class R-1 Certificateholders.
Section 2.03. Representations and Warranties of the Company
Concerning the Mortgage Loans. With respect to the conveyance of the
Mortgage Loans provided for in Section 2.01 herein, the Company hereby
represents and warrants to the Trustee that as of the Cut-Off Date unless
otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule was
true and correct in all material respects at the date or dates
respecting which such information is furnished;
(ii) As of the Closing Date, each Mortgage relating to a Mortgage
Loan that is not a Cooperative Loan is a valid and enforceable
(subject to Section 2.03(xvi)) first lien on an unencumbered estate in
fee simple or leasehold estate in the related Mortgaged Property
subject only to (a) liens for current real property taxes and special
assessments; (b) covenants, conditions and restrictions, rights of
way, easements and other matters of public record as of the date of
recording such Mortgage, such exceptions appearing of record being
acceptable to mortgage lending institutions generally or specifically
reflected in the appraisal obtained in connection with the origination
of the Mortgage Loan; (c) exceptions set forth in the title insurance
policy relating to such Mortgage, such exceptions being acceptable to
mortgage lending institutions generally; and (d) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
the Mortgage;
(iii) As of the Closing Date, the Company had good title to,
and was the sole owner of, each Mortgage Loan free and clear of any
encumbrance or lien, and immediately upon the transfer and assignment
herein contemplated, the Trustee shall have good title to, and will be
the sole legal owner of, each Mortgage Loan, free and clear of any
encumbrance or lien (other than any lien under this Agreement);
(iv) As of the day prior to the Cut-Off Date, all payments due on
each Mortgage Loan had been made and no Mortgage Loan had been
delinquent (i.e., was more than 30 days past due) more than once in
the preceding 12 months and any such delinquency lasted for no more
than 30 days;
(v) As of the Closing Date, there is no late assessment for
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delinquent taxes outstanding against any Mortgaged Property;
(vi) As of the Closing Date, there is no offset, defense or
counterclaim to any Mortgage Note, including the obligation of the
Mortgagor to pay the unpaid principal or interest on such Mortgage
Note except to the extent that the Buydown Agreement for a Buydown
Loan forgives certain indebtedness of a Mortgagor;
(vii) As of the Closing Date, each Mortgaged Property is free
of damage and in good repair, ordinary wear and tear excepted;
(viii) Each Mortgage Loan at the time it was made complied
with all applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws;
(ix) Each Mortgage Loan was originated by a savings association,
savings bank, credit union, insurance company, or similar institution
which is supervised and examined by a federal or state authority or by
a mortgagee approved by the FHA and will be serviced by an institution
which meets the servicer eligibility requirements established by the
Company;
(x) As of the Closing Date, each Mortgage Loan which is not a
Cooperative Loan is covered by an ALTA form or CLTA form of mortgagee
title insurance policy or other form of policy of insurance which, as
of the origination date of such Mortgage Loan, was acceptable to FNMA
or FHLMC, 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 FNMA or FHLMC and qualified to
do business in the state in which the related Mortgaged Property is
located. Such policy insures the originator of the Mortgage Loan, its
successors and assigns as to the first priority lien of the Mortgage
in the original principal amount of the Mortgage Loan subject to the
exceptions set forth in such policy. Such policy is in full force and
effect and will be in full force and effect and inure to the benefit
of the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders upon the consummation of the transactions
contemplated by this Agreement and no claims have been made under such
policy, and no prior holder of the related Mortgage, including the
Company, has done, by act or omission, anything which would impair the
coverage of such policy;
(xi) Not less than approximately 97.8% (by Principal Balance) of
the Group I Loans, not less than approximately 58.9% (by Principal
Balance) of the Group II Loans, not less than approximately 80.7% (by
Principal Balance) of the Group III Loans and not less than
approximately 88.4% (by Principal Balance) of the Group IV 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;
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(xii) As of the Closing Date, all policies of insurance
required by this Agreement or by a Selling and Servicing Contract
have been validly issued and remain in full force and effect,
including such policies covering the Company, the Master Servicer or
any Servicer;
(xiii) As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
(xiv) Each Mortgage was documented by appropriate FNMA/FHLMC
mortgage instruments in effect at the time of origination, or other
instruments approved by the Company;
(xv) As of the Closing Date and other than with respect to
Cooperative Loans, the Mortgaged Property securing each Mortgage is
improved with a one- to four-family dwelling unit, including units in
a duplex, condominium project, townhouse, a planned unit development
or a de minimis planned unit development;
(xvi) As of the Closing Date, each Mortgage and Mortgage Note
is the legal, valid and binding obligation of the maker thereof and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity;
(xvii) As of the date of origination, as to Mortgaged
Properties which are units in condominiums or planned unit
developments, all of such units met FNMA or FHLMC requirements, are
located in a condominium or planned unit development projects which
have received FNMA or FHLMC approval, or are approvable by FNMA or
FHLMC or have otherwise been approved by the Company;
(xviii) One of the Group I Loans and none of the Group II,
Group III and Group IV Loans are Buydown Loans;
(xix) Based solely on representations of the Mortgagors
obtained at the origination of the related Mortgage Loans,
approximately 97.88% (by Principal Balance) of the Group I Loans will
be secured by owner occupied Mortgaged Properties which are the
primary residences of the related Mortgagors, approximately 1.69% (by
Principal Balance) of the Group I Loans will be secured by owner
occupied Mortgaged Properties which were second or vacation homes of
the Mortgagors and approximately 0.43% (by Principal Balance) of the
Group I Loans will be secured by Mortgaged Properties which were
investor properties of the related Mortgagors; approximately 72.62%
(by Principal Balance) of the Group II Loans will be secured by owner
occupied Mortgaged Properties which are the primary residences of the
related Mortgagors, approximately 2.87% (by Principal Balance) of the
Group II Loans will be secured by owner occupied Mortgaged Properties
which were second or vacation homes of the Mortgagors and
approximately 24.51% (by Principal Balance) of the Group II Loans
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will be secured by Mortgaged Properties which were investor properties
of the related Mortgagors; approximately 74.59% (by Principal Balance)
of the Group III Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related Mortgagors,
approximately 2.70% (by Principal Balance) of the Group III Loans will
be secured by owner occupied Mortgaged Properties which were second or
vacation homes of the Mortgagors and approximately 22.71% (by
Principal Balance) of the Group III Loans will be secured by Mortgaged
Properties which were investor properties of the related Mortgagors;
approximately 87.85% (by Principal Balance) of the Group IV Loans will
be secured by owner occupied Mortgaged Properties which are the
primary residences of the related Mortgagors, approximately 2.75% (by
Principal Balance) of the Group IV Loans will be secured by owner
occupied Mortgaged Properties which were second or vacation homes of
the Mortgagors and approximately 9.40% (by Principal Balance) of the
Group IV Loans will be secured by Mortgaged Properties which were
investor properties of the related Mortgagors; one of the Group IV
Loans will be secured by interests in Cooperative Apartments and none
of the Group I, Group II and Group III Loans will be secured by
interests in Cooperative Apartments;
(xx) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form satisfactory to
FNMA or FHLMC;
(xxi) The Mortgage Loans have been underwritten substantially
in accordance with the applicable Underwriting Standards;
(xxii) All of the Mortgage Loans have due-on-sale clauses; by
the terms of the Mortgage Notes, however, the due on sale provisions
may not be exercised at the time of a transfer if prohibited by law;
(xxiii) The Company used no adverse selection procedures in
selecting the Mortgage Loans from among the outstanding fixed-rate
conventional mortgage loans purchased by it which were available for
inclusion in the Mortgage Pool and as to which the representations and
warranties in this Section 2.03 could be made;
(xxiv) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Destroyed Mortgage Note, if such Mortgage
Loan is subsequently in default, the enforcement of such Mortgage Loan
or of the related Mortgage by or on behalf of the Trustee will not be
materially adversely affected by the absence of the original Mortgage
Note;
(xxv) Based upon an appraisal of the Mortgaged Property
securing each Mortgage Loan, approximately 90.09% (by Principal
Balance) of the Group I Loans had a current Loan-to-Value Ratio less
than or equal to 80%, approximately 9.91% (by Principal Balance) of
the Group I Loans had a current Loan-to-Value Ratio greater than 80%
but less than or equal to 95% and no Group I Loan had a current Loan-
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to-Value Ratio greater than 95%; approximately 77.93% (by Principal
Balance) of the Group II Loans had a current Loan-to-Value Ratio less
than or equal to 80%, approximately 21.93% (by Principal Balance) of
the Group II Loans had a current Loan-to-Value Ratio greater than 80%
but less than or equal to 95% and approximately 0.14% (by Principal
Balance) of the Group II Loans had a current Loan-to-Value Ratio
greater than 95%; approximately 85.05% (by Principal Balance) of the
Group III Loans had a current Loan-to-Value Ratio less than or equal
to 80%, approximately 14.95% (by Principal Balance) of the Group III
Loans had a current Loan-to-Value Ratio greater than 80% but less than
or equal to 95% and no Group III Loan had a current Loan-to-Value
Ratio greater than 95%; and approximately 94.48% (by Principal
Balance) of the Group IV Loans had a current Loan-to-Value Ratio less
than or equal to 80%, approximately 5.52% (by Principal Balance) of
the Group IV Loans had a current Loan-to-Value Ratio greater than 80%
but less than or equal to 95% and no Group IV Loan had a current Loan-
to-Value Ratio greater than 95%;
(xxvi) Approximately 59.07% (by Principal Balance) of the
Group I Loans, approximately 47.22% (by Principal Balance) of the
Group II Loans, approximately 50.24% (by Principal Balance) of the
Group III Loans and approximately 61.25% (by Principal Balance) of the
Group IV Loans were originated for the purpose of refinancing existing
mortgage debt, including cash-out refinancings; and approximately
40.93% (by Principal Balance) of the Group I Loans, approximately
52.78% (by Principal Balance) of the Group II Loans, approximately
49.76% (by Principal Balance) of the Group III Loans and approximately
38.75% (by Principal Balance) of the Group IV Loans were originated
for the purpose of purchasing the Mortgaged Property;
(xxvii) Not less than approximately 88.50%, 32.74%, 26.24% and
36.53% (by Principal Balance) of the Group I Loans, Group II Loans,
Group III Loans and Group IV Loans, respectively, were originated
under full documentation programs;
(xxviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1);
(xxix) With respect to each Cooperative Loan, the Cooperative
Stock that is pledged as security for the Mortgage Loan is held by a
person as a tenant-stockholder (as defined in Section 216 of the Code)
in a cooperative housing corporation (as defined in Section 216 of the
Code); and
(xxx) Each Cooperative Loan is secured by a valid, subsisting
and enforceable (except as such enforcement may be limited by laws
affecting the enforcement of creditors' rights generally and
principles of equity) perfected first lien and security interest in
the related Cooperative Stock securing the related Mortgage Note,
subject only to (a) liens of the Cooperative for unpaid assessments
representing the Mortgagor's pro rata share of the Cooperative's
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payments for its blanket mortgage, current and future real property
taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject, and (b) other matters to
which like collateral is commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
the Security Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 2.03 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian, as the case may be, and
shall continue throughout the term of this Agreement. Upon discovery by any
of the Company, the Master Servicer, the Trustee or the Custodian of a
breach of any of the foregoing representations and warranties which
materially and adversely affects the value of the related Mortgage Loans or
the interests of the Certificateholders in the related Mortgage Loans, the
Company, the Master Servicer, the Trustee or the Custodian, as the case may
be, discovering such breach shall give prompt written notice to the others.
Within 90 days of its discovery or its receipt of notice of breach, the
Company shall repurchase, subject to the limitations set forth in the
definition of "Purchase Price", or substitute for the affected Mortgage
Loan or Mortgage Loans or any property acquired in respect thereof from the
Trustee, unless it has cured such breach in all material respects. After
the end of the three-month period beginning on the "start-up day", any such
substitution shall be made only if the Company provides to the Trustee an
Opinion of Counsel reasonably satisfactory to the Trustee that each
Substitute Mortgage Loan will be a "qualified replacement mortgage" within
the meaning of Section 860G(a)(4) of the Code. Such substitution shall be
made in the manner and within the time limits set forth in Section 2.02.
Any such repurchase by the Company shall be accomplished in the manner and
at the Purchase Price, if applicable, but shall not be subject to the time
limits, set forth in Section 2.02. It is understood and agreed that the
obligation of the Company to provide such substitution or to make such
repurchase of any affected Mortgage Loan or Mortgage Loans or any property
acquired in respect thereof as to which a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach
available to the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders or the Trustee on behalf of the Holders of the REMIC I
Regular Interests and the Class R-1 Certificateholders.
Section 2.04. Acknowledgment of Transfer of Trust Fund;
Authentication of the Class R-1 Certificates. The Trustee acknowledges the
transfer and assignment to it of the property constituting the Trust Fund,
but without having made the review required to be made within 45 days
pursuant to Section 2.02, and, as of the Closing Date, shall cause to be
authenticated and delivered to or upon the order of the Company, the Class
R-1 Certificates in Authorized Denominations evidencing the residual
beneficial ownership interest in the REMIC I Trust Fund.
Section 2.05. Conveyance of REMIC II; REMIC Election and
Designations. A trust ("REMIC II") of which the Trustee is the trustee is
hereby created under the laws of the State of New York for the benefit of
the Holders of the Certificates (other than the Class R-1 Certificates).
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The purpose of REMIC II is to hold the REMIC II Trust Fund and provide for
the issuance, execution and delivery of the Certificates (other than the
Class R-1 Certificates). The assets of REMIC II shall consist of the REMIC
II Trust Fund. REMIC II shall be irrevocable.
The assets of REMIC II shall remain in the custody of the Trustee, on
behalf of REMIC II, and shall be kept in REMIC II. Moneys to the credit of
REMIC II shall be held by the Trustee and invested as provided herein. All
assets received and held in REMIC II will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of State
Street Bank and Trust Company in its own right, or any Person claiming
through it. The Trustee, on behalf of REMIC II, shall not have the power
or authority to transfer, assign, hypothecate, pledge or otherwise dispose
of any of the assets of REMIC II to any Person, except as permitted herein.
No creditor of a beneficiary of REMIC II, of the Trustee, of the Master
Servicer or of the Company shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the
property of REMIC II, except in accordance with the terms of this
Agreement.
Concurrently with the execution and delivery hereof, the Company does
hereby agree to irrevocably sell, transfer, assign, set over, and otherwise
convey to the Trustee in trust for the benefit of the Holders of the
Certificates (other than the Class R-1 Certificates), without recourse, all
the Company's right, title and interest in and to the REMIC II Trust Fund,
including all interest and principal received by the Company on or with
respect to the REMIC I Regular Interests after the Cut-Off Date. The
Trustee hereby accepts REMIC II created hereby and accepts delivery of the
REMIC II Trust Fund on behalf of REMIC II and acknowledges that it holds
the REMIC I Regular Interests for the benefit of the Holders of the
Certificates (other than the Class R-1 Certificates) issued pursuant to
this Agreement. It is the express intent of the parties hereto that the
conveyance of the REMIC II Trust Fund to the Trustee by the Company as
provided in this Section 2.05 be, and be construed as, an absolute sale of
the REMIC II Trust Fund. It is, further, not the intention of the parties
that such conveyance be deemed a pledge of the REMIC II Trust Fund by the
Company to the Trustee to secure a debt or other obligation of the Company.
However, in the event that, notwithstanding the intent of the parties, the
REMIC II Trust Fund is held to be the property of the Company, or if for
any other reason this Agreement is held or deemed to create a security
interest in the REMIC II Trust Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.05 shall be deemed
to be a grant by the Company to the Trustee of a security interest in all
of the Company's right, title, and interest, whether now owned or hereafter
acquired, in and to:
(I) All accounts, contract rights, general intangibles, chattel
paper, instruments, documents, money, deposit accounts, certificates
of deposit, goods, letters of credit, advices of credit and investment
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property consisting of, arising from or relating to any of the
property described below: The uncertificated REMIC I Regular
Interests, including without limitation all rights represented thereby
in and to (i) the Mortgage Loans identified on the Mortgage Loan
Schedule, including the related Mortgage Notes, Mortgages, Cooperative
Stock Certificates, and Cooperative Leases, all Substitute Mortgage
Loans and all distributions with respect to such Mortgage Loans and
Substitute Mortgage Loans payable on and after the Cut-Off Date, (ii)
the Certificate Account, the Expense Account, the Class I-A-18
Interest Supplement Account, the Class I-A-23 Rounding Account and 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); (iii) the Mortgage Pool Insurance
Policy (including the Fraud Waiver and the Ninety-Seven Percent Loan-
to-Value Program Endorsement), the Special Hazard Insurance Policy,
the Bankruptcy and Extraordinary Expense Reserve Fund and amounts paid
or payable by the insurer under any FHA insurance policy or any
Primary Insurance Policy and proceeds of any VA guaranty and any other
insurance policy related to any Mortgage Loan or the Mortgage Pool;
(iv) all property or rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance proceeds
payable with respect to, or claims against other persons with respect
to, all or any part of the collateral described in (i)-(iii) above
(including any accrued discount realized on liquidation of any
investment purchased at a discount), and (v) all cash and non-cash
proceeds of the collateral described in (i)-(iv) above;
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit, investment
property and other rights arising from or by virtue of the disposition
of, or collections with respect to, or insurance proceeds payable with
respect to, or claims against other persons with respect to, all or
any part of the collateral described in (I) above (including any
accrued discount realized on liquidation of any investment purchased
at a discount); and
(III) All cash and non-cash proceeds of the collateral
described in (I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes, the
Mortgages and such other goods, letters of credit, advices of credit,
instruments, money, documents, chattel paper or certificated securities
shall be deemed to be possession by the secured party or possession by a
purchaser for purposes of perfecting the security interest pursuant to the
Uniform Commercial Code (including, without limitation, Sections 9-305 and
9-115 thereof) as in force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
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confirmations from, securities intermediaries, bailees or agents of, or
persons holding for, the Trustee, as applicable for the purpose of
perfecting such security interest under applicable law.
The Company and the Trustee shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the REMIC II Trust
Fund, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as
such throughout the term of this Agreement. In connection herewith, the
Trustee shall have all of the rights and remedies of a secured party and
creditor under the Uniform Commercial Code as in force in the relevant
jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each of
the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.05, and to enter into a
Custodial Agreement for such purpose; provided, however, that the Trustee
shall be and remain liable for actions of any such Custodian only to the
extent it would otherwise be responsible for such acts hereunder.
The Company and the Trustee agree that the Company, on behalf of the
REMIC II Trust Fund, shall elect to treat the REMIC II Trust Fund as a
REMIC within the meaning of Section 860D of the Code and, if necessary,
under applicable state laws. Such election shall be included in the Form
1066 and any appropriate state return to be filed on behalf of the REMIC
constituted by the REMIC II Trust Fund for its first taxable year.
The Closing Date is hereby designated as the "startup day" of the
REMIC constituted by the REMIC II Trust Fund within the meaning of Section
860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC II Trust Fund are
hereby designated as "regular interests" for purposes of Section 860G(a)(1)
of the Code. The Class R-2 Certificates are being issued in a single Class,
which is hereby designated as the sole class of "residual interest" in the
REMIC II Trust Fund for purposes of Section 860G(a)(2) of the Code.
The parties intend that the affairs of the REMIC II Trust Fund formed
hereunder shall constitute, and that the affairs of the REMIC II Trust Fund
shall be conducted so as to qualify it as, a REMIC. In furtherance of such
intention, the Company covenants and agrees that it shall act as agent for
the Tax Matters Person (and the Company is hereby appointed to act as Tax
Matters Person) on behalf of the REMIC II Trust Fund and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed,
a federal tax return using a calendar year as the taxable year for the
REMIC II Trust Fund when and as required by the REMIC provisions and other
applicable federal income tax laws; (b) make an election, on behalf of the
REMIC II Trust Fund, to be treated as a REMIC on the federal tax return of
the REMIC II Trust Fund for its first taxable year, in accordance with the
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REMIC provisions; (c) prepare and forward, or cause to be prepared and
forwarded, to the Holders of the Certificates (other than the Class R-1
Certificates) all information reports as and when required to be provided
to them in accordance with the REMIC provisions; (d) conduct the affairs of
the REMIC II Trust Fund at all times that any of the Certificates (other
than the Class R-1 Certificates) are outstanding so as to maintain the
status of the REMIC II Trust Fund as a REMIC under the REMIC provisions;
(e) not knowingly or intentionally take any action or omit to take any
action that would cause the termination of the REMIC status of the REMIC II
Trust Fund; and (f) pay the amount of any federal prohibited transaction
penalty taxes imposed on the REMIC II Trust Fund when and as the same shall
be due and payable (but such obligation shall not prevent the Company or
any other appropriate person from contesting any such tax in appropriate
proceedings and shall not prevent the Company from withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings);
provided, that the Company shall be entitled to be indemnified from the
REMIC II Trust Fund for any such prohibited transaction penalty taxes if
the Company's failure to exercise reasonable care was not the primary cause
of the imposition of such prohibited transaction penalty taxes.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC II Trust Fund as defined in Section 860F of the Code and not paid
by the Company pursuant to clause (f) of the preceding paragraph, such tax
shall be charged against amounts otherwise distributable to the Holders of
the Class R-2 Certificates. Notwithstanding anything to the contrary
contained herein, the Company is hereby authorized to retain from amounts
otherwise distributable to the Holders of the Class R-2 Certificates on any
Distribution Date sufficient funds to reimburse the Company for the payment
of such tax (to the extent that the Company has not been previously
reimbursed therefor and is entitled to such reimbursement).
Section 2.06. Acceptance by Trustee; Authentication of Certificates.
The Trustee acknowledges and accepts the assignment to it of the property
constituting the REMIC II Trust Fund and declares that as of the Closing
Date it holds and shall hold any documents constituting a part of the REMIC
II Trust Fund, and the REMIC II Trust Fund, as Trustee in trust, upon the
trusts herein set forth, for the use and benefit of all present and future
Holders of the Certificates (other than the Class R-1 Certificates). In
connection therewith, as of the Closing Date, the Trustee shall cause to be
authenticated and delivered to or upon the order of the Company, in
exchange for the property constituting the REMIC II Trust Fund, the
Certificates (other than the Class R-1 Certificates) in Authorized
Denominations evidencing the ownership interest in the REMIC II Trust Fund.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. The Company to Act as Master Servicer. The Company
shall act as Master Servicer to service and administer the Mortgage Loans
on behalf of the Trustee and for the benefit of the Certificateholders in
accordance with the terms hereof and in the same manner in which, and with
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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 the Mortgage Pool Insurance Policy (including the Fraud
Waiver and the Ninety-Seven Percent Loan-to-Value Program Endorsement), the
Special 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
repurchase any related delinquent Mortgage Loan 90 days after the first
delinquent Due Date for an amount equal to its Purchase Price; provided,
however, that the aggregate Purchase Price of Mortgage Loans so repurchased
shall not exceed one-half of one percent (0.50%) of the aggregate Principal
Balance, as of the Cut-Off Date, of all Mortgage Loans.
Consistent with the terms of this Section 3.01, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of
the related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected by
such waiver, modification, postponement or indulgence; provided, however,
that (unless the Mortgagor is in default with respect to the Mortgage Loan
or in the reasonable judgment of the Master Servicer such default is
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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 or VA guaranty, hazard insurance
policy or federal flood insurance policy, the Mortgage Pool Insurance
Policy or the Special Hazard Insurance Policy. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would both constitute a sale or exchange
of such Mortgage Loan within the meaning of Section 1001 of the Code
(including any proposed, temporary or final regulations promulgated
thereunder) (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal Prepayment
or in a default situation) and cause either REMIC to fail to qualify as
such under the Code.
The Master Servicer is hereby authorized and empowered by the Trustee
to execute and deliver or cause to be executed and delivered on behalf of
the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders, and the Trustee or any of them, any and all instruments
of satisfaction or cancellation, or of partial or full release, discharge
or modification, assignments of Mortgages and endorsements of Mortgage
Notes in connection with refinancings (in jurisdictions where such
assignments are the customary and usual standard of practice of mortgage
lenders) and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. The Trustee shall
execute and furnish to the Master Servicer, at the Master Servicer's
direction, any powers of attorney and other documents prepared by the
Master Servicer and determined by the Master Servicer to be necessary or
appropriate to enable the Master Servicer to carry out its supervisory,
servicing and administrative duties under this Agreement.
The Master Servicer and each Servicer shall obtain (to the extent
generally commercially available from time to time) and maintain fidelity
bond and errors and omissions coverage acceptable to FNMA or FHLMC with
respect to their obligations under this Agreement and the applicable
Selling and Servicing Contract, respectively. The Master Servicer or each
Servicer, as applicable, shall establish escrow accounts for, or pay when
due (by means of an advance), any tax liens in connection with the
Mortgaged Properties that are not paid by the Mortgagors when due to the
extent that any such payment would not constitute a Nonrecoverable Advance
when made. Notwithstanding the foregoing, the Master Servicer shall not
permit any modification with respect to any Mortgage Loan that would both
constitute a sale or exchange of such Mortgage Loan within the meaning of
Section 1001 of the Code (including any proposed, temporary or final
regulations promulgated thereunder) (other than in connection with a
proposed conveyance or assumption of such Mortgage Loan that is treated as
a Principal Prepayment or in a default situation) and cause either REMIC to
fail to qualify as such under the Code. The Master Servicer shall be
entitled to approve a request from a Mortgagor for a partial release of the
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related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged
Property or other similar matters if it has determined, exercising its good
faith business judgment in the same manner as it would if it were the owner
of the related Mortgage Loan, that the security for, and the timely and
full collectability of, such Mortgage Loan would not be adversely affected
thereby and that the applicable trust fund would not fail to continue to
qualify as a REMIC under the Code as a result thereof and that no tax on
"prohibited transactions" or "contributions" after the startup day would be
imposed on either REMIC as a result thereof.
In connection with the servicing and administering of each Mortgage
Loan, the Master Servicer and any affiliate of the Master Servicer (i) may
perform services such as appraisals, default management and brokerage
services that are not customarily provided by servicers of mortgage loans,
and shall be entitled to reasonable compensation therefor and (ii) may, at
its own discretion and on behalf of the Trustee, obtain credit information
in the form of a "credit score" from a credit repository.
Section 3.02. Custodial Accounts. The Master Servicer shall cause to
be established and maintained by each Servicer under the Master Servicer's
supervision the Custodial Account for P&I, Buydown Fund Accounts (if any)
and special Custodial Account for Reserves and shall deposit or cause to be
deposited therein daily the amounts related to the Mortgage Loans required
by the Selling and Servicing Contracts to be so deposited. Proceeds
received with respect to individual Mortgage Loans from any title, hazard,
or FHA insurance policy, VA guaranty, Primary Insurance Policy, or other
insurance policy covering such Mortgage Loans shall be deposited first in
the Custodial Account for Reserves if required for the restoration or
repair of the related Mortgaged Property. Proceeds from such insurance
policies not so deposited in the Custodial Account for Reserves shall be
deposited in the Custodial Account for P&I, and shall be applied to the
balances of the related Mortgage Loans as payments of interest and
principal.
The Master Servicer is hereby authorized to make withdrawals from and
to issue drafts against the Custodial Accounts for P&I and the Custodial
Accounts for Reserves for the purposes required or permitted by this
Agreement. Each Custodial Account for P&I and each Custodial Account for
Reserves shall bear a designation clearly showing the respective interests
of the applicable Servicer, as trustee, and of the Master Servicer, in
substantially one of the following forms:
(a) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of principal and
interest custodial account for PNC Mortgage Securities Corp., its
successors and assigns, for various owners of interests in PNC
Mortgage Securities Corp. mortgage-backed pools or (ii) [Servicer's
Name] in trust for PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and
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insurance custodial account for PNC Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners of
interests in PNC Mortgage Securities Corp. mortgage-backed pools or
(ii) [Servicer's Name] in trust for PNC Mortgage Securities Corp. and
various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that have
been collected by any Servicer and are due to the Certificate Account
pursuant to Section 4.01 of this Agreement.
Section 3.03. The Investment Account; Eligible Investments.(a)
Not later than the Withdrawal Date, the Master Servicer shall withdraw or
direct the withdrawal of funds in the Custodial Accounts for P&I, for
deposit in the Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers which
were due on the Due Date prior to such Withdrawal Date, net of
Servicing Fees due the applicable Servicers and less any amounts to be
withdrawn later by the applicable Servicers from the applicable
Buydown Fund Accounts;
(ii) Payoffs and the proceeds of other types of liquidations of
the Mortgage Loans received by the applicable Servicer for such
Mortgage Loans during the applicable Payoff Period, with interest to
the date of Payoff or liquidation less any amounts to be withdrawn
later by the applicable Servicers from the applicable Buydown Fund
Accounts; and
(iii) Curtailments received by the applicable Servicers in
the Prior Period.
At its option, the Master Servicer may invest funds withdrawn from the
Custodial Accounts for P&I, as well as any Buydown Funds, Insurance
Proceeds and Liquidation Proceeds previously received by the Master
Servicer (including amounts paid by the Company in respect of any Purchase
Obligation or its substitution obligations set forth in Section 2.02 or
Section 2.03 or in connection with the exercise of the option to terminate
this Agreement pursuant to Section 9.01) for its own account and at its own
risk, during any period prior to their deposit in the Certificate Account.
Such funds, as well as any funds which were withdrawn from the Custodial
Accounts for P&I on or before the Withdrawal Date, but not yet deposited
into the Certificate Account, shall immediately be deposited by the Master
Servicer with the Investment Depository in an Investment Account in the
name of the Master Servicer and the Trustee for investment only as set
forth in this Section 3.03. The Master Servicer shall bear any and all
losses incurred on any investments made with such funds and shall be
entitled to retain all gains realized on such investments as additional
servicing compensation. Not later than the Business Day prior to the
Distribution Date, the Master Servicer shall deposit such funds, net of any
gains (except Payoff Earnings) earned thereon, in the Certificate Account.
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(b) Funds held in the Investment Account shall be invested in (i) one
or more Eligible Investments which shall in no event mature later than the
Business Day prior to the related Distribution Date (except if such
Eligible Investments are obligations of the Trustee, such Eligible
Investments may mature on the Distribution Date), or (ii) such other
instruments as shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
(a) Not later than the Business Day prior to the related Distribution
Date, the Master Servicer shall direct the Investment Depository to deposit
the amounts previously deposited into the Investment Account (which may
include a deposit of Eligible Investments) to which the Holders of the
REMIC I Regular Interests and Class R-1 Certificateholders are entitled
into the Certificate Account. In addition, not later than the Business Day
prior to the Distribution Date, the Master Servicer shall deposit into the
Certificate Account any Monthly P&I Advances or other payments required to
be made by the Master Servicer pursuant to Section 4.02 of this Agreement
and any Insurance Proceeds or Liquidation Proceeds (including amounts paid
by the Company in respect of any Purchase Obligation or in connection with
the exercise of its option to terminate this Agreement pursuant to Section
9.01) not previously deposited in the Custodial Accounts for P&I or the
Investment Account.
(b) Funds held in the Certificate Account shall be invested at the
direction of the Master Servicer in (i) one or more Eligible Investments
which shall in no event mature later than the Business Day prior to the
related Distribution Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature on the
Distribution Date), or (ii) such other instruments as shall be required to
maintain the Ratings. The Master Servicer shall be entitled to receive any
gains earned on such Eligible Investments and shall bear any losses
suffered in connection therewith.
Section 3.05. Permitted Withdrawals from the Certificate Account, the
Investment Account and Custodial Accounts for P&I and of Buydown Funds from
the Buydown Fund Accounts.
(a) The Master Servicer is authorized to make withdrawals, from time
to time, from the Investment Account, the Certificate Account or the
Custodial Accounts for P&I established by the Servicers of amounts
deposited therein in respect of the Certificates, as follows:
(i) To reimburse itself or the applicable Servicer for Monthly
P&I Advances made pursuant to Section 4.02 or a Selling and Servicing
Contract, such right to reimbursement pursuant to this paragraph (i)
being limited to amounts received on particular Mortgage Loans
(including, for this purpose, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of principal and/or interest
respecting which any such Monthly P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for amounts
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expended by or for the account of the Master Servicer pursuant to
Section 3.09 or amounts expended by such Servicer pursuant to the
Selling and Servicing Contracts in connection with the restoration of
property damaged by an Uninsured Cause or in connection with the
liquidation of a Mortgage Loan;
(iii) To pay to itself, with respect to the related Mortgage
Loans, the Master Servicing Fee (net of Compensating Interest reduced
by Payoff Earnings and Payoff Interest) as to which no prior
withdrawals from funds deposited by the Master Servicer have been
made;
(iv) To reimburse itself or the applicable Servicer for advances
made with respect to related Mortgage Loans which the Master Servicer
has determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned
in the Investment Account and the Certificate Account to which it is
entitled and to reimburse itself for expenses incurred by and
reimbursable to it pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the
Certificate Account not required to be on deposit therein at the time
of such withdrawal;
(vii) To deposit in the Certificate Account, not later than
the Business Day prior to the related Distribution Date, the amounts
specified in Section 3.04(a);
(viii) To deposit in the Expense Account, on each Withdrawal
Date, the Premium Payment Amounts with respect to the Mortgage Pool
Insurance Policy and the Special Hazard Insurance Policy pursuant to
Section 3.19; and
after making or providing for the above withdrawals
(ix) To clear and terminate the Investment Account and the
Certificate Account following termination of this Agreement pursuant
to Section 9.01.
Since, in connection with withdrawals pursuant to paragraphs (i) and
(ii), the Master Servicer's entitlement thereto is limited to collections
or other recoveries on the related Mortgage Loan, the Master Servicer or
the applicable Servicer shall keep and maintain separate accounting for
each Mortgage Loan, for the purpose of justifying any such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such Servicer
holds and maintains a Buydown Fund Account) is authorized to make
withdrawals, from time to time, 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:
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(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) In the event of a Payoff of any Mortgage Loan having a
related Buydown Fund, to apply amounts remaining in Buydown Fund
Accounts to reduce the required amount of such principal Payoff (or,
if the Mortgagor has made a Payoff, to refund such remaining Buydown
Fund amounts to the Person entitled thereto);
(iii) In the event of foreclosure or liquidation of any
Mortgage Loan having a Buydown Fund, to deposit remaining Buydown Fund
amounts in the Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account
representing Buydown Funds following termination of this Agreement
pursuant to Section 9.01;
(c) The Trustee is authorized to make withdrawals from time to time
from the Certificate Account to reimburse itself for advances it has made
pursuant to Section 7.01(a) hereof that it has determined to be
Nonrecoverable Advances.
Section 3.06. Maintenance of Primary Insurance Policies; Collections
Thereunder. The Master Servicer shall use commercially reasonable efforts
to keep, and to cause the Servicers to keep, in full force and effect each
Primary Insurance Policy required with respect to a Mortgage Loan, in the
manner set forth in the applicable Selling and Servicing Contract, until no
longer required. Notwithstanding the foregoing, the Master Servicer shall
have no obligation to maintain such Primary Insurance Policy for a Mortgage
Loan for which the outstanding Principal Balance thereof at any time
subsequent to origination was 80% or less of the value of the related
Mortgaged Property (as determined by the appraisal obtained at the time of
origination), unless required by applicable law.
Unless required by applicable law, the Master Servicer shall not
cancel or refuse to renew, or allow any Servicer under its supervision to
cancel or refuse to renew, any such Primary Insurance Policy in effect at
the date of the initial issuance of the Certificates that is required to be
kept in force hereunder; provided, however, that neither the Master
Servicer nor any Servicer shall advance funds for the payment of any
premium due under any Primary Insurance Policy if it shall determine that
such an advance would be a Nonrecoverable Advance.
Section 3.07. Maintenance of Hazard Insurance. The Master Servicer
shall cause to be maintained for each Mortgage Loan (other than a
Cooperative Loan) fire insurance with extended coverage in an amount which
is not less than the original principal balance of such Mortgage Loan,
except in cases approved by the Master Servicer in which such amount
exceeds the value of the improvements to the Mortgaged Property. The Master
Servicer shall also require fire insurance with extended coverage in a
comparable amount on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Mortgage Loan (other than a Cooperative Loan). Any
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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 FNMA or FHLMC. 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 and the Mortgage Pool Insurance
Policy. The Master Servicer is also authorized to enter into a substitution
of liability agreement with such Person, pursuant to which the original
Mortgagor is released from liability and such Person is substituted as
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Mortgagor and becomes liable under the Mortgage Note. The Master Servicer
shall not enter into any substitution or assumption with respect to a
Mortgage Loan if such substitution or assumption shall (i) both constitute
a "significant modification" effecting an exchange or reissuance of such
Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause the REMICs to fail to qualify as a REMIC under the
REMIC Provisions or (ii) cause the imposition of any tax on "prohibited
transactions" or "contributions" after the startup day under the REMIC
Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to
the Trustee the original copy of such substitution or assumption agreement
and other documents and instruments constituting a part thereof. In
connection with any such assumption or substitution agreement, the terms of
the related Mortgage Note shall not be changed. Any fee collected by the
applicable Servicer for entering into an assumption or substitution of
liability agreement shall be retained by such Servicer as additional
servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which
the Master Servicer may be restricted by law from preventing, for any
reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause to
be foreclosed upon or comparably converted, the ownership of any Mortgaged
Property securing a Mortgage Loan which comes into and continues in default
and as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.01. In lieu of such foreclosure
or other conversion, and taking into consideration the desirability of
maximizing net Liquidation Proceeds after taking into account the effect of
Insurance Proceeds upon Liquidation Proceeds, the Master Servicer may, to
the extent consistent with prudent mortgage loan servicing practices,
accept a payment of less than the outstanding Principal Balance of a
delinquent Mortgage Loan in full satisfaction of the indebtedness evidenced
by the related Mortgage Note and release the lien of the related Mortgage
upon receipt of such payment. The Master Servicer shall not foreclose upon
or otherwise comparably convert a Mortgaged Property if the Master Servicer
is aware of evidence of toxic waste, other hazardous substances or other
evidence of environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection with such
foreclosure or other conversion, the Master Servicer shall cause to be
followed such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in general mortgage servicing
activities. The foregoing is subject to the provision that, in the case of
damage to a Mortgaged Property from an Uninsured Cause, the Master Servicer
shall not be required to advance its own funds towards the restoration of
the property unless it shall be determined in the sole judgment of the
Master Servicer, (i) that such restoration will increase the proceeds of
liquidation of the Mortgage Loan to Certificateholders after reimbursement
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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 or in connection with the preservation of the coverage of the
Mortgage Pool Insurance Policy (including the Fraud Waiver and the Ninety-
Seven Percent Loan-to-Value Program Endorsement) and the Special Hazard
Insurance Policy; 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.
With respect to each of the Group I-B Certificates, the Master
Servicer may enter into a special servicing agreement with an unaffiliated
holder of a 100% Percentage Interest of the Class B Certificate with the
lowest priority or a holder of a 100% interest in a class of securities
representing such interests in such Class, subject to each Rating Agency's
acknowledgment that the Ratings of the Group I Certificates in effect
immediately prior to the entering into of such agreement would not be
qualified, downgraded or withdrawn and the Group I 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 holder may (a) instruct the Master Servicer to instruct a
Servicer to the extent provided in the applicable Selling and Servicing
Contract to commence or delay foreclosure proceedings with respect to
delinquent Group I Loans and will contain provisions for the deposit of
cash with the Master Servicer by the holder that would be available for
distribution to Holders of the Group I Certificates if Liquidation Proceeds
are less than they otherwise may have been had the Servicer acted in
accordance with its normal procedures, (b) purchase delinquent Group I
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 Group I Loans plus accrued interest thereon at
the applicable Mortgage Interest Rate through the last day of the month in
which such Group I Loan is purchased and/or (c) assume all of the servicing
rights and obligations with respect to delinquent Group I Loans so long as
(i) the Master Servicer has the right to transfer the servicing rights and
obligations of such Group I Loans to another servicer and (ii) such holder
will service such Group I 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 two 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 two years
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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 Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such withholding. Without
limiting the foregoing, the Master Servicer agrees that it will not
withhold with respect to payments of interest or original issue discount in
the case of a Certificateholder that has furnished or caused to be
furnished an effective Form W-8 or an acceptable substitute form or a
successor form and who is not a "10 percent shareholder" within the meaning
of Code Section 871(h)(3)(B) or a "controlled foreign corporation"
described in Code Section 881(c)(3)(C) with respect to REMIC I, REMIC II or
the Depositor. In the event the Trustee withholds any amount from
interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate the amount withheld to such Certificateholder.
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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 the related Mortgage File to
the Master Servicer or the related Servicer as indicated by the Master
Servicer and shall execute such documents as shall be necessary to the
prosecution of any such proceedings. Such trust receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that herein above specified, the trust receipt
shall be released by the Trustee to the Master Servicer.
Section 3.11. Compensation to the Master Servicer and the Servicers.
As compensation for its activities hereunder, the Master Servicer shall be
entitled to receive from the Investment Account or the Certificate Account
the amounts provided for by Section 3.05(a)(iii). The Master Servicer shall
be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor,
except as specifically provided herein.
As compensation for its activities under the applicable Selling and
Servicing Contract, the applicable Servicer shall be entitled to withhold
or withdraw from the related Custodial Account for P&I the amounts provided
for in such Selling and Servicing Contract. Each Servicer is required to
pay all expenses incurred by it in connection with its servicing activities
under its Selling and Servicing Contract (including payment of premiums for
Primary Insurance Policies, if required) and shall not be entitled to
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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 provide such statements to any
Certificateholder upon request at the expense of the Master Servicer. Such
statement shall also, to the extent available, include information
regarding delinquencies on the Mortgage Loans, indicating the number and
aggregate Principal Balance of Mortgage Loans which are one, two, three or
more months delinquent, the number and aggregate Principal Balance of
Mortgage Loans with respect to which foreclosure proceedings have been
initiated and the book value of any Mortgaged Property acquired by the
Trust Fund through foreclosure, deed in lieu of foreclosure or other
exercise of the Trust Fund's security interest in the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master Servicer
shall deliver to the Trustee, on or before April 30 of each year, beginning
with the first April 30 succeeding the Cut-Off Date by at least six months,
an Officer's Certificate stating as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the preceding
calendar year and performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, the Master Servicer has fulfilled all its obligations
under this Agreement throughout such year, or, if there has been a default
in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. Copies of such
statement shall be provided by the Master Servicer to Certificateholders
upon request or by the Trustee (solely to the extent that such copies are
available to the Trustee) at the expense of the Master Servicer, should the
Master Servicer fail to so provide such copies.
Section 3.14. Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event that the Certificates are legal
for investment by federally-insured savings associations, the Master
Servicer shall provide to the OTS, the FDIC and the supervisory agents and
examiners of the OTS and the FDIC access to the documentation regarding the
related Mortgage Loans required by applicable regulations of the OTS or the
FDIC, as applicable, and shall in any event provide such access to the
documentation regarding such Mortgage Loans to the Trustee and its
representatives, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Master Servicer designated by it.
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Section 3.15. Annual Independent Public Accountants' Servicing
Report. On or before April 30 of each year, beginning with the first April
30 succeeding the Cut-Off Date by at least six months, the Master Servicer,
at its expense, shall cause a firm of independent public accountants to
furnish a statement to the Trustee 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. Mortgage Pool Insurance Policy. The Master Servicer
agrees to exercise commercially reasonable efforts to maintain and keep the
Mortgage Pool Insurance Policy (including the Fraud Waiver and the Ninety-
Seven Percent Loan-to-Value Program Endorsement) in full force and effect
throughout the term of this Agreement, unless coverage thereunder has been
exhausted through the payment of claims; provided, however, that in no case
shall the Master Servicer be required to (i) expend its own funds to
maintain such policy or (ii) make a Nonrecoverable Advance. In the event
that (i) the claims paying ability rating of the Mortgage Pool Insurer, and
consequently, each of the Ratings are reduced below the level of the
Ratings originally given, (ii) the Mortgage Pool Insurer ceases to be a
qualified mortgage insurer duly qualified as such under applicable laws or
(iii) the Mortgage Pool Insurance Policy is cancelled for any reason other
than the exhaustion of coverage thereunder, the Master Servicer acting on
behalf of the Trustee shall exercise commercially reasonable efforts to
obtain from another insurer acceptable to the Rating Agencies a replacement
policy comparable to the initial Mortgage Pool Insurance Policy; provided,
however, that if the cost of any such replacement policy shall be greater
than the cost of the initial Mortgage Pool Insurance Policy, the amount of
coverage of such replacement policy shall be reduced to a level such that
the premium rate therefor shall not exceed 100% of the premium rate on the
initial Mortgage Pool Insurance Policy.
In connection with its activities hereunder, the Master Servicer
agrees to present, on behalf of the Trustee and Certificateholders, claims
to the Mortgage Pool Insurer under the Mortgage Pool Insurance Policy, and,
in this regard, to take such commercially reasonable action (other than the
making of Nonrecoverable Advances) as shall be necessary to permit recovery
under the Mortgage Pool Insurance Policy. The Master Servicer shall
collect all amounts relating to the Certificates under the Mortgage Pool
Insurance Policy and shall deposit such amounts in the related Custodial
Account for P&I or in the Certificate Account until distributed in
accordance with Section 4.01 or Section 4.04 or withdrawn in accordance
with Section 3.03 or Section 3.05 of this Agreement..
Section 3.17. Special Hazard Insurance Policy. The Master Servicer
agrees to exercise commercially reasonable efforts to maintain and keep the
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Special Hazard Insurance Policy in full force and effect throughout the
term of this Agreement, unless coverage thereunder has been exhausted
through the payment of claims; provided, however, that in no case shall the
Master Servicer be required to (i) expend its own funds to maintain such
policy or (ii) make a Nonrecoverable Advance. In the event that (i) the
claims paying ability rating of the Special Hazard Insurer, and
consequently, each of the Ratings are reduced below the level of the
Ratings originally given to the Certificates, (ii) the Special Hazard
Insurer ceases to be a qualified mortgage insurer duly qualified as such
under applicable laws or (iii) the Special Hazard Insurance Policy is
cancelled for any reason other than the exhaustion of coverage thereunder,
the Master Servicer acting on behalf of the Trustee shall exercise
commercially reasonable efforts to obtain from another insurer acceptable
to the Rating Agencies a replacement policy comparable to the initial
Special Hazard Insurance Policy; provided, however, that if the cost of any
such replacement policy shall be greater than the cost of the initial
Special Hazard Insurance Policy, the amount of coverage of such replacement
policy shall be reduced to a level such that the premium rate therefor
shall not exceed 100% of the premium rate on the initial Special Hazard
Insurance Policy.
In connection with its activities hereunder, the Master Servicer
agrees to present, on behalf of the Trustee and Certificateholders, claims
to the Special Hazard Insurer under the Special Hazard Insurance Policy,
and, in this regard, to take such commercially reasonable action (other
than the making of Nonrecoverable Advances) as shall be necessary to permit
recovery under the Special Hazard Insurance Policy. The Master Servicer
shall collect all amounts relating to the Certificates under the Special
Hazard Insurance Policy and shall deposit such amounts in the related
Custodial Account for P&I or in the Certificate Account until distributed
in accordance with Section 4.01 or Section 4.04 or withdrawn in accordance
with Section 3.03 or Section 3.05 of this Agreement.
Section 3.18. Bankruptcy and Extraordinary Expense Reserve Fund. On
or prior to the Closing Date, the Trustee shall establish and thereafter
maintain the Bankruptcy and Extraordinary Expense Reserve Fund. On or
prior to the Closing Date, DLJ shall deposit an amount equal to $278,774 to
provide coverage for Bankruptcy and Extraordinary Losses. For each
Distribution Date, the Master Servicer shall determine the amount of
Bankruptcy and Extraordinary Losses on the Group II, Group III and Group IV
Loans as of the related Due Date for such Distribution Date and shall
notify the Trustee by noon New York City time two Business Days prior to
such Distribution Date of such amount. In addition, for each Distribution
Date, the Master Servicer shall determine the amount of any Realized Losses
on the Group II, Group III and Group IV Loans not covered by the Mortgage
Pool Insurance Policy as of the related Due Date for such Distribution Date
and shall notify the Trustee by noon New York City time two Business Days
prior to such Distribution Date of such amount. On each such Distribution
Date, the Trustee shall then withdraw from the Bankruptcy and Extraordinary
Expense Reserve Fund, to the extent funds are available therein, the amount
needed to cover any such Bankruptcy Losses and Extraordinary Losses and
Realized Losses not covered by the Mortgage Pool Insurance Policy and
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deposit such amount in the Certificate Account.
Upon (i) termination of the Trust Fund and the REMIC II Trust Fund,
(ii) the cancellation of the Bankruptcy and Extraordinary Expense Reserve
Fund or (iii) the substitution by DLJ of an alternative form of credit
enhancement therefor, the Trustee shall remit to DLJ any amounts at the
time remaining in the Bankruptcy and Extraordinary Expense Reserve Fund;
provided however, that the Trustee shall not remit any such amounts to the
extent that any such action would result in the downgrading of the Ratings
of the Certificates originally assigned by the Rating Agencies. Upon any
reduction of the amounts required by the Rating Agencies to be on deposit
in the Bankruptcy and Extraordinary Expense Reserve Fund, any amounts on
deposit in excess of such required amount shall be remitted to DLJ;
provided however, that the Trustee shall not remit any such amounts to the
extent that any such action would result in the downgrading of the Ratings
of the Certificates originally assigned by the Rating Agencies.
Funds held in the Bankruptcy and Extraordinary Expense Reserve Fund
may be invested at the direction of DLJ in one or more Eligible Investments
which shall in no event mature later than the date on which any funds so
invested are needed to make payments from the Bankruptcy and Extraordinary
Expense Reserve Fund.
To the extent that it constitutes a "reserve fund" for purposes of the
REMIC Provisions, the Bankruptcy and Extraordinary Expense Reserve Fund
established hereunder shall be an "outside reserve fund" as defined in
Treasury Regulation 1.860G-2(h), and in that regard (i) such fund shall be
an outside reserve fund and not an asset of either REMIC, (ii) such fund
shall be owned for federal tax purposes by DLJ and DLJ shall report all
amounts of income, deduction, gain or loss accruing therefrom, and (iii)
amounts transferred by the REMIC to the fund shall be treated as
distributed by the REMIC to DLJ.
Section 3.19. Expense Account.
(a) On or prior to the Closing Date, the Trustee shall cause to be
established and maintained the Expense Account in which the Master Servicer
shall deposit, on each Withdrawal Date, that portion of the payments
received with respect to the Mortgage Loans constituting the Excess Amount.
The Master Servicer shall deposit the portion of the Excess Amount
attributable to the Premium Payment Rate for the Mortgage Pool Insurance
Policy to the Mortgage Pool Insurance Premium Sub-Account and the portion
of the Excess Amount attributable to the Premium Payment Rate for the
Special Hazard Insurance Policy to the Special Hazard Insurance Premium Sub-
Account. The Master Servicer shall, from time to time, make withdrawals
from the Mortgage Pool Insurance Premium Sub-Account to pay the Premium due
and owing with respect to the Mortgage Pool Insurance Policy in accordance
with Section 3.16. The Master Servicer shall, from time to time, make
withdrawals from the Special Hazard Insurance Premium Sub-Account to pay
the Premium due and owing with respect to the Special Hazard Insurance
Policy in accordance with Section 3.17. If the Master Servicer fails to
pay any such Premium that is due and owing from amounts on deposit in such
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accounts, and funds are at the time on deposit in the applicable account,
the Trustee shall be entitled to withdraw, by written notification to the
institution maintaining the Expense Account (if other than the Trustee),
amounts from the applicable account to the extent necessary to pay such
Premium and apply such amounts to the payment thereof. In no event shall
the Master Servicer be obligated for the payment of the Premiums with
respect to the Special Hazard Insurance Policy and the Mortgage Pool
Insurance Policy other than from amounts on deposit in the Special Hazard
Insurance Premium Sub-Account and the Mortgage Pool Insurance Premium Sub-
Account, respectively.
(b) To the extent that it constitutes a "reserve fund" for purposes
of the REMIC Provisions, the Expense Account established hereunder shall be
an "outside reserve fund" as defined in Treasury Regulation 1.860G-2(h),
and in that regard (i) such fund shall be an outside reserve fund and not
an asset of either REMIC, (ii) such fund shall be owned for federal tax
purposes by DLJ and DLJ shall report all amounts of income, deduction, gain
or loss accruing therefrom, and (iii) amounts transferred by the REMIC to
the Expense Account shall be treated as distributed by the REMIC to DLJ.
(c) To the extent that on any Distribution Date, amounts on deposit
in the Special Hazard Insurance Premium Sub-Account are in excess of the
amounts necessary to pay any and all Premiums due prior to the third
succeeding Distribution Date with respect to the Special Hazard Insurance
Policy, the Master Servicer shall direct the Trustee to withdraw such
amounts from the Special Hazard Insurance Premium Sub-Account and remit
such amounts to DLJ. To the extent that on any Distribution Date, amounts
on deposit in the Mortgage Pool Insurance Premium Sub-Account are in excess
of the amounts necessary to pay any and all Premiums due prior to the next
Distribution Date with respect to the Mortgage Pool Insurance Policy, the
Master Servicer shall direct the Trustee to withdraw such amounts from the
Mortgage Pool Insurance Premium Sub-Account and remit such amounts to DLJ.
If the Master Servicer fails to direct the Trustee to withdraw such excess
amounts, the Trustee shall be entitled to withdraw, by written notification
to the institution maintaining the applicable account (if other than the
Trustee), amounts from such account and remit such amounts to the owner of
the Excess Amount.
(d) The owner of the Excess Amount as of the Closing Date shall be
DLJ. The Excess Amount shall not be transferable. On the Closing Date, the
Trustee shall register such interest in the name of DLJ in the Certificate
Register. The Excess Amount shall be deemed dated the date of the making of
an entry relating to the registration thereof in the Certificate Register.
(e) Funds held in the Expense Account may be invested at the
direction of DLJ to the Trustee in one or more Eligible Investments upon
receipt by the Trustee from the Master Servicer of a written confirmation
that such investment directions will not mature later than the date on
which any funds so invested are needed to make payments from the Expense
Account. The Trustee shall not be liable for any delay in receipt of such
written confirmation from the Master Servicer and the Trustee shall not be
responsible for investigating or verifying the information contained
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therein. The Trustee shall have no liability for any investment losses,
including any losses on any investment required to be liquidated prior to
maturity in order to make a payment required hereunder.
Section 3.20. Assumption or Termination of Selling and Servicing
Contracts by Trustee. In the event the Master Servicer, or any successor
Master Servicer, shall for any reason no longer be the Master Servicer
(including by reason of an Event of Default), the Trustee as trustee
hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under the Selling and Servicing
Contracts with respect to the related Mortgage Loans unless the Trustee
elects to terminate the Selling and Servicing Contracts with respect to
such Mortgage Loans in accordance with the terms thereof. The Trustee, its
designee or the successor servicer for the Trustee shall be deemed to have
assumed all of the Master Servicer's interest therein with respect to the
related Mortgage Loans and to have replaced the Master Servicer as a party
to the Selling and Servicing Contracts to the same extent as if the rights
and duties under the Selling and Servicing Contracts relating to such
Mortgage Loans had been assigned to the assuming party, except that the
Master Servicer shall not thereby be relieved of any liability or
obligations under the Selling and Servicing Contracts with respect to the
Master Servicer's duties to be performed prior to its termination
hereunder.
The Master Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to the
Selling and Servicing Contracts and the Mortgage Loans then being master
serviced by the Master Servicer and an accounting of amounts collected and
held by the Master Servicer and otherwise use its best efforts to effect
the orderly and efficient transfer of the rights and duties under the
related Selling and Servicing Contracts relating to such Mortgage Loans to
the assuming party.
Section 3.21. Maintenance of the Class I-A-23 Rounding Account;
Collections Thereunder. On or prior to the Closing Date, the Trustee shall
establish and maintain the Class I-A-23 Rounding Account and DLJ shall
deposit $999.99 therein. On the first Distribution Date with respect to
which the Master Servicer determines that amounts are available out of the
REMIC II Available Distribution Amount for distributions of principal on
the Class I-A-23 Certificates, and the aggregate amount allocable to such
distributions of principal is not an amount equal to an integral multiple
of $1,000, the Master Servicer shall notify the Trustee in writing by Noon
New York City time two Business Days prior to such Distribution Date of the
Rounding Amount, and the Trustee shall withdraw from the Class I-A-23
Rounding Account the applicable Rounding Amount. On each succeeding
Distribution Date, prior to the earlier of (i) the Group I Credit Support
Depletion Date and (ii) the date on which any loss is allocated to the
Class I-A-23 Certificates by Pro Rata Allocation, with respect to which the
Master Servicer determines that amounts are available out of the REMIC II
Available Distribution Amount for distributions of principal on the Class I-
A-23 Certificates, the aggregate amount allocable to such Class will be
applied first to replenish any funds withdrawn from the Class I-A-23
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Rounding Account on prior Distribution Dates which have not been repaid.
If the remainder of the aggregate amount allocable to distributions of
principal on such Class is not an amount equal to an integral multiple of
$1,000, the Master Servicer shall notify the Trustee in writing by Noon New
York City time two Business Days prior to such Distribution Date of the
applicable Rounding Amount, and the Trustee shall withdraw from the Class I-
A-23 Rounding Account, to the extent funds are available therein, the
amount so notified by the Master Servicer.
Any amounts withdrawn by the Trustee from the Class I-A-23 Rounding
Account shall be deposited in the Certificate Account for distribution to
the Class I-A-23 Certificateholders as described in the immediately
preceding paragraph (and shall be deemed to have been distributed to the
Class I-A-23-L Regular Interests and deposited for their benefit into the
Certificate Account in accordance with Section 4.01(i)).
Amounts on deposit in the Class I-A-23 Rounding Account shall not be
invested and shall not be held in an interest-bearing account.
On or promptly after the earlier of (i) the Group I Credit Support
Depletion Date and (ii) the date on which any loss is allocated to the
Class I-A-23 Certificates by Pro Rata Allocation, the Master Servicer shall
be entitled to withdraw and pay to itself as additional servicing
compensation any remaining amounts on deposit in the Class I-A-23 Rounding
Account.
Section 3.22. Maintenance of the Class I-A-18 Interest Supplement
Account. On or prior to the Closing Date, the Master Servicer shall cause
to be established and maintained the Class I-A-18 Interest Supplement
Account (from which the Trustee shall have the power to withdraw funds on
deposit therein) into which an amount equal to $5,000 shall be contributed
by DLJ to provide coverage with respect to the Class I-A-18 Interest
Supplement Amount. For each of the first twelve Distribution Dates, the
Master Servicer shall calculate the Class I-A-18 Interest Supplement Amount
and shall notify the Trustee in writing by Noon New York City time two
Business Days prior to the Distribution Date of such amount. On each such
Distribution Date, the Trustee shall then withdraw from the Class I-A-18
Interest Supplement Account, to the extent funds are available therein, the
Class I-A-18 Interest Supplement Amount and deposit such amount in the
Certificate Account for payment to the Class I-A-18 Certificateholders.
After the twelfth Distribution Date, the Trustee shall withdraw from the
Class I-A-18 Interest Supplement Account and pay to Donaldson, Lufkin &
Jenrette Securities Corporation any amount then remaining therein.
Amounts on deposit in the Class I-A-18 Interest Supplement Account
shall not be invested and shall not be held in an interest-bearing account.
The Class I-A-18 Interest Supplement Account established hereunder, to
the extent that it constitutes a "reserve fund" for purposes of the REMIC
Provisions, shall be an "outside reserve fund" as defined in Treasury
Regulation 1.860G-2(h), and in that regard (i) such fund shall be an
outside reserve fund and not an asset of either REMIC, (ii) such fund shall
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be owned for federal tax purposes by DLJ and it shall report all amounts of
income, deduction, gain or loss accruing therefrom, and (iii) amounts
transferred by the REMIC to the Class I-A-18 Interest Supplement Account
shall be treated as distributed by the REMIC to DLJ.
ARTICLE IV
Payments to Certificateholders; Payment of Expenses
Section 4.01. Distributions to Holders of REMIC I Regular Interests
and Class R-1 Certificateholders. On each Distribution Date, the Trustee
(or any duly appointed paying agent) (i) shall be deemed to have
distributed from the Certificate Account the REMIC I Distribution Amount to
the Holders of the REMIC I Regular Interests and to have deposited such
amount for their benefit into the Certificate Account and (ii) from the
Certificate Account shall distribute to the Class R-1 Certificateholders
the sum of (a) the Excess Liquidation Proceeds and (b) the amounts to be
distributed to the Class R-1 Certificateholders pursuant to the definition
of "REMIC I Distribution Amount" for such Distribution Date, all in
accordance with written statements received from the Master Servicer
pursuant to Section 4.02(b), by wire transfer in immediately available
funds for the account of each such Holder and the Class R-1
Certificateholder, or by any other means of payment acceptable to each such
Holder and the Class R-1 Certificateholder of record on the immediately
preceding Record Date (other than as provided in Section 9.01 respecting
the final distribution), as specified by each such Certificateholder and at
the address of such Holder appearing in the Certificate Register.
Notwithstanding any other provision of this Agreement, no actual
distributions pursuant to clause (i) of this Section 4.01 shall be made on
account of the deemed distributions described in this paragraph except in
the event of a liquidation of REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution Reports
to the Trustee.
(a) To the extent described below, the Master Servicer is obligated
to advance its own funds to the Certificate Account to cover any shortfall
between (i) payments scheduled to be received in respect of Mortgage Loans,
and (ii) the amounts actually deposited in the Certificate Account on
account of such payments; provided that, with respect to any Balloon Loan
that is delinquent on its maturity date, the Master Servicer will not be
required to advance the related balloon payment but will be required to
continue to make advances in accordance with this Section 4.02 with respect
to such Balloon Loan in an amount equal to one month's interest on the
unpaid principal balance at the applicable Pass-Through Rate for each
Distribution Date. 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.
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Prior to the close of business on the Business Day immediately
following each Withdrawal Date, the Master Servicer shall determine whether
or not it will make a Monthly P&I Advance on the Business Day prior to the
next succeeding Distribution Date (in the event that the applicable
Servicer fails to make such advances) and shall furnish a written statement
to the Trustee, the Paying Agent, if any, and to any Certificateholder
requesting the same, setting forth the aggregate amount to be distributed
on the next succeeding Distribution Date on account of principal and
interest in respect of the Mortgage Loans, stated separately. In the event
that full scheduled amounts of principal and interest in respect of the
Mortgage Loans shall not have been received by or on behalf of the Master
Servicer prior to such Determination Date and the Master Servicer shall
have determined that a Monthly P&I Advance shall be made in accordance with
this Section 4.02, the Master Servicer shall so specify and shall specify
the aggregate amount of such advance.
In the event that the Master Servicer shall be required to make a
Monthly P&I Advance, it shall on the Business Day prior to the related
Distribution Date either (i) deposit in the Certificate Account an amount
equal to such Monthly P&I Advance, (ii) make an appropriate entry in the
records of the Certificate Account that funds in such account being held
for future distribution or withdrawal have been, as permitted by this
Section 4.02, used by the Master Servicer to make such Monthly P&I Advance,
or (iii) make advances in the form of any combination of (i) and (ii)
aggregating the amount of such Monthly P&I Advance. Any funds being held
for future distribution to Certificateholders and so used shall be replaced
by the Master Servicer by deposit in the Certificate Account on the
Business Day immediately preceding any future Distribution Date to the
extent that funds in the Certificate Account on such Distribution Date with
respect to the Mortgage Loans shall be less than payments to
Certificateholders required to be made on such date with respect to the
Mortgage Loans. Under each Selling and Servicing Contract, the Master
Servicer is entitled to receive from the Custodial Accounts for P&I
established by the Servicers amounts received by the applicable Servicers
on particular Mortgage Loans as late payments of principal and interest or
as Liquidation or Insurance Proceeds and respecting which the Master
Servicer has made an unreimbursed advance of principal and interest. The
Master Servicer is also entitled to receive other amounts from the related
Custodial Accounts for P&I established by the Servicers to reimburse itself
for prior Nonrecoverable Advances respecting Mortgage Loans serviced by
such Servicers. The Master Servicer shall deposit these amounts in the
Investment Account prior to withdrawal pursuant to Section 3.05.
In accordance with Section 3.05, Monthly P&I Advances are reimbursable
to the Master Servicer from cash in the Investment Account or the
Certificate Account to the extent that the Master Servicer shall determine
that any such advances previously made are Nonrecoverable Advances pursuant
to Section 4.03.
(b) Prior to Noon New York City time two Business Days prior to each
Distribution Date, the Master Servicer shall provide the Trustee with a
statement in writing regarding the amount, if any, to be withdrawn from the
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Bankruptcy and Extraordinary Hazard Reserve Fund pursuant to Section 3.18,
the amount, if any, to be drawn upon each of the Special Hazard Insurance
Policy and the Mortgage Pool Insurance Policy (specifying amounts drawn
pursuant to the Fraud Waiver and the Ninety-Seven Percent Loan-to-Value
Endorsement thereof) and the amount, if any, to be withdrawn from the Class
I-A-18 Interest Supplement Account pursuant to Section 3.22 and from the
Class I-A-23 Rounding Account pursuant to Section 3.21 and the amount of
principal and interest, the Residual Distribution Amount and the Excess
Liquidation Proceeds to be distributed to each Class of REMIC I Regular
Interests and each Class of Certificates on such Distribution Date (such
amounts to be determined in accordance with the definitions of "REMIC I
Distribution Amount" and "REMIC II Distribution Amount", Section 4.01 and
Section 4.04 hereof and other related definitions set forth in Article I
hereof).
Section 4.03. Nonrecoverable Advances. Any advance previously made by
a Servicer pursuant to its Selling and Servicing Contract with respect to a
Mortgage Loan or by the Master Servicer that the Master Servicer shall
determine in its good faith judgment not to be ultimately recoverable from
Insurance Proceeds or Liquidation Proceeds or otherwise with respect to
such Mortgage Loan or recoverable as late Monthly Payments with respect to
such Mortgage Loan shall be a Nonrecoverable Advance. The determination by
the Master Servicer that it or the applicable Servicer has made a
Nonrecoverable Advance or that any advance would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate of
the Master Servicer delivered to the Trustee on the Determination Date and
detailing the reasons for such determination. Notwithstanding any other
provision of this Agreement, any insurance policy relating to the Mortgage
Loans, or any other agreement relating to the Mortgage Loans to which the
Company or the Master Servicer is a party, (a) the Company, 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
Company, the Master Servicer, or such Servicer shall determine would be a
Nonrecoverable Advance, and (b) the Company, the Master Servicer, and each
Servicer shall be entitled to reimbursement for any advance as provided in
Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Distributions to Certificateholders (other than Class R-
1 Certificateholders).
(a) On each Distribution Date, the Trustee (or any duly appointed
paying agent) shall (i) withdraw from the Certificate Account, the REMIC II
Available Distribution Amount for such Distribution Date and shall
distribute, from the amount so withdrawn, to the extent of the REMIC II
Available Distribution Amount, the REMIC II Distribution Amount to the
Certificates (other than the Class R-1 Certificates), (provided that any
portion of such amount distributable to the Class I-A-23 Certificates shall
be used first to pay any amount payable to the Class I-A-23 Rounding
Account pursuant to Section 3.21), (ii) withdraw from the Certificate
Account the Rounding Amount for distribution on such date pursuant to
Section 3.21 and distribute the amounts so withdrawn to the Class I-A-23
Certificates in accordance with such Section 3.21 and (iii) withdraw from
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the Certificate Account the Class I-A-18 Interest Supplement Amount for
distribution on such date pursuant to Section 3.22 and distribute the
amounts so withdrawn to the Class I-A-18 Certificates, all in accordance
with written statements received from the Master Servicer pursuant to
Section 4.02(b), by wire transfer in immediately available funds for the
account of, or by check mailed to, each such Certificateholder of record on
the immediately preceding Record Date (other than as provided in Section
9.01 respecting the final distribution), as specified by each such
Certificateholder and at the address of such Holder appearing in the
Certificate Register.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all allocations of
Realized Losses made on any Distribution Date shall be binding upon all
Holders of such Certificates and of any Certificates issued upon the
registration of transfer or exchange therefor or in lieu thereof, whether
or not such distribution is noted on such Certificate. The final
distribution of principal of each Certificate (and the final distribution
upon the Class R-1 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 4.04(c)(ii) and Section 9.01(b).
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Mortgage Loans and Insurance Proceeds and Liquidation
Proceeds received and expected to be received during the Payoff Period, the
Master Servicer has notified the Trustee that it believes that the entire
remaining unpaid Class Principal Balance of any Class of Certificates will
become distributable on the next Distribution Date, the Trustee shall, no
later than the 18th day of the month of such Distribution Date, mail or
cause to be mailed to each Person in whose name a Certificate to be so
retired is registered at the close of business on the Record Date and to
the Rating Agencies a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution
will be payable on such Distribution Date, but only upon presentation
and surrender of such Certificate at the office or agency of the
Certificate Registrar maintained for such purpose (the address of
which shall be set forth in such notice), and (B) no interest shall
accrue on such Certificate after such Distribution Date.
Section 4.05. Statements to Certificateholders. With each
distribution from the Certificate Account on a Distribution Date, the
Master Servicer shall prepare and forward to the Trustee (and to the
Company if the Company is no longer acting as Master Servicer), and the
Trustee shall forward to each Certificateholder, a statement setting forth,
to the extent applicable: the amount of the distribution payable to the
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applicable Class that represents principal and the amount that represents
interest, and the applicable Class Principal Balance after giving effect to
such distribution.
Upon request by any Certificateholder or the Trustee, the Master
Servicer shall forward to such Certificateholder, the Trustee and the
Company (if the Company is no longer acting as Master Servicer) an
additional report which sets forth with respect to the Mortgage Loans:
(a) The number and aggregate Principal Balance of the Mortgage
Loans delinquent one, two and three months or more;
(b) The (i) number and aggregate Principal Balance of Mortgage
Loans with respect to which foreclosure proceedings have been
initiated, and (ii) the number and aggregate book value of Mortgaged
Properties acquired through foreclosure, deed in lieu of foreclosure
or other exercise of rights respecting the Trustee's security interest
in the Mortgage Loans, in each case, by Loan Group;
(c) The amount of the Group I Special Hazard Coverage and the
amount of coverage available to the Group II, Group III and Group IV
Certificates under the Mortgage Pool Insurance Policy (and specifying
the amount available under each of the Fraud Endorsement and the
Ninety-Seven Percent Loan-to-Value Program Endorsement) as of the
close of business on the applicable Determination Date;
(d) The amount of the Group I Bankruptcy Coverage and the amount
of coverage available to the Group II, Group III and Group IV
Certificates under the Bankruptcy and Extraordinary Expense Reserve
Fund as of the close of business on the applicable Determination Date;
(e) The amount of the Group I Fraud Coverage available to the
Group I Senior Certificates remaining as of the close of business on
the applicable Determination Date; and
(f) The amount of Realized Losses incurred in respect of each
Loan Group allocable to the Certificates on the related Distribution
Date and the cumulative amount of Realized Losses incurred in respect
of each Loan Group allocated to such Certificates since the Cut-Off
Date.
Upon request by any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder with
such information as is necessary and appropriate, in the Master Servicer's
sole discretion, for purposes of satisfying applicable reporting
requirements under Rule 144A of the Securities Act.
Section 4.06. Principal Distributions on the Class I-A-23
Certificates. Prior to the earlier of (i) the Group I Credit Support
Depletion Date and (ii) the date on which any loss is allocated to the
Class I-A-23 Certificates by Pro Rata Allocation, distributions in
reduction of the Class Principal Balance of such Class will be made in
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integral multiples of $1,000 at the request of the appropriate
representatives of Deceased Holders of Certificates of such Class and at
the request of Living Holders of Certificates of such Class or by mandatory
distributions, pursuant to Section 4.06(a) and Section 4.06(d). On and
after the earlier of (i) the Group I Credit Support Depletion Date and (ii)
the date on which any loss is allocated to the Class I-A-23 Certificates by
Pro Rata Allocation, distributions in reduction of the Class Principal
Balances of such Class will be made on a pro rata basis pursuant to Section
4.06(e).
(a) On each Distribution Date on which principal distributions to the
Class I-A-23 Certificates are made, such distributions will be made in the
following priority:
(i) first, to requesting Deceased Holders, in the order in which
such requests are received by DTC, but not exceeding an aggregate
amount of $25,000 for each requesting Deceased Holder; and
(ii) second, to requesting Living Holders, in the order in which
such requests are received by DTC, but not exceeding an aggregate
amount of $10,000 for each requesting Living Holder.
Thereafter, distributions will be made, with respect to the Class I-A-23
Certificates, as provided in clauses (i) and (ii) above up to a second
$25,000 and $10,000, respectively. This sequence of priorities will be
repeated until all requests for principal distributions by Deceased Holders
and Living Holders of such Class have been honored, to the extent of
amounts available for principal distributions to such Class.
All requests for principal distributions to Class I-A-23 Certificates
will be accepted in accordance with the provisions set forth in Section
4.06(c). Requests for principal distributions that are received by the
Trustee after the related Record Date and requests for principal
distributions received in a timely manner but not accepted with respect to
any Distribution Date, will be treated as requests for principal
distributions to the Class I-A-23 Certificates on the next succeeding
Distribution Date, and each succeeding Distribution Date thereafter, until
each such request is accepted or is withdrawn as provided in Section
4.06(c). Such requests as are not so withdrawn shall retain their order of
priority without the need for any further action on the part of the
appropriate Holder of the Class I-A-23 Certificate, all in accordance with
the procedures of DTC and the Trustee. Upon the transfer of beneficial
ownership of any Class I-A-23 Certificate, any distribution request
previously submitted with respect to such Certificate will be deemed to
have been withdrawn only upon the receipt by the Trustee on or before the
Record Date for such Distribution Date of notification of such withdrawal
in the manner set forth in Section 4.06(c) using a form required by DTC.
Distributions in reduction of the Class Principal Balance of the Class
I-A-23 Certificates will be applied in an amount equal to the portion of
the Group I Senior Principal Distribution Amount allocable to such Class
pursuant to Section 4.04, plus any amounts available for distribution from
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the Class I-A-23 Rounding Account established as provided in Section 3.21,
provided that the aggregate distribution of principal to such Class on any
Distribution Date shall be made in an integral multiple of $1,000.
To the extent that the portion of the Group I Senior Principal
Distribution Amount allocable to the Class I-A-23 Certificates on any
Distribution Date exceeds the aggregate Certificate Principal Balance of
Class I-A-23 Certificates with respect to which principal distribution
requests, as set forth above, have been received, principal distributions
in reduction of the Class Principal Balance of such Class will be made by
mandatory distribution pursuant to Section 4.06(d).
(b) A Class I-A-23 Certificate shall be deemed to be held by a
Deceased Holder for purposes of this Section 4.06 if the death of the
Holder thereof is deemed to have occurred. Class I-A-23 Certificates
beneficially owned by tenants by the entirety, joint tenants or tenants in
common will be considered to be beneficially owned by a single owner. The
death of a tenant by the entirety, joint tenant or tenant in common will be
deemed to be the death of the Holder, and the Class I-A-23 Certificates so
beneficially owned will be eligible for priority with respect to principal
distributions, subject to the limitations stated above. Class I-A-23
Certificates beneficially owned by a trust will be considered to be
beneficially owned by each beneficiary of the trust to the extent of such
beneficiary's beneficial interest therein, but in no event will a trust's
beneficiaries collectively be deemed to be Holders of a number of Class I-A-
23 Certificates greater than the number of Class I-A-23 Certificates of
which such trust is the owner. The death of a beneficiary of a trust will
be deemed to be the death of a Holder of the Class I-A-23 Certificates
beneficially owned by the trust to the extent of such beneficiary's
beneficial interest in such trust. The death of an individual who was a
tenant by the entirety, joint tenant or tenant in common in a tenancy which
is the beneficiary of a trust will be deemed to be the death of the
beneficiary of such trust. The death of a person who, during his or her
lifetime, was entitled to substantially all of the beneficial ownership
interests in a Class I-A-23 Certificate will be deemed to be the death of
the Holder of such Class I-A-23 Certificate regardless of the registration
of ownership, if such beneficial ownership interest can be established to
the satisfaction of the Trustee. Such beneficial interest will be deemed
to exist in typical cases of street name or nominee ownership, ownership by
a trustee, ownership under the Uniform Gifts to Minors Act and community
property or other joint ownership arrangements between a husband and wife.
Beneficial interest shall include the power to sell, transfer or otherwise
dispose of a Class I-A-23 Certificate and the right to receive the proceeds
therefrom, as well as interest and principal distributions, as applicable,
payable with respect thereto. The Trustee may rely entirely upon
documentation delivered to it in establishing beneficial ownership
interests in Class I-A-23 Certificates. The Trustee shall not be under any
duty to determine independently the occurrence of the death of any deceased
Holder. The Trustee may rely entirely upon documentation delivered to it
pursuant to Section 4.06(c) in establishing the eligibility of any Holder
to receive the priority accorded Deceased Holders in Section 4.06(a).
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(c) Requests for principal distributions to any Class I-A-23
Certificate must be made by delivering a written request therefor to the
DTC Participant or Indirect DTC Participant that maintains the account
evidencing such Holder's interest in such Certificate. In the case of a
request on behalf of a Deceased Holder, appropriate evidence of death and
any tax waivers are required to be forwarded to the Trustee under separate
cover. The DTC Participant should in turn make the request of DTC (or, in
the case of an Indirect DTC Participant, such Indirect DTC Participant must
notify the related DTC Participant of such request, which DTC Participant
should make the request of DTC) on a form required by DTC and provided to
the DTC Participant. Upon receipt of such request, DTC will date and time
stamp such request and forward such request to the Trustee. DTC may
establish such procedures as it deems fair and equitable to establish the
order of receipt of requests for such distributions received by it on the
same day. None of the Company, the Master Servicer or the Trustee shall be
liable for any delay in delivery of requests for distributions or
withdrawals of such requests by DTC, a DTC Participant or any Indirect DTC
Participant.
The Trustee shall maintain a list of those DTC Participants
representing the appropriate Holders of Class I-A-23 Certificates that have
submitted requests for principal distributions, together with the order of
receipt and the amounts of such requests. Subject to the priorities
described in Section 4.06(a) above, DTC will honor requests for
distributions in the order of their receipt. The Trustee shall notify DTC
as to which requests should be honored on each Distribution Date at least
two Business Days prior to such Distribution Date and shall notify DTC as
to the portion of the Group I Senior Principal Distribution Amount
(together with any amounts available for distribution from the Class I-A-23
Rounding Account) to be distributed to the Class I-A-23 Certificates by
mandatory distribution pursuant to Section 4.06(d). Requests shall be
honored by DTC in accordance with the procedures, and subject to the
priorities and limitations, described in this Section 4.06. The exact
procedures to be followed by the Trustee and DTC for purposes of
determining such priorities and limitations will be those established from
time to time by the Trustee or DTC, as the case may be. The decisions of
the Trustee and DTC concerning such matters will be final and binding on
all affected persons.
Class I-A-23 Certificates that have been accepted for a distribution
shall be due and payable on the applicable Distribution Date. Such
Certificates shall cease to bear interest after the last calendar day of
the month preceding the month in which such Distribution Date occurs.
Any Holder of a Class I-A-23 Certificate that has requested a
principal distribution may withdraw its request by so notifying in writing
the DTC Participant or Indirect DTC Participant that maintains such
Holder's account. In the event that such account is maintained by an
Indirect DTC Participant, such Indirect DTC Participant must notify the
related DTC Participant which in turn must forward the withdrawal of such
request, on a form required by DTC, to DTC to be forwarded to the Trustee.
If such notice of withdrawal of a request for distribution has not been
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received by DTC and forwarded to the Trustee on or before the Record Date
for the next Distribution Date, the previously made request for a principal
distribution will be irrevocable with respect to the making of principal
distributions on such Distribution Date.
In the event any requests for principal distributions are rejected by
the Trustee for failure to comply with the requirements of this Section
4.06, the Trustee shall return such request to the appropriate DTC
Participant with a copy to DTC with an explanation as to the reason for
such rejection.
(d) To the extent, if any, that principal distributions to be made to
the Class I-A-23 Certificates on a Distribution Date exceed the aggregate
amount of principal distribution requests for such Class which have been
received on or before the applicable Record Date, as provided in Section
4.06(a) above, additional Class I-A-23 Certificates will be selected to
receive mandatory principal distributions in lots equal to $1,000 in
accordance with the then-applicable Random Lot procedures of DTC, and the
then-applicable procedures of the DTC Participants and Indirect DTC
Participants representing the Holders (which procedures may or may not be
by random lot). The Trustee shall notify DTC of the aggregate amount of
the mandatory principal distribution to be made on the next Distribution
Date. DTC shall then allocate such aggregate amount among the DTC
Participants on a Random Lot basis. Each DTC Participant and, in turn,
each Indirect DTC Participant will then select, in accordance with its own
procedures, Class I-A-23 Certificates from among those held in its accounts
to receive mandatory principal distributions, such that the total amount of
principal distributed to the Class I-A-23 Certificates so selected is equal
to the aggregate amount of such mandatory distributions allocated to such
DTC Participant by DTC and to such Indirect DTC Participant by its related
DTC Participant, as the case may be. DTC Participants and Indirect DTC
Participants that hold Class I-A-23 Certificates selected for mandatory
principal distributions are required to provide notice of such mandatory
distributions to the affected Holders. The Master Servicer shall notify
the Trustee in writing of the amount of principal distributions to be made
on each Distribution Date in a timely manner such that the Trustee may
fulfill its obligations under the Depositary Agreement.
(e) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the earlier of (i) the Group I Credit
Support Depletion Date and (ii) the date on which any loss is allocated to
the Class I-A-23 Certificates by Pro Rata Allocation,, distributions in
reduction of the Class Principal Balance of such Class will be made pro
rata among the Holders of the Certificates of such Class and will not be
made in integral multiples of $1,000 nor pursuant to requests for
distribution as permitted by Section 4.06(a) or by mandatory distributions
as provided for by Section 4.06(d).
In the event that Definitive Certificates representing the Class I-A-
23 Certificates are issued pursuant to Section 5.09, an amendment to this
Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in
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which distributions in reduction of the Class I-A-23 Principal Balance are
to be made; provided that such procedures shall be consistent, to the
extent practicable and customary for certificates similar to the Class I-A-
23 Certificates, with the provisions of this Section 4.06.
ARTICLE V
The Certificates
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the forms set forth in
Exhibit A and B with the additional insertion from Exhibit H attached
hereto, and shall be executed by the Trustee, authenticated by the Trustee
(or any duly appointed Authenticating Agent) and delivered to or upon the
order of the Company upon receipt by the Trustee of the documents specified
in Section 2.01. The Certificates shall be issuable in Authorized
Denominations evidencing Percentage Interests. Certificates shall be
executed by manual or facsimile signature on behalf of the Trustee by
authorized officers of the Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were at the time of execution the
proper officers of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of such Certificates. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless
there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by the Trustee or
any Authenticating Agent by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The following definitions apply for purposes of this Section
5.01: "Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or
holds a Residual Certificate and of which a Disqualified Organization,
directly or indirectly, may be a stockholder, partner or beneficiary; "Pass-
Through Entity" means any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies; "Ownership
Interest" means, with respect to any Residual Certificate, any ownership or
security interest in such Residual Certificate, including any interest in a
Residual Certificate as the Holder thereof and any other interest therein
whether direct or indirect, legal or beneficial, as owner or as pledgee;
"Transfer" means any direct or indirect transfer or sale of, or 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).
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(i) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by
the following provisions and to have irrevocably authorized the
Trustee or its designee under clause (iii)(A) below to deliver
payments to a Person other than such Person and to negotiate the terms
of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to
the following provisions:
(A) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Residual Certificate to a U.S. Person,
the Trustee shall require delivery to it, and shall not register
the Transfer of any Residual Certificate until its receipt of (1)
an affidavit and agreement (a "Transferee Affidavit and
Agreement") attached hereto as Exhibit J from the proposed
Transferee, in form and substance satisfactory to the Company,
representing and warranting, among other things, that it is not a
Non-U.S. Person, that such transferee is a Permitted Transferee,
that it is not acquiring its Ownership Interest in the Residual
Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person who is not a Permitted
Transferee, that for so long as it retains its Ownership Interest
in a Residual Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this
Section 5.01(c) and agrees to be bound by them, and (2) a
certificate, attached hereto as Exhibit I, from the Holder
wishing to transfer the Residual Certificate, in form and
substance satisfactory to the Company, representing and
warranting, among other things, that no purpose of the proposed
Transfer is to 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
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the Trustee in the form attached hereto as Exhibit J; (ii) to
obtain the express written consent of the Company prior to any
transfer of such Ownership Interest, which consent may be
withheld in the Company's sole discretion; and (iii) to provide a
certificate to the Trustee in the form attached hereto as Exhibit
I.
(ii) The Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit
and Agreement, a certificate of the Holder requesting such transfer in
the form attached hereto as Exhibit J and all of such other documents
as shall have been reasonably required by the Trustee as a condition
to such registration.
(iii) (A) If any "disqualified organization" (as defined in
Section 860E(e)(5) of the Code) shall become a holder of a Residual
Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Residual Certificate. If any Non-U.S. Person
shall become a holder of a Residual Certificate, then the last
preceding holder which is a U.S. Person shall be restored, to the
extent permitted by law, to all rights and obligations as Holder
thereof retroactive to the date of registration of the Transfer to
such Non-U.S. Person of such Residual Certificate. If a transfer of a
Residual Certificate is disregarded pursuant to the provisions of
Treasury Regulations Section 1.860E-1 or Section 1.860G-3, then the
last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual Certificate that
is in fact not permitted by this Section 5.01(c) or for making any
payments due on such Certificate to the holder thereof or for taking
any other action with respect to such holder under the provisions of
this Agreement.
(B) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this
Section 5.01(c) and to the extent that the retroactive
restoration of the rights of the Holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Company shall have
the right, without notice to the Holder or any prior Holder of
such Residual Certificate, to sell such Residual Certificate to a
purchaser selected by the Company on such terms as the Company
may choose. Such purported Transferee shall promptly endorse and
deliver each Residual Certificate in accordance with the
instructions of the Company. Such purchaser may be the Company
itself or any affiliate of the Company. The proceeds of such
sale, net of the commissions (which may include commissions
payable to the Company or its affiliates), expenses and taxes
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due, if any, shall be remitted by the Company to such purported
Transferee. The terms and conditions of any sale under this
clause (iii)(B) shall be determined in the sole discretion of the
Company, and the Company shall not be liable to any Person having
an Ownership Interest in a Residual Certificate as a result of
its exercise of such discretion.
(iv) The Company, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary to
compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is not
a Permitted Transferee, including the information regarding "excess
inclusions" of such Residual Certificates required to be provided to
the Internal Revenue Service and certain Persons as described in
Treasury Regulation Section 1.860D-1(b)(5), and (B) as a result of any
regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organizations described in
Section 1381 of the Code having as among its record holders at any
time any Person who is not a Permitted Transferee. Reasonable
compensation for providing such information may be required by the
Company from such Person.
(v) The provisions of this Section 5.01 set forth prior to this
Section (v) may be modified, added to or eliminated by the Company and
the Trustee, provided that there shall have been delivered to the
Trustee the following:
(A) written notification from each Rating Agencies to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agencies to downgrade its
then-current Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Company (as evidenced by a certificate of the
Company), to the effect that such modification, addition to or
absence of such provisions will not cause REMIC I and REMIC II to
cease to qualify as a REMIC and will not create a risk that (1)
REMIC I and REMIC II may be subject to an entity-level tax caused
by the Transfer of any Residual Certificate to a Person which is
not a Permitted Transferee or (2) a Certificateholder or another
Person will be subject to a REMIC-related tax caused by the
Transfer of a Residual Certificate to a Person which is not a
Permitted Transferee.
(vi) The following legend shall appear on all Residual
Certificates:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO
THE COMPANY AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
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INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS [R-
1] [R-2] CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF THE CLASS [R-1][R-2] CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH.
(vii) The Tax Matters Person for each of REMIC I and REMIC
II, while not a Disqualified Organization, shall be the tax matters
person for the related REMIC within the meaning of Section 6231(a)(7)
of the Code and Treasury Regulation Section 1.860F-4(d).
(d) In the case of any Class B, Class IV-AM, Class M or Residual
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 a Class B, Class IV-AM, Class M or
Residual Certificate is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under Section
406 of ERISA or Section 4975 of the Code, and will not subject the Trustee,
the Master Servicer or the Company to any obligation or liability
(including obligations or liabilities under Section 406 of ERISA or Section
4975 of the Code) in addition to those undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Trustee, the Master
Servicer or the Company or (ii) only in the case of a Class B, Class IV-AM
or Class M 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 Group I
Junior Subordinate Certificate shall be made unless such transfer, sale,
pledge or other disposition is made in accordance with this Section 5.01(e)
or Section 5.01(f); provided that any transfer, sale, pledge or other
disposition of a Group I 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
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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 Group I 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 Group I Junior
Subordinate Certificate shall be deemed to be made in accordance with this
Section 5.01(e) unless such transfer is made pursuant to an effective
registration statement under the Securities Act or unless the Trustee is
provided with the certificates and an Opinion of Counsel, if required, on
which the Trustee may conclusively rely, which establishes or establish to
the Trustee's satisfaction that such transfer is exempt from the
registration requirements under the Securities Act, as follows: In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act, the Trustee shall require, in order to assure compliance
with the Securities Act, that the Certificateholder desiring to effect such
transfer certify to the Trustee in writing, in substantially the form
attached hereto as Exhibit F, the facts surrounding the transfer, with such
modifications to such Exhibit F as may be appropriate to reflect the actual
facts of the proposed transfer, and that the Certificateholder's proposed
transferee certify to the Trustee in writing, in substantially the form
attached hereto as Exhibit G, the facts surrounding the transfer, with such
modifications to such Exhibit G as may be appropriate to reflect the actual
facts of the proposed transfer. If such certificate of the proposed
transferee does not contain substantially the substance of Exhibit G, the
Trustee shall require an Opinion of Counsel satisfactory to it that such
transfer may be made without registration, which Opinion of Counsel shall
not be obtained at the expense of the Trustee, the REMIC I Trust Fund, the
REMIC II Trust Fund or the Company. Such Opinion of Counsel shall allow for
the forwarding, and the Trustee shall forward, a copy thereof to the Rating
Agencies. Notwithstanding the foregoing, any Group I 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 Group I Junior
Subordinate Certificate in accordance with this Section 5.01(f), the
proposed transferee of such Certificate must provide the Trustee and the
Company with an investment letter substantially in the form of Exhibit L
attached hereto, which investment letter shall not be an expense of the
Trustee or the Company, and which investment letter states that, among
other things, such transferee (i) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of
other "qualified institutional buyers" as defined under Rule 144A, and (ii)
is aware that the proposed transferor intends to rely on the exemption from
registration requirements under the Securities Act provided by Rule 144A.
Notwithstanding the foregoing, the proposed transferee of such Certificate
shall not be required to provide the Trustee or the Company with Annex 1 or
Annex 2 to the form of Exhibit L attached hereto if the Company so consents
prior to each such transfer. Such transfers shall be deemed to have
complied with the requirements of this Section 5.01(f). The Holder of a
Certificate desiring to effect such transfer does hereby agree to indemnify
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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 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, NY 10006,
Attention: Corporate Trust Window, or such other address or agency as may
hereafter be provided to the Master Servicer in writing by the Trustee, the
Trustee shall execute, and the Trustee or any Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of Authorized Denominations of
like Percentage Interest. At the option of the Certificateholders,
Certificates may be exchanged for other Certificates in Authorized
Denominations of like Percentage Interest, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute,
and the Trustee, or any Authenticating Agent, shall authenticate and
deliver, the Certificates which the Certificateholder making the exchange
is entitled to receive. Every Certificate presented or surrendered for
transfer shall (if so required by the Trustee or any Authenticating Agent)
be duly endorsed by, or be accompanied by a written instrument of transfer
in form satisfactory to the Trustee or any Authenticating Agent and duly
executed by, the Holder thereof or such Holder's attorney duly authorized
in writing.
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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 II Trust Fund (or with
respect to the Class R-1 Certificates, the residual ownership interests in
the REMIC I Trust Fund) as if originally issued, whether or not the lost or
stolen Certificate shall be found at any time.
Section 5.05. Persons Deemed Owners. The Company, the Master
Servicer, the Trustee and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate
for the purpose of receiving distributions pursuant to Section 4.01 and
Section 4.04 and for all other purposes whatsoever, and neither the
Company, the Master Servicer, the Trustee, the Certificate Registrar nor
any agent of the Company, the Master Servicer or the Trustee shall be
affected by notice to the contrary.
Section 5.06. Temporary Certificates. Upon the initial issuance of
the Certificates, the Trustee may execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver, temporary Certificates
which are printed, lithographed, typewritten or otherwise produced, in any
Authorized Denomination, of the tenor of the definitive Certificates in
lieu of which they are issued and with such variations in form from the
forms of the Certificates set forth as Exhibits A, B, C and H hereto as the
Trustee's officers executing such Certificates may determine, as evidenced
by their execution of the Certificates. Notwithstanding the foregoing, the
Certificates may remain in the form of temporary Certificates.
If temporary Certificates are issued, the Trustee shall cause
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definitive Certificates to be prepared within ten Business Days of the
Closing Date or as soon as practicable thereafter. After preparation of
definitive Certificates, the temporary Certificates shall be exchangeable
for definitive Certificates upon surrender of the temporary Certificates at
the office or agency of the Trustee to be maintained as provided in Section
5.10 hereof, without charge to the holder. Any tax or governmental charge
that may be imposed in connection with any such exchange shall be borne by
the Master Servicer. Upon surrender for cancellation of any one or more
temporary Certificates, the Trustee shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver in exchange therefor a
like principal amount of definitive Certificates of Authorized
Denominations. Until so exchanged, the temporary Certificates shall in all
respects be entitled to the same benefits under this Agreement as
definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates. Notwithstanding
the foregoing, the Book-Entry Certificates, upon original issuance, shall
be issued in the form of one or more typewritten Certificates of Authorized
Denomination representing the Book-Entry Certificates, to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Company. The
Book-Entry Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of DTC, as the initial
Clearing Agency, and no Beneficial Holder shall receive a definitive
certificate representing such Beneficial Holder's interest in any Class of
Book-Entry Certificate, except as provided above and in Section 5.09. Each
Book-Entry Certificate shall bear the following legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Unless and until definitive, fully registered Book-Entry Certificates (the
"Definitive Certificates") have been issued to the Beneficial Holders
pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in full force
and effect with respect to the Book-Entry Certificates;
(b) the Master Servicer and the Trustee may deal with the
Clearing Agency for all purposes with respect to the Book-Entry
Certificates (including the making of distributions on the Book-Entry
Certificates) as the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.07
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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 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
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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
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
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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 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.
ARTICLE VII
Default
Section 7.01. Events of Default. (a) In case one or more of the
following Events of Default by the Master Servicer or by a successor Master
Servicer shall occur and be continuing, that is to say:
(i) Any failure by the Master Servicer to deposit into the
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Certificate Account any payment required to be deposited therein by
the Master Servicer under the terms of this Agreement which continues
unremedied for a period of ten days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or to the Master
Servicer and the Trustee by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II
Trust Fund; or
(ii) Failure on the part of the Master Servicer duly to
observe or perform in any material respect any other of the covenants
or agreements on the part of the Master Servicer contained in the
Certificates or in this Agreement which continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Master Servicer by the Trustee, or to the Master Servicer and the
Trustee by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC II Trust Fund; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iv) The Master Servicer shall consent to the appointment of
a trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its
property; or
(v) The Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable bankruptcy, insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) Any failure of the Master Servicer to make any Monthly
P&I Advance (other than a Nonrecoverable Advance) which continues
unremedied at the opening of business on the Distribution Date in
respect of which such Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied, either the Trustee, or the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of the REMIC
II Trust Fund, by notice in writing to the Company and the Master Servicer
(and to the Trustee if given by the Certificateholders, in which case such
notice shall set forth evidence reasonably satisfactory to the Trustee that
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such Event of Default has occurred and shall not have been remedied) may
terminate all of the rights (other than its right to reimbursement for
advances) and obligations of the Master Servicer, including its right to
the Master Servicing Fee, under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, if any. Such determination shall be final
and binding. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section 7.01; and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether
to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee for administration by it of all
cash amounts which shall at the time be credited by the Master Servicer to
the Certificate Account or thereafter be received with respect to the
Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default described
in clause (vi) of this Section 7.01(a) shall occur, the Trustee shall, by
notice in writing to the Master Servicer, which may be delivered by
telecopy, immediately suspend all of the rights and obligations of the
Master Servicer thereafter arising under this Agreement, but without
prejudice to any rights it may have as a Certificateholder or to
reimbursement of Monthly P&I Advances and other advances of its own funds,
and the Trustee shall act as provided in Section 7.02 to carry out the
duties of the Master Servicer, including the obligation to make any Monthly
P&I Advance the nonpayment of which was an Event of Default described in
clause (vi) of this Section 7.01(a). Any such action taken by the Trustee
must 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 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
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perform in any material respect any of the covenants or agreements on
the part of the Company contained in the Certificates or in this
Agreement which continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Trustee, or to
the Company and the Trustee by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II
Trust Fund; or
(ii) A decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Company and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iii) The Company shall consent to the appointment of a
trustee in bankruptcy, conservator or receiver or liquidator in any
bankruptcy, insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Company
or of or relating to all or substantially all of its property; or
(iv) The Company shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take
advantage of any applicable bankruptcy, insolvency or reorganization
statute, make an assignment for the benefit of creditors, or
voluntarily suspend payment of its obligations;
then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II Trust
Fund, by notice in writing to the Company and the Trustee, may direct the
Trustee in accordance with Section 10.03 to institute an action, suit or
proceeding in its own name as Trustee hereunder to enforce the Company's
obligations hereunder.
(c) In any circumstances in which this Agreement states that
Certificateholders owning Certificates evidencing a certain percentage
Percentage Interest in the REMIC II Trust Fund may take certain action,
such action shall be taken by the Trustee, but only if the requisite
percentage of Certificateholders required under this Agreement for taking
like action or giving like instruction to the Trustee under this Agreement
shall have so directed the Trustee in writing.
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
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all the rights and powers and be subject to all the responsibilities,
duties and liabilities relating thereto arising after the Master Servicer
receives such notice of termination placed on the Master Servicer by the
terms and provisions hereof and thereof, and shall have the same
limitations on liability herein granted to the Master Servicer; provided,
that the Trustee shall not under any circumstances be responsible for any
representations and warranties or any Purchase Obligation of the Company or
any liability incurred by the Master Servicer at or prior to the time the
Master Servicer was terminated as Master Servicer and the Trustee shall not
be obligated to make a Monthly P&I Advance if it is prohibited by law from
so doing. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans which the Master Servicer would have
been entitled to retain or to withdraw from the Certificate Account if the
Master Servicer had continued to act hereunder, except for those amounts
due to the Master Servicer as reimbursement for advances previously made or
amounts previously expended and are otherwise reimbursable hereunder.
Notwithstanding the above, the Trustee may, if it shall be unwilling to so
act, or shall if it is unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Master Servicer
hereunder. Pending any such appointment, the Trustee is obligated to act in
such capacity. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree;
provided, however, that no such compensation shall, together with the
compensation to the Trustee, be in excess of that permitted the Master
Servicer hereunder. The Trustee and such successor shall take such actions,
consistent with this Agreement, as shall be necessary to effectuate any
such succession.
Section 7.03. Notification to Certificateholders. Upon any such
termination or appointment of a successor to the Master Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register.
ARTICLE VIII
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.
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(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that the Trustee shall not be responsible for the
accuracy or content of any such certificate, statement, opinion, report, or
other order or instrument furnished by the Company or Master Servicer to
the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, 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
(ii) The Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence Percentage Interests aggregating not less
than 25% of the REMIC II Trust Fund relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or relating to the exercise of any trust or power conferred
upon the Trustee under this Agreement.
(d) Within ten days after the occurrence of any Event of Default
known to the Trustee, the Trustee shall transmit by mail to the Rating
Agencies notice of each Event of Default. Within 90 days after the
occurrence of any Event of Default known to the Trustee, the Trustee shall
transmit by mail to all Certificateholders (with a copy to the Rating
Agencies) notice of each Event of Default, unless such Event of Default
shall have been cured or waived; provided, however, the Trustee shall be
protected in withholding such notice if and so long as a Responsible
Officer of the Trustee in good faith determines that the withholding of
such notice is in the best interests of the Certificateholders; and
provided, further, that in the case of any Event of Default of the
character specified in Section 7.01(i) and Section 7.01(ii) no such notice
to Certificateholders or to the Rating Agencies shall be given until at
least 30 days after the occurrence thereof.
(e) The Trustee acknowledges that it is named as the "insured" under
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each of the Mortgage Pool Insurance Policy and the Special Hazard Insurance
Policy and acknowledges that the Master Servicer has agreed, pursuant to
Section 3.16 and Section 3.17 hereof, to perform the obligations of the
Trustee under the Mortgage Pool Insurance Policy and under the Special
Hazard Insurance Policy, respectively, in each case, on behalf of the
Trustee. Each of the Trustee and the Master Servicer hereby covenant not
to cancel either of the Mortgage Pool Insurance Policy or the Special
Hazard Insurance Policy until the Trust is terminated in accordance with
the provisions hereof.
Section 8.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any
action taken or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the
Holders of Certificates evidencing Percentage Interests aggregating
not less than 25% of the REMIC II Trust Fund; provided, however, that
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security, if any, afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to proceeding;
(v) The Trustee may execute the trust or any of the powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys; and
(vi) The Trustee shall not be deemed to have knowledge or notice
of any matter, including without limitation an Event of Default,
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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.
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 its request for
all reasonable expenses and disbursements incurred or made by the Trustee
in accordance with any of the provisions of this Agreement and indemnify
the Trustee from any loss, liability or expense incurred by it hereunder
(including the reasonable compensation and the expenses and disbursements
of its counsel and of all persons not regularly in its employ) except any
such expense or disbursement as may arise from its negligence or bad faith.
Such obligation shall survive the termination of this Agreement or
resignation or removal of the Trustee. The Company shall, at its expense,
prepare or cause to be prepared all federal and state income tax and
franchise tax and information returns relating to the REMIC I Trust Fund or
the REMIC II Trust Fund required to be prepared or filed by the Trustee and
shall indemnify the Trustee for any liability of the Trustee arising from
any error in such returns.
Section 8.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC,
(ii) a corporation or association organized and doing business under the
laws of the United States of America or of any state, authorized under such
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laws to exercise corporate trust powers, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of any
aforementioned supervising or examining authority, then for the purposes of
this Section 8.06, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee shall resign immediately in the manner and
with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Master Servicer. Upon receiving such notice
of resignation, the Master Servicer shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Master Servicer may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee
so removed, one copy to the successor.
The Holders of Certificates evidencing Percentage Interests
aggregating more than 50% of the REMIC II Trust Fund may at any time remove
the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys in-
fact duly authorized, one complete set of which instruments shall be
delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08. Any expenses associated with the
resignation of the Trustee shall be borne by the Trustee, and any expenses
associated with the removal of the Trustee shall be borne by the Master
Servicer.
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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 Trust Fund may at the time be located, the Master Servicer and the
Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Trustee to
act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust Fund or the
REMIC II Trust Fund and to vest in such Person or Persons, in such
capacity, such title to the Trust Fund or the REMIC II Trust Fund, or any
part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable; provided, that the
Trustee shall remain liable for all of its obligations and duties under
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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 Trust Fund or the REMIC
II Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustee(s) and co-
trustee(s), as effectively as if given to each of them. Every instrument
appointing any separate trustee(s) or co-trustee(s) shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and the trust shall vest in
and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or
more Authenticating Agents which shall be authorized to act on behalf of
the Trustee in authenticating Certificates. Wherever reference is made in
this Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
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include authentication on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Master Servicer and must be a corporation or banking association organized
and doing business under the laws of the United States of America or of any
state, having a principal office and place of business in New York, New
York, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent so long as it shall be eligible in accordance with
the provisions of the first paragraph of this Section 8.11 without the
execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Master Servicer. The
Trustee may, upon prior written approval of the Master Servicer, at any
time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Master
Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of the first paragraph of
this Section 8.11, the Trustee may appoint, upon prior written approval of
the Master Servicer, a successor Authenticating Agent, shall give written
notice of such appointment to the Master Servicer and shall mail notice of
such appointment to all Certificateholders. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent.
Any reasonable compensation paid to an Authenticating Agent shall be a
reimbursable expense pursuant to Section 8.05 if paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or more
Paying Agents which shall be authorized to act on behalf of the Trustee in
making withdrawals from the Certificate Account, and distributions to
Certificateholders as provided in Section 4.01, Section 4.04(a) and Section
9.01(b) to the extent directed to do so by the Master Servicer. Wherever
reference is made in this Agreement to the withdrawal from the Certificate
Account by the Trustee, such reference shall be deemed to include such a
withdrawal on behalf of the Trustee by a Paying Agent. Whenever reference
is made in this Agreement to a distribution by the Trustee or the
furnishing of a statement to Certificateholders by the Trustee, such
reference shall be deemed to include such a distribution or furnishing on
behalf of the Trustee by a Paying Agent. Each Paying Agent shall provide to
the Trustee such information concerning the Certificate Account as the
Trustee shall request from time to time. Each Paying Agent must be
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reasonably acceptable to the Master Servicer and must be a corporation or
banking association organized and doing business under the laws of the
United States of America or of any state, having a principal office and
place of business in New York, New York, having a combined capital and
surplus of at least $15,000,000, authorized under such laws to do a trust
business and subject to supervision or examination by federal or state
authorities.
Any corporation into which any Paying Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which any Paying Agent shall be a
party, or any corporation succeeding to the corporate agency business of
any Paying Agent, shall continue to be the Paying Agent provided that such
corporation after the consummation of such merger, conversion,
consolidation or succession meets the eligibility requirements of this
Section 8.12.
Any Paying Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Master Servicer; provided, that the
Paying Agent has returned to the Certificate Account or otherwise
accounted, to the reasonable satisfaction of the Master Servicer, for all
amounts it has withdrawn from the Certificate Account. The Trustee may,
upon prior written approval of the Master Servicer, at any time terminate
the agency of any Paying Agent by giving written notice of termination to
such Paying Agent and to the Master Servicer. Upon receiving a notice of
resignation or upon such a termination, or in case at any time any Paying
Agent shall cease to be eligible in accordance with the provisions of the
first paragraph of this Section 8.12, the Trustee may appoint, upon prior
written approval of the Master Servicer, a successor Paying Agent, shall
give written notice of such appointment to the Master Servicer and shall
mail notice of such appointment to all Certificateholders. Any successor
Paying Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Paying
Agent. Any reasonable compensation paid to any Paying Agent shall be a
reimbursable expense pursuant to Section 8.05 if paid by the Trustee.
ARTICLE IX
Termination
Section 9.01. Termination Upon Repurchase by the Company or
Liquidation of All Mortgage Loans.
(a) Except as otherwise set forth in this Article IX, including,
without limitation, the obligation of the Master Servicer to make payments
to Certificateholders as hereafter set forth, the respective obligations
and responsibilities of the Company, the Master Servicer and the Trustee
created hereby shall terminate upon (i) the 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
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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 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 repurchase by the Company to the extent that the Principal
Balance of such Mortgage Loan has not been previously reduced by such
Bankruptcy Loss, and (y) the appraised fair market value as of the
effective date of the termination of the trust created hereby of (A) all
property in the Trust Fund which secured a Mortgage Loan and which was
acquired by foreclosure or deed in lieu of foreclosure after the Cut-Off
Date, including related Insurance Proceeds, and (B) all other property in
the Trust Fund, any such appraisal to be conducted by an appraiser mutually
agreed upon by the Company and the Trustee, or (ii) the later of the final
payment or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund or the disposition of all
property acquired upon foreclosure in respect of any Mortgage Loan, and the
payment to Certificateholders of all amounts required to be paid to them
hereunder; provided, however, that in no event shall the trusts created
hereby continue beyond the expiration of 21 years from the death of the
survivor of the issue of Joseph P. Kennedy, the late ambassador of the
United States to the Court of St. James, living on the date hereof.
The Company may repurchase the outstanding Mortgage Loans and any
Mortgaged Properties acquired by the Trust Fund at the price stated in
clause (i) of the preceding paragraph provided that the aggregate Principal
Balance of the Mortgage Loans at the time of any such repurchase aggregates
less than five percent of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-Off Date. If such right is exercised, the Company shall
provide to the Trustee (and to the Master Servicer, if the Company is no
longer acting as Master Servicer) the written certification of an officer
of the Company (which certification shall include a statement to the effect
that all amounts required to be paid in order to 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 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
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"Termination Date"), (ii) the amount of such final payment (the
"Termination Payment") and (iii) that the Record Date otherwise applicable
to the Distribution Date upon which the Termination Date occurs is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Registrar therein specified.
Upon any such notice, the Certificate Account shall terminate subject to
the Master Servicer's obligation to hold all amounts payable to
Certificateholders in trust without interest pending such payment.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the Termination
Date, the Company shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and
receive the Termination Payment with respect thereto. If within one year
after the second notice all the Certificates shall not have been
surrendered for cancellation, the Company may take appropriate steps to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
Section 9.02. Additional Termination Requirements.
(a) In the event the Company exercises its purchase option as
provided in Section 9.01, the REMIC I Trust Fund and the REMIC II Trust
Fund shall be terminated in accordance with the following additional
requirements, unless the Company, at its own expense, obtains for the
Trustee an Opinion of Counsel to the effect that the failure of the REMIC I
Trust Fund and the REMIC II Trust Fund to comply with the requirements of
this Section 9.02 will not (i) result in the imposition of taxes on
"prohibited transactions" of the REMIC I Trust Fund and the REMIC II Trust
Fund as described in Section 860F of the Code, or (ii) cause the REMIC I
Trust Fund or the REMIC II Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding:
(i) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Trustee under Section 9.01, the
Company, in its capacity as agent of the Tax Matters Person shall
prepare the documentation required and adopt a plan of complete
liquidation on behalf of the REMIC I Trust Fund and the REMIC II Trust
Fund meeting the requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Company, on behalf
of the REMIC I Trust Fund and the REMIC II Trust Fund; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Master
Servicer as agent of the Trustee shall sell all of the assets of the
REMIC I Trust Fund and the REMIC II Trust Fund to the Company for cash
in the amount specified in Section 9.01.
(b) By its acceptance of any Residual Certificate, the Holder thereof
hereby agrees to authorize the Company to adopt such a plan of complete
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liquidation upon the written request of the Company and to take such other
action in connection therewith as may be reasonably requested by the
Company.
Section 9.03. Trusts Irrevocable. Except as expressly provided
herein, the trusts created hereby are irrevocable.
ARTICLE X
Miscellaneous Provisions
Section 10.01. Amendment.
(a) This Agreement may be amended from time to time by the Master
Servicer, the Company and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity; (ii) to correct or
supplement any provision herein which may be defective or inconsistent with
any other provisions herein; (iii) to comply with any requirements imposed
by the Code or any regulations thereunder; (iv) to correct the description
of any property at any time included in the Trust Fund or the REMIC II
Trust Fund, or to assure the conveyance to the Trustee of any property
included in the Trust Fund or the REMIC II Trust Fund; and (v) pursuant to
Section 5.01(c)(v). No such amendment (other than one entered into pursuant
to clause (iii) of the preceding sentence) shall adversely affect in any
material respect the interest of any Certificateholder. Prior to entering
into any amendment without the consent of Certificateholders pursuant to
this paragraph, the Trustee may require an Opinion of Counsel to the effect
that such amendment is permitted under this paragraph. The placement of an
"original issue discount" legend on, or any change required to correct any
such legend previously placed on, a Certificate shall not be deemed any
amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
Master Servicer, the Company and the Trustee with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not
less than 66% of the REMIC II Trust Fund for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the
provisions of, this Agreement or of modifying in any manner the rights of
the Certificateholders; provided, however, that no such amendment shall,
without the consent of the Holder of each Certificate affected thereby (i)
reduce in any manner the amount of, or delay the timing of, distributions
of principal or interest required to be made hereunder or reduce the
Certificateholder's Percentage Interest, the Certificate Interest Rate or
the Termination Payment with respect to any of the Certificates, (ii)
reduce the percentage of Percentage Interests specified in this Section
10.01 which are required to amend this Agreement, (iii) create or permit
the creation of any lien against any part of the Trust Fund or the REMIC II
Trust Fund, or (iv) modify any provision in any way which would permit an
earlier retirement of the Certificates.
Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
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Certificateholder. Any failure to provide such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of
any such amendment.
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Section 10.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or the
comparable jurisdictions in which any Mortgaged Property is situated, and
in any other appropriate public recording office or elsewhere, such
recordation to be effected by the Company and at its expense on direction
by the Trustee, but only upon direction accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
Section 10.03. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement, the Trust Fund or the REMIC II Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding-
up of the Trust Fund or the REMIC II Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote or in any manner
otherwise to control the operation and management of the Trust Fund or the
REMIC II Trust Fund or the obligations of the parties hereto (except as
provided in Section 5.09, Section 7.01, Section 8.01, Section 8.02, Section
8.07, Section 10.01 and this Section 10.03), nor shall anything herein set
forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability
to any third person by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing of
any provision of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC II Trust Fund shall have made
written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
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indemnity, shall have neglected or refused to institute any such action,
suit or proceeding. However, the Trustee is under no obligation to exercise
any of the extraordinary trusts or powers vested in it by this Agreement or
to make any investigation of matters arising hereunder or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. It is understood and intended, and expressly covenanted
by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue or by availing of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other of such Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.03, each and every
Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 10.04. Access to List of Certificateholders. The Certificate
Registrar shall furnish or cause to be furnished to the Trustee, within 30
days after receipt of a request by the Trustee in writing, a list, in such
form as the Trustee may reasonably require, of the names and addresses of
the Certificateholders as of the most recent Record Date for payment of
distributions to such Certificateholders.
If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application states
that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement or under the Certificates
and is accompanied by a copy of the communication which such applicants
propose to transmit, then the Trustee shall, within five Business Days
after the receipt of such list from the Certificate Registrar, afford such
applicants access during normal business hours to the most recent list of
Certificateholders held by the Trustee. If such a list is as of a date more
than 90 days prior to the date of receipt of such applicants' request, the
Trustee shall promptly request from the Certificate Registrar a current
list as provided above, and shall afford such applicants access to such
list promptly upon receipt.
Every Certificateholder, by receiving and holding the same, agrees
with the Master Servicer and the Trustee that neither the Master Servicer
nor the Trustee shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 10.05. Governing Law. This Agreement 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
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accordance with such laws.
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, 26
Broadway, 15th Floor, New York, New York 10004, Attention: Mike Stock, 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: George Massim, 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 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
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any of the following events, in the manner provided in Section 10.06:
(i) the occurrence of an Event of Default pursuant to Section
7.01, subject to the provisions of Section 8.01(d);
(ii) the appointment of a successor Master Servicer pursuant to
Section 7.02;
(b) The Master Servicer shall notify the Rating Agencies of the
occurrence of any of the following events, or in the case of clauses (iii),
(iv), (vii) and (viii) promptly upon receiving notice thereof, in the
manner provided in Section 10.06:
(i) any amendment of this Agreement pursuant to Section 10.01;
(ii) the appointment of a successor Trustee pursuant to Section
8.08;
(iii) the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions coverage
pursuant to Section 3.01 and Section 3.06 with respect to the Master
Servicer or any Servicer;
(iv) any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
(v) the repurchase of any Mortgage Loan pursuant to a Purchase
Obligation or the repurchase of the outstanding Mortgage Loans
pursuant to Section 9.01;
(vi) the occurrence of the final Distribution Date or the
termination of the trust pursuant to Section 9.01(a)(ii);
(vii) the failure of the Master Servicer to make a Monthly
P&I Advance following a determination on the Determination Date that
the Master Servicer would make such advance pursuant to Section 4.02;
and
(viii) the failure of the Master Servicer to make a
determination on the Determination Date regarding whether it would
make a Monthly P&I Advance when a shortfall exists between (x)
payments scheduled to be received in respect of the Mortgage Loans and
(y) the amounts actually deposited in the Certificate Account on
account of such payments, pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements pursuant to
Section 4.02, Section 4.05, Section 3.12, Section 3.13 or Section 3.15 or
any other statements or reports to the Rating Agencies in such time and
manner that such statements or determinations are required to be provided
to Certificateholders. With respect to the reports described in the second
paragraph of Section 4.05, the Master Servicer shall provide such reports
to the Rating Agencies in respect of each Distribution Date, without regard
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to whether any Certificateholder or the Trustee has requested such report
for such Distribution Date.
IN WITNESS WHEREOF, the Company and the Trustee have caused their
names to be signed hereto by their respective officers, thereunto duly
authorized, and their respective seals, duly attested, to be hereunto
affixed, all as of the day and year first above written.
PNC MORTGAGE SECURITIES CORP.
By: /s/ Daniel P. Hoffman
Its: Vice President
(SEAL)
STATE STREET BANK AND TRUST COMPANY, as TRUSTEE
By: /s/ David Duclos
Its: Assistant Vice President
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 30th day of October 1998 before me, a Notary Public in and for
said State, personally appeared Daniel P. Hoffman, 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.
<PAGE>
<PAGE> 164
COUNTY OF SUFFOLK )
On this 30th day of October 1998 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
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
<PAGE>
<PAGE> 165
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-1 Certificate Interest Rate: 6.750%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date: December 25, 2028
Class I-A-1 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
<PAGE>
<PAGE> 166
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-2 Certificate Interest Rate: 6.750%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date: December 25, 2028
Class I-A-2 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
<PAGE>
<PAGE> 167
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-3 Certificate Interest Rate: 6.750%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-3 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-4
<PAGE>
<PAGE> 168
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-4 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-4 Certificate Interest Rate: 6.750%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-4 Principal Balance
as of the Cut-Off Date: $[ ]
<PAGE>
<PAGE> 169
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-5 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-5 Certificate Interest Rate: 6.850%
Cut-Off Date: October 1, 1998
<PAGE>
<PAGE> 170
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-5 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
<PAGE>
<PAGE> 171
Series 1998-10 Portion of the Class I-A-6 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-6 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-6 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-7
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
<PAGE>
<PAGE> 172
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-7 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-7 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-7 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-8
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
<PAGE>
<PAGE> 173
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-8 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-8 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-8 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-9
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
<PAGE>
<PAGE> 174
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 (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-9 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-9 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-9 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
<PAGE>
<PAGE> 175
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-10
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Standard Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-10 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-10 Certificate Interest Rate: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-10 Principal Balance
<PAGE>
<PAGE> 176
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-11
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Standard Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-11 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
<PAGE>
<PAGE> 177
$__________________________________________
Class I-A-11 Certificate Interest Rate: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-11 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-12
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
<PAGE>
<PAGE> 178
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 1998-10 Portion of the Class I-A-12 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-12 Certificate Interest Rate: 10.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-12 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-13
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
<PAGE>
<PAGE> 179
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-13 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-13 Certificate Interest Rate: 6.650%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-13 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-14
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
<PAGE>
<PAGE> 180
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 (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-14 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-14 Certificate Interest Rate: 7.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-14 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
<PAGE>
<PAGE> 181
Class I-A-15
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular 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 (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-15 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-15 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-15 Principal Balance
as of the Cut-Off Date: $[ ]
<PAGE>
<PAGE> 182
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-16
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-16 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-16 Certificate Interest Rate: 6.500%
<PAGE>
<PAGE> 183
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-16 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-17
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
<PAGE>
<PAGE> 184
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-17 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-17 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-17 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-18
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
<PAGE>
<PAGE> 185
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-18 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-18 Certificate Interest Rate: Variable
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-18 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-19
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
<PAGE>
<PAGE> 186
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-19 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-19 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-19 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-20
Evidencing a Percentage Interest in a trust fund whose assets consist of
<PAGE>
<PAGE> 187
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-20 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-20 Certificate Interest Rate: 6.320%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-20 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
<PAGE>
<PAGE> 188
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-21
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-21 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-21 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
<PAGE>
<PAGE> 189
Last Scheduled Distribution Date:
Class I-A-21 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-22
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
<PAGE>
<PAGE> 190
Series 1998-10 Portion of the Class I-A-22 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-22 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-22 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-23
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
<PAGE>
<PAGE> 191
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 1998-10 Portion of the Class I-A-23 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-23 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-23 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-24
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
<PAGE>
<PAGE> 192
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-A-24 Notional
Amount as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class I-A-24 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-24 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-24 Notional Amount
as of the Cut-Off Date: $0.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
<PAGE>
<PAGE> 193
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 (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as described
in the Prospectus Supplement), this Certificate has been issued with
original issue discount ("OID") of no more than $ per $100,000
of initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Standard Prepayment Assumption or any
other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-X Notional Amount
as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class I-X Certificate Interest Rate:
6.500% applied to the Class I-X Notional
Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class I-X Principal Balance
as of the Cut-Off Date: $0.00
Class I-X Notional Amount
as of the Cut-Off Date: $[
]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
<PAGE>
<PAGE> 194
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
275% of the Standard Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Standard Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class I-P Principal Balance as
of the Cut-Off Date evidenced by this
Certificate:
Class I-P Certificate Interest Rate: 0.00%$_______________________________
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-P Principal Balance as of the Cut-Off Date:
Cede & Co.
<PAGE>
<PAGE> 195
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-1 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-1 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class I-B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-1 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
<PAGE>
<PAGE> 196
Class I-B-1 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-1 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-2 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-2 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class I-B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in
<PAGE>
<PAGE> 197
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-2 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class I-B-2 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-2 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-3 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-3 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
<PAGE>
<PAGE> 198
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class I-B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-3 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class I-B-3 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-3 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Date") of this Certificate is
October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
<PAGE>
<PAGE> 199
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-4 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-4 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION OR
THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class I-B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-4
Principal Balance as of the Cut-Off
Date Evidenced by this Certificate:
$
Class I-B-4 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-4 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
<PAGE>
<PAGE> 200
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 (the "Date") of this Certificate is
October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-5 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-5 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION OR
THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class I-B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-5
Principal Balance as of the Cut-Off
Date Evidenced by this Certificate:
$
Class I-B-5 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-5 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
<PAGE>
<PAGE> 201
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Date") of this Certificate is
October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 275% of the Standard Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has been
issued with original issue discount ("OID") of no more than $
per $100,000 of initial Certificate Principal Balance, the yield to
maturity is %, and the amount of OID attributable to the short period
is not more than $ per $100,000 of initial Certificate Principal
Balance, computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-6 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A
CLASS I-B-6 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE
OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION OR
THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class I-B-6 Certificates will be subordinate in right of payment to and
<PAGE>
<PAGE> 202
provide credit support to certain Classes of Certificates, as described in
the Pooling Agreement.
Series 1998-10 Portion of the Class I-B-6
Principal Balance as of the Cut-Off
Date Evidenced by this Certificate:
$
Class I-B-6 Certificate Interest Rate: 6.500%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-B-6 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
<PAGE>
<PAGE> 203
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 1998-10 Portion of the Class II-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$_____________________________________
Class II-A-1 Certificate Interest Rate: 7.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class II-A-1 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
<PAGE>
<PAGE> 204
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class II-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$_____________________________________
Class II-A-2 Certificate Interest Rate: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class II-A-2 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
<PAGE>
<PAGE> 205
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class II-X-1 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class II-X-1 Certificate Interest Rate:
7.000% applied to the Class II-X-1
Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class II-X-1 Principal Balance
as of the Cut-Off Date: $0.00
Class II-X-1 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
<PAGE>
<PAGE> 206
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 (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class II-X-2 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class II-X-2 Certificate Interest Rate:
7.000% applied to the Class II-X-2
Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class II-X-2 Principal Balance
as of the Cut-Off Date: $0.00
Class II-X-2 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
Exhibit A
CUSIP
<PAGE>
<PAGE> 207
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class II-X-3 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class II-X-3 Certificate Interest Rate:
7.000% applied to the Class II-X-3
Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class II-X-3 Principal Balance
<PAGE>
<PAGE> 208
as of the Cut-Off Date: $0.00
Class II-X-3 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class II-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate:
Class II-P Certificate Interest Rate: 0.00%$_______________________________
Cut-Off Date: October 1, 1998
<PAGE>
<PAGE> 209
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-P Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-M
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has been issued
with original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not more
than $ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-M 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 II-M 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 II-M Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as set forth in
the Pooling Agreement.
<PAGE>
<PAGE> 210
Series 1998-10 Portion of the Class II-M Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class II-M Remittance Rate: 6.4809%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-M Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
<PAGE>
<PAGE> 211
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 1998-10 Portion of the Class III-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class III-A-1 Certificate Interest Rate: 7.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class III-A-1 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
<PAGE>
<PAGE> 212
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class III-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$_____________________________________
Class III-A-2 Certificate Interest Rate: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class III-A-2 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
<PAGE>
<PAGE> 213
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class III-X Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class III-X Certificate Interest Rate:
7.000% applied to the Class III-X
Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class III-X Principal Balance
as of the Cut-Off Date: $0.00
Class III-X Notional Amount
as of the Cut-Off Date: $[
]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
<PAGE>
<PAGE> 214
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 (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class III-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate:
Class III-P Certificate Interest Rate: 0.00%$_______________________
________
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class III-P Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-M
<PAGE>
<PAGE> 215
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has been issued
with original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not more
than $ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS III-M 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 III-M 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 III-M Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as set forth in
the Pooling Agreement.
Series 1998-10 Portion of the Class III-M Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class III-M Remittance Rate: 6.4809%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class III-M Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
<PAGE>
<PAGE> 216
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class IV-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$__________________________________________
Class IV-A-1 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
<PAGE>
<PAGE> 217
Class IV-A-1 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. [Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as described in
the Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the Mortgage Loans
will prepay at a rate based on the Basic Prepayment Assumption or any other
rate.]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class IV-X Notional
<PAGE>
<PAGE> 218
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_______________________________________
__
Class IV-X Certificate Interest Rate:
6.250% applied to the Class IV-X
Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25,
1998
Last Scheduled Distribution Date:
Class IV-X Principal Balance
as of the Cut-Off Date: $0.00
Class IV-X Notional Amount
as of the Cut-Off Date: $[
]
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended. The issue date (the "Issue Date") of this Certificate is October
29, 1998. Interest is not payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $ per $100,000
of initial Certificate Principal Balance, computed under the exact method.
No representation is made that the Mortgage Loans will prepay at a rate
based on the Basic Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of The
<PAGE>
<PAGE> 219
Depository Trust Company, a New York corporation ("DTC"), to the Trustee or
its agent for registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Series 1998-10 Portion of the Class IV-P Principal Balance
as of the Cut-Off Date evidenced by this
Certificate:
Class IV-P Certificate Interest Rate: 0.00%$_______________________________
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class IV-P Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-AM
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has been issued
with original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not more
than $ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS IV-AM CERTIFICATE PRESENTED FOR REGISTRATION IN
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<PAGE> 220
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 IV-AM 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 IV-AM Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as set forth in
the Pooling Agreement.
Series 1998-10 Portion of the Class IV-AM Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class IV-AM Remittance Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class IV-AM Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-M
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other
things, a pool of conventional one- to four-family mortgage loans formed
and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as
amended (the "Code"). The issue date (the "Issue Date") of this Certificate
is October 29, 1998. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
pricing this Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has been issued
with original issue discount ("OID") of no more than $ per
$100,000 of initial Certificate Principal Balance, the yield to maturity is
%, and the amount of OID attributable to the short period is not more
<PAGE>
<PAGE> 221
than $ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS IV-M 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 IV-M 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 IV-M Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as set forth in
the Pooling Agreement.
Series 1998-10 Portion of the Class IV-M Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$_______________________________________
__
Class IV-M Remittance Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class IV-M Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
Exhibit A
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-2
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
<PAGE>
<PAGE> 222
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
COMPANY AND THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT
EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE
TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED
IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE
CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R-2 CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER
AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-2 CERTIFICATE
BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R-2 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-2
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER
SERVICER, THE REMIC I TRUST FUND, THE REMIC II TRUST FUND OR THE COMPANY.
Solely for U.S. federal income tax purposes, this 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 1998-10 Percentage Interest evidenced by
this Class R-2 Certificate in the
distributions to be made with
respect to the Class R-2
Certificates: %
Class R-2 Certificate Interest Rate:
6.5000%. Additionally the Class R-2
Certificates are entitled to Excess
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<PAGE> 223
Liquidation Proceeds and the Residual
Distribution Amount as defined in the
Pooling Agreement.
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
__________________
Registered Owner
Certificate No. _________
Exhibit B
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-1
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
COMPANY AND THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT
EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF,
ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE
TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED
IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE
CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R-1 CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER
AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-1 CERTIFICATE
BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R-1 CERTIFICATE PRESENTED FOR REGISTRATION IN THE
NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
<PAGE>
<PAGE> 224
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-1
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER
SERVICER, THE REMIC I TRUST FUND, THE REMIC II TRUST FUND OR THE COMPANY.
Solely for U.S. federal income tax purposes, this Certificate represents a
"residual interest" in a "real estate mortgage investment conduit," as
those terms are defined in Sections 860G and 860D, respectively, of the
Internal Revenue Code of 1986, as amended.
Series 1998-10 Percentage Interest evidenced by
this Class R-1 Certificate in the
distributions to be made with
respect to the Class R-1
Certificates: %
Class R-1 Certificate Interest Rate: 6.500%.
Additionally the Class R-1 Certificates are
entitled to Excess Liquidation Proceeds and the
Residual Distribution Amount as defined in the
Pooling Agreement.
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class R-1 Principal Balance as of the Cut-Off Date: $50.00
__________________
Registered Owner
Certificate No. _________
This Certificate does not represent an obligation of or interest in
PNC Mortgage Securities Corp. or any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed by any agency or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in a trust fund (the "REMIC I Trust Fund") whose
assets consist of, among other things, a pool (the "Mortgage Pool") of
conventional one- to four-family mortgage loans (the "Mortgage Loans"),
formed and administered by PNC Mortgage Securities Corp. (the "Company"),
which term includes any successor entity under the Pooling Agreement
referred to below. The Mortgage Pool was created pursuant to a Pooling and
Servicing Agreement, dated as of the Cut-Off Date stated above (the
"Pooling Agreement"), between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Pooling Agreement. Nothing herein shall be deemed inconsistent with such
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<PAGE> 225
meanings, and in the event of any conflict between the Pooling Agreement
and the terms of this Certificate, the Pooling Agreement shall control.
This Certificate is issued under and is subject to the terms, provisions
and conditions of the Pooling Agreement, to which Pooling Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and
by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name
this Certificate is registered at the close of business on the last day (or
if such last day is not a Business Day, the Business Day immediately
preceding such last day) of the month immediately preceding the month of
such distribution (the "Record Date"), to the extent of such
Certificateholder's Percentage Interest represented by this Certificate in
the portion of the REMIC I Available Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.01 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been 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)
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<PAGE> 226
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC I Trust Fund.
The Certificates do not represent an obligation of, or an interest in,
the Company or any of its affiliates and are not insured or guaranteed by
any governmental agency. The Certificates are limited in right of payment
to certain collections and recoveries respecting the Mortgage Loans, all as
more specifically set forth herein and in the Pooling Agreement. In the
event funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer from the related recoveries on such
Mortgage Loan or from other cash deposited in the Certificate Account to
the extent that such advance is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions
to Certificateholders, such purposes including reimbursement to the Master
Servicer of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under
the Pooling Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of the Certificates evidencing
Percentage Interests aggregating not less than 66% of the REMIC II Trust
Fund. For the purposes of such provision and except as provided below,
voting rights relating to 100% of the Aggregate Certificate Principal
Balance will be allocated pro rata (by Certificate Principal Balance) among
such Certificates. 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
<PAGE>
<PAGE> 227
the office maintained by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or
other written instrument of transfer in form satisfactory to the Trustee or
any Authenticating Agent duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of Authorized Denominations evidencing the same Percentage
Interest set forth hereinabove will be issued to the designated transferee
or transferees.
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws. In the event that a transfer is to be
made without registration or qualification under applicable laws, (i) in
the event such transfer is made pursuant to Rule 144A under the Securities
Act, the Company and the Trustee shall require the transferee to execute an
investment letter in substantially the form attached as Exhibit L to the
Pooling Agreement, which investment letter shall not be an expense of the
Company, the Master Servicer or the Trustee and (ii) in the event that such
a transfer is not made pursuant to Rule 144A under the Securities Act, the
Company may require an Opinion of Counsel satisfactory to the Company that
such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Company, the Master
Servicer or the Trustee. Neither the Company nor the Trustee will register
the Certificate under the Securities Act, qualify the Certificate under any
state securities law or provide registration rights to any purchaser. Any
Holder desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Company and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
Authorized Denominations evidencing the same aggregate interest in the
portion of the REMIC I Available Distribution Amount distributable on this
Class of Certificate, as requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent
of the Company, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the trust funds
created thereby shall terminate upon (i) the later of the maturity or other
<PAGE>
<PAGE> 228
liquidation (including repurchase by the Company) of the last Mortgage Loan
remaining in the REMIC I Trust Fund or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan, and (ii) the payment to Certificateholders of all amounts held by the
Trustee and required to be paid to them pursuant to the Pooling Agreement.
In the event that the Company repurchases any Mortgage Loan pursuant to the
Pooling Agreement, such Pooling Agreement generally requires that the
Trustee distribute to the Certificateholders in the aggregate an amount
equal to 100% of the unpaid Principal Balance of such Mortgage Loan, plus
accrued interest at the applicable Pass-Through Rate to the next scheduled
Due Date for the Mortgage Loan. The Pooling Agreement permits, but does not
require, the Company to repurchase from the REMIC I Trust Fund all Mortgage
Loans at the time subject thereto and all property acquired in respect of
any Mortgage Loan upon payment to the Certificateholders of the amounts
specified in the Pooling Agreement. The exercise of such right will effect
early retirement of the Certificates, the Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the Mortgage
Loans at the time of repurchase being less than five percent (5%) of the
aggregate unpaid Principal Balance of the Mortgage Loans as of the Cut-Off
Date.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
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.
<PAGE>
<PAGE> 229
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 Trsut 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
Corporate Trust Department
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02102
Telephone: (617) 664-5436
Facsimile: (617) 664-5368
Exhibit E
SELLING AND SERVICING
CONTRACT
This Selling and Servicing Contract (this "Agreement") is made and entered
into by PNC Mortgage Securities Corp. and its successors and assigns ("PNC
Mortgage") and the entity identified below and its successors and assigns
(the "Company").
WITNESSETH:
WHEREAS, this Company wishes to sell first lien residential mortgage
loans to, and service first lien residential mortgage loans on behalf of,
PNC Mortgage; and
<PAGE>
<PAGE> 230
WHEREAS, the Company has submitted a Seller Application to PNC
Mortgage and has been approved by PNC Mortgage for participation in the PNC
Mortgage Purchase Programs; and
WHEREAS, the Company has received and reviewed the PNC Mortgage
Purchase Programs Seller Guide (the "Seller Guide"), as well as the PNC
Mortgage Servicing Guide (the "Servicing Guide" and, together with the
Seller Guide, the "Guides"), and understands each and every provision
thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, PNC Mortgage and the Company hereby agree as
follows:
1. Guides. The Guides, which set forth the terms and conditions
under which PNC Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of PNC
Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by PNC Mortgage, are incorporated
into this Agreement in full by reference and made a part hereof as fully as
if set forth at length herein. All capitalized terms used and not defined
herein have the meanings ascribed to them in the Guides.
2. Company's Duties. The Company shall diligently perform all
duties incident to the origination, sale and servicing of the mortgage
loans subject to this Agreement. In the performance of its servicing
duties, the Company shall exercise the same degree of care it exercises
when servicing mortgage loans for its own account, but in no event shall
the Company exercise less care than a reasonable prudent servicer would
exercise under similar circumstances. In addition, the Company shall
comply with all of the provisions of the Guides and with all other
requirements and instructions of PNC Mortgage. The Company shall perform
such duties at its sole expense, except as otherwise expressly provided in
the Guides.
3. Representations, Warranties and Covenants of the Company;
Remedies of PNC Mortgage. With respect to each mortgage loan sold by the
Company to PNC Mortgage pursuant to the terms of this Agreement, the
Company shall make all of the representations, warranties and covenants set
forth in the Guide and, in the event of the breach of any of such
representations, warranties and covenants, PNC Mortgage shall have all of
the remedies available at law or in equity, as well as all of the remedies
set forth in the Guide, including, but not limited to, repurchase and
indemnification. The representations and warranties made by the Company
with respect to any mortgage loan subject to this Agreement, as well as the
remedies available to PNC Mortgage upon the breach thereof, shall survive:
(a) any investigation regarding the 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.
<PAGE>
<PAGE> 231
4. Compensation. The Company shall be compensated for its services
hereunder as specified in the Guides.
5. No Assignment. This Agreement may not be assigned by the Company
without the prior written consent of PNC Mortgage. The Company hereby
consents to the assignment by PNC Mortgage of all or any part of its rights
and obligations under this Agreement to any affiliate designated by PNC
Mortgage. Any other transfer by PNC Mortgage will be allowed and be
effective upon written notice by PNC Mortgage to the Company.
6. Prior Agreements. This Agreement supersedes any prior agreements
and understandings between PNC Mortgage and the Company governing the
subject matter hereof; provided, however, the Company shall not be released
from any responsibility or liability that may have arisen under such
agreements and understanding.
7. Effective Date of Agreement. This Agreement is not effective
until it is executed and accepted by PNC Mortgage at its home office in
Illinois.
8. Notices. All notices, requests, demands or other communications
that are to be given under this Agreement shall be in writing, addressed to
the appropriate parties, and shall be sent by certified mail, return
receipt requested, postage prepaid, if to the Company, at the address below
and, if to PNC Mortgage, to the appropriate address or facsimile number
specified in the Guides. Any such notice, request, demand or other
communication shall be deemed effective upon receipt.
9. Independent Contractor. At no time shall the Company represent
that it is acting as an agent, partner or joint venturer of PNC Mortgage.
The Company shall at all times act as an independent contracting party.
10. Amendment. This Agreement may not be amended or modified orally,
and no provision of this Agreement may be waived or amended, except in
writing signed by the party against whom enforcement is sought. Such a
written waiver or amendment must expressly reference this Agreement.
However, by their terms the Guides may be amended or supplemented by PNC
Mortgage from time to time. Any such amendment(s) to the Guides shall be
in writing and be binding upon the parties hereto on and after the
effective date specified therein.
11. Miscellaneous. This Agreement, including all documents
incorporated by reference herein, constitutes the entire understanding
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
<PAGE>
<PAGE> 232
provision in any other jurisdiction, and to this end, the provisions hereof
are severable. This Agreement shall be governed by, and construed and
enforced in accordance with, applicable federal laws and laws of the State
of Illinois, without reference to conflict of laws principles. This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall constitute the same
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by proper
officials duly authorized on the dates hereinafter set forth. This
Agreement shall take effect as of the date of its execution in original or
facsimile signature by a duly authorized officer of PNC Mortgage.
__________________________________ ____________________________
________ _______
Name of the Company Company I.D. Number
__________________________________ ____________________________
________ _______
Type of organization Organized under laws of
________________________________________________________________
________________
Principal place of business: street address, city, state, zip
code
________________________________________________________________
________________
Typed name and title of the Company's authorized officer
____________________________________________ __________________
___________ _____
Signature of the Company's authorized Date
officer
Agreed to and accepted by PNC Mortgage Securities Corp.
________________________________________________________________
________________
Typed name and title of authorized representative
____________________________________________ __________________
___________ _____
Signature of authorized representative Date
<PAGE>
<PAGE> 233
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
GROUP I JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02102
Attn: Structured Finance
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates Series 1998-10, Class [ ] (the "Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act") and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, and (b) we have not offered or sold any
certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of
Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By:
Authorized Officer
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
GROUP I JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02102
<PAGE>
<PAGE> 234
Attn: Structured Finance
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 1998-10 (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 October 1, 1998 (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 1998-
10.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and
warrants to PNC and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the Purchaser is
organized, is authorized to invest in the Purchased Certificates, and to
enter into this Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for
its own account as principal and not with a view to the distribution
thereof, in whole or in part;
(c) The Purchaser is an "accredited investor" as such term is
defined in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section
501 of Regulation D under the Securities Act of 1933, as amended (the
"Act"), has knowledge of financial and business matters and is capable of
evaluating the merits and risks of an investment in the Purchased
Certificates; the Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment
decision; and the Purchaser is able to bear the economic risk of an
investment in the Purchased Certificates and can afford a complete loss of
such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from PNC
concerning the trust funds created pursuant to the Pooling Agreement (the
"Trust Funds"), the purchase by the Purchaser of the Purchased Certificates
and all matters relating thereto that PNC possesses or can acquire without
<PAGE>
<PAGE> 235
unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will continue
to comply, with the guidelines established by Thrift Bulletin 12 issued
December 13, 1988, by the Office of Regulatory Activities of the Federal
Home Loan Bank System; and
(g) The Purchaser will provide the Trustee and the Master
Servicer with affidavits substantially in the form of Exhibit A attached
hereto.
Section 3.Transfer of Purchased Certificates.
(a) The Purchaser understands that the Purchased Certificates
have not been registered under the Act, or any state securities laws and
that no transfer may be made unless the Purchased Certificates are
registered under the Act and under applicable state law or unless an
exemption from registration is available. The Purchaser further understands
that neither PNC nor the Trust Funds are under any obligation to register
the Purchased Certificates or make an exemption available. In the event
that such a transfer is to be made within two years from the Closing Date
without registration under the Act or applicable state securities laws, (i)
the Trustee shall require, in order to assure compliance with such laws,
that the Certificateholder's prospective transferee each certify to PNC and
the Trustee as to the factual basis for the registration or qualification
exemption relied upon, and (ii) the Trustee or PNC may require an Opinion
of Counsel that such transfer may be made pursuant to an exemption from the
Act and state securities laws, which Opinion of Counsel shall not be an
expense of the Trustee or PNC. Any such Certificateholder desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee
and PNC against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
(b) No transfer of a Purchased Certificate shall be made unless
the transferee provides PNC and the Trustee with (i) a Transferee's
Agreement, substantially in the form of this Agreement, and (ii) either (a)
an affidavit substantially in the form of Exhibit A hereto that the
proposed transferee (x) is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended, or
comparable provisions of any subsequent enactments (a "Plan"), a trustee of
any Plan, or any other Person who is using the "plan assets" of any Plan to
effect such acquisition or (y) is an insurance company, the source of funds
to be used by it to purchase the Purchased Certificates is an "insurance
company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase is
being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60, or (b) a Benefit Plan
Opinion (as defined in Exhibit A hereto).
(c) The Purchaser acknowledges that its Purchased Certificates
bear a legend setting forth the applicable restrictions on transfer.
<PAGE>
<PAGE> 236
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 1998-10
(THE "TRUST") CLASS [ ] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, _____________________, declare that, to
the best of my knowledge and belief, the following representations are
true, correct and complete; and
1. That I am the _______________ of __________________ (the
"Purchaser"), whose taxpayer identification number is ___________, and on
behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser (i) is not an employee benefit plan or
other plan or arrangement subject to the prohibited transaction provisions
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), or comparable provisions of any subsequent enactments (a
"Plan"), a trustee of any Plan, or any other Person who is using the "plan
assets" of any Plan to effect such acquisition, (ii) has provided a
"Benefit Plan Opinion" satisfactory to PNC Mortgage Securities Corp. (the
"Company") and the Trustee of the Trust Funds or (iii) is an insurance
company, the source of funds to be used by it to purchase the Purchased
Certificates is an "insurance company general account" (within the meaning
of Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-
60), and the purchase is being made in reliance upon the availability of
the exemptive relief afforded under Sections I and III of PTCE 95-60. 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
<PAGE>
<PAGE> 237
4975 of the Code) in addition to those undertaken in this Agreement, which
Benefit Plan Opinion shall not be an expense of the Trustee, the Master
Servicer or the Company.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to
be duly executed on its behalf, by its duly authorized officer this _____
day of __________________, 199__.
[Purchaser]
By:
Its:
Personally appeared before me ______________________, known or
proved to me to be the same person who executed the foregoing instrument
and to be a ________________ of the Purchaser, and acknowledged to me that
(s)he executed the same as his/her free act and deed and as the free act
and deed of the Purchaser.
SUBSCRIBED and SWORN to before me this day of ____________, 19__.
Notary Public
Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE CERTIFICATES (OTHER THAN THE CLASS R-1 CERTIFICATES)
This Certificate does not represent an obligation of or interest in
PNC Mortgage Securities Corp. or any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed by any agency or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner of certain interests in a trust fund (the "REMIC II Trust Fund")
whose assets consist of 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
<PAGE>
<PAGE> 238
the terms, provisions and conditions of the Pooling Agreement, to which
Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name
this Certificate is registered at the close of business on the last day (or
if such last day is not a Business Day, the Business Day immediately
preceding such last day) of the month immediately preceding the month of
such distribution (the "Record Date"), to the extent of such
Certificateholder's Percentage Interest represented by this Certificate in
the portion of the REMIC II Available Distribution Amount for such
Distribution Date then distributable on the Certificates of this Class, as
specified in Section 4.04 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate
to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall
not be entitled to any benefit under the Pooling Agreement or be valid for
any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
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.
<PAGE>
<PAGE> 239
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC II Trust Fund.
The Certificates do not represent an obligation of, or an interest in,
the Company or any of its affiliates and are not insured or guaranteed by
any governmental agency. The Certificates are limited in right of payment
to certain collections and recoveries respecting the Mortgage Loans, all as
more specifically set forth herein and in the Pooling Agreement. In the
event funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer from the related recoveries on such
Mortgage Loan or from other cash deposited in the Certificate Account to
the extent that such advance is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions
to Certificateholders, such purposes including reimbursement to the Master
Servicer of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under
the Pooling Agreement at any time by the Company, the Master Servicer and
the Trustee with the consent of the Holders of the Certificates evidencing
Percentage Interests aggregating not less than 66% of the REMIC II Trust
Fund. For the purposes of such provision and except as provided below,
voting rights relating to 100% of the Aggregate Certificate Principal
Balance will be allocated pro rata (by Certificate Principal Balance) among
such Certificates. 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
<PAGE>
<PAGE> 240
for registration of transfer at the offices of the Certificate Registrar or
the office maintained by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or
other written instrument of transfer in form satisfactory to the Trustee or
any Authenticating Agent duly executed by, the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of Authorized Denominations evidencing the same Percentage
Interest set forth hereinabove will be issued to the designated transferee
or transferees.
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws. In the event that a transfer is to be
made without registration or qualification under applicable laws, (i) in
the event such transfer is made pursuant to Rule 144A under the Securities
Act, the Company and the Trustee shall require the transferee to execute an
investment letter in substantially the form attached as Exhibit L to the
Pooling Agreement, which investment letter shall not be an expense of the
Company, the Master Servicer or the Trustee and (ii) in the event that such
a transfer is not made pursuant to Rule 144A under the Securities Act, the
Company may require an Opinion of Counsel satisfactory to the Company that
such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Company, the Master
Servicer or the Trustee. Neither the Company nor the Trustee will register
the Certificate under the Securities Act, qualify the Certificate under any
state securities law or provide registration rights to any purchaser. Any
Holder desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee, the Company and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
Authorized Denominations evidencing the same aggregate interest in the
portion of the REMIC II Available Distribution Amount distributable on this
Class of Certificate, as requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent
of the Company, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Company, the Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the trust funds
<PAGE>
<PAGE> 241
created thereby shall terminate upon (i) the later of the maturity or other
liquidation (including repurchase by the Company) of the last Mortgage Loan
remaining in the REMIC I Trust Fund or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage
Loan, and (ii) the payment to Certificateholders of all amounts held by the
Trustee and required to be paid to them pursuant to the Pooling Agreement.
In the event that the Company repurchases any Mortgage Loan pursuant to the
Pooling Agreement, such Pooling Agreement generally requires that the
Trustee distribute to the Certificateholders in the aggregate an amount
equal to 100% of the unpaid Principal Balance of such Mortgage Loan, plus
accrued interest at the applicable Pass-Through Rate to the next scheduled
Due Date for the Mortgage Loan. The Pooling Agreement permits, but does not
require, the Company to repurchase from the REMIC I Trust Fund all Mortgage
Loans at the time subject thereto and all property acquired in respect of
any Mortgage Loan upon payment to the Certificateholders of the amounts
specified in the Pooling Agreement. The exercise of such right will effect
early retirement of the Certificates, the Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the Mortgage
Loans at the time of repurchase being less than five percent (5%) of the
aggregate unpaid Principal Balance of the Mortgage Loans as of the Cut-Off
Date.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
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
<PAGE>
<PAGE> 242
instrumentality of the United States.
Exhibit I
TRANSFEROR CERTIFICATE
[Date]
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02102
Attn: Structured Finance
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1998-10, Class [R-1] [R-2]
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale from
(the "Seller") to (the "Purchaser") of
$____________________ initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 1998-10, Class [R-1][R-2] (the
"Certificate"), pursuant to Section 5.01 of the Pooling and Servicing
Agreement (the "Pooling Agreement"), dated as of October 1, 1998 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.
<PAGE>
<PAGE> 243
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i) understands
that as holder of a noneconomic residual interest it may incur tax
liabilities in excess of any cash flows generated by the interest, and (ii)
intends to pay taxes associated with its holding of the Certificates as
they become due.
Very truly yours,
[Seller]
By:
Name:
Title:
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class [R-1][R-2] Certificate (the "Owner")), a
[savings institution] [corporation] duly organized and existing under the
laws of [the State of ] [the United States], on behalf of
which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code")
and will endeavor to remain other than a disqualified organization for so
long as it retains its ownership interest in the Class [R-1][R-2]
Certificates, and (ii) is acquiring the Class [R-1][R-2] Certificates for
its own account or for the account of another Owner from which it has
received an affidavit and agreement in substantially the same form as this
affidavit and agreement. (For this purpose, a disqualified organization"
means the United States, any state or political subdivision thereof, or any
agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and,
except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any such governmental entity, or any
foreign government or international organization, or any agency or
instrumentality of such foreign government or organization, any rural
electric or telephone cooperative, or any organization (other than certain
<PAGE>
<PAGE> 244
farmers' cooperatives) that is generally exempt from federal income tax
unless such organization is subject to the tax on unrelated business
taxable income).
3. That the Owner is aware (i) of the tax that would be imposed
on transfers of the Class [R-1][R-2] Certificates after March 31, 1988;
(ii) that such tax would be on the transferor, or, if such transfer is
through an agent (which person includes a broker, nominee or middle-man)
for a disqualified organization, on the agent; (iii) that the person other-
wise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such person an affidavit that the transferee is not
a disqualified organization and, at the time of transfer, such person does
not have actual knowledge that the affidavit is false; and (iv) that the
Class [R-1][R-2] Certificates may be a "noneconomic residual interest"
within the meaning of Treasury regulations promulgated pursuant to the Code
and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual
interest, if a significant purpose of the transfer was to enable the
transferor to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-
through entity" holding the Class [R-1][R-2] Certificates if at any time
during the taxable year of the pass-through entity a disqualified
organization is the record holder of an interest in such entity. (For this
purpose, a "pass through entity" includes a regulated investment company, a
real estate investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register
the Transfer of the Class [R-1][R-2] Certificates unless the transferee, or
the transferees' agent, delivers to it an affidavit and agreement, among
other things, in substantially the same form as this affidavit and
agreement. The Owner expressly agrees that it will not consummate any such
transfer if it knows or believes that any of the representations contained
in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on
the face of the Class [R-1][R-2] Certificates and the provisions of Section
5.01 of the Pooling Agreement under which the Class [R-1][R-2] Certificates
were issued (in particular, clauses (iii)(A) and (iii)(B) of Section
5.01(c) which authorize the Trustee to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the Trustee in the event
the Owner holds such Certificates in violation of Section 5.01). The Owner
expressly agrees to be bound by and to comply with such restrictions and
provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class [R-1][R-2]
Certificates will only be owned, directly or indirectly, by an Owner that
is not a disqualified organization.
<PAGE>
<PAGE> 245
8. The Owner's Taxpayer Identification Number is
.
9. That no purpose of the Owner relating to the purchase of the
Class [R-1][R-2] Certificates by the Owner is or will be to enable the
transferor to impede the assessment or collection of tax.
10. That the Owner has no present knowledge or expectation that
it will be unable to pay any United States taxes owed by it so long as any
of the Certificates remain outstanding.
11. That the Owner has no present knowledge or expectation that
it will become insolvent or subject to a bankruptcy proceeding for so long
as any of the Certificates remain outstanding.
12. That no purpose of the Owner relating to any sale of the
Class [R-1][R-2] Certificates by the Owner will be to impede the assessment
or collection of tax.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under
the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within
the United States.
14. The Owner hereby agrees to cooperate with the Company and to
take any action required of it by the Code or Treasury regulations
thereunder (whether now or hereafter promulgated) in order to create or
maintain the REMIC status of the REMIC I Trust Fund and the REMIC II Trust
Fund (the "Trust Funds").
15. The Owner hereby agrees that it will not take any action
that could endanger the REMIC status of the Trust Funds or result in the
imposition of tax on the Trust Funds unless counsel for, or acceptable to,
the Company has provided an opinion that such action will not result in the
loss of such REMIC status or the imposition of such tax, as applicable.
16. The Owner as transferee of the Class [R-1][R-2] Certificates
has represented to their transferor that, if the Class [R-1][R-2]
Certificates constitute a noneconomic residual interest, the Owner (i)
understands that as holder of a noneconomic residual interest it may incur
tax liabilities in excess of any cash flows generated by the interest, and
(ii) intends to pay taxes associated with its holding of the Class [R-1][R-
2] Certificates as they become due.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of
Directors, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this day of
, 19 __ .
<PAGE>
<PAGE> 246
[Name of Owner]
By:
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument
and to be the [Title of Officer] of the Owner, and Acknowledged to me that
he executed the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ___ day of __________________,
19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the day
of , 19
Exhibit K
[RESERVED]
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
<PAGE>
<PAGE> 247
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 October 1, 1998 between
PNC Mortgage Securities Corp., as Depositor and Master Servicer and State
Street Bank and Trust Company, as Trustee) pursuant to Section 5.01(f) of
the Agreement, as follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has received and reviewed the Private Placement
Memorandum dated as of October __, 1998 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
<PAGE>
<PAGE> 248
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 12 issued
December 13, 1988, by the Office of Regulatory Activities of the
Federal Home Loan Bank System.
[Required only in the case of a transfer of a Class IV-AM, Class M or
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
<PAGE>
<PAGE> 249
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:
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
<PAGE>
<PAGE> 250
"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 $______________________ (Buyer must own
and/or invest on a discretionary basis at least $100,000,000 in securities
unless Buyer is a dealer, and, in that case, Buyer must own and/or invest
on a discretionary basis at least $10,000,000 in securities) in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over any
such institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") and is subject to the fiduciary
responsibility provisions of ERISA.
<PAGE>
<PAGE> 251
___ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer,
(ii) securities that are part of an unsold allotment to or subscription by
the Buyer, if the Buyer is a dealer, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated
with the Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting
company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule
144A.
Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own
account?
<PAGE>
<PAGE> 252
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate
steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set
forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is
a "qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933 ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of
the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is
an investment company registered under the Investment Company Act of 1940,
<PAGE>
<PAGE> 253
and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than
the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment
Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to
the Buyer will be in reliance on Rule 144A. In addition, the Buyer will
only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification by the undersigned as
of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
<PAGE>
<PAGE> 254
Date:
IF AN ADVISER:
Print Name of Buyer
By:
Name:
Title:
Date:
(SEAL)
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of October 1, 1998
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 1998-10
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)(vi) and (Y)(x) of the definition of "Mortgage
File," known by the Trustee to be required) pursuant to the third paragraph
of 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
<PAGE>
<PAGE> 255
genuineness of any signature thereon. The Trustee makes no representations
as to: (i) the validity, legality, enforceability or genuineness of any of
the documents contained in each Mortgage File or any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
as Trustee
By:
Name:
Title:
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02102
Attn: Structured Finance
PNC Mortgage Securities Corp.
75 North Fairway Drive
Vernon Hills, IL 60061
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-10
(THE "TRUST") CLASS [I-B-_] [IV-AM] [__-M] 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:
<PAGE>
<PAGE> 256
(a) not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Plan") or any other
person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting directly or indirectly on behalf of, or purchasing any of
the Purchased Certificates with "plan assets" of, any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R. Section
2510.3-101; or
(b) an insurance company, the source of funds to be used by it to
purchase the Purchased Certificates is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III of
PTCE 95-60.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to
be duly executed on its behalf, by its duly authorized officer this _____
day of __________________, 199__.
[Purchaser]
By:
Its:
Personally appeared before me ______________________, known or proved to me
to be the same person who executed the foregoing instrument and to be a
________________ of the Purchaser, and acknowledged to me that (s)he
executed the same as his/her free act and deed and as the free act and deed
of the Purchaser.
SUBSCRIBED and SWORN to before me this day of ____________, 19__.
Notary Public
Exhibit O
FORM OF MORTGAGE POOL INSURANCE POLICY
Copies of the Form of Mortgage Pool Insurance Policy (which have been
intentionally omitted from this filing) may be obtained from PNC Mortgage
Securities Corp. or State Street Bank and Trsut 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
<PAGE>
<PAGE> 257
Telephone: (847) 549-3683
Facsimile: (847) 549-3681
in the case of State Street Bank and Trust Company
David Duclos
Corporate Trust Department
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02102
Telephone: (617) 664-5436
Facsimile: (617) 664-5368
Exhibit P
FORM OF SPECIAL HAZARD INSURANCE POLICY
Copies of the Form of Special Hazard Insurance Policy (which have been
intentionally omitted from this filing) may be obtained from PNC Mortgage
Securities Corp. or State Street Bank and Trsut 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
Corporate Trust Department
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02102
Telephone: (617) 664-5436
Facsimile: (617) 664-5368
