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 27, 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
$743,559,038
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-11
Delaware 333-50053 T/B/D
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
Incorporation) Number)
75 NORTH FAIRWAY DRIVE
VERNON HILLS, ILLINOIS 60061
(Address of principal executive offices)
Registrant's telephone number, including area code:
(847) 549-6500
Item 1. Changes in Control of Registrant. Not applicable.
--------------------------------
Item 2. Acquisition or Disposition of Assets. Not applicable.
------------------------------------
Item 3. Bankruptcy or Receivership. Not applicable.
--------------------------
Item 4. Changes in Registrant's Certifying Accountant. Not applicable.
---------------------------------------------
Item 5. Other Events. Not applicable.
------------
Item 6. Resignation of Registrant's Directors. Not applicable.
-------------------------------------
Item 7. Financial Statements and Exhibits.
---------------------------------
The following exhibit is furnished herewith:
7.1 Pooling and Servicing Agreement between PNC
Mortgage Securities Corp., Depositor and Master Servicer,
and State Street Bank and Trust Company, Trustee,
dated as of October 1, 1998.
Item 8. Change in Fiscal Year. Not applicable.
---------------------
Item 9. Sales of Equity Securities Pursuant to Regulation S. Not
---------------------------------------------------
applicable.
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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 6, 1998
PNC MORTGAGE SECURITIES
CORP.
(Registrant)
By: \s\Thomas G. Lehmann
---------------------
Thomas G. Lehmann
Vice President
(Authorized Officer)
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EXHIBIT 7.1
EXECUTION COPY
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$750,084,532.16
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1998-11
Cut-Off Date: October 1, 1998
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TABLE OF CONTENTS
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ARTICLE I ................................................. 5
Section 1.01. Definitions ................................ 5
Aggregate Certificate Principal Balance ........................ 5
Appraised Value ................................................ 5
Assignment of Proprietary Lease ................................ 5
Authenticating Agent ........................................... 6
Authorized Denomination ........................................ 6
Bankruptcy Coverage ............................................ 6
Bankruptcy Coverage Initial Amount ............................. 6
Bankruptcy Loss ................................................ 6
Beneficial Holder .............................................. 6
Book-Entry Certificates ........................................ 6
Business Day ................................................... 6
Buydown Agreement .............................................. 6
Buydown Fund ................................................... 6
Buydown Fund Account ........................................... 7
Buydown Loan ................................................... 7
Certificate .................................................... 7
Certificate Account ............................................ 7
Certificateholder or Holder .................................... 7
Certificate Group .............................................. 8
Certificate Interest Rate ...................................... 8
Certificate Principal Balance .................................. 8
Certificate Register and Certificate Registrar ............... 8
Class ........................................................ 8
Class A Certificates ......................................... 8
Class B Certificates ......................................... 8
Class B-L Regular Interests .................................. 8
Class I-A-1 Certificates ..................................... 8
Class I-A-1-L Regular Interest ............................... 8
Class I-A-2 Certificates ..................................... 9
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Class I-A-2-L Regular Interest ............................... 9
Class I-A-3 Certificates ..................................... 9
Class I-A-3-L Regular Interest ............................... 9
Class I-A-4 Certificates ..................................... 9
Class I-A-4-L Regular Interest ............................... 9
Class I-A-5 Certificates ..................................... 9
Class I-A-5-L Regular Interest ............................... 9
Class I-A-6 Adjusted Percentage .............................. 9
Class I-A-6 Certificates ..................................... 9
Class I-A-6-L Regular Interest ............................... 9
Class I-A-6 Liquidation Amount ............................... 9
Class I-A-6-L Lockout Priority Amount ........................ 10
Class I-A-6 Percentage ....................................... 10
Class I-A-6 Prepayment Percentage ............................ 10
Class I-A-7 Certificates ..................................... 10
Class I-A-7-L Regular Interest ............................... 10
Class I-A-8 Certificates ..................................... 10
Class I-A-8-L Regular Interest ............................... 10
Class I-A-9 Certificates ..................................... 10
Class I-A-9-L Regular Interest ............................... 10
Class I-A-10 Certificates .................................... 10
Class I-A-10-L Regular Interest .............................. 10
Class I-A-11 Certificates .................................... 10
Class I-A-11-L Regular Interest .............................. 11
Class I-A-12 Certificates .................................... 11
Class I-A-12 Notional Amount ................................. 11
Class I-A-13 Certificates .................................... 11
Class I-A-13-L Regular Interest .............................. 11
Class I-A-14 Certificates .................................... 11
Class I-A-14-L Regular Interest .............................. 11
Class I-A-14 Rounding Account ................................ 11
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Class I-A-15 Certificates .................................... 11
Class I-A-15-L Regular Interest .............................. 11
Class I-A-15 Interest Amount ................................. 11
Class I-A-16 Certificates .................................... 12
Class I-A-16-L Regular Interest .............................. 12
Class I-A-17 Certificates .................................... 12
Class I-A-17-L Regular Interest .............................. 12
Class I-A-18 Certificates .................................... 12
Class I-A-18-L Regular Interest .............................. 12
Class I-A-19 Certificates .................................... 12
Class I-A-19-L Regular Interest .............................. 12
Class I-A-20 Certificates .................................... 12
Class I-A-20-L Regular Interest .............................. 12
Class I-A-21 Certificates .................................... 12
Class I-A-21-L Regular Interest .............................. 12
Class I-A-22 Certificates .................................... 12
Class I-A-22-L Regular Interest .............................. 12
Class I-B-1 Certificates ..................................... 13
Class I-B-1-L Regular Interest ............................... 13
Class I-B-2 Certificates ..................................... 13
Class I-B-2-L Regular Interest ............................... 13
Class I-B-3 Certificates ..................................... 13
Class I-B-3-L Regular Interest ............................... 13
Class I-B-4 Certificates ..................................... 13
Class I-B-4-L Regular Interest ............................... 13
Class I-B-5 Certificates ..................................... 13
Class I-B-5-L Regular Interest ............................... 13
Class I-B-6 Certificates ..................................... 13
Class I-B-6-L Regular Interest ............................... 13
Class I-P Certificates ....................................... 13
Class I-P Fraction ........................................... 13
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Class I-P-L Regular Interest ................................. 14
Class I-P Mortgage Loan ...................................... 14
Class I-X Certificates ...................................... 14
Class I-X Notional Amount .................................... 14
Class I-X-L Regular Interest ................................ 14
Class II-A-1 Certificates .................................... 14
Class II-A-1-L Regular Interest ............................. 14
Class II-A-2 Certificates ................................... 14
Class II-A-2-L Regular Interest ............................. 14
Class II-A-3 Certificates .................................... 14
Class II-A-3-L Regular Interest ............................. 14
Class II-B-1 Certificates .................................... 14
Class II-B-1-L Regular Interest ............................. 15
Class II-B-2 Certificates .................................... 15
Class II-B-2-L Regular Interest .............................. 15
Class II-B-3 Certificates .................................... 15
Class II-B-3-L Regular Interest .............................. 15
Class II-B-4 Certificates .................................... 15
Class II-B-4-L Regular Interest .............................. 15
Class II-B-5 Certificates .................................... 15
Class II-B-5-L Regular Interest .............................. 15
Class II-B-6 Certificates .................................... 15
Class II-B-6-L Regular Interest .............................. 15
Class II-P Certificates ..................................... 15
Class II-P Fraction .......................................... 15
Class II-P Mortgage Loan ..................................... 15
Class II-P-L Regular Interest ................................ 16
Class II-X Certificates ..................................... 16
Class II-X Notional Amount ................................... 16
Class II-X-L Regular Interest ................................ 16
Class Notional Amount ........................................ 16
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Class P Certificates ......................................... 16
Class P Fraction ............................................. 16
Class P Mortgage Loan ........................................ 16
Class P-L Regular Interests .................................. 16
Class Principal Balance ...................................... 16
Class R-1 Certificates ....................................... 17
Class R-2 Certificates ....................................... 17
Class R-2-L .................................................. 17
Class X Certificates ......................................... 17
Class X-L Regular Interests .................................. 17
Clearing Agency .............................................. 17
Closing Date ................................................. 17
Code ......................................................... 17
Company ...................................................... 17
Compensating Interest ........................................ 17
Cooperative .................................................. 17
Cooperative Apartment ....................................... 17
Cooperative Lease ............................................ 18
Cooperative Loans ............................................ 18
Cooperative Stock ............................................ 18
Cooperative Stock Certificate ................................ 18
Corporate Trust Office ....................................... 18
Corresponding Class .......................................... 18
Curtailment .................................................. 19
Curtailment Shortfall ........................................ 19
Custodial Account for P&I .................................... 19
Custodial Account for Reserves ............................... 19
Custodial Agreement .......................................... 20
Custodian .................................................... 20
Cut-Off Date ................................................. 20
DCR .......................................................... 20
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Deceased Holder .............................................. 20
Definitive Certificates ...................................... 20
Depositary Agreement ......................................... 20
Destroyed Mortgage Note ...................................... 20
Determination Date ........................................... 20
Disqualified Organization .................................... 21
Distribution Date ............................................ 21
DLJ .......................................................... 21
DTC .......................................................... 21
DTC Participant .............................................. 21
Due Date ..................................................... 21
Eligible Institution ......................................... 21
Eligible Investments ......................................... 21
ERISA ........................................................ 22
Event of Default ............................................. 23
Excess Liquidation Proceeds .................................. 23
FDIC ......................................................... 23
FHA .......................................................... 23
FHLMC ........................................................ 23
Final Maturity Date .......................................... 23
FNMA ......................................................... 23
Fraud Coverage Initial Amount ................................ 23
Fraud Loss ................................................... 23
Group I-A Certificates ....................................... 23
Group I-A-L Regular Interests ................................ 23
Group I-B Certificates ....................................... 23
Group I-B-L Regular Interests ................................ 23
Group I Bankruptcy Coverage .................................. 23
Group I Certificates ......................................... 24
Group I Credit Support Depletion Date ........................ 24
Group I Fraud Coverage ....................................... 24
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Group I Loans ................................................ 24
Group I Premium Rate Mortgage Loans .......................... 24
Group I Senior Certificates .................................. 24
Group I Senior Liquidation Amount ............................ 24
Group I Senior Percentage .................................... 24
Group I Senior Prepayment Percentage ......................... 25
Group I Senior Principal Distribution Amount ................. 26
Group I Special Hazard Coverage .............................. 26
Group I Subordinate Liquidation Amount ....................... 26
Group I Subordinate Percentage ............................... 26
Group I Subordinate Prepayment Percentage .................... 26
Group I Subordinate Principal Distribution Amount ............ 27
Group I Subordinate Principal Prepayments Distribution Amount. 27
Group I-L Regular Interests .................................. 27
Group I-L Senior Regular Interests ........................... 27
Group II-A Certificates ...................................... 27
Group II-A-L Regular Interests ............................... 27
Group II-B Certificates ...................................... 28
Group II-B-L Regular Interests ............................... 28
Group II Bankruptcy Coverage ................................. 28
Group II Certificates ........................................ 28
Group II Credit Support Depletion Date ....................... 28
Group II Fraud Coverage ...................................... 28
Group II Loans ............................................... 28
Group II Premium Rate Mortgage Loans ......................... 28
Group II Senior Certificates ................................. 28
Group II Senior Liquidation Amount ........................... 28
Group II Senior Percentage ................................... 29
Group II Senior Prepayment Percentage ........................ 29
Group II Senior Principal Distribution Amount ................ 30
Group II Special Hazard Coverage ............................. 30
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Group II Subordinate Liquidation Amount ...................... 30
Group II Subordinate Percentage .............................. 31
Group II Subordinate Prepayment Percentage ................... 31
Group II Subordinate Principal Distribution Amount ........... 31
Group II Subordinate Principal Prepayments Distribution Amount 31
Group II-L Regular Interests ................................. 31
Group II-L Senior Regular Interests .......................... 31
Indirect DTC Participants .................................... 32
Insurance Proceeds ........................................... 32
Interest Distribution Amount ................................. 32
Investment Account ........................................... 32
Investment Depository ........................................ 32
Junior Subordinate Certificates .............................. 32
LIBOR ........................................................ 32
LIBOR Determination Date ..................................... 33
Lender ....................................................... 33
Living Holder ................................................ 33
Liquidated Mortgage Loan ..................................... 33
Liquidation Principal ........................................ 34
Liquidation Proceeds ......................................... 34
Loan Group ................................................... 34
Loan Group I ................................................. 34
Loan Group II ................................................ 34
Loan-to-Value Ratio .......................................... 34
Master Servicer .............................................. 34
Master Servicing Fee ......................................... 34
Monthly P&I Advance .......................................... 34
Monthly Payment .............................................. 34
Mortgage ..................................................... 34
Mortgaged Property ........................................... 34
Mortgage File ................................................ 34
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Mortgage Interest Rate ....................................... 37
Mortgage Loan Schedule ....................................... 37
Mortgage Loans ............................................... 37
Mortgage Note ................................................ 37
Mortgage Pool ................................................ 37
Mortgagor .................................................... 38
Nonrecoverable Advance ....................................... 38
Non-U.S. Person .............................................. 38
OTS .......................................................... 38
Officer's Certificate ........................................ 38
Opinion of Counsel ........................................... 38
Original Value ............................................... 38
Ownership Interest ........................................... 38
Pass-Through Entity .......................................... 38
Pass-Through Rate ............................................ 38
Paying Agent ................................................. 39
Payoff ....................................................... 39
Payoff Earnings .............................................. 39
Payoff Interest .............................................. 39
Payoff Period ................................................ 39
Percentage Interest .......................................... 39
Permitted Transferee ......................................... 40
Person ....................................................... 40
Prepaid Monthly Payment ...................................... 40
Primary Insurance Policy ..................................... 40
Principal Balance ............................................ 41
Principal Payment ............................................ 41
Principal Payment Amount ..................................... 41
Principal Prepayment ......................................... 41
Principal Prepayment Amount .................................. 41
Prior Period ................................................. 42
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Pro Rata Allocation .......................................... 42
Purchase Obligation .......................................... 42
Purchase Price ............................................... 42
Qualified Insurer ............................................ 43
Random Lot ................................................... 43
Rating Agency ................................................ 43
Ratings ...................................................... 43
Realized Loss ................................................ 43
Record Date .................................................. 46
Reference Banks .............................................. 46
Regular Interests ............................................ 46
REMIC ........................................................ 46
REMIC Provisions ............................................. 46
REMIC I ...................................................... 46
REMIC I Available Distribution Amount ........................ 46
REMIC I Distribution Amount .................................. 47
REMIC I Regular Interest ..................................... 56
REMIC I Trust Fund ........................................... 56
REMIC II ..................................................... 56
REMIC II Available Distribution Amount ....................... 56
REMIC II Distribution Amount ................................. 56
REMIC II Trust Fund .......................................... 57
Reserve Fund ................................................. 57
Reserve Fund Initial Amount .................................. 57
Residual Certificates ........................................ 57
Residual Distribution Amount ................................. 57
Responsible Officer .......................................... 58
Rounding Amount .............................................. 58
S&P .......................................................... 58
Securities Act ............................................... 58
Security Agreement ........................................... 58
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Selling and Servicing Contract ............................... 58
Senior Certificates .......................................... 58
Senior Subordinate Certificates .............................. 58
Servicer ..................................................... 58
Servicing Fee ................................................ 59
Servicing Officer ............................................ 59
Special Hazard Coverage Initial Amount ....................... 59
Special Hazard Loss .......................................... 59
Step Down Percentage ......................................... 59
Stripped Interest Rate ....................................... 60
Subordinate Certificates ..................................... 60
Subordination Level .......................................... 60
Substitute Mortgage Loan ..................................... 60
Tax Matters Person ........................................... 60
Termination Date ............................................. 60
Termination Payment .......................................... 60
Transfer ..................................................... 60
Transferee ................................................... 60
Transferee Affidavit and Agreement ........................... 61
Trust ........................................................ 61
Trust Fund ................................................... 61
Trustee ...................................................... 61
Uncollected Interest ......................................... 61
Uncompensated Interest Shortfall ............................. 61
Underwriting Standards ....................................... 61
Uninsured Cause .............................................. 62
U.S. Person .................................................. 62
VA ........................................................... 62
Withdrawal Date .............................................. 62
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ARTICLE II Conveyance of the Trust Funds; REMIC Election
and Designations; Original Issuance of
Certificates .................................. 62
Section 2.01. Conveyance of the Trust Fund; REMIC Election and
Designations ............................. 62
Section 2.02. Acceptance by Trustee .................... 67
Section 2.03. Representations and Warranties of the
Company Concerning the Mortgage Loans .... 68
Section 2.04. Acknowledgment of Transfer of Trust Fund;
Authentication of the Class R-1
Certificates ............................. 73
Section 2.05. Conveyance of REMIC II; REMIC Election and
Designations ............................. 73
Section 2.06. Acceptance by Trustee; Authentication of
Certificates ............................. 76
ARTICLE III Administration and Servicing of Mortgage Loans. 76
Section 3.01. The Company to Act as Master Servicer .... 76
Section 3.02. Custodial Accounts ....................... 78
Section 3.03. The Investment Account; Eligible
Investments .............................. 79
Section 3.04. The Certificate Account .................. 80
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 ............................ 81
Section 3.06. Maintenance of Primary Insurance
Policies; Collections Thereunder ......... 82
Section 3.07. Maintenance of Hazard Insurance .......... 82
Section 3.08. Enforcement of Due-on-Sale Clauses;
Assumption Agreements .................... 83
Section 3.09. Realization Upon Defaulted Mortgage Loans. 84
Section 3.10. Trustee to Cooperate; Release of Mortgage
Files .................................... 86
Section 3.11. Compensation to the Master Servicer
and the Servicers ........................ 87
Section 3.12. Reports to the Trustee; Certificate
Account Statement ........................ 87
Section 3.13. Annual Statement as to Compliance ........ 87
Section 3.14. Access to Certain Documentation and
Information Regarding the Mortgage Loans . 88
Section 3.15. Annual Independent Public Accountants'
Servicing Report ......................... 88
Section 3.16. [Reserved.] .............................. 88
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Section 3.18. [Reserved.] .............................. 89
Section 3.20. Assumption or Termination of Selling
and Servicing Contracts by Trustee ....... 89
Section 3.21. Maintenance of the Class I-A-14 Rounding
Account; Collections Thereunder .......... 89
ARTICLE IV Payments to Certificateholders; Payment of
Expenses ...................................... 90
Section 4.01. Distributions to Holders of REMIC I
Regular Interests and Class R-1
Certificateholders ....................... 90
Section 4.02. Advances by the Master Servicer;
Distribution Reports to the Trustee ...... 90
Section 4.03. Nonrecoverable Advances .................. 92
Section 4.04. Distributions to Certificateholders
(other than Class R-1 Certificateholders). 92
Section 4.05. Statements to Certificateholders ......... 93
Section 4.06. Principal Distributions on the Class
I-A-14 Certificates ...................... 94
ARTICLE V The Certificates ................................... 98
Section 5.01. The Certificates ......................... 98
Section 5.02. Certificates Issuable in Classes;
Distributions of Principal and Interest;
Authorized Denominations ................. 103
Section 5.03. Registration of Transfer and Exchange of
Certificates ............................. 103
Section 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates ............................. 104
Section 5.05. Persons Deemed Owners .................... 105
Section 5.06. Temporary Certificates ................... 105
Section 5.07. Book-Entry for Book-Entry Certificates ... 105
Section 5.08. Notices to Clearing Agency ............... 106
Section 5.09. Definitive Certificates .................. 106
Section 5.10. Office for Transfer of Certificates ...... 107
ARTICLE VI The Company and the Master Servicer ........... 107
Section 6.01. Liability of the Company and the
Master Servicer .......................... 107
Section 6.02. Merger or Consolidation of the Company,
or the Master Servicer ................... 107
Section 6.03. Limitation on Liability of the Company,
the Master Servicer and Others ........... 107
Section 6.04. The Company and the Master Servicer not
to Resign ................................ 108
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ARTICLE VII Default ....................................... 108
Section 7.01. Events of Default ........................ 108
Section 7.02. Trustee to Act; Appointment of Successor . 111
Section 7.03. Notification to Certificateholders ....... 112
ARTICLE VIII Concerning the Trustee ........................ 112
Section 8.01. Duties of Trustee ........................ 112
Section 8.02. Certain Matters Affecting the Trustee .... 113
Section 8.03. Trustee Not Liable for Certificates
or Mortgage Loans ........................ 114
Section 8.04. Trustee May Own Certificates ............. 114
Section 8.05. The Master Servicer to Pay Trustee's
Fees and Expenses ........................ 114
Section 8.06. Eligibility Requirements for Trustee ..... 114
Section 8.07. Resignation and Removal of Trustee ....... 115
Section 8.08. Successor Trustee ........................ 115
Section 8.09. Merger or Consolidation of Trustee ....... 116
Section 8.10. Appointment of Co-Trustee or Separate
Trustee .................................. 116
Section 8.11. Authenticating Agents .................... 117
Section 8.12. Paying Agents ............................ 118
ARTICLE IX Termination ................................... 119
Section 9.01. Termination Upon Repurchase by the
Company or Liquidation of All Mortgage
Loans .................................... 119
Section 9.02. Additional Termination Requirements ...... 120
Section 9.03. Trusts Irrevocable ....................... 121
ARTICLE X Miscellaneous Provisions ........................... 121
Section 10.01. Amendment ................................ 121
Section 10.02. Recordation of Agreement ................. 122
Section 10.03. Limitation on Rights of Certificateholders 122
Section 10.04. Access to List of Certificateholders ..... 123
Section 10.05. Governing Law ............................ 123
Section 10.06. Notices .................................. 123
Section 10.07. Severability of Provisions ............... 124
Section 10.08. Counterpart Signatures ................... 124
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Section 10.09. Benefits of Agreement .................... 124
Section 10.10. Notices and Copies to Rating Agencies .... 124
Exhibit A Form of Certificates (other than Residual Certificates)
Exhibit B Form of Class R-2 Certificates
Exhibit C Form of Class R-1 Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Selling And Servicing Contract
Exhibit F Form Of Transferor Certificate For Junior Subordinate
Certificates
Exhibit G Form Of Transferee's Agreement For Junior Subordinate
Certificates
Exhibit H Form Of Additional Matter Incorporated Into The Certificates
(other than the Class R-1 Certificates)
Exhibit I Transferor Certificate
Exhibit J Transferee Affidavit And Agreement
Exhibit K [Reserved]
Exhibit L Form Of Investment Letter
Exhibit M Form of Trustee's Certification Pursuant to Section 2.02
Exhibit N Officer's Certificate With Respect to ERISA Matters
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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 and (ii) the
conveyance to the Trustee of the REMIC I Regular Interests and the
issuance to the Company of the Certificates (other than the Class R-1
Certificates) representing in the aggregate the entire beneficial
interest of REMIC II. All covenants and agreements made by the Company
and the Trustee herein with respect to the Mortgage Loans and the other
property constituting the assets of REMIC I are for the benefit of the
Holders from time to time of the REMIC I Regular Interests and the Class
R-1 Certificates. All covenants and agreements made by the Company and
the Trustee herein with respect to the REMIC I Regular Interests are for
the benefit of the Holders from time to time of the Certificates (other
than the Class R-1 Certificates). The Company is entering into this
Agreement, and the Trustee is accepting the 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 Junior
Subordinate Certificates, have been offered for sale pursuant to a
Prospectus, dated October 23, 1998, and a Prospectus Supplement, dated
October 23, 1998, of the Company (together, the "Prospectus"). The
Junior Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated October 27, 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 Class R-1 Certificates and each Class
of Certificates comprising the interests in REMIC II created hereunder:
1
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<CAPTION>
REMIC I Trust Fund
------------------
Class Designation
for each REMIC I
Regular Interest Initial Class
and the Class R-1 Type of Certificate Principal Final Maturity
Certificates Interest Interest Balance Date *
Rate (1)
- ----------------- -------- ----------- ------------- --------------
<S> <C> <C> <C> <C>
Class I-A-1-L Regular 6.750% $ 49,665,850.00 November 2028
Class I-A-2-L Regular (2) 1,910,226.00 November 2028
Class I-A-3-L Regular 6.500% 200,738,540.00 November 2028
Class I-A-4-L Regular 6.750% 9,575,720.00 November 2028
Class I-A-5-L Regular 6.500% 30,000,000.00 November 2028
Class I-A-6-L Regular 6.500% 57,130,000.00 November 2028
Class I-A-7-L Regular 6.500% 107,277,682.00 November 2028
Class I-A-8-L Regular 6.500% 7,945,000.00 November 2028
Class I-A-9-L Regular 6.500% 1,013,177.00 November 2028
Class I-A-10-L Regular 7.000% 10,513,177.00 November 2028
Class I-A-11-L Regular 6.500% 2,483,281.00 November 2028
Class I-A-13-L Regular (2) 847,168.00 November 2028
Class I-A-14-L Regular 6.750% 4,000,000.00 November 2028
Class I-A-15-L Regular 6.500% 2,000,000.00 November 2028
Class I-A-16-L Regular 6.750% 2,000,000.00 November 2028
Class I-A-17-L Regular 6.000% 2,500,000.00 November 2028
Class I-A-18-L Regular Variable (3) 312,500.00 November 2028
Class I-A-19-L Regular (2) 445,221.00 November 2028
Class I-A-20-L Regular 6.600% 78,054,853.00 November 2028
Class I-A-21-L Regular (2) 1,200,844.00 November 2028
Class I-A-22-L Regular Variable (4)1,687,500.00 November 2028
Class II-A-1-L Regular 6.500% 111,455,573.00 November 2013
Class II-A-2-L Regular (2) 4,458,223.00 November 2013
Class II-A-3-L Regular 6.250% 30,000,000.00 November 2013
Class I-X-L Regular 6.500% (5) ------------- November 2028
Class II-X-L Regular 6.250% (5) ------------- November 2013
Class I-P-L Regular (2) 205,181.00 November 2028
Class II-P-L Regular (2) 37,264.00 November 2013
Class I-B-1-L Regular 6.500% 15,300,161.00 November 2028
Class I-B-2-L Regular 6.500% 5,100,053.00 November 2028
Class I-B-3-L Regular 6.500% 2,400,025.00 November 2028
Class I-B-4-L Regular 6.500% 3,000,031.00 November 2028
Class I-B-5-L Regular 6.500% 1,200,012.00 November 2028
Class I-B-6-L Regular 6.500% 1,500,018.66 November 2028
Class II-B-1-L Regular 6.250% 2,251,173.00 November 2013
Class II-B-2-L Regular 6.250% 525,273.00 November 2013
Class II-B-3-L Regular 6.250% 525,273.00 November 2013
Class II-B-4-L Regular 6.250% 375,195.00 November 2013
Class II-B-5-L Regular 6.250% 225,117.00 November 2013
Class II-B-6-L Regular 6.250% 225,120.50 November 2013
Class R-2-L Regular 6.500% 50.00 November 2028
Class R-1+ Residual 6.500% 50.00 November 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 Excess
Liquidation Proceeds and the applicable Residual Distribution
Amount.
2
<PAGE>
(1) Interest distributed to the REMIC I Regular Interests (other than
the Class I-A-2-L, Class I-A-13-L, Class I-A-19-L, Class I-A-21-L,
Class II-A-2-L and Class P-L Certificates, which shall not be
entitled to receive any distributions of interest) and the Class
R-1 Certificates on each Distribution Date will have accrued at
the applicable per annum Certificate Interest Rate on the Class
Principal Balance or Class Notional Amount outstanding following
the immediately prior Distribution Date (or with respect to the
first Distribution Date, as of the Closing Date).
(2) The Class I-A-2-L, Class I-A-13-L, Class I-A-19-L, Class I-A-21-L,
Class II-A-2-L and Class P-L Regular Interests will not be
entitled to receive any distributions of interest.
(3) The initial Certificate Interest Rate for the Class I-A-18-L
Regular Interests will be 9.855% per annum. Thereafter, the Class
I-A-18-L Regular Interests will accrue interest at a per annum
rate equal to 38.880% minus the product of LIBOR and 5.4, with a
minimum Certificate Interest Rate of 0.000% per annum and a
maximum Certificate Interest Rate of 38.880% per annum.
(4) The initial Certificate Interest Rate for the Class I-A-22-L
Regular Interests will be 6.175% per annum. Thereafter, the Class
I-A-22-L Regular Interests will accrue interest at a per annum
rate equal to LIBOR plus 0.800%, subject to a minimum Certificate
Interest Rate of 0.800% per annum and a maximum Certificate
Interest Rate of 8.000% per annum.
(5) Each Class of the Class X-L Regular Interests will accrue interest
on the related Class Notional Amount. The Class X-L Regular
Interests will not be entitled to receive any distributions of
principal.
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 of the
Certificates(other Initial Class
than the Class R-1 Type of Certificate Principal Final Maturity
Certificates) Interest Interest Balance Date *
Rate (1)
- ----------------- -------- ----------- -------------- ---------------
<S> <C> <C> <C> <C>
Class I-A-1 Regular 6.750% $ 49,665,850.00 November 2028
Class I-A-2 Regular (2) 1,910,226.00 November 2028
Class I-A-3 Regular 6.500% 200,738,540.00 November 2028
Class I-A-4 Regular 6.750% 9,575,720.00 November 2028
Class I-A-5 Regular 6.500% 30,000,000.00 November 2028
Class I-A-6 Regular 6.500% 57,130,000.00 November 2028
Class I-A-7 Regular 6.500% 107,277,682.00 November 2028
Class I-A-8 Regular 6.500% 7,945,000.00 November 2028
Class I-A-9 Regular 6.500% 1,013,177.00 November 2028
Class I-A-10 Regular 7.000% 10,513,177.00 November 2028
Class I-A-11 Regular 6.250% 2,483,281.00 November 2028
Class I-A-12 Regular 6.500% (3) ------------- November 2028
Class I-A-13 Regular (2) 847,168.00 November 2028
Class I-A-14 Regular 6.750% 4,000,000.00 November 2028
Class I-A-15 Regular (4) 2,000,000.00 November 2028
Class I-A-16 Regular 6.750% 2,000,000.00 November 2028
Class I-A-17 Regular 6.000% 2,500,000.00 November 2028
Class I-A-18 Regular Variable (5) 312,500.00 November 2028
Class I-A-19 Regular (2) 445,221.00 November 2028
3
<PAGE>
Class I-A-20 Regular 6.600% 78,054,853.00 November 2028
Class I-A-21 Regular (2) 1,200,844.00 November 2028
Class I-A-22 Regular Variable (6) 1,687,500.00 November 2028
Class II-A-1 Regular 6.500% 111,455,573.00 November 2013
Class II-A-2 Regular (2) 4,458,223.00 November 2013
Class II-A-3 Regular 6.250% 30,000,000.00 November 2013
Class I-X Regular 6.500% (7) -------------- November 2028
Class II-X Regular 6.250% (7) -------------- November 2013
Class I-P Regular (2) 205,181.00 November 2028
Class II-P Regular (2) 37,264.00 November 2013
Class I-B-1 Regular 6.500% 15,300,161.00 November 2028
Class I-B-2 Regular 6.500% 5,100,053.00 November 2028
Class I-B-3 Regular 6.500% 2,400,025.00 November 2028
Class I-B-4 Regular 6.500% 3,000,031.00 November 2028
Class I-B-5 Regular 6.500% 1,200,012.00 November 2028
Class I-B-6 Regular 6.500% 1,500,018.66 November 2028
Class II-B-1 Regular 6.250% 2,251,173.00 November 2013
Class II-B-2 Regular 6.250% 525,273.00 November 2013
Class II-B-3 Regular 6.250% 525,273.00 November 2013
Class II-B-4 Regular 6.250% 375,195.00 November 2013
Class II-B-5 Regular 6.250% 225,117.00 November 2013
Class II-B-6 Regular 6.250% 225,120.50 November 2013
Class R-2+ Residual 6.500% 50.00 November 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-2, Class I-A-13, Class I-A-19, Class I-A-21, Class II-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-2, Class I-A-13, Class I-A-19, Class I-A-21, Class
II-A-2 and Class P Certificates will not be entitled to receive any
distributions of interest.
(3) The Class I-A-12 Certificates will accrue interest on the Class
I-A-12 Notional Amount. The Class I-A-12 Certificates will not be
entitled to receive any distributions of principal.
(4) The Certificate Interest Rate on the Class I-A-15 Certificates for
the first twelve Distribution Dates will be 8.000% per annum and for
the thirteenth through twenty-fourth Distribution Dates, 7.000% per
annum. Thereafter, the Certificate Interest Rate on the Class
I-A-15 Certificates will be 6.500% per annum. The Class I-A-15
Certificates are comprised of (i) the Class I-A-15-L Regular
Interests, whose Class Principal Balance is equal to the Class
I-A-15 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 Reserve Fund.
(5) The initial Certificate Interest Rate for the Class I-A-18
Certificates will be 9.855% per annum. Thereafter, the Class I-A-18
Certificates will accrue interest at a per annum rate equal to
38.880% minus the product of LIBOR and 5.4, subject to a minimum
Certificate Interest Rate of 0.000% per annum and a maximum
Certificate Interest Rate of 38.880% per annum.
(6) The initial Certificate Interest Rate for the Class I-A-22
Certificates will be 6.175% per annum. Thereafter, the Class I-A-22
Certificates will accrue interest at a per annum rate equal to LIBOR
plus 0.800%, subject to a minimum Certificate Interest Rate of
0.800% per annum and a maximum Certificate Interest Rate of 8.000%
per annum.
(7) Each Class of Class X Certificates will accrue interest on the
related Class Notional Amount. The Class X Certificates will not be
entitled to receive any distributions of principal.
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
4
<PAGE>
Certificates (other than the Class I-A-15, Class R-1 and Class R-2
Certificates) and the portion of the Class I-A-15 Certificates other
than the right to receive interest payments from the Reserve Fund 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
$750,084,532.16 and the Certificates have an Aggregate Certificate
Principal Balance of $750,084,532.16.
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:
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.
5
<PAGE>
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-4, Class I-A-5, Class I-A-8, Class I-A-9, Class
I-A-10, Class I-A-12, Class I-A-14, Class I-A-15, Class I-A-16, Class
I-A-17, 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 Class of the Junior
Subordinate Certificates may be issued in an amount that is not an
integral multiple of $1. With respect to the Class I-A-4, Class I-A-5,
Class I-A-8, Class I-A-9, Class I-A-10, Class I-A-14, Class I-A-15,
Class I-A-16 and Class I-A-17 Certificates, an initial Certificate
Principal Balance equal to $1,000 and integral multiples of $1 in excess
thereof. With respect to the Class I-A-12 and Class X Certificates, a
Class Notional Amount as of the Cut-Off Date equal to $100,000 and
multiples of $1 in excess thereof. With respect to each Class of the
Residual Certificates, one Certificate with a Percentage Interest equal
to 0.01% and one Certificate with a Percentage Interest equal to 99.99%.
Bankruptcy Coverage: The Group I Bankruptcy Coverage or the Group
-------------------
II Bankruptcy Coverage, as applicable.
Bankruptcy Coverage Initial Amount: With respect to Loan Group I,
----------------------------------
$226,018, and with respect to Loan Group II, $100,000.
Bankruptcy Loss: A loss on a Mortgage Loan arising out of (i) a
---------------
reduction in the scheduled Monthly Payment for such Mortgage Loan by a
court of competent jurisdiction in a case under the United States
Bankruptcy Code, other than any such reduction that arises out of clause
(ii) of this definition of "Bankruptcy Loss," including, without
limitation, any such reduction that results in a permanent forgiveness
of principal, or (ii) with respect to any Mortgage Loan, a valuation, by
a court of competent jurisdiction in a case under such Bankruptcy Code,
of the related Mortgaged Property in an amount less than the then
outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any
-----------------
Book-Entry Certificate as or through a DTC Participant or an Indirect
DTC Participant or a Person holding a beneficial interest in any
Definitive Certificate.
Book-Entry Certificates: The Class A, Class X and Class P
-----------------------
Certificates, beneficial ownership and transfers of which shall be made
through book entries as described in Section 5.07.
6
<PAGE>
Business Day: Any day other than a Saturday, a Sunday, or a day on
------------
which banking institutions in Chicago, Illinois, Boston, Massachusetts
or New York, New York are authorized or obligated by law or executive
order to be closed.
Buydown Agreement: An agreement between a Person and a Mortgagor
-----------------
pursuant to which such Person has provided a Buydown Fund.
Buydown Fund: A fund provided by the originator of a Mortgage Loan
------------
or another Person with respect to a Buydown Loan which provides an
amount sufficient to subsidize regularly scheduled principal and
interest payments due on such Buydown Loan for a period. Buydown Funds
may be (i) funded at the par values of future payment subsidies, or (ii)
funded in an amount less than the par values of future payment
subsidies, and determined by discounting such par values in accordance
with interest accruing on such amounts, in which event they will be
deposited in an account bearing interest. Buydown Funds may be held in a
separate Buydown Fund Account or may be held in a Custodial Account for
P&I or a Custodial Account for Reserves and monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created and
--------------------
maintained pursuant to Section 3.02 (a) with the corporate trust
department of the Trustee or another financial institution approved by
the Master Servicer, (b) within FDIC insured accounts (or other accounts
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 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, B and C hereto.
The additional matter appearing in Exhibit H shall be deemed
incorporated into Exhibits A and B 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 and reinvestment
7
<PAGE>
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 Closing Date shall be the Trustee.
Certificate Group: The Group I or Group II 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 and all Certificates
(other than the Class R-1 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 Certificates and
REMIC I 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, B and C. Each Class of REMIC I Regular Interests and the
Class R-1 Certificates shall be entitled to receive the amounts
allocated to such Class pursuant to the definition of "REMIC I
Distribution Amount" only to the extent of the REMIC I Available
Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of
"REMIC I Distribution Amount," and each Class of Certificates (other
than the Class R-1 Certificates) shall be entitled to receive the
amounts allocated to such Class pursuant to the definition of "REMIC II
Distribution Amount" only to the extent of the REMIC II Available
Distribution Amount for such Distribution Date remaining after
distributions in accordance with prior clauses of the definition of
"REMIC II Distribution Amount."
Class A Certificates: The Group I-A and Group II-A Certificates.
--------------------
8
<PAGE>
Class B Certificates: The Group I-B and Group II-B Certificates.
--------------------
Class B-L Regular Interests: The Group I-B-L and Group II-B-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-I-A-1.
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-I-A-2.
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 Certificates: The Certificates designated as "Class
------------------------
I-A-3" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-3.
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-I-A-4.
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-I-A-5.
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 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-6 Percentage.
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-I-A-6.
9
<PAGE>
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-6 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-6 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-6 Percentage on any
Distribution Date occurring prior to the fifth anniversary of the first
Distribution Date, and the Class I-A-6 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-6-L Lockout Priority Amount: For any Distribution Date,
-------------------------------------
the sum of (i) the Class I-A-6 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-6 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-6 Liquidation
Amount.
Class I-A-6 Percentage: For any Distribution Date, the Class I-A-6
----------------------
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-6 Prepayment Percentage: For any Distribution Date, the
---------------------------------
product of the Class I-A-6 Percentage and the Step Down Percentage.
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-I-A-7.
Class I-A-7-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-8 Certificates: The Certificates designated as "Class
------------------------
I-A-8" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-8.
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 Certificates: The Certificates designated as "Class
------------------------
I-A-9" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-9.
10
<PAGE>
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.
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-I-A-10.
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-I-A-11.
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-I-A-12.
Class I-A-12 Notional Amount: For any Distribution Date, the Class
----------------------------
I-A-11 Principal Balance immediately prior to such Distribution Date
multiplied by 25/650.
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-I-A-13.
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-I-A-14.
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.
Class I-A-14 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-14
Certificateholders or any other account serving a similar function
acceptable to the Rating Agencies, and which account provides that the
Trustee may make, or cause to be made, withdrawals as provided in
Section 3.21 hereof, to the extent of the amount then remaining in the
Class I-A-14 Rounding Account.
11
<PAGE>
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-I-A-15.
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-15 Interest Amount: For each of the first twenty-four
----------------------------
Distribution Dates, an amount equal to the excess of (i) the Class
I-A-15 Interest Distribution Amount over (ii) such amount calculated as
if the Certificate Interest Rate for the Class I-A-15 Certificates is
6.500% per annum.
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-I-A-16.
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-I-A-17.
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-I-A-18.
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-19 Certificates: The Certificates designated as "Class
-------------------------
I-A-19" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-19.
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-I-A-20.
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.
12
<PAGE>
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-I-A-21.
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-I-A-22.
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-B-1 Certificates: The Certificates designated as "Class
------------------------
I-B-1" on the face thereof in substantially the form attached hereto as
Exhibit A-I-B-1.
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-I-B-2.
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-I-B-3.
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-I-B-4.
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-I-B-5.
13
<PAGE>
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-I-B-6.
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.
Class I-P Certificates: The Certificates designated as "Class I-P" on
the face thereof in substantially the form attached hereto as Exhibit
A-I-P.
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-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-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate of
-----------------------
less than 6.500% per annum.
Class I-X Certificates: The Certificates designated as "Class I-X" on
----------------------
the face thereof in substantially the form attached hereto as Exhibit
A-I-X.
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-II-A-1.
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.
14
<PAGE>
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-II-A-2.
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-A-3 Certificates: The Certificates designated as "Class II-A-3"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-A-3.
Class II-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 II-B-1 Certificates: The Certificates designated as "Class II-B-1"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-1.
Class II-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 II-B-2 Certificates: The Certificates designated as "Class II-B-2"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-2.
Class II-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 II-B-3 Certificates: The Certificates designated as "Class II-B-3"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-3.
Class II-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 II-B-4 Certificates: The Certificates designated as "Class II-B-4"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-4.
Class II-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 II-B-5 Certificates: The Certificates designated as "Class II-B-5"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-5.
15
<PAGE>
Class II-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 II-B-6 Certificates: The Certificates designated as "Class II-B-6"
-------------------------
on the face thereof in substantially the form attached hereto as Exhibit
A-II-B-6.
Class II-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.
Class II-P Certificates: The Certificates designated as "Class II-P" on
-----------------------
the face thereof in substantially the form attached hereto as Exhibit
A-II-P.
Class II-P Fraction: For each Class II-P Mortgage Loan, a fraction, the
-------------------
numerator of which is 6.250% less the Pass-Through Rate on such Class
II-P Mortgage Loan and the denominator of which is 6.250%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-Through Rate of
------------------------
less than 6.250% 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 Certificates designated as "Class II-X" on
-----------------------
the face thereof in substantially the form attached hereto as Exhibit
A-II-X.
Class II-X Notional Amount: With respect to any Distribution Date, the
--------------------------
product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to
be received as of such Due Date, whether or not received, or with
respect to the initial Distribution Date, as of the Cut-Off Date, of the
Group II Premium Rate Mortgage Loans and (y) a fraction, the numerator
of which is the weighted average of the Stripped Interest Rates for the
Group II Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 6.250%.
Class II-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 Notional Amount: With respect to any of the Class I-A-12 and
---------------------
Class X Certificates and the Class X-L Regular Interests, 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, and the "Class
Notional Amount" for the Class I-A-12 Certificates is the Class I-A-12
Notional Amount).
Class P Certificates: The Class I-P and Class II-P Certificates.
--------------------
16
<PAGE>
Class P Fraction: The Class I-P or Class II-P Fraction, as applicable.
----------------
Class P Mortgage Loan: Any of the Class I-P or Class II-P Mortgage
---------------------
Loans.
Class P-L Regular Interests: The Class I-P-L and Class II-P-L Regular
---------------------------
Interests.
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, 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) or
(I)(b)(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 or the Class P Certificates. The Class Principal
Balance for the Class I-A-1 Certificates shall be referred to as the
"Class I-A-1 Principal Balance," the Class Principal Balance for the
Class 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 I-A-12, Class I-X and Class II-X Certificates and the Class
I-X-L and Class II-X-L Regular Interests 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 C,
which have been designated as the single class of "residual interest" in
REMIC II pursuant to Section 2.05.
Class R-2-L: 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 X Certificates: The Class I-X and Class II-X Certificates.
--------------------
Class X-L Regular Interests: The Class I-X-L and Class II-X-L Regular
---------------------------
Interests.
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 27, 1998, which is the date of settlement of the
------------
sale of the Certificates to the original purchasers thereof.
17
<PAGE>
Code: The Internal Revenue Code of 1986, as amended.
----
Company: PNC Mortgage Securities Corp., a Delaware corporation, or its
-------
successor-in-interest.
Compensating Interest: For any Distribution Date with respect to each
---------------------
Loan Group and the Mortgage Loans contained therein, the lesser of (i)
the sum of (a) the aggregate Master Servicing Fee payable with respect
to such Loan Group on such Distribution Date, (b) the aggregate Payoff
Earnings with respect to such Loan Group and (c) the aggregate Payoff
Interest with respect to such Loan Group and (ii) the aggregate
Uncollected Interest with respect to such Loan Group.
Cooperative: A private, cooperative housing corporation organized under
-----------
the laws of, and headquartered in, the States of New York 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 1998-11.
18
<PAGE>
Corresponding Class: With respect to the Group I Certificates and the
-------------------
Group I-L Regular Interests, the "Corresponding Class" shall be as
indicated in the following table.
<TABLE>
<CAPTION>
<S> <C>
Class I-A-1-L Class I-A-1
Class I-A-2-L Class I-A-2
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-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-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
</TABLE>
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:
<TABLE>
<CAPTION>
<S> <C>
Class II-A-1-L Class I-A-1
Class II-A-2-L Class I-A-2
Class II-A-3-L Class I-A-3
Class II-X-L Class II-X
Class II-P-L Class II-P
Class II-B-1-L Class II-B-1
Class II-B-2-L Class II-B-2
Class II-B-3-L Class II-B-3
Class II-B-4-L Class II-B-4
Class II-B-5-L Class II-B-5
Class II-B-6-L Class II-B-6
</TABLE>
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.
19
<PAGE>
Curtailment Shortfall: With respect to any Curtailment applied with a
---------------------
Monthly Payment other than a Prepaid Monthly Payment, an amount equal to
one month's interest on such Curtailment at the applicable Pass-Through
Rate on such Mortgage Loan.
Custodial Account for P&I: The Custodial Account for principal and
-------------------------
interest established and maintained by each Servicer pursuant to its
Selling and Servicing Contract and caused by the Master Servicer to be
established and maintained pursuant to Section 3.02 (a) with the
corporate trust department of the Trustee or another financial
institution approved by the Master Servicer such that the rights of the
Master Servicer, the Trustee and the Certificateholders thereto shall be
fully protected against the claims of any creditors of the applicable
Servicer and of any creditors or depositors of the institution in which
such account is maintained, (b) within FDIC insured accounts (or other
accounts with comparable insurance coverage acceptable to the Rating
Agencies) created, maintained and monitored by a Servicer or (c) in a
separate non-trust account without FDIC or other insurance in an
Eligible Institution. In the event that a Custodial Account for P&I is
established pursuant to clause (b) of the preceding sentence, amounts
held in such Custodial Account for P&I shall not exceed the level of
deposit insurance coverage on such account; accordingly, more than one
Custodial Account for P&I may be established. Any amount that is at any
time not protected or insured in accordance with the first sentence of
this definition of "Custodial Account for P&I" shall promptly be
withdrawn from such Custodial Account for P&I and be remitted to the
Investment Account.
Custodial Account for Reserves: The Custodial Account for Reserves
------------------------------
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established
and maintained pursuant to Section 3.02 (a) with the corporate trust
department of the Trustee or another financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the
Trustee and the Certificateholders thereto shall be fully protected
against the claims of any creditors of the applicable Servicer and of
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
20
<PAGE>
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.
------------
DCR: Duff & Phelps Credit Rating Co, provided that at any time it be a
---
Rating Agency.
Deceased Holder: A Beneficial Holder of a Class I-A-14 Certificate who
---------------
was living at the time such Class I-A-14 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 26,
--------------------
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
-------------------------
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 occurring in November 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
21
<PAGE>
of at least one of the two highest unsecured long-term debt ratings of the
Rating Agencies, (iii) with respect to any Buydown Fund Account or Custodial
Account which also serves as a Buydown Fund Account, the highest unsecured
long-term debt rating by the Rating Agencies, or (iv) the approval of the
Rating Agencies. Such institution may be the Servicer if the applicable
Selling and Servicing Contract requires the Servicer to provide the Master
Servicer with written notice on the Business Day following the date on which
the Servicer determines that such Servicer's short-term debt and unsecured
long-term debt ratings fail to meet the requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or securities
--------------------
listed below in which funds deposited in the Investment Account, the
Certificate Account, the Custodial Account for P&I and the Custodial
Account for Reserves may be invested:
(i) Obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) Repurchase agreements on obligations described in clause (i)
of this definition of "Eligible Investments," provided that the unsecured
obligations of the party (including the Trustee in its commercial
capacity) agreeing to repurchase such obligations have at the time one
of the two highest short term debt ratings of the Rating Agencies and
provided that such repurchaser's unsecured long term debt has one of the
two highest unsecured long term debt ratings of the Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits and
bankers' acceptances of any U.S. bank or trust company incorporated under
the laws of the United States or any state (including the Trustee in its
commercial capacity), provided that the debt obligations of such bank or
trust company (or, in the case of the principal bank in a bank holding
company system, debt obligations of the bank holding company) at the
date of acquisition thereof have one of the two highest short term debt
ratings of the Rating Agencies and unsecured long term debt has one of
the two highest unsecured long term debt ratings of the Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state of
the United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the highest
long-term debt ratings available for such securities from the Rating
Agencies;
(v) Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date of
acquisition has the highest commercial paper rating of the Rating
Agencies, provided that the corporation has unsecured long term debt
that has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any corporation
incorporated under the laws of the
22
<PAGE>
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 period pursuant to Section 1.860G-2(g)(1) of the Treasury
Regulations, and that such period can in no event exceed thirteen
months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or (b) has been
purchased at a price greater than the outstanding principal balance of
such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
Event of Default: Any event of default as specified in Section 7.01.
----------------
Excess Liquidation Proceeds: With respect to any Distribution Date, the
---------------------------
excess, if any, of aggregate Liquidation Proceeds received during the
Prior Period over the amount that would have been received if Payoffs
had been made with respect to such Mortgage Loans on the date such
Liquidation Proceeds were received.
FDIC: Federal Deposit Insurance Corporation, or any successor thereto.
----
FHA: Federal Housing Administration, or any successor thereto.
---
FHLMC: Federal Home Loan Mortgage Corporation, or any successor thereto.
-----
Final Maturity Date: With respect to each Class of the REMIC I Regular
-------------------
Interests and the Certificates, the date set forth in the table
contained in the Preliminary Statement hereto.
FNMA: Federal National Mortgage Association, or any successor thereto.
----
23
<PAGE>
Fraud Coverage Initial Amount: With respect to Loan Group I,
-----------------------------
$12,000,126 and with respect to Loan Group II, $1,500,782.
Fraud Loss: The occurrence of a loss on a Mortgage Loan arising from any
----------
action, event or state of facts with respect to such Mortgage Loan
which, because it involved or arose out of any dishonest, fraudulent,
criminal, negligent or knowingly wrongful act, error or omission by the
Mortgagor, originator (or assignee thereof) of such Mortgage Loan,
Lender, a Servicer or the Master Servicer, would result in an exclusion
from, denial of, or defense to coverage which otherwise would be
provided by a Primary Insurance Policy previously issued with respect to
such Mortgage Loan.
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 and Class I-A-22 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-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
and Class I-A-22-L Certificates.
Group I-B Certificates: The Class I-B-1, Class I-B-2, Class I-B-3, Class
----------------------
I-B-4, Class I-B-5 and Class I-B-6 Certificates.
Group 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 I Bankruptcy Coverage: With respect to Loan Group I, the
---------------------------
Bankruptcy Coverage Initial Amount for such Loan Group 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 Credit Support Depletion Date: The first Distribution Date on
-------------------------------------
which the aggregate Class Principal Balance of the Group I-B
Certificates has been or will be reduced to zero as a result of
principal distributions thereon and the allocation of Realized Losses on
such Distribution Date.
Group I Fraud Coverage: During the period prior to the first anniversary
----------------------
of the Cut-Off Date and with respect to Loan Group I, the Fraud Coverage
Initial Amount for such Loan Group 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-
24
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
the first, second, third and fourth anniversaries of the Cut-Off Date, the
Group I Fraud Coverage shall be reduced to the lesser of (i) 1.00% of
the aggregate principal balance of the Group I Loans as of the Due Date
in the preceding month and (ii) the excess of the Fraud Coverage Initial
Amount for Loan Group I over 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 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 Certificates: The Group I-A, Class I-X and Class I-P
---------------------------
Certificates.
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
-------------------------
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
25
<PAGE>
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; (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-L Senior
Regular Interests (other than the Class I-P-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
26
<PAGE>
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, the
-------------------------------
Special Hazard Coverage Initial Amount for such Loan Group 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) the Special Hazard Coverage Initial Amount as reduced by the
Special Hazard Losses allocated to the Group I Certificates 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 Group I
Senior Liquidation Amount for such Distribution Date.
Group I Subordinate Percentage: With respect to any Distribution Date,
------------------------------
the excess of 100% over the Group I Senior Percentage for such date.
Group I Subordinate Prepayment Percentage: On any Distribution Date, the
excess of 100% over the Group I Senior Prepayment Percentage for such
Distribution Date; provided, however, that if the aggregate Class
Principal Balance of the Group I-A 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 (without regard to
the proviso in the definition thereof) and (iii) the Group I Subordinate
Liquidation Amount over (B) the amounts required to be distributed to
the Class I-P-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. 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
27
<PAGE>
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 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"); provided, however, that if the amount
specified in clause (B) of the definition of "Group I Subordinate
Principal Distribution Amount" is greater than the sum of the amounts
specified in clauses (A)(i) and (A)(iii) of such definition, then the
Group I Subordinate Principal Prepayments Distribution Amount shall be
reduced by the amount of such excess.
Group I-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-L Senior Regular Interests: The Group I-A-L, Class I-X-L and
----------------------------------
Class I-P-L Regular Interests.
Group II-A Certificates: The Class II-A-1, Class II-A-2 and Class II-A-3
-----------------------
Certificates.
Group II-A-L Regular Interests: The Class II-A-1-L, Class II-A-2-L and
------------------------------
Class II-A-3-L Regular Interests.
Group II-B Certificates: The Class II-B-1, Class II-B-2, Class II-B-3,
-----------------------
Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
Group II-B-L Regular Interests: The Class II-B-1-L, Class II-B-2-L,
------------------------------
Class II-B-3-L, Class II-B-4-L, Class II-B-5-L and Class II-B-6-L
Regular Interests.
Group II Bankruptcy Coverage: With respect to Loan Group II, the
----------------------------
Bankruptcy Coverage Initial Amount for such Loan Group less (a) any
scheduled or permissible reduction in the amount of the Group II
Bankruptcy Coverage pursuant to this definition and (b) Bankruptcy
Losses allocated to the Group II Certificates. The Group II 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 II Certificates: The Group II-A, Class II-X, Class II-P and Group
---------------------
II-B Certificates.
28
<PAGE>
Group II Credit Support Depletion Date: The first Distribution Date on
--------------------------------------
which the aggregate Class Principal Balance of the Group II-B
Certificates has been or will be reduced to zero as a result of
principal distributions thereon and the allocation of Realized Losses on
such Distribution Date.
Group II Fraud Coverage: During the period prior to the first
-----------------------
anniversary of the Cut-Off Date and with respect to Loan Group II, the
Fraud Coverage Initial Amount for such Loan Group reduced by Fraud
Losses allocated to the Group II 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 II
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 II
Certificates since such anniversary; and during the period on and after
the fifth anniversary of the Cut-Off Date, the Group II Fraud Coverage
shall be zero. On each anniversary of the Cut-Off Date, the Group II
Fraud Coverage shall be reduced to the lesser of (i) on the first
anniversary of the Cut-Off Date, 1.00%, and on the second, third and
fourth anniversaries of the Cut-Off Date, 0.50%, in each case of the
aggregate principal balance of the Group II Loans as of the Due Date in
the preceding month and (ii) the excess of the Fraud Coverage Initial
Amount for Loan Group II over cumulative Fraud Losses allocated to the
Group II Certificates to date. The Group II 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 II Certificates by the Rating Agencies.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
--------------
Schedule as Group II Loans.
Group II Premium Rate Mortgage Loans: The Group II Loans having
------------------------------------
Pass-Through Rates in excess of 6.250% 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, 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, 100%; and (iii) on any other
29
<PAGE>
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 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
aggregate Class Principal Balances of the Group II-B Certificates
as of such Distribution Date, and
(b) cumulative Realized Losses on the Group II Loans allocated to the
Group II-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 II-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 II-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 II-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 II-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 II-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 II Senior Percentage for such Distribution Date plus 70% of the Group II
Subordinate 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 Group II 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 II Senior Percentage for such
Distribution Date plus 40% of the Group II 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 II Senior Percentage for such
Distribution Date plus 20% of the Group II Subordinate Percentage for
such Distribution Date; and (5) for any such Distribution Date
thereafter, the Group II Senior Percentage for such Distribution Date.
30
<PAGE>
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 Certificates
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
Class II-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 Senior Liquidation Amount.
Group II Special Hazard Coverage: With respect to Loan Group II, the
--------------------------------
Special Hazard Coverage Initial Amount for such Loan Group less Special
Hazard Losses allocated to the Group II Certificates, and the amount of
any scheduled reduction in the amount of Group II Special Hazard
Coverage as follows: on each anniversary of the Cut-Off Date, the Group
II 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 II 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 II and (c) twice
the unpaid principal balance of the largest single Mortgage Loan in Loan
Group II, in each case calculated as of the Due Date in the immediately
preceding month, and (2) the Special Hazard Coverage Initial Amount as
reduced by the Special Hazard Losses allocated to the Group II
Certificates since the Cut-Off Date. The Group II 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 II Subordinate 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.
Group II Subordinate Percentage: With respect to any Distribution Date,
-------------------------------
the excess of 100% over the Group II Senior Percentage for such date.
Group II Subordinate Prepayment Percentage: On any Distribution Date,
------------------------------------------
the excess of 100% over the Group II Senior Prepayment Percentage for
such Distribution Date; provided, however, that if the aggregate Class
Principal Balance of the Group II-A Certificates has been reduced to
zero, then the Group II Subordinate Prepayment Percentage shall equal
100%.
31
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Group II Subordinate Principal Distribution Amount: On any Distribution
--------------------------------------------------
Date, the excess of (A) the sum of (i) the Group II Subordinate
Percentage of the Principal Payment Amount for Loan Group II (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 Group II
Subordinate Principal Prepayments Distribution Amount (without regard to
the proviso in the definition thereof) and (iii) the Group II
Subordinate 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. On any Distribution
Date, the Group II Subordinate Principal Distribution Amount shall be
allocated pro rata, by Class Principal Balance, among the Classes of
Group II-B-L Regular Interests, and paid in the order of distribution to
such Classes pursuant to clause (I)(b) 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 II-B-L Regular Interests is less than such percentage as of the
Closing Date, the pro rata portion of the Group II 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 II-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 II-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 II-B-L Regular
Interests shall be as follows: Class II-B-1-L, Class II-B-2-L, Class
II-B-3-L, Class II-B-4-L, Class II-B-5-L and Class II-B-6-L.
Group II Subordinate Principal Prepayments Distribution Amount: On any
--------------------------------------------------------------
Distribution Date, the Group II Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group II (exclusive of the portion
thereof attributable to principal distributions to the Class II-P-L
Regular Interests pursuant to clause (I)(b)(i) of the definition of
"REMIC I Distribution Amount"); provided, however, that if the amount
specified in clause (B) of the definition of "Group II Subordinate
Principal Distribution Amount" is greater than the sum of the amounts
specified in clauses (A)(i) and (A)(iii) of such definition, then the
Group II Subordinate Principal Prepayments Distribution Amount shall be
reduced by the amount of such excess.
Group II-L Regular Interests: The Group II-A-L, Class II-X-L, Class
----------------------------
II-P-L and Group II-B-L Regular Interests.
Group II-L Senior Regular Interests: The Group II-A-L, Class II-X-L and
-----------------------------------
Class II-P-L Regular Interests.
Indirect DTC Participants: Entities such as banks, brokers, dealers or
-------------------------
trust companies, that clear through or maintain a custodial relationship
with a DTC Participant, either directly or indirectly.
Insurance Proceeds: Amounts paid or payable by the insurer under any
------------------
Primary Insurance Policy or any other insurance policy (including any
replacement policy permitted under this Agreement), covering any
Mortgage Loan or Mortgaged Property, including, without limitation,
32
<PAGE>
any hazard insurance policy required pursuant to Section 3.07, any title
insurance policy required pursuant to Section 2.03, and any FHA
insurance policy or VA guaranty.
Interest Distribution Amount: On any Distribution Date, for any Class of
----------------------------
the REMIC I Regular Interests and the 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
for such Class during the Prior Period, in each case before giving
effect to allocations of Realized Losses for the Prior Period or
distributions to be made on such Distribution Date, reduced by
Uncompensated Interest Shortfall, interest shortfalls related to the
Relief Act and the interest portion of Realized Losses allocated to such
Class pursuant to the definitions of "Uncompensated Interest Shortfall,"
"Relief Act" and "Realized Loss," respectively. The Interest
Distribution Amount for the Class I-A-2, Class I-A-13, Class I-A-19,
Class I-A-21, Class II-A-2 and Class P-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.
Junior Subordinate Certificates: The Class I-B-4, Class I-B-5, Class
-------------------------------
I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
LIBOR: With respect to each Distribution Date, the London Interbank
-----
Offered Rate for one-month United States dollar deposits determined by
the Master Servicer on the LIBOR Determination Date on the basis of
quotations provided by each of the Reference Banks as of approximately
11:00 a.m. (London time) on the LIBOR Determination Date as such
quotations appear on the Telerate Page 3750 (as defined in the
International Swap Dealers Association Inc. Code of 1987 Interest Rate
and Currency Exchange Definitions), as follows:
(A) in the event that only one or none of the Reference Banks
provides such quotations, the greater of:
(i) LIBOR as determined on the immediately preceding LIBOR
Determination Date (or, in the case of the first LIBOR Determination
Date, 5.22313%); and
(ii) the Reserve Rate. The "Reserve Rate" will be the rate per
annum (rounded upward, if necessary, to the nearest multiple of
1/16th of 1%) that the Master Servicer determines to be either
33
<PAGE>
(x) the arithmetic mean of the offered quotations that
the leading banks in New York City selected by the Master
Servicer in its sole discretion are then quoting on the
relevant LIBOR Determination Date for one-month United States
dollar deposits to the principal London office of each of the
Reference Banks or those of them (being at least two in number)
to which such offered quotations are, in the opinion of the
Master Servicer, being so made, or
(y) in the event that the Master Servicer can determine
no such arithmetic mean, the arithmetic mean of the offered
quotations that the leading banks in New York City selected by
the Master Servicer in its sole discretion are quoting on such
LIBOR Determination Date to leading European banks for
one-month United States dollar deposits, provided, however,
that if the banks selected by the Master Servicer are not then
so quoting, LIBOR shall be as determined on the immediately
preceding LIBOR Determination Date (or, in the case of the
first LIBOR Determination Date, 5.22313%, as specified above);
(B) otherwise, the arithmetic mean (rounded upward, if necessary,
to the nearest multiple of 1/16th of 1%) of such offered quotations
the establishment of which, in each case, shall be final and binding in
the absence of manifest error.
LIBOR Determination Date: With respect to interest paid on any
------------------------
Distribution Date, other than the first Distribution Date, the second
day on which banks in London and New York City are open for the
transaction of international business prior to the first day of the
month preceding the Distribution Date.
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-14 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 the Class P-L Regular Interests pursuant to clauses (I)(a)(i),
(I)(b)(i), (II)(a)(i) and (II)(b)(i) of the definition of "REMIC I
Distribution
34
<PAGE>
Amount," as applicable) 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, other than Insurance Proceeds.
Loan Group: Loan Group I or Loan Group II, as applicable.
----------
Loan Group I: The group of Mortgage Loans comprised of the Group I
------------
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group II
-------------
Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage Loan
-------------------
divided by the Original Value; however, references to "current
Loan-to-Value Ratio" shall mean the then current Principal Balance of a
Mortgage Loan divided by the Original Value.
Master Servicer: The Company, or any successor thereto appointed as
---------------
provided pursuant to Section 7.02, acting to service and administer the
Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer for
--------------------
supervising the mortgage servicing and advancing certain expenses, equal
to a per annum rate set forth for each Mortgage Loan in Exhibit D on the
outstanding Principal Balance of such Mortgage Loan, payable monthly
from the Certificate Account, the Investment Account or the Custodial
Account for P&I.
Monthly P&I Advance: An advance of funds by the Master Servicer pursuant
-------------------
to Section 4.02 or a Servicer pursuant to its Selling and Servicing
Contract to cover delinquent principal and interest installments.
Monthly Payment: The scheduled payment of principal and interest on a
---------------
Mortgage Loan (including any amounts due from a Buydown Fund, if any)
which is due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
--------
Mortgage Note.
Mortgaged Property: With respect to any Mortgage Loan, other than a
------------------
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan, the related Cooperative Stock
and Cooperative Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
Mortgage File: The following documents or instruments with respect to
-------------
each 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
35
<PAGE>
Company, as Trustee for the benefit of the Holders from time to time of
PNC Mortgage Securities Corp. Mortgage Pass-Through Certificates, Series
1998-11, 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
or the assignments referred to in Section (iii)(2) of this definition of
"Mortgage File" are endorsed or executed in blank as of the Closing Date,
the Company shall, within 45 days of the Closing Date, cause such
Mortgage Notes or assignments to be endorsed or executed 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 or executed in blank and the
Company shall not be required to endorse or execute such Mortgage Note
pursuant to the terms 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,
together with 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
1998-11" and all intervening assignments evidencing a complete chain of
assignment, from the originator to the name holder or the payee
endorsing the related Mortgage Note; or
(2) a copy of the Mortgage which represents a true and correct
reproduction of the original Mortgage and which has either been
certified (i) on the face thereof by the public recording office in the
appropriate jurisdiction in which the Mortgaged Property is located, or
(ii) by the originator or Lender as a true and correct copy the original
of which has been sent for recordation and an original Mortgage
assignment thereof duly executed and acknowledged in recordable form to
"State Street Bank and Trust Company, as Custodian/Trustee" or to "State
Street Bank and Trust Company, as Trustee for the Holders of PNC
Mortgage Securities Corp. Mortgage Pass-Through Certificates, Series
1998-11" 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, 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) or clause (i);
(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
36
<PAGE>
(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 1998-11" 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, provided, that, with respect to any Mortgage Note
whereby the related Mortgaged Property is located in California, such
original Mortgage Note may be endorsed or executed in blank and the
Company shall not be required to endorse or execute such Mortgage Note
pursuant to the terms set forth in this clause (i);
(ii) A counterpart of the Cooperative Lease and the Assignment
of Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of
the interests of the mortgagee with respect to the related Cooperative
Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of
title from the originator to the Trustee, each with evidence of recording
thereof, evidencing the interest of the originator under the Security
Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator
in the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an
unbroken chain of title from the originator to the Trustee;
37
<PAGE>
(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,
(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee, and
(x) its Loan Group.
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.
-------------
Mortgagor: The obligor on a Mortgage Note.
---------
38
<PAGE>
Nonrecoverable Advance: With respect to any Mortgage Loan, any advance
----------------------
which the Master Servicer shall determine to be a Nonrecoverable Advance
pursuant to Section 4.03 and which was, or is proposed to be, made by
(i) the Master Servicer or (ii) a Servicer pursuant to its Selling and
Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
---------------
OTS: The Office of Thrift Supervision, or any successor thereto.
---
Officer's Certificate: A certificate signed by the Chairman of the
---------------------
Board, the President, a Vice President, or the Treasurer of the Master
Servicer and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who shall be
------------------
reasonably acceptable to the Trustee and who may be counsel (including
in-house counsel) for the Company or the Master Servicer.
Original Value: With respect to any Mortgage Loan other than a Mortgage
--------------
Loan originated for the purpose of refinancing an existing mortgage
debt, the lesser of (a) the Appraised Value (if any) of the Mortgaged
Property at the time the Mortgage Loan was originated or (b) the
purchase price paid for the Mortgaged Property by the Mortgagor. With
respect to a Mortgage Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the
Appraised Value of the Mortgaged Property 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 the Servicing Fee and the Master
Servicing Fee. For each Mortgage Loan, any calculation of monthly
interest at such rate shall be based upon annual interest at such rate
(computed on the basis of a 360-day year of twelve 30-day months) on the
unpaid Principal Balance of the related Mortgage Loan divided by twelve,
and any calculation of interest at such rate by reason of a Payoff shall
be based upon annual interest at such rate on the outstanding Principal
Balance of the related Mortgage Loan multiplied by a fraction, the
numerator of which is the number of days elapsed from the Due Date of
the last scheduled payment of principal and interest to, but not
including, the date of such Payoff, and the denominator of which is (a)
for Payoffs received on a Due Date, 360, and (b) for all other Payoffs,
365.
Paying Agent: Any paying agent appointed by the Trustee pursuant to
------------
Section 8.12.
39
<PAGE>
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 X and Class I-A-12 Certificates), its Certificate Principal Balance
divided by the applicable Class Principal Balance;
(ii) with respect to the Class X and Class I-A-12 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:
(i) with respect to any Certificate (other than the Class X,
Class I-A-12 and Class R-2 Certificates), the product of (x) ninety-seven
percent (97%) and (y) the
40
<PAGE>
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-12
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.
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 or 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
41
<PAGE>
scheduled principal payments due on or before the Cut-Off Date, whether or
not received, reduced by all amounts distributed or (except when such
determination occurs earlier in the month than the Distribution Date) to be
distributed to Certificateholders through the Distribution Date in the month
of determination that are reported as allocable to principal of such Mortgage
Loan.
For purposes of the definition of Purchase Price and as used in Sections
2.02, 3.09 and 9.01, at the time of any determination, the principal
balance of a Mortgage Loan remaining to be paid at the close of business
on the Cut-Off Date, after deduction of all scheduled principal payments
due on or before the Cut-Off Date, whether or not received, reduced by
all amounts distributed or to be distributed to Certificateholders
through the Distribution Date in the month of determination that are
reported as allocable to principal of such Mortgage Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance" shall
mean, at the time of any determination, the principal balance of such
Substitute Mortgage Loan transferred to the Trust Fund, on the date of
substitution, reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
Substitute Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a Substitute
Mortgage Loan) shall not be adjusted solely by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period. Whenever a Realized Loss has been incurred with respect to a
Mortgage Loan during a calendar month, the Principal Balance of such
Mortgage Loan shall be reduced by the amount of such Realized Loss as of
the Distribution Date next following the end of such calendar month
after giving effect to 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, (iii) the principal portion of
Insurance Proceeds received during the Prior Period, and (iv) 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.
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<PAGE>
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 Classes of 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 applicable 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 (other than the Class I-P-L,
Class I-A-2-L, Class I-A-13-L, Class I-A-19-L and Class I-A-21-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 and (ii) with respect to
losses on Group II Loans, the allocation of the principal portion of
Realized Losses relating to a Group II Loan to the outstanding Classes
of Group II-L Regular Interests (other than the Class II-P-L Regular
Interests), pro rata according to their respective Class Principal
Balances (except if the loss is recognized with respect to a Class II-P
Mortgage Loan, in which case the applicable 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 Classes of Group II-L Regular Interests (other than the
Class II-A-2-L and Class II-P-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 related Class
Principal Balances. 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 thereof in the same manner and amounts as they reduce such
attributes of such Classes of REMIC I Regular Interests; provided,
however, that the interest portion of such losses allocated to the Class
I-A-11-L Regular Interests and applied to reduce the Interest
Distribution Amount thereof shall be allocated to the Class I-A-11 and
Class I-A-12 Certificates in reduction of the distribution of interest
to such Certificates pursuant to the distributions set forth in clause
(a)(ii)(B) of the definition of "REMIC 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 23, 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
43
<PAGE>
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-14 Certificates (as
described in Section 4.06), the method by which DTC will determine which
Class I-A-14 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 DCR and thereafter, each
-------------
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Company, or their respective
successors in interest.
Ratings: As of any date of determination, the ratings, if any, of the
-------
Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to any Mortgage
-------------
Loan which became a Liquidated Mortgage Loan during the related Prior
Period, the sum of (i) the principal balance of such Mortgage Loan
remaining outstanding and the principal portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
principal portion of such Realized Loss), and (ii) the accrued interest
on such Mortgage Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such
Mortgage Loan (the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Mortgage Loan which is not a
Liquidated Mortgage Loan, the amount of the Bankruptcy Loss incurred
with respect to such Mortgage Loan as of the related Due Date.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
Losses 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
thereof 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
44
<PAGE>
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 Regular
Interests, the Class R-2-L Regular Interests and the Class R-1
Certificates, pro rata according to their respective Class Principal
Balances in reduction thereof; 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-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-2-L, Class I-A-13-L, Class
I-A-19-L and Class I-A-21-L Regular Interests), the Class I-X-L and
Class R-2-L Regular Interests and the 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 thereof.
Except for Special Hazard Losses in excess of the Group II Special
Hazard Coverage, Fraud Losses in excess of the Group II Fraud Coverage
and Bankruptcy Losses in excess of the Group II Bankruptcy Coverage,
Realized Losses with respect to the Group II Loans shall be allocated
among the Group II-L Regular Interests (i) for Realized Losses allocable
to principal (a) first, to the Class II-B-6-L Regular Interests, until
the Class II-B-6-L Principal Balance has been reduced to zero, (b)
second, to the Class II-B-5-L Regular Interests, until the Class
II-B-5-L Principal Balance has been reduced to zero, (c) third, to the
Class II-B-4-L Regular Interests, until the Class II-B-4-L Principal
Balance has been reduced to zero, (d) fourth, to the Class II-B-3-L
Regular Interests, until the Class II-B-3-L Principal Balance has been
reduced to zero, (e) fifth, to the Class II-B-2-L Regular Interests,
until the Class II-B-2-L Principal Balance has been reduced to zero, (f)
sixth, to the Class II-B-1-L Regular Interests, until the Class II-B-1-L
Principal Balance has been reduced to zero and (g) seventh, to the Group
II-A-L Regular Interests pro rata according to their respective Class
Principal Balances in reduction 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-B-6-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then
in reduction of the Class II-B-6-L Principal
45
<PAGE>
Balance, (b) second, to the Class II-B-5-L Regular Interests, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class
II-B-5-L Principal Balance, (c) third, to the Class II-B-4-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class II-B-4-L Principal Balance, (d) fourth, to the Class
II-B-3-L Regular Interests, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class II-B-3-L Principal Balance,
(e) fifth, to the Class II-B-2-L Regular Interests, in reduction of
accrued but unpaid interest thereon and then in reduction of the Class
II-B-2-L Principal Balance, (f) sixth, to the Class II-B-1-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then
in reduction of the Class II-B-1-L Principal Balance, and (g) seventh,
to the Class II-A-1-L, Class II-A-3-L and Class II-X-L Regular Interests
pro rata according to accrued but unpaid interest on such Classes and
then pro rata according their Class Principal Balances in reduction
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-L
Regular Interests by Pro Rata Allocation.
Special Hazard Losses on Group II Loans in excess of the Group II
Special Hazard Coverage, Fraud Losses on Group II Loans in excess of the
Group II Fraud Coverage, and Bankruptcy Losses on Group II Loans in
excess of the Group II Bankruptcy Coverage shall be allocated among the
Group II-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-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 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
46
<PAGE>
allocated to the most junior Class of Group II-B-L Regular Interests, in
reduction of the Class Principal Balance thereof.
Record Date: The last Business Day of the month immediately preceding
-----------
the month of the related Distribution Date.
Reference Banks: Barclays Bank PLC, Bankers Trust Company and The Bank
---------------
of Tokyo, Ltd. or, if any such bank shall cease to provide quotations
for one-month United States dollar deposits, any other leading bank with
an established place of business in London engaged in transactions in
Eurodollar deposits in the international Eurocurrency market not
controlling, controlled by or under common control with the Company,
designated by the Company from time to time for the purpose of providing
quotations for one-month United States dollar-denominated deposits.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
-----------------
Interests and (ii) with respect to REMIC II, the Certificates (other
than the Residual Certificates).
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 and the Class R-1
Certificates pro rata according to the amount of the Interest
Distribution Amount to which each such Class would otherwise be entitled
in reduction thereof.
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.
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: On any Distribution Date, the
-------------------------------------
Class I-A-15 Interest Amount, if any, and, with respect to each Loan
Group, the sum of the following amounts with respect to the Mortgage
Loans in such Loan Group:
(1) the total amount of all cash received by or on behalf of the
Master Servicer with respect to such Mortgage Loans by the Determination
Date for such Distribution Date and not previously distributed
(including Monthly P&I Advances made by Servicers, Liquidation Proceeds
and scheduled amounts of distributions from Buydown Funds respecting
Buydown Loans, if any), except:
47
<PAGE>
(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;
(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
(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 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 or Group II 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:
48
<PAGE>
(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 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 Regular Interests entitled to
interest, the 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 Regular Interests entitled to
interest, the 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) first, to the Class I-A-6-L Regular Interests, the
Class I-A-6-L Principal Distribution Amount, until the Class I-A-6-L
Principal Balance has been reduced to zero;
(b) second, concurrently, the portion of the Group I Senior
Principal Distribution Amount remaining after the distribution
described above, as follows:
(1) 10.6234109102%, to the Class I-A-1-L and Class
I-A-2-L Regular Interests, pro rata, until the respective
Class Principal Balances of such Classes have each been
reduced to zero;
49
<PAGE>
(2) 0.5114951837%, to the Class I-A-11-L Regular
Interests, until the Class I-A-11-L Principal Balance has been
reduced to zero;
(3) 22.0966007518%, sequentially as follows:
(A) first, sequentially, to the Class R-1
Certificates and the Class R-2-L Regular Interests,
until the Class Principal Balance of each of
such Class has been reduced to zero; and
(B) second, to the Class I-A-7-L Regular Interests,
until the Class I-A-7-L Principal Balance has been
reduced to zero; and
(4) 66.7684931543%, sequentially, as follows:
(A) first, concurrently, until the Class I-A-20-L
Principal Balance has been reduced to zero, as follows:
(x) 28.5720166448%, to the Class I-A-20-L and
Class I-A-21-L Regular Interests, pro rata, until
the respective Class Principal Balances of
such Classes have each been reduced to zero; and
(y) 71.4279833552%, to the Class I-A-3-L
Regular Interests;
(B) second, to the Class I-A-3-L Regular Interests,
until the Class I-A-3-L Principal Balance has been
reduced to zero; and
(C) third, concurrently, until the Class I-A-4-L
Principal Balance has been reduced to zero, as follows:
(x) 27.2194063613%, to the Class I-A-4-L,
Class I-A-18-L, Class I-A-19-L and Class I-A-22-L
Regular Interests, pro rata, until the respective Class
Principal Balances of such Classes have each been
reduced to zero; and
(y) 72.7805936387%, sequentially, as follows:
(I) first, to the Class I-A-5-L Regular
Interests, until the Class I-A-5-L Principal
Balance has been reduced to zero; and
(II) second, to the Class I-A-8-L Regular
Interests;
50
<PAGE>
(c) third, to the Class I-A-8-L Regular Interests, the portion
of the Group I Senior Principal Distribution Amount remaining after the
distributions described above, until the Class I-A-8-L Principal Balance
has been reduced to zero;
(d) fourth, to the Class I-A-9-L, Class I-A-10-L, Class I-A-13-L,
Class I-A-14-L, Class I-A-15-L, Class I-A-16-L and Class I-A-17-L
Regular Interests, pro rata, the portion of the Group I Senior Principal
Distribution Amount remaining after the distributions described above,
until the respective Class Principal Balances of such Classes have each
been reduced to zero; and
(e) fifth, to the Class I-A-6-L Regular Interests, the portion of
the Group I Senior Principal Distribution Amount remaining after the
distributions described above, until the Class I-A-6-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, other than a
Special Hazard Loss, Fraud Loss or Bankruptcy Loss in excess of the
Group I Special Hazard Coverage, Group I Fraud Coverage or Group I
Bankruptcy Coverage, as applicable, 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;
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<PAGE>
(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;
(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;
52
<PAGE>
(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-L Regular Interests, 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-L Regular Interests for such
Distribution Date; and
(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
Loan Group II 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, Class II-A-3-L and Class
II-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;
53
<PAGE>
(iii) third, to the Class II-A-1-L, Class II-A-3-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, as
principal, the Group II Senior Principal Distribution Amount, pro rata
according to their respective Class Principal Balances, until the
aggregate Class Principal Balance of the Group II-A-L Regular Interests
has been reduced to zero;
(v) fifth, to the Class II-P-L Regular Interests, to the
extent of amounts otherwise available to pay the Group II Subordinate
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 Group II Subordinate 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, other than
a Special Hazard Loss, Fraud Loss or Bankruptcy Loss in excess of the
Group II Special Hazard Coverage, Group II Fraud Coverage or Group II
Bankruptcy Coverage, as applicable, 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-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 II-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 II-B-1-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-1-L Principal Balance has been reduced to zero;
(x) tenth, to the Class II-B-2-L Regular Interests, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xi) eleventh, to the Class II-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
54
<PAGE>
(xii) twelfth, to the Class II-B-2-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-2-L Principal Balance has been reduced to zero;
(xiii) thirteenth, to the Class II-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 II-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 II-B-3-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-3-L Principal Balance has been reduced to zero;
(xvi) sixteenth, to the Class II-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 II-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 II-B-4-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-4-L Principal Balance has been reduced to zero;
(xix) nineteenth, to the Class II-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 II-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 II-B-5-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-5-L Principal Balance has been reduced to zero;
(xxii) twenty-second, to the Class II-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 II-B-6-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
55
<PAGE>
(xxiv) twenty-fourth, to the Class II-B-6-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group II Subordinate Principal Distribution Amount," until the Class
II-B-6-L Principal Balance has been reduced to zero;
(xxv) twenty-fifth, to each Class of Group II-B-L Regular
Interests in the order of seniority, the remaining portion, if any, of
the REMIC I Available Distribution Amount for the Group II-L Regular
Interests, 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)(xxv) of this definition of "REMIC I
Distribution Amount" shall not cause a further reduction in the Class
Principal Balances of the Group II-B-L Regular Interests; and
(xxvi) twenty-sixth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group II-L Regular Interests for such
Distribution Date.
(II) For any Distribution Date on or after the Group I or Group II
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 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-L Regular Interests 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 Regular Interests entitled to
interest, the 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 Regular Interests entitled to
interest, the 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 Regular Interests entitled to
principal, the Class R-2-L Regular Interests and the Class R-1
Certificates, the Group I Senior Principal Distribution Amount, pro rata
according to their respective Class Principal Balances; and
56
<PAGE>
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group I-L Regular Interests for such
Distribution Date; and
(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 Loan Group II 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, Class II-A-3-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, Class II-A-3-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, as principal,
the Group II Senior Principal Distribution Amount, pro rata according to
their respective Class Principal Balances, until the aggregate Class
Principal Balance of the Group II-A-L Regular Interests has been reduced
to zero; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for the Group II-L Regular Interests 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
------------------
Reserve Fund.
REMIC II: The segregated pool of assets consisting of the REMIC II Trust
--------
Fund conveyed in trust to the Trustee for the benefit of the
Certificateholders (other than the Class R-1 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 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.
57
<PAGE>
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-11 and Class I-A-12 Certificates,
the amounts distributed to its Corresponding Class on such Distribution
Date;
(ii) (A) to the Class I-A-11 Certificates, the amount distributed
as principal to the Class I-A-11-L Regular Interests on such Distribution
Date and (B) to the Class I-A-11 and Class I-A-12 Certificates, the
amount distributed as interest to the Class I-A-11-L Regular Interests
on such Distribution Date concurrently as follows: (I) to the Class
I-A-11 Certificates, an amount equal to the product of 1/12 of the Class
I-A-11 Certificate Interest Rate and the Class I-A-11 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-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
Notional Amount; and
(iii) to the Class R-2 Certificates, the applicable Residual
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.
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 Certificates (other than the Class R-1
Certificates) issued hereunder.
Reserve Fund: 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 3.17.
Reserve Fund Initial Amount: $40,000.
---------------------------
58
<PAGE>
Residual Certificates: With respect to REMIC I, the Class R-1
---------------------
Certificates, which are being issued in a single class, and with respect
to REMIC II, the Class R-2 Certificates, which are being issued in a
single class. The Class R-1 and Class R-2 Certificates are hereby
designated the sole Class of "residual interests" in REMIC I and REMIC
II, respectively, for purposes of Section 860G(a)(2) of the Code.
Residual Distribution Amount: On any Distribution Date, with respect to
----------------------------
the Class R-1 Certificates and for Loan Group I or Loan Group II, any
portion of the REMIC I Available Distribution Amount for such Loan Group
remaining after all distributions to the Group I-L Regular Interests and
the Class R-1 Certificates pursuant to clauses (I)(a)(i) through
(I)(a)(xxv) or (II)(a)(i) through (II)(a)(iv), or to the Group II-L
Regular Interests pursuant to clauses (I)(b)(i) through (I)(b)(xxv) or
(II)(b)(i) through (II)(b)(iv), as applicable, of the definition of
"REMIC I Distribution Amount"; and with respect to the Class R-2
Certificates and for Loan Group I or Loan Group II, any portion of the
REMIC II Available Distribution Amount for such Loan Group remaining
after all distributions to the Group I and Class R-2 Certificates
pursuant to clauses (a)(i) and (a)(ii), or to the Group II Certificates
pursuant to clause (b)(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 the REMIC II Trust Fund
created hereby, the amounts which remain on deposit in the Certificate
Account or the Class I-A-14 Rounding Account after payment to the
Certificateholders 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: The amount of funds, if any, needed to be withdrawn
---------------
from the Class I-A-14 Rounding Account and used to round the amount of
any distributions in reduction of the Class I-A-14 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. Servicing Guide to the extent incorporated by reference therein)
between the Company and a Person relating to the sale of the
59
<PAGE>
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 Certificates, the Group II
-------------------
Senior Certificates and the Residual Certificates.
Senior Subordinate Certificates: The Subordinate Certificates other
-------------------------------
than the Junior Subordinate Certificates.
Servicer: A mortgage loan servicing institution to which the Master
--------
Servicer has assigned servicing duties with respect to any Mortgage Loan
under a Selling and Servicing Contract; provided, however, the Master
Servicer may designate itself or one or more other mortgage loan
servicing institutions as Servicer upon termination of an initial
Servicer's servicing duties.
Servicing Fee: For each Mortgage Loan, the fee paid to the Servicer
-------------
thereof to perform primary servicing functions for the Master Servicer
with respect to such Mortgage Loan, equal to the per annum rate set
forth for each Mortgage Loan in the Mortgage Loan Schedule on the
outstanding Principal Balance of such Mortgage Loan.
Servicing Officer: Any officer of the Master Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Mortgage Loans
or the Certificates, as applicable, whose name and specimen signature
appear on a list of servicing officers furnished to the Trustee by the
Master Servicer, as such list may from time to time be amended.
Special Hazard Coverage Initial Amount: With respect to Loan Group I,
--------------------------------------
$6,000,063 and with respect to and Loan Group II, $2,427,732.
Special Hazard Loss: The occurrence of any direct physical loss or
-------------------
damage to a Mortgaged Property not covered by a standard hazard
maintenance policy with extended coverage which is caused by or results
from any cause except: (i) fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, vandalism, aircraft,
vehicles, smoke, sprinkler leakage, except to the extent of that portion
of the loss which was uninsured because of the application of a
co-insurance clause of any insurance policy covering these perils; (ii)
normal wear and tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
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
60
<PAGE>
or air forces, (b) by military, naval or air forces, or (c) by an agent of
any such government, power, authority or forces; (vi) any weapon of war
employing atomic fission or radioactive force whether in time of peace
or war; (vii) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such occurrence; or (viii) seizure or destruction
under quarantine or customs regulations, or confiscation by order of any
government or public authority.
Step Down Percentage: For any Distribution Date, the percentage
--------------------
indicated below:
<TABLE>
<CAPTION>
Distribution Date Occurring In Step Down Percentage
------------------------------ --------------------
<S> <C>
November 1998 through October 2003 0%
November 2003 through October 2004 30%
November 2004 through October 2005 40%
November 2005 through October 2006 60%
November 2006 through October 2007 80%
November 2007 and thereafter 100%
</TABLE>
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, the excess, if any, of the Pass-Through Rate for such Mortgage
Loan over 6.250%.
Subordinate Certificates: The Group I-B and Group II-B 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 (provided that no Class of Group I-B-L Regular Interests shall be
subordinate in right of payment to the Class I-B-6-L Regular Interests)
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 any of the
Group II-B-L Regular Interests, the percentage obtained by dividing the
sum of the Class Principal Balances of the Classes of Group II-B-L
Regular Interests which are subordinate in right of payment to such
Class (provided that no Class of Group II-B-L Regular Interests shall be
subordinate in right of payment to the Class II-B-6-L Regular Interests)
by the aggregate Class Principal Balances of the Group II-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 II
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
61
<PAGE>
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).
Termination Payment: The final payment delivered to the
-------------------
Certificateholders on the Termination Date pursuant to the procedures
set forth in Section 9.01(b).
Transfer: Any direct or indirect transfer or sale of any Ownership
--------
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
----------
Interest in a Residual Certificate.
Transferee Affidavit and Agreement: An affidavit and agreement in the
----------------------------------
form attached hereto as Exhibit J.
Trust: The pool of assets consisting of the Trust Fund conveyed pursuant
-----
to Section 2.01 of this Agreement.
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 or the Investment Account (except amounts representing the
Master Servicing Fee or the Servicing Fee), or in the Class I-A-14
Rounding 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 Reserve Fund,
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.
Trustee: State Street Bank and Trust Company, or its
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successor-in-interest as provided in Section 8.09, or any successor
trustee appointed as herein provided.
Uncollected Interest: With respect to any Distribution Date for any
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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
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Date, an amount equal to one month's interest at the applicable
Pass-Through Rate on such Mortgage Loan less the amount of interest
actually paid by the Mortgagor with respect to such Payoff.
Uncompensated Interest Shortfall: With respect to a Loan Group, for any
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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 and the Class R-1 Certificates pro rata
according to the amount of the Interest Distribution Amount to which
each such Class would otherwise be entitled in reduction thereof.
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.
Underwriting Standards: The underwriting standards of Chase Manhattan
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Mortgage Corporation.
Uninsured Cause: Any cause of damage to a Mortgaged Property, the cost
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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,
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partnership or other entity created or organized in or under the laws of
the United States, any state thereof or the District of Columbia, or an
estate or trust that is subject to U.S. federal income tax regardless of
the source of its income.
VA: The Department of Veterans Affairs, formerly known as the Veterans
--
Administration, or any successor thereto.
Withdrawal Date: Any day during the period commencing on the 18th day of
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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
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Conveyance of the Trust Funds; REMIC Election and Designations; Original
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Issuance of Certificates
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Section 2.01. Conveyance of the Trust Fund; REMIC Election and
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Designations. The Trust of which the Trustee is the trustee is hereby
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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,
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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 owner of the
Reserve Fund, 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 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,
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the Investment Account, the Reserve Fund and the Class I-A-14 Rounding
Account, and all money or other property held therein, and the Custodial
Accounts for P&I and the Custodial Accounts for Reserves (to the extent of the
amounts on deposit or other property therein attributable to the Mortgage
Loans); and (iii) amounts paid or payable by the insurer under any FHA
insurance policy or any Primary Insurance Policy and proceeds of any VA
guaranty and any other insurance policy related to any Mortgage Loan or the
Mortgage Pool;
(II) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, 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, 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
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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 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
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above documents, herewith delivers to the Trustee a certification of a
Servicing Officer of the nature set forth in Section 3.10.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.01, and to enter into a
Custodial Agreement for such purpose, provided, however, that the
Trustee shall be and remain liable for the acts of any such Custodian
only to the extent that it is responsible for its own acts hereunder.
The Company and the Trustee agree that the Company, as 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
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such tax in appropriate proceedings and shall not prevent the Company from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); provided, that the Company shall be entitled to be
indemnified by the REMIC I Trust Fund for any such prohibited
transaction penalty taxes if the Company's failure to exercise
reasonable care was not the primary cause of the imposition of such
prohibited transaction penalty taxes.
The Trustee and the Master Servicer shall promptly provide the Company
with such information 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
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(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
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Trustee may rely upon the purported genuineness and due execution of any such
document, and on the purported genuineness of any signature thereon. The
Trustee shall not be required to make any independent examination of any
documents contained in each Mortgage File beyond the review specifically
required herein. The Trustee makes no representations as to: (i) the validity,
legality, enforceability or genuineness of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any Mortgage Loan. If the
Trustee finds any document or documents constituting a part of a Mortgage File
not to have been executed or received, or to be unrelated to the Mortgage
Loans identified in the Mortgage Loan Schedule, the Trustee shall promptly so
notify the Company. The Company hereby covenants and agrees that, if any
such defect cannot be corrected or cured, the Company shall, not later
than 60 days after the Trustee's notice to it respecting such defect,
within the three-month period commencing on the Closing Date (or within
the two-year period commencing on the Closing Date if the related
Mortgage Loan is a "defective obligation" within the meaning of Section
860G(a)(4)(B)(ii) of the Code and Treasury Regulation Section
1.860G-2(f)), either (i) 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
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
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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
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the Mortgage Loans. With respect to the conveyance of the Mortgage Loans
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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
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;
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(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) All of the Group I Loans and all of the Group II Loans with
Loan-to-Value Ratios as of the Cut-Off Date in excess of 80% were
covered by a Primary Insurance Policy or an FHA insurance policy or a VA
guaranty, and such policy or guaranty is valid and remains in full force
and effect;
(xii) As of the Closing Date, all policies of insurance required by
this Agreement or by a Selling and Servicing Contract have been validly
issued and remain in full force and effect, including such policies
covering the Company, the Master Servicer or any Servicer;
(xiii) As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
(xiv) Each Mortgage was documented by appropriate FNMA/FHLMC
mortgage instruments in effect at the time of origination, or other
instruments approved by the Company;
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(xv) As of the Closing Date, the Mortgaged Property securing each
Mortgage relating to a Mortgage Loan that is not a Cooperative Loan is
improved with a one- to four-family dwelling unit, including units in a
duplex, condominium project, townhouse, a planned unit development or a
de minimis planned unit development;
(xvi) As of the Closing Date, each Mortgage and Mortgage Note is the
legal, valid and binding obligation of the maker thereof and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by laws affecting the enforcement of
creditors' rights generally and principles of equity;
(xvii) As of the date of origination, as to Mortgaged Properties
which are units in condominiums or planned unit developments, all of such
units met FNMA or FHLMC requirements, are located in a condominium or
planned unit development projects which have received FNMA or FHLMC
approval, are approvable by FNMA or FHLMC or are otherwise acceptable to
the Company;
(xviii) None of the Group I Loans and Group II Loans are Buydown
Loans;
(xix) Based solely on representations of the Mortgagors obtained at
the origination of the related Mortgage Loans, approximately 96.94% (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 2.95% (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
0.11% (by Principal Balance) of the Group I Loans will be secured by
Mortgaged Properties which were investor properties of the related
Mortgagors; approximately 94.05% (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 and approximately 5.95%
(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 19 Group I Loans representing approximately 0.98% (by
Principal Balance) of the Group I Loans and 6 Group II Loans representing
approximately 1.27% (by Principal Balance) of the Group II Loans will be
secured by interests in Cooperative Apartments;
(xx) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form satisfactory to 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
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purchased by it which were available for inclusion in the Mortgage Pool
and as to which the representations and warranties in this Section 2.03
could be made;
(xxiv) With respect to each Cooperative Loan, the Cooperative Stock
that is pledged as security for the Cooperative Loan is held by a person
as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(xxv) Each Cooperative Loan is secured by a valid, subsisting and
enforceable (except as such enforcement may be limited by laws affecting
the enforcement of creditors' rights generally and principles of equity)
perfected first lien and security interest in the related Cooperative
Stock securing the related Mortgage Note, subject only to (a) liens of
the Cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the Cooperative's payments for its blanket mortgage,
current and future real property taxes, insurance premiums, maintenance
fees and other assessments to which like collateral is commonly subject,
and (b) other matters to which like collateral is commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by the Security Agreement;
(xxvi) With respect to any Mortgage Loan as to which an affidavit has
been delivered to the Trustee certifying that the original Mortgage Note
is a Destroyed Mortgage Note, if such Mortgage Loan is subsequently in
default, the enforcement of such Mortgage Loan or of the related
Mortgage by or on behalf of the Trustee will not be materially adversely
affected by the absence of the original Mortgage Note;
(xxvii) Based upon an appraisal of the Mortgaged Property securing
each Mortgage Loan, approximately 91.46% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio less than or equal to 80%,
approximately 8.54% (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-to-Value Ratio greater than
95%; and approximately 97.51% (by Principal Balance) of the Group II
Loans had a current Loan-to-Value Ratio less than or equal to 80%,
approximately 2.48% (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 no Group II Loan had a current Loan-to-Value Ratio greater than
95%;
(xxviii) Approximately 49.26% (by Principal Balance) of the Group I
Loans and approximately 73.93% (by Principal Balance) of the Group II
Loans were originated for the purpose of refinancing existing mortgage
debt, including cash-out refinancings; and approximately 50.74% (by
Principal Balance) of the Group I Loans and approximately 26.07% (by
Principal Balance) of the Group II Loans were originated for the purpose
of purchasing the Mortgaged Property;
(xxix) Not less than approximately 96.38% and 97.23% (by Principal
Balance) of the Group I Loans and Group II Loans, respectively, were
originated under full documentation programs; and
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(xxx) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian, as the case may be, and
shall continue throughout the term of this Agreement. Upon discovery by
any of the Company, the Master Servicer, the Trustee or the Custodian of
a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of the related Mortgage Loans
or the interests of the Certificateholders in the related Mortgage
Loans, the Company, the Master Servicer, the Trustee or the Custodian,
as the case may be, discovering such breach shall give prompt written
notice to the others. Within 90 days of its discovery or its receipt of
notice of breach, the Company shall 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
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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).
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
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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
property consisting of, arising from or relating to any of the property
described below: The uncertificated REMIC I Regular Interests, including
without limitation all rights represented thereby in and to (i) the
Mortgage Loans identified on the Mortgage Loan Schedule, including the
related Mortgage Notes, Mortgages, Cooperative Stock Certificates, and
Cooperative Leases, all Substitute Mortgage Loans and all distributions
with respect to such Mortgage Loans and Substitute Mortgage Loans
payable on and after the Cut-Off Date, (ii) the Certificate Account, the
Investment Account, the Reserve Fund and the Class I-A-14 Rounding
Account, and all money or other property held therein, and the Custodial
Accounts for P&I and the Custodial Accounts for Reserves (to the extent
of the amounts on deposit or other property therein attributable to the
Mortgage Loans); and (iii) amounts paid or payable by the insurer under
any FHA insurance policy or any Primary Insurance Policy and proceeds of
any VA guaranty and any other insurance policy related to any Mortgage
Loan or the
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Mortgage Pool; (iv) all property or rights arising from or by virtue of
the disposition of, or collections with respect to, or insurance proceeds
payable with respect to, or claims against other persons with respect to,
all or any part of the collateral described in (i)-(iii) above (including
any accrued discount realized on liquidation of any investment purchased
at a discount), and (v) all cash and non-cash proceeds of the collateral
described in (i)-(iv) above;
(II) All accounts, general intangibles, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods,
letters of credit, advices of credit, investment property and other
rights arising from or by virtue of the disposition of, or collections
with respect to, or insurance proceeds payable with respect to, or
claims against other persons with respect to, all or any part of the
collateral described in (I) above (including any accrued discount
realized on liquidation of any investment purchased at a discount); and
(III) All cash and non-cash proceeds of the collateral described in
(I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes, the Mortgages
and such other goods, letters of credit, advices of credit, instruments,
money, documents, chattel paper or certificated securities shall be
deemed to be possession by the secured party or possession by a
purchaser for purposes of perfecting the security interest pursuant to
the Uniform Commercial Code (including, without limitation, Sections
9-305 and 9-115 thereof) as in force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be
deemed notifications to, or acknowledgments, receipts or confirmations
from, securities intermediaries, bailees or agents of, or persons
holding for, the Trustee, as applicable for the purpose of perfecting
such security interest under applicable law.
The Company and the Trustee shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the REMIC II
Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. In connection
herewith, the Trustee shall have all of the rights and remedies of a
secured party and creditor under the Uniform Commercial Code as in force
in the relevant jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.05, and to enter into a
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.
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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 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
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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
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Administration and Servicing of Mortgage Loans
----------------------------------------------
Section 3.01. The Company to Act as Master Servicer. The Company shall
-------------------------------------
act as Master Servicer to service and administer the Mortgage Loans on
behalf of the Trustee and for the benefit of the Certificateholders in
accordance with the terms hereof and in the same manner in which, and
with the same care, skill, prudence and diligence with which, it
services and administers similar mortgage loans for other portfolios,
and shall have full power and authority to do or cause to be done any
and all things in connection with such servicing and administration
which it may deem necessary or desirable, including, without limitation,
the power and authority to bring actions and defend the Trust Fund on
behalf of the Trustee in order to enforce the terms of the Mortgage
Notes. The Master Servicer may perform its master servicing
responsibilities through agents or independent contractors, but shall
not thereby be released from any of its responsibilities hereunder and
the Master Servicer shall diligently pursue all of its rights against
such agents or independent contractors.
The Master Servicer shall make reasonable efforts to collect or cause to
be collected all payments called for under the terms and provisions of
the Mortgage Loans and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of any
Primary Insurance Policy, any FHA insurance policy or VA guaranty, any
hazard insurance policy, and federal flood insurance, cause to be
followed such collection procedures as are followed with respect to
mortgage loans comparable to the Mortgage Loans and held in portfolios
of responsible mortgage lenders in the local areas where each Mortgaged
Property is located. The Master Servicer shall enforce "due-on-sale"
clauses with respect to the related Mortgage Loans, to the extent
permitted by law, subject to the provisions set forth in Section 3.08.
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
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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 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. 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
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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 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
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Securities Corp., its successors and assigns, for various owners of
interests in PNC Mortgage Securities Corp. mortgage-backed pools or (ii)
[Servicer's Name] in trust for PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and
insurance custodial account for PNC Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners of
interests in PNC Mortgage Securities Corp. mortgage-backed pools or (ii)
[Servicer's Name] in trust for PNC Mortgage Securities Corp. and various
Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that
have been collected by any Servicer and are due to the Certificate
Account pursuant to Section 4.01 of this Agreement.
Section 3.03. The Investment Account; Eligible Investments.(a) Not
----------------------
later than the Withdrawal Date, the Master Servicer shall withdraw or
direct the withdrawal of funds in the Custodial Accounts for P&I, for
deposit in the Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers which
were due on the 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
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Distribution Date, the Master Servicer shall deposit such funds, net of any
gains (except Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i) one
or more Eligible Investments which shall in no event mature later than
the Business Day prior to the related Distribution Date (except if such
Eligible Investments are obligations of the Trustee, such Eligible
Investments may mature on the Distribution Date), or (ii) such other
instruments as shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
-----------------------
(a) Not later than the Business Day prior to the related Distribution
Date, the Master Servicer shall direct the Investment Depository to
deposit the amounts previously deposited into the Investment Account
(which may include a deposit of Eligible Investments) to which the
Holders of the REMIC I Regular Interests and 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;
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(ii) To reimburse itself or the applicable Servicer for amounts
expended by or for the account of the Master Servicer pursuant to
Section 3.09 or amounts expended by such Servicer pursuant to the
Selling and Servicing Contracts in connection with the restoration of
property damaged by an Uninsured Cause or in connection with the
liquidation of a Mortgage Loan;
(iii) To pay to itself, with respect to the related Mortgage Loans,
the Master Servicing Fee (net of Compensating Interest reduced by Payoff
Earnings and Payoff Interest) as to which no prior withdrawals from
funds deposited by the Master Servicer have been made;
(iv) To reimburse itself or the applicable Servicer for advances
made with respect to related Mortgage Loans which the Master Servicer has
determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned in
the Investment Account and the Certificate Account to which it is
entitled and to reimburse itself for expenses incurred by and
reimbursable to it pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the
Certificate Account not required to be on deposit therein at the time of
such withdrawal;
(vii) To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts
specified in Section 3.04(a); and
after making or providing for the above withdrawals
(viii) To clear and terminate the Investment Account and the
Certificate Account following termination of this Agreement pursuant to
Section 9.01.
Since, in connection with withdrawals pursuant to paragraphs (i) and
(ii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer or the applicable Servicer shall keep and maintain separate
accounting for each Mortgage Loan, for the purpose of justifying any
such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such Servicer
holds and maintains a Buydown Fund Account) is authorized to make
withdrawals, from time to time, from the Buydown Fund Account or
Custodial Account for P&I established by any Servicer under its
supervision of the following amounts of Buydown Funds:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(ii) In the event of a Payoff of any Mortgage Loan having a related
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);
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(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
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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 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
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in a community which participates in the National Flood Insurance Program at
the time of origination of the related Mortgage Loan, the Master Servicer
shall cause flood insurance to be provided. The hazard insurance coverage
required by this Section 3.07 may be met with blanket policies providing
protection equivalent to individual policies otherwise required. The
Master Servicer or the applicable Servicer shall be responsible for
paying any deductible amount on any such blanket policy. The Master
Servicer agrees to present, or cause to be presented, on behalf of and
for the benefit of the Trustee and Certificateholders, claims under the
hazard insurance policy respecting any Mortgage Loan, and in this regard
to take such reasonable actions as shall be necessary to permit recovery
under such policy.
Section 3.08. Enforcement of Due-on-Sale Clauses; Assumption Agreements.
---------------------------------------------------------
When any Mortgaged Property is about to be conveyed by the Mortgagor,
the Master Servicer shall, to the extent it has knowledge of such
prospective conveyance and prior to the time of the consummation of such
conveyance, exercise on behalf of the Trustee the Trustee's rights to
accelerate the maturity of such Mortgage Loan, to the extent that such
acceleration is permitted by the terms of the related Mortgage Note,
under any "due-on-sale" clause applicable thereto; provided, however,
that the Master Servicer shall not exercise any such right if the
due-on-sale clause, in the reasonable belief of the Master Servicer, is
not enforceable under applicable law or if such exercise would result in
non-coverage of any resulting loss that would otherwise be covered under
any insurance policy. In the event the Master Servicer is prohibited
from exercising such right, the Master Servicer is authorized to take or
enter into an assumption and modification agreement from or with the
Person to whom a Mortgaged Property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the Mortgage Note
and, unless prohibited by applicable state law or unless the Mortgage
Note contains a provision allowing a qualified borrower to assume the
Mortgage Note, the Mortgagor remains liable thereon; provided that the
Mortgage Loan shall continue to be covered (if so covered before the
Master Servicer enters such agreement) by any related Primary Insurance
Policy. The Master Servicer is also authorized to enter into a
substitution of liability agreement with such Person, pursuant to which
the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall not enter into any substitution or assumption
with respect to a Mortgage Loan if such substitution or assumption shall
(i) both constitute a "significant modification" effecting an exchange
or reissuance of such Mortgage Loan under the Code (or Treasury
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
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any assumption which the Master Servicer may be restricted by law from
preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
-----------------------------------------
Servicer shall foreclose upon or otherwise comparably convert, or cause
to be foreclosed upon or comparably converted, the ownership of any
Mortgaged Property securing a Mortgage Loan which comes into and
continues in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.01. In
lieu of such foreclosure or other conversion, and taking into
consideration the desirability of maximizing net Liquidation Proceeds
after taking into account the effect of Insurance Proceeds upon
Liquidation Proceeds, the Master Servicer may, to the extent consistent
with prudent mortgage loan servicing practices, accept a payment of less
than the outstanding Principal Balance of a delinquent Mortgage Loan in
full satisfaction of the indebtedness evidenced by the related Mortgage
Note and release the lien of the related Mortgage upon receipt of such
payment. The Master Servicer shall not foreclose upon or otherwise
comparably convert a Mortgaged Property if the Master Servicer is aware
of evidence of toxic waste, other hazardous substances or other evidence
of environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection with such
foreclosure or other conversion, the Master Servicer shall cause to be
followed such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in general mortgage servicing
activities. The foregoing is subject to the provision that, in the case
of damage to a Mortgaged Property from an Uninsured Cause, the Master
Servicer shall not be required to advance its own funds towards the
restoration of the property unless it shall be determined in the sole
judgment of the Master Servicer, (i) that such restoration will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders
after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable to it through Liquidation Proceeds. The
Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall
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 and the Group II-B
Certificates, the Master Servicer may enter into one or more special
servicing agreements with unaffiliated holders of a 100% Percentage
Interest of the Class B Certificate with the lowest priority or holders
of a 100% interest in a class of securities representing such interests
in such Class, subject to each Rating Agency's acknowledgment that the
Ratings of the Certificates in effect immediately prior to the entering
into of such agreement would not be qualified, downgraded or withdrawn
and the Certificates would not be placed on credit review status (except
for possible upgrading) as a result of such agreement. Any such
agreement may contain provisions whereby such holder may (a) instruct
the Master Servicer to instruct a Servicer to the extent provided in the
applicable Selling and Servicing Contract to commence or delay
foreclosure proceedings with respect to delinquent Mortgage Loans
provided that the holder deposits cash with the Master Servicer that
will be available for distribution to Certificateholders if Liquidation
Proceeds are less than they otherwise may have been had the Servicer
acted in accordance with its normal servicing procedures, (b)
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purchase delinquent Mortgage Loans from the Trust Fund immediately prior to
the commencement of foreclosure proceedings at a price equal to the
aggregate outstanding Principal Balance of such Mortgage Loans plus
accrued interest thereon at the applicable Mortgage Interest Rates
through the last day of the month in which such Mortgage Loans are
purchased or (c) assume all of the servicing rights and obligations with
respect to delinquent Mortgage Loans so long as (i) the Master Servicer
has the right to transfer the servicing rights and obligations of such
Mortgage Loans to another servicer and (ii) such holder will service
such Mortgage Loans in accordance with the applicable Selling and
Servicing Contract.
REMIC I shall not acquire any real property (or personal property
incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. In the event that REMIC I acquires
any real property (or personal property incident to such real property)
in connection with a default or imminent default of a Mortgage Loan,
such property shall be disposed of by the Master Servicer within 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 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
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shall not be required for any such withholding. Without limiting the
foregoing, the Master Servicer agrees that it will not withhold with respect
to payments of interest or original issue discount in the case of a
Certificateholder that has furnished or caused to be furnished an effective
Form W-8 or an acceptable substitute form or a successor form and who is not a
"10 percent shareholder" within the meaning of Code Section 871(h)(3)(B) or a
"controlled foreign corporation" described in Code Section 881(c)(3)(C) with
respect to REMIC I, REMIC II or the Depositor. In the event the Trustee
withholds any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholder.
Section 3.10. Trustee to Cooperate; Release of Mortgage Files. Upon the
-----------------------------------------------
Payoff or scheduled maturity of any Mortgage Loan, the Master Servicer
shall cause such final payment to be immediately deposited in the
related Custodial Account for P&I or the Investment Account. Upon notice
thereof, the Master Servicer shall promptly notify the Trustee by a
certification (which certification shall include a statement to the
effect that all amounts received in connection with such payment which
are required to be deposited in either such account have been so
deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the
Trustee shall, not later than the fifth succeeding Business Day, release
the related Mortgage File to the Master Servicer or the applicable
Servicer indicated in such request. With any such Payoff or other final
payment, the Master Servicer is authorized to prepare for and procure
from the trustee or mortgagee under the Mortgage which secured the
Mortgage Note a deed of full reconveyance or other form of satisfaction
or assignment of Mortgage and endorsement of Mortgage Note in connection
with a refinancing covering the Mortgaged Property, which satisfaction,
endorsed Mortgage Note or 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.
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As compensation for its activities under the applicable Selling and
Servicing Contract, the applicable Servicer shall be entitled to
withhold or withdraw from the related Custodial Account for P&I the
amounts provided for in such Selling and Servicing Contract. Each
Servicer is required to pay all expenses incurred by it in connection
with its servicing activities under its Selling and Servicing Contract
(including payment of premiums for Primary Insurance Policies, if
required) and shall not be entitled to reimbursement therefor except as
specifically provided in such Selling and Servicing Contract and not
inconsistent with this Agreement.
Section 3.12. Reports to the Trustee; Certificate Account Statement. Not
-----------------------------------------------------
later than 15 days after each Distribution Date, the Master Servicer
shall forward a statement, certified by a Servicing Officer, to the
Trustee setting forth the status of the Certificate Account as of the
close 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
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reasonable request and during normal business hours at the offices of the
Master Servicer designated by it.
Section 3.15. Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before April 30 of each year, beginning with the first April 30
succeeding the Cut-Off Date by at least six months, the Master Servicer,
at its expense, shall cause a firm of independent public accountants to
furnish a statement to the Trustee to the effect that, in connection
with the firm's examination of the financial statements as of the
previous December 31 of the Master Servicer's parent corporation (which
shall include a limited examination of the Master Servicer's financial
statements), nothing came to their attention that indicated that the
Master Servicer was not in compliance with Section 3.02, Section 3.03,
Section 3.04, Section 3.05, Section 3.11, Section 3.12 and Section 3.13
of this Agreement, except for (i) such exceptions as such firm believes
to be immaterial, and (ii) such other exceptions as are set forth in
such statement.
Section 3.16. [Reserved.]
-----------
Section 3.17. Maintenance of the Reserve Fund; Collections Thereunder.
-------------------------------------------------------
On or prior to the Closing Date, the Master Servicer shall cause to be
established and maintained the Reserve Fund in the Reserve Fund Initial
Amount (such amount to be contributed by DLJ) to provide coverage with
respect to the Class I-A-15 Interest Amount. For each of the first
twenty-four Distribution Dates, the Master Servicer shall calculate the
Class I-A-15 Interest Amount, and shall notify the Trustee by noon New
York City time two Business Days prior to the Distribution Date of such
amount. On each such Distribution Date, the Trustee shall then withdraw
from the Reserve Fund, to the extent funds are available therein, the
Class I-A-15 Interest Amount, and deposit such amount in the Certificate
Account. After the twenty-fourth Distribution Date, the Trustee shall
withdraw from the Reserve Fund and pay to DLJ any amounts then remaining
in the Reserve Fund.
Amounts on deposit in the Reserve Fund shall not be invested and
shall not be held in an interest-bearing account.
To the extent that it constitutes a "reserve fund" for purposes of the
REMIC Provisions, the 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 3.18. [Reserved.]
-----------
Section 3.19. [Reserved.]
-----------
Section 3.20. Assumption or Termination of Selling and Servicing
--------------------------------------------------
Contracts by Trustee. In the event the Master Servicer, or any successor
- --------------------
Master Servicer, shall for any reason no longer be the Master Servicer
(including by reason of an Event of Default), the Trustee as trustee
hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master
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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-14 Rounding Account;
-------------------------------------------------
Collections Thereunder. On or prior to the Closing Date, the Trustee
- ----------------------
shall establish the Class I-A-14 Rounding Account, and DLJ shall deposit
$999.99 therein. The Master Servicer shall maintain such account to
provide, if needed, the Rounding Amount on any Distribution Date. 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-14
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-14
Rounding Account the 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-14 Certificates, 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 such Class, the
aggregate amount allocable to such Class will be applied first to repay
any funds withdrawn from the Class I-A-14 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 Rounding
Amount, and the Trustee shall withdraw from the Class I-A-14 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-14 Rounding
Account shall be deposited in the Certificate Account for distribution
to the Class I-A-14 Certificateholders as described in the immediately
preceding paragraph (and shall be deemed to have been distributed to the
Class I-A-14-L Regular Interests and deposited for their benefit into
the Certificate Account in accordance with Section 4.01(i)).
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Amounts on deposit in the Class I-A-14 Rounding Accounts shall not be
invested.
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 (a) the Rounding Amount to the
Holders of the Class I-A-14-L Regular Interests and (b) the REMIC I
Distribution Amount to the Holders of the REMIC I Regular Interests, and
to have deposited such amounts for their benefit into the Certificate
Account and (ii) from the Certificate Account shall distribute to the
Class R-1 Certificateholders the sum of (a) the Excess Liquidation
Proceeds and (b) the amounts to be distributed to the Class R-1
Certificateholders pursuant to the definition of "REMIC I Distribution
Amount" for such Distribution Date, all in accordance with written
statements received from the Master Servicer pursuant to Section
4.02(b), by wire transfer in immediately available funds for the account
of each such Holder and the Class R-1 Certificateholder, or by any other
means of payment acceptable to each such Holder and the Class R-1
Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 9.01 respecting the final
distribution), as specified by each such Certificateholder and at the
address of such Holder appearing in the Certificate Register.
Notwithstanding any other provision of this Agreement, no actual
distributions pursuant to clause (i) of this Section 4.01 shall be made
on account of the deemed distributions described in this paragraph
except in the event of a liquidation of REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution Reports to
--------------------------------------------------------
the Trustee.
- ------------
(a) To the extent described below, the Master Servicer is obligated to
advance its own funds to the Certificate Account to cover any shortfall
between (i) payments scheduled to be received in respect of Mortgage
Loans, and (ii) the amounts actually deposited in the Certificate
Account on account of such payments. The Master Servicer's obligation to
make any advance or advances described in this Section 4.02 is effective
only to the extent that such advance is, in the good faith judgment of
the Master Servicer made on or before the Business Day immediately
following the Withdrawal Date, reimbursable from Insurance Proceeds or
Liquidation Proceeds of the related Mortgage Loans or recoverable as
late Monthly Payments with respect to the related Mortgage Loans or
otherwise.
Prior to the close of business on the Business Day immediately following
each Withdrawal Date, the Master Servicer shall determine whether or not
it will make a Monthly P&I Advance on the Business Day prior to the next
succeeding Distribution Date (in the event that the applicable Servicer
fails to make such advances) and shall furnish a 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
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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 amounts, if any, to be withdrawn from
the Reserve Fund pursuant to Section 3.17 and from the Class I-A-14
Rounding Account pursuant to Section 3.21, the amounts to be applied to
repay any funds withdrawn from the Class I-A-14 Rounding Account on
prior Distribution Dates 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
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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-14 Certificates
shall be used first to pay any amount payable to the Class I-A-14
Rounding Account pursuant to Section 3.21) and (ii) withdraw from the
Certificate Account the Rounding Amount deposited therein for
distribution on such date pursuant to Section 3.21 and distribute the
amount so withdrawn to the Class I-A-14 Certificates in accordance with
such Section 3.21, 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 and Class R-2 Certificates upon the
termination of REMIC I and REMIC II) shall be payable in the manner
provided above only upon presentation and surrender thereof on or after
the Distribution Date therefor at the office or agency of the
Certificate Registrar specified in the notice delivered pursuant to
Section 4.04(c)(ii) and Section 9.01(b).
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly Payments
on the Mortgage Loans and Insurance Proceeds and Liquidation Proceeds
received and expected to be received during the Payoff Period, the
Master Servicer has notified the Trustee that it believes that the
entire remaining unpaid Class Principal Balance of any Class of
Certificates will become distributable on the next Distribution Date,
the Trustee shall, no later than the 18th day of the
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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
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 Group
II Special Hazard Coverage available to the Senior Certificates remaining
as of the close of business on the applicable Determination Date;
(d) The amount of the Group I Bankruptcy Coverage and the Group II
Bankruptcy Coverage available to the Senior Certificates remaining as of
the close of business on the applicable Determination Date;
(e) The amount of the Group I Fraud Coverage and Group II Fraud
Coverage available to the Senior Certificates remaining as of the close
of business on the applicable Determination Date;
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(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; and
(g) The amounts on deposit in the Reserve Fund.
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-14 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-14
Certificates, distributions in reduction of the Class I-A-14 Principal
Balance will be made in integral multiples of $1,000 at the request of
the appropriate representatives of Deceased Holders of Certificates of
such Class and at the request of Living Holders of Certificates of such
Class or by mandatory distributions, pursuant to Section 4.06(a) and
Section 4.06(d). On and after the earlier of (i) the Group I Credit
Support Depletion Date and (ii) the date on which any loss is allocated
to the Class I-A-14 Certificates, distributions in reduction of the
Class I-A-14 Principal Balance 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-14 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) 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 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 the Class I-A-14
Certificates have been honored, to the extent of amounts available for
principal distributions to such Class.
All requests for principal distributions to Class I-A-14
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-14 Certificates on the next
succeeding Distribution Date, and each succeeding Distribution Date
thereafter, until each such
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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-14 Certificate, all in accordance with the procedures of DTC and the
Trustee. Upon the transfer of beneficial ownership of any Class I-A-14
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 I-A-14 Principal Balance
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 the Class
I-A-14 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-14 Certificates on any
Distribution Date exceeds the aggregate Certificate Principal Balance of
Class I-A-14 Certificates with respect to which principal distribution
requests, as set forth above, have been received, principal
distributions in reduction of the Class I-A-14 Principal Balance will be
made by mandatory distribution pursuant to Section 4.06(d).
(b) A Class I-A-14 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-14 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-14
Certificates so beneficially owned will be eligible for priority with
respect to principal distributions, subject to the limitations stated
above. Class I-A-14 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-14 Certificates greater than the number of
Class I-A-14 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-14 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-14 Certificate will be deemed to be the death of the Holder of such
Class I-A-14 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-14
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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-14 Certificates. The
Trustee shall not be under any duty to determine independently the occurrence
of the death of any deceased Holder. The Trustee may rely entirely upon
documentation delivered to it pursuant to Section 4.06(c) in establishing the
eligibility of any Holder to receive the priority accorded Deceased Holders in
Section 4.06(a).
(c) Requests for principal distributions to any Class I-A-14 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-14 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
applicable Rounding Account) to be distributed to the Class I-A-14
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-14 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-14 Certificate who 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
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turn must forward the withdrawal of such request, on a form required by DTC,
to DTC to be forwarded to the Trustee. If such notice of withdrawal of a
request for distribution has not been received by DTC and forwarded to the
Trustee on or before the Record Date for the next Distribution Date, the
previously made request for a principal distribution will be irrevocable with
respect to the making of principal distributions on such Distribution Date.
In the event any requests for principal distributions are rejected by
the Trustee for failure to comply with the requirements of this Section
4.06, the Trustee shall return such request to the appropriate DTC
Participant with a copy to DTC with an explanation as to the reason for
such rejection.
(d) To the extent, if any, that principal distributions to be made to
the Class I-A-14 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-14 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-14 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-14 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-14 Certificates selected for mandatory
principal distributions are required to provide notice of such mandatory
distributions to the affected Holders. The Master Servicer shall notify
the Trustee of the amount of principal distributions to be made on each
Distribution Date in a timely manner such that the Trustee may fulfill
its obligations under the Depositary Agreement.
(e) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the earlier of (i) the Group I Credit
Support Depletion Date and (ii) the date on which any loss is allocated
to the Class I-A-14 Certificates, distributions in reduction of the
Class I-A-14 Principal Balance will be made pro rata among the Holders
of the Class I-A-14 Certificates and will not be made in integral
multiples of $1,000 nor pursuant to requests for distribution as
permitted by Section 4.06(a) or by mandatory distributions as provided
for by Section 4.06(d).
(f) In the event that Definitive Certificates representing the Class
I-A-14 Certificates are issued pursuant to Section 5.09, an amendment to
this Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in
which distributions in reduction of the Class I-A-14 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-14 Certificates, with the provisions of this Section 4.06.
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ARTICLE V
---------
The Certificates
----------------
Section 5.01. The Certificates.
----------------
(a) The Certificates shall be substantially in the forms set forth in
Exhibit A, B and C 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).
(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
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Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(A) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate to a U.S. Person, the Trustee
shall require delivery to it, and shall not register the Transfer of
any Residual Certificate until its receipt of (1) an affidavit and
agreement (a "Transferee Affidavit and Agreement") attached hereto
as Exhibit J from the proposed Transferee, in form and substance
satisfactory to the Company, representing and warranting, among
other things, that it is not a Non-U.S. Person, that such transferee
is a Permitted Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who
is not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the
provisions of this Section 5.01(c) and agrees to be bound by them,
and (2) a certificate, attached hereto as Exhibit I, from the Holder
wishing to transfer the Residual Certificate, in form and substance
satisfactory to the Company, representing and warranting, among
other things, that no purpose of the proposed Transfer is to allow
such Holder to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee Affidavit and
Agreement by a proposed Transferee under clause (B) above, if the
Trustee has actual knowledge that the proposed Transferee is not a
Permitted Transferee, no Transfer of an Ownership Interest in a
Residual Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate agrees by holding or acquiring such Ownership
Interest (i) to require a Transferee Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its
Ownership Interest and to provide a certificate to the Trustee in
the form attached hereto as Exhibit J; (ii) to obtain the express
written 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.
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(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 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.
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(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
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.
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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 or Residual Certificates presented for
registration in the name of any Person, the Trustee shall require either
(i) an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company to the effect that the
purchase or holding of a Class B or Residual Certificate is permissible
under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code, and will not subject the Trustee, the Master Servicer or the
Company to any obligation or liability (including obligations or
liabilities under Section 406 of ERISA or Section 4975 of the Code) in
addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Master Servicer or the
Company or (ii) only in the case of a Class B Certificate, an officer's
certificate substantially in the form of Exhibit N attached hereto
acceptable to and in form and substance satisfactory to the Trustee and
the Company, which officer's certificate shall not be an expense of the
Trustee, the Master Servicer or the Company.
(e) No transfer, sale, pledge or other disposition of a Junior
Subordinate Certificate shall be made unless such transfer, sale, pledge
or other disposition is made in accordance with this Section 5.01(e) or
Section 5.01(f); provided that any transfer, sale, pledge or other
disposition of a Junior Subordinate Certificate shall be exempt from the
requirements of this Section 5.01(e) and Section 5.01(f) if each of the
Certificateholders desiring to effect such transfer and such
Certificateholder's transferee are among the following: (i) DLJ Mortgage
Capital, Inc., (ii) Donaldson, Lufkin & Jenrette Securities Corporation
and (iii) DLJ Mortgage Acceptance Corp. Each Person who, at any time,
acquires any ownership interest in any Junior Subordinate Certificate
shall be deemed by the acceptance or acquisition of such ownership
interest to have agreed to be bound by the following provisions of this
Section 5.01(e) and Section 5.01(f), as applicable. No transfer of a
Junior Subordinate Certificate shall be deemed to be made in accordance
with this Section 5.01(e) unless such transfer is made pursuant to an
effective registration statement under the Securities Act or unless the
Trustee is provided with the certificates and an Opinion of Counsel, if
required, on which the Trustee may conclusively rely, which establishes
or establish to the Trustee's satisfaction that such transfer is exempt
from the registration requirements under the Securities Act, as follows:
In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act, the Trustee shall require, in order to assure
compliance with the Securities Act, that the Certificateholder desiring
to effect such transfer certify to the 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
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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 Trust Fund, the REMIC II
Trust Fund or the Company. Such Opinion of Counsel shall allow for the
forwarding, and the Trustee shall forward, a copy thereof to the Rating
Agencies. Notwithstanding the foregoing, any Junior Subordinate
Certificate may be transferred, sold, pledged or otherwise disposed of
in accordance with the requirements set forth in Section 5.01(f).
(f) To effectuate a Certificate transfer of a Junior Subordinate
Certificate in accordance with this Section 5.01(f), the proposed
transferee of such Certificate must provide the Trustee and the Company
with an investment letter substantially in the form of Exhibit L
attached hereto, which investment letter shall not be an expense of the
Trustee or the Company, and which investment letter states that, among
other things, such transferee (i) is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or the accounts
of other "qualified institutional buyers" as defined under Rule 144A,
and (ii) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the Securities Act
provided by Rule 144A. Notwithstanding the foregoing, the proposed
transferee of such Certificate shall not be required to provide the
Trustee or the Company with Annex 1 or Annex 2 to the form of Exhibit L
attached hereto if the Company so consents prior to each such transfer.
Such transfers shall be deemed to have complied with the requirements of
this Section 5.01(f). The Holder of a Certificate desiring to effect
such transfer does hereby agree to indemnify the Trustee, the Company,
and the Certificate Registrar against any liability that may result if
transfer is not made in accordance with this Agreement.
Section 5.02. Certificates Issuable in Classes; Distributions of
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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, initial
Component Principal Balances and Final Maturity Dates as specified in
the Preliminary Statement to this Agreement. The aggregate Percentage
Interest of each Class of Certificates of which the Class Principal
Balance equals zero as of the Cut-Off Date that may be authenticated and
delivered under this Agreement is limited to 100%. Certificates shall be
issued in Authorized Denominations.
Section 5.03. Registration of Transfer and Exchange of Certificates. The
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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.
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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.
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 canceled
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
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and Section 4.04 and for all other purposes whatsoever, and neither the
Company, the Master Servicer, the Trustee, the Certificate Registrar nor
any agent of the Company, the Master Servicer or the Trustee shall be
affected by notice to the contrary.
Section 5.06. Temporary Certificates. Upon the initial issuance of the
----------------------
Certificates, the Trustee may execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver, temporary
Certificates which are printed, lithographed, typewritten or otherwise
produced, in any Authorized Denomination, of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations
in form from the forms of the Certificates set forth as Exhibits A, B, C
and H hereto as the Trustee's officers executing such Certificates may
determine, as evidenced by their execution of the Certificates.
Notwithstanding the foregoing, the Certificates may remain in the form
of temporary certificates.
If temporary Certificates are issued, the Trustee shall cause definitive
Certificates to be prepared within ten Business Days 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.
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Unless and until definitive, fully registered Book-Entry Certificates
(the "Definitive Certificates") have been issued to the Beneficial
Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in full force and
effect with respect to the Book-Entry Certificates;
(b) the Master Servicer and the Trustee may deal with the Clearing
Agency for all purposes with respect to the Book-Entry Certificates
(including the making of distributions on the Book-Entry Certificates)
as the sole Certificateholder;
(c) to the extent that the provisions of this Section 5.07 conflict
with any other provisions of this Agreement, the provisions of this
Section 5.07 shall control; and
(d) the rights of the Beneficial Holders shall be exercised only
through the Clearing Agency and the DTC Participants and shall be
limited to those established by law and agreements between such
Beneficial Holders and the Clearing Agency and/or the DTC Participants.
Pursuant to the Depositary Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.09, the initial Clearing
Agency will make book-entry transfers among the DTC Participants and
receive and transmit distributions of principal and interest on the
related Class of Book-Entry Certificates to such DTC Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Holders of
Book-Entry Certificates evidencing a specified Percentage Interest, such
direction or consent may be given by the Clearing Agency at the
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
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that the continuation of a book-entry system with respect to the Book-Entry
Certificates through the Clearing Agency is no longer in the best interests of
the Certificateholders with respect to such Certificates, the Trustee shall
notify all Certificateholders of Book-Entry Certificates of the occurrence of
any such event and of the availability of Definitive Certificates. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall execute and the Trustee or
any Authenticating Agent shall authenticate and deliver the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for all of
the Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon
and performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates, and the Trustee shall recognize the
Holders of Definitive Certificates as Certificateholders hereunder.
Section 5.10. Office for Transfer of Certificates. The Trustee shall
-----------------------------------
maintain in New York, New York and in Massachusetts an office or agency
where Certificates may be surrendered for registration of transfer or
exchange. State Street Bank and Trust Company, N.A., 61 Broadway, New
York, NY 10006, Attention: Corporate Trust Window, and the Corporate
Trust Office 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
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reason of reckless disregard of duties and obligations hereunder. The Company,
the Master Servicer and any director, officer, employee or agent of the
Company or the Master Servicer may rely in good faith on any document of
any kind properly executed and submitted by any Person respecting any
matters arising hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master
Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense relating to any Mortgage Loan (other than
as otherwise permitted in this Agreement) or incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and
duties hereunder. The Company and the Master Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it
in any expense or liability; provided, however, that the Company or the
Master Servicer may in its discretion undertake any such action which it
may deem necessary or desirable with respect to the Mortgage Loans, this
Agreement, the Certificates or the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund and the Company and the Master Servicer shall be entitled to
be reimbursed therefor out of the Certificate Account, as provided by
Section 3.05.
Section 6.04. The Company and the Master Servicer not to Resign. The
-------------------------------------------------
Company shall not resign from the obligations and duties (including,
without limitation, its obligations and duties as initial Master
Servicer) hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any successor
Master Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination
permitting the resignation of the Company or any successor Master
Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor Master Servicer shall have assumed the
Master Servicer's responsibilities and obligations in accordance with
Section 7.02 hereof.
If the Company is no longer acting as Master Servicer, then the
successor Master Servicer shall give prompt written notice to the
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
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Default
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Section 7.01. Events of Default. (a) In case one or more of the
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following Events of Default by the Master Servicer or by a successor
Master Servicer shall occur and be continuing, that is to say:
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(i) Any failure by the Master Servicer to deposit into the
Certificate Account any payment required to be deposited therein by the
Master Servicer under the terms of this Agreement which
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, marshaling 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, marshaling of assets and
liabilities or similar proceedings of or relating to the Master Servicer
or of or relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable bankruptcy, insolvency or reorganization statute, make
an assignment for the benefit of its creditors, or voluntarily suspend
payment of its obligations; or
(vi) Any failure of the Master Servicer to make any Monthly P&I
Advance (other than a Nonrecoverable Advance) which continues unremedied
at the opening of business on the Distribution Date in respect of which
such Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, either the Trustee, or the Holders of
Certificates evidencing Percentage Interests aggregating not less than
25% of the REMIC II Trust Fund, by notice in writing to the Company and
the Master Servicer (and to the Trustee if given by the
Certificateholders, in which case such notice shall set forth evidence
reasonably satisfactory to the Trustee that such Event of Default
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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 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
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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, marshaling 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, marshaling of assets and liabilities
or similar proceedings of or relating to the Company or of or relating to
all or substantially all of its property; or
(iv) The Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
any applicable bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of creditors, or voluntarily suspend payment
of its obligations;
then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Holders of Certificates evidencing
Percentage Interests aggregating not less than 25% of the REMIC II Trust
Fund, by notice in writing to the Company and the Trustee, may direct
the Trustee in accordance with Section 10.03 to institute an action,
suit or proceeding in its own name as Trustee hereunder to enforce the
Company's obligations hereunder.
(c) In any circumstances in which this Agreement states that
Certificateholders owning Certificates evidencing a certain percentage
Percentage Interest in the REMIC II Trust Fund may take certain action,
such action shall be taken by the Trustee, but only if the requisite
percentage of Certificateholders required under this Agreement for
taking like action or giving like instruction to the Trustee under this
Agreement shall have so directed the Trustee in writing.
Section 7.02. Trustee to Act; Appointment of Successor. On and after the
----------------------------------------
time the Master Servicer receives a notice of termination pursuant to
Section 7.01, the Trustee shall be the successor in all respects to the
Master Servicer under this Agreement and under the Selling and Servicing
Contracts with respect to the Mortgage Loans in the Mortgage Pool and
with respect to the transactions set forth or provided for herein and
shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto arising after
the Master Servicer receives such notice of termination placed on the
Master Servicer by the terms and provisions hereof and thereof, and
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
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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
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Concerning the Trustee
----------------------
Section 8.01. Duties of Trustee.
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(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default
has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Agreement,
and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that the Trustee shall not be responsible for the
accuracy or content of any such certificate, statement, opinion, report,
or other order or instrument furnished by the Company or Master Servicer
to the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:
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(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.
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;
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(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, 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.
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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,
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liability or expense incurred by it hereunder (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) except any such expense or disbursement
as may arise from its negligence or bad faith. Such obligation shall survive
the termination of this Agreement or resignation or removal of the
Trustee. The Company shall, at its expense, prepare or cause to be
prepared all federal and state income tax and franchise tax and
information returns relating to the REMIC I Trust Fund or the REMIC II
Trust Fund required to be prepared or filed by the Trustee and shall
indemnify the Trustee for any liability of the Trustee arising from any
error in such returns.
Section 8.06. Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be (i) an institution insured by the FDIC,
(ii) a corporation or association organized and doing business under the
laws of the United States of America or of any state, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of
any aforementioned supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may at any
----------------------------------
time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Master Servicer. Upon receiving such
notice of resignation, the Master Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or 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.
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Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee
as provided in Section 8.08. Any expenses associated with the
resignation of the Trustee shall be borne by the Trustee, and any
expenses associated with the removal of the Trustee shall be borne by
the Master Servicer.
Section 8.08. Successor Trustee. Any successor trustee appointed as
-----------------
provided in Section 8.07 shall execute, acknowledge and deliver to the
Master Servicer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein. The predecessor shall deliver to the successor trustee
all Mortgage Files, related documents, statements and all other property
held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such appointment such successor
trustee shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to (i) all 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
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the Trustee may consider necessary or desirable; provided, that the Trustee
shall remain liable for all of its obligations and duties under this
Agreement. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment; provided, that the Trustee
shall remain liable for all of its obligations and duties under this
Agreement. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section
8.06 hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section
8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly and severally, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust Fund or the REMIC II Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustee(s) and
co-trustee(s), as effectively as if given to each of them. Every
instrument appointing any separate trustee(s) or co-trustee(s) shall
refer to this Agreement and the conditions of this Article VIII. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions of
this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and the
trust shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or more
---------------------
Authenticating Agents which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in
this Agreement to the authentication of Certificates by the Trustee or
the Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent must be acceptable to the Master Servicer and must be a
corporation or banking association organized and doing business under
the laws of the United States of America or of any
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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 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
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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 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
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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 "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.
-----------------------------------
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(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
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
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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
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.
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<PAGE>
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 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
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<PAGE>
Registrar, afford such applicants access during normal business hours to the
most recent list of Certificateholders held by the Trustee. If such a list is
as of a date more than 90 days prior to the date of receipt of such
applicants' request, the Trustee shall promptly request from the Certificate
Registrar a current list as provided above, and shall afford such applicants
access to such list promptly upon receipt.
Every Certificateholder, by receiving and holding the same, agrees with
the Master Servicer and the Trustee that neither the Master Servicer nor
the Trustee shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Certificateholders
hereunder, regardless of the source from which such information was
derived.
Section 10.05. Governing Law. This Agreement shall be construed in
-------------
accordance with the laws of the State of New York and the obligations,
rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
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, 25 Broadway, 12th Floor, New York,
New York 10004, Attention: Frank Raiter, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in writing by
S&P and (e) in the case of DCR, 17 State Street, 12th Floor, New York,
New York 10004, or such other address as may hereafter be furnished to
the Trustee and Master Servicer in writing by DCR. Notices to the Rating
Agencies shall also be deemed to have been duly given if mailed by first
class mail, postage prepaid, to the above listed addresses of the Rating
Agencies. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid,
at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 10.07. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders
thereof.
Section 10.08. Counterpart Signatures. For the purpose of facilitating
----------------------
the recordation of this Agreement as herein provided and for other
purposes, this Agreement may be
126
<PAGE>
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 10.09. Benefits of Agreement. Nothing in this Agreement or in
---------------------
any Certificate, expressed or implied, shall give to any Person, other
than the parties hereto and their respective successors hereunder, any
separate trustee or co-trustee appointed under Section 8.10 and the
Certificateholders, any benefit or any legal or equitable right, remedy
or claim under this Agreement.
Section 10.10. Notices and Copies to Rating Agencies.
-------------------------------------
(a) The Trustee shall notify the Rating Agencies of the occurrence of
any of the following events, in the manner provided in Section 10.06:
(i) the occurrence of an Event of Default pursuant to Section 7.01,
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
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<PAGE>
Loans and (y) the amounts actually deposited in the Certificate Account
on account of such payments, pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements pursuant to
Section 4.02, Section 4.05, Section 3.12, Section 3.13 or Section 3.15
or any other statements or reports to the Rating Agencies in such time
and manner that such statements or determinations are required to be
provided to Certificateholders. With respect to the reports described in
the second paragraph of Section 4.05, the Master Servicer shall provide
such reports to the Rating Agencies in respect of each Distribution
Date, without regard to whether any Certificateholder or the Trustee has
requested such report for such Distribution Date.
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IN WITNESS WHEREOF, the Company and the Trustee have caused their
names to be signed hereto by their respective officers, thereunto duly
authorized, and their respective seals, duly attested, to be hereunto
affixed, all as of the day and year first above written.
PNC MORTGAGE SECURITIES CORP.
(SEAL)
By: \s\Michael A. Aaknes
--------------------
Michael A. Aaknes
Its: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY, as
TRUSTEE
(SEAL)
By: \s\ David Duclos
----------------
Its: Assistant Vice President
------------------------
<PAGE>
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 27th day of October 1998 before me, a Notary Public in and for
said State, personally appeared Michael A. Aaknes, known to me to be the
Assistant 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)
<PAGE>
CERTIFICATE OF ACKNOWLEDGEMENT
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 27th 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\Craig D. Lange (SEAL)
-------------------
<PAGE>
<PAGE>
Exhibit A-I-A-1
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 27, 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 1998-11 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:
Class I-A-1 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-2
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 27, 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 1998-11 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: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-2 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-3
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 amended.
The issue date (the "Issue Date") of this Certificate is October 27, 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 1998-11 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: 6.500%
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
A-1
<PAGE>
Exhibit A-I-A-4
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
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 27, 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 1998-11 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: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-5
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 27, 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 1998-11 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: 6.500%
Cut-Off Date: October 1, 1998
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
A-1
<PAGE>
Exhibit A-I-A-6
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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-I-A-7
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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-I-A-8
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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-I-A-9
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 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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-I-A-10
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 27, 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 1998-11 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: 7.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-10 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-11
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 27, 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 1998-11 Portion of the Class I-A-11 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$
-----------------------------------------------
Class I-A-11 Certificate Interest Rate: 6.250%
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
A-1
<PAGE>
Exhibit A-I-A-12
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 27, 1998.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
25% of the Constant Prepayment Rate 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 Constant Prepayment Rate 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 1998-11 Portion of the Class I-A-12 Notional Amount as of
the Cut-Off Date Evidenced by this Certificate:
$
-----------------------------------------------
Class I-A-12 Certificate Interest Rate: 6.500% applied to the Class I-A-12
Notional Amount
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: $0.00
Class I-A-12 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-13
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 27, 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 1998-11 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: 0.000%
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
A-1
<PAGE>
Exhibit A-I-A-14
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
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 27, 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 1998-11 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: 6.750%
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
A-1
<PAGE>
Exhibit A-I-A-15
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-15
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular 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 27, 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 1998-11 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: For the first twelve Distribution
Dates, 8.000%; for the thirteenth
through the twenty-fourth
Distribution Dates, 7.000%; and
thereafter, 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: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-16
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 27, 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 1998-11 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: 6.750%
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
A-1
<PAGE>
Exhibit A-I-A-17
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 27, 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 1998-11 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: 6.000%
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
A-1
<PAGE>
Exhibit A-I-A-18
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 27, 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 1998-11 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: For the initial Distribution Date,
9.855%; and thereafter, 38.880%
minus the product of LIBOR and 5.4,
with a minimum Certificate Interest
Rate of 0.000% and a maximum
Certificate Interest Rate of 38.880%
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
A-1
<PAGE>
Exhibit A-I-A-19
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 27, 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 1998-11 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: 0.000%
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
A-1
<PAGE>
Exhibit A-I-A-20
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-20
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 27, 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 1998-11 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: 6.600%
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.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-21
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 27, 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 1998-11 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: 0.000%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class I-A-21 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-A-22
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 27, 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 1998-11 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: For the initial Distribution Date,
6.175%; and thereafter, LIBOR plus
0.800%, with a minimum Certificate
Interest Rate of 0.800% and a maximum
Certificate Interest Rate of 8.000%
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
A-1
<PAGE>
Exhibit A-II-A-1
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 27, 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 1998-11 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: 6.500%
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
A-1
<PAGE>
Exhibit A-II-A-2
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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-II-A-3
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is October 27, 1998.
[Assuming that the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this Certificate (i.e.,
25% of the Constant Prepayment Rate 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 Constant Prepayment Rate 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 1998-11 Portion of the Class II-A-3 Principal Balance as of
the Cut-Off Date Evidenced by this Certificate:
$
-----------------------------------------------
Class II-A-3 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-A-3 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-X
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.
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 27, 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 1998-11 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
A-1
<PAGE>
Exhibit A-II-X
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is October 27, 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 1998-11 Portion of the Class II-X Notional Amount as of the
Cut-Off Date Evidenced by this Certificate:
$
--------------------------------------------------
Class II-X Certificate Interest Rate: 6.250% applied to
the Class II-X Notional Amount
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-X Principal Balance
as of the Cut-Off Date: $0.00
Class II-X Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
<PAGE>
Exhibit A-I-P
CUSIP
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 27, 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 1998-11 Portion of the Class I-P Principal Balance as of the
Cut-Off Date evidenced by this Certificate:
$
-----------------------------------------------
Class I-P Certificate Interest Rate: 0.000%
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.
Registered Owner
A-1
<PAGE>
Exhibit A-II-P
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 27, 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 1998-11 Portion of the Class II-P Principal Balance as of the
Cut-Off Date evidenced by this Certificate:
$
--------------------------------------------------
Class II-P Certificate Interest Rate: 0.000%
Cut-Off Date: October 1, 1998
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
A-1
<PAGE>
Exhibit A-I-B-1
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
27, 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 1998-11 Portion of the Class I-B-1 Principal Balance
as of the Cut-Off Date Evidenced by this
Certificate:
$
-----------------------------------------
Class I-B-1 Certificate Interest Rate: 6.500%
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.
--------
A-1
<PAGE>
Exhibit A-I-B-2
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
27, 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 the
Pooling Agreement.
Series 1998-11 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.
------
A-1
<PAGE>
Exhibit A-I-B-3
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
27, 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 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 1998-11 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.
-----
A-1
<PAGE>
Exhibit A-I-B-4
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 "Issue Date") of this Certificate is October
27, 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-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 1998-11 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.
--------
A-1
<PAGE>
Exhibit A-I-B-5
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.
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
27, 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 1998-11 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: $[ ]
---------------------
Registered Owner
Certificate No.
-----
A-1
<PAGE>
Exhibit A-I-B-6
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 "Issue Date") of this Certificate is October
27, 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
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-11 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.
-----
A-1
<PAGE>
Exhibit A-II-B-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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
27, 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-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 II-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 II-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 1998-11 Portion of the Class II-B-1 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$
-----------------------------------
Class II-B-1 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-1 Principal Balance
as of the Cut-Off Date: $
------------------
Registered Owner
Certificate No.
----
A-1
<PAGE>
Exhibit A-II-B-2
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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
27, 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-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 II-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 II-B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-11 Portion of the Class II-B-2 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$
--------------------------------
Class II-B-2 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-2 Principal Balance
as of the Cut-Off Date: $
------------------
Registered Owner
Certificate No.
------
A-1
<PAGE>
Exhibit A-II-B-3
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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
27, 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-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 II-B-3 CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY.
The Class II-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 1998-11 Portion of the Class II-B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------------
Class II-B-3 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-3 Principal Balance
as of the Cut-Off Date: $
----------------
Registered Owner
Certificate No.
-----
A-1
<PAGE>
Exhibit A-II-B-4
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 "Issue Date") of this Certificate is October
27, 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-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 II-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 II-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 1998-11 Portion of the Class II-B-4 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
--------------------------------
Class II-B-4 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-4 Principal Balance
as of the Cut-Off Date: $
-----------------
Registered Owner
Certificate No.
A-1
<PAGE>
Exhibit A-II-B-5
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is October
27, 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-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 II-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 II-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 1998-11 Portion of the Class II-B-5 Principal
Balance as of the Cut-Off Date Evidenced
by this Certificate:
$
------------------------------------
Class II-B-5 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-5 Principal Balance
as of the Cut-Off Date: $
----------------
Registered Owner
Certificate No.
-----
A-1
<PAGE>
Exhibit A-II-B-6
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 "Issue Date") of this Certificate is October
27, 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-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 II-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 II-B-6 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-11 Portion of the Class II-B-6 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
--------------------------------
Class II-B-6 Certificate Interest Rate: 6.250%
Cut-Off Date: October 1, 1998
First Distribution Date: November 25, 1998
Last Scheduled Distribution Date:
Class II-B-6 Principal Balance
as of the Cut-Off Date: $
----------------------
Registered Owner
Certificate No.
-------
A-1
<PAGE>
Exhibit B
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consist of, among other things, a
pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE COMPANY AND
THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED
BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R-2 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO
BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS
R-3 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 1998-11 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: 6.500%.
Additionally the Class R-2 Certificates are
entitled to the Residual Distribution Amount
as defined in the Pooling Agreement.
Cut-Off Date: October 1, 1998
A-1
<PAGE>
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.
-----
A-1
<PAGE>
Exhibit C-R-1
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 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 1998-11 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
C-1
<PAGE>
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.
----
C-1
<PAGE>
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 "Trust Fund") whose assets
consist of, among other things, a pool (the "Mortgage Pool") of conventional
one- to four-family mortgage loans (the "Mortgage Loans"), formed and
administered by PNC Mortgage Securities Corp. (the "Company"), which term
includes any successor entity under the Pooling Agreement referred to below.
The Mortgage Pool was created pursuant to a Pooling and Servicing Agreement,
dated as of the Cut-Off Date stated above (the "Pooling Agreement"), between
the Company and State Street Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month immediately preceding the month of such distribution
(the "Record Date"), to the extent of such Certificateholder's Percentage
Interest represented by this Certificate in the portion of the REMIC I
Available Distribution Amount for such Distribution Date then distributable on
the Certificates of this Class, as specified in Section 4.01 of the Pooling
Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate to the Certificate
Registrar.
Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been 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.
C-1
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
-------------------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------
Dated:
--------------------------
C-1
<PAGE>
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 Trust Fund.
The Certificates do not represent an obligation of, or an interest in,
the Company or any of its affiliates and are not insured or guaranteed by any
governmental agency. The Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Pooling Agreement. In the event funds
are advanced with respect to any Mortgage Loan, such advance is reimbursable
to the Master Servicer from the related recoveries on such Mortgage Loan or
from other cash deposited in the Certificate Account to the extent that such
advance is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement to the Master
Servicer of advances made, or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Certificateholders under the Pooling
Agreement at any time by the Company, the Master Servicer and the Trustee with
the consent of the Holders of the Certificates evidencing Percentage Interests
aggregating not less than 66% of the REMIC II Trust Fund. The Pooling
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained
by the Trustee in the City and State of New York, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth hereinabove
will be issued to the designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is exempt
from or is made in accordance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. In the event that a transfer is to be made without
registration or qualification under applicable laws, (i) in the event such
transfer is made pursuant to Rule 144A under the Securities Act, the Company
and the Trustee shall require the transferee to execute an investment letter
in substantially the form attached as Exhibit L to the Pooling Agreement,
which investment letter shall not be an expense of the Company, the Master
Servicer or the Trustee and (ii) in the event that such a transfer is not made
pursuant to Rule 144A under the Securities Act, the Company may require an
Opinion of Counsel satisfactory to the Company that such transfer may be made
without such registration or qualification, which Opinion of Counsel shall not
be an expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the Securities
Act, qualify the Certificate under any state securities law or provide
registration rights to any purchaser. Any Holder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company
and the Master Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state
laws.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain limitations therein
set forth, Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the portion of the
REMIC I Available Distribution Amount distributable on this Class of
Certificate, as requested by the Holder surrendering the same.
A reasonable service charge may be made for any such registration of
transfer or exchange, and the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and any agent of
the Company, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Company, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
C-1
<PAGE>
The obligations created by the Pooling Agreement and the trust funds
created thereby shall terminate upon (i) the later of the maturity or other
liquidation (including repurchase by the Company) of the last Mortgage Loan
remaining in the 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 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.
C-1
<PAGE>
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.
C-1
<PAGE>
Exhibit D
MORTGAGE LOAN SCHEDULE
Copies of the Mortgage Loan Schedules (which have been intentionally
omitted from this filing) may be obtained from PNC Mortgage Securities Corp. or
State Street Bank and Trust Company by contacting,
in the case of PNC Mortgage Securities Corp.,
Richie Moore
Master Servicing Department
PNC Mortgage Securities Corp.
75 N. Fairway Drive
Vernon Hills, Illinois 60061
Telephone: (847) 549-3683
Facsimile: (847) 549-3681
in the case of State Street Bank and Trust Company,
David Duclos
Corporate Trust Department
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02102
Telephone: (617) 664-5436
Facsimile: (617) 664-5368
<PAGE>
Exhibit E
SELLING AND SERVICING
CONTRACT
This Selling and Servicing Contract (this "Agreement") is made and entered
into by PNC Mortgage Securities Corp. and its successors and assigns ("PNC
Mortgage") and the entity identified below and its successors and assigns (the
"Company").
WITNESSETH:
WHEREAS, this Company wishes to sell first lien residential mortgage
loans to, and service first lien residential mortgage loans on behalf of, PNC
Mortgage; and
WHEREAS, the Company has submitted a Seller Application to PNC Mortgage
and has been approved by PNC Mortgage for participation in the PNC Mortgage
Purchase Programs; and
WHEREAS, the Company has received and reviewed the PNC Mortgage Purchase
Programs Seller Guide (the "Seller Guide"), as well as the PNC Mortgage
Servicing Guide (the "Servicing Guide" and, together with the Seller Guide,
the "Guides"), and understands each and every provision thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, PNC Mortgage and the Company hereby agree as
follows:
1. GUIDES. The Guides, which set forth the terms and conditions
under which PNC Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of PNC
Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by PNC Mortgage, are incorporated
into this Agreement in full by reference and made a part hereof as fully as if
set forth at length herein. All capitalized terms used and not defined herein
have the meanings ascribed to them in the Guides.
2. COMPANY'S DUTIES. The Company shall diligently perform all duties
incident to the origination, sale and servicing of the mortgage loans subject
to this Agreement. In the performance of its servicing duties, the Company
shall exercise the same degree of care it exercises when servicing mortgage
loans for its own account, but in no event shall the Company exercise less
care than a reasonable prudent servicer would exercise under similar
circumstances. In addition, the Company shall comply with all of the
provisions of the Guides and with all other requirements and instructions of
PNC Mortgage. The Company shall perform such duties at its sole expense,
except as otherwise expressly provided in the Guides.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY; REMEDIES
OF PNC MORTGAGE. With respect to each mortgage loan sold by the Company to
PNC Mortgage pursuant to the terms of this Agreement, the Company shall make
all of the representations, warranties and covenants set forth in the Guide
and, in the event of the breach of any of such representations, warranties and
covenants, PNC Mortgage shall have all of the remedies available at law or in
equity, as well as all of the remedies set forth in the Guide, including, but
not limited to, repurchase and indemnification. The representations and
warranties made by the Company with respect to any mortgage loan subject to
this Agreement, as well as the remedies available to PNC Mortgage upon the
breach thereof, shall survive: (a) any investigation regarding the mortgage
loan conducted by PNC Mortgage, its assignees or designees, (b) the
liquidation of the mortgage loan, (c) the purchase of the mortgage loan by PNC
Mortgage, its assignee or designee, (d) the repurchase of the mortgage loan by
the Company and (e) the termination of this Agreement.
4. COMPENSATION. The Company shall be compensated for its services
hereunder as specified in the Guides.
5. NO ASSIGNMENT. This Agreement may not be assigned by the Company
without the prior written consent of PNC Mortgage. The Company hereby
consents to the assignment by PNC Mortgage of all or any part of its rights
and obligations under this Agreement to any affiliate designated by PNC
Mortgage. Any other transfer by PNC Mortgage will be allowed and be effective
upon written notice by PNC Mortgage to the Company.
6. PRIOR AGREEMENTS. This Agreement supersedes any prior agreements
and understandings between PNC Mortgage and the Company governing the subject
matter hereof; provided, however, the Company shall not be released from any
responsibility or liability that may have arisen under such agreements and
understanding.
E-1
<PAGE>
7. EFFECTIVE DATE OF AGREEMENT. This Agreement is not effective
until it is executed and accepted by PNC Mortgage at its home office in
Illinois.
8. NOTICES. All notices, requests, demands or other communications
that are to be given under this Agreement shall be in writing, addressed to
the appropriate parties, and shall be sent by certified mail, return receipt
requested, postage prepaid, if to the Company, at the address below and, if to
PNC Mortgage, to the appropriate address or facsimile number specified in the
Guides. Any such notice, request, demand or other communication shall be
deemed effective upon receipt.
9. INDEPENDENT CONTRACTOR. At no time shall the Company represent
that it is acting as an agent, partner or joint venturer of PNC Mortgage. The
Company shall at all times act as an independent contracting party.
10. AMENDMENT. This Agreement may not be amended or modified orally,
and no provision of this Agreement may be waived or amended, except in writing
signed by the party against whom enforcement is sought. Such a written waiver
or amendment must expressly reference this Agreement. However, by their terms
the Guides may be amended or supplemented by PNC Mortgage from time to time.
Any such amendment(s) to the Guides shall be in writing and be binding upon
the parties hereto on and after the effective date specified therein.
11. MISCELLANEOUS. This Agreement, including all documents
incorporated by reference herein, constitutes the entire understanding between
the parties hereto and supersedes all other agreements, covenants,
representations, warranties, understandings and communications between the
parties, whether written or oral, with respect to the transactions
contemplated by this Agreement. All section headings contained herein are for
convenience only and shall not be construed as part of this Agreement. Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall as to such jurisdiction be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
portions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction, and to this end, the provisions hereof are
severable. This Agreement shall be governed by, and construed and enforced in
accordance with, applicable federal laws and laws of the State of Illinois,
without reference to conflict of laws principles. This Agreement may be
executed in one or more counterparts, each of which shall constitute an
original and all of which shall constitute the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by proper
officials duly authorized on the dates hereinafter set forth. This Agreement
shall take effect as of the date of its execution in original or facsimile
signature by a duly authorized officer of PNC Mortgage.
- ------------------------------- --------------------------
Name of the Company Company I.D. Number
- ------------------------------- ------------------------
Type of organization Organized under laws of
- --------------------------------------------------------------------
Principal place of business: street address, city, state, zip code
- --------------------------------------------------------------------
Typed name and title of the Company's authorized officer
- ---------------------------------------------- ----------------
Signature of the Company's authorized officer Date
AGREED TO AND ACCEPTED BY PNC MORTGAGE SECURITIES CORP.
- --------------------------------------------------------
Typed name and title of authorized representative
- -------------------------------------- ---------------
Signature of authorized representative Date
E-2
<PAGE>
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02102
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates Series 1998-11, 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]
-------------------------
Authorized Officer
F-1
<PAGE>
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company
Two International Place
Boston, MA 02102
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 1998-11 (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 1998-11.
Section 2. Representations and Warranties of the Purchaser. In
connection with the proposed transfer, the Purchaser represents and warrants
to PNC and the Trustee that:
(a) The Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which the Purchaser is
organized, is authorized to invest in the Purchased Certificates, and to enter
into this Agreement, and duly executed and delivered this Agreement;
(b) The Purchaser is acquiring the Purchased Certificates for
its own account as principal and not with a view to the distribution thereof,
in whole or in part;
(c) The Purchaser is an "accredited investor" as such term is
defined in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section 501
of Regulation D under the Securities Act of 1933, as amended (the "Act"), has
knowledge of financial and business matters and is capable of evaluating the
merits and risks of an investment in the Purchased Certificates; the Purchaser
has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision; and the Purchaser is able
to bear the economic risk of an investment in the Purchased Certificates and
can afford a complete loss of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from PNC
concerning the trust funds created pursuant to the Pooling Agreement (the
"Trust Funds"), the purchase by the Purchaser of the Purchased Certificates
and all matters relating thereto that PNC possesses or can acquire without
unreasonable effort or expense; and
G-1
<PAGE>
(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.
G-2
<PAGE>
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:
---------------
G-3
<PAGE>
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 1998-11
(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
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:
G-4
<PAGE>
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
G-5
<PAGE>
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 "Trust Fund") whose assets
consist of, among other things, a pool (the "Mortgage Pool") of conventional
one- to four-family mortgage loans (the "Mortgage Loans"), formed and
administered by PNC Mortgage Securities Corp. (the "Company"), which term
includes any successor entity under the Pooling Agreement referred to below.
The Mortgage Pool was created pursuant to a Pooling and Servicing Agreement,
dated as of the Cut-Off Date stated above (the "Pooling Agreement"), between
the Company and State Street Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month immediately preceding the month of such distribution
(the "Record Date"), to the extent of such Certificateholder's Percentage
Interest represented by this Certificate in the portion of the REMIC II
Available Distribution Amount for such Distribution Date then distributable on
the Certificates of this Class, as specified in Section 4.04 of the Pooling
Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as
such name and address shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate to the Certificate
Registrar.
Reference is hereby made to the further provisions of this Certificate
set forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any
purpose.
H-1
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:
---------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------
Dated:
-----------------------
H-2
<PAGE>
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. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Pooling
Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices of the Certificate Registrar or the office maintained
by the Trustee in the City and State of New York, duly endorsed by, or
accompanied by an assignment in the form below or other written instrument of
transfer in form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth hereinabove
will be issued to the designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is exempt
from or is made in accordance with the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws. In the event that a transfer is to be made without
registration or qualification under applicable laws, (i) in the event such
transfer is made pursuant to Rule 144A under the Securities Act, the Company
and the Trustee shall require the transferee to execute an investment letter
in substantially the form attached as Exhibit L to the Pooling Agreement,
which investment letter shall not be an expense of the Company, the Master
Servicer or the Trustee and (ii) in the event that such a transfer is not made
pursuant to Rule 144A under the Securities Act, the Company may require an
Opinion of Counsel satisfactory to the Company that such transfer may be made
without such registration or qualification, which Opinion of Counsel shall not
be an expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the Securities
Act, qualify the Certificate under any state securities law or provide
registration rights to any purchaser. Any Holder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company
and the Master Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state
laws.
The Certificates are issuable only as registered Certificates without
coupons in Authorized Denominations specified in the Pooling Agreement. As
provided in the Pooling Agreement and subject to certain 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.
H-3
<PAGE>
The Company, the Trustee and the Certificate Registrar and any agent of
the Company, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Company, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the trust funds
created thereby shall terminate upon (i) the later of the maturity or other
liquidation (including repurchase by the Company) of the last Mortgage Loan
remaining in the 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 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.
H-4
<PAGE>
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.
H-5
<PAGE>
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 1998-11, 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 1998-11, 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.
I-1
<PAGE>
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:
-------------------------
I-2
<PAGE>
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the Class [R-1][R-2] Certificate (the "Owner")), a
[savings institution] [corporation] duly organized and existing under the laws
of [the State of ] [the United States], on behalf of which he makes
----------
this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") and
will endeavor to remain other than a disqualified organization for so long as
it retains its ownership interest in the Class [R-1][R-2] Certificates, and
(ii) is acquiring the Class [R-1][R-2] Certificates for its own account or for
the account of another Owner from which it has received an affidavit and
agreement in substantially the same form as this affidavit and agreement. (For
this purpose, a disqualified organization" means the United States, any state
or political subdivision thereof, or any agency or instrumentality of any of
the foregoing (other than an instrumentality all of the activities of which
are subject to tax and, except for the Federal Home Loan Mortgage Corporation,
a majority of whose board of directors is not selected by any such
governmental entity, or any foreign government or international organization,
or any agency or instrumentality of such foreign government or organization,
any rural electric or telephone cooperative, or any organization (other than
certain farmers' cooperatives) that is generally exempt from federal income
tax unless such organization is subject to the tax on unrelated business
taxable income).
3. That the Owner is aware (i) of the tax that would be imposed
on transfers of the Class [R-1][R-2] Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middle-man) for a
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.
J-1
<PAGE>
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class [R-1][R-2]
Certificates will only be owned, directly or indirectly, by an Owner that is
not a disqualified organization.
8. The Owner's Taxpayer Identification Number is .
---------
9. That no purpose of the Owner relating to the purchase of the
Class [R-1][R-2] Certificates by the Owner is or will be to enable the
transferor to impede the assessment or collection of tax.
10. That the Owner has no present knowledge or expectation that
it will be unable to pay any United States taxes owed by it so long as any of
the Certificates remain outstanding.
11. That the Owner has no present knowledge or expectation that
it will become insolvent or subject to a bankruptcy proceeding for so long as
any of the Certificates remain outstanding.
12. That no purpose of the Owner relating to any sale of the
Class [R-1][R-2] Certificates by the Owner will be to impede the assessment or
collection of tax.
13. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate
or trust whose income from sources without the United States is includible in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
14. The Owner hereby agrees to cooperate with the Company and to
take any action required of it by the Code or Treasury regulations thereunder
(whether now or hereafter promulgated) in order to create or maintain the
REMIC status of the REMIC I Trust Fund and the REMIC II Trust Fund (the "Trust
Funds").
15. The Owner hereby agrees that it will not take any action
that could endanger the REMIC status of the Trust Funds or result in the
imposition of tax on the Trust Funds unless counsel for, or acceptable to, the
Company has provided an opinion that such action will not result in the loss
of such REMIC status or the imposition of such tax, as applicable.
16. The Owner as transferee of the Class [R-1][R-2] Certificates
has represented to their transferor that, if the Class [R-1][R-2] Certificates
constitute a noneconomic residual interest, the Owner (i) understands that as
holder of a noneconomic residual interest it may incur tax liabilities in
excess of any cash flows generated by the interest, and (ii) intends to pay
taxes associated with its holding of the Class [R-1][R-2] Certificates as they
become due.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors,
by its [Title of Officer] and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this day of , 19 .
----- --------- --
[Name of Owner]
By:
--------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
J-2
<PAGE>
[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
------------- ---
J-3
<PAGE>
Exhibit K
[RESERVED]
K-1
<PAGE>
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
-----------------------
-----------------------
-----------------------
-----------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of
the Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under the Securities Act
of 1933, as amended (the "1933 Act"), or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, and that the Seller has not offered the Rule
144A Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling and
Servicing Agreement (the "Agreement") dated as of 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 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)
L-1
<PAGE>
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 Subordinate Certificate]
[3. The Buyer warrants and represents to, and covenants with, the Trustee, the
Master Servicer and the Company that (1) the Buyer is not an employee benefit
plan (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), subject to the prohibited
transaction provisions of ERISA ("Plan"), or a plan (within the meaning of
Section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code")) subject to
Section 4975 of the Code (also a "Plan"), and the Buyer is not directly or
indirectly purchasing the Rule 144A Securities on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with "plan assets" of any
Plan, (2) the Buyer's purchase of the Rule 144A Securities is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and will
not subject the Trustee, the Master Servicer or the Company to any obligation
or liability (including obligations or liabilities under Section 406 of ERISA
or Section 4975 of the Code) in addition to those undertaken in this Agreement
and the Buyer has provided an Opinion of Counsel to such effect in accordance
with Section 5.01(d) of the Agreement or (3) the Buyer is an insurance
company, the source of funds to be used by it to purchase the Rule 144A
Securities is an "insurance company general account" (within the meaning of
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60),
and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
- ----------------------------- ---------------------------
Print Name of Seller Print Name of Buyer
By: By:
---------------------- -------------------------
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification
No.: No.:
-------------------- -----------------------
Date: Date:
L-2
<PAGE>
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities
----------------------
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
Corporation, etc. The Buyer is a corporation (other than a bank, savings
- --- -----------------
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code.
Bank. The Buyer (a) is a national bank or banking institution organized
- --- ----
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
Savings and Loan. The Buyer (a) is a savings and loan association,
- --- ----------------
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements.
Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
- --- -------------
of the Securities Exchange Act of 1934.
Insurance Company. The Buyer is an insurance company whose primary and
- --- -----------------
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State or
territory or the District of Columbia.
State or Local Plan. The Buyer is a plan established and maintained by a
- --- -------------------
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
ERISA Plan. The Buyer is an employee benefit plan within the meaning of
- --- ----------
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") and is subject to the fiduciary responsibility provisions of
ERISA.
Investment Adviser. The Buyer is an investment adviser registered under
- --- ------------------
the Investment Advisers Act of 1940.
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.
- ------------------------------
1 Buyer must own and/or invest on a discretionary basis at lest $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.
L-1-1
<PAGE>
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.
L-1-2
<PAGE>
-------- ------- Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for
a third party unless the Buyer has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule
144A to conclude that such third party independently meets the definition of
"qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
--------------------------
Print Name of Buyer
By:
Name:
Title:
Date:
L-1-3
<PAGE>
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and
(ii) as marked below, the Buyer alone, or the Buyer's Family of Investment
Companies, owned at least $100,000,000 in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year. For purposes of determining the amount of securities owned by the Buyer
or the Buyer's Family of Investment Companies, the cost of such securities was
used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies which owned in the
aggregate $______________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
----------
issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned
but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
-----------------------------
Print Name of Buyer
By:
--------------------------
Name:
Title:
Date:
L-2-1
<PAGE>
IF AN ADVISER:
- ----------------------------------
Print Name of Buyer
By:
-------------------------------
Name:
Title:
Date:
(SEAL)
L-2-2
<PAGE>
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 1998-11
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 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.
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as Trustee
By:
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Name:
Title:
M-1
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EXHIBIT N
BENEFIT PLAN AFFIDAVIT
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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 1998-11
(THE "TRUST") CLASS [_-B-_] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, , declare that, to the
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best of my knowledge and belief, the following representations are true,
correct and complete; and
1. That I am the of (the "Purchaser"),
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whose taxpayer identification number is ___________, and on behalf of which I
have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser is either:
(a) not an employee benefit plan or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code") (a "Plan") or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting directly or
indirectly on behalf of, or purchasing any of the Purchased Certificates with
"plan assets" of, any Plan within the meaning of the Department of Labor
("DOL") regulation at 29 C.F.R. Section 2510.3-101; or
(b) an insurance company, the source of funds to be used by it to purchase
the Purchased Certificates is an "insurance company general account" (within
the meaning of DOL Prohibited Transaction Class Exemption ("PTCE") 95-60), and
the purchase is being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be duly
executed on its behalf, by its duly authorized officer this _____ day of ,
199__.
[Purchaser]
By:
Its:
N-1
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Personally appeared before me ______________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
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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__.
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Notary Public
N-1
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