<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
July 30, 1998
(date of earliest event reported)
PNC MORTGAGE SECURITIES CORP.
as Depositor and Master Servicer under a
Pooling and Servicing Agreement
dated as of July 1, 1998
providing for the issuance of
$941,873,426.14
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-6
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
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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 U.S. Bank National Association, Trustee,dated
as of July 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: July 30, 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 VERSION
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
U.S. BANK
NATIONAL ASSOCIATION,
as Trustee
POOLING AND SERVICING AGREEMENT
$941,873,426
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1998-6
Cut-Off Date: July 1, 1998
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<TABLE>
<CAPTION>
<S> <C>
ARTICLE I ................................................... 9
Section 1.01............................................ 9
Accretion Directed Classes .................................. 9
Accretion Directed Components ............................... 9
Aggregate Certificate Principal Balance ..................... 9
Appraised Value ............................................. 9
Assignment of Proprietary Lease ............................. 9
Authenticating Agent ........................................ 9
Authorized Denomination ..................................... 9
Balloon Loan ................................................ 9
Bankruptcy Coverage ......................................... 10
Bankruptcy Coverage Initial Amount .......................... 10
Bankruptcy Loss ............................................. 10
Beneficial Holder ........................................... 10
Book-Entry Certificates ..................................... 10
Business Day ................................................ 10
Buydown Agreement ........................................... 10
Buydown Fund ................................................ 10
Buydown Fund Account ........................................ 10
Buydown Loan ................................................ 11
Certificate ................................................. 11
Certificate Account ......................................... 11
Certificateholder or Holder ................................. 11
Certificate Group ........................................... 11
Certificate Principal Balance ............................... 11
Certificate Register and Certificate Registrar .............. 11
Class ....................................................... 12
Class A Certificates ........................................ 12
Class A-L Regular Interests ................................. 12
Class B Certificates ........................................ 12
Class B-L Regular Interests ................................. 12
Class C-B-1 Certificates .................................... 12
Class C-B-1-L Regular Interest .............................. 12
Class C-B-2 Certificates .................................... 12
Class C-B-2-L Regular Interest .............................. 12
i
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TABLE OF CONTENTS
-----------------
(continued)
Class C-B-3 Certificates .................................... 13
Class C-B-3-L Regular Interest .............................. 13
Class C-B-4 Certificates .................................... 13
Class C-B-4-L Regular Interest .............................. 13
Class C-B-5 Certificates .................................... 13
Class C-B-5-L Regular Interest .............................. 13
Class C-B-6 Certificates .................................... 13
Class C-B-6-L Regular Interest .............................. 13
Class P Certificates ........................................ 13
Class P-L Regular Interests ................................. 13
Class P-M Regular Interests ................................. 13
Class P Fraction ............................................ 13
Class P Mortgage Loan ....................................... 13
Class X Certificates ........................................ 13
Class X-L Regular Interests ................................. 13
Class X-M Regular Interests ................................. 13
Class I-A-1 Certificates .................................... 13
Class I-A-1-L Regular Interests ............................. 14
Class I-A-2 Certificates .................................... 14
Class I-A-2-L Regular Interest .............................. 14
Class I-A-3 Certificates .................................... 14
Class I-A-3-L Regular Interest .............................. 14
Class I-A-4 Certificates .................................... 14
Class I-A-4-L Regular Interest .............................. 14
Class I-A-5 Certificates .................................... 14
Class I-A-5-L Regular Interest .............................. 14
Class I-A-6 Certificates .................................... 14
Class I-A-6-L Regular Interest .............................. 14
Class I-A-7 Certificates .................................... 14
Class I-A-7-L Regular Interest .............................. 14
ii
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TABLE OF CONTENTS
-----------------
(continued)
Class I-A-8 Certificates .................................... 14
Class I-A-8-L Regular Interest .............................. 15
Class I-A-9 Accretion Termination Date ...................... 15
Class I-A-9 Accrual Amount .................................. 15
Class I-A-9 Certificates .................................... 15
Class I-A-9-L Regular Interest .............................. 15
Class I-A-10 Certificates ................................... 15
Class I-A-10 Notional Amount ................................ 15
Class I-A-11 Certificates ................................... 15
Class I-A-11-L Regular Interest ............................. 15
Class I-A-12 Certificates ................................... 15
Class I-A-12-L Regular Interest ............................. 15
Class I-A-13 Certificates ................................... 15
Class I-A-13-L Regular Interest ............................. 16
Class I-A-14 Certificates ................................... 16
Class I-A-14-L Regular Interest ............................. 16
Class I-A-15 Certificates ................................... 16
Class I-A-15-L Regular Interest ............................. 16
Class I-A-16 Certificates ................................... 16
Class I-A-16-L Regular Interest ............................. 16
Class I-A-17 Certificates ................................... 16
Class I-A-17-L Regular Interest ............................. 16
Class I-A-18 Accretion Termination Date ..................... 16
Class I-A-18 Accrual Amount ................................. 16
Class I-A-18 Certificates ................................... 16
Class I-A-18-L Regular Interest ............................. 16
Class I-A-19 Certificates ................................... 17
Class I-A-19-L Regular Interest ............................. 17
Class I-A-20 Certificates ................................... 17
iii
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TABLE OF CONTENTS
-----------------
(continued)
Class I-A-20-L Regular Interest ............................. 17
Class I-A-21 Certificates ................................... 17
Class I-A-21-L Regular Interests ............................ 17
Class I-A-22 Certificates ................................... 17
Class I-A-22 Notional Amount ................................ 17
Class I-A-23 Certificates ................................... 17
Class I-A-23-L Regular Interest ............................. 17
Class I-A-24 Certificates ................................... 17
Class I-A-24 Notional Amount ................................ 17
Class I-B-1 Certificates .................................... 17
Class I-B-1-L Regular Interest .............................. 17
Class I-B-2 Certificates .................................... 18
Class I-B-2-L Regular Interest .............................. 18
Class I-B-3 Certificates .................................... 18
Class I-B-3-L Regular Interest .............................. 18
Class I-B-4 Certificates .................................... 18
Class I-B-4-L Regular Interest .............................. 18
Class I-B-5 Certificates .................................... 18
Class I-B-5-L Regular Interest .............................. 18
Class I-B-6 Certificates .................................... 18
Class I-B-6-L Regular Interest .............................. 18
Class I-P-M Regular Interest ................................ 18
Class I-X Certificates ...................................... 18
Class I-X-L Regular Interest ................................ 18
Class I-X-M Regular Interest ................................ 19
Class I-X Notional Amount ................................... 19
Class II-A-1 Certificates ................................... 19
Class II-A-1-L Regular Interest ............................. 19
Class II-A-2 Certificates ................................... 19
Class II-A-2-L Regular Interest ............................. 19
iv
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TABLE OF CONTENTS
-----------------
(continued)
Class II-A-3 Certificates ................................... 19
Class II-A-3-L Regular Interest ............................. 19
Class II-A-4 Certificates ................................... 19
Class II-A-4-L Regular Interests ............................ 19
Class II-A-5 Certificates ................................... 19
Class II-A-5-L Regular Interest ............................. 19
Class II-A-6 Certificates ................................... 20
Class II-A-6-L Regular Interest ............................. 20
Class II-A-7 Certificates ................................... 20
Class II-A-7-L Regular Interest ............................. 20
Class II-A-8 Certificates ................................... 20
Class II-A-8-L Regular Interest ............................. 20
Class II-A-9 Certificates ................................... 20
Class II-A-9-L Regular Interest ............................. 20
Class II-A-10 Certificates .................................. 20
Class II-A-10 Notional Amount ............................... 20
Class II-A-11 Certificates .................................. 20
Class II-A-11-L Regular Interest ............................ 20
Class II-A-12 Certificates .................................. 20
Class II-A-12-L Regular Interest ............................ 20
Class II-A-13 Certificates .................................. 21
Class II-A-13-L Regular Interest ............................ 21
Class II-X Certificates ..................................... 21
Class II-X-L Regular Interest ............................... 21
Class II-X-M Regular Interest ............................... 21
Class II-X Notional Amount .................................. 21
Class III-A-1 Certificates .................................. 21
Class III-A-1-L Regular Interest ............................ 21
Class III-P Certificates .................................... 21
v
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TABLE OF CONTENTS
-----------------
(continued)
Class III-P Fraction ........................................ 21
Class III-P Mortgage Loan ................................... 21
Class III-P-L Regular Interest .............................. 21
Class III-P-M Regular Interest .............................. 22
Class III-X Certificates .................................... 22
Class III-X-L Regular Interest .............................. 22
Class III-X-M Regular Interest .............................. 22
Class III-X Notional Amount ................................. 22
Class IV-A-1 Certificates ................................... 22
Class IV-A-1-L Regular Interest ............................. 22
Class IV-X Certificates ..................................... 22
Class IV-X-L Regular Interest ............................... 22
Class IV-X-M Regular Interest ............................... 22
Class IV-X Notional Amount .................................. 22
Class Notional Amount ....................................... 23
Class Principal Balance ..................................... 23
Class R-1 Certificates ...................................... 23
Class R-2 Certificates ...................................... 24
Class R-3 Certificates ...................................... 24
Class R-3-L ................................................. 24
Class W Regular Interest .................................... 24
Class Y Regular Interests ................................... 24
Class Y-1 Regular Interest .................................. 24
Class Y-1 Principal Distribution Amount ..................... 24
Class Y-2 Regular Interest .................................. 24
Class Y-2 Principal Distribution Amount ..................... 24
Class Y-3 Regular Interest .................................. 24
Class Y-3 Principal Distribution Amount ..................... 24
Class Y Principal Reduction Amounts ......................... 24
Class Z Regular Interests ................................... 33
vi
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TABLE OF CONTENTS
-----------------
(continued)
Class Z Principal Reduction Amounts ......................... 33
Class Z-1 Regular Interests ................................. 34
Class Z-1 Principal Distribution Amount ..................... 34
Class Z-2 Regular Interests ................................. 34
Class Z-2 Principal Distribution Amount ..................... 34
Class Z-3 Regular Interests ................................. 34
Class Z-3 Principal Distribution Amount ..................... 34
Clearing Agency ............................................. 34
Closing Date ................................................ 34
Code ........................................................ 34
Combined Bankruptcy Coverage ................................ 34
Combined Credit Support Depletion Date ...................... 35
Company ..................................................... 35
Compensating Interest ....................................... 36
Component ................................................... 36
Component I-A-1-1 ........................................... 36
Component I-A-1-1 Notional Amount ........................... 36
Component I-A-1-2 Accretion Termination Date ................ 36
Component I-A-1-2 Accrual Amount ............................ 36
Component I-A-1-2 ........................................... 36
Component I-A-1-2-L ......................................... 36
Component I-A-1-3 Accretion Termination Date ................ 36
Component I-A-1-3 Accrual Amount ............................ 36
Component I-A-1-3 ........................................... 37
Component I-A-1-3-L ......................................... 37
Component I-A-1-4 ........................................... 37
Component I-A-1-4-L ......................................... 37
Component I-A-1-5 ........................................... 37
Component I-A-1-5-L ......................................... 37
vii
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TABLE OF CONTENTS
-----------------
(continued)
Class I-A-1-5 Notional Amount ............................... 37
Component I-A-1-6 ........................................... 37
Component I-A-1-6-L ......................................... 37
Component I-A-21-1 .......................................... 37
Component I-A-21-1-L ........................................ 38
Component I-A-21-2 .......................................... 38
Component I-A-21-2-L ........................................ 38
Component II-A-4-1 .......................................... 38
Component II-A-4-1-L ........................................ 38
Component II-A-4-2 .......................................... 38
Component II-A-4-2-L ........................................ 38
Component Notional Amount ................................... 38
Component Principal Balance ................................. 38
Cooperative ................................................. 39
Cooperative Apartment ....................................... 39
Cooperative Lease ........................................... 39
Cooperative Loans ........................................... 39
Cooperative Stock ........................................... 39
Cooperative Stock Certificate ............................... 39
Corporate Trust Office ...................................... 39
Corresponding Class ......................................... 40
Corresponding Component ..................................... 41
Curtailment ................................................. 41
Curtailment Shortfall ....................................... 41
Custodial Account for P&I ................................... 41
Custodial Account for Reserves .............................. 42
Custodial Agreement ......................................... 42
Custodian ................................................... 42
Cut-Off Date ................................................ 42
DCR ......................................................... 42
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TABLE OF CONTENTS
-----------------
(continued)
Definitive Certificates ..................................... 42
Depositary Agreement ........................................ 42
Destroyed Mortgage Note ..................................... 42
Determination Date .......................................... 42
Disqualified Organization ................................... 42
Distribution Date ........................................... 42
DTC ......................................................... 43
DTC Participant ............................................. 43
Due Date .................................................... 43
Eligible Institution ........................................ 43
Eligible Investments ........................................ 43
ERISA ....................................................... 44
Event of Default ............................................ 44
Excess Liquidation Proceeds ................................. 44
FDIC ........................................................ 45
FHA ......................................................... 45
FHLB ........................................................ 45
FHLMC ....................................................... 45
FNMA ........................................................ 45
Fraud Coverage Initial Amount ............................... 45
Fraud Loss .................................................. 45
Group C-B Certificates ...................................... 45
Group C-B-L Regular Interests ............................... 45
Group C-B Component Balance ................................. 45
Group C-B Percentage ........................................ 45
Group C-B Subordinate Liquidation Amount .................... 45
Group C-B Subordinate Principal Distribution Amount ......... 45
Group I Adjusted Lockout Percentage ......................... 46
Group I Certificates ........................................ 46
ix
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TABLE OF CONTENTS
-----------------
(continued)
Group I-A Certificates ...................................... 46
Group I-A-L Regular Interests ............................... 47
Group I-B Certificates ...................................... 47
Group I-B-L Regular Interests ............................... 47
Group I-L Regular Interests ................................. 47
Group I Bankruptcy Coverage ................................. 47
Group I Credit Support Depletion Date ....................... 47
Group I Fraud Coverage ...................................... 47
Group I Loans ............................................... 47
Group I Lockout Liquidation Amount .......................... 48
Group I Lockout Priority Amount ............................. 48
Group I Lockout Percentage .................................. 48
Group I Lockout Prepayment Percentage ....................... 48
Group I Premium Rate Mortgage Loans ......................... 48
Group I Senior Certificates ................................. 48
Group I-L Senior Regular Interests .......................... 48
Group I Senior Liquidation Amount ........................... 48
Group I Senior Percentage ................................... 48
Group I Senior Prepayment Percentage ........................ 48
Group I Senior Principal Distribution Amount ................ 50
Group I Special Hazard Coverage ............................. 50
Group I Subordinate Liquidation Amount ...................... 50
Group I Subordinate Percentage .............................. 50
Group I Subordinate Prepayment Percentage ................... 50
Group I Subordinate Principal Distribution Amount ........... 51
Group I Subordinate Principal Prepayments Distribution
Amount ........................................... 51
Group II Adjusted Lockout Percentage ........................ 51
Group II Certificates ....................................... 51
Group II-A Certificates ..................................... 51
Group II-A-L Regular Interests .............................. 51
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Group II-L Regular Interests ................................ 52
Group II Loans .............................................. 52
Group II Lockout Liquidation Amount ......................... 52
Group II Lockout Priority Amount ............................ 52
Group II Lockout Percentage ................................. 52
Group II Lockout Prepayment Percentage ...................... 52
Group II Premium Rate Mortgage Loans ........................ 52
Group II Senior Liquidation Amount .......................... 52
Group II Senior Percentage .................................. 52
Group II Senior Prepayment Percentage, Group III Senior
Prepayment Percentage or Group IV Senior
Prepayment Percentage ........................... 52
Group II Senior Principal Distribution Amount ............... 55
Group II Subordinate Percentage ............................. 55
Group II Subordinate Prepayment Percentage .................. 55
Group II Subordinate Principal Prepayments Distribution
Amount .......................................... 55
Group III Certificates ...................................... 55
Group III-L Regular Interests ............................... 55
Group III Loans ............................................. 55
Group III Premium Rate Mortgage Loans ....................... 56
Group III Senior Liquidation Amount ......................... 56
Group III Senior Percentage ................................. 56
Group III Senior Principal Distribution Amount .............. 56
Group III Subordinate Percentage ............................ 56
Group III Subordinate Prepayment Percentage ................. 56
Group III Subordinate Principal Prepayments Distribution
Amount ......................................... 56
Group IV Certificates ....................................... 56
Group IV-L Regular Interests ................................ 56
Group IV Loans .............................................. 56
Group IV Premium Rate Mortgage Loans ........................ 56
Group IV Senior Liquidation Amount .......................... 57
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Group IV Senior Percentage .................................. 57
Group IV Senior Principal Distribution Amount ............... 57
Group IV Subordinate Percentage ............................. 57
Group IV Subordinate Prepayment Percentage .................. 57
Group IV Subordinate Principal Prepayments Distribution
Amount .......................................... 57
Indirect DTC Participants ................................... 57
Insurance Proceeds .......................................... 57
Interest Distribution Amount ................................ 57
Interest Transfer Amount .................................... 58
Investment Account .......................................... 58
Investment Depository ....................................... 58
Junior Subordinate Certificates ............................. 58
Lender ...................................................... 58
Liquidated Mortgage Loan .................................... 58
Liquidation Principal ....................................... 58
Liquidation Proceeds ........................................ 58
Loan Group .................................................. 59
Loan Group I ................................................ 59
Loan Group II ............................................... 59
Loan Group III .............................................. 59
Loan Group IV ............................................... 59
Loan-to-Value Ratio ......................................... 59
Master Servicer ............................................. 59
Master Servicing Fee ........................................ 59
Monthly P&I Advance ......................................... 59
Monthly Payment ............................................. 59
Mortgage .................................................... 59
Mortgaged Property .......................................... 59
Mortgage File ............................................... 59
Mortgage Interest Rate ...................................... 61
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Mortgage Loan Schedule ...................................... 61
Mortgage Loans .............................................. 62
Mortgage Note ............................................... 62
Mortgage Pool ............................................... 62
Mortgagor ................................................... 62
Nonrecoverable Advance ...................................... 62
Non-U.S. Person ............................................. 62
OTS ......................................................... 62
Officer's Certificate ....................................... 62
I-PO Fraction ............................................... 62
I-PO Mortgage Loan .......................................... 62
Opinion of Counsel .......................................... 63
Original Value .............................................. 63
Ownership Interest .......................................... 63
Pass-Through Entity ......................................... 63
Pass-Through Rate ........................................... 63
Paying Agent ................................................ 63
Payoff ...................................................... 63
Payoff Earnings ............................................. 63
Payoff Interest ............................................. 64
Payoff Period ............................................... 64
Percentage Interest ......................................... 64
Permitted Transferee ........................................ 65
Person ...................................................... 66
Planned Principal Balance ................................... 66
Prepaid Monthly Payment ..................................... 66
Primary Insurance Policy .................................... 66
Principal Balance ........................................... 66
Principal Payment ........................................... 67
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Principal Payment Amount .................................... 67
Principal Prepayment ........................................ 67
Principal Prepayment Amount ................................. 67
Principal Transfer Amount ................................... 67
Prior Period ................................................ 67
Priority Rule ............................................... 67
Pro Rata Allocation ......................................... 67
Purchase Obligation ......................................... 68
Purchase Price .............................................. 69
Qualified Insurer ........................................... 69
Rating Agency ............................................... 69
Ratings ..................................................... 69
Realized Loss ............................................... 69
Record Date ................................................. 72
Regular Interest Group ...................................... 72
Regular Interest Group ...................................... 72
Regular Interests ........................................... 73
REMIC ....................................................... 74
REMIC Provisions ............................................ 74
REMIC I ..................................................... 74
REMIC I Available Distribution Amount ....................... 74
REMIC I Distribution Amount ................................. 75
REMIC I Regular Interest .................................... 77
REMIC I Trust Fund .......................................... 77
REMIC II .................................................... 77
REMIC II Available Distribution Amount ...................... 78
REMIC II Distribution Amount ................................ 78
REMIC II Regular Interest ................................... 94
REMIC II Trust Fund ......................................... 94
REMIC III ................................................... 94
xiv
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REMIC III Available Distribution Amount ..................... 94
REMIC III Distribution Amount ............................... 94
REMIC III Trust Fund ........................................ 96
Remittance Rate ............................................. 96
Residual Certificates ....................................... 96
Residual Distribution Amount ................................ 96
Responsible Officer ......................................... 97
S&P ......................................................... 97
Securities Act .............................................. 97
Security Agreement .......................................... 97
Segment P Group ............................................. 97
Segment P Principal Balance ................................. 97
Segment T Group ............................................. 97
Segment T Principal Balance ................................. 98
Selling and Servicing Contract .............................. 98
Senior Certificates ......................................... 98
Senior Subordinate Certificates ............................. 98
Servicer .................................................... 98
Servicing Fee ............................................... 98
Servicing Officer ........................................... 98
Special Hazard Coverage Initial Amount ...................... 98
Special Hazard Loss ......................................... 98
Step Down Percentage ........................................ 99
Stripped Interest Rate ...................................... 99
Subordinate Certificates .................................... 99
Subordinate Percentage ...................................... 99
Subordination Level ......................................... 99
Substitute Mortgage Loan ................................... 100
Targeted Principal Balance ................................. 100
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Tax Matters Person ......................................... 100
Termination Date ........................................... 100
Termination Payment ........................................ 100
Transfer ................................................... 100
Transferee ................................................. 100
Transferee Affidavit and Agreement ......................... 100
Trustee .................................................... 101
Uncollected Interest ....................................... 101
Uncompensated Interest Shortfall ........................... 101
Underwriting Standards ..................................... 102
Uninsured Cause ............................................ 102
U.S. Person ................................................ 102
VA ......................................................... 102
Withdrawal Date ............................................ 102
ARTICLE II Conveyance of the Trust Funds; REMIC Election
and Designations; Original Issuance of
Certificates ................................... 102
Section 2.01.Conveyance of REMIC I; REMIC Election
and Designations ......................... 103
Section 2.02.Acceptance by Trustee .................... 107
Section 2.03.Representations and Warranties of the
Company Concerning the Mortgage Loans .... 109
Section 2.04.Acknowledgment of Transfer of REMIC
I Trust Fund; Authentication of the
Class R-1 Certificates ................... 113
Section 2.05.Conveyance of REMIC II; REMIC
Election and Designations ................ 113
Section 2.06.Acceptance by Trustee; Authentication
of Certificates .......................... 117
Section 2.07.Conveyance of REMIC III; REMIC
Election and Designations ................ 117
Section 2.08.Acceptance by Trustee; Authentication
of Certificates .......................... 120
ARTICLE III Administration and Servicing of Mortgage Loans . 120
Section 3.01.The Company to Act as Master Servicer .... 120
Section 3.02.Custodial Accounts ....................... 122
Section 3.03.The Investment Account;
Eligible Investments ..................... 123
Section 3.04.The Certificate Account .................. 124
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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 .................... 124
Section 3.06.Maintenance of Primary Insurance
Policies; Collections Thereunder ......... 126
Section 3.07.Maintenance of Hazard Insurance .......... 126
Section 3.08.Enforcement of Due-on-Sale
Clauses; Assumption Agreements ........... 127
Section 3.09.Realization Upon Defaulted Mortgage Loans. 128
Section 3.10.Trustee to Cooperate; Release
of Mortgage Files ........................ 130
Section 3.11.Compensation to the Master Servicer
and the Servicers ........................ 130
Section 3.12.Reports to the Trustee; Certificate
Account Statement ........................ 131
Section 3.13.Annual Statement as to Compliance ........ 131
Section 3.14.Access to Certain Documentation and
Information Regarding the Mortgage Loans . 131
Section 3.15.Annual Independent Public
Accountants' Servicing Report ............ 131
Section 3.17.[Reserved.] .............................. 132
Section 3.18.[Reserved.] .............................. 132
Section 3.19.[Reserved.] .............................. 132
Section 3.20.Assumption or Termination of Selling
and Servicing Contracts by Trustee ....... 132
ARTICLE IV Payments to Certificateholders; Payment of
Expenses ....................................... 132
Section 4.01.Distributions to Holders of REMIC
I Regular Interests and Class R-1
Certificateholders ....................... 132
Section 4.02.Advances by the Master Servicer;
Distribution Reports to the Trustee ...... 133
Section 4.03.Nonrecoverable Advances .................. 134
Section 4.04.Distributions to Holders of REMIC
II Regular Interests and Class R-2
Certificateholders ....................... 134
Section 4.05.Distributions to Certificateholders
(other than Class R-1 and Class R-2
Certificateholders) ...................... 135
Section 4.06.Statements to Certificateholders ......... 136
ARTICLE V The Certificates ............................... 137
Section 5.01.The Certificates ......................... 137
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Section 5.02.Certificates Issuable in Classes;
Distributions of Principal and
Interest; Authorized Denominations ....... 142
Section 5.03.Registration of Transfer and Exchange
of Certificates .......................... 142
Section 5.04.Mutilated, Destroyed, Lost or Stolen
Certificates ............................. 143
Section 5.05.Persons Deemed Owners .................... 144
Section 5.06.Temporary Certificates ................... 144
Section 5.07.Book-Entry for Book-Entry Certificates ... 144
Section 5.08.Notices to Clearing Agency ............... 145
Section 5.09.Definitive Certificates .................. 145
Section 5.10.Office for Transfer of Certificates ...... 146
ARTICLE VI The Company and the Master Servicer ............ 146
Section 6.01.Liability of the Company and the
Master Servicer .......................... 146
Section 6.02.Merger or Consolidation of the Company,
or the Master Servicer ................... 146
Section 6.03.Limitation on Liability of the
Company, the Master Servicer and Others .. 146
Section 6.04.The Company and the Master Servicer
not to Resign ............................ 147
ARTICLE VII Default ........................................ 147
Section 7.01.Events of Default ........................ 147
Section 7.02.Trustee to Act; Appointment of Successor . 150
Section 7.03.Notification to Certificateholders ....... 151
ARTICLE VIIIConcerning the Trustee ......................... 151
Section 8.01.Duties of Trustee ........................ 151
Section 8.02.Certain Matters Affecting the Trustee .... 152
Section 8.03.Trustee Not Liable for Certificates
or Mortgage Loans ........................ 153
Section 8.04.Trustee May Own Certificates ............. 153
Section 8.05.The Master Servicer to Pay Trustee's
Fees and Expenses ........................ 153
Section 8.06.Eligibility Requirements for Trustee ..... 153
Section 8.07.Resignation and Removal of Trustee ....... 154
Section 8.08.Successor Trustee ........................ 154
Section 8.09.Merger or Consolidation of Trustee ....... 155
xviii
<PAGE>
Section 8.10.Appointment of Co-Trustee or Separate
Trustee .................................. 155
Section 8.11.Authenticating Agents .................... 156
Section 8.12.Paying Agents ............................ 157
ARTICLE IX Termination .................................... 158
Section 9.01.Termination Upon Repurchase by the
Company or Liquidation of All Mortgage
Loans .................................... 158
Section 9.02.Additional Termination Requirements ...... 159
Section 9.03.Trusts Irrevocable ....................... 160
ARTICLE X Miscellaneous Provisions ....................... 161
Section 10.01.Amendment ............................... 161
Section 10.02.Recordation of Agreement ................ 162
Section 10.03.Limitation on Rights of
Certificateholders ...................... 162
Section 10.04.Access to List of Certificateholders .... 163
Section 10.05.Governing Law ........................... 163
Section 10.06.Notices ................................. 163
Section 10.07.Severability of Provisions .............. 164
Section 10.08.Counterpart Signatures .................. 164
Section 10.09.Benefits of Agreement ................... 164
Section 10.10.Notices and Copies to Rating Agencies ... 164
</TABLE>
Exhibit A Form of Certificates (other than Residual Certificates)
Exhibit B Form of Class R-3 Certificates
Exhibit C Form of Class R-1 and Class R-2 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
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
<PAGE>
<PAGE>
This Pooling and Servicing Agreement, dated and effective as
of July 1, 1998 (this "Agreement"), is executed by and between
PNC Mortgage Securities Corp., as Depositor and Master Servicer
(the "Company") and U.S. Bank National Association, 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 REMIC I. On the Closing Date, the Company will
acquire the REMIC I Regular Interests and the Class R-1
Certificates from REMIC I as consideration for its transfer to
REMIC I 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 REMIC II Regular Interests and the Class R-2
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 REMIC II Regular Interests and the Class R-2 Certificates.
Thereafter on the Closing Date, the Company will acquire the
Certificates (other than the Class R-1 and Class R-2
Certificates) from REMIC III as consideration for its transfer to
REMIC III of the REMIC II Regular Interests and will be the owner
of the Certificates. The Company has duly authorized the
execution and delivery of this Agreement to provide for (i) the
conveyance to the Trustee of the Mortgage Loans and the issuance
to the Company of the REMIC I Regular Interests and the Class R-1
Certificates representing in the aggregate the entire beneficial
ownership of REMIC I, (ii) the conveyance to the Trustee of the
REMIC I Regular Interests and the issuance to the Company of the
REMIC II Regular Interests and the Class R-2 Certificates
representing in the aggregate the entire beneficial ownership of
REMIC II and (iii) the conveyance to the Trustee by the Company
of the REMIC II Regular Interests and the issuance of the
Certificates (other than the Class R-1 and Class R-2
Certificates) representing in the aggregate the entire beneficial
interest of REMIC III. All covenants and agreements made by the
Company and the Trustee herein with respect to the Mortgage Loans
and the other property constituting the assets of REMIC I are for
the benefit of the Holders from time to time of the REMIC I
Regular Interests and the Class R-1 Certificates. All covenants
and agreements made by the Company and the Trustee herein with
respect to the REMIC I Regular Interests are for the benefit of
the Holders from time to time of the REMIC II Regular Interests
and the Class R-2 Certificates. All covenants and agreements
made by the Company and the Trustee herein with respect to the
REMIC II Regular Interests are for the benefit of the Holders
from time to time of the Certificates (other than the Class R-1
and Class R-2 Certificates). The Company is entering into this
Agreement, and the Trustee is accepting the three separate trusts
created hereby, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged.
1
<PAGE>
The Certificates issued hereunder, other than the Class I-A-
1 and Junior Subordinate Certificates, have been offered for sale
pursuant to a Prospectus, dated June 24, 1998, and a Prospectus
Supplement, dated July 28, 1998, of the Company (together, the
"Prospectus"). The Class I-A-1 and Junior Subordinate
Certificates have been offered for sale pursuant to a Private
Placement Memorandum, dated July 30, 1998. The REMIC I Trust
Fund, the REMIC II Trust Fund and the REMIC III 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 Remittance Rate, initial
Class Principal Balance, initial Class Notional Amount, initial
Component Principal Balance, initial Component Notional Amount
and Final Maturity Date for the REMIC I Regular Interests and the
Class R-1 Certificates, the REMIC II Regular Interests and the
Class R-2 Certificates and each Class of Certificates comprising
the interests in REMIC III created hereunder:
<TABLE>
<CAPTION>
REMIC I Trust Fund
------------------
Class Designation
for each REMIC I
Regular Interest Remittance Initial Class Final
and the Class R-1 Type of Rate (1) Principal Maturity
Certificates Interest Balance Date
- ----------------- -------- ---------- ------------- -----------
<S> <C> <C> <C> <C>
Class Y-1 Regular 6.50% 102,153.92 August 2028
Class Y-2 Regular 7.00% 45,273.13 August 2028
Class Y-3 Regular 6.75% 35,435.38 August 2028
Class Z-1 Regular 6.50% 204,348,224.17 August 2028
Class Z-2 Regular 7.00% 90,500,989.21 August 2028
Class Z-3 Regular 6.75% 70,835,327.28 August 2028
Class W Regular 6.75% 575,096,664.06 September 2028
Class I-X-M Regular (2) ---------- September 2028
Class II-X-M Regular (2) ---------- August 2028
Class III-X-M Regular (2) ---------- August 2028
Class IV-X-M Regular (2) ---------- August 2028
Class I-P-M Regular (3) 913,987.58 September 2028
Class III-P-M Regular (3) 70,472.89 August 2028
Class R-1+ Residual 6.750% 50.00 September 2028
</TABLE>
* The Distribution Date in the month the latest maturing Mortgage Loan in
the related Loan Group (or Loan Groups, as applicable) matures.
+ The Class R-1 Certificates are entitled to receive the applicable
Residual Distribution Amount and the Excess Liquidation Proceeds.
(1) Interest distributed to the REMIC I Regular Interests(other than the
Class P-M Regular Interests, which shall not be entitled to receive any
distributions of interest) and the Class R-1 Certificates on each
Distribution Date will have accrued at the applicable per annum
Remittance Rate on the Class Principal Balance outstanding following the
immediately prior Distribution Date (or with respect to the first
Distribution Date, as of the Closing Date).
(2) Each Class of the Class X-M Regular Interests will accrue interest on
the related Class Notional Amount.
The Class X-M Regular Interests will not be entitled to receive any
distributions of principal.
(3) The Class P-M Regular Interests will not be entitled to receive any
distributions of interest.
2
<PAGE>
As provided herein, with respect to REMIC I, the Company
will cause an election to be made on behalf of REMIC I to be
treated for federal income tax purposes as a REMIC. The REMIC I
Regular Interests will be designated regular interests in REMIC I
and the Class R-1 Certificates will be designated the sole class
of residual interest in REMIC I, for purposes of the REMIC
Provisions.
<TABLE>
<CAPTION>
REMIC II
--------
Class Designation
for each REMIC II
Regular Interest Initial Class
and the Class R-2 Type of Remittance Principal
Certificates Interest Rate (1) Balance Final Maturity
Date
- ----------------- -------- ---------- -------------
- -------------------
<S> <C> <C> <C> <C>
Class I-A-1-L (2) (2) 91,040,159.58 September
2028
Class I-A-2-L Regular 6.750% 23,008,034.00 September
2028
Class I-A-3-L Regular 6.750% 45,318,064.00 September
2028
Class I-A-4-L Regular 6.750% 10,020,496.00 September
2028
Class I-A-5-L Regular 6.750% 41,100,508.00 September
2028
Class I-A-6-L Regular 6.750% 28,461,668.00 September
2028
Class I-A-7-L Regular 6.750% 21,628,593.00 September
2028
Class I-A-8-L Regular 7.000% 75,757,606.00 September
2028
Class I-A-9-L Regular 7.000%(3) 8,450,000.00 September
2028
Class I-A-11-L Regular 6.750% 84,619,111.00 September
2028
Class I-A-12-L Regular 8.100% 4,827,411.00 September
2028
Class I-A-13-L Regular 7.000% 16,650,000.00 September
2028
Class I-A-14-L Regular 7.000% 12,427,142.00 September
2028
Class I-A-15-L Regular 7.000% 26,710,714.00 September
2028
Class I-A-16-L Regular 6.750% 18,557,500.00 September
2028
Class I-A-17-L Regular 6.750% 20,061,814.00 September
2028
Class I-A-18-L Regular 6.750%(4) 1,923,806.00 September
2028
Class I-A-19-L Regular 6.600% 13,275,381.00 September
2028
Class I-A-20-L Regular (5) 185,540.00 September
2028
Class I-A-21-L (6) (6) 2,066,218.00 September
2028
Class I-A-23-L Regular 6.750% 4,000,000.00 September
2028
Class II-A-1-L Regular 6.750% 23,754,476.00 August 2028
Class II-A-2-L Regular 6.750% 19,369,996.00 August 2028
Class II-A-3-L Regular 6.750% 10,900,000.00 August 2028
Class II-A-4-L (7) (7) 7,059,559.00 August 2028
Class II-A-5-L Regular 6.750% 41,311,111.00 August 2028
Class II-A-6-L Regular 6.750% 24,200,000.00 August 2028
Class II-A-7-L Regular 7.000% 11,237,408.00 August 2028
Class II-A-8-L Regular 7.000% 8,678,571.00 August 2028
Class II-A-9-L Regular 6.750% 38,775,528.00 August 2028
Class II-A-11-L Regular 7.000% 2,500,000.00 August 2028
3
<PAGE>
Class II-A-12-L Regular 6.500% 2,500,000.00 August 2028
Class II-A-13-L Regular (5) 321,429.00 August 2028
Class III-A-1-L Regular 7.000% 84,409,047.00 August 2028
Class IV-A-1-L Regular 6.750% 66,079,688.00 August 2028
Class I-X-L Regular 6.750%(8) ---------- September
2028
Class II-X-L Regular 6.500%(8) ---------- August 2028
Class III-X-L Regular 7.000%(8) ---------- August 2028
Class IV-X-L Regular 6.750%(8) ---------- August 2028
Class III-P-L Regular (5) 70,472.89 August 2028
Class I-B-1-L Regular 6.750% 12,960,233.00 September
2028
Class I-B-2-L Regular 6.750% 5,184,093.00 September
2028
Class I-B-3-L Regular 6.750% 2,592,046.00 September
2028
Class I-B-4-L Regular 6.750% 2,304,041.00 September
2028
Class I-B-5-L Regular 6.750% 1,152,020.00 September
2028
Class I-B-6-L Regular 6.750% 1,728,035.27 September
2028
Class C-B-1-L Regular Variable(9) 12,073,480.00 August 2028
Class C-B-2-L Regular Variable(9) 5,305,014.00 August 2028
Class C-B-3-L Regular Variable(9) 2,743,972.00 August 2028
Class C-B-4-L Regular Variable(9) 2,012,246.00 August 2028
Class C-B-5-L Regular Variable(9) 1,097,589.00 August 2028
Class C-B-6-L Regular Variable(9) 1,463,455.40 August 2028
Class R-3-L Regular 6.750% 50.00 September
2028
Class R-2+ Residual 6.750% 50.00 September
2028
</TABLE>
* The Distribution Date in the month the latest maturing Mortgage Loan in
the related Loan Group (or Loan Groups, as applicable) matures.
+ The Class R-2 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1) Interest distributed to the REMIC II Regular Interests and the Class R-2
Certificates (other than the Class P-L, Class I-A-20-L, Class I-A-21-L
and Class II-A-4-L Regular Interests and Component I-A-1-4-L and
Component I-A-1-6-L of the Class I-A-1-L Regular Interests, which will
not be entitled to receive any distributions of interest) on each
Distribution Date will have accrued at the applicable per annum
Remittance Rate on the Class Principal Balance, Class Notional Amount,
Component Principal Balance or Component Notional Amount outstanding
following the immediately prior Distribution Date (or with respect to
the first Distribution Date, as of the Closing Date).
(2) For purposes of calculating distributions, Class I-A-1-L will be
comprised of five Components having the designations, initial Component
Principal Balances and Remittance Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C>
Component I-A-1-2-L 41,411,326.00 6.750% (A)
Component I-A-1-3-L 43,500,000.00 7.000% (B)
Component I-A-1-4-L 5,214,846.00 (C)
Component I-A-1-5-L ------------ 6.750% (D)
Component I-A-1-6-L 913,987.58 (C)
</TABLE>
Each of the Components listed here will be a regular interest in REMIC
II.
(A) On each Distribution Date on or before the Component I-A-1-2
Accretion Termination Date, an amount equal to the Component
I-A-1-2 Accrual Amount will be added to the Component I-A-1-2-L
Principal Balance, and such amount will be distributed as
principal to certain Group I-A-L Regular Interests as set forth
herein and will not be distributed as interest to Component
I-A-1-2-L.
(B) On each Distribution Date on or before the Component I-A-1-3
Accretion Termination Date, an amount equal to the Component
I-A-1-3 Accrual Amount will be added to the Component I-A-1-3-L
Principal Balance, and such amount will be distributed as
principal to certain Group I-A-
4
<PAGE>
L Regular Interests as set forth herein and will not be
distributed as interest to Component I-A-1-3-L.
(C) Component I-A-1-4-L and Component I-A-1-6-L will not be entitled
to receive any distributions of interest.
(D) Component I-A-1-5-L will accrue interest on the Component I-A-1-5
Notional Amount.
(3) On each Distribution Date on or before the Class I-A-9 Accretion
Termination Date, an amount equal to the Class I-A-9 Accrual Amount
will be added to the Class I-A-9-L Principal Balance, and such amount
will be distributed as principal to certain Classes of Group I-A-L
Regular Interests and will not be distributed as interest to the Class
I-A-9-L Regular Interests.
(4) On each Distribution Date on or before the Class I-A-18 Accretion
Termination Date, an amount equal to the Class I-A-18 Accrual Amount
will be added to the Class I-A-18-L Principal Balance, and such amount
will be distributed as principal to certain Classes of Group I-A-L
Regular Interests and will not be distributed as interest to the Class
I-A-18-L Regular Interests.
(5) The Class III-P-L, Class I-A-20-L and Class II-A-13-L Regular Interests
will not be entitled to receive any distributions of interest.
(6) For purposes of calculating distributions, Class I-A-21-L will be
comprised of two Components having the designations, initial Component
Principal Balances and Remittance Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C> <C>
Component I-A-21-1-L 989,286.00 (A)
Component I-A-21-2-L 1,076,932.00 (A)
</TABLE>
Each of the Components listed here will be a regular interest in
REMIC II.
(A) Component I-A-21-1-L and Component I-A-21-2-L
will not be entitled to receive any distributions
of interest.
(7) For purposes of calculating distributions, Class II-A-4-L will be
comprised of two Components having the designations, initial
Component Principal Balances and Remittance Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C> <C>
Component II-A-4-1-L 1,588,889.00 (A)
Component II-A-4-2-L 5,470,670.00 (A)
</TABLE>
Each of the Components listed here will be a regular interest in
REMIC II.
(A) Component II-A-4-1-L and Component II-A-4-2-L will not be entitled
to receive any distributions of interest.
(8) Each of the Class X-L Regular Interests will accrue interest on their
related Class Notional Amount. The Class X-L Regular Interests will not
be entitled to receive any distributions of principal.
(9) The Remittance Rate on the Group C-B-L Regular Interests shall equal,
on any Distribution Date, the average of the Remittance Rates on
the Class Y-2, Class Y-3 and Class Y-4 Regular Interests, with such
average weighted on the basis of their respective Class Principal
Balances.
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 REMIC II
Regular Interests 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.
5
<PAGE>
REMIC III
<TABLE>
<CAPTION>
Class Designation
for each of the
Certificates (other
than the Class R-1 Initial Class
and Class R-2 Type of Remittance Principal
Certificates Interest Rate (1) Balance Final Maturity
Date
- ----------------- -------- ---------- -------------
- --------------------
<S> <C> <C> <C> <C>
Class I-A-1 (2) (2) 91,040,159.58 September 2028
Class I-A-2 Regular 6.400% 23,008,034.00 September 2028
Class I-A-3 Regular 6.400% 45,318,064.00 September 2028
Class I-A-4 Regular 6.400% 10,020,496.00 September 2028
Class I-A-5 Regular 6.400% 41,100,508.00 September 2028
Class I-A-6 Regular 6.400% 28,461,668.00 September 2028
Class I-A-7 Regular 6.165% 21,628,593.00 September 2028
Class I-A-8 Regular 6.700% 75,757,606.00 September 2028
Class I-A-9 Regular 7.000% (3) 8,450,000.00 September 2028
Class I-A-10 Regular 6.750% (4) ------------- September 2028
Class I-A-11 Regular 6.750% 84,619,111.00 September 2028
Class I-A-12 Regular 8.100% 4,827,411.00 September 2028
Class I-A-13 Regular 7.000% 16,650,000.00 September 2028
Class I-A-14 Regular 7.000% 12,427,142.00 September 2028
Class I-A-15 Regular 7.000% 26,710,714.00 September 2028
Class I-A-16 Regular 6.750% 18,557,500.00 September 2028
Class I-A-17 Regular 6.4000% 20,061,814.00 September 2028
Class I-A-18 Regular 6.750% (5) 1,923,806.00 September 2028
Class I-A-19 Regular 6.600% 13,275,381.00 September 2028
Class I-A-20 Regular (6) 185,540.00 September 2028
Class I-A-21 (7) (7) 2,066,218.00 September 2028
Class I-A-22 Regular 6.750% (8) ------------- September 2028
Class I-A-23 Regular 6.750% 4,000,000.00 September 2028
Class I-A-24 Regular 7.000% (9) ------------- September 2028
Class II-A-1 Regular 6.750% 23,754,476.00 August 2028
Class II-A-2 Regular 6.750% 19,369,996.00 August 2028
Class II-A-3 Regular 6.750% 10,900,000.00 August 2028
Class II-A-4 (10) (10) 7,059,559.00 August 2028
Class II-A-5 Regular 6.750% 41,311,111.00 August 2028
Class II-A-6 Regular 6.750% 24,200,000.00 August 2028
Class II-A-7 Regular 7.000% 11,237,408.00 August 2028
Class II-A-8 Regular 7.000% 8,678,571.00 August 2028
Class II-A-9 Regular 6.450% 38,775,528.00 August 2028
Class II-A-10 Regular 6.750% ------------- August 2028
Class II-A-11 Regular 7.000% 2,500,000.00 August 2028
Class II-A-12 Regular 6.500% 2,500,000.00 August 2028
Class II-A-13 Regular (6) 321,429.00 August 2028
6
<PAGE>
Class III-A-1 Regular 7.000% 84,409,047.00 August 2028
Class IV-A-1 Regular 6.750% 66,079,688.00 August 2028
Class I-X Regular 6.750% (12) ------------- September 2028
Class II-X Regular 6.500% (12) ------------- August 2028
Class III-X Regular 7.000% (12) ------------- August 2028
Class IV-X Regular 6.750% (12) ------------- August 2028
Class III-P Regular (6) 70,472.89 August 2028
Class I-B-1 Regular 6.750% 12,960,233.00 September 2028
Class I-B-2 Regular 6.750% 5,184,093.00 September 2028
Class I-B-3 Regular 6.750% 2,592,046.00 September 2028
Class I-B-4 Regular 6.750% 2,304,041.00 September 2028
Class I-B-5 Regular 6.750% 1,152,020.00 September 2028
Class I-B-6 Regular 6.750% 1,728,035.27 September 2028
Class C-B-1 Regular Variable(13) 12,073,480.00 August 2028
Class C-B-2 Regular Variable(13) 5,305,014.00 August 2028
Class C-B-3 Regular Variable(13) 2,743,972.00 August 2028
Class C-B-4 Regular Variable(13) 2,012,246.00 August 2028
Class C-B-5 Regular Variable(13) 1,097,589.00 August 2028
Class C-B-6 Regular Variable(13) 1,463,455.40 August 2028
Class R-3+ 6.750% 50.00 September 2028
</TABLE>
* The Distribution Date in the month the latest maturing Mortgage Loan
in the related Loan Group (or Loan Groups, as applicable) matures.
+ The Class R-3 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1) Interest distributed to the Certificates (other than the Class P,
Class I-A-20, Class I-A-21 and Class II-A-4 Certificates and
Component I-A-4 and Component I-A-1-6 of the Class I-A-1
Certificates, which will not be entitled to receive any
distributions of interest) on each Distribution Date will have
accrued at the applicable per annum Remittance Rate on the Class
Principal Balance, Class Notional Amount, Component Principal
Balance or Component Notional Amount outstanding following the
immediately prior Distribution Date (or with respect to the
first Distribution Date, as of the Closing Date).
(2) For purposes of calculating distributions, the Class I-A-1
Certificates will be comprised of six Components having the
designations, initial Component Principal Balances and
Remittance Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C> <C>
Component I-A-1-1 ------------- 6.750% (A)
Component I-A-1-2 41,411,326.00 6.400% (B)
Component I-A-1-3 43,500,000.00 7.000% (C)
Component I-A-1-4 5,214,846.00 (D)
Component I-A-1-5 ------------ 6.750% (E)
Component I-A-1-6 913,987.58 (D)
</TABLE>
Each of the Components listed here will be a regular interest in
REMIC II.
(A) Component I-A-1-1 will accrue interest on the Component I-A-1-1
Notional Amount. Component I-A-1-1 will not be entitled to receive
any distributions of principal.
(B) On each Distribution Date on or before the Component I-A-1-2
Accretion Termination Date, an amount equal to the Component
I-A-1-2 Accrual Amount will be added to the Component I-A-1-2
Principal Balance, and such amount will be distributed as principal
to certain Group I-A Certificates as set forth herein and will not
be distributed as interest to Component I-A-1-2.
(C) On each Distribution Date on or before the Component I-A-1-3
Accretion Termination Date, an amount equal to the Component
I-A-1-3 Accrual Amount will be added to the Component I-A-1-3
Principal Balance, and such amount will be distributed as principal
to certain Group I-A Certificates as set forth herein and will
not be distributed as interest to Component I-A-1-3.
(D) Component I-A-1-4 and Component I-A-1-6 will not be entitled to
receive any distributions of interest.
7
<PAGE>
(E) Component I-A-1-5 will accrue interest on the Component I-A-1-5
Notional Amount.
(3) On each Distribution Date on or before the Class I-A-9 Accretion
Termination Date, an amount equal to the Class I-A-9 Accrual Amount
will be added to the Class I-A-9 Principal Balance, and such amount
will be distributed as principal to certain Classes of Group I-A
Certificates and will not be distributed as interest to the Class
I-A-9 Certificates.
(4) The Class I-A-10 Certificates will accrue interest on the Class
I-A-10 Notional Amount. The Class I-A-10 Certificates will not
be entitled to receive distributions of principal.
(5) On each Distribution Date on or before the Class I-A-18 Accretion
Termination Date, an amount equal to the Class I-A-18 Accrual
Amount will be added to the Class I-A-18 Principal Balance, and
such amount will be distributed as principal to certain Classes
of Group I-A Certificates and will not be distributed as interest
to the Class I-A-18 Certificates.
(6) The Class III-P, Class I-A-20 and Class II-A-13 Certificates will
not be entitled to receive any distributions of interest.
(7) For purposes of calculating distributions, the Class I-A-21
Certificates will be comprised of two Components having the
designations, initial Component Principal Balances and Remittance
Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C> <C>
Component I-A-21-1 989,286.00 (A)
Component I-A-21-2 1,076,932.00 (A)
</TABLE>
Each of the Components listed here will be a regular interest in
REMIC III.
(A) Component I-A-21-1 and Component I-A-21-2 will not be entitled
to receive any distribution of interest.
(8) The Class I-A-22 Certificates will accrue interest on the Class
I-A-22 Notional Amount. The Class I-A-22 Certificates will not
be entitled to receive distributions of principal.
(9) The Class I-A-24 Certificates will accrue interest on the Class
I-A-24 Notional Amount. The Class I-A-24 Certificates will not
be entitled to receive distributions of principal.
(10) For purposes of calculating distributions, the Class II-A-4
Certificates will be comprised of two Components having the
designations, initial Component Principal Balances and
Remittance Rates set forth below:
<TABLE>
<CAPTION>
Initial Component
Designation Principal Balance Remittance Rate
----------- ----------------- ---------------
<S> <C> <C> <C>
Component I-A-4-1 1,588,889.00 (A)
Component I-A-4-2 5,470,670.00 (A)
</TABLE>
Each of the Components listed here will be a regular interest in
REMIC III.
(A) Component II-A-4-1 and Component II-A-4-2 will not be
entitled to receive any distributions of interest.
(11) The Class II-A-10 Certificates will accrue interest on the
Class II-A-10 Notional Amount. The Class II-A-10 Certificates
will not be entitled to receive distributions of principal.
(12) Each of the Class X Certificates will accrue interest on
their related Class Notional Amount. The Class X Certificates
will not be entitled to receive any distributions of principal.
(13) The Remittance Rate on each Class of the Group C-B Certificates
shall equal the Remittance Rate on the Corresponding Class of
Group C-B-L Regular Interests.
As provided herein, with respect to REMIC III, the Company
will cause an election to be made on behalf of REMIC III to be
treated for federal income tax purposes as a REMIC. The
Certificates (other than the Class I-A-1, Class I-A-21, Class II-
A-4, Class R-1, Class R-2 and Class R-3 Certificates) and the
Components of the Class I-A-1, Class I-A-21 and Class II-A-4
Certificates will be designated regular interests in REMIC III
and the Class R-3 Certificates will be designated the sole class
of residual interest in REMIC III, for purposes of the REMIC
Provisions. As of the
8
<PAGE>
Cut-Off Date, the Mortgage Loans have an aggregate Principal
Balance of $941,948,526 and the Certificates have an Aggregate
Certificate Principal Balance of $941,873,426.
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 ("REMIC I") 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 REMIC II Regular Interests
issued hereunder as hereinafter provided; and
WHEREAS, the Company has been duly authorized to (i) create
a trust ("REMIC III") to hold the REMIC II Regular Interests and
(ii) sell undivided beneficial ownership interests in REMIC III
and in order to do so is selling the Certificates issued
hereunder as hereinafter provided; and
WHEREAS, the Trustee is a national banking association duly
organized and existing under the laws of the United States 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:
Accretion Directed Classes: The Class I-A-7, Class I-A-8 and
--------------------------
Class I-A-15 Certificates, as applicable, and the Corresponding
Classes.
9
<PAGE>
Accretion Directed Components: Component I-A-1-3 and
--------------------------------
Component I-A-21-1, as applicable, and the Corresponding
Components.
Aggregate Certificate Principal Balance: At any given time,
---------------------------------------
the sum of the then current Class Principal Balances of the
Certificates.
Appraised Value: The amount set forth in an appraisal made
----------------
by or for the mortgage originator in connection with its
origination of each Mortgage Loan, or with respect to certain
Mortgage Loans originated to refinance mortgage debt, the
appraisal made by or for the mortgage originator in connection
with the origination of such mortgage debt.
Assignment of Proprietary Lease: With respect to a
-----------------------------------
Cooperative Loan, the assignment or mortgage of the related
Cooperative Lease from the Mortgagor to the originator of the
Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by
--------------------
the Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates
------------------------
(other than the Class I-A-10, Class I-A-13, Class I-A-14, Class I-
A-22, Class I-A-24, Class II-A-7, Class II-A-8, Class II-A-10,
Class II-A-11, Class II-A-12, Class X and Residual Certificates),
an initial Certificate Principal Balance equal to $25,000 and
multiples of $1 in excess thereof. With respect to the Class I-A-
13, Class I-A-14, Class II-A-7, Class II-A-8, Class II-A-11 and
Class II-A-12 Certificates, an initial Certificate Principal
Balance equal to $1,000 and multiples of $1 in excess thereof.
With respect to the Class X, Class I-A-10, Class I-A-22, Class I-
A-24 and Class II-A-10 Certificates, a Class Notional Amount as
of the Cut-Off Date equal to $100,000 and multiples of $1 in
excess thereof, except that one Certificate of each such Class
may be issued in a different amount. With respect to each Class
of the Residual Certificates, one Certificate with a Percentage
Interest equal to 0.01% and one Certificate with a Percentage
Interest equal to 99.99%.
Balloon Loan: Any Mortgage Loan which, by its terms, does
-------------
not fully amortize the principal balance thereof by its stated
maturity and thus requires a payment at the stated maturity
larger than the monthly payments due thereunder.
Bankruptcy Coverage: The Group I Bankruptcy Coverage and/or
-------------------
the Combined Bankruptcy Coverage, as applicable.
Bankruptcy Coverage Initial Amount: With respect to Loan
-----------------------------------
Group I, $174,099 and with respect to Loan Group II, Loan Group
III and Loan Group IV, $133,374.
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.
10
<PAGE>
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 (except the Class I-A-23 Certificates), beneficial
ownership and transfers of which shall be made through book
entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a
------------
day on which banking institutions in Chicago, Illinois or New
York, New York are authorized or obligated by law or executive
order to be closed.
Buydown Agreement: An agreement between a Person and a
------------------
Mortgagor pursuant to which such Person has provided a Buydown
Fund.
Buydown Fund: A fund provided by the originator of a
-------------
Mortgage Loan or another Person with respect to a Buydown Loan
which provides an amount sufficient to subsidize regularly
scheduled principal and interest payments due on such Buydown
Loan for a period. Buydown Funds may be (i) funded at the par
values of future payment subsidies, or (ii) funded in an amount
less than the par values of future payment subsidies, and
determined by discounting such par values in accordance with
interest accruing on such amounts, in which event they will be
deposited in an account bearing interest. Buydown Funds may be
held in a separate Buydown Fund Account or may be held in a
Custodial Account for P&I or a Custodial Account for Reserves and
monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created
--------------------
and maintained pursuant to Section 3.02 (a) with the corporate
trust department of the Trustee or another financial institution
approved by the Master Servicer, (b) within FDIC insured accounts
(or other accounts with comparable insurance coverage acceptable
to the Rating Agencies) created, maintained and monitored by a
Servicer or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution. Such account or
accounts may be non-interest bearing or may bear interest. In the
event that a Buydown Fund Account is established pursuant to
clause (b) of the preceding sentence, amounts held in such
Buydown Fund Account shall not exceed the level of deposit
insurance coverage on such account; accordingly, more than one
Buydown Fund Account may be established.
Buydown Loan: A Mortgage Loan for which the Mortgage
-------------
Interest Rate has been subsidized through a Buydown Fund provided
at the time of origination of such Mortgage Loan.
Certificate: Any one of the Group I, Group II, Group III,
-----------
Group IV, Group C-B 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.
11
<PAGE>
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 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, Section
4.04 and Section 4.06.
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. With respect to the REMIC II Regular
Interests, the owner of the REMIC II Regular Interests, which as
of the Closing Date shall be the Trustee.
Certificate Group: Any of the Group I, Group II, Group III,
-----------------
Group IV and Group C-B Certificates.
Certificate Principal Balance: For each Certificate of any
-----------------------------
Class, the portion of the related Class Principal Balance, if
any, represented by such Certificate.
Certificate Register and Certificate Registrar: The register
----------------------------------------------
maintained and the registrar appointed, respectively, pursuant to
Section 5.03.
Class: All REMIC I Regular Interests or the Class R-1
-----
Certificates having the same priority and rights to payments on
the Mortgage Loans from the REMIC I Available Distribution
Amount, all REMIC II Regular Interests or the Class R-2
Certificates having the same priority and rights to payments on
the REMIC I Regular Interests from the REMIC II Available
Distribution Amount and all Certificates (other than the Class R-
1 and Class R-2 Certificates) having the same priority and rights
to payments on the REMIC II Regular Interests from the REMIC III
Available Distribution Amount, as applicable, which Certificates,
REMIC I Regular Interests and REMIC II Regular Interests, as
applicable, shall be designated as a separate Class, and which,
in the case of the Certificates, shall be set forth in the
applicable forms of Certificates attached hereto as Exhibits A, 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
12
<PAGE>
"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", each Class of
REMIC II Regular Interests and the Class R-2 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", and each Class of Certificates
(other than the Class R-1 and Class R-2 Certificates)
shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "REMIC III Distribution Amount"
only to the extent of the REMIC III Available Distribution
Amount for such Distribution Date remaining after distributions
in accordance with prior clauses of the definition of "REMIC III
Distribution Amount."
Class A Certificates: The Group I-A, Group II-A, Class III-A-
--------------------
1 and Class IV-A-1 Certificates.
Class A-L Regular Interests: The Group I-A-L, Group II-A-L,
----------------------------
Class III-A-1-L and Class IV-A-1-L Regular Interests.
Class B Certificates: The Group I-B and Group C-B
------------------------
Certificates.
Class B-L Regular Interests: The Group I-B-L and Group C-B-L
---------------------------
Regular Interests.
Class C-B-1 Certificates: The Certificates designated as
--------------------------
"Class C-B-1" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-1.
Class C-B-1-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class C-B-2 Certificates: The Certificates designated as
--------------------------
"Class C-B-2" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-2.
Class C-B-2-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class C-B-3 Certificates: The Certificates designated as
--------------------------
"Class C-B-3" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-3.
Class C-B-3-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class C-B-4 Certificates: The Certificates designated as
--------------------------
"Class C-B-4" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-4.
13
<PAGE>
Class C-B-4-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class C-B-5 Certificates: The Certificates designated as
--------------------------
"Class C-B-5" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-5.
Class C-B-5-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class C-B-6 Certificates: The Certificates designated as
--------------------------
"Class C-B-6" on the face thereof in substantially the form
attached hereto as Exhibit A-C-B-6.
Class C-B-6-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as specified herein.
Class P Certificates: The Class III-P Certificates.
--------------------
Class P-L Regular Interests: The Class III-P-L Regular
------------------------------
Interests.
Class P-M Regular Interests: The Class I-P-M and Class III-P-
---------------------------
M Regular Interests.
Class P Fraction: Any of the I-PO Fraction or the Class III-
----------------
P Fraction, as applicable.
Class P Mortgage Loan: Any of the I-PO Mortgage Loans or the
---------------------
Class III-P Mortgage Loans.
Class X Certificates: The Class I-X, Class II-X, Class III-X
--------------------
and Class IV-X Certificates.
Class X-L Regular Interests: The Class I-X-L, Class II-X-L,
----------------------------
Class III-X-L and Class IV-X-L Regular Interests.
Class X-M Regular Interests: The Class I-X-M, Class II-X-M,
----------------------------
Class III-X-M and Class IV-X-M 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 Interests: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which is
comprised of REMIC II Regular Interests as specified in the
Preliminary Statement 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.
14
<PAGE>
Class I-A-2-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II 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 II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-6 Certificates: The Certificates designated as
--------------------------
"Class I-A-6" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-6.
Class I-A-6-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-7 Certificates: The Certificates designated as
--------------------------
"Class I-A-7" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-7.
Class I-A-7-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-9 Accretion Termination Date: The earlier to occur
--------------------------------------
of (i) the Distribution Date on which the Class I-A-8 Principal
Balance, the Segment T Principal Balance and Component I-A-1-
15
<PAGE>
3 Principal Balance have each been reduced to zero and (ii) the
Group I Credit Support Depletion Date.
Class I-A-9 Accrual Amount: On any Distribution Date, an
----------------------------
amount equal to the amount allocable to the Class I-A-9-L Regular
Interests on such Distribution Date pursuant to the definition of
"Interest Distribution Amount", without regard to the proviso at
the end of the first sentence of such definition.
Notwithstanding the foregoing, for any Distribution Date after
the Class I-A-9 Accretion Termination Date, the Class I-A-9
Accrual Amount shall be zero.
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.
Class I-A-9-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 Notional Amount: For any Distribution Date,
------------------------------
67.5177474082% of the product of (X) the sum of (i) the aggregate
Class Principal Balance of the Class I-A-2, Class I-A-3, Class I-
A-4, Class I-A-5, Class I-A-6 and Class I-A-7 Certificates and
(ii) the Component I-A-1-2 Principal Balance, in each case
immediately prior to such Distribution Date and (Y) 35/675.
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 II which
constitutes a REMIC II 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-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
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 II which
constitutes a REMIC II 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.
16
<PAGE>
Class I-A-14-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-16 Certificates: The Certificates designated as
---------------------------
"Class I-A-16" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-16.
Class I-A-16-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-18 Accretion Termination Date: The earlier to
-----------------------------------------
occur of (i) the Distribution Date on which the Class I-A-15
Principal Balance and the Component I-A-21-1 Principal Balance
have each been reduced to zero and (ii) the Group I Credit
Support Depletion Date.
Class I-A-18 Accrual Amount: On any Distribution Date, an
----------------------------
amount equal to the amount allocable to the Class I-A-18-L
Regular Interests on such Distribution Date pursuant to the
definition of "Interest Distribution Amount", without regard to
the proviso at the end of the first sentence of such definition.
Notwithstanding the foregoing, for any Distribution Date after
the Class I-A-18 Accretion Termination Date, the Class I-A-18
Accrual Amount shall be zero.
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 II which
constitutes a REMIC II 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.
17
<PAGE>
Class I-A-19-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-21 Certificates: The Certificates designated as
---------------------------
"Class I-A-21" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-21.
Class I-A-21-L Regular Interests: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which is
comprised of REMIC II Regular Interests as set forth in the
Preliminary Statement 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 Notional Amount: For any Distribution Date, the
----------------------------
sum of (i) the Class I-A-17 Principal Balance multiplied by
35/675 and (ii) the Class I-A-7 Principal Balance multiplied by
23.5/675.
Class I-A-23 Certificates: The Certificates designated as
---------------------------
"Class I-A-23" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-23.
Class I-A-23-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-A-24 Certificates: The Certificates designated as
---------------------------
"Class I-A-24" on the face thereof in substantially the form
attached hereto as Exhibit A-I-A-24.
Class I-A-24 Notional Amount: For any Distribution Date, the
----------------------------
Class I-A-8 Principal Balance multiplied by 30/675.
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 II which
constitutes a REMIC II 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.
18
<PAGE>
Class I-B-2-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II 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 II which
constitutes a REMIC II 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.
Class I-B-5-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-P-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class I-X Certificates: The Certificates designated as
------------------------
"Class I-X" on the face thereof in substantially the form
attached hereto as Exhibit A-I-X.
Class I-X-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class I-X-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class I-X Notional Amount: With respect to any Distribution
-------------------------
Date, 8.4500000005% of the product
19
<PAGE>
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 6.750%.
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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-2 Certificates: The Certificates designated as
---------------------------
"Class II-A-2" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-2.
Class II-A-2-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II 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 II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-4 Certificates: The Certificates designated as
---------------------------
"Class II-A-4" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-4.
Class II-A-4-L Regular Interests: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which is
comprised of REMIC II Regular Interests as set forth in the
Preliminary Statement and is entitled to distributions as set
forth herein.
Class II-A-5 Certificates: The Certificates designated as
---------------------------
"Class II-A-5" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-5.
Class II-A-5-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-6 Certificates: The Certificates designated as
---------------------------
"Class II-A-6" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-6.
Class II-A-6-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
20
<PAGE>
Class II-A-7 Certificates: The Certificates designated as
---------------------------
"Class II-A-7" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-7.
Class II-A-7-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-8 Certificates: The Certificates designated as
---------------------------
"Class II-A-8" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-8.
Class II-A-8-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-9 Certificates: The Certificates designated as
---------------------------
"Class II-A-9" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-9.
Class II-A-9-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-10 Certificates: The Certificates designated as
---------------------------
"Class II-A-10" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-10.
Class II-A-10 Notional Amount: For any Distribution Date,
-------------------------------
the Class II-A-9 Principal Balance multiplied by 30/675.
Class II-A-11 Certificates: The Certificates designated as
---------------------------
"Class II-A-11" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-11.
Class II-A-11-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-12 Certificates: The Certificates designated as
---------------------------
"Class II-A-12" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-12.
Class II-A-12-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-A-13 Certificates: The Certificates designated as
---------------------------
"Class II-A-13" on the face thereof in substantially the form
attached hereto as Exhibit A-II-A-13.
Class II-A-13-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
21
<PAGE>
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-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class II-X-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class II-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 6.500%.
Class III-A-1 Certificates: The Certificates designated as
---------------------------
"Class III-A-1" on the face thereof in substantially the form
attached hereto as Exhibit A-III-A-1.
Class III-A-1-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class III-P Certificates: The Certificates designated as
--------------------------
"Class III-P" on the face thereof in substantially the form
attached hereto as Exhibit A-III-P.
Class III-P Fraction: For each Class III-P Mortgage Loan, a
--------------------
fraction, the numerator of which is 7.000% less the Pass-Through
Rate on such Class III-P Mortgage Loan and the denominator of
which is 7.000%.
Class III-P Mortgage Loan: Any Group III Loan with a Pass-
--------------------------
Through Rate of less than 7.000% per annum.
Class III-P-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class III-P-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class III-X Certificates: The Certificates designated as
--------------------------
"Class III-X" on the face thereof in substantially the form
attached hereto as Exhibit A-III-X.
22
<PAGE>
Class III-X-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class III-X-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class III-X Notional Amount: With respect to any
--------------------------------
Distribution Date, the product of (x) the aggregate scheduled
principal balance, as of the second preceding Due Date after
giving effect to payments scheduled to be received as of such Due
Date, whether or not received, or with respect to the initial
Distribution Date, as of the Cut-Off Date, of the Group III
Premium Rate Mortgage Loans and (y) a fraction, the numerator of
which is the weighted average of the Stripped Interest Rates for
the Group III Premium Rate Mortgage Loans as of such Due Date and
the denominator of which is 7.000%.
Class IV-A-1 Certificates: The Certificates designated as
---------------------------
"Class IV-A-1" on the face thereof in substantially the form
attached hereto as Exhibit A-IV-A-1.
Class IV-A-1-L Regular Interest: The uncertificated partial
--------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class IV-X Certificates: The Certificates designated as
-------------------------
"Class IV-X" on the face thereof in substantially the form
attached hereto as Exhibit A-IV-X.
Class IV-X-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which
constitutes a REMIC II Regular Interest and is entitled to
distributions as set forth herein.
Class IV-X-M Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class IV-X Notional Amount: With respect to any Distribution
--------------------------
Date, the product of (x) the aggregate scheduled principal
balance, as of the second preceding Due Date after giving effect
to payments scheduled to be received as of such Due Date, whether
or not received, or with respect to the initial Distribution
Date, as of the Cut-Off Date, of the Group IV Premium Rate
Mortgage Loans and (y) a fraction, the numerator of which is the
weighted average of the Stripped Interest Rates for the Group IV
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 6.750%.
Class Notional Amount: With respect to any of the Class I-A-
---------------------
10, Class I-A-22, Class I-A-24, Class II-A-10 and Class X
Certificates and the Class X-L and Class X-M 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, the Class I-X-L and the Class I-X-M Regular
Interests is the Class I-X Notional Amount and the "Class
Notional Amount" for the Class I-A-10 Certificates is the Class I-
A-10 Notional Amount).
23
<PAGE>
Class Principal Balance: For any Class of Certificates and
------------------------
for any Class of Regular Interests (other than the Class I-A-1,
Class I-A-21 and Class II-A-4 Certificates and their
Corresponding Classes), 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, the REMIC I Regular Interests or the REMIC II
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 (including, with
respect to the Accretion Directed Classes and the Segment T
Group, the portions of the Class I-A-9 Accrual Amount, the Class
I-A-18 Accrual Amount, the Component I-A-1-2 Accrual Amount and
the Component I-A-1-3 Accrual Amount distributed to such Classes
of Certificates and Regular Interests) 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",
"REMIC II Distribution Amount" and "REMIC III Distribution
Amount". In addition to the foregoing, (i) on each Distribution
Date on or before the Class I-A-9 Accretion Termination Date, the
Class I-A-9-L and Class I-A-9 Principal Balance will be increased
by the Class I-A-9 Accrual Amount for such Distribution Date and
(ii) on each Distribution Date on or before the Class I-A-18
Accretion Termination Date, the Class I-A-18-L and Class I-A-18
Principal Balance will be increased by the Class I-A-18 Accrual
Amount for such Distribution Date. Notwithstanding the foregoing,
any amounts distributed in respect of losses pursuant to
paragraphs (I)(a)(vi) or (I)(e)(ii) of the definition of "REMIC
II Distribution Amount" shall not cause a further reduction in
the Component I-A-1-6-L Principal Balance (or its Corresponding
Component) or the Class III-P-L Principal Balances (or its
Corresponding Class). 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 Balance for
the Class X-L Regular Interests and their Corresponding Classes
shall be zero. The Class Principal Balance for the Class I-A-10,
Class I-A-22, Class I-A-24 and Class II-A-10 Certificates and
their Corresponding Classes shall be zero. The Class I-A-1-L,
Class I-A-21-L and Class II-A-4-L Principal Balances shall equal
the sum of the Component Principal Balances of the Components
thereof and likewise for the Corresponding Classes.
Class R-1 Certificates: The Certificates designated as
------------------------
"Class R-1" 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 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-3 Certificates: The Certificates designated as
------------------------
"Class R-3" 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 III pursuant to
Section 2.07.
24
<PAGE>
Class R-3-L: The uncertificated partial undivided beneficial
-----------
ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth
herein.
Class W 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 Y Regular Interests: The Class Y-1, Class Y-2 and
---------------------------
Class Y-3 Regular Interests.
Class Y-1 Regular Interest: The uncertificated partial
-----------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-1 Principal Distribution Amount: For any
----------------------------------------------
Distribution Date, the excess, if any, of the Class Y-1 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Y-1 Regular
Interests on such Distribution Date.
Class Y-2 Regular Interest: The uncertificated partial
-----------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any
----------------------------------------------
Distribution Date, the excess, if any, of the Class Y-2 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Y-2 Regular
Interests on such Distribution Date.
Class Y-3 Regular Interest: The uncertificated partial
-----------------------------
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-3 Principal Distribution Amount: For any
----------------------------------------------
Distribution Date, the excess, if any, of the Class Y-3 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Y-3 Regular
Interests on such Distribution Date.
Class Y Principal Reduction Amounts: For any Distribution
-------------------------------------
Date, the amounts by which the Class Principal Balances of the
Class Y-1, Class Y-2 and Class Y-3 Regular Interests,
respectively, will be reduced on such Distribution Date by the
allocation of Realized Losses and the distribution of principal,
determined as follows:
For purposes of the succeeding formulas the following
symbols shall have the meanings set forth below:
PIIB = the Group C-B Component Balance for Loan Group II after
the allocation of Realized Losses and distributions of principal
on such Distribution Date.
PIIIB = the Group C-B Component Balance for Loan Group III
after the allocation of Realized Losses and distributions of
principal on such Distribution Date.
25
<PAGE>
PIVB = the Group C-B Component Balance for Loan Group IV after
the allocation of Realized Losses and distributions of principal
on such Distribution Date.
R = the Remittance Rate on the Group C-B-L Regular Interests =
(6.5%PIIB + 7%PIIIB + 6.75%PIVB)/(PIIB + PIIIB + PIVB)
R1 = the weighted average of the Remittance Rates on the Group II-
L and Group IV-L Regular Interests (other than the Class II-X-L
and Class IV-X-L Regular Interests)
= (6.5% (P1 - DP1) + 6.75% (P3 - DP3))/(P1 - DP1 + P3 - DP3)
R2 = the weighted average of the Remittance Rates on the Group
III-L and Group IV-L Regular Interests (other than the Class III-
X-L, Class IV-X-L and Class III-P-L Regular Interests) = (7%
(P2 - DP2) + 6.75% (P3 - DP3))/(P2 - DP2 + P3 - DP3)
r1 = the weighted average of the Class Y-1 and Class Y-3
Remittance Rates
= (6.5% Y1 + 6.75% Y3)/(Y1 + Y3)
r2 = the weighted average of the Class Y-2 and Class Y-3
Remittance Rates
= (7% Y2 + 6.75% Y3)/(Y2 + Y3)
Y1 = the principal balance of the Class Y-1 Regular
Interests after distributions on the prior Distribution
Date.
Y2 = the principal balance of the Class Y-2 Regular
Interests after distributions on the prior Distribution
Date.
Y3 = the principal balance of the Class Y-3 Regular
Interests after distributions on the prior Distribution
Date.
DY1 = the Class Y-1 Principal Reduction Amount.
DY2 = the Class Y-2 Principal Reduction Amount.
DY3 = the Class Y-3 Principal Reduction Amount.
P1 = the aggregate principal balance of the Class Y-1 and
Class Z-1 Regular Interests after distributions on the prior
Distribution Date.
P2 = the aggregate principal balance of the Class Y-2 and
Class Z-2 Regular Interests after distributions on the prior
Distribution Date.
P3 = the aggregate principal balance of the Class Y-3 and
Class Z-3 Regular Interests after distributions on the prior
Distribution Date.
DP1 = the aggregate of the Class Y-1 and Class Z-1 Principal
Reduction Amounts.
26
<PAGE>
DP2= the aggregate of the Class Y-2 and Class Z-2 Principal
Reduction Amounts.
DP3 = the aggregate of the Class Y-3 and Class Z-3 Principal
Reduction Amounts.
a = .0005
g1 = (R - R1)/(7% - R). If R3 6.75%, g1 is a non-negative number
unless its denominator is zero, in which event it is
undefined.
g2 = (R - 6.5%)/(R2 - R). If R<6.75%, g2 is a non-negative
number.
If g1 is undefined, DY1 = Y1, DY2 = (Y2/P2)DP2, and DY3 = Y3.
If g2 is zero, DY2 = Y2, DY1 = (Y1/P1)DP1, and DY3 = Y3.
In the remaining situations, DY1, DY2 and DY3 shall be defined as
follows:
I. If R3 6.75% and r13R1, make the following additional
definitions:
dY3 = ((6.5% - R1)/(6.75% - R1))Y1 + Y3
dY3 is a number between Y3 and 0 such that (6.5%Y1 + 6.75%(Y3.-
dY3))/(Y1 + Y3.- dY3) = R1.
Y4 = Y1 + Y3.- dY3
P4 = P1 + P3.
)Y4 = )Y1 + )Y3.- dY3
1. If Y2 - a(P2 - DP2)30, Y4-a(P4 - DP4) 30, and g1(P4 - DP4) < (P2
- DP2), DY2 = Y2 - ag1(P4 - DP4) and DY4 = Y4 - a(P4 - DP4).
2. If Y2 - a(P2 - DP2)3 0, Y4 - a(P4 - DP4)3 0, and g1(P4 - DP4)3
(P2 - DP2), DY2 = Y2 - a(P2 - DP2) and DY4 = Y4 - (a/g1)(P2 - DP2).
3. If Y2 - a(P2 - DP2) <0, Y4 - a(P4 - DP4)3 0, and Y4 - a(P4 - DP4)
3 Y4 - (Y2/g1), DY2 = Y2 - ag1(P4 - DP4) and DY4 = Y4 - a(P4 - DP4).
4. If Y2 - a(P2 - DP2) <0, Y4 - (Y2/g1)3 0, and Y4 - a(P4 - DP4)~
Y4 - (Y2/g1), DY2 = 0 and DY4 = Y4 - (Y2/g1).
5. If Y4 - a(P4 - DP4) <0, Y4 - (Y2/g1) <0, and Y2 - a(P2 - DP2)~
Y2 - (g1Y4), DY2 = Y2 - (g1Y4) and DY4 = 0.
6. If Y4 - a(P4 - DP4) <0, Y2 - a(P2 - DP2)3 0, and Y2 - a(P2 - DP2)
3 Y2 - (g1Y4), DY2 = Y2 - (P2 - DP2) and DY4 = Y4 - (a/g1)(P2 - DP2).
27
<PAGE>
)Y1 = [Y1/(Y1 + Y3 - dY3)]Y4
)Y3 = dY3 + [(Y3 - dY3/(Y1 + Y3 - dY3)]Y4
The purpose of the foregoing definitional provisions together
with the related provisions allocating Realized Losses and
defining the Class Y and Class Z Principal Distribution Amounts
is to accomplish the following goals in the following order of
priority:
1. Making the ratio of Y2 to Y4 equal to 1 after taking account
of the allocation Realized Losses and the distributions that will
be made through end of the Distribution Date to which such
provisions relate and assuring that the Principal Reduction
Amount for each of the Class Y-1, Class Y-2, Class Y-3, Class Z-1
Class Z-2 and Class Z-3 Regular Interests is greater than or
equal to zero for such Distribution Date;
2. Making the Class Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-1 and Class Z-1 Principal
Balances, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-2 and Class Z-2 Principal
Balances and the Class Y-3 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of
the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y2
and whose denominator is the sum of Y2 and Class Z-2 Principal
Balance and (b) the fraction whose numerator is Y4 and whose
denominator is the sum of Y4, the Class Z-1 Principal Balance and
the Class Z-3 Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class Y Principal Reduction Amount to accomplish
both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement
that each Class Y Principal Reduction Amount must be less than or
equal to the sum of (a) the principal portion of Realized Losses
to be allocated on the related Distribution Date for the related
Pool remaining after the allocation of such Realized Losses to
the related Class P-M Regular Interests and (b) the remainder of
the REMIC I Available Distribution Amount for the related Loan
Group or after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests and
(iii) in respect of interest on the related Class Y and Class Z
Regular Interests, or, if both of such goals cannot be
accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such
requirement. In the event of any conflict among the provisions
of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and
their priorities set forth above within the requirement set forth
in the preceding sentence. If the formula allocation of Y4
between Y1 and Y3 cannot be achieved because either Y1 as so
defined is greater than P1 or Y3 as so defined is greater than
P3, such an allocation shall be made as close as possible to the
formula allocation within the requirement that Y1 < P1 and Y3 <
P3.
II. If R36.75% and r1<R1, make the following additional
definitions:
28
<PAGE>
dY1 = Y1 + ((R1 - 6.75%)/(R1 - 6.5%))Y3
dY1 is a number between Y1 and 0 such that (6.5%(Y1 - dY1) +
6.75%Y3)/(Y1 - dY1 + Y3.) = R1.
Y5 = Y1 - dY1 + Y3.
P5 = P1 + P3.
)Y5 = )Y1 - dY1 + )Y3.
1. If Y2 - a(P2 - DP2)3 0, Y5- a(P5 - DP5)3 0, and g1(P5 - DP5)<
(P2 - DP2), DY2 = Y2 - ag1(P5 - DP5) and DY5 = Y5 - a(P5 - DP5).
2. If Y2 - a(P2 - DP2)3 0, Y5 - a(P5 - DP5)3 0, and g1(P5 - DP5)3
(P2 - DP2), DY2 = Y2 - a(P2 - DP2) and DY5 = Y5 - (a/g1)(P2 - DP2).
3. If Y2 - a(P2 - DP2)<0, Y5 - a(P5 - DP5)3 0, and Y5 - a(P5 - DP5)3
Y5 - (Y2/g1), DY2 = Y2 - ag1(P5 - DP5) and DY5 = Y5 - a(P5 - DP5).
4. If Y2 - a(P2 - DP2)< 0, Y5 - (Y2/g1)3 0, and Y5 - a(P5 - DP5)~
Y5 - (Y2/g1), DY2 = 0 and DY5 = Y5 - (Y2/g1).
5. If Y5 - a(P5 - DP5)<0, Y5 - (Y2/g1) <0, and Y2 - a(P2 - DP2)~
Y2 - (g1Y5), DY2 = Y2 - (g1Y5) and DY5 = 0.
6. If Y5 - a(P5 - DP5)<0, Y2 - a(P2 - DP2)3 0, and Y2 - a(P2 - DP2)3
Y2 -(g1Y5), DY2 = Y2 - a(P2 - DP2) and DY5 = Y5 - (a/g1)(P2 - DP2).
)Y1 = dY1 + [(Y1 - dY1)/(Y1 - dY1 + Y3)]Y5
)Y3 = [Y3/(Y1 - dY1 + Y3)]Y5
The purpose of the foregoing definitional provisions together
with the related provisions allocating Realized Losses and
defining the Class Y and Class Z Principal Distribution Amounts
is to accomplish the following goals in the following order of
priority:
1. Making the ratio of Y2 to Y5 equal to 1 after taking account
of the allocation Realized Losses and the distributions that will
be made through end of the Distribution Date to which such
provisions relate and assuring that the Principal Reduction
Amount for each of the Class Y-1, Class Y-2, Class Y-3, Class Z-1
Class Z-2 and Class Z-3 Regular Interests is greater than or
equal to zero for such Distribution Date;
2. Making the Class Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-1 and Class Z-1 Principal
Balances, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-2 and Class Z-2 Principal
Balances and the Class Y-3 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances in each case after giving effect to allocations of
29
<PAGE>
Realized Losses and distributions to be made through the end of
the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y2
and whose denominator is the sum of Y2 and Class Z-2 Principal
Balance and (b) the fraction whose numerator is Y5 and whose
denominator is the sum of Y5, the Class Z-1 Principal Balance and
the Class Z-3 Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class Y Principal Reduction Amount to accomplish
both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement
that each Class Y Principal Reduction Amount must be less than or
equal to the sum of (a) the principal portion of Realized Losses
to be allocated on the related Distribution Date for the related
Loan Group remaining after the allocation of such Realized Losses
to the related Class P-M Regular Interests and (b) the remainder
of the REMIC I Available Distribution Amount for the related Loan
Group or after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests and
(iii) in respect of interest on the related Class Y and Class Z
Regular Interests, or, if both of such goals cannot be
accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such
requirement. In the event of any conflict among the provisions
of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and
their priorities set forth above within the requirement set forth
in the preceding sentence. If the formula allocation of Y5
between Y1 and Y3 cannot be achieved because either Y1 as so
defined is greater than P1 or Y3 as so defined is greater than
P3, such an allocation shall be made as close as possible to the
formula allocation within the requirement that )Y1 <)P1 and )Y3
<)P3.
III. If R~ 6.75% and r23R2, make the following additional
definitions:
dY2 = ((6.75% - R2)/(7% - R2))Y3 + Y2
dY2 is a number between Y2 and 0 such that (6.75%Y3 + 7%(Y2.-
d Y2))/(Y3 + Y2.- dY2) = R2.
Make the following additional definitions:
Y6 = Y2 - dY2 + Y3.
P6 = P2 + P3.
)Y6 = )Y2 - dY2 + )Y3.
1. If Y6 - a(P6 - DP6)3 0, Y1- a(P1 - DP1)3 0, and g2(P1 - DP1) <
(P6 - DP6), DY6 = Y6 - ag2(P1 - DP1) and DY1 = Y1 - a(P1 - DP1).
2. If Y6 - a(P6 - DP6)3 0, Y1 - a(P1 - DP1)3 0, and g2(P1 - DP1)3
(P6 - DP6), DY6 = Y6 - a(P6 - DP6) and DY1 = Y1 - (a/g2)(P6 - DP6).
3. If Y6 - a(P6 - DP6) < 0, Y1 - a(P1 - DP1)3 0, and Y1 -
a(P1 - DP1)3 Y1 - (Y6/g2), DY6 = Y6 - ag2(P1 - DP1) and DY1 = Y1
- - a(P1 - DP1).
4. If Y6 - a(P6 - DP6) < 0, Y1 - (Y6/g2)3 0, and Y1 - a(P1 - DP1)
~ Y1 - (Y6/g2), DY6 = 0 and DY1 = Y1 - (Y6/g2).
5. If Y1 - a(P1 - DP1) < 0, Y1 - (Y6/g2) < 0, and Y6 - a(P6 - DP6)~
Y6 - (g2Y1), DY6 = Y6 - (g2Y1) and DY1 = 0.
6. If Y1 - a(P1 - DP1)< 0, Y6 - a(P6 - DP6)3 0, and Y6 - a(P6 - DP6)3
Y6 - (g2Y1), DY6 = Y6 - a(P6 - DP6) and DY1 = Y1 - (a/g2)(P6 - DP6).
)Y2 = dY2 + [(Y2 - dY2)/(Y2 - dY2 + Y3)]Y6
)Y3 = [Y3/(Y2 - dY2 + Y3)]Y6
The purpose of the foregoing definitional provisions together
with the related provisions allocating Realized Losses and
defining the Class Y and Class Z Principal Distribution Amounts
is to accomplish the following goals in the following order of
priority:
1. Making the ratio of Y1 to Y6 equal to 2 after taking account
of the allocation Realized Losses and the distributions that
will be made through end of the Distribution Date to which
such provisions relate and assuring that the Principal
Reduction Amount for each of the Class Y-1, Class Y-2, Class
Y-3, Class Z-1 Class Z-2 and Class Z-3 Regular Interests is
greater than or equal to zero for such Distribution Date;
2. Making the Class Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-1 and Class Z-1 Principal
Balances, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-2 and Class Z-2 Principal
Balances and the Class Y-3 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of
the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y1
and whose denominator is the sum of Y1 and Class Z-1 Principal
Balance and (b) the fraction whose numerator is Y6 and whose
denominator is the sum of Y6, the Class Z-2 Principal Balance and
the Class Z-3 Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class Y Principal Reduction Amount to accomplish
both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement
that each Class Y Principal Reduction Amount must be less than or
equal to the sum of (a) the principal portion of Realized Losses
to be
31
<PAGE>
allocated on the related Distribution Date for the related
Loan Group remaining after the allocation of such Realized Losses
to the related Class P-M Regular Interests and (b) the remainder
of the REMIC I Available Distribution Amount for the related Loan
Group or after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests and
(iii) in respect of interest on the related Class Y and Class Z
Regular Interests, or, if both of such goals cannot be
accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such
requirement. In the event of any conflict among the provisions
of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and
their priorities set forth above within the requirement set forth
in the preceding sentence. If the formula allocation of Y6
between Y2 and Y3 cannot be achieved because either Y2 as so
defined is greater than P2 or Y3 as so defined is greater than
P3, such an allocation shall be made as close as possible to the
formula allocation within the requirement that )Y2 <)P2 and )Y3<)
P3.
IV. If R<6.75% and r2<R2, make the following additional
definitions:
dY3 = Y3 + ((R2 - 7%)/(R2 - 6.75%))Y2
dY3 is a number between Y3 and 0 such that (6.75%(Y3 - dY3) +
7%Y2)/(Y3 - dY3 + Y2.) = R2.
Y7 = Y3 - dY3 + Y2.
P7 = P3 + P2.
)Y7 = )Y3 - dY3 + )Y2.
1. If Y7 - a(P7 - DP7)3 0, Y1- a(P1 - DP1)3 0, and g2(P1 - DP1)
< (P7 - DP7), DY7 = Y7 - ag2(P1 - DP1) and DY1 = Y1 - a(P1 - DP1).
2. If Y7 - a(P7 - DP7)3 0, Y1 - a(P1 - DP1)3 0, and g2(P1 - DP1)3
(P7 - DP7), DY7 = Y7 - a(P7 - DP7) and DY1 = Y1 - (a/g2)(P7 - DP7).
3. If Y7 - a(P7 - DP7)< 0, Y1 - a(P1 - DP1)3 0, and Y1 - a(P1 - DP1)3
Y1 - (Y7/g2), DY7 = Y7 - ag2(P1 - DP1) and DY1 = Y1 - a(P1 - DP1).
4. If Y7 - a(P7 - DP7)< 0, Y1 - (Y7/g2)3 0, and Y1 - a(P1 - DP1)~
Y1 - (Y7/g2), DY7 = 0 and DY1 = Y1 - (Y7/g2).
5. If Y1 - a(P1 - DP1)< 0, Y1 - (Y7/g2) < 0, and Y7 - a(P7 - DP7)~
Y7 - (g2Y1), DY7 = Y7 - (g2Y1) and DY1 = 0.
6. If Y1 - a(P1 - DP1)< 0, Y7 - a(P7 - DP7)3 0, and Y7 - a(P7 - DP7)3
Y7 - (g2Y1), DY7 = Y7 - a(P7 - DP7) and DY1 = Y1 - (a/g2)(P7 - DP7).
)Y2 = [(Y2/(Y2 + Y3 - dY3)]Y7
32
<PAGE>
)Y3 = dY3 + [(Y3 - dY3)/(Y2 + Y3 - dY3)]Y7
The purpose of the foregoing definitional provisions together
with the related provisions allocating Realized Losses and
defining the Class Y and Class Z Principal Distribution Amounts
is to accomplish the following goals in the following order of
priority:
1. Making the ratio of Y1 to Y7 equal to 2 after taking account
of the allocation Realized Losses and the distributions that will
be made through end of the Distribution Date to which such
provisions relate and assuring that the Principal Reduction
Amount for each of the Class Y-1, Class Y-2, Class Y-3, Class Z-1
Class Z-2 and Class Z-3 Regular Interests is greater than or
equal to zero for such Distribution Date;
2. Making the Class Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-1 and Class Z-1 Principal
Balances, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-2 and Class Z-2 Principal
Balances and the Class Y-3 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances in each case after giving effect to allocations of
Realized Losses and distributions to be made through the end of
the Distribution Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator is Y1
and whose denominator is the sum of Y1 and Class Z1 Principal
Balance and (b) the fraction whose numerator is Y7 and whose
denominator is the sum of Y7, the Class Z-2 Principal Balance and
the Class Z-3 Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class Y Principal Reduction Amount to accomplish
both of goals 1 and 2 above, the amounts thereof should be
adjusted to so as to accomplish such goals within the requirement
that each Class Y Principal Reduction Amount must be less than or
equal to the sum of (a) the principal portion of Realized Losses
to be allocated on the related Distribution Date for the related
Pool remaining after the allocation of such Realized Losses to
the related Class P-M Regular Interests and (b) the remainder of
the REMIC I Available Distribution Amount for the related Loan
Group or after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests and
(iii) in respect of interest on the related Class Y and Class Z
Regular Interests, or, if both of such goals cannot be
accomplished within such requirement, such adjustment as is
necessary shall be made to accomplish goal 1 within such
requirement. In the event of any conflict among the provisions
of the definition of the Class Y Principal Reduction Amounts,
such conflict shall be resolved on the basis of the goals and
their priorities set forth above within the requirement set forth
in the preceding sentence. If the formula allocation of Y7
between Y2 and Y3 cannot be achieved because either Y2 as so
defined is greater than P2 or Y3 as so defined is greater than
P3, such an allocation shall be made as close as possible to the
formula allocation within the requirement that Y2 < P2 and Y3 <
P3.
The principal balances for the Class Y-1, Class Y-2 and Class Y-3
Regular Interests as of the Cut-Off Date should be calculated as
follows: First, calculate the Cut-Off Date values for P1, P2 and
P3. Then calculate the Cut-Off Date value of R using those
balances and the Class Principal Balances of the Senior
Certificates.
33
<PAGE>
If R3 6.75%,calculate R1 = (6.5%P1 + 6.75%P3)/(P1 + P3) and g1
=(R - R1)/(7% - R).
If P2~g1(P1 + P3), the Cut-Off Date principal balance of the
Class Y-2 Regular Interest (Y2) equals 0.0005P2 and the Cut-Off
Date principal balances of the Class Y-1 and Class Y-3 Regular
Interests (Y1 and Y3) equal 0.0005 P1P2/[g1(P1 + P3)] and 0.0005
P3P2/[g1(P1 + P3)] respectively.
If P2 >g1(P1 + P3), the Cut-Off Date principal balances of the
Class Y-1 and Class Y-3 Interests (Y1 and Y3) equal 0.0005 P1 and
0.0005 P3 respectively and the Cut-Off Date principal balance of
the Class Y-2 Regular Interest (Y2) equals 0.0005g1(P1 + P3).
If R<6.75%,calculate R2 = (7%P2 + 6.75%P3)/(P2 + P3) and g2
=(R - 6.5%)/( R2 - R).
If P2 + P3~g2P1, the Cut-Off Date principal balances of the Class
Y2 and Class Y3 Regular Interests (Y2 and Y3) equal 0.0005P2 and
0.0005P3, respectively, and the Cut-Off Date principal balance of
the Class Y-1 Interest (Y1) equals 0.0005(P2+P3)/g2.
If P2 + P3> g2P1, the Cut-Off Date principal balance of the Class
Y-1 Interest (Y1) equal 0.0005 P1 and the Cut-Off Date principal
balances of the Class Y-2 and Class Y-3 Interests (Y2 and Y3)
equal 0.0005g2P1P2/(P2 +P3) and 0.0005g2P1P3/(P2 +P3),
respectively.
Class Z Regular Interests: The Class Z-1, Class Z-2 and
---------------------------
Class Z-3 Regular Interests.
Class Z Principal Reduction Amounts: For any Distribution
-------------------------------------
Date, the amounts by which the Class Principal Balances of the
Class Z-1, Class Z-2 and Class Z-3 Regular Interests,
respectively, will be reduced on such Distribution Date by the
allocation of Realized Losses and the distribution of principal,
which shall be in each case the excess of (A) the sum of (x) the
excess of the REMIC I Available Distribution Amount for the
related Loan Group (i.e. the "related Loan Group" for the Class Z-
1 Regular Interests is Loan Group II) over the sum of the amounts
thereof distributable (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests, (iii)
in respect of interest on the related Class Y and Class Z Regular
Interests and (iv) to the Class R-1 Certificates and (y) the
excess of the Realized Losses allocable to principal for the
related Loan Group over the portion of such Realized Losses
allocable to the related Class P-M Regular Interests over (B) the
Class Y Principal Reduction Amount for the related Loan Group.
Class Z-1 Regular Interests: 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 Z-1 Principal Distribution Amount: For any
-----------------------------------------------
Distribution Date, the excess, if any, of the Class Z-1 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Z-1 Regular
Interests on such Distribution Date.
Class Z-2 Regular Interests: 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.
34
<PAGE>
Class Z-2 Principal Distribution Amount: For any
-----------------------------------------------
Distribution Date, the excess, if any, of the Class Z-2 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Z-2 Regular
Interests on such Distribution Date.
Class Z-3 Regular Interests: 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 Z-3 Principal Distribution Amount: For any
-----------------------------------------------
Distribution Date, the excess, if any, of the Class Z-3 Principal
Reduction Amount for such Distribution Date over the principal
portion of Realized Losses allocated to the Class Z-3 Regular
Interests on such Distribution Date.
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: July 30, 1998, which is the date of settlement
------------
of the sale of the Certificates to the original purchasers
thereof.
Code: The Internal Revenue Code of 1986, as amended.
----
Combined Bankruptcy Coverage: With respect to Loan Group II,
----------------------------
Loan Group III and Loan Group IV, the Bankruptcy Coverage Initial
Amount for such Loan Groups less (a) any scheduled or permissible
reduction in the amount of Combined Bankruptcy Coverage pursuant
to this definition and (b) Bankruptcy Losses allocated to the
Group II-L, Group III-L, Group IV-L and Group C-B-L Regular
Interests. The Combined 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.
Combined Credit Support Depletion Date: The first
---------------------------------------------
Distribution Date on which the aggregate of the Class Principal
Balances of the Group C-B Certificates has been or will be
reduced to zero as a result of principal distributions thereon
and the allocation of Realized Losses on such Distribution Date.
Combined Fraud Coverage: During the period prior to the
------------------------
first anniversary of the Cut-Off Date and with respect to Loan
Group II, Loan Group III and Loan Group IV, the Fraud Coverage
Initial Amount for such Loan Groups reduced by Fraud Losses
allocated to the Group II-L, Group III-L, Group IV-L and Group C-
B-L Regular Interests; 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 Combined 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-L,
Group III-L, Group IV-L and Group C-B-L Regular Interests since
such anniversary; and during the period on and after the fifth
anniversary of the Cut-Off Date, the Combined Fraud Coverage
shall be zero. On each anniversary of the Cut-Off Date, the
Combined Fraud Coverage shall be reduced to the lesser of (i) on
the first and second anniversaries of the Cut-Off Date, 2.00%,
and on the third and fourth anniversaries of the Cut-Off Date,
1.00% of the aggregate principal balance of the Mortgage Loans in
Loan Group II, Loan Group III and Loan Group IV as of the Due
Date in the preceding month and (ii) the excess of the Fraud
Coverage Initial Amount for Loan Group II, Loan Group III and
Loan Group IV over cumulative Fraud Losses allocated to the Group
II-L,
35
<PAGE>
Group III-L, Group IV-L and Group C-B-L Regular Interests
to date. The Combined 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, Group III, Group IV and Group C-B Certificates by the
Rating Agencies.
Combined Special Hazard Coverage: With respect to Loan Group
--------------------------------
II, Loan Group III and Loan Group IV, the Special Hazard Coverage
Initial Amount for such Loan Groups less Special Hazard Losses
allocated to the Group II-L, Group III-L, Group IV-L and Group C-
B-L Regular Interests and the amount of any scheduled reduction
in the amount of Combined Special Hazard Coverage as follows: on
each anniversary of the Cut-Off Date, the Combined 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, Loan Group III
and Loan Group IV located in the single California zip code area
containing the largest aggregate principal balance of the
Mortgage Loans, (b) 1.0% of the aggregate unpaid principal
balance of the Mortgage Loans in Loan Group II, Loan Group III
and Loan Group IV and (c) twice the unpaid principal balance of
the largest single Mortgage Loan in Loan Group II, Loan Group
III, and Loan Group IV, 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-L, Group III-L, Group IV-L and
Group C-B-L Regular Interests since the Cut-Off Date. The
Combined 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.
Company: PNC Mortgage Securities Corp., a Delaware
-------
corporation, or its successor-in-interest.
Compensating Interest: For any Distribution Date with
----------------------
respect to each Loan Group and the Mortgage Loans contained
therein, the lesser of (i) the sum of (a) the aggregate Master
Servicing Fee payable with respect to such Loan Group on such
Distribution Date, (b) the aggregate Payoff Earnings with respect
to such Loan Group and (c) the aggregate Payoff Interest with
respect to such Loan Group and (ii) the aggregate Uncollected
Interest with respect to such Loan Group.
Component: A portion of the Class I-A-1, Class I-A-21 and
---------
Class II-A-4 Certificates and the Class I-A-1-L, Class I-A-21-L
and Class II-A-4-L Regular Interests representing parts of the
entitlement of each such Class to principal and/or interest, in
each case as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-1-1: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to interest as
set forth in the Preliminary Statement hereto and the remainder
of the Agreement.
Component I-A-1-1 Notional Amount: For any Distribution
-----------------------------------
Date, 32.4822525918% of the product of (X) the sum of (i) the
aggregate Class Principal Balance of the Class I-A-2, Class I-A-
3, Class I-A-4, Class I-A-5, Class I-A-6 and Class I-A-7
Certificates and (ii) the Component I-A-1-2 Principal Balance, in
each case immediately prior to such Distribution Date and (Y)
35/675.
36
<PAGE>
Component I-A-1-2 Accretion Termination Date: The earlier
---------------------------------------------
to occur of (i) the Distribution Date on which the Class I-A-7
Principal Balance has been reduced to zero and (ii) the Group I
Credit Support Depletion Date.
Component I-A-1-2 Accrual Amount: On any Distribution Date,
--------------------------------
an amount equal to the amount allocable to Component I-A-1-2-L on
such Distribution Date pursuant to the definition of "Interest
Distribution Amount", without regard to the proviso at the end of
the first sentence of such definition. Notwithstanding the
foregoing, for any Distribution Date after the Component I-A-1-2
Accretion Termination Date, the Component I-A-1-2 Accrual Amount
shall be zero.
Component I-A-1-2: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to principal
and interest as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-1-2-L: A portion of the Class I-A-1-L Regular
-------------------
Interests representing part of the entitlement of such Class to
principal and interest as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component I-A-1-3 Accretion Termination Date: The earlier
---------------------------------------------
to occur of (i) the Distribution Date on which the Class I-A-8
Principal Balance and the Segment T Principal Balance have each
been reduced to zero and (ii) the Group I Credit Support
Depletion Date.
Component I-A-1-3 Accrual Amount: On any Distribution Date,
--------------------------------
an amount equal to the amount allocable to Component I-A-1-3-L on
such Distribution Date pursuant to the definition of "Interest
Distribution Amount", without regard to the proviso at the end of
the first sentence of such definition. Notwithstanding the
foregoing, for any Distribution Date after the Component I-A-1-3
Accretion Termination Date, the Component I-A-1-3 Accrual Amount
shall be zero.
Component I-A-1-3: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to principal
and interest as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-1-3-L: A portion of the Class I-A-1-L Regular
-------------------
Interests representing part of the entitlement of such Class to
principal and interest as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component I-A-1-4: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to principal
as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Component I-A-1-4-L: A portion of the Class I-A-1-L Regular
-------------------
Interests representing part of the entitlement of such Class to
principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-1-5: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to interest as
set forth in the Preliminary Statement hereto and the remainder
of the Agreement.
37
<PAGE>
Component I-A-1-5-L: A portion of the Class I-A-1-L Regular
-------------------
Interests representing part of the entitlement of such Class to
interest as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Class I-A-1-5 Notional Amount: With respect to any
---------------------------------
Distribution Date, 91.5499999995% of 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 6.750%.
Component I-A-1-6: A portion of the Class I-A-1 Certificates
-----------------
representing part of the entitlement of such Class to principal
as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Component I-A-1-6-L: A portion of the Class I-A-1-L Regular
-------------------
Interests representing part of the entitlement of such Class to
principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-21-1: A portion of the Class I-A-21
--------------------
Certificates representing part of the entitlement of such Class
to principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-21-1-L: A portion of the Class I-A-21-L
---------------------
Regular Interests representing part of the entitlement of such
Class to principal as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component I-A-21-2: A portion of the Class I-A-21
--------------------
Certificates representing part of the entitlement of such Class
to principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component I-A-21-2-L: A portion of the Class I-A-21-L
---------------------
Regular Interests representing part of the entitlement of such
Class to principal as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component II-A-4-1: A portion of the Class II-A-4
--------------------
Certificates representing part of the entitlement of such Class
to principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
Component II-A-4-1-L: A portion of the Class II-A-4-L
---------------------
Regular Interests representing part of the entitlement of such
Class to principal as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component II-A-4-2: A portion of the Class II-A-4
--------------------
Certificates representing part of the entitlement of such Class
to principal as set forth in the Preliminary Statement hereto and
the remainder of the Agreement.
38
<PAGE>
Component II-A-4-2-L: A portion of the Class II-A-4-L
---------------------
Regular Interests representing part of the entitlement of such
Class to principal as set forth in the Preliminary Statement
hereto and the remainder of the Agreement.
Component Notional Amount: With respect to Component I-A-1-
-------------------------
1 and Component I-A-1-1-L, the Component I-A-1-1 Notional Amount,
and with respect to Component I-A-1-5 and Component I-A-1-5-L,
the Component I-A-1-5 Notional Amount.
Component Principal Balance: For any Component of the Class
---------------------------
I-A-1, Class I-A-21 and Class II-A-4 Certificates and for any
Component of the Class I-A-1-L, Class I-A-21-L and Class II-A-4-L
Regular Interests, the applicable initial Component Principal
Balance therefor set forth in the Preliminary Statement hereto,
corresponding to the rights of such Component in payments of
principal due to be passed through to the Component from
principal payments on the REMIC I Regular Interests or the REMIC
II Regular Interests, as applicable, as reduced from time to time
by (x) distributions of principal to the Class I-A-1, Class I-A-
21 and Class II-A-4 Certificates or the Class I-A-1-L, Class I-A-
21-L and Class II-A-4-L Regular Interests, as applicable, in
respect of such Component (including, with respect to the
Accretion-Directed Components, the portion of the Class I-A-9
Accrual Amount and the Class I-A-18 Accrual Amount distributed to
such Component) and (y) the portion of Realized Losses allocated
to the Component Principal Balance in respect of such Component
pursuant to the definition of "Realized Loss" with respect to a
given Distribution Date. In addition to the foregoing, on each
Distribution Date on or before the Component I-A-1-2 Accretion
Termination Date, the Component I-A-1-2 Principal Balance and
Component I-A-1-2-L Principal Balance will be increased by the
Component I-A-1-2 Accrual Amount for such Distribution Date and
on each Distribution Date on or before the Component I-A-1-3
Accretion Termination Date, the Component I-A-1-3 Principal
Balance and Component I-A-1-3-L Principal Balance will be
increased by the Component I-A-1-3 Accrual Amount for such
Distribution Date. For any Distribution Date, the reduction of
the Component Principal Balance of any Component pursuant to the
definition of "Realized Loss" shall be deemed effective prior to
the determination and distribution of principal on such Component
pursuant to the definition of "REMIC II Distribution Amount" or
"REMIC III Distribution Amount". The Component Principal Balance
for Component I-A-1-2 and Component I-A-1-2-L shall be referred
to as the "Component I-A-1-1 Principal Balance," and so on. The
Component I-A-1-1 Principal Balance and the Component I-A-1-5
Principal Balance shall be zero and likewise for the
Corresponding Components.
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
39
<PAGE>
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 REMIC I 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 State of Minnesota, 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 180 East 5th Street, SPFT0210,
St. Paul, MN 55101, Attention: Structured Finance PNC 1998-6.
Corresponding Class: With respect to the Group I and Class
-------------------
R-3 Certificates and the Group I-L Regular Interests, the
"Corresponding Class" shall be as indicated in the following
table.
<TABLE>
<CAPTION>
<S> <C> <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-11-L Class I-A-11
Class I-A-12-L Class I-A-12
Class I-A-13-L Class I-A-13
Class I-A-14-L Class I-A-14
Class I-A-15-L Class I-A-15
Class I-A-16-L Class I-A-16
Class I-A-17-L Class I-A-17
Class I-A-18-L Class I-A-18
Class I-A-19-L Class I-A-19
Class I-A-20-L Class I-A-20
Class I-A-21-L Class I-A-21
Class I-A-23-L Class I-A-23
Class I-X-L Class I-X
40
<PAGE>
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-3-L Class R-3
</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>
<C> <S> <S>
Class II-A-1-L Class II-A-1
Class II-A-2-L Class II-A-2
Class II-A-3-L Class II-A-3
Class II-A-4-L Class II-A-4
Class II-A-5-L Class II-A-5
Class II-A-6-L Class II-A-6
Class II-A-7-L Class II-A-7
Class II-A-8-L Class II-A-8
Class II-A-9-L Class II-A-9
Class II-A-11-L Class II-A-11
Class II-A-12-L Class II-A-12
Class II-A-13-L Class II-A-13
Class II-X-L Class II-X
</TABLE>
With respect to the Group III Certificates and the Group III-
L Regular Interests, the "Corresponding Class" for the Class III-
A-1-L, Class III-X-L and Class III-P-L Regular Interests shall be
the Class III-A-1, Class III-X and Class III-P Certificates,
respectively, and vice-versa.
With respect to the Group IV Certificates and the Group IV-L
Regular Interests, the "Corresponding Class" for the Class IV-A-1-
L and Class IV-X-L Regular Interests shall be the Class IV-A-1
and Class IV-X Certificates, respectively, and vice-versa.
With respect to the Group C-B Certificates and the Group C-B-
L Regular Interests, the "Corresponding Class" for the Class C-B-
1-L, Class C-B-2-L, Class C-B-3-L, Class C-B-4-L, Class C-B-5-L
and Class C-B-6-L Regular Interests shall be the Class C-B-1,
Class C-B-2, Class C-B-3, Class C-B-4, Class C-B-5 and Class C-B-
6 Certificates, respectively, and vice-versa.
Corresponding Component: With respect to each of Component
-----------------------
I-A-1-2-L, Component I-A-1-3-L, Component I-A-1-4-L, Component I-
A-1-5-L and Component I-A-1-6-L, the following shall be the
"Corresponding Component", respectively: Component I-A-1-2,
Component I-A-1-3, Component I-A-1-4, Component I-A-1-5 and
Component I-A-1-6, and vice-versa. With respect to each of
Component I-A-21-1-L and Component I-A-21-2-L, the following
shall be the "Corresponding Component", respectively: Component I-
A-21-1 and Component I-A-21-2, and vice-versa. With respect to
each of Component II-A-4-1-L and Component II-A-4-2-L, the
following shall be the
41
<PAGE>
"Corresponding Component", respectively: Component II-A-4-1 and
Component II-A-4-2, and vice-versa.
Curtailment: Any payment of principal on a Mortgage Loan,
-----------
made by or on behalf of the related Mortgagor, other than a
Monthly Payment, a Prepaid Monthly Payment or a Payoff, which is
applied to reduce the outstanding principal balance of the
Mortgage Loan.
Curtailment Shortfall: With respect to any Curtailment
----------------------
applied with a Monthly Payment other than a Prepaid Monthly
Payment, an amount equal to one month's interest on such
Curtailment at the applicable Pass-Through Rate on such Mortgage
Loan.
Custodial Account for P&I: The Custodial Account for
----------------------------
principal and interest established and maintained by each
Servicer pursuant to its Selling and Servicing Contract and
caused by the Master Servicer to be established and maintained
pursuant to Section 3.02 (a) with the corporate trust department
of the Trustee or another financial institution approved by the
Master Servicer such that the rights of the Master Servicer, the
Trustee and the Certificateholders thereto shall be fully
protected against the claims of any creditors of the applicable
Servicer and of any creditors or depositors of the institution in
which such account is maintained, (b) within FDIC insured
accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and
monitored by a Servicer or (c) in a separate non-trust account
without FDIC or other insurance in an Eligible Institution. In
the event that a Custodial Account for P&I is established
pursuant to clause (b) of the preceding sentence, amounts held in
such Custodial Account for P&I shall not exceed the level of
deposit insurance coverage on such account; accordingly, more
than one Custodial Account for P&I may be established. Any amount
that is at any time not protected or insured in accordance with
the first sentence of this definition of "Custodial Account for
P&I" shall promptly be withdrawn from such Custodial Account for
P&I and be remitted to the Investment Account.
Custodial Account for Reserves: The Custodial Account for
-------------------------------
Reserves established and maintained by each Servicer pursuant to
its Selling and Servicing Contract and caused by the Master
Servicer to be established and maintained pursuant to Section
3.02 (a) with the corporate trust department of the Trustee or
another financial institution approved by the Master 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.
42
<PAGE>
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 which is not an affiliate of the
---------
Master Servicer or the Company and which is appointed pursuant to
a Custodial Agreement. Any Custodian so appointed shall act as
agent on behalf of the Trustee, and shall be compensated by the
Trustee at no additional charge to the Master Servicer. The
Trustee shall remain at all times responsible under the terms of
this Agreement, notwithstanding the fact that certain duties have
been assigned to a Custodian.
Cut-Off Date: July 1, 1998.
------------
DCR: Duff & Phelps Credit Rating Co., provided that at any
---
time it be a Rating Agency
Definitive Certificates: Certificates in definitive, fully
------------------------
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated
---------------------
July 28, 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, the REMIC II Regular Interests and the
Certificates, the 25th day (or, if such 25th day is not a
Business Day, the Business Day immediately succeeding such 25th
day) of each month, with the first such date being August 25,
1998.
DTC: The Depository Trust Company.
---
DTC Participant: A broker, dealer, bank, other financial
----------------
institution or other Person for whom DTC effects book-entry
transfers and pledges of securities deposited with DTC.
Due Date: The first day of each calendar month, which is the
--------
day on which the Monthly Payment for each Mortgage Loan is due.
Eligible Institution: An institution having (i) the highest
--------------------
short-term debt rating, and one of the two highest long-term debt
ratings of the Rating Agencies, (ii) with respect to any
Custodial Account for P&I and special Custodial Account for
Reserves, an unsecured long-term debt rating of at least one of
the two highest unsecured long-term debt ratings of the Rating
Agencies, (iii) with respect to any Buydown Fund Account or
Custodial Account which also serves as a Buydown Fund Account,
the highest unsecured long-term debt rating by the Rating
Agencies, or (iv) the approval of the Rating Agencies. Such
institution may be the Servicer if the applicable Selling and
Servicing Contract requires the Servicer to provide the Master
Servicer with written notice on the Business Day
43
<PAGE>
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 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,
provided that the debt obligations of such bank or trust company
(or, in the case of the principal bank in a bank holding company
system, debt obligations of the bank holding company) at the date
of acquisition thereof have one of the two highest short term
debt ratings of the Rating Agencies and unsecured long term debt
has one of the two highest unsecured long term debt ratings of
the Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state
of the United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the
highest long-term debt ratings available for such securities from
the Rating Agencies;
(v) Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date
of acquisition has the highest commercial paper rating of the
Rating Agencies, provided that the corporation has unsecured long
term debt that has one of the two highest unsecured long term
debt ratings of the Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States or
any state thereof and have the highest long-term unsecured rating
available for such securities from the Rating Agencies; provided,
however, that securities issued by any such corporation will not
be investments to the extent that investment therein would cause
the outstanding principal amount of securities issued by such
corporation that are then held as part of the Investment Account
or the Certificate Account to exceed 20% of the aggregate
principal amount of all Eligible Investments then held in the
Investment Account and the Certificate Account;
(vii) Units of taxable money market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the
Securities and Exchange Commission under
44
<PAGE>
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.
Final Maturity Date: With respect to each Class of the
---------------------
REMIC I Regular Interests, the REMIC II Regular Interests and the
Certificates, the date set forth in the table contained in the
Preliminary Statement hereto.
FDIC: Federal Deposit Insurance Corporation, or any
----
successor thereto.
FHA: Federal Housing Administration, or any successor
---
thereto.
FHLB: Federal Home Loan Bank of San Francisco, or any
----
successor thereto.
FHLMC: Federal Home Loan Mortgage Corporation, or any
-----
successor thereto.
FNMA: Federal National Mortgage Association, or any
----
successor thereto.
Fraud Coverage Initial Amount: With respect to Loan Group
------------------------------
I, $11,520,213 and with respect to Loan Group II, Loan Group III
and Loan Group IV, $7,318,757.
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.
45
<PAGE>
Group C-B Certificates: The Class C-B-1, Class C-B-2, Class
-----------------------
C-B-3, Class C-B-4, Class C-B-5 and Class C-B-6 Certificates.
Group C-B-L Regular Interests: The Class C-B-1-L, Class C-B-
-----------------------------
2-L, Class C-B-3-L, Class C-B-4-L, Class C-B-5-L and Class C-B-6-
L Regular Interests.
Group C-B Component Balance: With respect to any of Loan
-----------------------------
Group II, Loan Group III or Loan Group IV at any time, the
outstanding aggregate Principal Balance of the Mortgage Loans in
the applicable Loan Group minus the then outstanding Class
Principal Balance of the Group II, Group III or Group IV
Certificates, as applicable.
Group C-B Percentage: At any time, the aggregate Class
----------------------
Principal Balance of the Group C-B Certificates divided by the
then outstanding aggregate Principal Balance of the Group II,
Group III and Group IV Loans.
Group C-B Subordinate Liquidation Amount: The excess, if
------------------------------------------
any, of the aggregate of Liquidation Principal for all Group II
Loans, Group III Loans and Group IV Loans which became Liquidated
Mortgage Loans during the Prior Period, over the sum of the Group
II Senior Liquidation Amount, the Group III Senior Liquidation
Amount and the Group IV Senior Liquidation Amount for such
Distribution Date.
Group C-B Subordinate Principal Distribution Amount: On any
---------------------------------------------------
Distribution Date, the excess of (A) the sum of (i) the Group II
Subordinate Percentage of the Principal Payment Amount for Loan
Group II, (ii) the Group III Subordinate Percentage of the
Principal Payment Amount for Loan Group III (exclusive of the
portion thereof attributable to principal distributions to the
Class III-P-L Regular Interests pursuant to clause (I)(c)(i) of
the definition of "REMIC II Distribution Amount"), (iii) the
Group IV Subordinate Percentage of the Principal Payment Amount
for Loan Group IV, (iv) the Group II Subordinate Principal
Prepayments Distribution Amount, (v) the Group III Subordinate
Principal Prepayments Distribution Amount, (vi) the Group IV
Subordinate Principal Prepayments Distribution Amount and (vii)
the Group C-B Subordinate Liquidation Amount over (B) the sum of
(x) the amounts required to be distributed to the Class III-P-L
Regular Interests pursuant to clauses (I)(e)(i) and (I)(e)(ii) of
the definition of "REMIC II Distribution Amount" on such
Distribution Date, (y) in the event that the aggregate Class
Principal Balance of any one or more of the Group II-A-L, or
Class III-A-1-L or Class IV-A-1-L Regular Interests has been
reduced to zero, principal paid from the REMIC II Available
Distribution Amount of the Regular Interest Group or Groups
related to such Class A-L Regular Interests to the remaining
Class A-L Regular Interests as set forth in clause (X) of the
last sentence of paragraph (I)(e) of the definition of "REMIC II
Distribution Amount", and (z) the amounts in respect of principal
paid from the REMIC II Available Distribution Amount of an
Overcollateralized Group to an Undercollateralized Group pursuant
to clause (Y) of the last sentence of paragraph (I)(e) and the
last sentence of paragraph (II) of the definition of "REMIC II
Distribution Amount". Any reduction in the Group C-B Subordinate
Principal Distribution Amount pursuant to clause (B) of this
definition shall offset: (i) first, the amount calculated
pursuant to clause (A)(i), clause (A)(ii) and clause (A)(iii) of
this definition, pro rata, (ii) second, the amount calculated
pursuant to clause (A)(vii) of this definition and (iii) third,
the amount calculated pursuant to clause (A)(iv), clause (A)(v)
and clause (A)(vi) of this definition, pro rata. On any
Distribution Date, the Group C-B Subordinate Principal
Distribution Amount shall be allocated pro rata, by Class
Principal
46
<PAGE>
Balance, among the Classes of Group C-B-L Regular Interests
and paid in the order of distribution to such Classes pursuant
to clause (I)(e) of the definition of "REMIC II
Distribution Amount" except as otherwise stated in
such definition. Notwithstanding the foregoing, on any
Distribution Date prior to distributions on such date, if
the Subordination Level for any Class of Group C-B-L Regular
Interests is less than such percentage as of the Closing Date,
the pro rata portion of the Group C-B Subordinate Principal
Prepayments Distribution Amount otherwise allocable to the Class
or Classes junior to such Class will be distributed to the most
senior Class of the Group C-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 C-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 C-B-L
Regular Interests shall be as follows: Class C-B-1-L, Class
C-B-2-L, Class C-B-3-L, Class C-B-4-L, Class C-B-5-L and Class
C-B-6-L.
Group I Adjusted Lockout Percentage: For any Distribution
-------------------------------------
Date occurring prior to the Distribution Date in August 2003, 0%,
and for the August 2003 Distribution Date and any Distribution
Date thereafter, the Group I Lockout Percentage.
Group I Certificates: The Group I-A, Class I-X and Group I-B
--------------------
Certificates.
Group I-A Certificates: The Class I-A-1, Class I-A-2, Class
-----------------------
I-A-3, Class I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class
I-A-8, Class I-A-9, Class I-A-10, Class I-A-11, Class I-A-12,
Class I-A-13, Class I-A-14, Class I-A-15, Class I-A-16, Class I-A-
17, Class I-A-18, Class I-A-19, Class I-A-20, Class I-A-21, Class
I-A-22, Class I-A-23 and Class I-A-24 Certificates.
Group I-A-L Regular Interests: The Class I-A-1-L, Class I-A-
-----------------------------
2-L, Class I-A-3-L, Class I-A-4-L, Class I-A-5-L, Class I-A-6-L,
Class I-A-7-L, Class I-A-8-L, Class I-A-9-L, Class I-A-11-L,
Class I-A-12-L, Class I-A-13-L, Class I-A-14-L, Class I-A-15-L,
Class I-A-16-L, Class I-A-17-L, Class I-A-18-L, Class I-A-19-L,
Class I-A-20-L, Class I-A-21-L and Class I-A-23-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-L Regular Interests: The Group I-A-L, Class I-X-L,
----------------------------
Group I-B-L and Class R-3-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 Credit Support Depletion Date: The first
---------------------------------------------
Distribution Date on which the aggregate Class
47
<PAGE>
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-Off Date (calculated in accordance with
the second sentence of this definition) reduced by Fraud Losses
allocated to the Group I Certificates since such anniversary; and
during the period on and after the fifth anniversary of the Cut-
Off Date, the Group I Fraud Coverage shall be zero. On each
anniversary of the Cut-Off Date, the Group I Fraud Coverage shall
be reduced to the lesser of (i) on the first, second, third and
fourth anniversaries of the Cut-Off Date, 1.00% of the aggregate
principal balance of the Group I Loans as of the Due Date in the
preceding month and (ii) 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 Lockout Liquidation Amount: The aggregate, for each
----------------------------------
Group I Loan which became a Liquidated Mortgage Loan during the
calendar month preceding the month of the Distribution Date, of
the lesser of (i) the Group I Lockout Percentage of the Principal
Balance of such Mortgage Loan (exclusive of the I-PO Fraction
thereof, with respect to any I-PO Mortgage Loan) and (ii) the
Group I Lockout Percentage on any Distribution Date occurring
prior to the fifth anniversary of the first Distribution Date,
and the Group I Lockout 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.
Group I Lockout Priority Amount: For any Distribution Date,
--------------------------------
the sum of (i) the Group I Adjusted Lockout Percentage of the
Principal Payment Amount for Loan Group I (exclusive of the
portion thereof attributable to principal distributions to
Component I-A-1-6-L pursuant to clause (I)(a)(i) of the
definition of "REMIC II Distribution Amount"), (ii) the Group I
Lockout Prepayment Percentage of the Principal Prepayment Amount
for Loan Group I (exclusive of the portion thereof attributable
to principal distributions to Component I-A-1-6-L pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution
Amount") and (iii) the Group I Lockout Liquidation Amount.
Group I Lockout Percentage: For any Distribution Date, the
---------------------------
aggregate Class Principal Balance of the Class I-A-16 and Class I-
A-23 Certificates divided by the aggregate Class Principal
Balance of the Group I Certificates (less the Component I-A-1-6
Principal Balance), in each case immediately prior to such
Distribution Date.
Group I Lockout Prepayment Percentage: For any Distribution
--------------------------------------
Date, the product of the Group I Lockout Percentage and the Step
Down Percentage.
48
<PAGE>
Group I Premium Rate Mortgage Loans: The Group I Loans
-------------------------------------
having Pass-Through Rates in excess of 6.750% per annum.
Group I Senior Certificates: The Group I-A and Class I-X
-----------------------------
Certificates.
Group I-L Senior Regular Interests: The Group I-A-L and
------------------------------------
Class I-X-L Regular Interests.
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
I-PO Fraction thereof, with respect to any I-PO 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 (less the Component I-A-1-6 Principal Balance) and
the Residual Certificates divided by the aggregate Class
Principal Balance of the Group I Certificates and the Residual
Certificates (less the Component I-A-1-6 Principal Balance), 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 REMIC I) for each
of the immediately preceding six calendar months is
less than or equal to 50% of the aggregate Class
Principal Balances of the Group I-B Certificates as of
such Distribution Date, and
(b) cumulative Realized Losses on the Group I Loans
allocated to the Group I-B Certificates are less than
or equal to (1) for any Distribution Date before the
month of the sixth anniversary of the month of the
first Distribution Date, 30% of the sum of the Class
Principal Balances of the Group I-B Certificates as of
the Cut-Off Date, (2) for any Distribution Date in or
after the month of the sixth anniversary of the month
of the first Distribution Date but before the seventh
anniversary of the month of the first Distribution
Date, 35% of the sum of the Class Principal Balances of
the Group I-B Certificates as of the Cut-Off Date, (3)
for any Distribution Date in or after the month of the
seventh anniversary of the month of the first
Distribution Date but before the eighth anniversary of
the month of the first Distribution Date, 40% of the
sum of the Class Principal Balances of the Group I-B
Certificates as of the Cut-Off Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date
but before the ninth anniversary of the month of the
first Distribution Date, 45% of the sum of the Class
Principal Balances of the Group I-B Certificates as of
the Cut-Off Date, and (5) for any Distribution Date in
or
49
<PAGE>
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 Component I-A-1-6-L of the
Class I-A-1-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, Component I-A-1-6-L will receive the I-PO Fraction of all
principal payments, including, without limitation, Principal
Prepayments, received in respect of each I-PO 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 Component I-A-1-6-L pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount"), (b) the Group I Senior Prepayment
Percentage of the Principal Prepayment Amount for Loan Group I
(exclusive of the portion thereof attributable to principal
distributions to Component I-A-1-6-L pursuant to clauses
(I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Group I Senior Liquidation
Amount.
Group I 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-L Regular
Interests, 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
50
<PAGE>
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-L Regular Interests since the Cut-Off Date. The
Group I Special Hazard Coverage may be reduced upon written
confirmation from the Rating Agencies that such reduction will not
adversely affect the then current ratings assigned to the
Certificates by the Rating Agencies.
Group I Subordinate Liquidation Amount: The excess, if any,
--------------------------------------
of the aggregate of Liquidation Principal for all Group I Loans
which became Liquidated Mortgage Loans during the Prior Period,
over the related Group I Senior Liquidation Amount for such
Distribution Date.
Group I Subordinate Percentage: With respect to any
----------------------------------
Distribution Date, the excess of 100% over the Group I Senior
Percentage for such date.
Group I Subordinate Prepayment Percentage: On any
------------------------------------------------
Distribution Date for Loan Group I, the excess of 100% over the
Group I Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the aggregate Class Principal Balance
of the Group I-A Certificates (less the Component I-A-1-6
Principal Balance) and the Residual Certificates has been reduced
to zero, then the Group I Subordinate Prepayment Percentage shall
equal 100%.
Group I Subordinate Principal Distribution Amount: On any
--------------------------------------------------
Distribution Date, the excess of (A) the sum of (i) the Group I
Subordinate Percentage of the Principal Payment Amount for Loan
Group I (exclusive of the portion thereof attributable to
principal distributions to Component I-A-1-6-L pursuant to clause
(I)(a)(i) of the definition of "REMIC II Distribution Amount"),
(ii) the Group I Subordinate Principal Prepayments Distribution
Amount and (iii) the Group I Subordinate Liquidation Amount over
(B) the amounts required to be distributed to Component I-A-1-6-L
pursuant to clauses (I)(a)(v) and (I)(a)(vi) of the definition of
"REMIC II Distribution Amount" on such Distribution Date, as
applicable. Any reduction in the Group I Subordinate Principal
Distribution Amount pursuant to clause (B) of this definition
shall offset: (i) first, the amount calculated pursuant to clause
(A)(i) of this definition, (ii) second, the amount calculated
pursuant to clause (A)(iii) of this definition and (iii) third,
the amount calculated pursuant to clause (A)(ii) of this
definition. On any Distribution Date, the Group I Subordinate
Principal Distribution Amount shall be allocated pro rata, by
Class Principal Balance, among the Classes of Group I-B-L Regular
Interests, and paid in the order of distribution to such
Classes pursuant to clause (I)(a) of the definition
of "REMIC II Distribution Amount", except as otherwise
stated in such definition. Notwithstanding the foregoing,
on any Distribution Date prior to distributions on such
date, if the Subordination Level for any Class of Group I-B-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.
51
<PAGE>
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 Component I-A-1-6-L pursuant to clause
(I)(a)(i) of the definition of "REMIC II Distribution Amount").
Group II Adjusted Lockout Percentage: For any Distribution
-------------------------------------
Date occurring prior to the Distribution Date in August 2003, 0%,
and for the August 2003 Distribution Date and any Distribution
Date thereafter, the Group II Lockout Percentage.
Group II Certificates: The Group II-A and Class II-X
-----------------------
Certificates.
Group II-A Certificates: The Class II-A-1, Class II-A-2,
-------------------------
Class II-A-3, Class II-A-4, Class II-A-5, Class II-A-6, Class II-
A-7, Class II-A-8, Class II-A-9, Class II-A-10, Class II-A-11,
Class II-A-12 and Class II-A-13 Certificates.
Group II-A-L Regular Interests: The Class II-A-1-L, Class II-
------------------------------
A-2-L, Class II-A-3-L, Class II-A-4-L, Class II-A-5-L, Class II-A-
6-L, Class II-A-7-L, Class II-A-8-L, Class II-A-9-L, Class II-A-
11-L, Class II-A-12-L and Class II-A-13-L Regular Interests.
Group II-L Regular Interests: The Group II-A-L and Class II-
----------------------------
X-L Regular Interests.
Group II Loans: The Mortgage Loans designated on the
----------------
Mortgage Loan Schedule as Group II Loans.
Group II Lockout Liquidation Amount: The aggregate, for each
-----------------------------------
Group II Loan which became a Liquidated Mortgage Loan during the
calendar month preceding the month of the Distribution Date, of
the lesser of (i) the Group II Lockout Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Group II
Lockout Percentage on any Distribution Date occurring prior to
the fifth anniversary of the first Distribution Date, and the
Group II Lockout 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.
Group II Lockout Priority Amount: For any Distribution Date,
--------------------------------
the sum of (i) the Group II Adjusted Lockout Percentage of the
Principal Payment Amount for Loan Group II, (ii) the Group II
Lockout Prepayment Percentage of the Principal Prepayment Amount
for Loan Group II and (iii) the Group II Lockout Liquidation
Amount; provided, however that the Group II Lockout Priority
Amount for any Distribution Date shall not exceed the excess of
the Group II Senior Principal Distribution Amount over $100.
Group II Lockout Percentage: For any Distribution Date, the
---------------------------
lesser of (a) 100% and (b) the sum of (i) the Class II-A-5
Principal Balance, (ii) the Component II-A-4-1 Principal Balance
and (iii) $29,500,000, divided by the aggregate Principal Balance
of the Group II Loans, in each case immediately prior to such
Distribution Date.
Group II Lockout Prepayment Percentage: For any Distribution
--------------------------------------
Date, the product of the Group II Lockout Percentage for such
Distribution Date and the applicable Step Down Percentage.
52
<PAGE>
Group II Premium Rate Mortgage Loans: The Group II Loans
--------------------------------------
having Pass-Through Rates in excess of 6.500% per annum.
Group II Senior Liquidation Amount: The aggregate, for each
----------------------------------
Group II Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of: (i) the Group II Senior
Percentage of the Principal Balance of such Mortgage Loan, and
(ii) the Group II Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan.
Group II Senior Percentage: With respect to any Distribution
--------------------------
Date, the lesser of (i) 100% and (ii) the aggregate Class
Principal Balance of the Group II-A Certificates divided by the
aggregate Principal Balances of the Group II Loans, in each case
immediately prior to the Distribution Date.
Group II Senior Prepayment Percentage, Group III Senior
------------------------------------------------------------
Prepayment Percentage or Group IV Senior Prepayment Percentage:
- ----------------------------------------------------------------
(i) On any Distribution Date occurring before the Distribution
Date in the month of the fifth anniversary of the first
Distribution Date, each of the Group II Senior Prepayment
Percentage, the Group III Senior Prepayment Percentage and the
Group IV Senior Prepayment Percentage shall equal 100%; (ii) on
any other Distribution Date on which the Group II Senior
Percentage for such Distribution Date exceeds the Group II Senior
Percentage as of the Closing Date, the Group III Senior
Percentage for such Distribution Date exceeds the Group III
Senior Percentage as of the Closing Date or the Group IV Senior
Percentage for such Distribution Date exceeds the Group IV Senior
Percentage as of the Closing Date, then each of the Group II
Senior Prepayment Percentage, the Group III Senior Prepayment
Percentage and the Group IV Senior Prepayment Percentage shall
equal 100%; and (iii) on any other Distribution Date in each of
the months of the fifth anniversary of the first Distribution
Date and thereafter, each of the Group II Senior Prepayment
Percentage, the Group III Senior Prepayment Percentage and the
Group IV Senior Prepayment Percentage shall equal 100%, unless
the following tests specified in clauses (a) through (f) are met
with respect to each of Loan Group II, Loan Group III and Loan
Group IV:
(a) the mean aggregate Principal Balance of the Group II
Loans which are 60 or more days delinquent (including
loans in foreclosure and property held by REMIC I) for
each of the immediately preceding six calendar months
is less than or equal to 50% of the related Group C-B
Component Balance as of such Distribution Date,
(b) the mean aggregate Principal Balance of the Group III
Loans which are 60 or more days delinquent (including
loans in foreclosure and property held by REMIC I) for
each of the immediately preceding six calendar months
is less than or equal to 50% of the related Group C-B
Component Balance as of such Distribution Date,
(c) the mean aggregate Principal Balance of the Group IV
Loans which are 60 or more days delinquent (including
loans in foreclosure and property held by REMIC I) for
each of the immediately preceding six calendar months
is less than or equal to 50% of the related Group C-B
Component Balance as of such Distribution Date,
(d) cumulative Realized Losses on the Group II Loans
allocated to the Group C-B Certificates is less than or
equal to (1) for any Distribution Date before the month
of the sixth anniversary of the month of the first
Distribution Date, 30% of the related Group C-B
Component Balance as of the Closing Date, (2) for any
Distribution Date
53
<PAGE>
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 related Group C-B Component Balance as
of the Closing Date, (3) for any Distribution Date in
or after the month of the seventh anniversary of the
month of the first Distribution Date but before the
eighth anniversary of the month of the first
Distribution Date, 40% of the related Group C-B Component
Balance as of the Closing Date, (4) for any Distribution
Date in or after the month of the eighth anniversary of
the month of the first Distribution Date but before the
ninth anniversary of the month of the first Distribution
Date, 45% of the related Group C-B Component Balance as
of the Closing Date, and (5) for any Distribution Date
in or after the month of the ninth anniversary of
the month of the first Distribution Date, 50% of
the related Group C-B Component Balance as of the
Closing Date,
(e) cumulative Realized Losses on the Group III Loans
allocated to the Group C-B Certificates is less than or
equal to (1) for any Distribution Date before the month
of the sixth anniversary of the month of the first
Distribution Date, 30% of the related Group C-B
Component Balance as of the Closing Date, (2) for any
Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date
but before the seventh anniversary of the month of the
first Distribution Date, 35% of the related Group C-B
Component Balance as of the Closing Date, (3) for any
Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date
but before the eighth anniversary of the month of the
first Distribution Date, 40% of the related Group C-B
Component Balance as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date
but before the ninth anniversary of the month of the
first Distribution Date, 45% of the related Group C-B
Component Balance as of the Closing Date, and (5) for
any Distribution Date in or after the month of the
ninth anniversary of the month of the first
Distribution Date, 50% of the related Group C-B
Component Balance as of the Closing Date, and
(f) cumulative Realized Losses on the Group IV Loans
allocated to the Group C-B Certificates is less than or
equal to (1) for any Distribution Date before the month
of the sixth anniversary of the month of the first
Distribution Date, 30% of the related Group C-B
Component Balance as of the Closing Date, (2) for any
Distribution Date in or after the month of the sixth
anniversary of the month of the first Distribution Date
but before the seventh anniversary of the month of the
first Distribution Date, 35% of the related Group C-B
Component Balance as of the Closing Date, (3) for any
Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date
but before the eighth anniversary of the month of the
first Distribution Date, 40% of the related Group C-B
Component Balance as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date
but before the ninth anniversary of the month of the
first Distribution Date, 45% of the related Group C-B
Component Balance as of the Closing Date, and (5) for
any Distribution Date in or after the month of the
ninth anniversary of the month of the first
Distribution Date, 50% of the related Group C-B
Component Balance as of the Closing Date,
54
<PAGE>
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, the Group III Senior Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus
70% of the Subordinate Percentage for the related Loan Group for
such Distribution Date; (2) for any such Distribution Date 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, the Group III Senior Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus
60% of the Subordinate Percentage for the related Loan Group for
such Distribution Date; (3) for any such Distribution Date 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, the Group III Senior Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus
40% of the Subordinate Percentage for the related Loan Group for
such Distribution Date; (4) for any such Distribution Date 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, the Group III Senior Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus
20% of the Subordinate Percentage for the related Loan Group for
such Distribution Date; and (5) for any such Distribution Date
thereafter, the Group II Senior Percentage, the Group III Senior
Percentage or the Group IV Senior Percentage, as applicable, for
such Distribution Date.
If on any Distribution Date the allocation to the Group II-
L, Group III-L or the Group IV-L Regular Interests (other than
the Class III-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 II Senior Prepayment Percentage, the Group III Senior
Prepayment Percentage or the Group IV Senior Percentage, as
applicable, for such Distribution Date shall be limited to the
percentage necessary to reduce such sum to zero. Notwithstanding
the foregoing, however, on each Distribution Date, the Class III-
P-L Regular Interests will receive the Class III-P Fraction of
all principal payments, including, without limitation, Principal
Prepayments, received in respect of each Class III-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, (b) the Group II Senior Prepayment Percentage of the
Principal Prepayment Amount for Loan Group II and (c) the Group
II Senior Liquidation Amount.
Group II Subordinate 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 for Loan Group II, 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%.
55
<PAGE>
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.
Group III Certificates: The Class III-A-1, Class III-X and
-----------------------
Class III-P Certificates.
Group III-L Regular Interests: The Class III-A-1-L, Class
-------------------------------
III-X-L and Class III-P-L Regular Interests.
Group III Loans: The Mortgage Loans designated on the
-----------------
Mortgage Loan Schedule as Group III Loans.
Group III Premium Rate Mortgage Loans: The Group III Loans
--------------------------------------
having Pass-Through Rates in excess of 7.000% per annum.
Group III Senior Liquidation Amount: The aggregate, for each
-----------------------------------
Group III Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of: (i) the Group III Senior
Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class III-P Fraction thereof, with respect to
any Class III-P Mortgage Loan), and (ii) the Group III Senior
Prepayment Percentage of the Liquidation Principal with respect
to such Mortgage Loan.
Group III Senior Percentage: With respect to any
--------------------------------
Distribution Date, the lesser of (i) 100% and (ii) the Class III-
A-1 Principal Balance divided by the aggregate Principal Balance
of the Group III Loans (less the Class III-P Principal Balance),
in each case immediately prior to the Distribution Date.
Group III Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Group
III Senior Percentage of the Principal Payment Amount for Loan
Group III (exclusive of the portion thereof attributable to
principal distributions to the Class III-P-L Regular Interests
pursuant to clauses (I)(c)(i) and (II)(c)(i) of the definition of
"REMIC II Distribution Amount"), (b) the Group III Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan
Group III (exclusive of the portion thereof attributable to
principal distributions to the Class III-P-L Regular Interests
pursuant to clauses (I)(c)(i) and (II)(c)(i) of the definition of
"REMIC II Distribution Amount", as applicable) and (c) the Group
III Senior Liquidation Amount.
Group III Subordinate Percentage: With respect to any
-----------------------------------
Distribution Date, the excess of 100% over the Group III Senior
Percentage for such date.
Group III Subordinate Prepayment Percentage: On any
------------------------------------------------
Distribution Date for Loan Group III, the excess of 100% over the
Group III Senior Prepayment Percentage for such Distribution
Date; provided, however, that if the Class III-A-1 Principal
Balance has been reduced to zero, then the Group III Subordinate
Prepayment Percentage shall equal 100%.
Group III Subordinate Principal Prepayments Distribution
------------------------------------------------------------
Amount: On any Distribution Date, the Group III Subordinate
- ------
Prepayment Percentage of the Principal Prepayment Amount for Loan
Group III (exclusive of the portion thereof attributable to
principal distributions to the Class III-P-L Regular Interests
pursuant to clause (I)(c)(i) of the definition of "REMIC II
Distribution Amount").
Group IV Certificates: The Class IV-A-1 and Class IV-X
-----------------------
Certificates.
56
<PAGE>
Group IV-L Regular Interests: The Class IV-A-1-L and Class
-----------------------------
IV-X-L Regular Interests.
Group IV Loans: The Mortgage Loans designated on the
----------------
Mortgage Loan Schedule as Group IV Loans.
Group IV Premium Rate Mortgage Loans: The Group IV Loans
--------------------------------------
having Pass-Through Rates in excess of 6.750% per annum.
Group IV Senior Liquidation Amount: The aggregate, for each
----------------------------------
Group IV Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of: (i) the Group IV Senior
Percentage of the Principal Balance of such Mortgage Loan, and
(ii) the Group IV Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan.
Group IV Senior Percentage: With respect to any Distribution
--------------------------
Date, the lesser of (i) 100% and (ii) the Class IV-A-1 Principal
Balance divided by the aggregate Principal Balance of the Group
IV Loans, in each case immediately prior to the Distribution
Date.
Group IV Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Group IV
Senior Percentage of the Principal Payment Amount for Loan Group
IV, (b) the Group IV Senior Prepayment Percentage of the
Principal Prepayment Amount for Loan Group IV and (c) the Group
IV Senior Liquidation Amount.
Group IV Subordinate Percentage: With respect to any
----------------------------------
Distribution Date, the excess of 100% over the Group IV Senior
Percentage for such date.
Group IV Subordinate Prepayment Percentage: On any
------------------------------------------------
Distribution Date for Loan Group IV, the excess of 100% over the
Group IV Senior Prepayment Percentage for such Distribution Date;
provided, however, that if the Class IV-A-1 Principal Balance has
been reduced to zero, then the Group IV Subordinate Prepayment
Percentage shall equal 100%.
Group IV Subordinate Principal Prepayments Distribution
------------------------------------------------------------
Amount: On any Distribution Date, the Group IV Subordinate
- ------
Prepayment Percentage of the Principal Prepayment Amount for Loan
Group IV.
Indirect DTC Participants: Entities such as banks, brokers,
--------------------------
dealers or trust companies, that clear through or maintain a
custodial relationship with a DTC Participant, either directly or
indirectly.
Insurance Proceeds: Amounts paid or payable by the insurer
-------------------
under any Primary Insurance Policy or any other insurance policy
(including any replacement policy permitted under this
Agreement), covering any Mortgage Loan or Mortgaged Property,
including, without limitation, any hazard insurance policy
required pursuant to Section 3.07, any title insurance policy
required pursuant to Section 2.03, and any FHA insurance policy
or VA guaranty.
Interest Distribution Amount: On any Distribution Date, for
----------------------------
any Class of the REMIC I Regular Interests, the REMIC II Regular
Interests (or the Components thereof in the case of the Class I-A-
1-L Regular Interests) and the Residual Certificates (other than
the Class R-3 Certificates), the amount of interest accrued on
the respective Class Principal Balance, Component Principal
Balance, Class Notional Amount or Component Notional Amount, as
applicable, at the related Remittance Rate for
57
<PAGE>
such Class or Component 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". The Interest Distribution Amount for
the Class I-A-20-L, Class II-A-13-L and Class P-L Regular Interests
shall equal zero. The Interest Distribution Amount for Component
I-A-1-4-L, Component I-A-1-6-L, Component I-A-21-1-L, Component
I-A-21-2-L, Component II-A-4-1-L and Component II-A-4-2-L shall equal
zero.
Interest Transfer Amount: On any Distribution Date for each
------------------------
Undercollateralized Group, an amount equal to one month's
interest on the applicable Principal Transfer Amount at 6.500%
per annum if the Undercollateralized Group is Loan Group II, at
7.000% per annum if the Undercollateralized Group is Loan Group
III and at 6.750% per annum if the Undercollateralized Group is
Loan Group IV, plus any shortfall of interest on the Group II-L
Regular Interests (if the Undercollateralized Group is Loan Group
II), Group III-L Regular Interests (if the Undercollateralized
Group is Loan Group III) or the Group IV-L Regular Interests (if
the Undercollateralized Group is Loan Group IV) from prior
Distribution Dates, including accrued and unpaid interest on such
shortfall at the applicable rate set forth above.
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 C-B-4, Class C-B-5 and Class C-B-6
Certificates.
Lender: An institution from which the Company purchased any
------
Mortgage Loans pursuant to a Selling and Servicing Contract.
Liquidated Mortgage Loan: A Mortgage Loan as to which the
-------------------------
Master Servicer or the applicable Servicer has determined in
accordance with its customary servicing practices that all
amounts which it expects to recover from or on account of such
Mortgage Loan, whether from Insurance Proceeds, Liquidation
Proceeds or otherwise have been recovered. For purposes of this
definition, acquisition of a Mortgaged Property by the REMIC I
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 Component I-A-1-6-L and the Class P-L Regular
Interests pursuant to clauses (I)(a)(i), (I)(c)(i), (II)(a)(i)
and (II)(c)(i) of the definition of "REMIC II Distribution
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
58
<PAGE>
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, Loan Group II, Loan Group III or
-----------
Loan Group IV, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the
-------------
Group I Loans.
Loan Group II: The group of Mortgage Loans comprised of the
-------------
Group II Loans.
Loan Group III: The group of Mortgage Loans comprised of the
--------------
Group III Loans.
Loan Group IV: The group of Mortgage Loans comprised of the
-------------
Group IV Loans.
Loan-to-Value Ratio: The original principal amount of a
--------------------
Mortgage Loan divided by the Original Value; however, references
to "current Loan-to-Value Ratio" shall mean the then current
Principal Balance of a Mortgage Loan divided by the Original
Value.
Master Servicer: The Company, or any successor thereto
----------------
appointed as provided pursuant to Section 7.02, acting to service
and administer the Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer
--------------------
for supervising the mortgage servicing and advancing certain
expenses, equal to a per annum rate set forth for each Mortgage
Loan in Exhibit D on the outstanding Principal Balance of such
Mortgage Loan, payable monthly from the Certificate Account, the
Investment Account or the Custodial Account for P&I.
Monthly P&I Advance: An advance of funds by the Master
---------------------
Servicer pursuant to Section 4.02 or a Servicer pursuant to its
Selling and Servicing Contract to cover delinquent principal and
interest installments.
Monthly Payment: The scheduled payment of principal and
----------------
interest on a Mortgage Loan (including any amounts due from a
Buydown Fund, if any) which is due on the related Due Date for
such Mortgage Loan.
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:
59
<PAGE>
(i) The original Mortgage Note endorsed to "U.S. Bank
National Association, as Custodian/Trustee, without
recourse" or "U.S. Bank National Association, as Trustee for
the benefit of the Holders from time to time of PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series
1998-6, 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;
(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 "U.S. Bank National Association, as
Custodian/Trustee", or to "U.S. Bank National Association, as
Trustee for the Holders of PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates, Series 1998-6" 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 assign-
ment thereof duly executed and acknowledged in recordable form
to "U.S. Bank National Association, as Custodian/Trustee" or
to "U.S. Bank National Association, as Trustee for the Holders
of PNC Mortgage Securities Corp. Mortgage Pass-Through Certi-
ficates, Series 1998-6" 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;
(iv) A copy of (a) the title insurance policy, or
(b) in lieu thereof, a title insurance binder, a copy of an
attorney's title opinion, certificate or other evidence of
title acceptable to the Company; and
(v) For any Mortgage Loan that has been modified or
amended, the original instrument or instruments effecting
such modification or amendment;
and (Y) with respect to each Cooperative Loan:
61
<PAGE>
(i) the original Mortgage Note endorsed to "U.S. Bank
National Association, as Custodian/Trustee", or to "U.S.
Bank National Association, as Trustee for the Holders of PNC
Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1998-6" and all intervening
endorsements evidencing a complete chain of endorsements,
from the originator to the Trustee, or, in the event of any
Destroyed Mortgage Note, a copy or a duplicate original of
the Mortgage Note, together with an original lost note
affidavit from the originator of the related Mortgage Loan
or the Company stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the
related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and
the Assignment of Proprietary Lease to the originator of the
Cooperative Loan with intervening assignments showing an
unbroken chain of title from such originator to the Trustee;
(iii) The related Cooperative Stock Certificate,
representing the related Cooperative Stock pledged with
respect to such Cooperative Loan, together with an undated
stock power (or other similar instrument) executed in blank;
(iv) The original recognition agreement by the
Cooperative of the interests of the mortgagee with respect
to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement,
and any continuation statements, filed by the originator of
such Cooperative Loan as secured party, each with evidence
of recording thereof, evidencing the interest of the
originator under the Security Agreement and the Assignment
of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the
security interest referenced in clause (vi) above showing an
unbroken chain of title from the originator to the Trustee,
each with evidence of recording thereof, evidencing the
interest of the originator under the Security Agreement and
the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the
originator in the Security Agreement, Assignment of
Proprietary Lease and the recognition agreement referenced
in clause (iv) above, showing an unbroken chain of title
from the originator to the Trustee;
(ix) An executed UCC-1 financing statement showing the Company as
debtor and the Trustee as secured party, each in a form
sufficient for filing, evidencing the interest of such debtors in
the Cooperative Loans; and
(x) For any Cooperative Loan that has been modified or amended,
the original instrument or instruments effecting such
modification or amendment.
Mortgage Interest Rate: For any Mortgage Loan, the per annum
rate at which interest accrues on such Mortgage Loan pursuant to
the terms of the related Mortgage Note.
Mortgage Loan Schedule: The schedule, as amended from time
-----------------------
to time, of Mortgage Loans attached
61
<PAGE>
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
REMIC I Trust Fund, the Mortgage Loans so held being identified
in the Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of indebtedness
--------------
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
-------------
Mortgagor: The obligor on a Mortgage Note.
---------
Nonrecoverable Advance: With respect to any Mortgage Loan,
-----------------------
any advance which the Master Servicer shall determine to be a
Nonrecoverable Advance pursuant to Section 4.03 and which was, or
is proposed to be, made by (i) the Master Servicer or (ii) a
Servicer pursuant to its Selling and Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
---------------
OTS: The Office of Thrift Supervision, or any successor
---
thereto.
62
<PAGE>
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.
I-PO Fraction: For each I-PO Mortgage Loan, a fraction, the
-------------
numerator of which is 6.750% less the Pass-Through Rate on such I-
PO Mortgage Loan and the denominator of which is 6.750%.
I-PO Mortgage Loan: Any Group I Loan with a Pass-Through
--------------------
Rate of less than 6.750% per annum.
Opinion of Counsel: A written opinion of counsel, who shall
------------------
be reasonably acceptable to the Trustee and who may be 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.
Overcollateralized Group: With respect to Loan Group II, if
------------------------
on any Distribution Date such Loan Group is not an
Undercollateralized Group, with respect to Loan Group III, if on
any Distribution Date such Loan Group is not an
Undercollateralized Group and with respect to Loan Group IV, if
on any Distribution Date such Loan Group is not an
Undercollateralized Group.
Ownership Interest: With respect to any Residual
--------------------
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as
the Holder thereof and any other interest therein whether direct
or indirect, legal or beneficial, as owner or as pledgee.
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.
63
<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 August 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 Certificates, any Class of the Class X
Certificates, the Class I-A-10, Class I-A-22, Class II-A-10
and Class I-A-1 Certificates), its Certificate Principal
Balance divided by the applicable Class Principal Balance;
(ii) with respect to any Class of the Class X
Certificates, the Class I-A-10, Class I-A-22 and Class II-A-
10 Certificates, the portion of the respective Class
Notional Amount evidenced by such Certificate divided by the
respective Class Notional Amount;
(iii) with respect to the Class I-A-1 Certificates,
its Certificate Principal Balance divided by the applicable
Class Principal Balance; provided that if the Class I-A-1
Principal Balance has been reduced to zero but the
respective Component Notional Amounts thereof are greater
than zero, the Certificate Principal Balance immediately
prior to the Distribution Date when the Class I-A-1
Principal Balance was reduced to zero divided by the Class I-
A-1 Principal Balance as such time; and
(iv) with respect to the Residual Certificates, the
percentage set forth on the face of such Certificate.
64
<PAGE>
(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 III,
which for purposes of such rights only shall equal:
(A) if the Class I-A-1 Principal Balance is greater than
zero or if the Class I-A-1 Principal Balance and the Component
Notional Amounts of Component I-A-1-1 and Component I-A-1-5 have
all been reduced to zero;
(i) with respect to any Certificate (other than any
Class of the Class X Certificates, the Class I-A-10, Class I-
A-22, Class II-A-10 and Class R-3 Certificates), the product
of (x) ninety-three percent (93%) and (y) the percentage
calculated by dividing its Certificate Principal Balance by
the Aggregate Certificate Principal Balance of the
Certificates; provided, however, that the percentage in (x)
above shall be increased by one percent (1%) upon each
retirement of the Certificates referenced in the
parenthetical above (other than the Class R-3 Certificates);
(ii) with respect to any of Class of the Class X
Certificates, the Class I-A-10, Class I-A-22 and Class II-A-
10 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-3 Certificates, zero; or
(B) if the Class I-A-1 Principal Balance has been reduced
to zero but the Component Notional Amounts of Component I-A-1-1
and Component I-A-1-5 are greater than zero;
(i) with respect to any Certificate (other than any
Class of the Class X Certificates, the Class I-A-1, Class I-
A-10, Class I-A-22, Class II-A-10 and Class R-3
Certificates), the product of (x) ninety-two percent (92%)
and (y) the percentage calculated by dividing its
Certificate Principal Balance by the Aggregate Certificate
Principal Balance of the Certificates; provided, however,
that the percentage in (x) above shall be increased by one
percent (1%) upon each retirement of the Certificates
referenced in the parenthetical above (other than the Class
R-3 Certificates);
(ii) with respect to any of Class of the Class X
Certificates, the Class I-A-1, Class I-A-10, Class I-A-22
and Class II-A-10 Certificates, one percent (1%) of such
Certificate's Percentage Interest as calculated by paragraph
(a)(ii) of this definition (with the "Class Notional Amount"
of the Class I-A-1 Certificates equal to the sum of the
Component Notional Amounts of the Components thereof); and
(iii) with respect to the Class R-3 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
65
<PAGE>
of the Code (unless such organization is subject to the tax im-
posed 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, REMIC II or REMIC III, 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.
Planned Principal Balance: The amount set forth in the table
-------------------------
attached as Appendix A to the Prospectus, for the applicable
Distribution Date, for the Class I-A-2, Class I-A-3, Class I-A-4,
Class I-A-5, Class I-A-6, Class I-A-17 and Class I-A-20
Certificates, and for the Segment P Group and the combined amount
set forth for the Class I-A-7 Certificates and Component I-A-1-2,
which amount shall also constitute the "Planned Principal
Balance" for the Corresponding Classes and Corresponding
Components.
Prepaid Monthly Payment: Any Monthly Payment received prior
-----------------------
to its scheduled Due Date, which is intended to be applied to a
Mortgage Loan on its scheduled Due Date and held in the related
Custodial Account for P&I until the Withdrawal Date following its
scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty
--------------------------
insurance, if any, on an individual Mortgage Loan, providing
coverage as required by Section 2.03(xi).
Principal Balance: Except as used in Sections 2.02, 3.09 and
-----------------
9.01 and for purposes of the definition of Purchase Price, at the
time of any determination, the principal balance of a Mortgage
Loan remaining to be paid at the close of business on the Cut-Off
Date, after application of all scheduled principal payments due
on or before the Cut-Off Date, whether or not received, reduced
by all amounts distributed or (except when such determination
occurs earlier in the month than the Distribution Date) to be
distributed to Certificateholders through the Distribution Date
in the month of determination that are reported as allocable to
principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used
in Sections 2.02, 3.09 and 9.01, at the time of any
determination, the principal balance of a Mortgage Loan remaining
to be paid at the close of business on the Cut-Off Date, after
deduction of all scheduled principal payments due on or before
the Cut-Off Date, whether or not received, reduced by all amounts
distributed or to be distributed to Certificateholders through
the Distribution Date in the month of determination that are
reported as allocable to principal of such Mortgage Loan.
66
<PAGE>
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 REMIC I 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, and (iii) any other unscheduled payments of
principal which were received with respect to any Mortgage Loan
during the Prior Period, other than Payoffs, Curtailments and
Liquidation Principal.
Principal Prepayment: Any payment of principal on a Mortgage
--------------------
Loan which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On any Distribution Date and
----------------------------
for any Loan Group, the sum with respect to the Mortgage Loans in
such Loan Group of (i) Curtailments received during the Prior
Period from such Mortgage Loans and (ii) Payoffs received during
the Payoff Period from such Mortgage Loans.
Principal Transfer Amount: On any Distribution Date for each
-------------------------
Undercollateralized Group, the excess, if any, of the aggregate
Class Principal Balance of the Class A-L Regular Interests of
such Undercollateralized Group over the aggregate Principal
Balance of the Mortgage Loans in the related Loan Group (less
with respect to Loan Group III the Class III-P Fraction of any
Class III-P Mortgage Loans in Loan Group III).
Prior Period: The calendar month immediately preceding any
-------------
Distribution Date.
Priority Rule: With respect to distributions of principal
--------------
to the Segment T Group or the Segment P Group, such distributions
shall occur in the following manner: concurrently, 26.6666655619%
to the Class I-A-12-L Regular Interests and 73.3333344381% to the
Class I-A-19-L Regular Interests, until the Class I-A-12-L
Principal Balance and Class I-A-19-L Principal Balance have each
been reduced to zero.
Pro Rata Allocation: (i) With respect to losses on Group I
--------------------
Loans, the allocation of the principal
67
<PAGE>
portion of Realized Losses to the outstanding Group I-L Regular
Interests (other than Component I-A-1-6-L), pro rata according
to their respective
Class or Component Principal Balances, in reduction of their
respective Class or Component Principal Balances (except if the
loss is recognized with respect to a I-PO Mortgage Loan, in which
case the I-PO Fraction of such loss will first be allocated to
Component I-A-1-6-L, and the remainder of such loss will be
allocated as set forth above), and the allocation of the interest
portion of Realized Losses to the outstanding Group I-L Regular
Interests, pro rata according to the amount of interest accrued
but unpaid on each such Class or Component in reduction thereof,
and then in reduction of their respective Class or Component
Principal Balances (other than the Class I-A-20-L and Class I-A-
21-L Regular Interests and Component I-A-1-6-L); provided,
however that all Realized Losses that would otherwise be
allocable to the Class I-A-1-L Regular Interests (other than
Component I-A-1-6-L) will instead be allocated to the Class I-A-
23-L Regular Interests until the Class I-A-23-L Principal Balance
has been reduced to zero; and (ii) with respect to losses on
Group II Loans, Group III Loans and Group IV Loans, the
allocation of the principal portion of Realized Losses relating
to a Group II Loan, Group III Loan or Group IV Loan to all
Classes of the Group II-L, Group III-L, Group IV-L and Group C-B-
L Regular Interests (other than the Class III-P-L Regular
Interests) pro rata according to their respective Class or
Component Principal Balances (except if the loss is recognized
with respect to a Class III-P Mortgage Loan, in which case the
applicable Class III-P Fraction of such loss will first be
allocated to the Class III-P-L Regular Interests, and the
remainder of such loss will be allocated as set forth above), and
the allocation of the interest portion of Realized Losses to all
Classes of the Group II-L, Group III-L, Group IV-L and Group C-B-
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
(other than the Class II-A-4-L, Class II-A-13-L and Class III-P-L
Regular Interests). Any losses allocated among all Classes and
Components of REMIC II Regular Interests pursuant to this
definition of "Pro Rata Allocation" shall also be allocated to
the Corresponding Classes and Corresponding Components in the
same manner and amounts as they reduce such attributes of the
Corresponding Class and Corresponding Components of REMIC II
Regular Interests; provided, however, that (i) the interest
portion of such losses allocated to the 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-17-L and Class I-A-22-L Regular Interests and Component
I-A-1-2-L and applied to reduce the Interest Distribution Amount
thereof shall be allocated to the 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-10, Class
I-A-17 and Class I-A-22 Certificates and Component I-A-1-1 and
Component I-A-1-2 in reduction of the distribution to such
Certificates and Components pursuant to the distributions set
forth in clause (a)(iv) of the definition of "REMIC III
Distribution Amount", pro rata according to the allocation set
forth in such definition, (ii) the interest portion of such
losses allocated to the Class II-A-9-L Regular Interests and
applied to reduce the Interest Distribution Amount thereof shall
be allocated to the Class II-A-9 and Class II-A-10 Certificates
in reduction of the distribution to such Certificates pursuant to
the distributions set forth in clause (b)(ii) of the definition
of "REMIC III Distribution Amount", pro rata according to the
allocation set forth in such definition, and (iii) the interest
portion of such losses allocated to the Class I-A-8-L Regular
Interests and applied to reduce the Interest Distribution Amount
thereof shall be allocated to the Class I-A-8 and Class I-A-24
Certificates in reduction of the distribution to such
Certificates pursuant to the distributions set forth in clause
(b)(v) of the definition of "REMIC III Distribution Amount", pro
rata according to the allocation set forth in such definition.
Prospectus: The Prospectus, dated June 24, 1998, and the
----------
Prospectus Supplement, dated July 28, 1998, of the Company.
68
<PAGE>
Purchase Obligation: An obligation of the Company to
--------------------
repurchase Mortgage Loans under the circumstances and in the
manner provided in Section 2.02 or Section 2.03.
Purchase Price: With respect to any Mortgage Loan to be
---------------
purchased pursuant to a Purchase Obligation, an amount equal to
the sum of the Principal Balance thereof, and unpaid accrued
interest thereon, if any, to the last day of the calendar month
in which the date of repurchase occurs at a rate equal to the
applicable Pass-Through Rate; provided, however, that no Mortgage
Loan shall be purchased or required to be purchased pursuant to
Section 2.03, or more than two years after the Closing Date under
Section 2.02, unless (a) the Mortgage Loan to be purchased is in
default, or default is in the judgment of the Company reasonably
imminent, or (b) the Company, at its expense, delivers to the
Trustee an Opinion of Counsel to the effect that the purchase of
such Mortgage Loan will not give rise to a tax on a prohibited
transaction, as defined in Section 860F(a) of the Code; provided,
further, that in the case of clause (b) above, the Company will
use its reasonable efforts to obtain such Opinion of Counsel if
such opinion is obtainable.
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.
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 shall be allocated to the REMIC I Regular
Interests as follows: The interest portion of Realized Losses, if
any, shall be allocated among the Classes of REMIC I Regular
Interests related to such Loan Group pro rata according to the
amount of interest accrued but unpaid thereon, in reduction
thereof (i.e. the "related" Loan Group for the Class Z-1, Class Y-
1 and Class II-X-M Regular Interests is Loan Group II). Any
interest portion of Realized Losses in excess of the amount
allocated pursuant to the preceding sentence shall be treated as
a principal portion of Realized Losses not attributable to any
specific Mortgage Loan in such Loan Group and allocated pursuant
to the succeeding sentences. The applicable Class P Fraction of
any principal
69
<PAGE>
portion of Realized Losses attributable to a Class P Mortgage
Loan in the Loan Group shall be allocated to the
related Class P-M Regular Interests in reduction of the principal
balance thereof. The remainder of the principal portion of
Realized Losses shall be allocated, first, to the Class Y Regular
Interests related to the Loan Group to the extent of the
applicable Class Y Principal Reduction Amount in reduction of the
Class Principal Balance of such Regular Interests and, second,
the remainder, if any, of such principal portion of Realized
Losses shall be allocated to the related Class Z Regular
Interests in reduction of the Class Principal Balance thereof.
Realized Losses, Special Hazard Losses, Fraud Losses and
Bankruptcy Losses allocated to any Class and Component of REMIC
II Regular Interests shall also be allocated to the Corresponding
Classes and Corresponding Components of Certificates and applied
to reduce the Class Principal Balance for such Class of
Certificates in the same manner and amounts as they reduce such
attributes of the Corresponding Class of REMIC II Regular
Interests; provided, however, that the allocation of the interest
portion of such losses is subject to the proviso contained in the
last sentence of the definition of "Pro Rata Allocation" herein.
Except for Special Hazard Losses in excess of Group I
Special Hazard Coverage, Fraud Losses in excess of Group I Fraud
Coverage and Bankruptcy Losses in excess of Group I Bankruptcy
Coverage, Realized Losses with respect to the Group I Loans shall
be allocated among the Group I-L Regular Interests (i) for
Realized Losses allocable to principal (a) first, to the Class I-
B-6-L Regular Interests, until the Class I-B-6-L Principal
Balance has been reduced to zero, (b) second, to the Class I-B-5-
L Regular Interests, until the Class I-B-5-L Principal Balance
has been reduced to zero, (c) third, to the Class I-B-4-L Regular
Interests, until the Class I-B-4-L Principal Balance has been
reduced to zero, (d) fourth, to the Class I-B-3-L Regular
Interests, until the Class I-B-3-L Principal Balance has been
reduced to zero, (e) fifth, to the Class I-B-2-L Regular
Interests, until the Class I-B-2-L Principal Balance has been
reduced to zero, (f) sixth, to the Class I-B-1-L Regular
Interests, until the Class I-B-1-L Principal Balance has been
reduced to zero, and (g) seventh, to the Group I-A-L Regular
Interests and the Residual Certificates, pro rata according to
their Class Principal Balances (or Component Principal Balances
in the case of Component I-A-1-2-L, Component I-A-1-3-L and
Component I-A-1-4-L) in reduction of their respective Class or
Component Principal Balances, as applicable; provided, however,
that if the loss is recognized with respect to a I-PO Mortgage
Loan, the I-PO Fraction of such loss will first be allocated to
Component I-A-1-6-L 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-20-L and Class I-A-21-L
Regular Interests), the Class I-X-L Regular Interests and the
Residual Certificates pro rata according to accrued but unpaid
interest on such Classes (or in the case of the Class I-A-1-L
70
<PAGE>
Regular Interests, the interest bearing Components thereof) and
then pro rata according to their Class Principal Balances (or
Component Principal Balances, in the case of Component I-A-1-2-L
and Component I-A-1-3-L) in reduction of their respective Class
or Component Principal Balances, as applicable; provided, however
that all Realized Losses allocated to principal and interest that
would otherwise be allocable to the Class I-A-1-L Regular
Interests (other than Component I-A-1-6-L thereof) shall be
allocated instead to the Class I-A-23-L Regular Interests, until
the Class I-A-23-L Principal Balance has been reduced to zero.
Except for Special Hazard Losses in excess of the Combined
Special Hazard Coverage, Fraud Losses in excess of the Combined
Fraud Coverage and Bankruptcy Losses in excess of the Combined
Bankruptcy Coverage, Realized Losses with respect to the Group II
Loans, the Group III Loans and the Group IV Loans shall be
allocated among the Group II-L, Group III-L, Group IV-L and
Group C-B-L Regular Interests (i) for Realized Losses allocable
to principal (a) first, to the Class C-B-6-L Regular Interests,
until the Class C-B-6-L Principal Balance has been reduced to
zero, (b) second, to the Class C-B-5-L Regular Interests, until
the Class C-B-5-L Principal Balance has been reduced to zero, (c)
third, to the Class C-B-4-L Regular Interests, until the Class C-
B-4-L Principal Balance has been reduced to zero, (d) fourth, to
the Class C-B-3-L Regular Interests, until the Class C-B-3-L
Principal Balance has been reduced to zero, (e) fifth, to the
Class C-B-2-L Regular Interests, until the Class C-B-2-L
Principal Balance has been reduced to zero, (f) sixth, to the
Class C-B-1-L Regular Interests, until the Class C-B-1-L
Principal Balance has been reduced to zero and (g) seventh, to
(I) the Group II-A-L Regular Interests, (II) the Class III-A-1-L
Regular Interests or (III) the Class IV-A-1-L Regular Interests,
as applicable, pro rata, according to their respective
Class Principal Balances (or Component Principal Balances in the
case of Component II-A-4-1-L and Component II-A-4-2-L) in
reduction thereof; provided, however, that if the loss is
recognized with respect to a Class III-P Mortgage Loan, the Class
III-P Fraction of such loss will first be allocated to the Class
III-P-L Regular Interests, and the remainder of such loss will be
allocated as set forth above in this clause (i); and (ii) for
Realized Losses allocable to interest (a) first, to the Class C-B-
6-L Regular Interests, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class C-B-6-L
Principal Balance, (b) second, to the Class C-B-5-L Regular
Interests, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class C-B-5-L Principal Balance, (c)
third, to the Class C-B-4-L Regular Interests, in reduction of
accrued but unpaid interest thereon and then in reduction of the
Class C-B-4-L Principal Balance, (d) fourth, to the Class C-B-3-L
Regular Interests, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class C-B-3-L Principal
Balance, (e) fifth, to the Class C-B-2-L Regular Interests, in
reduction of accrued but unpaid interest thereon and then in
reduction of the Class C-B-2-L Principal Balance, (f) sixth, to
the Class C-B-1-L Regular Interests, in reduction of accrued but
unpaid interest thereon and then in reduction of the Class C-B-1-
L Principal Balance, and (g) seventh, to (I) the Group II-A-L
Regular Interests (other than the Class II-A-4-L and Class II-A-
13-L Regular Interests) and the Class II-X-L Regular Interests,
(II) the Class III-A-1-L Regular Interests and the Class III-X-L
Regular Interests or (III) the Class IV-A-1-L Regular Interests
and the Class IV-X-L Regular Interests, as applicable, pro rata
according to accrued but unpaid interest on such Classes of REMIC
II Regular Interests and then in reduction of the Class Principal
Balances of the Group II-A-L (other than the Class II-A-4-L and
Class II-A-13-L Regular Interests), the Class III-A-1-L Regular
Interests or the Class IV-A-1-L Regular Interests, as applicable;
provided that, in the case of clause (i)(g) and (ii)(g) of this
paragraph, losses on Group II Loans will only be allocated to the
Group II-L Regular Interests, losses on Group III
71
<PAGE>
Loans will only be allocated to the Group III-L Regular Interests
and losses on Group IV Loans will only be allocated to the Group
IV-L Regular Interests.
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, Group III Loans and
Group IV Loans in excess of the Combined Special Hazard Coverage,
Fraud Losses on Group II Loans, Group III Loans and Group IV
Loans in excess of the Combined Fraud Coverage, and Bankruptcy
Losses on Group II Loans, Group III Loans and Group IV Loans in
excess of the Combined Bankruptcy Coverage shall be allocated
among the Group II-L, Group III-L, Group IV-L and Group C-B-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 II 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 II 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,
Group III-L, Group IV-L and Group C-B-L Regular Interests exceeds
the aggregate principal balance of the Group II Loans, the Group
III Loans and the Group IV Loans remaining to be paid at the
close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect
of each such Mortgage Loan whether or not paid and (ii) all
amounts of principal in respect of each such Mortgage Loan that
have been received or advanced and included in the REMIC II
Available Distribution Amount for the Group II-L, Group III-L and
Group IV-L Regular Interests, and all losses in respect of each
such Mortgage Loan that have been allocated to the REMIC II
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 C-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.
Regular Interest Group: Any of the Group I-L, Group II-L,
-----------------------
Group III-L, Group IV-L and Group C-B-L Regular Interests.
72
<PAGE>
Regular Interests: (i) With respect to REMIC I, the REMIC I
-----------------
Regular Interests, (ii) with respect to REMIC II, the REMIC II
Regular Interests and (iii) with respect to the REMIC III, 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 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 and the
portion of the Group C-B-L Regular Interests that derives its
Interest Distribution Amount from the Group II Loans pro rata
according to the amount of the Interest Distribution Amount to
which each such Class (or portion thereof) would otherwise be
entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
III shall be allocated to the Group III-L Regular Interests and
the portion of the Group C-B-L Regular Interests that derives its
Interest Distribution Amount from the Group III Loans pro rata
according to the amount of the Interest Distribution Amount to
which each such Class (or portion thereof) would otherwise be
entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
IV shall be allocated to the Group IV-L Regular Interests and the
portion of the Group C-B-L Regular Interests that derives its
Interest Distribution Amount from the Group IV Loans pro rata
according to the amount of the Interest Distribution Amount to
which each such Class (or portion thereof) would otherwise be
entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
II shall be allocated to the Class II-X-M, Class Y-1 and Class Z-
1 Regular Interests, pro rata according to the amount of the
Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
III shall be allocated to the Class III-X-M, Class Y-2 and Class
Z-2 Regular Interests, pro rata according to the amount of the
Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
IV shall be allocated to the Class IV-X-M, Class Y-3 and Class Z-
3 Regular Interests, pro rata according to the amount of the
Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
Interest shortfalls related to the Relief Act for Loan Group
I shall be allocated to the Class W, Class I-X-M and Class I-P-M
Regular Interests, pro rata according to the amount of the
Interest Distribution Amount to which each such Class of Regular
Interests would otherwise be entitled in reduction thereof.
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REMIC: A real estate mortgage investment conduit, as such
-----
term is defined in the Code.
REMIC Provisions: Sections 860A through 860G of the Code,
-----------------
related Code provisions and regulations promulgated thereunder,
as the foregoing may be in effect from time to time.
REMIC I: The segregated pool of assets consisting of the
--------
REMIC I Trust Fund conveyed in trust to the Trustee for the
benefit of the Holders of the REMIC I Regular Interests and the
Class R-1 Certificateholders pursuant to Section 2.01, with
respect to which a separate REMIC election is to be made.
REMIC I Available Distribution Amount: With respect to each
-------------------------------------
Loan Group on any Distribution Date, the sum of the following
amounts with respect to the Mortgage Loans in such Loan Group:
(1) the total amount of all cash received by or on
behalf of the Master Servicer with respect to such Mortgage
Loans by the Determination Date for such Distribution Date
and not previously distributed (including Monthly P&I
Advances made by Servicers, proceeds of Mortgage Loans in
such Loan Group which have been liquidated and scheduled
amounts of distributions from Buydown Funds respecting
Buydown Loans, if any), except:
(a) all scheduled payments of principal and
interest collected but due on a date subsequent to the
related Due Date;
(b) all Curtailments received after the Prior
Period (together with any interest payment received
with such prepayments to the extent that it represents
the payment of interest accrued on a related Mortgage
Loan subsequent to the Prior Period);
(c) all Payoffs received after the Payoff Period
immediately preceding such Distribution Date (together
with any interest payment received with such Payoffs to
the extent that it represents the payment of interest
accrued on the Mortgage Loans for the period subsequent
to the Prior Period), and interest which was accrued
and received on Payoffs received during the period from
the 1st to the 14th day of the month of such
Determination Date, which interest shall not be
included in the calculation of the REMIC I Available
Distribution Amount for any Distribution Date;
(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:
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<PAGE>
(a) any Monthly P&I Advance made by the Master
Servicer to the Trustee with respect to such
Distribution Date relating to such Mortgage Loans; and
(b) Compensating Interest; and
(3) the total amount, to the extent not previously
distributed, of all cash received by the Distribution Date
by the Trustee or the Master Servicer, in respect of a
Purchase Obligation under Section 2.02 and Section 2.03 or
any permitted repurchase of a Mortgage Loan.
REMIC I Distribution Amount: For any Distribution Date, the
---------------------------
REMIC I Available Distribution Amount shall be distributed to the
REMIC I Regular Interests and the Class R-1 Certificates in the
following amounts and priority:
(a) To the extent of the REMIC I Available Distribution
Amount for Loan Group I:
(i) first, to the Class I-P-M Regular Interests, the
aggregate for all of the I-PO Mortgage Loans of the product
for each I-PO Mortgage Loan of the applicable I-PO Fraction
and the sum of (x) scheduled payments of principal on such I-
PO 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 I-PO
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 I-
PO Mortgage Loan during the Payoff Period;
(ii) second, to the Class W and Class I-X-M Regular
Interests and the Class R-1 Certificates, concurrently, the
Interest Distribution Amounts for such Classes of Regular
Interests and Certificates remaining unpaid from previous
Distribution Dates;
(iii) third, to the Class W and Class I-X-M Regular
Interests and the Class R-1 Certificates, concurrently, the
Interest Distribution Amounts for such Classes of Regular
Interests and Certificates for the current Distribution
Date;
(iv) fourth, to the Class R-1 Certificates, until the
Class R-1 Principal Balance has been reduced to zero;
(v) fifth, to the Class W Regular Interests, until the
Class W Principal Balance has been reduced to zero; and
(vi) sixth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group I for such Distribution
Date.
(b) To the extent of the REMIC I Available Distribution
Amount for Loan Group II:
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<PAGE>
(i) first, to the Class II-X-M, Class Y-1 and
Class Z-1 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the Class II-X-M, Class Y-1 and
Class Z-1 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts;
(iii) third, to the Class Y-1 and Class Z-1 Regular
Interests, the Class Y-1 Principal Distribution Amount and
the Class Z-1 Principal Distribution Amount, respectively;
and
(iv) fourth, to the Class R-1 Certificates, the
Residual Distribution Amount for Loan Group II for such
Distribution Date.
(c) To the extent of the REMIC I Available Distribution
Amount for Loan Group III:
(i) first, to the Class III-P-M Regular
Interests, the aggregate for all of the Class III-P
Mortgage Loans of the product for each Class III-P
Mortgage Loan of the applicable Class III-P Fraction and
the sum of (x) scheduled payments of principal on such
Class III-P Mortgage Loan due on or before the related
Due Date in respect of which no distribution has been
made on any previous Distribution Date and which were
received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to
such Distribution Date, (y) the principal portion
received in respect of such Class III-P Mortgage Loan
during the Prior Period of (1) Curtailments, (2)
Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to
a Purchase Obligation or any repurchase of a Mortgage
Loan permitted hereunder and (4) Liquidation Proceeds and
(z) the principal portion of Payoffs received in respect
of such Class III-P Mortgage Loan during the Payoff
Period;
(ii) second, to the Class III-X-M, Class Y-2 and
Class Z-2 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class III-X-M, Class Y-2 and
Class Z-2 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts;
(iv) fourth, to the Class Y-2 and Class Z-2
Regular Interests, the Class Y-2 Principal Distribution
Amount and the Class Z-2 Principal Distribution Amount,
respectively; and
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<PAGE>
(iv) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group III for such Distribution
Date.
(d) To the extent of the REMIC I Available Distribution
Amount for Loan Group IV:
(i) first, to the Class IV-X-M, Class Y-3 and
Class Z-3 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests remaining unpaid from previous Distribution
Dates, pro rata according to their respective shares of
such unpaid amounts;
(ii) second, to the Class IV-X-M, Class Y-3 and
Class Z-3 Regular Interests, concurrently, the sum of the
Interest Distribution Amounts for such Classes of Regular
Interests for the current Distribution Date, pro rata
according to their respective Interest Distribution
Amounts;
(iii) third, to the Class Y-3 and Class Z-3
Regular Interests, the Class Y-3 Principal Distribution
Amount and the Class Z-3 Principal Distribution Amount,
respectively; and
(iv) fourth, to the Class R-1 Certificates, the
Residual Distribution Amount for Loan Group IV 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: The corpus of the trust created pursuant
------------------
to Section 2.01 of this Agreement. The REMIC I 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); (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) 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.
REMIC II: The segregated pool of assets consisting of the
---------
REMIC II Trust Fund conveyed in trust to the Trustee for the
benefit of the Holders of the REMIC II Regular Interests and the
Class R-2 Certificateholders pursuant to Section 2.05, with
respect to which a separate REMIC election is to be made.
REMIC II Available Distribution Amount: With respect to the
--------------------------------------
Group I-L Regular Interests, on any Distribution Date, the
aggregate of all distributions with respect to the Class I-X-M,
Class I-P-M and
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<PAGE>
Class W Regular Interests. With respect to the Group II-L
Regular Interests, on any Distribution Date, the aggregate
of all distributions with respect to the Class II-X-M,
Class Y-1 and Class Z-1 Regular Interests. With respect to the
Group III-L Regular Interests, on any Distribution Date, the
aggregate of all distributions with respect to the Class III-X-M,
Class III-P-M, Class Y-2 and Class Z-2 Regular Interests. With
respect to the Group IV-L Regular Interests, on any Distribution
Date, the aggregate of all distributions with respect to the
Class IV-X-M, Class Y-3 and Class Z-3 Regular Interests.
REMIC II Distribution Amount: (I) For any Distribution Date
----------------------------
prior to the Group I Credit Support Depletion Date or the
Combined Credit Support Depletion Date, as applicable, the REMIC
II Available Distribution Amount shall be distributed to the
REMIC II Regular Interests in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests and
the Class R-2 Certificates, on any Distribution Date prior to the
Group I Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group I-L Regular
Interests remaining following prior distributions, if any, on
such Distribution Date:
(i) first, to Component I-A-1-6-L, the aggregate for
all I-PO Mortgage Loans of the product for each I-PO
Mortgage Loan of the applicable I-PO Fraction and the sum of
(x) scheduled payments of principal on such I-PO 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 I-PO
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 I-
PO 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-3-L
Regular Interests and the Class R-2 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; provided, however,
that (A) on or before the Class I-A-9 Accretion Termination
Date, the amount that would otherwise be payable to the
Class I-A-9-L Regular Interests pursuant to this clause
(I)(a)(ii) will be paid instead as principal as set forth in
clause (I)(a)(iii)(b) of this definition of "REMIC II
Distribution Amount", (B) on or before the Class I-A-18
Accretion Termination Date, the amount that would otherwise
be payable to the Class I-A-18-L Regular Interests pursuant
to this clause (I)(a)(ii) will be paid instead as principal
as set forth in clause (I)(a)(iii)(c) of this definition of
"REMIC II Distribution Amount", (C) on or before the
Component I-A-1-2 Accretion Termination Date, the amount
that would otherwise be payable to Component I-A-1-2-L
pursuant to this clause (I)(a)(ii) will be paid instead as
principal as set forth in clause (I)(a)(iii)(d) of this
definition of "REMIC II Distribution Amount" and (D) on or
before the Component I-A-1-3 Accretion Termination Date, the
amount that would otherwise be
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<PAGE>
payable to Component I-A-1-3-L pursuant to this clause
(I)(a)(ii) will be paid instead as principal as set
forth in clause (I)(a)(iii)(e) of this definition of
"REMIC II Distribution Amount";
(iii) third,
(a) to the Group I-A-L Regular Interests entitled
to interest, the Class I-X-L and Class R-3-L Regular
Interests and the Class R-2 Certificates, concurrently,
the sum of the Interest Distribution Amounts for such
Classes of Regular Interests and Certificates for the
current Distribution Date, pro rata according to their
respective Interest Distribution Amounts provided,
however, that (A) on or before the Class I-A-9
Accretion Termination Date, the amount that would
otherwise be payable to the Class I-A-9-L Regular
Interests pursuant to this clause (I)(a)(iii)(a) will
be paid instead as principal as set forth in clause
(I)(a)(iii)(b) of this definition of "REMIC II
Distribution Amount", (B) on or before the Component I-
A-1-3 Accretion Termination Date, the amount that would
otherwise be payable to Component I-A-1-3-L pursuant to
this clause (I)(a)(iii)(a) will be paid instead as
principal as set forth in clause (I)(a)(iii)(c) of this
definition of "REMIC II Distribution Amount", (C) on or
before the Component I-A-1-2 Accretion Termination
Date, the amount that would otherwise be payable to
Component I-A-1-2-L pursuant to this clause
(I)(a)(iii)(d) will be paid instead as principal as set
forth in clause (I)(a)(iii)(d) of this definition of
"REMIC II Distribution Amount", (D) on or before the
Class I-A-18 Accretion Termination Date, the amount
that would otherwise be payable to the Class I-A-18-L
Regular Interests pursuant to this clause
(I)(a)(iii)(a) will be paid instead as principal as set
forth in clause (I)(a)(iii)(e) of this definition of
"REMIC II Distribution Amount"; and
(b) on or before the Class I-A-9 Accretion
Termination Date, the Class I-A-9 Accrual Amount, as
principal, as follows:
(1) first, to the Class I-A-8-L Regular
Interests and the Segment T Group (in accordance
with the Priority Rule), pro rata, to the extent
necessary to reduce the Class I-A-8-L Principal
Balance and the Segment T Principal Balance to
their respective Targeted Principal Balances for
such Distribution Date;
(2) second, to the Component I-A-1-3-L, to
the extent necessary to reduce the Component I-A-1-
3-L Principal Balance to its Targeted Principal
Balance for such Distribution Date; and
(3) third, to the Class I-A-9-L Regular
Interests, until the Class I-A-9-L Principal
Balance has been reduced to zero;
(c) on or before the Component I-A-1-3 Accretion
Termination Date, the Component I-A-1-3 Accrual Amount,
as principal, as follows:
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<PAGE>
(1) first, to the Class I-A-8-L Regular
Interests and the Segment T Group (in accordance
with the Priority Rule), pro rata, to the extent
necessary to reduce the Class I-A-8-L Principal
Balance and the Segment T Principal Balance to
their respective Targeted Principal Balances for
such Distribution Date (after taking into account
the distribution of the Class I-A-9 Accrual
Amount); and
(2) second, to Component I-A-1-3-L, until
the Component I-A-1-3-L Principal Balance has been
reduced to zero;
(d) on or before the Component I-A-1-2 Accretion
Termination Date, the Component I-A-1-2 Accrual Amount,
as principal, as follows:
(1) first, to the Class I-A-7-L Regular
Interests, until the Class I-A-7-L Principal
Balance has been reduced to zero; and
(2) second, to Component I-A-1-2-L, until
the Component I-A-1-2-L Principal Balance has been
reduced to zero;
(e) on or before the Class I-A-18 Accretion
Termination Date, the Class I-A-18 Accrual Amount, as
principal, as follows:
(1) first, to the Class I-A-15-L Regular
Interests and Component I-A-21-1-L, pro rata, to
the extent necessary to reduce the Class I-A-15-L
Principal Balance and the Component I-A-21-1-L
Principal Balance to their respective Targeted
Principal Balances for such Distribution Date; and
(2) second, to the Class I-A-18-L Regular
Interests, until the Class I-A-18-L Principal
Balance has been reduced to zero;
(iv) fourth, to the Group I-A-L and Class R-3-L Regular
Interests and the Class R-2 Certificates, as principal, the
Group II Senior Principal Distribution Amount, as follows;
(a) 65.0000001650%, sequentially, as follows:
(1) first, sequentially, to the Class I-A-2-
L, Class I-A-3-L, Class I-A-4-L, Class I-A-5-L and
Class I-A-6-L Regular Interests, in that order, to
the extent necessary to reduce their respective
Class Principal Balances to their respective
Planned Principal Balances for such Distribution
Date;
(2) second, sequentially, to the Class I-A-7-
L regular Interests and Component I-A-1-2-L, to
the extent necessary to reduce the aggregate of
their Class and Component Principal Balances to
their combined Planned Principal Balance for such
Distribution Date, as follows:
(A) first, to the Class I-A-7-L Regular
Interests, until the Class I-A-7-L Principal
Balance has been reduced to zero;
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<PAGE>
(B) second, to Component I-A-1-2-L,
until the Component I-A-1-2-L Principal
Balance has been reduced to zero:
(3) third, concurrently, until the Component
I-A-1-4-L Principal Balance has been reduced to
zero, as follows:
(A) 3.5714291340% to Component I-A-1-4-
L; and
(B) 96.4285708660%, sequentially, as
follows:
(v) first, to the Class I-A-8-L
Regular Interests and the Segment T
Group (in accordance with the Priority
Rule), pro rata, to the extent necessary
to reduce the Class I-A-8-L Principal
Balance and the Segment T Principal
Balance to their respective Targeted
Principal Balances for such Distribution
Date;
(w) second, to Component I-A-1-3-
L, to the extent necessary to reduce the
Component I-A-1-3-L Principal Balance to
its Targeted Principal Balance for such
Distribution Date;
(x) third, to the Class I-A-9-L
Regular Interests, until the Class I-A-9-
L Principal Balance has been reduced to
zero;
(y) fourth, to the Class I-A-8-L
Regular Interests and the Segment T
Group (in accordance with the Priority
Rule), pro rata, until the Class I-A-8-L
Principal Balance and the Segment T
Principal Balance have been reduced to
zero; and
(z) fifth, to Component I-A-1-3-L,
until the Component I-A-1-3-L Principal
Balance has been reduced to zero; and
(4) fourth, sequentially, to the 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 Regular Interests and
Component I-A-1-2-L, in that order, until their
respective Class or Component Principal Balances
have each been reduced to zero;
(b) 34.9999998350%, sequentially, as follows:
(1) first, to the Class I-A-16-L and Class I-
A-23-L Regular Interests, pro rata, an amount, up
to the amount of the Group I Lockout Priority
Amount for such Distribution Date, until the Class
Principal
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<PAGE>
Balances of the Class I-A-16-L and Class I-A-23-L
Regular Interests have each been reduced to zero;
(2) second, concurrently, until the Class I-
A-11-L Principal Balance has been reduced to zero,
as follows:
(A) 60.6589684588%, sequentially as follows
(x) first, sequentially, to the
Class R-2 Certificates and the Class R-3-
L Regular Interests, in that order,
until the Class Principal Balances
thereof have been reduced to zero; and
(y) second, to the Class I-A-11-L
Regular Interests; and
(B) 39.3410315412%, sequentially, as
follows:
(t) first, to the Class I-A-20-L
Regular Interests and the Segment P
Group (in accordance with the Priority
Rule), pro rata, to the extent necessary
to reduce the Class I-A-20-L Principal
Balance and the Segment P Principal
Balance to their respective Planned
Principal Balances for such Distribution
Date;
(u) second, to the Class I-A-17-L
Regular Interests, to the extent
necessary to reduce the Class I-A-17-L
Principal Balance to its Planned
Principal Balance for such Distribution
Date;
(v) third, to the Class I-A-15-L
Regular Interests and Component I-A-21-1-
L, pro rata, to the extent necessary to
reduce the Class I-A-15-L Principal
Balance and the Component I-A-21-1-L
Principal Balance to their respective
Targeted Principal Balances for such
Distribution Date;
(w) fourth, to the Class I-A-18-L
Regular Interests, until the Class I-A-
18-L Principal Balance has been reduced
to zero;
(x) fifth, to the Class I-A-15-L
Regular Interests and Component I-A-21-1-
L, pro rata, until the Class I-A-15-L
Principal Balance and the Component I-A-
21-1-L Principal Balance have each been
reduced to zero;
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<PAGE>
(y) sixth, to the Class I-A-20-L
Regular Interests and the Segment P
Group (in accordance with the Priority
Rule), pro rata, until the Class I-A-20-
L Principal Balance and the Segment P
Principal Balance have each been reduced
to zero; and
(z) seventh, to the Class I-A-17-L
Regular Interests, until the Class I-A-
17-L Principal Balance has been reduced
to zero;
(3) third, concurrently, until the Component
I-A-21-2-L Principal Balance has been reduced to
zero, as follows:
(A) 3.5714311771%, to Component I-A-21-
2-L; and
(B) 96.4285688229%, sequentially, as
follows:
(x) first, to the Class I-A-13-L
Regular Interests, until the Class I-A-
13-L Principal Balance has been reduced
to zero; and
(y) second, to the Class I-A-14-L
Regular Interests, until the Class I-A-
14-L Principal Balance has been reduced
to zero; and
(4) fourth, to the Class I-A-16-L and Class
I-A-23-L Regular Interests, pro rata, until the
Class Principal Balances of the Class I-A-16-L and
Class I-A-23-L Regular Interests have each been
reduced to zero;
(v) fifth, to Component I-A-1-6-L, 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 Component I-A-1-6-L on previous
Distribution Dates pursuant to clause (I)(a)(vi) of this
definition of "REMIC II Distribution Amount" and remaining
unpaid from such previous Distribution Dates;
(vi) sixth, to Component I-A-1-6-L, 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 I-PO Fraction of any Realized Loss on a
I-PO 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 II Distribution Amount" shall not cause
a further reduction in the Component I-A-1-6-L Principal
Balance;
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(vii) seventh, to the Class I-B-1-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests remaining unpaid from previous
Distribution Dates;
(viii) eighth, to the Class I-B-1-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests for the current Distribution Date;
(ix) ninth, to the Class I-B-1-L Regular Interests, the
portion of the Group I Subordinate Principal Distribution
Amount allocable to such Class of Regular Interests pursuant
to the definition of "Group I Subordinate Principal
Distribution Amount", until the Class I-B-1-L Principal
Balance has been reduced to zero;
(x) tenth, to the Class I-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular
Interests remaining unpaid from previous Distribution Dates;
(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;
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<PAGE>
(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;
(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 II 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 II 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-2 Certificates,
the Residual Distribution Amount for the Group I-L Regular
Interests for such Distribution Date;
(b) With respect to the Group II-L Regular Interests, on any
Distribution Date prior to the Combined Credit Support Depletion
Date, to the extent of the REMIC II Available Distribution Amount
for the Group II-L Regular Interests remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Group II-A-L Regular Interests
entitled to interest and the 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;
(ii) second, to the Group II-A-L Regular Interests
entitled to interest and the Class II-X-L Regular Interests,
concurrently, the sum of the Interest Distribution Amounts
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<PAGE>
for such Classes of Regular Interests for the current
Distribution Date, pro rata according to their respective
Interest Distribution Amounts; and
(iii) third, to the Group II-A-L Regular Interests,
as principal, the Group II Senior Principal Distribution
Amount, as follows:
(a) first, to the Class II-A-5-L Regular
Interests and Component II-A-4-1-L, pro rata, an
amount, up to the amount of the Group II Lockout
Priority Amount for such Distribution Date, until the
Class II-A-5-L Principal Balance and the Component II-A-
4-1-L Principal Balance have each been reduced to zero;
(b) second, concurrently, until the Component II-
A-4-2-L Principal Balance has been reduced to zero;
(1) 3.7037040046% to Component II-A-4-2-L;
and
(2) 96.2962959954%, sequentially, as
follows:
(A) first, concurrently, until the
Class II-A-1-L Principal Balance has been
reduced to zero, as follows:
(x) 48.9783010309%, to the Class
II-A-1-L Regular Interests; and
(y) 51.0216989691%, to the Class
II-A-9-L Regular Interests;
(B) second, concurrently, until the
Class II-A-2-L Principal Balance and the
Class II-A-9-L Principal Balance have each
been reduced to zero, as follows;
(x) 57.9940000000%, to the Class
II-A-2-L Regular Interests; and
(y) 42.0060000000%, to the Class
II-A-9-L Regular Interests;
(C) third, to the Class II-A-3-L
Regular Interests until the Class II-A-3-L
Principal Balance has been reduced to zero;
(D) fourth, to the Class II-A-6-L
Regular Interests until the Class II-A-6-L
Principal Balance has been reduced to zero;
(E) fifth, to the Class II-A-11-L and
Class II-A-12-L Regular Interests, pro rata,
until the Class II-A-11-L and Class II-A-12-L
Principal Balance have each been reduced to
zero;
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<PAGE>
(F) sixth, to the Class II-A-7-L
Regular Interests, until the Class II-A-7-L
Principal Balance has been reduced to zero;
and
(G) seventh, to the Class II-A-8-L and
Class II-A-13-L Regular Interests, pro rata,
until the Class II-A-8-L and Class II-A-13-L
Principal Balance have each been reduced to
zero; and
(c) third, to the Class II-A-5-L Regular
Interests and Component II-A-4-1-L, pro rata, until the
Class II-A-5-L Principal Balance and the Component II-A-
4-1-L Principal Balance have each been reduced to zero;
(c) With respect to the Group III-L Regular Interests, on
any Distribution Date prior to the Combined Credit Support
Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Group III-L Regular Interests
remaining following prior distributions, if any, on such
Distribution Date:
(i) first, to the Class III-P-L Regular Interests, the
aggregate for all Class III-P Mortgage Loans of the product
for each Class III-P Mortgage Loan of the applicable Class
III-P Fraction and the sum of (x) scheduled payments of
principal on such Class III-P Mortgage Loan due on or before
the related Due Date in respect of which no distribution has
been made on any previous Distribution Date and which were
received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to
such Distribution Date, (y) the principal portion received
in respect of such Class III-P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds,
(3) the amount, if any, of the principal portion of the
Purchase Price paid pursuant to a Purchase Obligation or any
repurchase of a Mortgage Loan permitted hereunder and (4)
Liquidation Proceeds and (z) the principal portion of
Payoffs received in respect of such Class III-P Mortgage
Loan during the Payoff Period;
(ii) second, to the Class III-A-1-L and Class III-X-L
Regular Interests, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests remaining
unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
(iii) third, to the Class III-A-1-L and Class III-X-
L Regular Interests, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Regular Interests
for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts; and
(iv) fourth, to the Class III-A-1-L Regular Interests,
as principal, the Group III Senior Principal Distribution
Amount;
(d) With respect to the Group IV-L Regular Interests, on
any Distribution Date prior to the Combined Credit Support
Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Group IV-L Regular Interests
remaining following prior distributions, if any, on such
Distribution Date:
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<PAGE>
(i) first, to the Class IV-A-1-L and Class IV-X-L
Regular Interests, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests remaining
unpaid from previous Distribution Dates, pro rata according
to their respective shares of such unpaid amounts;
(ii) second, to the Class IV-A-1-L and Class IV-X-L
Regular Interests, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Regular Interests
for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts; and
(iii) third, to the Class IV-A-1-L Regular
Interests, as principal, the Group IV Senior Principal
Distribution Amount;
(e) With respect to the Group C-B-L and Class III-P-L
Regular Interests and the Class R-2 Certificates, on any
Distribution Date prior to the Combined Credit Support Depletion
Date and subject to the payment of the amounts pursuant to
paragraph (I)(b), paragraph (I)(c) and paragraph (I)(d) of this
definition of "REMIC II Distribution Amount", and to the extent
of the REMIC II Available Distribution Amounts for the Group II-
L, Group III-L and Group IV-L Regular Interests remaining
following prior distributions, if any, on such Distribution Date:
(i) first, to the Class III-P-L Regular Interests, to
the extent of amounts otherwise available to pay the Group C-
B Subordinate Principal Distribution Amount (without regard
to clause (B) of the definition thereof) on such
Distribution Date, the amount payable to the Class III-P-L
Regular Interests on previous Distribution Dates pursuant to
clause (I)(e)(ii) of this definition of "REMIC II
Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(ii) second, to the Class III-P-L Regular Interests, to
the extent of amounts otherwise available to pay the Group C-
B Subordinate Principal Distribution Amount (without regard
to clause (B) of the definition thereof) on such
Distribution Date, an amount equal to the Class III-P
Fraction, as applicable, of any Realized Loss on a Class III-
P Mortgage Loan, other than a Special Hazard Loss in excess
of the Combined Special Hazard Coverage, a Fraud Loss in
excess of the Combined Fraud Coverage or a Bankruptcy Loss
in excess of the Combined Bankruptcy Coverage, provided that
any amounts distributed in respect of losses pursuant to
paragraph (I)(e)(i) or this paragraph (I)(e)(ii) of this
definition of "REMIC II Distribution Amount" shall not cause
a further reduction in the Class III-P-L Principal Balance;
(iii) third, to the Class C-B-1-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests remaining unpaid from previous
Distribution Dates;
(iv) fourth, to the Class C-B-1-L Regular Interests,
the Interest Distribution Amount for such Class of Regular
Interests for the current Distribution Date;
(v) fifth, to the Class C-B-1-L Regular Interests, the
portion of the Group C-B Subordinate Principal Distribution
Amount allocable to such Class of Regular Interests
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<PAGE>
pursuant to the definition of "Group C-B Subordinate
Principal Distribution Amount", until the Class C-B-1-L
Principal Balance has been reduced to zero;
(vi) sixth, to the Class C-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular
Interests remaining unpaid from previous Distribution Dates;
(vii) seventh, to the Class C-B-2-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests for the current Distribution Date;
(viii) eighth, to the Class C-B-2-L Regular
Interests, the portion of the Group C-B Subordinate
Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class
C-B-2-L Principal Balance has been reduced to zero;
(ix) ninth, to the Class C-B-3-L Regular Interests, the
Interest Distribution Amount for such Class of Regular
Interests remaining unpaid from previous Distribution Dates;
(x) tenth, to the Class C-B-3-L Regular Interests, the
Interest Distribution Amount for such Class of Regular
Interests for the current Distribution Date;
(xi) eleventh, to the Class C-B-3-L Regular Interests,
the portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of Regular
Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class
C-B-3-L Principal Balance has been reduced to zero;
(xii) twelfth, to the Class C-B-4-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests remaining unpaid from previous
Distribution Dates;
(xiii) thirteenth, to the Class C-B-4-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests for the current Distribution Date;
(xiv) fourteenth, to the Class C-B-4-L Regular
Interests, the portion of the Group C-B Subordinate
Principal Distribution Amount allocable to such Class of
Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class
C-B-4-L Principal Balance has been reduced to zero;
(xv) fifteenth, to the Class C-B-5-L Regular Interests,
the Interest Distribution Amount for such Class of Regular
Interests remaining unpaid from previous Distribution Dates;
(xvi) sixteenth, to the Class C-B-5-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests for the current Distribution Date;
(xvii) seventeenth, to the Class C-B-5-L Regular
Interests, the portion of the Group C-B Subordinate
Principal Distribution Amount allocable to such Class of
Regular
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<PAGE>
Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class
C-B-5-L Principal Balance has been reduced to zero;
(xviii) eighteenth, to the Class C-B-6-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests remaining unpaid from previous
Distribution Dates;
(xix) nineteenth, to the Class C-B-6-L Regular
Interests, the Interest Distribution Amount for such Class
of Regular Interests for the current Distribution Date;
(xx) twentieth, to the Class C-B-6-L Regular Interests,
the portion of the Group C-B Subordinate Principal
Distribution Amount allocable to such Class of Regular
Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class
C-B-6-L Principal Balance has been reduced to zero;
(xxi) twenty-first, to each Class of Group C-B-L
Regular Interests in the order of seniority, the remaining
portion, if any, of the REMIC II Available Distribution
Amount for the Group II-L, Group III-L and Group IV-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)(e)(xxi) of this definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the Class
Principal Balances of the Group C-B-L Regular Interests; and
(xxii) twenty-second, to the Class R-2 Certificates,
the Residual Distribution Amount for the Group II-L, Group
III-L and Group IV-L Regular Interests for such Distribution
Date;
Notwithstanding the foregoing paragraph (I) of this
definition of "REMIC II Distribution Amount,"
(X) on any Distribution Date occurring on or after
the date on which the aggregate Class Principal Balance of one or
more of the Group II-A-L Regular Interests, the Class III-A-1-L
Regular Interests or the Class IV-A-1-L Regular Interests have
been reduced to zero, the remaining Class A-L Regular Interests
of the other Regular Interest Group or Groups will be entitled to
receive as principal, in addition to any principal payments
otherwise described above, all amounts in respect of principal on
the Mortgage Loans in the Loan Group relating to the Class A-L
Regular Interests that have been paid in full (after
distributions of principal to the Class III-P-L Regular Interests
pursuant to paragraph (I)(c)(i) above, if applicable), which
amounts will be paid in accordance with paragraphs (I)(b)(iii),
(I)(c)(iv) or (I)(d)(iii) above, as applicable, to the extent of
and in reduction of the Class Principal Balances thereof, prior
to any distributions of principal to the Group C-B-L Regular
Interests in paragraph (I)(e) above, provided, however, that if
there are two Regular Interest Groups with outstanding Class A-L
Regular Interests, then such principal will be distributed
between those Class A-L Regular Interests pro rata according to
Class Principal Balance, provided, further, that principal will
not be distributed as set forth above if on such Distribution
Date (a) the Group C-B Percentage for such Distribution Date is
greater than or equal to 200% of the Group C-B Percentage as of
the Closing Date and (b) the average outstanding principal
balance of the Mortgage Loans in any of Loan Group II, Loan Group
III or Loan Group IV delinquent 60 days or more over the last
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six months (including Mortgage Loans in foreclosure and Mortgage
Loans the property of which is held by REMIC I and acquired by
foreclosure or deed in lieu of foreclosure), as a percentage of
the related Group C-B Component Balance, is less than 50%, and
(Y) if on any Distribution Date any of Loan Group II,
Loan Group III or Loan Group IV is an Undercollateralized Group
and the other Loan Group or Groups is an Overcollateralized
Group, then the REMIC II Available Distribution Amount of the
Overcollateralized Group or Groups, to the extent remaining after
distributions to the Class X-L Regular Interests and the Class A-
L Regular Interests of the Overcollateralized Group or Groups and
the Class III-P-L Regular Interests (if applicable) pursuant to
paragraph (I)(b), paragraph (I)(c) or paragraph (I)(d), as
applicable, will be paid in the following priority: (i) an amount
equal to the Interest Transfer Amount will be paid to the
Undercollateralized Group or Groups and (ii) an amount equal to
the Principal Transfer Amount will be paid to the
Undercollateralized Group or Groups, and (iii) any remaining
amounts will be distributed pursuant to paragraph (I)(e) of this
definition of "REMIC II Distribution Amount"; provided that (i)
if there is exactly one Undercollateralized Group, then it will
receive the Interest Transfer Amount and the Principal Transfer
Amount, as applicable, from the Overcollateralized Groups pro
rata, according to the remaining REMIC II Available Distribution
Amount of the two Overcollateralized Groups and (ii) if there are
two Undercollateralized Groups and the remaining REMIC II
Available Distribution Amount for the Overcollateralized Group is
insufficient to pay the Interest Transfer Amounts and Principal
Transfer Amounts to both such Undercollateralized Groups, then
the remaining REMIC II Available Distribution Amount for the
Overcollateralized Group will be paid to the Undercollateralized
Groups, pro rata, according to their respective Interest Transfer
Amounts and Principal Transfer Amounts.
(II) For any Distribution Date on or after the Group I
Credit Support Depletion Date or the Combined Credit Support
Depletion Date, as applicable, the REMIC II Available
Distribution Amount shall be distributed to the outstanding
Classes of REMIC II Regular Interests and the Class R-2
Certificates in the following amounts and priority:
(a) With respect to the Group I-L Regular Interests and the
Class R-2 Certificates, on each Distribution Date on or after the
Group I Credit Support Depletion Date, to the extent of the REMIC
II Available Distribution Amount for the Group I-L Regular
Interests remaining following prior distributions, if any, on
such Distribution Date:
(i) first, to Component I-A-1-6-L, principal in the
amount that would otherwise be distributed to such Component
on such Distribution Date pursuant to clause (I)(a)(i) of
this definition of "REMIC II Distribution Amount";
(ii) second, to the Group I-A-L Regular Interests
entitled to interest, the Class R-3-L and Class I-X-L
Regular Interests and the Class R-2 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 II
Distribution Amount", and remaining unpaid, pro rata
according to such amount payable to the extent of amounts
available;
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<PAGE>
(iii) third, to the Group I-A-L Regular Interests
entitled to interest, the Class R-3-L and Class I-X-L
Regular Interests and the Class R-2 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-1-L (other than Component
I-A-1-6-L of the Class I-A-1-L Regular Interests) and Class
R-3-L Regular Interests and the Class R-2 Certificates, pro
rata, the Group I Senior Principal Distribution Amount; and
(v) fifth, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I-L Regular Interests for
such Distribution Date;
(b) With respect to the Group II-L Regular Interests and
the Class R-2 Certificates, on each Distribution Date on or after
the Combined Credit Support Depletion Date, to the extent of the
REMIC II Available Distribution Amount for the Group II-L Regular
Interests remaining following prior distributions, if any, on
such Distribution Date:
(i) first, to the Group II-A-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)(i) or (II)(b)(ii) of this definition of "REMIC
II Distribution Amount", and remaining unpaid, pro rata
according to such amount;
(ii) second, to the Group II-A-L Regular Interests
entitled to interest and the 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;
(iii) third, to the Group II-A-L Regular Interests,
pro rata, the Group II Senior Principal Distribution Amount;
and
(iv) fourth, to the Class R-2 Certificates, the
Residual Distribution Amount for the Group II-L Regular
Interests for such Distribution Date;
(c) With respect to the Group III-L Regular Interests and
the Class R-2 Certificates, on each Distribution Date on or after
the Combined Credit Support Depletion Date, to the extent of the
REMIC II Available Distribution Amount for the Group III-L
Regular Interests remaining following prior distributions, if
any, on such Distribution Date:
(i) first, to the Class III-P-L Regular Interests,
principal in the amount that would otherwise be distributed
to such Class on such Distribution Date pursuant to clause
(I)(c)(i) of this definition of "REMIC II Distribution
Amount";
(ii) second, to the Class III-A-1-L and Class III-X-L
Regular Interests, the amount payable to each such Class of
Regular Interests on prior Distribution Dates pursuant to
clause (I)(c)(ii) or (II)(c)(iii) of this definition of
"REMIC II Distribution
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<PAGE>
Amount", and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
(iii) third, to the Class III-A-1-L and Class III-X-
L Regular Interests, the Interest Distribution Amount for
such Class of Regular Interests for the current Distribution
Date, pro rata according to their respective Interest
Distribution Amounts;
(iv) fourth, to the Class III-A-1-L Regular Interests,
the Group III Senior Principal Distribution Amount; and
(v) fifth, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group III-L Regular Interests
for such Distribution Date.
(d) With respect to the Group IV-L Regular Interests and
the Class R-2 Certificates, on each Distribution Date on or after
the Combined Credit Support Depletion Date, to the extent of the
REMIC II Available Distribution Amount for the Group IV-L Regular
Interests remaining following prior distributions, if any, on
such Distribution Date:
(i) first, to the Class IV-A-1-L and Class IV-X-L
Regular Interests, the amount payable to each such Class of
Regular Interests on prior Distribution Dates pursuant to
clause (I)(d)(i) or (II)(d)(ii) of this definition of "REMIC
II Distribution Amount", and remaining unpaid, pro rata
according to such amount payable to the extent of amounts
available;
(ii) second, to the Class IV-A-1-L and Class IV-X-L
Regular Interests, the Interest Distribution Amount for such
Class of Regular Interests for the current Distribution
Date, pro rata according to their respective Interest
Distribution Amounts;
(iii) third, to the Class IV-A-1-L Regular
Interests, the Group IV Senior Principal Distribution
Amount; and
(iv) fourth, to the Class R-2 Certificates, the
Residual Distribution Amount for the Group IV-L Regular
Interests for such Distribution Date.
Notwithstanding the foregoing paragraph (II) of this
definition of "REMIC II Distribution Amount" and prior to
distributions pursuant to paragraph (II)(b)(iv), (II)(c)(v) or
(II)(d)(iv), if on any Distribution Date any of Loan Group II,
Loan Group III or Loan Group IV is an Undercollateralized Group
and the other Loan Group or Groups are an Overcollateralized
Group, then the REMIC II Available Distribution Amount of the
Overcollateralized Group or Groups, to the extent any such
amounts are remaining after distributions to the Class X-L and
Class A-L Regular Interests of the Overcollateralized Group and
the Class III-P-L Regular Interests, if applicable, pursuant to
paragraphs (II)(b), (II)(c) or (II)(d), as applicable, will be
paid in the following priority: (i) an amount equal to the
Interest Transfer Amount will be paid to the Undercollateralized
Group or Groups and (ii) an amount equal to the Principal
Transfer Amount will be paid to the Undercollateralized Group or
Groups; provided that (i) if there is exactly one
Undercollateralized Group, then it will receive the Interest
Transfer Amount and the Principal Transfer Amount, as applicable,
from the Overcollateralized Groups pro rata, according to the
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remaining REMIC II Available Distribution Amount of the two
Overcollateralized Groups and (ii) if there are two
Undercollateralized Groups and the remaining REMIC II Available
Distribution Amount for the Overcollateralized Group is
insufficient to pay the Interest Transfer Amounts and Principal
Transfer Amounts to both such Undercollateralized Groups, then
the remaining REMIC II Available Distribution Amount for the
Overcollateralized Group will be paid to the Undercollateralized
Groups, pro rata, according to their respective Interest and
Principal Transfer Amounts.
REMIC II Regular Interest: The Classes of Regular Interests
--------------------------
in the REMIC II Trust Fund designated as "regular interests" in
the table titled "REMIC II Trust Fund" in the Preliminary
Statement hereto.
REMIC II Trust Fund: The REMIC II Trust Fund created
----------------------
pursuant to Section 2.05 of this Agreement. The REMIC II Trust
Fund consists of the REMIC I Regular Interests to be held by the
Trustee for the benefit of the Holders from time to time of the
REMIC II Regular Interests and the Class R-2 Certificates issued
hereunder.
REMIC III: The segregated pool of assets consisting of the
----------
REMIC II Regular Interests conveyed in trust to the Trustee for
the benefit of the Certificateholders (other than the Class R-1
and Class R-2 Certificateholders) pursuant to Section 2.07, with
respect to which a separate REMIC election is to be made.
REMIC III 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. With respect to the
Group III Certificates, on any Distribution Date, the aggregate
of all distributions with respect to the Group III-L Regular
Interests. With respect to the Group IV Certificates, on any
Distribution Date, the aggregate of all distributions with
respect to the Group IV-L Regular Interests. With respect to the
Group C-B Certificates, on any Distribution Date, the aggregate
of all distributions with respect to the Group C-B-L Regular
Interests.
REMIC III Distribution Amount: The REMIC III Available
-------------------------------
Distribution Amount shall be distributed to the Certificates
(other than the Class R-1 and Class R-2 Certificates) in the
following amounts and priority:
(a) With respect to the Group I and Class R-3
Certificates, to the extent of the REMIC III Available
Distribution Amount for the Group I Certificates:
(i) to the Class R-3 Certificates and each Class of Group I
Certificates other than 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-10, Class I-A-17, Class I-A-22 and Class I-A-24
Certificates, the amounts distributed to its Corresponding Class
on such Distribution Date;
(ii) to each of Component I-A-1-3, Component I-A-1-4, Component
I-A-1-5 and Component I-A-1-6, the amounts distributed to its
Corresponding Component on such Distribution Date;
94
<PAGE>
(iii) (A) to the 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 and
Class I-A-17 Certificates, the amounts paid as principal to
its Corresponding Class for such Distribution Date and (B) to
Component I-A-1-2, the amounts paid as principal to its
Corresponding Component for such Distribution Date;
(iv) to the 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-10, Class
I-A-17 and Class I-A-22 Certificates and Component I-A-1-1
and Component I-A-1-2, the amount distributed as interest to
the 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 and Class I-A-17-L
Regular Interests and Component I-A-1-2-L, concurrently, as
follows: (I) to each of the Class I-A-2, Class I-A-3, Class
I-A-4, Class I-A-5, Class I-A-6 and Class I-A-7 Certificates
and Component I-A-1-2, an amount equal to the product of 1/12
of the Remittance Rate for such Class or Component and the
Class or Component Principal Balance (before allocating
Realized Losses of principal and giving effect to distributions
of principal, in each case, on such Distribution Date); (II)
to the Class I-A-10 Certificates, an amount equal to the
product of 1/12 of the Class I-A-10 Remittance Rate and the
Class I-A-10 Notional Amount; (III) to Component I-A-1-1, an
amount equal to the product of 1/12 of the Component I-A-1-1
Remittance Rate and the Component I-A-1-1 Notional Amount; (IV)
to the Class I-A-22 Certificates, an amount equal to the product
of 1/12 of the Class I-A-22-2 Remittance Rate and the Class I-A-
22-2 Notional Amount; (V) to the Class I-A-17 Certificates, an
amount equal to the product of 1/12 of the Remittance Rate for
such Class and the Class I-A-17 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such Distribution
Date);
(v) to the Class I-A-8 and Class I-A-24 Certificates,
the amount distributed as interest to the Class I-A-8-L
Regular Interests for such Distribution Date, concurrently,
as follows: (I) to the Class I-A-8 Certificates, an amount
equal to the product of 1/12 of the Remittance Rate for such
Class and the Class I-A-8 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such
Distribution Date); (II) to the Class I-A-24 Certificates,
an amount equal to the product of 1/12 of the Class I-A-24
Remittance Rate and the Class I-A-24 Notional Amount;
(vi) to the Class R-3 Certificates, the applicable
Residual Distribution Amount, if any.
(b) With respect to the Group II and Class R-3
Certificates, to the extent of the REMIC III Available
Distribution Amount for the Group II Certificates:
(i) to each Class of Group II Certificates other than the Class
II-A-4, Class II-A-9 and Class II-A-10 Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date,
and to each of Component II-A-4-1 and Component II-A-4-2, the
amounts distributed to its Corresponding Components for such
Distribution Date; and
(ii) (A) to the Class II-A-9 Certificates, the amounts
distributed as principal to its Corresponding Class on such
Distribution Date and (B) to the Class II-A-9 and Class
95
<PAGE>
II-A-10 Certificates, the amount distributed as interest to the
Class II-A-9-L Regular Interests on such Distribution Date
concurrently as follows: (I) to the Class II-A-9 Certificates,
an amount equal to the product of 1/12 of the Class II-A-9
Remittance Rate and the Class II-A-9 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 II-A-10 Certificates, an amount
equal to the product of 1/12 of the Class II-A-10 Remittance
Rate and the Class II-A-10 Notional Amount;
(c) With respect to the Group III Certificates, to the extent of
the REMIC III Available Distribution Amount for the Group III
Certificates, to each Class of Group III Certificates, the
amounts distributed to its Corresponding Class on such
Distribution Date.
(d) With respect to the Group IV Certificates, to the
extent of the REMIC III Available Distribution Amount for the
Group IV Certificates, to each Class of Group IV Certificates,
the amounts distributed to its Corresponding Class on such
Distribution Date.
(e) With respect to the Group C-B and Class R-3
Certificates, to the extent of the REMIC III Available
Distribution Amount for the Group C-B Certificates:
(i) to each Class of Group C-B Certificates, the
amounts distributed to its Corresponding Class on such
Distribution Date; and
(ii) to the Class R-3 Certificates, the applicable Residual
Distribution Amount, if any.
In each case where a distribution is required to be made
concurrently to two or more Classes of Certificates pursuant to
this definition of "REMIC III Distribution Amount", if the
portion of the REMIC III Available Distribution Amount from which
such deemed distribution is required to be made is insufficient
to make such distribution in full to such Classes of
Certificates, such distribution shall be allocated between such
Classes of Certificates pro rata according to the respective
amounts to which they are otherwise entitled from such
distribution.
REMIC III Trust Fund: The REMIC III Trust Fund created
-----------------------
pursuant to Section 2.07 of this Agreement. The REMIC III Trust
Fund consists of the REMIC II Regular Interests to be held by the
Trustee for the benefit of the Holders from time to time of the
Certificates issued hereunder (other than the Class R-1 and Class
R-2 Certificates).
Remittance Rate: For each Class or Component of
-----------------
Certificates, REMIC I Regular Interests and REMIC II Regular
Interests, the per annum rate set forth as the Remittance Rate
for such Class in the Preliminary Statement hereto.
Residual Certificates: With respect to REMIC I, the Class R-
---------------------
1 Certificates, which are being issued in a single class, with
respect to REMIC II, the Class R-2 Certificates, which are being
issued in a single class and with respect to REMIC III, the Class
R-3 Certificates, which are being issued in a single class. The
Class R-1, Class R-2 and Class R-3 Certificates are hereby
designated the sole Class of "residual interests" in REMIC I,
REMIC II and REMIC III, respectively, for purposes of Section
860G(a)(2) of the Code.
96
<PAGE>
Residual Distribution Amount: On any Distribution Date, with
----------------------------
respect to the Class R-1 Certificates, any portion of the REMIC I
Available Distribution Amount remaining after all distributions
to the REMIC I Regular Interests and Class R-1 Certificates
pursuant to clauses (a)(i) through (a)(v), (b)(i) through
(b)(iii), (c)(i) through (c)(iv) or (d)(i) through (d)(iii), as
applicable, of the definition of "REMIC I Distribution Amount",
with respect to the Class R-2 Certificates, any portion of the
REMIC II Available Distribution Amount remaining after all
distributions to the REMIC II Regular Interests and the Class R-2
Certificates pursuant to clauses (I)(a)(i) through (I)(a)(xxv),
(I)(d)(i) through (I)(d)(xxi), (II)(a)(i) through (II)(a)(iv),
(II)(b)(i) through (II)(b)(iii), (II)(c)(i) through (II)(c)(iv)
or (II)(d)(i) through (II)(d)(iii), as applicable, of the
definition of "REMIC II Distribution Amount" and with respect to
the Class R-3 Certificates, any portion of the REMIC III
Available Distribution Amount remaining after all distributions
to the Certificates pursuant to clauses (a)(i) through (a)(vi) or
(e)(i) of the definition of "REMIC III Distribution Amount". Upon
termination of the obligations created by this Agreement and the
REMIC I Trust Fund, the REMIC II Trust Fund and the REMIC III
Trust Fund created hereby, the amounts which remain on deposit in
the Certificate Account after payment to the Holders of the REMIC
I Regular Interests of the amounts set forth in Section 9.01 of
this Agreement, and subject to the conditions set forth therein,
shall be distributed to the Class R-1, Class R-2 and Class R-3
Certificates in accordance with the preceding sentence of this
definition as if the date of such distribution were a
Distribution Date.
Responsible Officer: When used with respect to the Trustee,
-------------------
any officer assigned to and working in its Corporate Trust
Department or similar group and also, with respect to a
particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity
with the particular subject.
S&P: Standard & Poor's Ratings Services, a division of The
---
McGraw-Hill Companies, Inc., provided that at any time it be a
Rating Agency.
Securities Act: The Securities Act of 1933, as amended.
--------------
Security Agreement: With respect to a Cooperative Loan, the
------------------
agreement or mortgage creating a security interest in favor of
the originator of the Cooperative Loan in the related Cooperative
Stock.
Segment P Group: The Class II-A-12-L and Class II-A-19-L
-----------------
Regular Interests.
Segment P Principal Balance: With respect to any
--------------------------------
Distribution Date, an amount equal to $5,009,579 minus the sum of
(i) the aggregate amount distributed to the Segment P Group prior
to such Distribution Date and (ii) the aggregate amount of
Realized Losses allocated to the Segment P Group prior to such
Distribution Date. The amount of Realized Losses allocated to
the Segment P Group on each Distribution Date will equal the
product of (x) the aggregate amount of Realized Losses allocable
to principal allocated to the Class I-A-12-L and Class I-A-19-L
Regular Interests on such Distribution Date and (y) a fraction,
the numerator of which is the Segment P Principal Balance and the
denominator of which is the sum of the Segment T Principal
Balance and the Segment P Principal Balance, in each case
immediately prior to such Distribution Date.
97
<PAGE>
Segment T Group: The Class II-A-12-L and Class II-A-19-L
-----------------
Regular Interests.
Segment T Principal Balance: With respect to any
--------------------------------
Distribution Date, an amount equal to $13,093,213 minus the sum
of (i) the aggregate amount distributed to the Segment T Group
prior to such Distribution Date and (ii) the aggregate amount of
Realized Losses allocated to the Segment T Group prior to such
Distribution Date. The amount of Realized Losses allocated to
the Segment T Group on each Distribution Date will equal the
product of (x) the aggregate amount of Realized Losses allocated
to the Class I-A-12-L and Class I-A-19-L Regular Interests on
such Distribution Date and (y) a fraction, the numerator of which
is the Segment T Principal Balance and the denominator of which
is the sum of the Segment T Principal Balance and the Segment P
Principal Balance, in each case immediately prior to such
Distribution Date.
Selling and Servicing Contract: (a) The contract (including
-------------------------------
the PNC Mortgage Securities Corp. Selling Guide and PNC Mortgage
Securities Corp. Servicing Guide to the extent incorporated by
reference therein) between the Company and a Person relating to
the sale of the Mortgage Loans to the Company and the servicing
of such Mortgage Loans for the benefit of the Certificateholders,
which contract is substantially in the form of Exhibit E hereto,
as such contract may be amended or modified from time to time;
provided, however, that any such amendment or modification shall
not materially adversely affect the interests and rights of
Certificateholders and (b) any other similar contract providing
substantially similar rights and benefits as those provided by
the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Group I Senior Certificates, the
--------------------
Group II Certificates, the Group III Certificates, the Group IV
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, $5,760,106 and with respect to and Loan Group II, Loan
Group III and Loan Group IV, $3,659,378.
Special Hazard Loss: The occurrence of any direct physical
--------------------
loss or damage to a Mortgaged
98
<PAGE>
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 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> <C>
August 1998 through July 2003 0%
August 2003 through July 2004 30%
August 2004 through July 2005 40%
August 2005 through July 2006 60%
August 2006 through July 2007 80%
August 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
6.750%. For each Group II Loan, the excess, if any, of the Pass-
Through Rate for such Mortgage Loan over 6.500%. For each Group
III Loan, the excess, if any, of the Pass-Through Rate for such
Mortgage Loan over 7.000%. For each Group IV Loan, the excess, if
any, of the Pass-Through Rate for such Mortgage Loan over 6.750%.
Subordinate Certificates: The Group I-B and Group C-B
-------------------------
Certificates.
Subordinate Percentage: The Group I Subordinate Percentage,
----------------------
the Group II Subordinate Percentage, the Group III Subordinate
Percentage and the Group IV Subordinate Percentage, as
applicable.
Subordination Level: On any specified date, with respect to
-------------------
any of the Group C-B-L Regular Interests, the percentage obtained
by dividing the sum of the Class Principal Balances of the
Classes of REMIC II Regular Interests which are subordinate in
right of payment to such Class
99
<PAGE>
(provided that no Class of Group C-B-L Regular Interests shall be
subordinate in right of payment to the Class C-B-6-L Regular
Interests) by the aggregate Class Principal Balances of the
Group II-L, Group III-L, Group IV-L and Group C-B-L Regular
Interests as of such date prior to giving effect to distri-
butions of principal or interest or allocations of Realized Losses
on the Group II Loans, the Group III Loans and the Group IV Loans
on such date. 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
applicable, 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.
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.
Targeted Principal Balance: The respective amounts set forth
--------------------------
in the table attached as Appendix B to the Prospectus, for the
applicable Distribution Date, for each of the Class I-A-8 and
Class I-A-15 Certificates and for Component I-A-1-3, Component I-
A-21-1 and the Segment T Group, which amounts shall also
constitute the "Targeted Principal Balance" for the Corresponding
Classes and Corresponding Components, respectively.
Tax Matters Person: A Holder of the Class R-1 Certificate,
--------------------
with respect to REMIC I, a Holder of the Class R-2 Certificate,
with respect to REMIC II and a holder of the Class R-3
Certificate with respect to REMIC III, in each case holding a
Certificate having an Authorized Denomination of at least 0.01%
or any Permitted Transferee of such Class R-1, Class R-2 or Class
R-3 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, Class R-2 or Class R-
3 Certificate. If the Tax Matters Person for REMIC I, REMIC II or
REMIC III becomes a Disqualified Organization, the last preceding
Holder of such Authorized Denomination of the Class R-1, Class R-
2 or Class R-3 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.
100
<PAGE>
Transferee Affidavit and Agreement: An affidavit and
--------------------------------------
agreement in the form attached hereto as Exhibit J.
Trustee: U.S. Bank National Association, or its successor-in-
-------
interest as provided in Section 8.09, or any successor trustee
appointed as herein provided.
Uncollected Interest: With respect to any Distribution Date
--------------------
for any Mortgage Loan on which a Payoff was made by a Mortgagor
during the related Payoff Period, except for Payoffs received
during the period from the first through the 14th day of the
month of such Distribution Date, an amount equal to one month's
interest at the applicable Pass-Through Rate on such Mortgage
Loan less the amount of interest actually paid by the Mortgagor
with respect to such Payoff.
Uncompensated Interest Shortfall: With respect to a Loan
---------------------------------
Group, for any Distribution Date, the excess, if any, of (i) the
sum of (a) aggregate Uncollected Interest with respect to the
Mortgage Loans in the related Loan Group and (b) aggregate
Curtailment Shortfall with respect to the Mortgage Loans in the
related Loan Group over (ii) Compensating Interest with respect
to such Loan Group.
Uncompensated Interest Shortfall for Loan Group I shall be
allocated to the Group I-L Regular Interests pro rata according
to the amount of the Interest Distribution Amount to which each
such Class would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Group II-L Regular Interests and the portion of
the Group C-B-L Regular Interests that derives its Interest
Distribution Amount from the Group II Loans pro rata according to
the amount of the Interest Distribution Amount to which each such
Class (or portion thereof) would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be
allocated to the Group III-L Regular Interests and the portion of
the Group C-B-L Regular Interests that derives its Interest
Distribution Amount from the Group III Loans pro rata according
to the amount of the Interest Distribution Amount to which each
such Class (or portion thereof) would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be
allocated to the Group IV-L Regular Interests and the portion of
the Group C-B-L Regular Interests that derives its Interest
Distribution Amount from the Group IV Loans pro rata according to
the amount of the Interest Distribution Amount to which each such
Class (or portion thereof) would otherwise be entitled in
reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Class II-X-M, Class Y-1 and Class Z-1 Regular
Interests, pro rata according to the amount of the Interest
Distribution Amount to which each such Class of Regular Interests
would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be
allocated to the Class III-X-M, Class Y-2 and Class Z-2 Regular
Interests, pro rata according to the amount of the Interest
102
<PAGE>
Distribution Amount to which each such Class of Regular Interests
would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be
allocated to the Class IV-X-M, Class Y-3 and Class Z-3 Regular
Interests, pro rata according to the amount of the Interest
Distribution Amount to which each such Class of Regular Interests
would otherwise be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be
allocated to the Class W and Class I-X-M Regular Interests, pro
rata according to the amount of the Interest Distribution Amount
to which each such Class of Regular Interests would otherwise be
entitled in reduction thereof.
Undercollateralized Group: Loan Group II, if on any
--------------------------
Distribution Date the aggregate Class Principal Balance of the
Group II-A-L Regular Interests is greater than the aggregate
Principal Balance of the Mortgage Loans in Loan Group II, Loan
Group III, if on any Distribution Date the Class III-A-1-L
Principal Balance is greater than the aggregate Principal Balance
of the Mortgage Loans in Loan Group III (less the Class III-P
Principal Balance) and Loan Group IV, if on any Distribution Date
the Class IV-A-1-L Principal Balance is greater than the
aggregate Principal Balance of the Mortgage Loans in Loan Group
IV.
Underwriting Standards: The underwriting standards of
------------------------
Commerce Security Bank, People's Heritage Bank, IndyMac, Inc.,
Headlands Mortgage Company, Old Kent Mortgage Company, Washington
Mutual Bank, PNC Mortgage Securities Corp., Prism Mortgage
Company, 1st Chicago NBD Company, First Nationwide Mortgage
Company, GMAC Mortgage Corporation, Chase Manhattan Mortgage
Corporation, FT Mortgage Companies and Western Financial Savings
Bank, FSB.
Uninsured Cause: Any cause of damage to a Mortgaged
-----------------
Property, the cost of the complete restoration of which is not
fully reimbursable under the hazard insurance policies required
to be maintained pursuant to Section 3.07.
U.S. Person: A citizen or resident of the United States, a
------------
corporation, partnership or other entity created or organized in
or under the laws of the United States, any state thereof or the
District of Columbia, or an estate or trust that is subject to
U.S. federal income tax regardless of the source of its income.
VA: The Department of Veterans Affairs, formerly known as
--
the Veterans Administration, or any successor thereto.
Withdrawal Date: Any day during the period commencing on the
---------------
18th day of the month of the related Distribution Date (or if
such day is not a Business Day, the immediately preceding
Business Day) and ending on the last Business Day prior to the
21st day of the month of such Distribution Date.
ARTICLE II
----------
102
<PAGE>
Conveyance of the Trust Funds; REMIC Election and Designations;
- ---------------------------------------------------------------
Original Issuance of Certificates
---------------------------------
Section 2.01. Conveyance of REMIC I; REMIC Election and
-------------------------------------------
Designations. A trust ("REMIC I") of which the Trustee is the
- ------------
trustee is hereby created under the laws of the State of New York
for the benefit of the Holders of the REMIC I Regular Interests
and the Class R-1 Certificates. The purpose of REMIC I is to
hold the REMIC I Trust Fund and provide for the issuance,
execution and delivery of the Class R-1 Certificates. The assets
of REMIC I shall consist of the REMIC I Trust Fund. REMIC I
shall be irrevocable.
The assets of REMIC I shall remain in the custody of the
Trustee, on behalf of REMIC I, and shall be kept in REMIC I.
Moneys to the credit of REMIC I shall be held by the Trustee and
invested as provided herein. All assets received and held in
REMIC I will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of U.S. Bank
National Association in its own right, or any Person claiming
through it. The Trustee, on behalf of REMIC I, shall not have
the power or authority to transfer, assign, hypothecate, pledge
or otherwise dispose of any of the assets of REMIC I to any
Person, except as permitted herein. No creditor of a beneficiary
of REMIC I, 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 I, 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, without recourse, all the Company's right, title
and interest in and to the REMIC I Trust Fund, including but not
limited to (i) 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 REMIC I created hereby and accepts
delivery of the REMIC I Trust Fund on behalf of REMIC I 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 REMIC I
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
REMIC I Trust Fund. It is, further, not the intention of the
parties that such Conveyance be deemed a pledge of the REMIC I
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 I 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 I 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:
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(I) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and
investment property consisting of, arising from or relating to
any of the property described in (i), (ii) and (iii) below: (i)
the Mortgage Loans identified on the Mortgage Loan Schedule,
including the related Mortgage Notes, Mortgages, Cooperative
Stock Certificates, and Cooperative Leases, all Substitute
Mortgage Loans and all distributions with respect to such
Mortgage Loans and Substitute Mortgage Loans payable on and after
the Cut-Off Date; (ii) the Certificate Account, the Investment
Account, the Custodial Accounts for P&I, the Custodial Accounts
for Reserves, and all money or other property held therein; 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 REMIC I 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
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Mortgage Files for the Mortgage Loans, which shall on original
issuance thereof and at all times be registered in the name of the
Trustee.
Concurrently with the execution and delivery hereof, the
Company shall cause assignments of the Mortgage Loans to the
Trustee to be recorded or filed, except in states where, in the
opinion of counsel admitted to practice in such state acceptable
to the Company, the Trustee and the Rating Agencies submitted in
lieu of such recording or filing, such recording or filing is not
required to protect the Trustee's interest in such Mortgage Loans
against creditors of, or against sale, further assignments,
satisfaction or discharge by the Lender, a Servicer, the Company
or the Master Servicer, and the Company shall cause to be filed
the Form UCC-3 assignment and Form UCC-1 financing statement
referred to in clause (Y)(vii) and (ix), respectively, of the
definition of "Mortgage File." In connection with its servicing
of Cooperative Loans, the Master Servicer will use its best
efforts to file timely continuation statements, if necessary,
with regard to each financing statement and assignment relating
to Cooperative Loans.
In instances where the original recorded Mortgage or any
intervening assignment thereof (recorded or in recordable form)
relating to a Mortgage Loan cannot be delivered by the Company to
the Trustee prior to or concurrently with the execution and
delivery hereof (due to a delay on the part of the recording
office), the Company may, in lieu of delivering such 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
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to the limitations set forth in the preceding sentence, provide to
the Trustee upon request therefor a duplicate title insurance policy
for any Mortgage Loan.
For Mortgage Loans for which the Company has received a
Payoff after the Cut-Off Date and prior to the date of execution
and delivery hereof, the Company, in lieu of delivering the above
documents, herewith delivers to the Trustee a certification of a
Servicing Officer of the nature set forth in Section 3.10.
The Trustee is authorized, with the Master Servicer's
consent, to appoint any bank or trust company approved by and
unaffiliated with each of the Company and the Master Servicer as
Custodian of the documents or instruments referred to above in
this Section 2.01, and to enter into a Custodial Agreement for
such purpose, provided, however, that the Trustee shall be and
remain liable for the acts of any such Custodian only to the
extent that it is responsible for its own acts hereunder.
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
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action or omit to take any action that would cause the termination
of the REMIC status of the REMIC I Trust Fund; and (f) pay the amount
of any federal prohibited transaction penalty taxes imposed on the
REMIC I Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Company or any other
appropriate person from contesting any such tax in appropriate
proceedings and shall not prevent the Company from withholding
payment of such tax, if permitted by law, pending the outcome
of such proceedings); provided, that the Company shall be entitled
to be indemnified by the REMIC I Trust Fund for any such prohibited
transaction penalty taxes if the Company's failure to exercise
reasonable care was not the primary cause of the imposition of
such prohibited transaction penalty taxes.
The Trustee and the Master Servicer shall promptly provide
the Company with such information as the Company may from time to
time request for the purpose of enabling the Company to prepare
tax returns.
In the event that a Mortgage Loan is discovered to have a
defect which, had such defect been discovered before the startup
day, would have prevented such Mortgage Loan from being a
"qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, and the Company does not repurchase such Mortgage Loan
within 90 days of such date, the Master Servicer, on behalf of
the Trustee, shall within 90 days of the date such defect is
discovered sell such Mortgage Loan at such price as the Master
Servicer in its sole discretion, determines to be the greatest
price that will result in the purchase thereof within 90 days of
such date, unless the Master Servicer delivers to the Trustee an
Opinion of Counsel to the effect that continuing to hold such
Mortgage Loan will not adversely affect the status of the
electing portion of the REMIC I Trust Fund as a REMIC for federal
income tax purposes.
In the event that any tax is imposed on "prohibited
transactions" of the REMIC I Trust Fund as defined in Section
860F of the Code and not paid by the Company pursuant to clause
(f) of the third preceding paragraph, such tax shall be charged
against amounts otherwise distributable to the Class R-1
Certificateholders. Notwithstanding anything to the contrary
contained herein, the Trustee is hereby authorized to retain from
amounts otherwise distributable to the Class R-1
Certificateholders on any Distribution Date sufficient funds to
reimburse the Company in its capacity as agent for the Tax
Matters Person for the payment of such tax (upon the written
request of the Company, to the extent reimbursable, and to the
extent that the Company has not been previously reimbursed
therefor).
Section 2.02. Acceptance by Trustee. The Trustee acknowledges
receipt (or with respect to any Mortgage Loan subject to a
Custodial Agreement, receipt by the Custodian thereunder) of the
documents (or certified copies thereof as specified in Section
2.01) referred to in Section 2.01 above, but without having made
the review required to be made within 45 days pursuant to this
Section 2.02, and declares that as of the Closing Date it holds
and will hold such documents and the other documents constituting
a part of the Mortgage Files delivered to it, and the REMIC I
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
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hereto, to the effect that 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 have been executed and
received, and that such documents relate to the Mortgage Loans
identified in the Mortgage Loan Schedule. In performing such review,
the Trustee may rely upon the purported genuineness and due execution
of any such document, and on the purported genuineness of any
signature thereon. The Trustee shall not be required to make any
independent examination of any documents contained in each
Mortgage File beyond the review specifically required herein. The
Trustee makes no representations as to: (i) the validity,
legality, enforceability or genuineness of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any
Mortgage Loan. If the Trustee finds any document or documents
constituting a part of a Mortgage File not to have been executed
or received, or to be unrelated to the Mortgage Loans identified
in the Mortgage Loan Schedule, the Trustee shall promptly so
notify the Company. The Company hereby covenants and agrees that,
if any such defect cannot be corrected or cured, the Company
shall, not later than 60 days after the Trustee's notice to it
respecting such defect, within the three-month period commencing
on the Closing Date (or within the two-year period commencing on
the Closing Date if the related Mortgage Loan is a "defective
obligation" within the meaning of Section 860G(a)(4)(B)(ii) of
the Code and Treasury Regulation Section 1.860G-2(f)), either (i)
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. 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
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Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Company or its designee or assignee
title to any Mortgage Loan released pursuant hereto. The obligation
of the Company to repurchase or substitute any Mortgage Loan as to
which such a defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
the Holders of the REMIC I Regular Interests or the Class R-1
Certificateholders or the Trustee on behalf of the Holders of
the REMIC I Regular Interests or the Class R-1 Certificateholders.
Section 2.03. Representations and Warranties of the Company
---------------------------------------------
Concerning the Mortgage Loans. With respect to the conveyance of
- -----------------------------
the Mortgage Loans provided for in Section 2.01 herein, the
Company hereby represents and warrants to the Trustee that as of
the Cut-Off Date unless otherwise indicated:
(i) The information set forth in the Mortgage Loan Schedule
was true and correct in all material respects at the date or dates
respecting which such information is furnished;
(ii) As of the Closing Date, each Mortgage 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
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interest on such Mortgage Note except to the extent that the
Buydown Agreement for a Buydown Loan forgives certain
indebtedness of a Mortgagor;
(vii) As of the Closing Date, each Mortgaged
Property is free of damage and in good repair, ordinary
wear and tear excepted;
(viii) Each Mortgage Loan at the time it was made
complied with all applicable state and federal laws, including,
without limitation, usury, equal credit opportunity, disclosure
and recording laws;
(ix) Each Mortgage Loan was originated by a savings
association, savings bank, credit union, insurance company,
or similar institution which is supervised and examined by
a federal or state authority or by a mortgagee approved by
the FHA and will be serviced by an institution which meets
the servicer eligibility requirements established by the
Company;
(x) As of the Closing Date, each Mortgage Loan is covered
by an ALTA form or CLTA form of mortgagee title insurance policy
or other form of policy of insurance which, as of the origination
date of such Mortgage Loan, was acceptable to FNMA or FHLMC, and
has been issued by, and is the valid and binding obligation of, a
title insurer which, as of the origination date of such Mortgage
Loan, was acceptable to FNMA or FHLMC and qualified to do
business in the state in which the related Mortgaged Property is
located. Such policy insures the originator of the Mortgage Loan,
its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan
subject to the exceptions set forth in such policy. Such policy
is in full force and effect and will be in full force and effect
and inure to the benefit of the Holders of the REMIC I Regular
Interests and the Class R-1 Certificateholders upon the
consummation of the transactions contemplated by this Agreement
and no claims have been made under such policy, and no prior
holder of the related Mortgage, including the Company, has done,
by act or omission, anything which would impair the coverage of
such policy;
(xi) Not less than approximately 97.8% (by Principal Balance)
of the Group I Loans, not less than approximately 87.6% (by
Principal Balance) of the Group II Loans, not less than
approximately 83.6% (by Principal Balance) of the Group III Loans
and not less than approximately 88.6% (by Principal Balance) of
the Group IV Loans with Loan-to-Value Ratios as of the Cut-Off
Date in excess of 80% were covered by a Primary Insurance Policy
or an FHA insurance policy or a VA guaranty, and such policy or
guaranty is valid and remains in full force and effect;
(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;
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(xiv) Each Mortgage was documented by appropriate FNMA/FHLMC
mortgage instruments in effect at the time of origination, or
other instruments approved by the Company;
(xv) As of the Closing Date, the Mortgaged Property securing
each Mortgage is improved with a one- to four-family dwelling unit,
including units in a duplex, condominium project, townhouse, a
planned unit development or a de minimis planned unit development;
(xvi) As of the Closing Date, each Mortgage and Mortgage Note
is the legal, valid and binding obligation of the maker thereof
and is enforceable in accordance with its terms, except only as
such enforcement may be limited by laws affecting the enforcement
of creditors' rights generally and principles of equity;
(xvii) As of the date of origination, as to Mortgaged
Properties which are units in condominiums or planned unit
developments, all of such units met FNMA or FHLMC requirements,
are located in a condominium or planned unit development projects
which have received FNMA or FHLMC approval, or are approvable by
FNMA or FHLMC;
(xviii) None of the Mortgage Loans are Buydown Loans;
(xix) Based solely on representations of the Mortgagors
obtained at the origination of the related Mortgage Loans,
approximately 97.9% (by Principal Balance) of the Group I Loans
will be secured by owner occupied Mortgaged Properties which are
the primary residences of the related Mortgagors, approximately
1.5% (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 0.5% (by
Principal Balance) of the Group I Loans will be secured by
Mortgaged Properties which were investor properties of the
related Mortgagors; approximately 80.2% (by Principal Balance) of
the Group II Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related
Mortgagors, approximately 2.6% (by Principal Balance) of the
Group II Loans will be secured by owner occupied Mortgaged
Properties which were second or vacation homes of the Mortgagors
and approximately 17.2% (by Principal Balance) of the Group II
Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors; approximately 68.9% (by
Principal Balance) of the Group III Loans will be secured by
owner occupied Mortgaged Properties which are the primary
residences of the related Mortgagors, approximately 2.8% (by
Principal Balance) of the Group III Loans will be secured by
owner occupied Mortgaged Properties which were second or vacation
homes of the Mortgagors and approximately 28.4% (by Principal
Balance) of the Group III Loans will be secured by Mortgaged
Properties which were investor properties of the related
Mortgagors; approximately 90.8% (by Principal Balance) of the
Group IV Loans will be secured by owner occupied Mortgaged
Properties which are the primary residences of the related
Mortgagors, approximately 0.9% (by Principal Balance) of the
Group IV Loans will be secured by owner occupied Mortgaged
Properties which were second or vacation homes of the Mortgagors
and approximately 8.3% (by Principal Balance) of the Group IV
Loans will be
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secured by Mortgaged Properties which were investor
properties of the related Mortgagors; and none of the Group I
Loans, Group II Loans, Group III Loans and Group IV Loans will be
secured by interests in Cooperative Apartments;
(xx) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form
satisfactory to FNMA or FHLMC;
(xxi) The Mortgage Loans have been underwritten substantially
in accordance with the applicable Underwriting Standards;
(xxii) All of the Mortgage Loans have due-on-sale clauses; by
the terms of the Mortgage Notes, however, the due on sale
provisions may not be exercised at the time of a transfer if
prohibited by law;
(xxiii) The Company used no adverse selection procedures in
selecting the Mortgage Loans from among the outstanding fixed-
rate conventional mortgage loans purchased by it which were
available for inclusion in the Mortgage Pool and as to which the
representations and warranties in this Section 2.03 could be
made;
(xxiv) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Destroyed Mortgage Note, if such
Mortgage Loan is subsequently in default, the enforcement of such
Mortgage Loan or of the related Mortgage by or on behalf of the
Trustee will not be materially adversely affected by the absence
of the original Mortgage Note;
(xxv) Based upon an appraisal of the Mortgaged Property
securing each Mortgage Loan, approximately 89.4% (by Principal
Balance) of the Group I Loans had a current Loan-to-Value Ratio
less than or equal to 80%, approximately 10.6% (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%;
approximately 90.3% (by Principal Balance) of the Group II Loans
had a current Loan-to-Value Ratio less than or equal to 80%,
approximately 9.7% (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%; approximately 85.4% (by Principal
Balance) of the Group III Loans had a current Loan-to-Value Ratio
less than or equal to 80%, approximately 14.6% (by Principal
Balance) of the Group III Loans had a current Loan-to-Value Ratio
greater than 80% but less than or equal to 95% and no Group III
Loan had a current Loan-to-Value Ratio greater than 95%;
approximately 96.7% (by Principal Balance) of the Group IV Loans
had a current Loan-to-Value Ratio less than or equal to 80%,
approximately 3.3% (by Principal Balance) of the Group IV Loans
had a current Loan-to-Value Ratio greater than 80% but less than
or equal to 95% and no Group IV Loan had a current Loan-to-Value
Ratio greater than 95%
(xxvi) Approximately 55.2% (by Principal Balance) of the
Group I Loans, approximately 54.3% (by Principal Balance) of the
Group II Loans, approximately 50.0% (by Principal Balance) of the
Group III Loans and approximately 41.3% (by Principal
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Balance of the Group IV Loans were originated for the purpose of
refinancing existing mortgage debt, including cash-out refinancings
and approximately 44.8% (by Principal Balance) of the Group I Loans,
approximately 45.7% (by Principal Balance) of the Group II Loans,
approximately 50.0% (by Principal Balance) of the Group III Loans
and approximately 58.7% (by Principal Balance) of the Group IV
Loans were originated for the purpose of purchasing the Mortgaged
Property;
(xxvii) Not less than approximately 85.1%, 33.8%, 30.7% and
20.5% (by Principal Balance) of the Group I Loans, Group II Loans,
Group III Loans and Group IV Loans, respectively, were originated
under full documentation programs;
(xxviii) Each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section 1.860G-2(a)(1).
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 REMIC I Trust Fund;
-------------------------------------------------
Authentication of the Class R-1 Certificates. The Trustee
- -------------------------------------------------
acknowledges the transfer and assignment to it of the property
constituting the REMIC I 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.
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Section 2.05. Conveyance of REMIC II; REMIC Election and
--------------------------------------------
Designations. A trust ("REMIC II") of which the Trustee is the
- ------------
trustee is hereby created under the laws of the State of New York
for the benefit of the Holders of the REMIC II Regular Interests
and the Class R-2 Certificates. The purpose of REMIC II is to
hold the REMIC II Trust Fund and provide for the issuance,
execution and delivery of the REMIC II Regular Interests and the
Class R-2 Certificates. The assets of REMIC II shall consist of
the REMIC II Trust Fund. REMIC II shall be irrevocable.
The assets of REMIC II shall remain in the custody of the
Trustee, on behalf of REMIC II, and shall be kept in REMIC II.
Moneys to the credit of REMIC II shall be held by the Trustee and
invested as provided herein. All assets received and held in
REMIC II will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of U.S. Bank
National Association 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 REMIC II Regular Interests and the
Class R-2 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 REMIC II Regular Interests and
the Class R-2 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,
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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 Custodial Accounts for P&I, the
Custodial Accounts for Reserves and all money or other
property held therein; (iii) amounts paid or payable by the
insurer under any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any
other insurance policy related to any Mortgage Loan or the
Mortgage Pool; (iv) all property or rights arising from or
by virtue of the disposition of, or collections with respect
to, or insurance proceeds payable with respect to, or claims
against other persons with respect to, all or any part of
the collateral described in (i)-(iii) above (including any
accrued discount realized on liquidation of any investment
purchased at a discount), and (v) all cash and non-cash
proceeds of the collateral described in (i)-(iv) above;
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices
of credit, investment property and other rights arising from
or by virtue of the disposition of, or collections with
respect to, or insurance proceeds payable with respect to,
or claims against other persons with respect to, all or any
part of the collateral described in (I) above (including any
accrued discount realized on liquidation of any investment
purchased at a discount); and
(III) All cash and non-cash proceeds of the
collateral described in (I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes, the
Mortgages and such other goods, letters of credit, advices of
credit, instruments, money, documents, chattel paper or
certificated securities shall be deemed to be possession by the
secured party or possession by a purchaser for purposes of
perfecting the security interest pursuant to the Uniform
Commercial Code (including, without limitation, Sections 9-305
and 9-115 thereof) as in force in the relevant jurisdiction; and
(d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons 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
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rights and remedies of a secured party and creditor under the
Uniform Commercial Code as in force in the relevant jurisdiction.
The Trustee is authorized, with the Master Servicer's
consent, to appoint any bank or trust company approved by and
unaffiliated with each of the Company and the Master Servicer as
Custodian of the documents or instruments referred to above in
this Section 2.05, and to enter into a Custodial Agreement for
such purpose; provided, however, that the Trustee shall be and
remain liable for actions of any such Custodian only to the
extent it would otherwise be responsible for such acts hereunder.
The Company and the Trustee agree that the Company, on
behalf of the REMIC II Trust Fund, shall elect to treat the REMIC
II Trust Fund as a REMIC within the meaning of Section 860D of
the Code and, if necessary, under applicable state laws. Such
election shall be included in the Form 1066 and any appropriate
state return to be filed on behalf of the REMIC constituted by
the REMIC II Trust Fund for its first taxable year.
The Closing Date is hereby designated as the "startup day"
of the REMIC constituted by the REMIC II Trust Fund within the
meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained
in the Preliminary Statement hereto) relating to the REMIC II
Trust Fund are hereby designated as "regular interests" for
purposes of Section 860G(a)(1) of the Code. The Class R-2
Certificates are being issued in a single Class, which is hereby
designated as the sole class of "residual interest" in the REMIC
II Trust Fund for purposes of Section 860G(a)(2) of the Code.
The parties intend that the affairs of the REMIC II Trust
Fund formed hereunder shall constitute, and that the affairs of
the REMIC II Trust Fund shall be conducted so as to qualify it
as, a REMIC. In furtherance of such intention, the Company
covenants and agrees that it shall act as agent for the Tax
Matters Person (and the Company is hereby appointed to act as Tax
Matters Person) on behalf of the REMIC II Trust Fund and that in
such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, a federal tax return using a calendar year as
the taxable year for the REMIC II Trust Fund when and as required
by the REMIC provisions and other applicable federal income tax
laws; (b) make an election, on behalf of the REMIC II Trust Fund,
to be treated as a REMIC on the federal tax return of the REMIC
II Trust Fund for its first taxable year, in accordance with the
REMIC provisions; (c) prepare and forward, or cause to be
prepared and forwarded, to the Holders of the REMIC II Regular
Interests and the Class R-2 Certificates all information reports
as and when required to be provided to them in accordance with
the REMIC provisions; (d) conduct the affairs of the REMIC II
Trust Fund at all times that any of the REMIC II Regular
Interests and the Class R-2 Certificates are outstanding so as to
maintain the status of the REMIC II Trust Fund as a REMIC under
the REMIC provisions; (e) not knowingly or intentionally take any
action or omit to take any action that would cause the
termination of the REMIC status of the REMIC II Trust Fund; and
(f) pay the amount of any federal prohibited transaction penalty
taxes imposed on the REMIC II Trust Fund when and as the same
shall be due and payable (but such obligation shall not prevent
the Company or any other appropriate person from contesting any
such tax in appropriate proceedings and shall not prevent the
Company from withholding payment of such tax, if permitted by
law, pending the outcome of
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<PAGE>
such proceedings); provided, that the Company shall be entitled
to be indemnified from the REMIC II Trust Fund for any such
prohibited transaction penalty taxes if the Company's failure
to exercise reasonable care was not the primary cause of the
imposition of such prohibited transaction penalty taxes.
In the event that any tax is imposed on "prohibited
transactions" of the REMIC II Trust Fund as defined in Section
860F of the Code and not paid by the Company pursuant to clause
(f) of the preceding paragraph, such tax shall be charged against
amounts otherwise distributable to the Holders of the Class R-2
Certificates. Notwithstanding anything to the contrary contained
herein, the Company is hereby authorized to retain from amounts
otherwise distributable to the Holders of the Class R-2
Certificates on any Distribution Date sufficient funds to
reimburse the Company for the payment of such tax (to the extent
that the Company has not been previously reimbursed therefor).
Section 2.06. Acceptance by Trustee; Authentication of
-------------------------------------------
Certificates. The Trustee acknowledges and accepts the assignment
- ------------
to it of the property constituting the REMIC II Trust Fund and
declares that as of the Closing Date it holds 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 REMIC II Regular Interests and the Class R-2
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 Class R-2 Certificates
in Authorized Denominations evidencing the residual ownership
interest in the REMIC II Trust Fund.
Section 2.07. Conveyance of REMIC III; REMIC Election and
---------------------------------------------
Designations. A trust ("REMIC III") 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 and Class R-2 Certificates). The purpose of REMIC
III is to hold the REMIC III Trust Fund and provide for the
issuance, execution and delivery of the Certificates (other than
the Class R-1 and Class R-2 Certificates). The assets of REMIC
III shall consist of the REMIC III Trust Fund. REMIC III shall
be irrevocable.
The assets of REMIC III shall remain in the custody of the
Trustee, on behalf of REMIC III, and shall be kept in REMIC III.
Moneys to the credit of REMIC III shall be held by the Trustee
and invested as provided herein. All assets received and held in
REMIC III will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of U.S. Bank
National Association in its own right, or any Person claiming
through it. The Trustee, on behalf of REMIC III, shall not have
the power or authority to transfer, assign, hypothecate, pledge
or otherwise dispose of any of the assets of REMIC III to any
Person, except as permitted herein. No creditor of a beneficiary
of REMIC III, 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 III, except in accordance with the terms of
this Agreement.
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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 Certificateholders (other than the Class R-1 and
Class R-2 Certificateholders), without recourse, all the
Company's right, title and interest in and to the REMIC III Trust
Fund, including all interest and principal received by the
Company on or with respect to the REMIC II Regular Interests
after the Cut-Off Date. The Trustee hereby accepts REMIC III
created hereby and accepts delivery of the REMIC III Trust Fund
on behalf of REMIC III and acknowledges that it holds the REMIC
II Regular Interests for the benefit of the Holders of the
Certificates (other than the Class R-1 and Class R-2
Certificates) issued pursuant to this Agreement. It is the
express intent of the parties hereto that the conveyance of the
REMIC III Trust Fund to the Trustee by the Company as provided in
this Section 2.07 be, and be construed as, an absolute sale of
the REMIC III Trust Fund. It is, further, not the intention of
the parties that such conveyance be deemed a pledge of the REMIC
III 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 III 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 III Trust Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.07 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 II 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 Custodial Accounts for P&I, the
Custodial Accounts for Reserves and all money or other
property held therein; (iii) amounts paid or payable by the
insurer under any FHA insurance policy or any Primary
Insurance Policy and proceeds of any VA guaranty and any
other insurance policy related to any Mortgage Loan or the
Mortgage Pool; (iv) all property or rights arising from or
by virtue of the disposition of, or collections with respect
to, or insurance proceeds payable with respect to, or claims
against other persons with respect to, all or any part of
the collateral described in (i)-(iii) above (including any
accrued discount realized on liquidation of any investment
purchased at a discount), and (v) all cash and non-cash
proceeds of the collateral described in (i)-(iv) above;
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices
of credit,
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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 III 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 2.07, and to enter into a Custodial Agreement for
such purpose; provided, however, that the Trustee shall be and
remain liable for actions of any such Custodian only to the
extent it would otherwise be responsible for such acts hereunder.
The Company and the Trustee agree that the Company, on
behalf of the REMIC III Trust Fund, shall elect to treat the
REMIC III 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 III Trust Fund for its first taxable
year.
The Closing Date is hereby designated as the "startup day"
of the REMIC constituted by the REMIC III Trust Fund within the
meaning of Section 860G(a)(9) of the Code.
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The regular interests (as set forth in the table contained
in the Preliminary Statement hereto) relating to the REMIC III
Trust Fund are hereby designated as "regular interests" for
purposes of Section 860G(a)(1) of the Code. The Class R-3
Certificates are being issued in a single Class, which is hereby
designated as the sole class of "residual interest" in the REMIC
III Trust Fund for purposes of Section 860G(a)(2) of the Code.
The parties intend that the affairs of the REMIC III Trust
Fund formed hereunder shall constitute, and that the affairs of
the REMIC III 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 III 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 III 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 III
Trust Fund, to be treated as a REMIC on the federal tax return of
the REMIC III Trust Fund for its first taxable year, in
accordance with the REMIC provisions; (c) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders
(other than the Class R-1 and Class R-2 Certificateholders) 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 III Trust Fund at all times that any Certificates
are outstanding so as to maintain the status of the REMIC III
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 III Trust Fund; and (f) pay the amount of any federal
prohibited transaction penalty taxes imposed on the REMIC III
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 III 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 III 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-3
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-3
Certificates on any Distribution Date sufficient funds to
reimburse the Company for the payment of such tax (to the extent
that the Company has not been previously reimbursed therefor).
Section 2.08. Acceptance by Trustee; Authentication of
--------------------------------------------
Certificates. The Trustee acknowledges and accepts the assignment
- ------------
to it of the property constituting the REMIC III Trust Fund and
declares that as of the Closing Date it holds and shall hold any
documents constituting a part of the REMIC III Trust Fund, and
the REMIC III Trust Fund, as Trustee in trust, upon the trusts
herein set forth, for the use and benefit of all present and
future Certificateholders (other than the Class R-1 and Class R-2
Certificateholders). In connection therewith, as of the Closing
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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 III Trust Fund, the Certificates (other
than the Class R-1 and Class R-2 Certificates) in Authorized
Denominations evidencing the entire ownership of the REMIC III
Trust Fund.
ARTICLE III
-----------
Administration and Servicing of Mortgage Loans
----------------------------------------------
Section 3.01. The Company to Act as Master Servicer. The
-------------------------------------
Company shall act as Master Servicer to service and administer
the Mortgage Loans on behalf of the Trustee and for the benefit
of the Certificateholders in accordance with the terms hereof and
in the same manner in which, and with the same care, skill,
prudence and diligence with which, it services and administers
similar mortgage loans for other portfolios, and shall have full
power and authority to do or cause to be done any and all things
in connection with such servicing and administration which it may
deem necessary or desirable, including, without limitation, the
power and authority to bring actions and defend REMIC I, REMIC II
and REMIC III on behalf of the Trustee in order to enforce the
terms of the Mortgage Notes. The Master Servicer may perform its
master servicing responsibilities through agents or independent
contractors, but shall not thereby be released from any of its
responsibilities hereunder and the Master Servicer shall
diligently pursue all of its rights against such agents or
independent contractors.
The Master Servicer shall make reasonable efforts to collect
or cause to be collected all payments called for under the terms
and provisions of the Mortgage Loans and shall, to the extent
such procedures shall be consistent with this Agreement and the
terms and provisions of any Primary Insurance Policy, any FHA
insurance policy or VA guaranty, any hazard insurance policy, and
federal flood insurance, cause to be followed such collection
procedures as are followed with respect to mortgage loans
comparable to the Mortgage Loans and held in portfolios of
responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce
"due-on-sale" clauses with respect to the related Mortgage Loans,
to the extent permitted by law, subject to the provisions set
forth in Section 3.08.
Consistent with the foregoing, the Master Servicer may in
its discretion (i) waive or cause to be waived any assumption fee
or late payment charge in connection with the prepayment of any
Mortgage Loan and (ii) only upon determining that the coverage of
any applicable insurance policy or guaranty related to a Mortgage
Loan will not be materially adversely affected, arrange a
schedule, running for no more than 180 days after the first
delinquent Due Date, for payment of any delinquent installment on
any Mortgage Note or for the liquidation of delinquent items. The
Master Servicer shall have the right, but not the obligation, to
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.
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
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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 furnish the Master
Servicer, at the Master Servicer's direction, with any powers of
attorney and other documents necessary or appropriate to enable
the Master Servicer to carry out its supervisory, servicing and
administrative duties under this Agreement.
The Master Servicer and each Servicer shall obtain (to the
extent generally commercially available from time to time) and
maintain fidelity bond and errors and omissions coverage
acceptable to FNMA or FHLMC with respect to their obligations
under this Agreement and the applicable Selling and Servicing
Contract, respectively. The Master Servicer or each Servicer, as
applicable, shall establish escrow accounts for, or pay when due
(by means of an advance), any tax liens in connection with the
Mortgaged Properties that are not paid by the Mortgagors when due
to the extent that any such payment would not constitute a
Nonrecoverable Advance when made. Notwithstanding the foregoing,
the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would both constitute a sale or
exchange of such Mortgage Loan within the meaning of Section 1001
of the Code (including any proposed, temporary or final
regulations promulgated thereunder) (other than in connection
with a proposed conveyance or assumption of such Mortgage Loan
that is treated as a Principal Prepayment or in a default
situation) and cause any of the REMICs to fail to qualify as such
under the Code. The Master Servicer shall be entitled to approve
a request from a Mortgagor for a partial release of the related
Mortgaged Property, the granting of an easement thereon in favor
of another Person, any alteration or demolition of the related
Mortgaged Property or other similar matters if it has determined,
exercising its good faith business judgment in the same manner as
it would if it were the owner of the related Mortgage Loan, that
the security for, and the timely and full collectability of, such
Mortgage Loan would not be adversely affected thereby and that
the applicable trust fund would not fail to 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,
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Primary Insurance Policy, or other insurance policy covering such
Mortgage Loans shall be deposited first in the Custodial Account for
Reserves if required for the restoration or repair of the related
Mortgaged Property. Proceeds from such insurance policies not so
deposited in the Custodial Account for Reserves shall be
deposited in the Custodial Account for P&I, and shall be
applied to the balances of the related Mortgage Loans as
payments of interest and principal.
The Master Servicer is hereby authorized to make withdrawals
from and to issue drafts against the Custodial Accounts for P&I
and the Custodial Accounts for Reserves for the purposes required
or permitted by this Agreement. Each Custodial Account for P&I
and each Custodial Account for Reserves shall bear a designation
clearly showing the respective interests of the applicable
Servicer, as trustee, and of the Master Servicer, in
substantially one of the following forms:
(a) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of
principal and interest custodial account for PNC Mortgage
Securities Corp., its successors and assigns, for various
owners of interests in PNC Mortgage Securities Corp.
mortgage-backed pools or (ii) [Servicer's Name] in trust for
PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for
Reserves: (i) [Servicer's Name], as agent, trustee and/or
bailee of taxes and 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.
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At its option, the Master Servicer may invest funds
withdrawn from the Custodial Accounts for P&I, as well as any
Buydown Funds, Insurance Proceeds and Liquidation Proceeds
previously received by the Master Servicer (including amounts
paid by the Company in respect of any Purchase Obligation or its
substitution obligations set forth in Section 2.02 or Section
2.03 or in connection with the exercise of the option to
terminate this Agreement pursuant to Section 9.01) for its own
account and at its own risk, during any period prior to their
deposit in the Certificate Account. Such funds, as well as any
funds which were withdrawn from the Custodial Accounts for P&I on
or before the Withdrawal Date, but not yet deposited into the
Certificate Account, shall immediately be deposited by the Master
Servicer with the Investment Depository in an Investment Account
in the name of the Master Servicer and the Trustee for investment
only as set forth in this Section 3.03. The Master Servicer shall
bear any and all losses incurred on any investments made with
such funds and shall be entitled to retain all gains realized on
such investments as additional servicing compensation. Not later
than the Business Day prior to the Distribution Date, the Master
Servicer shall deposit such funds, net of any gains (except
Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested
in (i) one or more Eligible Investments which shall in no event
mature later than the Business Day prior to the related
Distribution Date (except if such Eligible Investments are
obligations of the Trustee, such Eligible Investments may mature
on the Distribution Date), or (ii) such other instruments as
shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
-----------------------
(a) Not later than the Business Day prior to the related
Distribution Date, the Master Servicer shall direct the
Investment Depository to deposit 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.
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Section 3.05. Permitted Withdrawals from the Certificate
-------------------------------------------
Account, the Investment Account and Custodial Accounts for P&I
- -----------------------------------------------------------------
and of Buydown Funds from the Buydown Fund Accounts.
- ---------------------------------------------------
(a) The Master Servicer is authorized to make withdrawals,
from time to time, from the Investment Account, the Certificate
Account or the Custodial Accounts for P&I established by the
Servicers of amounts deposited therein in respect of the
Certificates, as follows:
(i) To reimburse itself or the applicable Servicer for
Monthly P&I Advances made pursuant to Section 4.02 or a
Selling and Servicing Contract, such right to reimbursement
pursuant to this paragraph (i) being limited to amounts
received on particular Mortgage Loans (including, for this
purpose, Insurance Proceeds and Liquidation Proceeds) which
represent late recoveries of principal and/or interest
respecting which any such Monthly P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for
amounts 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;
(vi) 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
(vii) 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
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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);
(iii) In the event of foreclosure or liquidation of
any Mortgage Loan having a Buydown Fund, to deposit
remaining Buydown Fund amounts in the Investment Account as
Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account
representing Buydown Funds following termination of this
Agreement pursuant to Section 9.01;
(c) The Trustee is authorized to make withdrawals from time
to time from the Certificate Account to reimburse itself for
advances it has made pursuant to Section 7.01(a) hereof that it
has determined to be Nonrecoverable Advances.
Section 3.06. Maintenance of Primary Insurance Policies;
-------------------------------------------
Collections Thereunder. The Master Servicer shall use its best
- -----------------------
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
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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 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
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shall (i) both constitute a "significant modification" effecting
an exchange or reissuance of such Mortgage Loan under the Code
(or Treasury regulations promulgated thereunder) and cause the
REMICs to fail to qualify as a REMIC under the REMIC Provisions
or (ii) cause the imposition of any tax on "prohibited
transactions" or "contributions" after the startup day under the
REMIC Provisions. The Master Servicer shall notify the Trustee
that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original copy of such
substitution or assumption agreement and other documents and
instruments constituting a part thereof. In connection with any
such assumption or substitution agreement, the terms of the
related Mortgage Note shall not be changed. Any fee collected by
the applicable Servicer for entering into an assumption or
substitution of liability agreement shall be retained by such
Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other
provision of this Agreement, the Master Servicer shall not be
deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage
Loan by operation of law or any assumption which the Master
Servicer may be restricted by law from preventing, for any reason
whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The
-----------------------------------------
Master Servicer shall foreclose upon or otherwise comparably
convert, or cause to be foreclosed upon or comparably converted,
the ownership of any Mortgaged Property securing a Mortgage Loan
which comes into and continues in default and as to which no
satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.01. In lieu of such
foreclosure or other conversion, and taking into consideration
the desirability of maximizing net Liquidation Proceeds after
taking into account the effect of Insurance Proceeds upon
Liquidation Proceeds, the Master Servicer may, to the extent
consistent with prudent mortgage loan servicing practices, accept
a payment of less than the outstanding Principal Balance of a
delinquent Mortgage Loan in full satisfaction of the indebtedness
evidenced by the related Mortgage Note and release the lien of
the related Mortgage upon receipt of such payment. The Master
Servicer shall not foreclose upon or otherwise comparably convert
a Mortgaged Property if the Master Servicer is aware of evidence
of toxic waste, other hazardous substances or other evidence of
environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection
with such foreclosure or other conversion, the Master Servicer
shall cause to be followed such practices and procedures as it
shall deem necessary or advisable and as shall be normal and
usual in general mortgage servicing activities. The foregoing is
subject to the provision that, in the case of damage to a
Mortgaged Property from an Uninsured Cause, the Master Servicer
shall not be required to advance its own funds towards the
restoration of the property unless it shall be determined in the
sole judgment of the Master Servicer, (i) that such restoration
will increase the proceeds of liquidation of the Mortgage Loan to
Certificateholders after reimbursement 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
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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 C-B Certificates and the
Group I-B Certificates, the Master Servicer may enter into a
special servicing agreement with an unaffiliated holder of a 100%
Percentage Interest of the Class B Certificate with the lowest
priority or a holder of a 100% interest in a class of securities
representing such interests in such Class, subject to each Rating
Agency's acknowledgment that the Ratings of the 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 and will contain provisions for the
deposit of cash with the Master Servicer by the holder that would
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 procedures
or (b) purchase delinquent Mortgage Loans from the REMIC I Trust
Fund immediately prior to the commencement of foreclosure
proceedings at a price equal to the aggregate outstanding
Principal Balance of such Mortgage Loans plus accrued interest
thereon at the applicable Mortgage Interest Rate through the last
day of the month in which such Mortgage Loan is purchased.
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,
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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 shall comply with all federal withholding
requirements with respect to payments to Certificateholders of
interest or original issue discount that the Master Servicer
reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for any such
withholding. Without limiting the foregoing, the Master Servicer
agrees that it will not withhold with respect to payments of
interest or original issue discount in the case of a
Certificateholder that has furnished or caused to be furnished an
effective Form W-8 or an acceptable substitute form or a
successor form and who is not a "10 percent shareholder" within
the meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect
to REMIC I, REMIC II, REMIC III 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
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necessary to the prosecution of any such proceedings. Such trust
receipt shall obligate the Master Servicer to return the Mortgage
File to the Trustee when the need therefor by the Master Servicer
no longer exists, unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer
similar to that herein above specified, the trust receipt shall
be released by the Trustee to the Master Servicer.
Section 3.11. Compensation to the Master Servicer and the
--------------------------------------------
Servicers. As compensation for its activities hereunder, the
- ---------
Master Servicer shall be entitled to receive from the Investment
Account or the Certificate Account the amounts provided for by
Section 3.05(a)(iii). The Master Servicer shall be required to
pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor,
except as specifically provided herein.
As compensation for its activities under the applicable
Selling and Servicing Contract, the applicable Servicer shall be
entitled to withhold or withdraw from the related Custodial
Account for P&I the amounts provided for in such Selling and
Servicing Contract. Each Servicer is required to pay all expenses
incurred by it in connection with its servicing activities under
its Selling and Servicing Contract (including payment of premiums
for Primary Insurance Policies, if required) and shall not be
entitled to reimbursement therefor except as specifically
provided in such Selling and Servicing Contract and not
inconsistent with this Agreement.
Section 3.12. Reports to the Trustee; Certificate Account
--------------------------------------------
Statement. Not later than 15 days after each Distribution Date,
- ---------
the Master Servicer shall forward a statement, certified by a
Servicing Officer, to the Trustee setting forth the status of the
Certificate Account as of the close 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 REMIC I
Trust Fund through foreclosure, deed in lieu of foreclosure or
other exercise of the REMIC I Trust Fund's security interest in
the Mortgaged Property.
Section 3.13. Annual Statement as to Compliance. The Master
---------------------------------
Servicer shall deliver to the Trustee, on or before April 30 of
each year, beginning with the first April 30 succeeding the Cut-
Off Date by at least six months, an Officer's Certificate stating
as to the signer thereof, that (i) a review of the activities of
the Master Servicer during the preceding calendar year and
performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of
any such obligation, specifying each such default known to such
officer and the
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nature and status thereof. Copies of such statement shall
be provided by the Master Servicer to Certificateholders
upon request or by the Trustee (solely to the extent that such
copies are available to the Trustee) at the expense of the
Master Servicer, should the Master Servicer fail to so provide
such copies.
Section 3.14. Access to Certain Documentation and Information
-----------------------------------------------
Regarding the Mortgage Loans. In the event that the Certificates
- -----------------------------
are legal for investment by federally-insured savings
associations, the Master Servicer shall provide to the OTS, the
FDIC and the supervisory agents and examiners of the OTS and the
FDIC access to the documentation regarding the related Mortgage
Loans required by applicable regulations of the OTS or the FDIC,
as applicable, and shall in any event provide such access to the
documentation regarding such Mortgage Loans to the Trustee and
its representatives, such access being afforded without charge,
but only upon reasonable request and during normal business hours
at the offices of the Master Servicer designated by it.
Section 3.15. Annual Independent Public Accountants' Servicing
------------------------------------------------
Report. On or before April 30 of each year, beginning with the
- ------
first April 30 succeeding the Cut-Off Date by at least six
months, the Master Servicer, at its expense, shall cause a firm
of independent public accountants to furnish a statement to the
Trustee to the effect that, in connection with the firm's
examination of the financial statements as of the previous
December 31 of the Master Servicer's parent corporation (which
shall include a limited examination of the Master Servicer's
financial statements), nothing came to their attention that
indicated that the Master Servicer was not in compliance with
Section 3.02, Section 3.03, Section 3.04, Section 3.05, Section
3.11, Section 3.12 and Section 3.13 of this Agreement, except for
(i) such exceptions as such firm believes to be immaterial, and
(ii) such other exceptions as are set forth in such statement.
Section 3.16. [Reserved]
Section 3.17. [Reserved.]
Section 3.18. [Reserved.]
Section 3.19. [Reserved.]
Section 3.20. Assumption or Termination of Selling and Servicing
--------------------------------------------------
Contracts by Trustee. In the event the Master Servicer, or any
- ---------------------
successor Master Servicer, shall for any reason no longer be the
Master Servicer (including by reason of an Event of Default), the
Trustee as trustee hereunder or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer
under the Selling and Servicing Contracts with respect to the
related Mortgage Loans unless the Trustee elects to terminate the
Selling and Servicing Contracts with respect to such Mortgage
Loans in accordance with the terms thereof. The Trustee, its
designee or the successor servicer for the Trustee shall be
deemed to have assumed all of the Master Servicer's interest
therein with respect to the related Mortgage Loans and to have
replaced the Master Servicer as a party to the Selling and
Servicing Contracts to the same extent as if the rights and
duties under the Selling and Servicing Contracts relating to such
Mortgage Loans had been assigned to the assuming party, except
that the Master Servicer shall not thereby be relieved of any
liability or
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obligations under the Selling and Servicing Contracts with
respect to the Master Servicer's duties to be performed prior
to its termination hereunder.
The Master Servicer at its expense shall, upon request of
the Trustee, deliver to the assuming party all documents and
records relating to the Selling and Servicing Contracts and the
Mortgage Loans then being master serviced by the Master Servicer
and an accounting of amounts collected and held by the Master
Servicer and otherwise use its best efforts to effect the orderly
and efficient transfer of the rights and duties under the related
Selling and Servicing Contracts relating to such Mortgage Loans
to the assuming party.
ARTICLE IV
----------
Payments to Certificateholders; Payment of Expenses
---------------------------------------------------
Section 4.01. Distributions to Holders of REMIC I Regular
--------------------------------------------
Interests and Class R-1 Certificateholders. On each Distribution
- ------------------------------------------
Date, the Trustee (or any duly appointed paying agent) (i) shall
be deemed to have distributed from the Certificate Account the
REMIC I Distribution Amount to the Holders of the REMIC I Regular
Interests and to have deposited such amount for their benefit
into the Certificate Account and (ii) from the Certificate
Account shall distribute to the Class R-1 Certificateholders the
sum of (a) the Excess Liquidation Proceeds and (b) the amounts to
be distributed to the Class R-1 Certificateholders pursuant to
the definition of "REMIC I Distribution Amount" for such
Distribution Date, all in accordance with written statements
received from the Master Servicer pursuant to Section 4.02(b), by
wire transfer in immediately available funds for the account of
each such Holders 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 III and REMIC II and not REMIC I.
Section 4.02. Advances by the Master Servicer; Distribution
---------------------------------------------
Reports to the Trustee.
- ----------------------
(a) To the extent described below, the Master Servicer is
obligated to advance its own funds to the Certificate Account to
cover any shortfall between (i) payments scheduled to be received
in respect of Mortgage Loans, and (ii) the amounts actually
deposited in the Certificate Account on account of such payments;
provided that, with respect to any Balloon Loan that is
delinquent on its maturity date, the Master Servicer will not be
required to advance the related balloon payment but will be
required to continue to make advances in accordance with this
Section 4.02 with respect to such Balloon Loan in an amount equal
to one month's interest on the unpaid principal balance at the
applicable Pass-Through Rate for each Distribution Date . The
Master Servicer's obligation to make any advance or advances
described in this Section 4.02 is effective only to the extent
that such advance is, in the good faith judgment of the Master
Servicer made on or before the Business Day immediately following
the Withdrawal Date,
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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 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 regarding the amount of principal and
interest, the Residual Distribution Amount and the Excess
Liquidation Proceeds to be distributed to each Class of REMIC I
Regular Interests, each Class of REMIC II Regular Interests and
each Class of Certificates on such Distribution Date (such
amounts to be determined
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in accordance with the definitions of "REMIC I Distribution
Amount", "REMIC II Distribution Amount" and "REMIC III
Distribution Amount", Section 4.01, Section 4.04 and Section
4.06 hereof and other related definitions set forth in Article
I hereof).
Section 4.03. Nonrecoverable Advances. Any advance previously
-----------------------
made by a Servicer pursuant to its Selling and Servicing Contract
with respect to a Mortgage Loan or by the Master Servicer that
the Master Servicer shall determine in its good faith judgment
not to be ultimately recoverable from Insurance Proceeds or
Liquidation Proceeds or otherwise with respect to such Mortgage
Loan or recoverable as late Monthly Payments with respect to such
Mortgage Loan shall be a Nonrecoverable Advance. The
determination by the Master Servicer that it or the applicable
Servicer has made a Nonrecoverable Advance or that any advance
would constitute a Nonrecoverable Advance, shall be evidenced by
an Officer's Certificate of the Master Servicer delivered to the
Trustee on the Determination Date and detailing the reasons for
such determination. Notwithstanding any other provision of this
Agreement, any insurance policy relating to the Mortgage Loans,
or any other agreement relating to the Mortgage Loans to which
the Company or the Master Servicer is a party, (a) the Company,
the Master Servicer, and each Servicer shall not be obligated to,
and shall not, make any advance that, after reasonable inquiry
and in its sole discretion, the Company, the Master Servicer, or
such Servicer shall determine would be a Nonrecoverable Advance,
and (b) the Company, the Master Servicer, and each Servicer shall
be entitled to reimbursement for any advance as provided in
Section 3.05(a)(i), (ii) and (iv) of this Agreement.
Section 4.04. Distributions to Holders of REMIC II Regular
--------------------------------------------
Interests and Class R-2 Certificateholders. On each Distribution
- ------------------------------------------
Date, the Trustee (or any duly appointed paying agent) (i) shall
be deemed to have distributed from the Certificate Account the
REMIC II Distribution Amount to the Holders of the REMIC II
Regular Interests and to have deposited such amount for their
benefit into the Certificate Account and (ii) from the
Certificate Account shall distribute to the Class R-2
Certificateholders the amounts to be distributed to the Class R-2
Certificateholders pursuant to the definition of "REMIC II
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 Holders
and the Class R-2 Certificateholder, or by any other means of
payment acceptable to each such Holder and the Class R-2
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 4.04 shall
be made on account of the deemed distributions described in this
paragraph except in the event of a liquidation of REMIC III and
not REMIC II.
Section 4.05. Distributions to Certificateholders (other than
-----------------------------------------------
Class R-1 and Class R-2 Certificateholders).
- -------------------------------------------
(a) On each Distribution Date, the Trustee (or any duly
appointed paying agent) shall withdraw from the Certificate
Account, the REMIC III Available Distribution Amount for such
Distribution Date and shall distribute, from the amount so
withdrawn, to the extent of the REMIC III Available Distribution
Amount, the REMIC III Distribution Amount to the Certificates
(other
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than the Class R-1 and Class R-2 Certificates), all in
accordance with written statements received from the Master
Servicer pursuant to Section 4.02(b), by wire transfer in
immediately available funds for the account of, or by check
mailed to, each such Certificateholder of record on the
immediately preceding Record Date (other than as provided in
Section 9.01 respecting the final distribution), as specified by
each such Certificateholder and at the address of such Holder
appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all
allocations of Realized Losses made on any Distribution Date
shall be binding upon all Holders of such Certificates and of any
Certificates issued upon the registration of transfer or exchange
therefor or in lieu thereof, whether or not such distribution is
noted on such Certificate. The final distribution of principal of
each Certificate (and the final distribution upon the Class R-1
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
4.06(c)(ii) and Section 9.01(b).
(c) Whenever, on the basis of Curtailments, Payoffs and Monthly
Payments on the Mortgage Loans and Insurance Proceeds and
Liquidation Proceeds received and expected to be received during
the Payoff Period, the Master Servicer has notified the Trustee
that it believes that the entire remaining unpaid Class Principal
Balance of any Class of Certificates will become distributable on
the next Distribution Date, the Trustee shall, no later than the
18th day of the month of such Distribution Date, mail or cause to
be mailed to each Person in whose name a Certificate to be so
retired is registered at the close of business on the Record Date
and to the Rating Agencies a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution
will be payable on such Distribution Date, but only upon presentation and
surrender of such Certificate at the office or agency of the Certificate
Registrar maintained for such purpose (the address of which shall be set
forth in such notice), and (B) no interest shall accrue on such
Certificate after such Distribution Date.
Section 4.06. 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:
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(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 Combined 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 Combined 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
Combined Fraud Coverage available to the Senior Certificates
remaining as of the close of business on the applicable
Determination Date; and
(f) The amount of Realized Losses incurred in respect
of each Loan Group allocable to the Certificates on the
related Distribution Date and the cumulative amount of
Realized Losses incurred in respect of each Loan Group
allocated to such Certificates since the Cut-Off Date.
Upon request by any Certificateholder, the Master Servicer,
as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and
appropriate, in the Master Servicer's sole discretion, for
purposes of satisfying applicable reporting requirements under
Rule 144A of the Securities Act.
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
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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 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
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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.
(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.
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(B) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
restrictions in this Section 5.01(c) and to the extent
that the retroactive restoration of the rights of the
Holder of such Residual Certificate as described in
clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Company shall have the right,
without notice to the Holder or any prior Holder of
such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Company on
such terms as the Company may choose. Such purported
Transferee shall promptly endorse and deliver each
Residual Certificate in accordance with the
instructions of the Company. Such purchaser may be the
Company itself or any affiliate of the Company. The
proceeds of such sale, net of the commissions (which
may include commissions payable to the Company or its
affiliates), expenses and taxes due, if any, shall be
remitted by the Company to such purported Transferee.
The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of
the Company, and the Company shall not be liable to any
Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such
discretion.
(iv) The Company, on behalf of the Trustee, shall make available,
upon written request from the Trustee, all information necessary
to compute any tax imposed (A) as a result of the Transfer of an
Ownership Interest in a Residual Certificate to any Person who is
not a Permitted Transferee, including the information regarding
"excess inclusions" of such Residual Certificates required to be
provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulation Section 1.860D-1(b)(5), and (B)
as a result of any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate
or organizations described in Section 1381 of the Code having as
among its record holders at any time any Person who is not a
Permitted Transferee. Reasonable compensation for providing such
information may be required by the Company from such Person.
(v) The provisions of this Section 5.01 set forth prior to this
Section (v) may be modified, added to or eliminated, 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, REMIC II and REMIC III to cease
to qualify as a REMIC and will not create a risk that
(1) REMIC I, REMIC II and REMIC III 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.
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(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] [R-3] CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION
SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER
AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THE CLASS [R-1][R-2] [R-
3]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, REMIC II
and REMIC III, while not a Disqualified Organization, shall be
the tax matters person for the related REMIC within the meaning
of Section 6231(a)(7) of the Code and Treasury Regulation Section
1.860F-4(d).
(d) In the case of any Class B, Class I-A-23 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, Class I-A-23 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
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or the Company or (ii) only in the case of a Class B or Class I-A-23
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 or a Class I-A-1 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 or a Class I-A-1 Certificate
shall be exempt from the requirements of this Section 5.01(e) and
Section 5.01(f) if each of the Certificateholder desiring to
effect such transfer and such Certificateholder's transferee are
among the following: (i) DLJ Mortgage Capital, Inc., (ii)
Donaldson, Lufkin & Jenrette Securities Corporation and (iii) DLJ
Mortgage Acceptance Corp. Each Person who, at any time, acquires
any ownership interest in any Junior Subordinate Certificate
shall be deemed by the acceptance or acquisition of such
ownership interest to have agreed to be bound by the following
provisions of this Section 5.01(e) and Section 5.01(f), as
applicable. No transfer of a Junior Subordinate Certificate shall
be deemed to be made in accordance with this Section 5.01(e)
unless such transfer is made pursuant to an effective
registration statement under the Securities Act or unless the
Trustee is provided with the certificates and an Opinion of
Counsel, if required, on which the Trustee may conclusively rely,
which establishes or establish to the Trustee's satisfaction that
such transfer is exempt from the registration requirements under
the Securities Act, as follows: In the event that a transfer is
to be made in reliance upon an exemption from the Securities Act,
the Trustee shall require, in order to assure compliance with the
Securities Act, that the Certificateholder desiring to effect
such transfer certify to the Trustee in writing, in substantially
the form attached hereto as Exhibit F, the facts surrounding the
transfer, with such modifications to such Exhibit F as may be
appropriate to reflect the actual facts of the proposed transfer,
and that the Certificateholder's proposed transferee certify to
the Trustee in writing, in substantially the form attached hereto
as Exhibit G, the facts surrounding the transfer, with such
modifications to such Exhibit G as may be appropriate to reflect
the actual facts of the proposed transfer. If such certificate of
the proposed transferee does not contain substantially the
substance of Exhibit G, the Trustee shall require an Opinion of
Counsel satisfactory to it that such transfer may be made without
registration, which Opinion of Counsel shall not be obtained at
the expense of the Trustee, the REMIC I Trust Fund, the REMIC II
Trust Fund, the REMIC III 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 and Class I-A-1
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 or a Class I-A-1 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
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other things, such transferee (i) is a "qualified institutional buyer"
as defined under Rule 144A, acting for its own account or the
accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (ii) is aware that the proposed transferor
intends to rely on the exemption from registration requirements
under the Securities Act provided by Rule 144A. Notwithstanding
the foregoing, the proposed transferee of such Certificate shall
not be required to provide the Trustee or the Company with Annex
1 or Annex 2 to the form of Exhibit L attached hereto if the
Company so consents prior to each such transfer. Such transfers
shall be deemed to have complied with the requirements of this
Section 5.01(f). The Holder of a Certificate desiring to effect
such transfer does hereby agree to indemnify the Trustee, the
Company, and the Certificate Registrar against any liability that
may result if transfer is not made in accordance with this
Agreement.
Section 5.02. Certificates Issuable in Classes; Distributions of
--------------------------------------------------
Principal and Interest; Authorized Denominations. The aggregate
- -------------------------------------------------
principal amount of the Certificates that may be authenticated
and delivered under this Agreement is limited to the aggregate
Principal Balance of the Mortgage Loans as of the Cut-Off Date,
as specified in the Preliminary Statement to this Agreement,
except for Certificates authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Certificates pursuant to Section 5.03. Such aggregate
principal amount shall be allocated among one or more Classes
having designations, types of interests, initial per annum
Remittance 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 Trustee shall cause to be maintained at one of
- ------------
its offices or at its designated agent, a Certificate Register in
which there shall be recorded the name and address of each
Certificateholder. Subject to such reasonable rules and
regulations as the Trustee may prescribe, the Certificate
Register shall be amended from time to time by the Trustee or its
agent to reflect notice of any changes received by the Trustee or
its agent pursuant to Section 10.06. The Trustee hereby appoints
itself as the initial Certificate Registrar.
Upon surrender for registration of transfer of any
Certificate to the Trustee at the office of First Trust of New
York, National Association, 100 Wall Street, Suite 1600, New
York, NY 10005, Attention: Tom Bowen, 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
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a written instrument of transfer in form satisfactory to the
Trustee or any Authenticating Agent and duly executed by, the
Holder thereof or such Holder's attorney duly authorized in
writing.
A reasonable service charge may be made for any such
exchange or transfer of Certificates, and the Trustee may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any exchange or
transfer of Certificates.
All Certificates surrendered for exchange or transfer shall
be cancelled by the Trustee or any Authenticating Agent.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (i) any mutilated Certificate is surrendered to the Trustee or
any Authenticating Agent, or (ii) the Trustee or any
Authenticating Agent receives evidence to their satisfaction of
the destruction, loss or theft of any Certificate, and there is
delivered to the Trustee or any Authenticating Agent such
security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or
any Authenticating Agent that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
Percentage Interest. Upon the issuance of any new Certificate
under this Section 5.04, the Trustee or any Authenticating Agent
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Trustee or any Authenticating Agent) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.04
shall constitute complete and indefeasible evidence of ownership
in the REMIC III Trust Fund (or with respect to the Class R-1 and
Class R-2 Certificates, the residual ownership interests in the
REMIC I Trust Fund and REMIC II Trust Fund, respectively) 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, Section 4.04 and Section 4.06 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 set forth in this definition 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
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preparation of definitive Certificates, the temporary
Certificates shall be exchangeable for definitive Certificates
upon surrender of the temporary Certificates at the office or
agency of the Trustee to be maintained as provided in Section
5.10 hereof, without charge to the holder. Any tax or
governmental charge that may be imposed in connection with any
such exchange shall be borne by the Master Servicer. Upon
surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver in exchange
therefor a like principal amount of definitive Certificates of
Authorized Denominations. Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates.
-----------------------------------------
Notwithstanding the foregoing, the Book-Entry Certificates, upon
original issuance, shall be issued in the form of one or more
typewritten Certificates of Authorized Denomination representing
the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Company. The Book-Entry
Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of DTC, as the
initial Clearing Agency, and no Beneficial Holder shall receive a
definitive certificate representing such Beneficial Holder's
interest in any Class of Book-Entry Certificate, except as
provided above and in Section 5.09. Each Book-Entry Certificate
shall bear the following legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New
York corporation ("DTC"), to the Trustee or its agent
for registration of transfer, exchange, or payment, and
any Certificate issued is registered in the name of
Cede & Co. or such other name as is requested by an
authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an
interest herein.
Unless and until definitive, fully registered Book-Entry
Certificates (the "Definitive Certificates") have been issued to
the Beneficial Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in
full force and effect with respect to the Book-Entry
Certificates;
(b) the Master Servicer and the Trustee may deal with
the Clearing Agency for all purposes with respect to the
Book-Entry Certificates (including the making of
distributions on the Book-Entry Certificates) as the sole
Certificateholder;
(c) to the extent that the provisions of this Section
5.07 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
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Certificates are issued pursuant to Section 5.09, the
initial Clearing Agency will make book-entry transfers among
the DTC Participants and receive and transmit distributions
of principal and interest on the related Class of Book-Entry
Certificates to such DTC Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Holders of Book-Entry Certificates evidencing a specified
Percentage Interest, such direction or consent may be given by
the Clearing Agency at the direction of Beneficial Holders owning
Book-Entry Certificates evidencing the requisite Percentage
Interest represented by the Book-Entry Certificates. The Clearing
Agency may take conflicting actions with respect to the Book-
Entry Certificates to the extent that such actions are taken on
behalf of the Beneficial Holders.
Section 5.08. Notices to Clearing Agency. Whenever notice or
--------------------------
other communication to the Certificateholders is required under
this Agreement, unless and until Definitive Certificates shall
have been issued to the related Certificateholders pursuant to
Section 5.09, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give
such notices and communications to the related DTC Participants
in accordance with its applicable rules, regulations and
procedures.
Section 5.09. Definitive Certificates. If (a) the Master
-----------------------
Servicer notifies the Trustee in writing that the Clearing Agency
is no longer willing or able to discharge properly its
responsibilities under the Depositary Agreement with respect to
the Book-Entry Certificates and the Trustee or the Master
Servicer is unable to locate a qualified successor, (b) the
Master Servicer, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system with respect to
the Book-Entry Certificates through the Clearing Agency or (c)
after the occurrence of an Event of Default, Certificateholders
holding Book-Entry Certificates evidencing Percentage Interests
aggregating not less than 66% of the aggregate Class Principal
Balance of such Certificates advise the Trustee and the Clearing
Agency through DTC Participants in writing that the continuation
of a book-entry system with respect to the Book-Entry
Certificates through the Clearing Agency is no longer in the best
interests of the Certificateholders with respect to such
Certificates, the Trustee shall notify all Certificateholders of
Book-Entry Certificates of the occurrence of any such event and
of the availability of Definitive Certificates. Upon surrender to
the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the
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, an office or agency where
Certificates may be surrendered for registration of
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transfer or exchange. First Trust of New York, National Association, 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Tom
Bowen, is 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 REMIC I, REMIC II or REMIC III Trust Fund or the
Certificateholders for any action taken by such Person or by a
Servicer or for such Person's or Servicer's refraining from the
taking of any action in good faith pursuant to this Agreement, or
for errors in judgment; provided, however, that this provision
shall not protect the Company, the Master Servicer or any such
Person against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of
duties and obligations hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the
Company or the Master Servicer may rely in good faith on any
document of any kind properly executed and submitted by any
Person respecting any matters arising hereunder. The Company, the
Master Servicer and any director, officer, employee or agent of
the Company or the Master Servicer shall be indemnified by the
REMIC I 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 REMIC I Trust
Fund
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and the Company and the Master Servicer shall be entitled to
be reimbursed therefor out of the Certificate Account, as
provided by Section 3.05.
Section 6.04. The Company and the Master Servicer not to Resign.
-------------------------------------------------
The Company shall not resign from the obligations and duties
(including, without limitation, its obligations and duties as
initial Master Servicer) hereby imposed on it except upon
determination that its duties hereunder are no longer permissible
under applicable law. Any successor Master Servicer shall not
resign from the obligations and duties hereby imposed on it
except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination
permitting the resignation of the Company or any successor Master
Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor Master Servicer shall
have assumed the Master Servicer's responsibilities and
obligations in accordance with Section 7.02 hereof.
If the Company is no longer acting as Master Servicer,
then the successor Master Servicer shall give prompt written
notice to the Company of any information received by such
successor Master Servicer which affects or relates to an ongoing
obligation or right of the Company under this Agreement.
ARTICLE VII
-----------
Default
-------
Section 7.01. Events of Default. (a) In case one or more of the
-----------------
following Events of Default by the Master Servicer or by a
successor Master Servicer shall occur and be continuing, that is
to say:
(i) Any failure by the Master Servicer to deposit
into the 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 III 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 III
Trust Fund; or
(iii) A decree or order of a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a trustee in bankruptcy, conservator
or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been
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entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(iv) The Master Servicer shall consent to the
appointment of a trustee in bankruptcy, conservator or
receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Master Servicer
or of or relating to all or substantially all of its
property; or
(v) The Master Servicer shall admit in writing
its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) Any failure of the Master Servicer to make
any Monthly P&I Advance (other than a Nonrecoverable
Advance) which continues unremedied at the opening of
business on the Distribution Date in respect of which such
Monthly P&I Advance was to have been made;
then, and in each and every such case, so long as an Event of
Default shall not have been remedied, either the Trustee, or the
Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC III Trust Fund, by
notice in writing to the Company and the Master Servicer (and to
the Trustee if given by the Certificateholders, in which case
such notice shall set forth evidence reasonably satisfactory to
the Trustee that such Event of Default has occurred and shall not
have been remedied) may terminate all of the rights (other than
its right to reimbursement for advances) and obligations of the
Master Servicer, including its right to the Master Servicing Fee,
under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, if any. Such determination shall be final and
binding. On or after the receipt by the Master Servicer of such
written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates or
the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section 7.01; and, without
limitation, the Trustee is hereby authorized and empowered to
execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the
Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee for administration by it
of all cash amounts which shall at the time be credited by the
Master Servicer to the Certificate Account or thereafter be
received with respect to the Mortgage Loans.
Notwithstanding the foregoing, if an Event of Default
described in clause (vi) of this Section 7.01(a) shall occur, the
Trustee shall, by notice in writing to the Master Servicer, which
may be delivered by telecopy, immediately suspend all of the
rights and obligations of the Master Servicer thereafter arising
under this Agreement, but without prejudice to any rights it may
have as a Certificateholder or to reimbursement of Monthly P&I
Advances and other advances of its own funds, and the Trustee
shall act as provided in Section 7.02 to carry out the duties of
the Master Servicer, including the obligation to make any Monthly
P&I Advance the nonpayment of which was an Event of Default
described in clause (vi) of this Section 7.01(a). Any such action
taken by the Trustee must be prior to the distribution on the
relevant Distribution Date. If the Master Servicer shall within
two
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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 the Trustee by the Holders of
Certificates evidencing Percentage Interests aggregating not
less than 25% of the REMIC III Trust Fund; or
(ii) A decree or order of a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a trustee in bankruptcy, conservator
or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Company
and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(iii) The Company shall consent to the appointment
of a trustee in bankruptcy, conservator or receiver or
liquidator in any bankruptcy, insolvency, readjustment of
debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating
to all or substantially all of its property; or
(iv) The Company shall admit in writing its
inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable
bankruptcy, insolvency or reorganization statute, make an
assignment for the benefit of creditors, or voluntarily
suspend payment of its obligations;
then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of
the REMIC III 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 III Trust Fund may
take certain action, such action shall be taken by the Trustee,
but only if the requisite percentage
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of Certificateholders required under this Agreement for taking like action
or giving like instruction to the Trustee under this Agreement shall have
so directed the Trustee in writing.
Section 7.02. Trustee to Act; Appointment of Successor. On and
----------------------------------------
after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee shall be the
successor in all respects to the Master Servicer under this
Agreement and under the Selling and Servicing Contracts with
respect to the Mortgage Loans in the Mortgage Pool and with
respect to the transactions set forth or provided for herein and
shall have all the rights and powers and be subject to all the
responsibilities, duties and liabilities relating thereto arising
after the Master Servicer receives such notice of termination
placed on the Master Servicer by the terms and provisions hereof
and thereof, and shall have the same limitations on liability
herein granted to the Master Servicer; provided, that the Trustee
shall not under any circumstances be responsible for any
representations and warranties or any Purchase Obligation of the
Company or any liability incurred by the Master Servicer at or
prior to the time the Master Servicer was terminated as Master
Servicer and the Trustee shall not be obligated to make a Monthly
P&I Advance if it is prohibited by law from so doing. As
compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would
have been entitled to retain or to withdraw from the Certificate
Account if the Master Servicer had continued to act hereunder,
except for those amounts due to the Master Servicer as
reimbursement for advances previously made or amounts previously
expended and are otherwise reimbursable hereunder.
Notwithstanding the above, the Trustee may, if it shall be
unwilling to 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
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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
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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, certifi-
cates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this
Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of
any such certificate, statement, opinion, report, or other order
or instrument furnished by the Company or Master Servicer to the
Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of an Event of Default and after the
curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely
by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this
Agreement against the Trustee, and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Agreement; and
(ii) The Trustee shall not be personally liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence Percentage Interests aggregating not
less than 25% of the REMIC III 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
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otherwise provided in Section 8.01:
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(i) The Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) The Trustee shall not be personally liable for any
action taken or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have
occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested
in writing to do so by the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of the REMIC III 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.
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Section 8.04. Trustee May Own Certificates. The Trustee or any
----------------------------
agent or affiliate of the Trustee, in its individual or any other
capacity, may become the owner or pledgee of Certificates with
the same rights it would have if it were not Trustee.
Section 8.05. The Master Servicer to Pay Trustee's Fees and
---------------------------------------------
Expenses. Subject to any separate written agreement with the
- --------
Trustee, the Master Servicer covenants and agrees to, and the
Master Servicer shall, pay the Trustee from time to time, and the
Trustee shall be entitled to payment, for all services rendered
by it in the execution of the trust hereby created and in the
exercise and performance of any of the powers and duties
hereunder of the Trustee. Except as otherwise expressly provided
herein, the Master Servicer shall pay or reimburse the Trustee
upon its request for all reasonable expenses and disbursements
incurred or made by the Trustee in accordance with any of the
provisions of this Agreement and indemnify the Trustee from any
loss, liability or expense incurred by it hereunder (including
the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ)
except any such expense or disbursement as may arise from its
negligence or bad faith. Such obligation shall survive the
termination of this Agreement or resignation or removal of the
Trustee. The Company shall, at its expense, prepare or cause to
be prepared all federal and state income tax and franchise tax
and information returns relating to the REMIC I Trust Fund, the
REMIC II Trust Fund or the REMIC III 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,
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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 III Trust Fund may at any
time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such
Holders or their attorneys in-fact duly authorized, one complete
set of which instruments shall be delivered to the Master
Servicer, one complete set to the Trustee so removed and one
complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of
a successor trustee pursuant to any of the provisions of this
Section 8.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 8.08.
Any expenses associated with the resignation of the Trustee shall
be borne by the Trustee, and any expenses associated with the
removal of the Trustee shall be borne by the Master Servicer.
Section 8.08. Successor Trustee. Any successor trustee appointed
-----------------
as provided in Section 8.07 shall execute, acknowledge and
deliver to the Master Servicer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor trustee shall
become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee
herein. The predecessor shall deliver to the successor trustee
all Mortgage Files, related documents, statements and all other
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
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further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in
which any part of the REMIC I Trust Fund, the REMIC II Trust Fund
or REMIC III Trust Fund may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-
trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the REMIC I Trust Fund,
the REMIC II Trust Fund or REMIC III Trust Fund and to vest in
such Person or Persons, in such capacity, such title to the REMIC
I Trust Fund, the REMIC II Trust Fund or REMIC III Trust Fund, or
any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts
as the Master Servicer and the Trustee may consider necessary or
desirable; provided, that the Trustee shall remain liable for all
of its obligations and duties under this Agreement. If the Master
Servicer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment;
provided, that the Trustee shall remain liable for all of its
obligations and duties under this Agreement. No co-trustee or
separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder
and no notice to Certificateholders of the appointment of co-
trustee(s) or separate trustee(s) shall be required under Section
8.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties
and obligations conferred or imposed upon the Trustee shall be
conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly and
severally, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the
holding of title to the REMIC I Trust Fund, the REMIC II Trust
Fund or the REMIC III 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
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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 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, Section 4.06(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
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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 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
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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 REMIC I Trust Fund at a price equal, after the
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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 REMIC I 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 REMIC I Trust Fund, any such appraisal
to be conducted by an appraiser mutually agreed upon by the
Company and the Trustee, or (ii) the later of the final payment
or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan remaining in the REMIC I 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 REMIC I 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 REMIC I
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 REMIC I 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
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Servicer's obligation to hold all amounts payable to
Certificateholders in trust without interest pending such
payment.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months
after the Termination Date, the Company shall give a second
written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the Termination
Payment with respect thereto. If within one year after the second
notice all the Certificates shall not have been surrendered for
cancellation, the Company may take appropriate steps to contact
the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds
and other assets which remain in trust hereunder.
Section 9.02. Additional Termination Requirements.
-----------------------------------
(a) In the event the Company exercises its purchase option as
provided in Section 9.01, the REMIC I Trust Fund, the REMIC II
Trust Fund and the REMIC III 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, the REMIC II Trust Fund and REMIC III 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, the REMIC II Trust Fund and the REMIC III Trust
Fund as described in Section 860F of the Code, or (ii) cause the
REMIC I Trust Fund, the REMIC II Trust Fund or the REMIC III
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, the REMIC II
Trust Fund and the REMIC III 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, the REMIC II Trust Fund and the REMIC III 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, the REMIC II Trust Fund and the
REMIC III 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.
160
<PAGE>
ARTICLE X
---------
Miscellaneous Provisions
------------------------
Section 10.01. Amendment.
---------
(a) This Agreement may be amended from time to time by the
Master Servicer, the Company and the Trustee, without the consent
of any of the Certificateholders, (i) to cure any ambiguity; (ii)
to correct or supplement any provision herein which may be
defective or inconsistent with any other provisions herein; (iii)
to comply with any requirements imposed by the Code or any
regulations thereunder; (iv) to correct the description of any
property at any time included in the REMIC I Trust Fund, the
REMIC II Trust Fund or the REMIC III Trust Fund, or to assure the
conveyance to the Trustee of any property included in the REMIC I
Trust Fund, the REMIC II Trust Fund or the REMIC III Trust Fund;
and (v) pursuant to Section 5.01(c)(v). No such amendment (other
than one entered into pursuant to clause (iii) of the preceding
sentence) shall adversely affect in any material respect the
interest of any Certificateholder. Prior to entering into any
amendment without the consent of Certificateholders pursuant to
this paragraph, the Trustee may require an Opinion of Counsel to
the effect that such amendment is permitted under this paragraph.
The placement of an "original issue discount" legend on, or any
change required to correct any such legend previously place 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 III 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 Remittance Rate or the Termination Payment with respect to
any of the Certificates, (ii) reduce the percentage of Percentage
Interests specified in this Section 10.01 which are required to
amend this Agreement, (iii) create or permit the creation of any
lien against any part of the REMIC I Trust Fund, the REMIC II
Trust Fund or the REMIC III 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
162
<PAGE>
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 REMIC I Trust Fund, the REMIC II
Trust Fund or REMIC III Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a
partition or winding-up of the REMIC I Trust Fund, the REMIC II
Trust Fund or the REMIC III Trust Fund, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any
of them.
No Certificateholder shall have any right to vote or in any
manner otherwise to control the operation and management of the
REMIC I Trust Fund, the REMIC II Trust Fund or the REMIC III
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 III 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
163
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availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.03, each and
every Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
Section 10.04. Access to List of Certificateholders. The
-------------------------------------
Certificate Registrar shall furnish or cause to be furnished to
the Trustee, within 30 days after receipt of a request by the
Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date for payment
of distributions to such Certificateholders.
If three or more Certificateholders (hereinafter referred to
as "applicants") apply in writing to the Trustee, and such
application states that the applicants desire to communicate with
other Certificateholders with respect to their rights under this
Agreement or under the Certificates and is accompanied by a copy
of the communication which such applicants propose to transmit,
then the Trustee shall, within five Business Days after the
receipt of such list from the Certificate Registrar, afford such
applicants access during normal business hours to the most recent
list of Certificateholders held by the Trustee. If such a list is
as of a date more than 90 days prior to the date of receipt of
such applicants' request, the Trustee shall promptly request from
the Certificate Registrar a current list as provided above, and
shall afford such applicants access to such list promptly upon
receipt.
Every Certificateholder, by receiving and holding the same,
agrees with the Master Servicer and the Trustee that neither the
Master Servicer nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 10.05. Governing Law. This Agreement shall be construed
-------------
in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.
Section 10.06. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered at or mailed by registered or
certified mail to (a) in the case of the Company, 75 North
Fairway Drive, Vernon Hills, Illinois 60061, Attention: General
Counsel (with a copy directed to the attention of the Master
Servicing Department) or such other address as may hereafter be
furnished to the Trustee in writing by the Company, (b) in the
case of the Trustee, at its Corporate Trust Office, or such other
address as may hereafter be furnished to the Master Servicer in
writing by the Trustee, (c) in the case of the Certificate
Registrar, at its Corporate Trust Office, or such other address
as may hereafter be furnished to the Trustee in writing by the
Certificate Registrar, (d) in the case of S&P, 26 Broadway, 15th
Floor, New York, New York 10004, Attention: Frank Raiter, or
such other address as may hereafter be furnished to the Trustee
and Master Servicer in writing by S&P
164
<PAGE>
and (e) in the case of Fitch, 1 State Street Plaza, New York, New
York, Attention: George Massim, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in writing by
Fitch. Notices to the Rating Agencies shall also be deemed to have been
duly given if mailed by first class mail, postage prepaid, to the
above listed addresses of the Rating Agencies. Any notice
required or permitted to be mailed to a Certificateholder shall
be given by first class mail, postage prepaid, at the address of
such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 10.07. Severability of Provisions. If any one or more of
--------------------------
the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the Holders thereof.
Section 10.08. Counterpart Signatures. For the purpose of
----------------------
facilitating the recordation of this Agreement as herein provided
and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.
Section 10.09. Benefits of Agreement. Nothing in this Agreement
---------------------
or in any Certificate, expressed or implied, shall give to any
Person, other than the parties hereto and their respective
successors hereunder, any separate trustee or co-trustee
appointed under Section 8.10 and the Certificateholders, any
benefit or any legal or equitable right, remedy or claim under
this Agreement.
Section 10.10. Notices and Copies to Rating Agencies.
-------------------------------------
(a) The Trustee shall notify the Rating Agencies of the
occurrence of 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;
165
<PAGE>
(iii) the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions
coverage pursuant to Section 3.01 and Section 3.06 with respect
to the Master Servicer or any Servicer;
(iv) any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
(v) the repurchase of any Mortgage Loan pursuant to a Purchase
Obligation or the repurchase of the outstanding Mortgage Loans
pursuant to Section 9.01;
(vi) the occurrence of the final Distribution Date or the
termination of the trust pursuant to Section 9.01(a)(ii);
(vii) the failure of the Master Servicer to make a Monthly
P&I Advance following a determination on the Determination Date
that the Master Servicer would make such advance pursuant to
Section 4.02; and
(viii) the failure of the Master Servicer to make a
determination on the Determination Date regarding whether it
would make a Monthly P&I Advance when a shortfall exists between
(x) payments scheduled to be received in respect of the Mortgage
Loans and (y) the amounts actually deposited in the Certificate
Account on account of such payments, pursuant to Section 4.02.
The Master Servicer shall provide copies of the statements
pursuant to Section 4.02, Section 4.05, Section 3.12, Section
3.13 or Section 3.15 or any other statements or reports to the
Rating Agencies in such time and manner that such statements or
determinations are required to be provided to Certificateholders.
With respect to the reports described in the second paragraph of
Section 4.05, the Master Servicer shall provide such reports to
the Rating Agencies in respect of each Distribution Date, without
regard to whether any Certificateholder or the Trustee has
requested such report for such Distribution Date.
166
<PAGE>
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
U.S. BANK NATIONAL ASSOCIATION,
as TRUSTEE
(SEAL)
No Seal By: \s\C. Hatfield
------------------------
C. Hatfield
-------------
Its: Vice President
--------------
<PAGE>
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 30th day of July, 1998 before me, a Notary Public in
---- ----------
and for said State, personally appeared, 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
STATE OF MINNESOTA )
) SS.
COUNTY OF RAMSEY )
On this 30th day of July, 1998 before me, a Notary Public in
---- ----------
and for said State, personally appeared Christina Hatfield known to
me to be the Vice President of U.S. BANK NATIONAL ASSOCIATION, a
national banking association, one of the corporations that executed
the within instrument, and also known to me to be the person who
executed in 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 this certificate first above written.
\s\Deborah J. Franco
---------------------
Notary Public
(SEAL)
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
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.
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 1998-6 Portion of the Class I-A-1
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$________________________
Class I-A-1 Remittance Rate: Based on the following six
Components: (i) Component I-A-1-1: 6.750% applied to the
Component I-A-1-1 Notional Amount; (ii) Component I-A-1-2
Remittance Rate: 6.400%; (iii) Component I-A-1-3 Remittance
Rate: 7.000% applied to the Component I-A-1-3 Notional Amount;
(iv) Component I-A-1-4 Remittance Rate: 0.00%; (v) Component I-A-
1-5 Remittance Rate: 6.750% applied to the Component I-A-1-5
Principal Balance; and (vi) Component I-A-1-6 Remittance Rate:
0.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-2
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$________________________
Class I-A-2 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-2 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-2
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-3
Principal Balance as of the
the Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class I-A-3 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-3 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-3
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-4
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class I-A-4 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-4 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-4
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-5
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$__________________________
Class I-A-5 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-5 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-5
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-6
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$__________________________
Class I-A-6 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-6 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-6
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-7
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$________________________________
Class I-A-7 Remittance Rate: 6.165%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-7 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-7
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-8
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class I-A-8 Remittance Rate: 6.700%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-8 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-8
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-9
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class I-A-9 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-9 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-9
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-10
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$______________________
Class I-A-10 Remittance Rate: 6.750% applied to the Class I-A-10
Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-10 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-10 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-10
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-11
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_____________________________
Class I-A-11 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-11 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-11
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-12
Principal Balance as of
the Cut-Off Date Evidenced by
this Certificate:
$_____________________________
Class I-A-12 Remittance Rate: 8.100%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-12 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-12
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-13
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class I-A-13 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-13 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-13
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-14
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________
Class I-A-14 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-14 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-14
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-15
Principal Balance as of the
the Cut-Off Date Evidenced by
this Certificate:
$__________________________
Class I-A-15 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-15 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-15
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-16
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$______________________________
Class I-A-16 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-16 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-16
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-17
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_______________________________
Class I-A-17 Remittance Rate: 6.400%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-17 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-17
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-18
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_____________________________
Class I-A-18 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-18 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-18
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-19
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_____________________________
Class I-A-19 Remittance Rate: 6.600%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-19 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-19
<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 July 29, 1998. Interest is not
payable with respect to this Certificate. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-20
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_____________________________
Class I-A-20 Remittance Rate: 0.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-20 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-20
<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 July 29, 1998. Interest is not
payable with respect to this Certificate. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-21
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$______________________________
Class I-A-21 Remittance Rate: 0.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-21 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-21
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-22
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class I-A-22 Remittance Rate: 6.750% applied to the Class I-A-22
Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-22 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-22 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-22
<PAGE>
Exhibit A-I-A-23
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-23
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-A-23 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE
POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND IN
FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO
THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS I-A-23
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY
OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
MASTER SERVICER OR THE COMPANY.
The Class I-A-23 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 1998-6 Portion of the Class I-A-23
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$______________________________
Class I-A-23 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-23 Principal Balance
as of the Cut-Off Date: $[ ]
Registered Owner____________
Certificate No. ___
A-23
<PAGE>
Exhibit A-I-A-24
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-24
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class I-A-24
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class I-A-24 Remittance Rate: 6.750% applied to the Class I-A-24
Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-A-24 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-24 Notional Amount
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-24
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
Series 1998-6 Portion of the Class I-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class I-X Remittance Rate: 6.750% applied to the Class
I-X Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 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-25
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 275% of the Standard Prepayment
Assumption as described in the Prospectus Supplement), this
Certificate has been issued with original issue discount ("OID")
of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount
of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-1 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
I-B-1 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class I-B-1 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class I-B-1
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class I-B-1 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-1 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-26
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 275% of the Standard Prepayment
Assumption as described in the Prospectus Supplement), this
Certificate has been issued with original issue discount ("OID")
of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount
of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-2 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
I-B-2 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class I-B-2 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class I-B-2
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class I-B-2 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-2 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-27
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 275% of the Standard Prepayment
Assumption as described in the Prospectus Supplement), this
Certificate has been issued with original issue discount ("OID")
of no more than $ per $100,000 of initial Certificate
Principal Balance, the yield to maturity is %, and the amount
of OID attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that
the Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-3 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
I-B-3 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT 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 1998-6 Portion of the Class I-B-3
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class I-B-3 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-3 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-28
<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 "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-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 1998-6 Portion of the Class I-B-
4 Principal Balance as of
the Cut-Off Date Evidenced
by this Certificate:
$__________________________
Class I-B-4 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-4 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-29
<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 "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-5 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
I-B-5 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class I-B-5 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class I-B-
5 Principal Balance as of
the Cut-Off Date Evidenced
by this Certificate:
$__________________________
Class I-B-5 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-5 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-30
<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 "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 275% of the Standard Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-B-6 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
I-B-6 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class I-B-6 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class I-B-
6 Principal Balance as of
the Cut-Off Date Evidenced
Evidenced by this Certificate:
$_________________________
Class I-B-6 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class I-B-6 Principal Balance
as of the Cut-Off Date: $[ ]
__________________
Registered Owner
Certificate No. _________
A-31
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-1
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class II-A-1 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-1 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-32
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-2
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class II-A-2 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-2 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-33
<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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-3
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-3 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-3 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-34
<PAGE>
Exhibit A-II-A-4
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-4
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. Interest is not
payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-4
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-4 Remittance Rate: 0.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-4 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-35
<PAGE>
Exhibit A-II-A-5
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-5
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-5
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$_________________________
Class II-A-5 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-5 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-36
<PAGE>
Exhibit A-II-A-6
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-6
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-6
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class II-A-6 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-6 Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-37
<PAGE>
Exhibit A-II-A-7
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-7
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-7
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-7 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-7 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-38
<PAGE>
Exhibit A-II-A-8
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-A-8
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-8
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$________________________
Class II-A-8 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-8 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-39
<PAGE>
Exhibit A-II-A-9
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 July 29, 1998. Interest is not
payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-9
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-9 Remittance Rate: 6.450%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-9 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-40
<PAGE>
Exhibit A-II-A-10
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-10
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-10 Remittance Rate: 6.750% applied to the
Class II-A-10 Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-10 Principal Balance as of the Cut-Off Date: $0.00
Class II-A-10 Notional Amount as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-41
<PAGE>
Exhibit A-II-A-11
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-11
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$___________________________
Class II-A-11 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-11 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-42
<PAGE>
Exhibit A-II-A-12
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-12
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-12 Remittance Rate: 6.500%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-12 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-43
<PAGE>
Exhibit A-II-A-13
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-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 July 29, 1998. Interest is not
payable with respect to this Certificate.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class II-A-13
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class II-A-13 Remittance Rate: 0.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class II-A-13 Principal Balance as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-44
<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 July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Series 1998-6 Portion of the Class II-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class II-X Remittance Rate: 6.500% applied to the Class
II-X Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 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-45
<PAGE>
Exhibit A-III-A-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class III-A-1
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$____________________________
Class III-A-1 Remittance Rate: 7.000%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class III-A-1 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-46
<PAGE>
Exhibit A-III-X
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-X
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Series 1998-6 Portion of the Class III-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class III-X Remittance Rate: 7.000% applied to the Class
III-X Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class III-X Principal Balance
as of the Cut-Off Date: $0.00
Class III-X Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-47
<PAGE>
Exhibit A-III-P
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-P
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed 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 July 29, 1998. Interest is not
payable with respect to this Certificate. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Series 1998-6 Portion of the Class III-P
Principal Balance as of the Cut-Off
Date evidenced by this Certificate:
$____________________________
Class III-P Remittance Rate: 0.00%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class III-P Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
A-48
<PAGE>
Exhibit A-IV-A-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Trustee or its agent for registration
of transfer, exchange, or payment, and any Certificate issued is
registered in the name of Cede & Co. or such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
Series 1998-6 Portion of the Class IV-A-1
Principal Balance as of the
Cut-Off Date Evidenced by
this Certificate:
$__________________________
Class IV-A-1 Remittance Rate: 6.750%
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class IV-A-1 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-49
<PAGE>
Exhibit A-IV-X
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-X
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended. The issue date (the "Issue
Date") of this Certificate is July 29, 1998. [Assuming that the
Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
Series 1998-6 Portion of the Class IV-X
Notional Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class IV-X Remittance Rate: 6.750% applied to the
Class IV-X Notional Amount
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class IV-X Principal Balance
as of the Cut-Off Date: $0.00
Class IV-X Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-50
<PAGE>
Exhibit A-C-B-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-1
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Issue Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-1 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-1 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class C-B-1 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-1
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class C-B-1 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-1 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-51
<PAGE>
Exhibit A-C-B-2
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-2
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Issue Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-2 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-2 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class C-B-2 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-2
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class C-B-2 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-2 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-52
<PAGE>
Exhibit A-C-B-3
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-3
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Issue Date") of this Certificate is July 29, 1998.
[Assuming that the Mortgage Loans underlying the Certificates
prepay at the prepayment assumption used by the issuer in pricing
this Certificate (i.e., 100% of the Basic Prepayment Assumption
as described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-3 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-3 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class C-B-3 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-3
Principal Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$_____________________________
Class C-B-3 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-3 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-53
<PAGE>
Exhibit A-C-B-4
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-4
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-4 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-4 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-4 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-
4 Principal Balance as of
the Cut-Off Date Evidenced
by this Certificate
$______________________
Class C-B-4 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-4 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-54
<PAGE>
Exhibit A-C-B-5
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-5
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-5 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-5 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-5 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-
5 Principal Balance as of
the Cut-Off Date Evidenced
by this Certificate:
$______________________
Class C-B-5 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-5 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-55
<PAGE>
Exhibit A-C-B-6
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-6
Evidencing a Percentage Interest in a trust fund whose assets
consist of interests in another trust fund whose assets consists
of, among other things, a pool of conventional one- to four-
family mortgage loans formed and administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in
a "real estate mortgage investment conduit," as those terms are
defined in Sections 860G and 860D, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code"). The issue date
(the "Date") of this Certificate is July 29, 1998. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the
prepayment assumption used by the issuer in pricing this
Certificate (i.e., 100% of the Basic Prepayment Assumption as
described in the Prospectus Supplement), this Certificate has
been issued with original issue discount ("OID") of no more than
$ per $100,000 of initial Certificate Principal
Balance, the yield to maturity is %, and the amount of OID
attributable to the short period is not more than $
per $100,000 of initial Certificate Principal Balance, computed
under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic
Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS C-B-6 CERTIFICATE PRESENTED FOR
REGISTRATION IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL
REQUIRE, EXCEPT AS OTHERWISE SET FORTH IN SECTION 5.01(d) OF
THE POOLING AGREEMENT, AN OPINION OF COUNSEL ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND THE
COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS
C-B-6 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE
AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class C-B-6 Certificates will be subordinate in right of
payment to and provide credit support to certain Classes of
Certificates, as described in the Pooling Agreement.
Series 1998-6 Portion of the Class C-B-
6 Principal Balance as of
the Cut-Off Date Evidenced
by this Certificate:
$_________________________
Class C-B-6 Remittance Rate: Variable
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class C-B-6 Principal Balance
as of the Cut-Off Date: $
__________________
Registered Owner
Certificate No. _________
A-56
<PAGE>
Exhibit B
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-3
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-3 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.
NO TRANSFER OF ANY CLASS R-3 CERTIFICATE SHALL BE MADE UNLESS THE
TRANSFEREE PROVIDES THE COMPANY AND THE TRUSTEE WITH 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-3 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 1998-6 Percentage Interest evidenced by
this Class R-3 Certificate in
the distributions to be made
with respect to the Class R-3
Certificates: ___________%
Class R-3 Remittance Rate: 6.750%. Additionally
the Class R-3 Certificates are entitled to the
Residual Distribution Amount as defined in the
Pooling Agreement.
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class R Principal Balance as of the Cut-Off Date: $50.00
__________________
Registered Owner
Certificate No. _________
B-1
<PAGE>
Exhibit C-R-1 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.
NO TRANSFER OF ANY CLASS R-1 CERTIFICATE SHALL BE MADE UNLESS THE
TRANSFEREE PROVIDES THE COMPANY AND THE TRUSTEE WITH 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 1998-6 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 Remittance Rate: 6.750%. Additionally the
Class R-1 Certificates are entitled to Excess
Liquidation Proceeds and the Residual Distribution
Amount as defined in the Pooling Agreement.
Cut-Off Date: July 1, 1998
First Distribution Date: August 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 "REMIC
I Trust Fund") whose assets consist of, among other things, a
pool (the "Mortgage Pool") of conventional one- to four-family
mortgage loans (the "Mortgage Loans"), formed and administered by
PNC Mortgage Securities Corp. (the "Company"), which term
includes any successor entity under the Pooling Agreement
referred to below. The Mortgage Pool was created pursuant to a
Pooling and Servicing Agreement, dated as of the Cut-Off Date
stated above (the "Pooling Agreement"), between the Company and
U.S. Bank National Association, 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-2
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By: _________________________________
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:__________________________
Dated:_______________________
C-3
<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 I
Trust Fund.
The Certificates do not represent an obligation of, or an
interest in, the Company or any of its affiliates and are not
insured or guaranteed by any governmental agency. The
Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as
more specifically set forth herein and in the Pooling Agreement.
In the event funds are advanced with respect to any Mortgage
Loan, such advance is reimbursable to the Master Servicer from
the related recoveries on such Mortgage Loan or from other cash
deposited in the Certificate Account to the extent that such
advance is not otherwise recoverable.
As provided in the Pooling Agreement, withdrawals from the
Certificate Account may be made from time to time for purposes
other than distributions to Certificateholders, such purposes
including reimbursement to the Master Servicer of advances made,
or certain expenses incurred, by it.
The Pooling Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the
Certificateholders under the Pooling Agreement at any time by the
Company, the Master Servicer and the Trustee with the consent of
the Holders of the Certificates evidencing Percentage Interests
aggregating not less than 66% of the REMIC III Trust Fund. For
the purposes of such provision and except as provided below,
voting rights relating to 100% of the Aggregate Certificate
Principal Balance will be allocated pro rata (by Certificate
Principal Balance) among such Certificates. The Pooling Agreement
also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
Certificate Registrar or 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
C-4
<PAGE>
and the Master Servicer against any liability that may result
if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
The Certificates are issuable only as registered
Certificates without coupons in Authorized Denominations
specified in the Pooling Agreement. As provided in the Pooling
Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the
portion of the REMIC I Available Distribution Amount
distributable on this Class of Certificate, as requested by the
Holder surrendering the same.
A reasonable service charge may be made for any such
registration of transfer or exchange, and the Trustee may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and
any agent of the Company, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the
Company, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the
trust funds created thereby shall terminate upon (i) the later of
the maturity or other liquidation (including repurchase by the
Company) of the last Mortgage Loan remaining in the REMIC I Trust
Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the
payment to Certificateholders of all amounts held by the Trustee
and required to be paid to them pursuant to the Pooling
Agreement. In the event that the Company repurchases any Mortgage
Loan pursuant to the Pooling Agreement, such Pooling Agreement
generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of
the unpaid Principal Balance of such Mortgage Loan, plus accrued
interest at the applicable Pass-Through Rate to the next
scheduled Due Date for the Mortgage Loan. The Pooling Agreement
permits, but does not require, the Company to repurchase from the
REMIC I Trust Fund all Mortgage Loans at the time subject thereto
and all property acquired in respect of any Mortgage Loan upon
payment to the Certificateholders of the amounts specified in the
Pooling Agreement. The exercise of such right will effect early
retirement of the Certificates, the Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the
Mortgage Loans at the time of repurchase being less than five
percent (5%) of the aggregate unpaid Principal Balance of the
Mortgage Loans as of the Cut-Off Date.
C-5
<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-6
<PAGE>
Exhibit C-R-2
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-2
Evidencing a Percentage Interest in certain distributions with
respect to a pool of conventional one- to four-family mortgage
loans formed and administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER
AFFIDAVIT TO THE COMPANY AND THE CERTIFICATE REGISTRAR THAT (1)
SUCH TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT
FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF
THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A),
(B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION
AND (2) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO
IMPEDE THE ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL
INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CLASS R-2 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL
BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH
PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY
PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS R-2
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
NO TRANSFER OF ANY CLASS R-2 CERTIFICATE SHALL BE MADE UNLESS THE
TRANSFEREE PROVIDES THE COMPANY AND THE TRUSTEE WITH 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 1998-6 Percentage Interest evidenced by
this Class R-2 Certificate in the
distributions to be made with
with respect to the Class R-2
Certificates: _____________%
Class R-2 Remittance Rate: 6.750%. Additionally
the Class R-2 Certificates are entitled to Excess
Liquidation Proceeds and the Residual Distribution
Amount as defined in the Pooling Agreement.
Cut-Off Date: July 1, 1998
First Distribution Date: August 25, 1998
Last Scheduled Distribution Date:
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
__________________
Registered Owner
Certificate No. _________
C-7
<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 "REMIC
II Trust Fund") whose assets consist of, among other things, a
pool (the "Mortgage Pool") of conventional one- to four-family
mortgage loans (the "Mortgage Loans"), formed and administered by
PNC Mortgage Securities Corp. (the "Company"), which term
includes any successor entity under the Pooling Agreement
referred to below. The Mortgage Pool was created pursuant to a
Pooling and Servicing Agreement, dated as of the Cut-Off Date
stated above (the "Pooling Agreement"), between the Company and
U.S. Bank National Association, 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 4.06 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-8
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By: ______________________________________
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: __________________________
Dated:________________________
C-9
<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 III Trust Fund. For
the purposes of such provision and except as provided below,
voting rights relating to 100% of the Aggregate Certificate
Principal Balance will be allocated pro rata (by Certificate
Principal Balance) among such Certificates. The Pooling Agreement
also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
Certificate Registrar or 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
C-10
<PAGE>
and the Master Servicer against any liability that may result
if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Certificates are issuable only as registered
Certificates without coupons in Authorized Denominations
specified in the Pooling Agreement. As provided in the Pooling
Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of Authorized
Denominations evidencing the same aggregate interest in the
portion of the REMIC II Available Distribution Amount
distributable on this Class of Certificate, as requested by the
Holder surrendering the same.
A reasonable service charge may be made for any such
registration of transfer or exchange, and the Trustee may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and
any agent of the Company, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the
Company, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the
trust funds created thereby shall terminate upon (i) the later of
the maturity or other liquidation (including repurchase by the
Company) of the last Mortgage Loan remaining in the REMIC I Trust
Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the
payment to Certificateholders of all amounts held by the Trustee
and required to be paid to them pursuant to the Pooling
Agreement. In the event that the Company repurchases any Mortgage
Loan pursuant to the Pooling Agreement, such Pooling Agreement
generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of
the unpaid Principal Balance of such Mortgage Loan, plus accrued
interest at the applicable Pass-Through Rate to the next
scheduled Due Date for the Mortgage Loan. The Pooling Agreement
permits, but does not require, the Company to repurchase from the
REMIC I Trust Fund all Mortgage Loans at the time subject thereto
and all property acquired in respect of any Mortgage Loan upon
payment to the Certificateholders of the amounts specified in the
Pooling Agreement. The exercise of such right will effect early
retirement of the Certificates, the Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the
Mortgage Loans at the time of repurchase being less than five
percent (5%) of the aggregate unpaid Principal Balance of the
Mortgage Loans as of the Cut-Off Date.
C-11
<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-12
<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 U.S. Bank National Association
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 U.S. Bank National Association,
Tina Hatfield
Corporate Trust Department
U.S. Bank National Association
180 E. Fifth Street
St. Paul, Minnesota 55101
Telephone: (612) 244-5021
Facsimile: (612) 244-0711
D-1
<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.
E-1
<PAGE>
4. Compensation. The Company shall be compensated for its
------------
services hereunder as specified in the Guides.
5. No Assignment. This Agreement may not be assigned by
-------------
the Company without the prior written consent of PNC Mortgage.
The Company hereby consents to the assignment by PNC Mortgage of
all or any part of its rights and obligations under this
Agreement to any affiliate designated by PNC Mortgage. Any other
transfer by PNC Mortgage will be allowed and be effective upon
written notice by PNC Mortgage to the Company.
6. Prior Agreements. This Agreement supersedes any prior
----------------
agreements and understandings between PNC Mortgage and the
Company governing the subject matter hereof; provided, however,
the Company shall not be released from any responsibility or
liability that may have arisen under such agreements and
understanding.
7. Effective Date of Agreement. This Agreement is not
---------------------------
effective until it is executed and accepted by PNC Mortgage at
its home office in Illinois.
8. Notices. All notices, requests, demands or other
-------
communications that are to be given under this Agreement shall be
in writing, addressed to the appropriate parties, and shall be
sent by certified mail, return receipt requested, postage
prepaid, if to the Company, at the address below and, if to PNC
Mortgage, to the appropriate address or facsimile number
specified in the Guides. Any such notice, request, demand or
other communication shall be deemed effective upon receipt.
9. Independent Contractor. At no time shall the Company
----------------------
represent that it is acting as an agent, partner or joint
venturer of PNC Mortgage. The Company shall at all times act as
an independent contracting party.
10. Amendment. This Agreement may not be amended or
---------
modified orally, and no provision of this Agreement may be waived
or amended, except in writing signed by the party against whom
enforcement is sought. Such a written waiver or amendment must
expressly reference this Agreement. However, by their terms the
Guides may be amended or supplemented by PNC Mortgage from time
to time. Any such amendment(s) to the Guides shall be in writing
and be binding upon the parties hereto on and after the effective
date specified therein.
11. Miscellaneous. This Agreement, including all
-------------
documents incorporated by reference herein, constitutes the
entire understanding between the parties hereto and supersedes
all other agreements, covenants, representations, warranties,
understandings and communications between the parties, whether
written or oral, with respect to the transactions contemplated by
this Agreement. All section headings contained herein are for
convenience only and shall not be construed as part of this
Agreement. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such
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.
E-2
<PAGE>
_______________________________ ______________________________
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
officer
Agreed to and accepted by PNC Mortgage Securities Corp.
- -------------------------------------------------------
__________________________________________________________________
Typed name and title of authorized representative
_____________________________________________ __________________
Signature of authorized representative Date
E-3
<PAGE>
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
U.S. Bank National Association, as Trustee
180 East 5th Street, SPFT0210
St. Paul, MN 55101
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates Series 1998-6, Class [ ] (the
"Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand the Certificates have not been
registered under the Securities Act of 1933, as amended (the
"Act") and are being disposed by us in a transaction that is
exempt from the registration requirements of the Act, and (b) we
have not offered or sold any certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached
or negotiated with any person with respect thereto, or taken any
other action which would result in a violation of Section 5 of
the Act.
Very truly yours,
[Name of Transferor]
By:_______________________
Authorized Officer
F-1
<PAGE>
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
U.S. Bank National Association
180 East 5th Street, SPFT0210
St. Paul, MN 55101
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 1998-6 (the "Purchased Certificates") in the principal
amount of $______________. In doing so, the Purchaser hereby
acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used
herein and not otherwise defined herein shall have the meaning
ascribed to it in the Pooling and Servicing Agreement, dated as
of July 1, 1998 (the "Pooling Agreement"), by and between PNC
Mortgage Securities Corp. ("PNC") and U.S. Bank National
Association, as trustee (the "Trustee"), of the PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series 1998-
6.
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
G-1
<PAGE>
and all matters relating thereto that PNC possesses or can acquire
without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and
will continue to comply, with the guidelines established by
Thrift Bulletin 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 1998-6
-------------------------------------------------
(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 AND CLASS
R-2 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
III Trust Fund") whose assets consist of interests in a trust
fund (the "REMIC II Trust Fund") whose assets consist of
interests in a trust fund (the "REMIC I Trust Fund") whose assets
consist of, among other things, a pool (the "Mortgage Pool") of
conventional one- to four-family mortgage loans (the "Mortgage
Loans"), formed and administered by PNC Mortgage Securities Corp.
(the "Company"), which term includes any successor entity under
the Pooling Agreement referred to below. The Mortgage Pool was
created pursuant to a Pooling and Servicing Agreement, dated as
of the Cut-Off Date stated above (the "Pooling Agreement"),
between the Company and U.S. Bank National Association, 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 III Available
Distribution Amount for such Distribution Date then distributable
on the Certificates of this Class, as specified in Section 4.04
of the Pooling Agreement.
Distributions on this Certificate will be made by the
Trustee by wire transfer or check mailed to the address of the
Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by
the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate to the Certificate
Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature,
this Certificate shall not be entitled to any benefit under the
Pooling Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
H-1
<PAGE>
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By: ________________________________________
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the
within-mentioned Pooling Agreement.
U.S. BANK NATIONAL ASSOCIATION,
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
III 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 III Trust Fund. For
the purposes of such provision and except as provided below,
voting rights relating to 100% of the Aggregate Certificate
Principal Balance will be allocated pro rata (by Certificate
Principal Balance) among such Certificates. Any such consent by
the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent
is made upon this Certificate. The Pooling Agreement also permits
the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this
Certificate 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,
H-3
<PAGE>
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 III Available Distribution Amount
distributable on this Class of Certificate, as requested by the
Holder surrendering the same.
A reasonable service charge may be made for any such
registration of transfer or exchange, and the Trustee may require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The Company, the Trustee and the Certificate Registrar and
any agent of the Company, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the
Company, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Pooling Agreement and the
trust funds created thereby shall terminate upon (i) the later of
the maturity or other liquidation (including repurchase by the
Company) of the last Mortgage Loan remaining in the REMIC I Trust
Fund or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the
payment to Certificateholders of all amounts held by the Trustee
and required to be paid to them pursuant to the Pooling
Agreement. In the event that the Company repurchases any Mortgage
Loan pursuant to the Pooling Agreement, such Pooling Agreement
generally requires that the Trustee distribute to the
Certificateholders in the aggregate an amount equal to 100% of
the unpaid Principal Balance of such Mortgage Loan, plus accrued
interest at the applicable Pass-Through Rate to the next
scheduled Due Date for the Mortgage Loan. The Pooling Agreement
permits, but does not require, the Company to repurchase from the
REMIC I Trust Fund all Mortgage Loans at the time subject thereto
and all property acquired in respect of any Mortgage Loan upon
payment to the Certificateholders of the amounts specified in the
Pooling Agreement. The exercise of such right will effect early
retirement of the Certificates, the Company's right to repurchase
being subject to the aggregate unpaid Principal Balance of the
Mortgage Loans at the time of repurchase being less than five
percent (5%) of the aggregate unpaid Principal Balance of the
Mortgage Loans as of the Cut-Off Date.
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]
U.S. Bank National Association, as Trustee
180 East 5th Street, SPFT0210
St. Paul, MN 55101
Attn: Structured Finance
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
--- ----------------------------------------------------
Certificates, Series 1998-6, Class [R-1] [R-2] [R-3]
----------------------------------------------------
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
1998-6, Class [R-1][R-2][R-3] (the "Certificate"), pursuant to
Section 5.01 of the Pooling and Servicing Agreement (the "Pooling
Agreement"), dated as of July 1, 1998 among PNC Mortgage
Securities Corp., as depositor and master servicer (the
"Company") and U.S. Bank National Association, 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] [R-3]
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][R-3] Certificates, and
(ii) is acquiring the Class [R-1][R-2][R-3] 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][R-3] 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][R-
3] 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][R-3]
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.)
J-1
<PAGE>
5. That the Owner is aware that the Trustee will not
register the Transfer of the Class [R-1][R-2][R-3] 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][R-3] Certificates and
the provisions of Section 5.01 of the Pooling Agreement under
which the Class [R-1][R-2][R-3] Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.01(c)
which authorize the Trustee to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the Trustee in
the event the Owner holds such Certificates in violation of
Section 5.01). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.
7. That the Owner consents to any additional
restrictions or arrangements that shall be deemed necessary upon
advice of counsel to constitute a reasonable arrangement to
ensure that the Class [R-1][R-2][R-3] 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][R-3] 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][R-3] 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, the REMIC II Trust Fund and the REMIC III
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][R-
3] Certificates has represented to their transferor that, if the
Class [R-1][R-2][R-3] Certificates constitute a noneconomic
residual interest,
J-2
<PAGE>
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][R-3] Certificates as they
become due.
IN WITNESS WHEREOF, the Owner has caused this
instrument to be executed on its behalf, pursuant to the
authority of its Board of Directors, by its [Title of Officer]
and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this day of , 19 __ .
[Name of Owner]
By:____________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
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 July 1, 1998 between PNC Mortgage Securities Corp., as
Depositor and Master Servicer and U.S. Bank National Association,
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 June __, 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
L-1
<PAGE>
any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Rule
144A Securities, any interest in the Rule 144A Securities or
any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar
security with, any person in any manner, or made any
general solicitation by means of general advertising or in
any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the
Rule 144A Securities a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person
to act, in such manner with respect to the Rule 144A
Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has
(1) completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2, or (2)
obtained the waiver of the Company with respect to Annex 1
and Annex 2 pursuant to Section 5.01(f) of the Agreement.
The Buyer is aware that the sale to it is being made in
reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other
qualified institutional buyers, understands that such Rule
144A Securities may be resold, pledged or transferred only
(i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or
for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being
made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
f. The Buyer is not affiliated with (i) the Trustee
or (ii) any Rating Agency that rated the Rule 144A
Securities.
g. If applicable, the Buyer has complied, and will
continue to comply, with the guidelines established by
Thrift Bulletin 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 or a Class I-A-23 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.
L-2
<PAGE>
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-3
<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.
- -------------------------------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
L-1-1
<PAGE>
___ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and is subject to the fiduciary responsibility provisions of
ERISA.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is
a bank or trust company and whose participants are
exclusively (a) plans established and maintained by a State,
its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit
of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974, but is not a trust fund that includes
as participants individual retirement accounts or H.R. 10
plans.
3. The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer,
(ii) securities that are part of an unsold allotment to or
subscription by the Buyer, if the Buyer is a dealer, (iii) bank
deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned
but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities 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.
L-2-1
<PAGE>
________________________________
Print Name of Buyer
By:____________________________
Name:
Title:
Date:__________________________
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 July
1, 1998 by and between PNC Mortgage Securities
Corp., as Depositor and Master Servicer, and U.S.
Bank National Association, as Trustee, relating to
PNC Mortgage Securities Corp. Mortgage Pass-
Through Certificates, Series 1998-6
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.
_____________________________
as Trustee
By:__________________________
Name:
Title:
M-1
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
U.S. Bank National Association, as Trustee
180 East 5th Street, SPFT0210
St. Paul, MN 55101
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 1998-6
(THE "TRUST") CLASS [I-A-23] [_-B-_] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, _____________________,
declare that, to the best of my knowledge and belief, the
following representations are true, correct and complete; and
1. That I am the _______________ of
__________________ (the "Purchaser"), whose taxpayer
identification number is ___________, and on behalf of which I
have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased
Certificate representing an interest in the Trust Funds.
3. That the Purchaser is either:
(a) not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended (the
"Code") (a "Plan") or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting
directly or indirectly on behalf of, or purchasing any of the
Purchased Certificates with "plan assets" of, any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29
C.F.R. Section 2510.3-101; or
(b) an insurance company, the source of funds to be used by
it to purchase the Purchased Certificates is an "insurance
company general account" (within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is
being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.
IN WITNESS WHEREOF, the Purchaser has caused this
instrument to be duly executed on its behalf, by its duly
authorized officer this _____ day of __________________, 199__.
[Purchaser]
By:___________________________
Its:
N-1
<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
N-1
