EXHIBIT 7.1
EXECUTION COPY
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$781,765,822.75
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1998-7
Cut-Off Date: August 1, 1998
TABLE OF CONTENTS
PAGE
ARTICLE I..................................................... 7
Section 1.01. Definitions ........................... 7
Aggregate Certificate Principal Balance....................... 7
Appraised Value .............................................. 7
Assignment of Proprietary Lease .............................. 7
Authenticating Agent ......................................... 7
Authorized Denomination ...................................... 7
Bankruptcy Coverage .......................................... 8
Bankruptcy Coverage Initial Amount ........................... 8
Bankruptcy Loss .............................................. 8
Beneficial Holder ............................................ 8
Book-Entry Certificates ...................................... 8
Business Day ................................................. 8
Buydown Agreement ............................................ 8
Buydown Fund ................................................. 8
Buydown Fund Account ......................................... 9
Buydown Loan ................................................. 9
Certificate .................................................. 9
Certificate Account .......................................... 9
Certificateholder or Holder .................................. 9
Certificate Group ............................................ 10
Certificate Principal Balance ................................ 10
Certificate Register and Certificate Registrar ............... 10
Class ........................................................ 10
Class A Certificates ......................................... 10
Class A-L Regular Interests .................................. 10
Class B Certificates ......................................... 10
Class X-X Regular Interests .................................. 10
Class I-A-1 Certificates ..................................... 10
Class I-A-1-L Regular Interest ............................... 11
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TABLE OF CONTENTS
(continued)
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Class I-A-2 Certificates ..................................... 11
Class I-A-2 Notional Amount .................................. 11
Class I-A-3 Certificates ..................................... 11
Class I-A-3-L Regular Interest ............................... 11
Class I-A-4 Certificates ..................................... 11
Class I-A-4 Interest Amount .................................. 11
Class I-A-4-L Regular Interest ............................... 11
Class I-A-5 Adjusted Percentage .............................. 11
Class I-A-5 Certificates ..................................... 11
Class I-A-5 Liquidation Amount ............................... 11
Class I-A-5-L Lockout Priority Amount ........................ 11
Class I-A-5 Percentage ....................................... 12
Class I-A-5 Prepayment Percentage ............................ 12
Class I-A-5-L Regular Interest ............................... 12
Class I-A-6 Certificates ..................................... 12
Class I-A-6-L Regular Interest ............................... 12
Class I-A-7 Certificates ..................................... 12
Class I-A-7-L Regular Interest ............................... 12
Class I-A-8 Certificates ..................................... 12
Class I-A-8-L Regular Interest ............................... 12
Class I-A-9 Certificates ..................................... 12
Class I-A-9 Interest Amount .................................. 12
Class I-A-9-L Regular Interest ............................... 13
Class I-A-10 Certificates .................................... 13
Class I-A-10-L Regular Interest .............................. 13
Class I-A-11 Certificates .................................... 13
Class I-A-11-L Regular Interest .............................. 13
Class I-A-12 Certificates .................................... 13
Class I-A-13 Certificates .................................... 13
Class I-A-13-L Regular Interest .............................. 13
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TABLE OF CONTENTS
(continued)
Page
Class I-A-14 Certificates .................................... 13
Class I-A-14-L Regular Interest .............................. 13
Class I-A-15 Certificates .................................... 13
Class I-A-15-L Regular Interest .............................. 13
Class I-A-16 Certificates .................................... 13
Class I-A-16-L Regular Interest .............................. 13
Class I-A-17 Certificates .................................... 14
Class I-A-17-L Regular Interest .............................. 14
Class I-A-18 Certificates .................................... 14
Class I-A-18-L Regular Interest .............................. 14
Class I-A-19 Certificates .................................... 14
Class I-A-19-L Regular Interest .............................. 14
Class I-A-20 Certificates .................................... 14
Class I-A-20 Notional Amount ................................. 14
Class I-A-21 Certificates .................................... 14
Class I-A-21-L Regular Interest .............................. 14
Class I-A-22 Certificates .................................... 14
Class I-A-22-L Regular Interest .............................. 14
Class I-A-23 Certificates .................................... 14
Class I-A-23 Notional Amount ................................. 14
Class I-A-24 Certificates .................................... 15
Class I-A-24-L Regular Interest .............................. 15
Class I-A-25 Certificates .................................... 15
Class I-A-25-L Regular Interest .............................. 15
Class I-A-26 Certificates .................................... 15
Class I-A-26-L Regular Interest .............................. 15
Class I-A-27 Certificates .................................... 15
Class I-A-27 Fraction ........................................ 15
Class I-A-27-L Principal Distribution Amount ................. 15
Class I-A-27-L Regular Interest .............................. 16
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TABLE OF CONTENTS
(continued)
Page
Class I-B-1 Certificates ..................................... 16
Class I-B-1-L Regular Interest ............................... 16
Class I-B-2 Certificates ..................................... 16
Class I-B-2-L Regular Interest ............................... 16
Class I-B-3 Certificates ..................................... 16
Class I-B-3-L Regular Interest ............................... 16
Class I-B-4 Certificates ..................................... 16
Class I-B-4-L Regular Interest ............................... 16
Class I-B-5 Certificates ..................................... 16
Class I-B-5-L Regular Interest ............................... 17
Class I-B-6 Certificates ..................................... 17
Class I-B-6-L Regular Interest ............................... 17
Class I-P Certificates ....................................... 17
Class I-P Fraction ........................................... 17
Class I-P-L Regular Interest ................................. 17
Class I-P-M Regular Interest ................................. 17
Class I-P Mortgage Loan ...................................... 17
Class I-X-1 Certificates ..................................... 17
Class I-X-1 Notional Amount .................................. 17
Class I-X-1 Premium Rate Mortgage Loans ...................... 17
Class I-X-1-L Regular Interest ............................... 17
Class I-X-1-M Regular Interest ............................... 18
Class I-X-2 Certificates ..................................... 18
Class I-X-2 Notional Amount .................................. 18
Class I-X-2 Premium Rate Mortgage Loans ...................... 18
Class I-X-2-L Regular Interest ............................... 18
Class I-X-2-M Regular Interest ............................... 18
Class II-A-1 Certificates .................................... 18
Class II-A-1-L Regular Interest .............................. 18
Class II-B-1 Certificates .................................... 18
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TABLE OF CONTENTS
(continued)
Page
Class II-B-1-L Regular Interest .............................. 18
Class II-B-2 Certificates .................................... 18
Class II-B-2-L Regular Interest .............................. 18
Class II-B-3 Certificates .................................... 19
Class II-B-3-L Regular Interest .............................. 19
Class II-B-4 Certificates .................................... 19
Class II-B-4-L Regular Interest .............................. 19
Class II-B-5 Certificates .................................... 19
Class II-B-5-L Regular Interest .............................. 19
Class II-B-6 Certificates .................................... 19
Class II-B-6-L Regular Interest .............................. 19
Class II-P Certificates ...................................... 19
Class II-P Fraction .......................................... 19
Class II-P Mortgage Loan ..................................... 19
Class II-P-L Regular Interest ................................ 19
Class II-P-M Regular Interest ................................ 19
Class II-X Certificates ...................................... 19
Class II-X Notional Amount ................................... 20
Class II-X-L Regular Interest ................................ 20
Class II-X-M Regular Interest ................................ 20
Class Notional Amount ........................................ 20
Class P Certificates ......................................... 20
Class P Fraction ............................................. 20
Class P Mortgage Loan ........................................ 20
Class P-L Regular Interests .................................. 20
Class P-M Regular Interests .................................. 20
Class Principal Balance ...................................... 20
Class R-1 Certificates ....................................... 21
Class R-2 Certificates ....................................... 21
Class R-3 Certificates ....................................... 21
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TABLE OF CONTENTS
(continued)
Page
Class R-3-L .................................................. 21
Class W Regular Interest ..................................... 21
Class X Certificates ......................................... 21
Class X-L Regular Interests .................................. 21
Class X-M Regular Interests .................................. 21
Class Y Principal Reduction Amounts .......................... 21
Class Y Regular Interests .................................... 29
Class Y-1 Principal Distribution Amount ...................... 29
Class Y-1 Regular Interest ................................... 29
Class Y-2 Principal Distribution Amount ...................... 29
Class Y-2 Regular Interest ................................... 29
Class Y-3 Principal Distribution Amount ...................... 30
Class Y-3 Regular Interest ................................... 30
Class Y-4 Principal Distribution Amount ...................... 30
Class Y-4 Regular Interest ................................... 30
Class Z Principal Reduction Amounts .......................... 30
Class Z Regular Interests .................................... 30
Class Z-1 Principal Distribution Amount ...................... 30
Class Z-1 Regular Interests .................................. 30
Class Z-2 Principal Distribution Amount ...................... 30
Class Z-2 Regular Interests .................................. 31
Class Z-3 Principal Distribution Amount ...................... 31
Class Z-3 Regular Interests .................................. 31
Class Z-4 Principal Distribution Amount ...................... 31
Class Z-4 Regular Interests .................................. 31
Clearing Agency .............................................. 31
Closing Date ................................................. 31
Code ......................................................... 31
Company ...................................................... 31
Compensating Interest ........................................ 31
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TABLE OF CONTENTS
(continued)
Page
Component .................................................... 31
Component I-A-19-1 ........................................... 31
Component I-A-19-1-L ......................................... 32
Component I-A-19-2 ........................................... 32
Component I-A-19-2-L ......................................... 32
Component Principal Balance .................................. 32
Cooperative .................................................. 32
Cooperative Apartment ........................................ 32
Cooperative Lease ............................................ 32
Cooperative Loans ............................................ 32
Cooperative Stock ............................................ 33
Cooperative Stock Certificate ................................ 33
Corporate Trust Office ....................................... 33
Corresponding Class .......................................... 33
Corresponding Component ...................................... 34
Curtailment .................................................. 34
Curtailment Shortfall ........................................ 34
Custodial Account for P&I .................................... 34
Custodial Account for Reserves ............................... 34
Custodial Agreement .......................................... 35
Custodian .................................................... 35
Cut-Off Date ................................................. 35
Definitive Certificates ...................................... 35
Depositary Agreement ......................................... 35
Destroyed Mortgage Note ...................................... 35
Determination Date ........................................... 35
Disqualified Organization .................................... 35
Distribution Date ............................................ 35
DTC .......................................................... 35
DTC Participant .............................................. 36
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TABLE OF CONTENTS
(continued)
Page
Due Date ..................................................... 36
Eligible Institution ......................................... 36
Eligible Investments ......................................... 36
ERISA ........................................................ 37
Event of Default ............................................. 37
Excess Liquidation Proceeds .................................. 37
FDIC ......................................................... 37
FHA .......................................................... 37
FHLB ......................................................... 38
FHLMC ........................................................ 38
Fitch ........................................................ 38
FNMA ......................................................... 38
Fraud Coverage Initial Amount ................................ 38
Fraud Loss ................................................... 38
Group I Certificates ......................................... 38
Group I Bankruptcy Coverage .................................. 38
Group I Credit Support Depletion Date ........................ 38
Group I Fraud Coverage ....................................... 38
Group I Loans ................................................ 39
Group I Senior Certificates .................................. 39
Group I Senior Liquidation Amount ............................ 39
Group I Senior Percentage .................................... 39
Group I Senior Prepayment Percentage ......................... 39
Group I Senior Principal Distribution Amount ................. 40
Group I Special Hazard Coverage .............................. 40
Group I Subordinate Liquidation Amount ....................... 41
Group I Subordinate Percentage ............................... 41
Group I Subordinate Prepayment Percentage .................... 41
Group I Subordinate Principal Distribution Amount ............ 41
Group I Subordinate Principal Prepayments Distribution Amount. 42
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TABLE OF CONTENTS
(continued)
Page
Group I-A Certificates ....................................... 42
Group I-A-L Regular Interests ................................ 42
Group I-B Certificates ....................................... 42
Group I-B-L Regular Interests ................................ 42
Group I-L Regular Interests .................................. 42
Group I-L Senior Regular Interests ........................... 42
Group II Bankruptcy Coverage ................................. 42
Group II Certificates ........................................ 42
Group II Credit Support Depletion Date ....................... 42
Group II Fraud Coverage ...................................... 42
Group II Loans ............................................... 43
Group II Premium Rate Mortgage Loans ......................... 43
Group II Senior Certificates ................................. 43
Group II Senior Liquidation Amount ........................... 43
Group II Senior Percentage ................................... 43
Group II Senior Prepayment Percentage ........................ 43
Group II Senior Principal Distribution Amount ................ 44
Group II Special Hazard Coverage ............................. 45
Group II Subordinate Liquidation Amount ...................... 45
Group II Subordinate Percentage .............................. 45
Group II Subordinate Prepayment Percentage ................... 45
Group II Subordinate Principal Distribution Amount ........... 45
Group II Subordinate Principal Prepayments Distribution Amount 46
Group II-B Certificates ...................................... 46
Group II-X-X Regular Interests ............................... 46
Group II-L Regular Interests ................................. 46
Group II-L Senior Regular Interests .......................... 46
Indirect DTC Participants .................................... 46
Insurance Proceeds ........................................... 46
Interest Distribution Amount ................................. 46
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TABLE OF CONTENTS
(continued)
Page
Investment Account ........................................... 47
Investment Depository ........................................ 47
Junior Subordinate Certificates .............................. 47
LIBOR ........................................................ 47
LIBOR Determination Date ..................................... 48
Lender ....................................................... 48
Liquidated Mortgage Loan ..................................... 48
Liquidation Principal ........................................ 48
Liquidation Proceeds ......................................... 48
Loan Group ................................................... 48
Loan Group I ................................................. 48
Loan Group II ................................................ 48
Loan-to-Value Ratio .......................................... 49
Master Servicer .............................................. 49
Master Servicing Fee ......................................... 49
Monthly P&I Advance .......................................... 49
Monthly Payment .............................................. 49
Mortgage ..................................................... 49
Mortgaged Property ........................................... 49
Mortgage File ................................................ 49
Mortgage Interest Rate ....................................... 51
Mortgage Loan Schedule ....................................... 51
Mortgage Loans ............................................... 52
Mortgage Note ................................................ 52
Mortgage Pool ................................................ 52
Mortgagor .................................................... 52
Nonrecoverable Advance ....................................... 52
Non-U.S. Person .............................................. 52
OTS .......................................................... 52
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TABLE OF CONTENTS
(continued)
Page
Officer's Certificate ........................................ 52
Opinion of Counsel ........................................... 52
Original Value ............................................... 52
Ownership Interest ........................................... 52
Pass-Through Entity .......................................... 53
Pass-Through Rate ............................................ 53
Paying Agent ................................................. 53
Payoff ....................................................... 53
Payoff Earnings .............................................. 53
Payoff Interest .............................................. 53
Payoff Period ................................................ 53
Percentage Interest .......................................... 53
Permitted Transferee ......................................... 54
Person ....................................................... 55
Planned Principal Balance .................................... 55
Prepaid Monthly Payment ...................................... 55
Primary Insurance Policy ..................................... 55
Principal Balance ............................................ 55
Principal Payment ............................................ 56
Principal Payment Amount ..................................... 56
Principal Prepayment ......................................... 56
Principal Prepayment Amount .................................. 56
Prior Period ................................................. 56
Pro Rata Allocation .......................................... 56
Purchase Obligation .......................................... 57
Purchase Price ............................................... 57
Qualified Insurer ............................................ 58
Rating Agency ................................................ 58
Ratings ...................................................... 58
Realized Loss ................................................ 58
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TABLE OF CONTENTS
(continued)
Page
Record Date .................................................. 61
Reference Banks .............................................. 61
Regular Interests ............................................ 61
REMIC ........................................................ 62
REMIC Provisions ............................................. 62
REMIC I ...................................................... 62
REMIC I Available Distribution Amount ........................ 62
REMIC I Distribution Amount .................................. 63
REMIC I Regular Interest ..................................... 65
REMIC I Trust Fund ........................................... 65
REMIC II ..................................................... 65
REMIC II Available Distribution Amount ....................... 65
REMIC II Distribution Amount ................................. 65
REMIC II Regular Interest .................................... 75
REMIC II Trust Fund .......................................... 75
REMIC III .................................................... 75
REMIC III Available Distribution Amount ...................... 75
REMIC III Distribution Amount ................................ 75
REMIC III Trust Fund ......................................... 77
Remittance Rate .............................................. 77
Reserve Fund ................................................. 77
Reserve Fund Initial Amount .................................. 77
Residual Certificates ........................................ 77
Residual Distribution Amount ................................. 77
Responsible Officer .......................................... 78
S&P .......................................................... 78
Securities Act ............................................... 78
Security Agreement ........................................... 78
Selling and Servicing Contract ............................... 78
Senior Certificates .......................................... 78
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TABLE OF CONTENTS
(continued)
Page
Senior Subordinate Certificates .............................. 78
Servicer ..................................................... 78
Servicing Fee ................................................ 78
Servicing Officer ............................................ 78
Special Hazard Coverage Initial Amount ....................... 79
Special Hazard Loss .......................................... 79
Step Down Percentage ......................................... 79
Stripped Interest Rate ....................................... 79
Subgroup ..................................................... 79
Subgroup I-1 ................................................. 80
Subgroup I-1 Initial Senior Component Balance ................ 80
Subgroup I-1 Loans ........................................... 80
Subgroup I-1 Senior Component Balance ........................ 80
Subgroup I-1 Senior Liquidation Amount ....................... 80
Subgroup I-1 Senior Percentage ............................... 80
Subgroup I-1 Senior Prepayment Percentage .................... 80
Subgroup I-1 Senior Principal Distribution Amount ............ 81
Subgroup I-1 Subordinate Component Balance ................... 82
Subgroup I-1 Subordinate Percentage .......................... 82
Subgroup I-2 ................................................. 82
Subgroup I-2 Initial Senior Component Balance ................ 82
Subgroup I-2 Loans ........................................... 82
Subgroup I-2 Senior Component Balance ........................ 82
Subgroup I-2 Senior Liquidation Amount ....................... 82
Subgroup I-2 Senior Percentage ............................... 82
Subgroup I-2 Senior Prepayment Percentage .................... 82
Subgroup I-2 Senior Principal Distribution Amount ............ 83
Subgroup I-2 Subordinate Component Balance ................... 84
Subgroup I-2 Subordinate Percentage .......................... 84
Subgroup I-3 ................................................. 84
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TABLE OF CONTENTS
(continued)
Page
Subgroup I-3 Initial Senior Component Balance ................ 84
Subgroup I-3 Loans ........................................... 84
Subgroup I-3 Senior Component Balance ........................ 84
Subgroup I-3 Senior Liquidation Amount ....................... 84
Subgroup I-3 Senior Percentage ............................... 84
Subgroup I-3 Senior Prepayment Percentage .................... 84
Subgroup I-3 Senior Principal Distribution Amount ............ 85
Subgroup I-3 Subordinate Component Balance ................... 86
Subgroup I-3 Subordinate Percentage .......................... 86
Subgroup I-4 ................................................. 86
Subgroup I-4 Initial Senior Component Balance ................ 86
Subgroup I-4 Loans ........................................... 86
Subgroup I-4 Senior Component Balance ........................ 86
Subgroup I-4 Senior Liquidation Amount ....................... 86
Subgroup I-4 Senior Percentage ............................... 86
Subgroup I-4 Senior Prepayment Percentage .................... 86
Subgroup I-4 Senior Principal Distribution Amount ............ 87
Subgroup I-4 Subordinate Component Balance ................... 88
Subgroup I-4 Subordinate Percentage .......................... 88
Subordinate Certificates ..................................... 88
Subordination Level .......................................... 88
Substitute Mortgage Loan ..................................... 88
Tax Matters Person ........................................... 88
Termination Date ............................................. 88
Termination Payment .......................................... 88
Transfer ..................................................... 88
Transferee ................................................... 89
Transferee Affidavit and Agreement ........................... 89
Trustee ...................................................... 89
Uncollected Interest ......................................... 89
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TABLE OF CONTENTS
(continued)
Page
Uncompensated Interest Shortfall ............................. 89
Underwriting Standards ....................................... 89
Uninsured Cause .............................................. 90
U.S. Person .................................................. 90
VA ........................................................... 90
Withdrawal Date .............................................. 90
ARTICLE II Conveyance of the Trust Funds; REMIC Election
and Designations; Original Issuance of
Certificates ..................................... 90
Section 2.01. Conveyance of REMIC I; REMIC Election
and Designations ...................... 90
Section 2.02. Acceptance by Trustee ................. 95
Section 2.03. Representations and Warranties of the
Company Concerning the Mortgage Loans . 96
Section 2.04. Acknowledgment of Transfer of REMIC I
Trust Fund; Authentication of the Class
R-1 Certificates ...................... 100
Section 2.05. Conveyance of REMIC II; REMIC Election and
Designations .......................... 100
Section 2.06. Acceptance by Trustee; Authentication of
Certificates .......................... 104
Section 2.07. Conveyance of REMIC III; REMIC Election
and Designations ...................... 104
Section 2.08. Acceptance by Trustee; Authentication of
Certificates .......................... 107
ARTICLE III Administration and Servicing of Mortgage Loans 107
Section 3.01. The Company to Act as Master Servicer . 107
Section 3.02. Custodial Accounts .................... 109
Section 3.03. The Investment Account; Eligible
Investments ........................... 110
Section 3.04. The Certificate Account ............... 111
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 ................. 111
Section 3.06. Maintenance of Primary Insurance Policies;
Collections Thereunder ................ 113
Section 3.07. Maintenance of Hazard Insurance ....... 113
Section 3.08. Enforcement of Due-on-Sale Clauses;
Assumption Agreements ................. 114
Section 3.09. Realization Upon Defaulted Mortgage
Loans ................................. 115
Section 3.10. Trustee to Cooperate; Release of Mortgage
Files ................................. 117
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Section 3.11. Compensation to the Master Servicer and
the Servicers .......................... 117
Section 3.12. Reports to the Trustee; Certificate
Account Statement ...................... 118
Section 3.13. Annual Statement as to Compliance ...... 118
Section 3.14. Access to Certain Documentation and
Information Regarding the Mortgage
Loans .................................. 118
Section 3.15. Annual Independent Public Accountants'
Servicing Report ....................... 118
Section 3.16. [Reserved] ............................. 119
Section 3.18. [Reserved.] ............................ 119
Section 3.19. [Reserved.] ............................ 119
Section 3.20. Assumption or Termination of Selling and
Servicing Contracts by Trustee ......... 119
ARTICLE IV Payments to Certificateholders; Payment of
Expenses .......................................... 120
Section 4.01. Distributions to Holders of REMIC I
Regular Interests and Class R-1
Certificateholders ..................... 120
Section 4.02. Advances by the Master Servicer;
Distribution Reports to the Trustee .... 120
Section 4.03. Nonrecoverable Advances ................ 121
Section 4.04. Distributions to Holders of REMIC II
Regular Interests and Class R-2
Certificateholders ..................... 122
Section 4.05. Distributions to Certificateholders (other
than Class R-1 and Class R-2
Certificateholders) .................... 122
Section 4.06. Statements to Certificateholders ....... 123
ARTICLE V The Certificates .................................... 124
Section 5.01. The Certificates ....................... 124
Section 5.02. Certificates Issuable in Classes;
Distributions of Principal and Interest;
Authorized Denominations ............... 130
Section 5.03. Registration of Transfer and Exchange of
Certificates ........................... 130
Section 5.04. Mutilated, Destroyed, Lost or Stolen
Certificates ........................... 131
Section 5.05. Persons Deemed Owners .................. 131
Section 5.06. Temporary Certificates ................. 131
Section 5.07. Book-Entry for Book-Entry Certificates . 132
Section 5.08. Notices to Clearing Agency ............. 133
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Section 5.09. Definitive Certificates ................ 133
Section 5.10. Office for Transfer of Certificates .... 133
ARTICLE VI The Company and the Master Servicer ............ 134
Section 6.01. Liability of the Company and the Master
Servicer ............................... 134
Section 6.02. Merger or Consolidation of the Company,
or the Master Servicer ................. 134
Section 6.03. Limitation on Liability of the Company,
the Master Servicer and Others ......... 134
Section 6.04. The Company and the Master Servicer not
to Resign .............................. 135
ARTICLE VII Default ........................................ 135
Section 7.01. Events of Default ...................... 135
Section 7.02. Trustee to Act; Appointment of Successor 138
Section 7.03. Notification to Certificateholders ..... 138
ARTICLE VIII Concerning the Trustee ......................... 138
Section 8.01. Duties of Trustee ...................... 138
Section 8.02. Certain Matters Affecting the Trustee .. 139
Section 8.03. Trustee Not Liable for Certificates or
Mortgage Loans ......................... 140
Section 8.04. Trustee May Own Certificates ........... 141
Section 8.05. The Master Servicer to Pay Trustee's
Fees and Expenses ...................... 141
Section 8.06. Eligibility Requirements for Trustee ... 141
Section 8.07. Resignation and Removal of Trustee ..... 141
Section 8.08. Successor Trustee ...................... 142
Section 8.09. Merger or Consolidation of Trustee ..... 142
Section 8.10. Appointment of Co-Trustee or Separate
Trustee ................................ 143
Section 8.11. Authenticating Agents .................. 144
Section 8.12. Paying Agents .......................... 144
ARTICLE IX Termination .................................... 145
Section 9.01. Termination Upon Repurchase by the
Company or Liquidation of All Mortgage
Loans .................................. 145
Section 9.02. Additional Termination Requirements .... 147
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Section 9.03. Trusts Irrevocable ..................... 147
ARTICLE X Miscellaneous Provisions ........................... 148
Section 10.01. Amendment ............................. 148
Section 10.02. Recordation of Agreement .............. 149
Section 10.03. Limitation on Rights of
Certificateholders .................... 149
Section 10.04. Access to List of Certificateholders .. 150
Section 10.05. Governing Law ......................... 150
Section 10.06. Notices ............................... 150
Section 10.07. Severability of Provisions ............ 151
Section 10.08. Counterpart Signatures ................ 151
Section 10.09. Benefits of Agreement ................. 151
Section 10.10. Notices and Copies to Rating Agencies . 151
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
xviii
This Pooling and Servicing Agreement, dated and effective as of
August 1, 1998 (this "Agreement"), is executed by and between PNC Mortgage
Securities Corp., as Depositor and Master Servicer (the "Company") and
State Street Bank and Trust Company, as Trustee (the "Trustee").
Capitalized terms used in this Agreement and not otherwise defined have
the meanings ascribed to such terms in Article I hereof.
PRELIMINARY STATEMENT
The Company at the Closing Date is the owner of the Mortgage Loans
and the other property being conveyed by it to the Trustee for inclusion
in 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.
The Certificates issued hereunder, other than the Junior
Subordinate Certificates, have been offered for sale pursuant to a Prospectus,
dated June 24, 1998, and a Prospectus Supplement, dated August 26, 1998, of
the Company (together, the "Prospectus"). The Junior Subordinate
Certificates have been offered for sale pursuant to a Private Placement
Memorandum, dated August 28, 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
1
Principal Balance, initial Class Notional Amount, initial Component
Principal Balance 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:
REMIC I TRUST FUND
Class Designation
for each REMIC I
Regular Interest Initial Class
and the Class R-1 Type of Remittance Principal Final Maturity
Certificates Interest Rate (1) Balance Date*
------------------ -------- ---------- ------------- --------------
Class Y-1 Regular 6.375% $22,132.03 September 2028
Class Y-2 Regular 6.500% 23,832.19 September 2028
Class Y-3 Regular 6.625% 17,252.24 September 2028
Class Y-4 Regular 6.750% 159,287.58 September 2028
Class Z-1 Regular 6.375% 44,241,918.97 September 2028
Class Z-2 Regular 6.500% 47,640,545.81 September 2028
Class Z-3 Regular 6.625% 34,487,236.76 September 2028
Class Z-4 Regular 6.750% 318,593,286.44 September 2028
Class W Regular 7.000% 336,323,813.00 September 2028
Class I-X-1-M Regular 6.750% ------------ September 2028
(2)
Class I-X-2-M Regular 6.750% ------------ September 2028
(2)
Class II-X-M Regular 7.000% ------------ September 2028
(2)
Class I-P-M Regular (3) 111,049.00 September 2028
Class II-P-M Regular (3) 142,468.00 September 2028
Class R-1+ Residual 6.750% 50.00 September 2028
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group matures.
+ The Class R-1 Certificates are entitled to receive the applicable
Residual Distribution Amount and 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
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.
3
REMIC II
Class Designation
for each REMIC II
Regular Interest Initial Class
and the Class R-2 Type of Remittance Principal Final Maturity
Certificates Interest Rate (1) Balance Date*
------------------ -------- ---------- ------------- --------------
Class I-A-1-L Regular 6.750% $ 193,893,668.00 September 2028
Class I-A-3-L Regular 6.750% 28,860,000.00 September 2028
Class I-A-4-L Regular (2) 4,000,000.00 September 2028
Class I-A-5-L Regular 6.750% 42,160,661.00 September 2028
Class I-A-6-L Regular 6.750% 10,566,252.00 September 2028
Class I-A-7-L Regular 6.750% 2,398,638.00 September 2028
Class I-A-8-L Regular 7.000% 6,200,000.00 September 2028
Class I-A-9-L Regular (3) 1,050,000.00 September 2028
Class I-A-10-L Regular 6.400% 24,491,893.00 September 2028
Class I-A-11-L Regular 6.400% 8,617,949.00 September 2028
Class I-A-12-L Regular 6.400% 5,000,000.00 September 2028
Class I-A-13-L Regular 6.750% 31,000,000.00 September 2028
Class I-A-14-L Regular (4) 2,112,745.00 September 2028
Class I-A-15-L Regular 7.000% 2,436,000.00 September 2028
Class I-A-16-L Regular 7.000% 2,436,000.00 September 2028
Class I-A-17-L Regular 7.000% 2,436,000.00 September 2028
Class I-A-18-L Regular 7.000% 2,429,151.00 September 2028
Class I-A-19-L (5) (5) 434,711.00 September 2028
Class I-A-21-L Regular 7.000% 2,000,000.00 September 2028
Class I-A-22-L Regular 8.000% 10,670,755.00 September 2028
Class I-A-24-L Regular 7.250% 28,522,051.00 September 2028
Class I-A-25-L Regular 6.750% 8,740,000.00 September 2028
Class I-A-26-L Regular 6.500% 1,150,000.00 September 2028
Class I-A-27-L Regular (4) 4,656,636.00 September 2028
Class II-A-1-L Regular 7.000% 312,771,172.00 September 2028
Class I-X-1-L Regular 6.750% (6) -------------- September 2028
Class I-X-2-L Regular 6.750% (6) -------------- September 2028
Class II-X-L Regular 7.000% (6) -------------- September 2028
Class I-P-L Regular (4) 111,049.00 September 2028
Class II-P-L Regular (4) 142,468.00 September 2028
Class I-B-1-L Regular Variable (7) 9,573,940.00 September 2028
Class I-B-2-L Regular Variable (7) 3,785,046.00 September 2028
Class I-B-3-L Regular Variable (7) 2,003,848.00 September 2028
Class I-B-4-L Regular Variable (7) 1,335,898.00 September 2028
Class I-B-5-L Regular Variable (7) 890,599.00 September 2028
Class I-B-6-L Regular Variable (7) 1,335,902.12 September 2028
Class II-B-1-L Regular 7.000% 12,617,485.00 September 2028
Class II-B-2-L Regular 7.000% 3,364,662.00 September 2028
Class II-B-3-L Regular 7.000% 3,364,662.00 September 2028
Class II-B-4-L Regular 7.000% 2,187,030.00 September 2028
Class II-B-5-L Regular 7.000% 672,932.00 September 2028
Class II-B-6-L Regular 7.000% 1,345,869.63 September 2028
Class R-3-L Regular 6.750% 50.00 September 2028
Class R-2+ Residual 6.750% 50.00 September 2028
4
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group matures.
+ The Class R-2 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1) Interest distributed to the REMIC II Regular Interests (other than the
Class I-A-14-L, Class I-A-19-L, Class I-A-27-L and Class P-L Regular
Interests, which will not be entitled to receive any distributions of
interest) and the Class R-2 Certificates on each Distribution Date
will have accrued at the applicable per annum Remittance Rate on the
Class Principal Balance or Class Notional Amount outstanding following
the immediately prior Distribution Date (or with respect to the first
Distribution Date, as of the Closing Date).
(2) The Remittance Rate on the Class I-A-4-L Regular Interests for the
first twelve Distribution Dates will be 8.000% per annum, for the
thirteenth through the twenty-fourth Distribution Dates, 7.500% per
annum, and for the twenty-fifth through the thirty-sixth Distribution
Dates, 7.000% per annum. Thereafter, the Remittance Rate on the Class
I-A-4-L Regular Interests will be 6.500% per annum.
(3) The Remittance Rate on the Class I-A-9-L Regular Interests for the
first twelve Distribution Dates will be 7.500% per annum and for the
thirteenth through the twenty-fourth Distribution Dates, 7.000% per
annum. Thereafter, the Remittance Rate on the Class I-A-9-L Regular
Interests will be 6.500% per annum.
(4) The Class I-A-14-L, Class I-A-27-L and Class P-L Certificates will not
be entitled to receive any distributions of interest.
(5) For purposes of calculating distributions, Class I-A-19-L will be
comprised of two Components having the designations, initial Component
Principal Balances and Remittance Rates set forth below:
INITIAL COMPONENT
DESIGNATION PRINCIPAL BALANCE REMITTANCE RATE
----------- ----------------- ---------------
Component I-A-19-1-L $ 74,075.00 (A)
Component I-A-19-2-L 360,636.00 (A)
Each of the Components listed here will be a regular interest in
REMIC II.
(A) Neither Component I-A-19-1-L nor Component I-A-19-2-L will
be entitled to receive any distributions of interest.
(6) Each of the Class X-L Regular Interests will accrue interest on
the related Class Notional Amount. The Class X-L Regular
Interests will not be entitled to receive any distributions of
principal.
(7) The Remittance Rate on the Class I-B-L Regular Interests will equal,
on any Distribution Date, the quotient expressed as a percentage of
(a) the sum of (i) the product of (x) 6.375% and (y) the Subgroup I-1
Subordinate Component Balance immediately prior to such Distribution
Date, (ii) the product of (x) 6.500% and (y) the Subgroup I-2
Subordinate Component Balance immediately prior to such Distribution
Date, (iii) the product of (x) 6.625% and (y) the Subgroup I-3
Subordinate Component Balance immediately prior to such Distribution
Date and (iv) the product of (x) 6.750% and (y) the Subgroup I-4
Subordinate Component Balance immediately prior to such Distribution
Date divided by (b) the sum of the Subgroup I-1 Subordinate Component
Balance, the Subgroup I-2 Subordinate Component Balance, the Subgroup
I-3 Subordinate Component Balance and the Subgroup I-4 Subordinate
Component Balance immediately prior to such Distribution Date.
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
REMIC III
Class Designation
for each of the
Certificates (other
than the Class R-1 Initial Class
and Class R-2 Type of Remittance Principal Final Maturity
Certificates) Interest Rate (1) Balance Date*
------------------ -------- ---------- ------------- --------------
Class I-A-1 Regular 6.710% $ 193,893,668.00 September 2028
Class I-A-2 Regular 6.750% (2) -------------- September 2028
Class I-A-3 Regular 6.750% 28,860,000.00 September 2028
Class I-A-4 Regular (3) 4,000,000.00 September 2028
Class I-A-5 Regular 6.750% 42,160,661.00 September 2028
Class I-A-6 Regular 6.750% 10,566,252.00 September 2028
Class I-A-7 Regular 6.750% 2,398,638.00 September 2028
Class I-A-8 Regular 7.000% 6,200,000.00 September 2028
Class I-A-9 Regular (4) 1,050,000.00 September 2028
Class I-A-10 Regular 6.400% 24,491,893.00 September 2028
Class I-A-11 Regular 6.400% 8,617,949.00 September 2028
Class I-A-12 Regular 6.400% 5,000,000.00 September 2028
Class I-A-13 Regular 6.750% 31,000,000.00 September 2028
Class I-A-14 Regular (5) 2,112,745.00 September 2028
Class I-A-15 Regular 7.000% 2,436,000.00 September 2028
Class I-A-16 Regular 7.000% 2,436,000.00 September 2028
Class I-A-17 Regular 7.000% 2,436,000.00 September 2028
Class I-A-18 Regular 7.000% 2,429,151.00 September 2028
Class I-A-19 (6) (6) 434,711.00 September 2028
Class I-A-20 Regular 6.750% (7) ------------- September 2028
Class I-A-21 Regular 7.000% 2,000,000.00 September 2028
Class I-A-22 Regular Variable (8) 10,670,755.00 September 2028
Class I-A-23 Regular Variable (9) ------------- September 2028
Class I-A-24 Regular 7.250% 28,522,051.00 September 2028
Class I-A-25 Regular 6.400% 8,740,000.00 September 2028
Class I-A-26 Regular 6.500% 1,150,000.00 September 2028
Class I-A-27 Regular (5) 4,656,636.00 September 2028
Class II-A-1 Regular 7.000% 312,771,172.00 September 2028
Class I-X-1 Regular 6.750% (10) ------------- September 2028
Class I-X-2 Regular 6.750% (10) ------------- September 2028
Class II-X Regular 7.000% (10) ------------- September 2028
Class I-P Regular (5) 111,049.00 September 2028
Class II-P Regular (5) 142,468.00 September 2028
Class I-B-1 Regular Variable (11) 9,573,940.00 September 2028
Class I-B-2 Regular Variable (11) 3,785,046.00 September 2028
Class I-B-3 Regular Variable (11) 2,003,848.00 September 2028
Class I-B-4 Regular Variable (11) 1,335,898.00 September 2028
Class I-B-5 Regular Variable (11) 890,599.00 September 2028
Class I-B-6 Regular Variable (11) 1,335,902.12 September 2028
Class II-B-1 Regular 7.000% 12,617,485.00 September 2028
Class II-B-2 Regular 7.000% 3,364,662.00 September 2028
Class II-B-3 Regular 7.000% 3,364,662.00 September 2028
Class II-B-4 Regular 7.000% 2,187,030.00 September 2028
Class II-B-5 Regular 7.000% 672,932.00 September 2028
Class II-B-6 Regular 7.000% 1,345,869.63 September 2028
Class R-3+ Residual 6.750% 50.00 September 2028
6
* The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group 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 I-A-14,
Class I-A-19, Class I-A-27 and Class P Certificates, which will not be
entitled to receive any distributions of interest) on each
Distribution Date will have accrued at the applicable per annum
Remittance Rate on the Class Principal Balance or Class Notional
Amount outstanding following the immediately prior Distribution
Date (or with respect to the first Distribution Date, as of the
Closing Date).
(2) The Class I-A-2 Certificates will accrue interest on the Class I-A-2
Notional Amount. The Class I-A-2 Certificates will not be entitled
to receive any distributions of principal.
(3) The Remittance Rate on the Class I-A-4 Certificates for the first
twelve Distribution Dates will be 8.000% per annum, for the thirteenth
through the twenty-fourth Distribution Dates, 7.500% per annum, and
for the twenty-fifth through the thirty-sixth Distribution Dates,
7.000% per annum. Thereafter, the Remittance Rate on the Class I-A-4
Certificates will be 6.500% per annum.
(4) The Remittance Rate on the Class I-A-9 Certificates for the first
twelve Distribution Dates will be 7.500% per annum and for the
thirteenth through the twenty-fourth Distribution Dates, 7.000% per
annum. Thereafter, the Remittance Rate on the Class I-A-9
Certificates will be 6.500% per annum.
(5) The Class I-A-14, Class I-A-27 and Class P Certificates will not be
entitled to receive any distributions of interest.
(6) For purposes of calculating distributions, Class I-A-19 will be
comprised of two Components having the designations, initial Component
Principal Balances and Remittance Rates set forth below:
INITIAL COMPONENT
DESIGNATION PRINCIPAL BALANCE REMITTANCE RATE
----------- ----------------- ---------------
Component I-A-19-1 $ 74,075.00 (A)
Component I-A-19-2 360,636.00 (A)
Each of the Components listed here will be a regular interest in REMIC
III.
(A) Neither Component I-A-19-1 nor Component I-A-19-2 will be
entitled to receive any distributions of interest.
(7) The Class I-A-20 Certificates will accrue interest on the Class I-A-20
Notional Amount. The Class I-A-20 Certificates will not be entitled
to receive any distributions of principal.
(8) The initial Remittance Rate for the Class I-A-22 Certificates will be
6.006% per annum. Thereafter, the Class I-A-22 Certificates will
accrue interest at a per annum rate equal to LIBOR plus 0.350%,
subject to a minimum and maximum Remittance Rate of 0.350% and 8.000%
per annum, respectively.
(9) The initial Remittance Rate for the Class I-A-23 Certificates will be
1.994% per annum. Thereafter, the Class I-A-23 Certificates will
accrue interest at a per annum rate equal to 7.650% minus LIBOR,
subject to a minimum and maximum Remittance Rate of 0.000% and 7.650%
per annum, respectively. The Class I-A-23 Certificates will accrue
interest on the Class I-A-23 Notional Amount. The Class I-A-23
Certificates will not be entitled to receive any distributions of
principal.
(10) Each Class of Class X Certificates will accrue interest on the
related Class Notional Amount. The Class X Certificates will not be
entitled to receive any distributions of principal.
(11) The Remittance Rate on the Class I-B Certificates will equal, on any
Distribution Date, the quotient expressed as a percentage of (a) the
sum of (i) the product of (x) 6.375% and (y) the Subgroup I-1
Subordinate Component Balance immediately prior to such Distribution
Date, (ii) the product of (x) 6.500% and (y) the Subgroup I-2
Subordinate Component Balance immediately prior to such
7
Distribution Date, (iii) the product of (x) 6.625% and (y) the
Subgroup I-3 Subordinate Component Balance immediately prior to such
Distribution Date and (iv) the product of (x) 6.750% and (y) the
Subgroup I-4 Subordinate Component Balance immediately prior to such
Distribution Date divided by (b) the sum of the Subgroup I-1
Subordinate Component Balance, the Subgroup I-2 Subordinate Component
Balance, the Subgroup I-3 Subordinate Component Balance and the
Subgroup I-4 Subordinate Component Balance immediately prior to such
Distribution Date.
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
R-1, Class R-2 and Class R-3 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 Cut-Off Date, the Mortgage Loans have an
aggregate Principal Balance of $781,765,822.75 and the Certificates have
an Aggregate Certificate Principal Balance of $781,765,822.75.
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 Massachusetts trust company duly organized
and existing under the laws of The Commonwealth of Massachusetts and has
full power and authority to enter into this Agreement.
NOW, THEREFORE, in order to declare the terms and conditions upon
which the Certificates are, and are to be, authenticated, issued and
delivered, and in consideration of the
8
premises and of the purchase and acceptance of the Certificates by the
Holders thereof, the Company covenants and agrees with the Trustee, for
the equal and proportionate benefit of the respective Holders from time to
time of the Certificates, as follows:
ARTICLE I
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
Aggregate Certificate Principal Balance: At any given time, the sum
---------------------------------------
of the then current Class Principal Balances of the Certificates.
Appraised Value: The amount set forth in an appraisal made by or
---------------
for the mortgage originator in connection with its origination of each
Mortgage Loan, or with respect to certain Mortgage Loans originated to
refinance mortgage debt, the appraisal made by or for the mortgage
originator in connection with the origination of such mortgage debt.
Assignment of Proprietary Lease: With respect to a Cooperative
-------------------------------
Loan, the assignment or mortgage of the related Cooperative Lease from the
Mortgagor to the originator of the Cooperative Loan.
Authenticating Agent: Any authenticating agent appointed by the
--------------------
Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates (other
-----------------------
than the Class I-A-2, Class I-A-4, Class I-A-7, Class I-A-8, Class I-A-9,
Class I-A-15, Class I-A-16, Class I-A-17, Class I-A-18, Class I-A-20, Class
I-A-21, Class I-A-23, Class I-A-26, Class X and Residual Certificates),
an initial Certificate Principal Balance equal to $25,000 and integral
multiples of $1 in excess thereof, except that one Certificate of each
such Class may be issued in a different amount. With respect to the
Class I-A-4, Class I-A-7, Class I-A-8, Class I-A-9, Class I-A-15, Class
I-A-16, Class I-A-17, Class I-A-18, Class I-A-21 and Class I-A-26 Certificates,
an initial Certificate Principal Balance equal to $1,000 and integral
multiples of $1 in excess thereof. With respect to the Class X and Class
I-A-2, Class I-A-20 and Class I-A-23 Certificates, a Class Notional Amount
as of the Cut-Off Date equal to $100,000 and multiples of $1 in excess
thereof. With respect to each Class of the Residual Certificates, one
Certificate with a Percentage Interest equal to 0.01% and one Certificate
with a Percentage Interest equal to 99.99%.
Bankruptcy Coverage: The Group I Bankruptcy Coverage or the Group
-------------------
II Bankruptcy Coverage, as applicable.
Bankruptcy Coverage Initial Amount: With respect to Loan Group I,
----------------------------------
$135,039 and with respect to Loan Group II, $124,954.
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
9
United States Bankruptcy Code, other than any such reduction that arises
out of clause (ii) of this definition of "Bankruptcy Loss", including,
without limitation, any such reduction that results in a permanent
forgiveness of principal, or (ii) with respect to any Mortgage Loan, a
valuation, by a court of competent jurisdiction in a case under such
Bankruptcy Code, of the related Mortgaged Property in an amount less
than
the then outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any
-----------------
Book-Entry Certificate as or through a DTC Participant or an Indirect DTC
Participant or a Person holding a beneficial interest in any Definitive
Certificate.
Book-Entry Certificates: The Class A, Class X and Class P
-----------------------
Certificates, beneficial ownership and transfers of which shall be made
through book entries as described in Section 5.07.
Business Day: Any day other than a Saturday, a Sunday, or a day on
------------
which banking institutions in Chicago, Illinois, Boston, Massachusetts or
New York, New York are authorized or obligated by law or executive order
to be closed.
Buydown Agreement: An agreement between a Person and a Mortgagor
-----------------
pursuant to which such Person has provided a Buydown Fund.
Buydown Fund: A fund provided by the originator of a Mortgage Loan
------------
or another Person with respect to a Buydown Loan which provides an amount
sufficient to subsidize regularly scheduled principal and interest
payments due on such Buydown Loan for a period. Buydown Funds may be (i)
funded at the par values of future payment subsidies, or (ii) funded in an
amount less than the par values of future payment subsidies, and
determined by discounting such par values in accordance with interest
accruing on such amounts, in which event they will be deposited in an
account bearing interest. Buydown Funds may be held in a separate Buydown
Fund Account or may be held in a Custodial Account for P&I or a Custodial
Account for Reserves and monitored by a Servicer.
Buydown Fund Account: A separate account or accounts created and
--------------------
maintained pursuant to Section 3.02 (a) with the corporate trust
department of the Trustee or another financial institution approved by the
Master Servicer, (b) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to the Rating Agencies) created,
maintained and monitored by a Servicer or (c) in a separate non-trust
account without FDIC or other insurance in an Eligible Institution. Such
account or accounts may be non-interest bearing or may bear interest. In
the event that a Buydown Fund Account is established pursuant to clause
(b) of the preceding sentence, amounts held in such Buydown Fund Account
shall not exceed the level of deposit insurance coverage on such account;
accordingly, more than one Buydown Fund Account may be established.
Buydown Loan: A Mortgage Loan for which the Mortgage Interest Rate
------------
has been subsidized through a Buydown Fund provided at the time of
origination of such Mortgage Loan.
Certificate: Any one of the Group I, Group II or Residual
-----------
Certificates, issued pursuant to this Agreement, executed by the Trustee
and authenticated by or on behalf of the Trustee hereunder in
substantially one of the forms set forth in Exhibit A, B and C hereto. The
additional matter appearing in Exhibit H shall be deemed incorporated into
Exhibits A and B as though set forth at the end of such Exhibits.
10
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 4.05.
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: The Group I and Group II Certificates, as
----------------- applicable.
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 "REMIC I Distribution Amount" only to
the extent of the REMIC I Available Distribution Amount for such
Distribution
11
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 and Class II-A-1 Certificates.
--------------------
Class A-L Regular Interests: The Group I-A-L and Class II-A-1-L
---------------------------
Regular Interests.
Class B Certificates: The Group I-B and Group II-B Certificates.
--------------------
Class X-X Regular Interests: The Group I-B-L and Group II-X-X
---------------------------
Regular Interests.
Class I-A-1 Certificates: The Certificates designated as "Class
------------------------
I-A-1" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-1.
Class I-A-1-L Regular Interest: The uncertificated partial
------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-2 Certificates: The Certificates designated as "Class
------------------------
I-A-2" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-2.
Class I-A-2 Notional Amount: For any Distribution Date, the Class
---------------------------
I-A-1 Principal Balance immediately prior to such Distribution Date
multiplied by 4/675.
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 Interest Amount: For each of the first thirty-six
---------------------------
Distribution Dates, an amount equal to the excess of (i) the Class I-A-4
Interest Distribution Amount over (ii) such amount calculated as if the
Remittance Rate for the Class I-A-4 Certificates is 6.500% per annum.
12
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 Adjusted Percentage: For any Distribution Date
-------------------------------
occurring prior to the Distribution Date in September 2003, 0%, and for the
September 2003 Distribution Date and any Distribution Date thereafter,
the Class I-A-5 Percentage.
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 Liquidation Amount: The aggregate, for each Group I
------------------------------
Loan which became a Liquidated Mortgage Loan during the calendar month
preceding the month of the Distribution Date, of the lesser of (i) the
Class I-A-5 Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class I-P Fraction thereof, with respect to any Class
I-P Mortgage Loan) and (ii) the Class I-A-5 Percentage on any Distribution
Date occurring prior to the fifth anniversary of the first Distribution
Date, and the Class I-A-5 Prepayment Percentage on the fifth anniversary
of the first Distribution Date and each Distribution Date thereafter, in
each case, of the Liquidation Principal with respect to such Mortgage
Loan.
Class I-A-5-L Lockout Priority Amount: For any Distribution Date,
-------------------------------------
the sum of (i) the Class I-A-5 Adjusted Percentage of the Principal Payment
Amount for Loan Group I (exclusive of the portion thereof attributable to
principal distributions to the Class I-P-L Regular Interests pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount"),
(ii) the Class I-A-5 Prepayment Percentage of the Principal Prepayment
Amount for Loan Group I (exclusive of the portion thereof attributable to
principal distributions to the Class I-P-L Regular Interests pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount") and
(iii) the Class I-A-5 Liquidation Amount.
Class I-A-5 Percentage: For any Distribution Date, the Class I-A-5
----------------------
Principal Balance divided by the aggregate Principal Balance of the Group
I Certificates (less the Class I-P Principal Balance) and the Residual
Certificates, in each case immediately prior to such Distribution Date.
Class I-A-5 Prepayment Percentage: For any Distribution Date, the
---------------------------------
product of the Class I-A-5 Percentage and the Step Down Percentage.
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.
13
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 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 Interest Amount: For each of the first twenty-four
---------------------------
Distribution Dates, an amount equal to the excess of (i) the Class I-A-9
Interest Distribution Amount over (ii) such amount calculated as if the
Remittance Rate for the Class I-A-9 Certificates is 6.500% per annum.
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-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-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-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.
14
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.
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 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.
Class I-A-19-L Regular Interest: 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.
15
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 Notional Amount: For any Distribution Date, the Class
----------------------------
I-A-25 Principal Balance immediately prior to such Distribution Date
multiplied by 35/675.
Class I-A-21 Certificates: The Certificates designated as "Class
-------------------------
I-A-21" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-21.
Class I-A-21-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-22 Certificates: The Certificates designated as "Class
-------------------------
I-A-22" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-22.
Class I-A-22-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class I-A-23 Certificates: The Certificates designated as "Class
-------------------------
I-A-23" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-23.
Class I-A-23 Notional Amount: For any Distribution Date, the Class
----------------------------
I-A-22 Principal Balance immediately prior to such Distribution Date.
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-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-25 Certificates: The Certificates designated as "Class
-------------------------
I-A-25" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-25.
Class I-A-25-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-26 Certificates: The Certificates designated as "Class
-------------------------
I-A-26" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-26.
Class I-A-26-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.
16
Class I-A-27 Certificates: The Certificates designated as "Class
-------------------------
I-A-27" on the face thereof in substantially the form attached hereto as
Exhibit A-I-A-27.
Class I-A-27 Fraction: For Subgroup I-1 and for each Subgroup I-1
---------------------
Loan, 0.375/6.750; for Subgroup I-2 and for each Subgroup I-2 Loan,
0.250/6.750; for Subgroup I-3 and for each Subgroup I-3 Loan, 0.125/6.750;
and for Subgroup I-4, zero.
Class I-A-27-L Principal Distribution Amount: For any Distribution
--------------------------------------------
Date, the sum of: (i) the Subgroup I-1 Senior Principal Distribution
Amount multiplied by 0.375/6.750, (ii) the Subgroup I-2 Senior Principal
Distribution Amount multiplied by 0.250/6.750 and (iii) the Subgroup I-3
Senior Principal Distribution Amount multiplied by 0.125/6.750.
Notwithstanding the foregoing, for any Distribution Date on which
there has been an increase (a "Component Increase") in the Senior
Component Balance for one or more Subgroups (each, an "Overcollateralized
Subgroup") in respect of Realized Losses in another Subgroup (an
"Undercollateralized Subgroup") pursuant to the fifth paragraph of the
definition of "Realized Loss", the Class I-A-27-L Principal Distribution
Amount calculated in accordance with the first paragraph of this
definition shall be adjusted as follows: for each Overcollateralized
Subgroup, (A) if the Class I-A-27 Fraction for such Overcollateralized
Subgroup is greater than the Class I-A-27 Fraction for the
Undercollateralized Subgroup, then the Class I-A-27-L Principal
Distribution Amount shall be reduced by the product of (x) the excess of
the Class I-A-27 Fraction for such Overcollateralized Subgroup over the
Class I-A-27 Fraction for the Undercollateralized Subgroup and (y) the
amount of the applicable Component Increase, and (B) if the Class I-A-27
Fraction for such Overcollateralized Subgroup is less than the Class
I-A-27 Fraction for the Undercollateralized Subgroup, then the Class
I-A-27-L Principal Distribution Amount shall be increased by the product
of (x) the excess of the Class I-A-27 Fraction for the Undercollateralized
Subgroup over the Class I-A-27 Fraction for such Overcollateralized
Subgroup and (y) the amount of the applicable Component Increase (the net
reduction or net increase in the Class I-A-27-L Principal Distribution
Amount resulting from application of clauses (A) and (B) to all
Overcollateralized Subgroups referred to herein as the "Net Reduction" or
"Net Increase", respectively); provided, however, that (i) if the Net
Reduction is greater than the Class I-A-27-L Principal Distribution Amount
calculated in accordance with the first paragraph of this definition, then
the Class I-A-27-L Principal Distribution Amount shall equal zero, and the
remainder of the Net Reduction shall be carried out on the next
Distribution Date or Distribution Dates, as necessary, and (ii) if the Net
Increase is greater than the Group I Senior Principal Distribution Amount
(less the Class I-A-27-L Principal Distribution Amount calculated in
accordance with the first paragraph of this definition), then the Class
I-A-27-L Principal Distribution Amount shall equal the Group I Senior
Principal Distribution Amount, and the remainder of the Net Increase shall
be carried out on the next Distribution Date or Distribution Dates, as
necessary.
Class I-A-27-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-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.
17
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.
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 Certificates: The Certificates designated as "Class I-P"
on
----------------------
the face thereof in substantially the form attached hereto as Exhibit
A-I-P.
Class I-P Fraction: For each Class I-P Mortgage Loan, a fraction,
------------------
the numerator of which is 6.375% less the Pass-Through Rate on such Class I-P
Mortgage Loan and the denominator of which is 6.375%.
18
Class I-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 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-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate
-----------------------
of less than 6.375% per annum.
Class I-X-1 Certificates: The Certificates designated as "Class
------------------------
I-X-1" on the face thereof in substantially the form attached hereto as
Exhibit A-I-X-1.
Class I-X-1 Notional Amount: With respect to any Distribution Date,
---------------------------
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Class I-X-1
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Class I-X-1
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 6.750%.
Class I-X-1 Premium Rate Mortgage Loans: The Subgroup I-1 Loans
---------------------------------------
having Pass-Through Rates in excess of 6.375% per annum; the Subgroup I-2
Loans; the Subgroup I-3 Loans; and the Subgroup I-4 Loans having Mortgage
Interest Rates less than 7.625% per annum.
Class I-X-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-X-1-M Regular Interest: The uncertificated partial
------------------------------
undivided beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-X-2 Certificates: The Certificates designated as "Class
------------------------
I-X-2" on the face thereof in substantially the form attached hereto as
Exhibit A-I-X-2.
Class I-X-2 Notional Amount: With respect to any Distribution Date,
---------------------------
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Class I-X-2
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Class I-X-2
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 6.750%.
Class I-X-2 Premium Rate Mortgage Loans: The Subgroup I-4 Loans
---------------------------------------
having Mortgage Interest Rates greater than or equal to 7.625% per
annum.
19
Class I-X-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-X-2-M Regular Interest: The uncertificated partial
------------------------------
undivided beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class 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-B-1 Certificates: The Certificates designated as "Class
-------------------------
II-B-1" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-1.
Class II-B-1-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class II-B-2 Certificates: The Certificates designated as "Class
-------------------------
II-B-2" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-2.
Class II-B-2-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class II-B-3 Certificates: The Certificates designated as "Class
-------------------------
II-B-3" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-3.
Class II-B-3-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class II-B-4 Certificates: The Certificates designated as "Class
-------------------------
II-B-4" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-4.
Class II-B-4-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class II-B-5 Certificates: The Certificates designated as "Class
-------------------------
II-B-5" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-5.
20
Class II-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 II-B-6 Certificates: The Certificates designated as "Class
-------------------------
II-B-6" on the face thereof in substantially the form attached hereto as
Exhibit A-II-B-6.
Class II-B-6-L Regular Interest: The uncertificated partial
-------------------------------
undivided beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class II-P Certificates: The Certificates designated as "Class
-----------------------
II-P" on the face thereof in substantially the form attached hereto as Exhibit
A-II-P.
Class II-P Fraction: For each Class II-P Mortgage Loan, a fraction,
-------------------
the numerator of which is 7.000% less the Pass-Through Rate on such Class
II-P Mortgage Loan and the denominator of which is 7.000%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-Through
------------------------
Rate of less than 7.000% per annum.
Class II-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 II-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 II-X Certificates: The Certificates designated as "Class
-----------------------
II-X" on the face thereof in substantially the form attached hereto as Exhibit
A-II-X.
Class II-X Notional Amount: With respect to any Distribution Date,
--------------------------
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or with respect to
the initial Distribution Date, as of the Cut-Off Date, of the Group II
Premium Rate Mortgage Loans and (y) a fraction, the numerator of which is
the weighted average of the Stripped Interest Rates for the Group II
Premium Rate Mortgage Loans as of such Due Date and the denominator of
which is 7.000%.
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.
21
Class Notional Amount: With respect to any of the Class I-A-2,
---------------------
Class I-A-20, Class I-A-23 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-1
Certificates and the Class I-X-1-L and Class I-X-1-M Regular Interests is
the Class I-X-1 Notional Amount, and the "Class Notional Amount" for the
Class I-A-2 Certificates is the Class I-A-2 Notional Amount).
Class P Certificates: The Class I-P and Class II-P Certificates.
-------------------
Class P Fraction: The Class I-P or Class II-P Fraction, as
----------------
applicable.
Class P Mortgage Loan: Any of the Class I-P or Class II-P Mortgage
---------------------
Loans.
Class P-L Regular Interests: The Class I-P-L and Class II-P-L
---------------------------
Regular Interests.
Class P-M Regular Interests: The Class I-P-M and Class II-P-M
---------------------------
Regular Interests.
Class Principal Balance: For any Class of Certificates and for any
-----------------------
Class of Regular Interests (other than the Class I-A-19 Certificates and
the Class I-A-19-L Regular Interests), the applicable initial Class
Principal Balance therefor set forth in the Preliminary Statement hereto,
corresponding to the rights of such Class in payments of principal due to
be passed through to Certificateholders or the Holders of the Regular
Interests from principal payments on the Mortgage Loans, 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
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".
Notwithstanding the foregoing, any amounts distributed in respect of
losses pursuant to paragraph (I)(a)(vi) or (I)(b)(vi) of the definition of
"REMIC II Distribution Amount" shall not cause a further reduction in the
Class Principal Balances of the Class P-L Regular Interests or the Class P
Certificates. The Class Principal Balance for the Class I-A-1 Certificates
shall be referred to as the "Class I-A-1 Principal Balance",
the Class Principal Balance for the Class I-A-1-L Regular Interests shall
be referred to as the "Class I-A-1-L Principal Balance" and so on. The
Class Principal Balances for the Class X Certificates and their
Corresponding Classes and for the Class I-A-2, Class I-A-20 and Class
I-A-23 Certificates shall each be zero. The Class I-A-19 and Class
I-A-19-L Principal Balance shall each equal the sum of the Component
Principal Balances of the respective Components thereof.
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.
22
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.
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 X Certificates: The Class I-X-1, Class I-X-2 and Class II-X
--------------------
Certificates.
Class X-L Regular Interests: The Class I-X-1-L, Class I-X-2-L and
---------------------------
Class II-X-L Regular Interests.
Class X-M Regular Interests: The Class I-X-1-M, Class I-X-2-M and
---------------------------
Class II-X-M Regular Interests.
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,
Class Y-3 and Class Y-4 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:
PIB = the Subordinate Component Balance for Subgroup I-1 after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
PIIB = the Subordinate Component Balance for Subgroup I-2 after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
PIIIB = the Subordinate Component Balance for Subgroup I-3 after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
PIVB = the Subordinate Component Balance for Subgroup I-4 after the
allocation of Realized Losses and distributions of principal on such
Distribution Date.
R = the Remittance Rate on the Class I-B-L Regular Interests
= (6.375%PIB + 6.5%PIIB + 6.625%PIIIB + 6.75%PIVB)/( PIB + PIIB +
PIIIB + PIVB)
R1 = the weighted average of the Remittance Rates on the Subgroup I-1-L,
Subgroup I-2-L and Subgroup I-3-L Regular Interests (other than the Class
I-P-L, Class I-X-1-L and Class I-X-2-L Regular Interests)
= (6.375%(P1 - DP1) + 6.5%(P2 - DP2) + 6.625%(P3 - DP3))/(P1 - DP1 +
P2 - DP2 + P3 - DP3)
23
R2 = the weighted average of the Remittance Rates on the Subgroup I-2-L,
Subgroup I-3-L and Subgroup I-4-L Regular Interests (other than the Class
I-X-1-L, Class I-X-2-L and Class I-P-L Regular Interests)
= (6.5%(P2 - DP2) + 6.625%(P3 - DP3) + 6.75%(P4 - DP4))/(P2 - DP2 +
P3 - DP3 + P4 - DP4)
R3 = the weighted average of the Remittance Rates on the Subgroup I-1-L
and Subgroup I-2-L Regular Interests (other than the Class I-P-L, Class
I-X-1-L and Class I-X-2-L Regular Interests)
= (6.375%(P1 - DP1) + 6.5%(P2 - DP2))/(P1 - (P1 + P2 - DP2)
R4 = the weighted average of the Remittance Rates on the Subgroup I-3-L
and Subgroup I-4-L Regular Interests (other than the Class I-X-1-L, Class
I-X-2-L and Class I-P-L Regular Interests)
= (6.625%(P3 - DP3) + 6.75%(P4 - DP4))/(P3 - (P3 + P4 - DP4)
r1 = the weighted average of the Class Y-1, Class Y-2 and Class Y-3
Remittance Rates
= (6.375% Y1 + 6.5% Y2 + 6.625% Y3)/(Y1 + Y2 + Y3)
r2 = the weighted average of the Class Y-2, Class Y-3 and Class Y-4
Remittance Rates
= (6.5% Y2 + 6.625% Y3 + 6.75% Y4)/(Y2 + Y3 + Y4)
r3 = the weighted average of the Class Y-1 and Class Y-2 Remittance
Rates
= (6.375% Y1 + 6.5% Y2)/(Y1 + Y2)
r4 = the weighted average of the Class Y-3 and Class Y-4 Remittance
Rates
= (6.625% Y3 + 6.75% Y4)/(Y3 + Y4)
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.
Y4 = the principal balance of the Class Y-4 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.
DY4 = the Class Y-4 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.
P4 = the aggregate principal balance of the Class Y-4 and Class Z-4
Regular Interests after distributions on the prior Distribution Date.
DP1 = the aggregate of the Class Y-1 and Class Z-1 Principal Reduction
Amounts.
24
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.
DP4 = the aggregate of the Class Y-4 and Class Z-4 Principal Reduction
Amounts.
a = .0005
g1 = (R - R1)/(6.75% - R). If R3 6.625%, g1 is a non-negative number
unless its denominator is zero, in which event it is undefined.
g2 = (R - 6.375%)/(R2 - R). If R<6.5%, g2 is a non-negative number.
g3 = (R - R3)/(R4 - R). If 6.5% ~R~ 6.625%, g2 is a non-negative number
unless its denominator is zero, in which case it is undefined.
If g1 is undefined, DY1 = X0, XX0 = X0, XX0 = Y3, and DY4 = (Y4/P4)DP4.
If g2 is zero, DY1 = (Y1/P1)DP1, DY2 = X0, XX0 = Y3 and DY4 = Y4.
If 6.5% ~R~ 6.625% and g3 is undefined, DY1 = X0, XX0 = X0, XX0 = Y4,
and DY3 = (Y3/P3)DP3.
If 6.5% ~R~ 6.625% and g3 is zero, DY2 = (Y2/P2)DP2, DY1 = X0, XX0 = Y3
and DY4 = Y4.
In the remaining situations, XX0, XX0, XX0 and DY4 shall be defined as
follows:
I. If R3 6.625%, make the following additional definitions:
dY1 = 0, if R1< r1;
(R1- r1)( Y1 + Y2 + Y3)Y1/((R1 - 6.375%)Y1 + (R1 - 6.5%)Y2), if X00
x0 and R13 6.5%; and
(R1- r1)( Y1 + Y2 + Y3)/(R1 - 6.375%), if X00 x0 and
R1<6.5%;
dY2 = 0, if R1< r1 and R1(6.5%;
(R1- r1)( Y1 + Y2 + Y3)Y2/((R1 - 6.5%)Y2 + (R1 - 6.625%)Y3),
if R1< r1 and R1<6.5%;
(R1- r1)( Y1 + Y2 + Y3)Y2/((R1 - 6.375%)Y1 + (R1 - 6.5%)Y2),
if R1( r1 and R1(6.5%; and
0, if R1( r1 and R1<6.5%;
and
dY3 = (R1- r1)( Y1 + Y2 + Y3)/(R1 - 6.625%), if R1< r1 and
R1(6.5%;
(R1- r1)( Y1 + Y2 + Y3)Y3/((R1 - 6.5%)Y2 + (R1 - 6.625%)Y3), if
R1< r1 and R1<6.5%; and
0, if R1( r1.
dY1, dY2, and dY3 are numbers between Y1 and 0, Y2 and 0, and Y3 and 0,
respectively, such that (6.375%(Y1 - dY1) + 6.5%( Y2.- dY2) + 6.625%(
Y3.-
dY3))/(Y1 - dY1 + Y2.- dY2 + Y3.- dY3) = R1.
Y5 = X0 - xX0 + Y2.- dY2 + Y3.- dY3
P5 = P1 + P2 + P3.
DP5 = DP1 + DP2 + DP3.
)Y5 = )Y1 - dY1 + )Y2.- dY2 + (Y3.- dY3
25
1. If Y4 - a(P4 - DP4) 3 0, Y5- a(P5 - DP5) 3 0, and g1(P5 - DP5) <
(P4
- DP4), DY4 = Y4 - ag1(P5 - DP5) and DY5 = Y5 - a(P5 - DP5).
2. If Y4 - a(P4 - DP4) 3 0, Y5 - a(P5 - DP5) 3 0, and g1(P5 - DP5) 3
(P4 - DP4), DY4 = Y4 - a(P4 - DP4) and DY5 = Y5 - (a/g1)(P4 - DP4).
3. If Y4 - a(P4 - DP4) < 0, Y5 - a(P5 - DP5)3 0, and Y5 - a(P5 - DP5)
3
Y5 - (Y4/g1), DY4 = Y4 - ag1(P5 - DP5) and DY5 = Y5 - a(P5 - DP5).
4. If Y4 - a(P4 - DP4) < 0, Y5 - (Y4/g1)3 0, and Y5 - a(P5 - DP5) + Y5
- (Y4/g1), DY4 = 0 and DY5 = Y5 - DY4/g1).
5. If Y5 - a(P5 - DP5) < 0, Y5 - (Y4/g1) < 0, and Y4 - a(P4 - DP4) +
Y4
- (g1Y5), DY4 = Y4 - (g1Y5) and DY5 = 0.
6. If Y5 - a(P5 - DP5) < 0, Y4 - a(P4 - DP4)3 0, and Y4 - a(P4 - DP4)3
Y4 - (g1Y5), DY4 = Y4 - a(P4 - DP4) and DY5 = Y5 - (a/g1)(P4 - DP4).
)Y1 = dY1 + [(Y1 - dY1)/(Y1 - dY1 + X0 - xX0 + Y3 - dY3)](Y5
)Y2 = dY2 + [(Y2 - dY2)/(Y1 - dY1 + X0 - xX0 + Y3 - dY3)](Y5
)Y3 = dY3 + [(Y3 - dY3)/(Y1 - dY1 + X0 - xX0 + Y3 - dY3)](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 Y4 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
Y-4, Class Z-1, Class Z-2, Class Z-3 and Class Z-4 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, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances and the Class Y-4 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-4 and Class Z-4 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 Y4 and
whose denominator is the sum of Y4 and Class Z-4 Principal
Balance and (b) the fraction whose numerator is Y5 and whose
denominator is the sum of Y5, the Class Z-1 Principal Balance,
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 Subgroup remaining after the allocation of such Realized Losses to
the related Class P-M Regular Interest (if any) and (b) the remainder of
the portion of the REMIC I Available Distribution Amount derived from the
related Subgroup after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular Interest
(if any), (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
26
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 among
(Y1, (Y2 and (Y3 cannot be achieved because either (Y1 as so defined is
greater than (P1, (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 (Y1 <(P1,
(Y2 < (P2 and (Y3 < (P3.
II. If R~6.5%, make the following additional definitions:
dY2 = 0, if R2< r2;
(R2- r2)( Y2 + Y3 + Y4)Y2/((R2 - 6.5%)Y2 + (R2 - 6.625%)Y3), if R2 3 r2
and R2 3 6.625%; and
(R2- r2)( Y2 + Y3 + Y4)/(R2 - 6.5%), if R2 3 r2 and R2 3
6.625%;
dY3 =0, if R2< r2 and R2 3
6.625%;
(R2- r2)( Y2 + Y3 + Y4)Y3/((R2 - 6.625%)Y3 + (R2 - 6.75%)Y4), if R2<
r2 and R2<6.625%;
(R2- r2)( Y2 + Y3 + Y4)Y3/((R2 - 6.5%)Y2 + (R2 - 6.625%)Y3), if R2(
r2 and R2 3 6.625%; and
0, if R2 3 r2 and R2<6.625%;
and
dY4 = (R2- r2)( Y2 + Y3 + Y4)/(R2 - 6.75%), if R2< r2 and
R2(6.625%;
(R2- r2)( Y2 + Y3 + Y4)Y4/((R2 - 6.625%)Y3 + (R2 - 6.75%)Y4),
if R2< r2 and R2<6.625%;
and
0, if R2 3 r2.
dY2, dY3, and dY4 are numbers between Y2 and 0, Y3 and 0, and Y4 and 0,
respectively, such that (6.5%(Y2 - dY2) + 6.625%( Y3.- dY3) + 6.75%(
Y4.-
dY4))/(Y2 - dY2 + Y3.- dY3 + Y4.- dY4) = R2.
Y6 = X0 - xX0 + Y3.- dY3 + Y4.- dY4
P6 = P2 + P3 + P4.
DP6 = DP2 + DP3 + DP4.
)Y6 = )Y2 - dY2 + )Y3.- dY3 + )Y4.- dY4
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 - ((P6 - DP6)~ Y6
- (g2Y1), DY6 = Y6 - (g2Y1) and DY1 = 0.
6. If Y1 - ((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 + X0 - xX0 + Y4 - dY4)](Y6
)Y3 = dY3 + [(Y3 - dY3)/(Y2 - dY2 + X0 - xX0 + Y4 - dY4)](Y6
27
)Y4 = dY4 + [(Y4 - dY4)/(Y2 - dY2 + X0 - xX0 + Y4 - dY4)](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 Y6 to Y1 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
Y-4, Class Z-1, Class Z-2, Class Z-3 and Class Z-4 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, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances and the Class Y-4 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-4 and Class Z-4 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,
the Class Z-3 Principal Balance and the Class Z-4 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 Subgroup remaining after the allocation of such Realized Losses to
the related Class P-M Regular Interest (if any) and (b) the remainder of
the portion of the REMIC I Available Distribution Amount derived from the
related Subgroup after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular Interest
(if any), (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 among (Y2, (Y3 and (Y4 cannot be achieved
because either (Y2 as so defined is greater than (P2, (Y3 as so defined is
greater than (P3 or (Y4 as so defined is greater than (P4, such an
allocation shall be made as close as possible to the formula allocation
within the requirement that (Y2 < (P2, (Y3 < (P3 and (Y4 < (P4.
III. If 6.5%~R~6.625%, make the following additional definitions:
(Y1 = 0, if R3< r3; and
(R3- r3)(Y1 + Y2)/(R3 - 6.375%), if R3 3 r3;
dY2 = 0, if R3 3 r3; and
(R3- r3)(Y1 + Y2)/(R3 - 6.5%), if R3< r3;
dY3 = 0, if R4< r4; and
(R4- r4)(Y3 + Y4)/(R4 - 6.625%), if R4 3 r4; and
dY4 = (R4- r4)(Y3 + Y4)/(R4 - 6.75%), if R4< r4; and
0, if R4 3 r4.
28
dY1, dY2, dY3, and dY4 are numbers between Y1 and 0, Y2 and 0, Y3 and 0,
and Y4 and 0, respectively, such that
(6.375%(Y1 - dY1) + 6.5%(Y2.- dY2))/(Y1 - dY1 + Y2.- dY2) = R3 and
(6.625%(Y3 - dY3) + 6.75%(Y4.- dY4))/(Y3 - dY3 + Y4.- dY4) = R4.
Y7 = Y1 - dY1 + Y2.- dY2
P7 = P1 + P2.
DP7 = DP1 + DP2.
)Y7 = )Y1 - dY1 + )Y2.- dY2.
Y8 = Y3.- dY3 + Y4.- dY4.
P8 = P3 + P4.
DP8 = DP3 + DP4.
)Y8 = )Y3.- dY3 + )Y4.- dY4
1. If Y8 - a(P8 - DP8)3 0, Y7- a(P7 - DP7)3 0, and g3(P7 - DP7) < (P8 -
DP8), DY8 = Y8 - ag3(P7 - DP7) and DY7 = Y7 - a(P7 - DP7).
2. If Y8 - a(P8 - DP8)3 0, Y7 - a(P7 - DP7)3 0, and g3(P7 - DP7)3 (P8
-
DP8), DY8 = Y8 - a(P8 - DP8) and DY7 = Y7 - (a/g3)(P8 - DP8).
3. If Y8 - a(P8 - DP8) < 0, Y7 - a(P7 - DP7)3 0, and Y7 - a(P7 - DP7)3
Y7
- (Y8/g3), DY8 = Y8 - ag3(P7 - DP7) and DY7 = Y7 - a(P7 - DP7).
4. If Y8 - a(P8 - DP8) < 0, Y7 - (Y8/g3)3 0, and Y7 - a(P7 - DP7) ~ Y7
-
(Y8/g3), DY8 = 0 and DY7 = Y7 - (Y8/g3).
5. If Y7 - a(P7 - DP7) < 0, Y7 - (Y8/g3) < 0, and Y8 - a(P8 - DP8) ~ Y8
-
(g3Y7), DY8 = Y8 - (g3Y7) and DY7 = 0.
6. If Y7 - a(P7 - DP7) < 0, Y8 - a(P8 - DP8) 3 0, and Y8 - a(P8 - DP8)3
Y8 - (g3Y7), DY8 = Y8 - a(P8 - DP8) and DY7 = Y7 - (a/g3)(P8 - DP8).
)Y1 = dY1 + [(Y1 - dY1)/(Y1 - dY1 + Y2 - dY2)](Y7
)Y2 = dY2 + [(Y2 - dY2)/(Y1 - dY1 + Y2 - dY2)](Y7
)Y3 = dY3 + [(Y3 - dY3)/(Y3 - dY3 + Y4 - dY4)](Y8
)Y4 = dY4 + [(Y4 - dY4)/(Y3 - dY3 + Y4 - dY4)](Y8
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 Y8 to Y7 equal to (3 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
Y-4,
29
Class Z-1, Class Z-2, Class Z-3 and Class Z-4 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, the Class Y-2 Principal Balance less than or equal to
0.0005 of the sum of the Class Y-3 and Class Z-3 Principal
Balances and the Class Y-4 Principal Balance less than or equal
to 0.0005 of the sum of the Class Y-4 and Class Z-4 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 Y7 and
whose denominator is the sum of Y7, the Class Z-1 Principal
Balance and the Class Z-2 Principal Balance and (b) the fraction
whose numerator is Y8 and whose denominator is the sum of Y8, the
Class Z-3 Principal Balance and the Class Z-4 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 Subgroup remaining after the allocation of such Realized Losses to
the related Class P-M Regular Interest (if any) and (b) the remainder of
the portion of the REMIC I Available Distribution Amount derived from the
related Subgroup after reduction thereof by the distributions to be made
on such Distribution Date (i) to the related Class P-M Regular Interest
(if any), (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 )Y1 and )Y2, or of )Y8 between )Y3 and
)Y4 cannot be achieved because either )Y1 as so defined is greater than
)P1, )Y2 as so defined is greater than )P2, )Y3 as so defined is greater
than )P3 or )Y4 as so defined is greater than )P4, such an allocation
shall be made as close as possible to the formula allocation within the
requirement that )Y1 < )P1, )Y2 < )P2, )Y3 < )P3 and )Y4 < )P4.
NOTE:
-----
The principal balances for the Class Y-1, Class Y-2, Class Y-3 and Class
Y-4 Regular Interests as of the Cut-Off Date should be calculated as
follows: First, calculate the Cut-Off Date values for P1, P2, P3 and P4.
Then calculate the Cut-Off Date value of R using those balances and the
Subordinate Component Balances for the Subgroups of Group I.
If R3 6.625%,calculate R1 = (6.375%P1 + 6.5%P2 + 6.625%P3)/(P1 + P2 + P3)
and g1 = (R - R1)/(6.75% - R).
If P4 ~ (1(P1 + P2 + P3), the Cut-Off Date principal balance of the Class
Y-4 Regular Interest (Y4) equals 0.0005P4 and the Cut-Off Date principal
balances of the Class Y-1, Class Y-2 and Class Y-3 Regular Interests (Y1,
Y2 and Y3) equal 0.0005 P1P4/[g1(P1 + P2 + P3)], 0.0005 P2P4/[g1(P1 + P2 +
P3)] and 0.0005 P3P4/[g1(P1 + P2 + P3)] respectively.
If P4 > g1(P1 + P2 + P3), the Cut-Off Date principal balances of the Class
Y-1, Class Y-2 and Class X-0 Xxxxxxxxx (X0, X0 and Y3) equal 0.0005 P1,
0.0005 P2 and 0.0005 P3 respectively and the Cut-Off Date principal
balance of the Class Y-4 Regular Interest (Y4) equals 0.0005(1(P1 + P2 +
P3).
If R~6.5%,calculate R2 = (6.5%P2 + 6.625%P3 + 6.75%P4)/(P2 + P3 + P4) and
g2 =(R - 6.5%)/(R2 - R).
30
If P2 + P3 + P4 ~ g2P1, the Cut-Off Date principal balances of the Class
Y-2, Class Y-3 and Class Y-3 Regular Interests (Y2, Y3 and Y4) equal
0.0005P2, 0.0005P3 and 0.0005P4, respectively, and the Cut-Off Date
principal balance of the Class Y-1 Interest (Y1) equals
0.0005(P2+P3+P4)/g2.
If P2 + P3 + P4> g2P1, the Cut-Off Date principal balance of the Class Y-1
Interest (Y1) equals 0.0005 P1 and the Cut-Off Date principal balances of
the Class Y-2, Class Y-3 and Class Y-4 Interests (Y2, Y3 and Y4) equal
0.0005g2P1P2/(P2 + P3 + P4), 0.0005g2P1P3/(P2 + P3 + P4) and
0.0005g2P1P4/(P2 + P3 + P4), respectively.
If 6.5% g2(P1 + P2), the Cut-Off Date principal balances of the Class
Y-1 and Class Y-2 Interests (Y1 and Y2) equal 0.0005 P1 and 0.0005 P2 and
the Cut-Off Date principal balances of the Class Y-3 and Class Y-4
Interests (Y3 and Y4) equal 0.0005g3P3(P1 + P2)/(P3 + P4) and
0.0005g3P4(P1 + P2)/(P3 + P4), respectively.
Class Y Regular Interests: The Class Y-1, Class Y-2, Class Y-3 and
-------------------------
Class Y-4 Regular Interests
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-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-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-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-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-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.
31
Class Y-4 Principal Distribution Amount: For any Distribution
---------------------------------------
Date, the excess, if any, of the Class Y-4 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses allocated
to the Class Y-4 Regular Interests on such Distribution Date.
Class Y-4 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 Z Principal Reduction Amounts: For any Distribution Date, the
-----------------------------------
amounts by which the Class Principal Balances of the Class Z-1, Class Z-2,
Class Z-3 and Class Z-4 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 Subgroup (i.e. the "related Subgroup" for the Class Z-1
Regular Interests is Subgroup I-1) over the sum of the amounts thereof
distributable (i) to the Class I-P-M Regular Interests, (ii) to the Class
I-X-1-M and Class I-X-2-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 Subgroup over the portion of such Realized
Losses allocable to the Class I-P-M Regular Interests over (B) the Class Y
Principal Reduction Amount for the related Subgroup.
Class Z Regular Interests: The Class Z-1, Class Z-2, Class Z-3 and
-------------------------
Class Z-4 Regular Interests.
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-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-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-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.
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.
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.
32
Class Z-4 Principal Distribution Amount: For any Distribution Date,
---------------------------------------
the excess, if any, of the Class Z-4 Principal Reduction Amount for such
Distribution Date over the principal portion of Realized Losses
allocated to the Class Z-4 Regular Interests on such Distribution Date.
Class Z-4 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.
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: August 28, 1998, which is the date of settlement of
------------
the sale of the Certificates to the original purchasers thereof.
Code: The Internal Revenue Code of 1986, as amended.
----
Company: PNC Mortgage Securities Corp., a Delaware corporation, or
------- its successor-in-interest.
Compensating Interest: For any Distribution Date with respect to
---------------------
each Loan Group and the Mortgage Loans contained therein, the lesser of (i) the
sum of (a) the aggregate Master Servicing Fee payable with respect to such
Loan Group on such Distribution Date, (b) the aggregate Payoff Earnings
with respect to such Loan Group and (c) the aggregate Payoff Interest with
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-19 Certificates and the Class
---------
I-A-19-L Regular Interests representing parts of the entitlement of each
such Class to principal, in each case as set forth in the Preliminary
Statement hereto and the remainder of the Agreement.
Component I-A-19-1: A portion of the Class I-A-19 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-19-1-L: A portion of the Class I-A-19-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-19-2: A portion of the Class I-A-19 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-19-2-L: A portion of the Class I-A-19-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 Principal Balance: For any Component of the Class I-A-19
---------------------------
Certificates and for any Component of the Class I-A-19-L Regular
Interests, the applicable initial Component Principal
33
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-19 Certificates or the Class I-A-19-L Regular Interests, as
applicable, in respect of 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. 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-19-1 shall be referred to as
the "Component I-A-19-1 Principal Balance," and so on.
Cooperative: A private, cooperative housing corporation organized
-----------
under the laws of, and headquartered in, the States of New York or New
Jersey which owns or leases land and all or part of a building or
buildings located in such states, including apartments, spaces used for
commercial purposes and common areas therein and whose board of
directors
authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
---------------------
owned or leased by a Cooperative, which unit the Mortgagor has an
exclusive right to occupy pursuant to the terms of a proprietary lease or
occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
-----------------
proprietary lease or occupancy agreement with respect to the Cooperative
Apartment occupied by the Mortgagor and relating to the related
Cooperative Stock, which lease or agreement confers an exclusive right to
the holder of such Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
-----------------
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii)
an assignment or mortgage of the Cooperative Lease, (iv) financing
statements and (v) a stock power (or other similar instrument), and
ancillary thereto, a recognition agreement between the Cooperative and the
originator of the Cooperative Loan, each of which was transferred and
assigned to the Trustee pursuant to Section 2.01 and are from time to time
held as part of 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 Commonwealth of Massachusetts, at which at any particular time its
corporate trust business with respect to this Agreement shall be
administered, which office at the date of the execution of this Agreement
is located at Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attention:
Corporate Trust PNC 1998-7.
34
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.
Class I-A-1-L Class I-A-1
Class I-A-3-L Class I-A-3
Class I-A-4-L Class I-A-4
Class I-A-5-L Class I-A-5
Class I-A-6-L Class I-A-6
Class I-A-7-L Class I-A-7
Class I-A-8-L Class I-A-8
Class I-A-9-L Class I-A-9
Class I-A-10-L Class I-A-10
Class I-A-11-L Class I-A-11
Class I-A-12-L Class I-A-12
Class I-A-13-L Class I-A-13
Class I-A-14-L Class I-A-14
Class I-A-15-L Class I-A-15
Class I-A-16-L Class I-A-16
Class I-A-17-L Class I-A-17
Class I-A-18-L Class I-A-18
Class I-A-19-L Class I-A-19
Class I-A-21-L Class I-A-21
Class I-A-22-L Class I-A-22
Class I-A-24-L Class I-A-24
Class I-A-25-L Class I-A-25
Class I-A-26-L Class I-A-26
Class I-A-27-L Class I-A-27
Class I-X-1-L Class I-X-1
Class I-X-2-L Class I-X-2
Class I-P-L Class I-P
Class I-B-1-L Class I-B-1
Class I-B-2-L Class I-B-2
Class I-B-3-L Class I-B-3
Class I-B-4-L Class I-B-4
Class I-B-5-L Class I-B-5
Class I-B-6-L Class I-B-6
Class R-3-L Class R-3
With respect to the Group II Certificates and the Group II-L
Regular Interests, the "Corresponding Class" shall be as indicated in the
following table.
Class II-A-1-L Class II-A-1
Class II-X-L Class II-X
Class II-P-L Class II-P
Class II-B-1-L Class II-B-1
Class II-B-2-L Class II-B-2
Class II-B-3-L Class II-B-3
Class II-B-4-L Class II-B-4
Class II-B-5-L Class II-B-5
Class II-B-6-L Class II-B-6
35
Corresponding Component: With respect to each of Component
-----------------------
I-A-19-1-L and Component I-A-19-2-L, the "Corresponding Component" shall
be Component I-A-19-1 and Component I-A-19-2, respectively, 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.
36
Custodial Agreement: The agreement, if any, among the Master
-------------------
Servicer, the Trustee and a Custodian providing for the safekeeping of the
Mortgage Files on behalf of the Certificateholders.
Custodian: A custodian (other than the Trustee) which is not an
---------
affiliate of the Master Servicer or the Company and which is appointed
pursuant to a Custodial Agreement. Any Custodian so appointed shall act as
agent on behalf of the Trustee, and shall be compensated by the Trustee at
no additional charge to the Master Servicer. The Trustee shall remain at
all times responsible under the terms of this Agreement, notwithstanding
the fact that certain duties have been assigned to a Custodian.
Cut-Off Date: August 1, 1998.
------------
Definitive Certificates: Certificates in definitive, fully
-----------------------
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated August
--------------------
27, 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 September 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
37
following the date on which the Servicer determines that such Servicer's
short-term debt and unsecured long-term debt ratings fail to meet the
requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or
--------------------
securities listed below in which funds deposited in the Investment
Account, the Certificate Account, the Custodial Account for P&I and the
Custodial Account for Reserves may be invested:
(i) Obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(ii) Repurchase agreements on obligations described in clause
(i) of this definition of "Eligible Investments", provided that the
unsecured obligations of the party (including the Trustee in its
commercial capacity) agreeing to repurchase such obligations have at
the time one of the two highest short term debt ratings of the Rating
Agencies and provided that such repurchaser's unsecured long term debt
has one of the two highest unsecured long term debt ratings of the
Rating Agencies;
(iii) Federal funds, certificates of deposit, time deposits and
bankers' acceptances of any U.S. bank or trust company incorporated
under the laws of the United States or any state (including the
Trustee in its commercial capacity), provided that the debt
obligations of such bank or trust company (or, in the case of the
principal bank in a bank holding company system, debt obligations of
the bank holding company) at the date of acquisition thereof have one
of the two highest short term debt ratings of the Rating Agencies and
unsecured long term debt has one of the two highest unsecured long
term debt ratings of the Rating Agencies;
(iv) Obligations of, or obligations guaranteed by, any state of
the United States or the District of Columbia, provided that such
obligations at the date of acquisition thereof shall have the highest
long-term debt ratings available for such securities from the Rating
Agencies;
(v) Commercial paper of any corporation incorporated under the
laws of the United States or any state thereof, which on the date of
acquisition has the highest commercial paper rating of the Rating
Agencies, provided that the corporation has unsecured long term debt
that has one of the two highest unsecured long term debt ratings of
the Rating Agencies;
(vi) Securities (other than stripped bonds or stripped coupons)
bearing interest or sold at a discount that are issued by any
corporation incorporated under the laws of the United States or any
state thereof and have the highest long-term unsecured rating
available for such securities from the Rating Agencies; provided,
however, that securities issued by any such corporation will not be
investments to the extent that investment therein would cause the
outstanding principal amount of securities issued by such corporation
that are then held as part of the Investment Account or the
Certificate Account to exceed 20% of the aggregate principal amount of
all Eligible Investments then held in the Investment Account and the
Certificate Account;
38
(vii) Units of taxable money market funds (which may be 12b-1
funds, as contemplated under the rules promulgated by the Securities
and Exchange Commission under the Investment Company Act of 1940),
which funds have the highest rating available for such securities
from the Rating Agencies or which have been designated in writing by
the Rating Agencies as Eligible Investments; and
(viii) Such other investments the investment in which will not,
as evidenced by a letter from each of the Rating Agencies, result in
the downgrading or withdrawal of the Ratings;
provided, however, that such obligation or security is held for a
temporary period pursuant to Section 1.860G-2(g)(1) of the Treasury
Regulations, and that such period can in no event exceed thirteen
months.
In no event shall an instrument be an Eligible Investment if such
instrument (a) evidences a right to receive only interest payments with
respect to the obligations underlying such instrument or (b) has been
purchased at a price greater than the outstanding principal balance of
such instrument.
ERISA: The Employee Retirement Income Security Act of 1974, as
-----
amended.
Event of Default: Any event of default as specified in Section
----------------
7.01.
Excess Liquidation Proceeds: With respect to any Distribution Date,
---------------------------
the excess, if any, of aggregate Liquidation Proceeds received during the
Prior Period over the amount that would have been received if Payoffs had
been made with respect to such Mortgage Loans on the date such Liquidation
Proceeds were received.
FDIC: Federal Deposit Insurance Corporation, or any successor
----
thereto.
FHA: Federal Housing Administration, or any successor thereto.
---
FHLB: Federal Home Loan Bank of San Francisco, or any successor
----
thereto.
FHLMC: Federal Home Loan Mortgage Corporation, or any successor
-----
thereto.
Final Maturity Date: With respect to each Class of the REMIC I
-------------------
Regular Interests, the REMIC II Regular Interests and the Certificates,
the date set forth in the table contained in the Preliminary Statement
hereto.
Fitch: Fitch IBCA, Inc., provided that at any time it be a Rating
-----
Agency.
FNMA: Federal National Mortgage Association, or any successor
----
thereto.
Fraud Coverage Initial Amount: With respect to Loan Group I,
-----------------------------
$4,452,995 and with respect to Loan Group II, $6,729,325.
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
39
dishonest, fraudulent, criminal, negligent or knowingly wrongful act,
error or omission by the Mortgagor, originator (or assignee thereof) of
such Mortgage Loan, Lender, a Servicer or the Master Servicer, would
result in an exclusion from, denial of, or defense to coverage which
otherwise would be provided by a Primary Insurance Policy previously
issued with respect to such Mortgage Loan.
Group I Certificates: The Group I-A, Class I-P, Class I-X-1, Class
--------------------
I-X-2, and Group I-B Certificates.
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 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 and second anniversaries of the Cut-Off Date, 1.00%, and
on the third and fourth anniversaries of the Cut-Off Date, 0.50%, in each
case 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 Senior Certificates: The Group I-A, Class I-X-1, Class
---------------------------
I-X-2 and Class I-P Certificates.
Group I Senior Liquidation Amount: For any Distribution Date, the
---------------------------------
sum of (i) the Subgroup I-1 Senior Liquidation Amount, (ii) the Subgroup I-2
Senior Liquidation Amount, (iii) the Subgroup I-3 Senior Liquidation
Amount and (iv) the Subgroup I-4 Senior Liquidation Amount.
40
Group I Senior Percentage: With respect to any Distribution Date,
-------------------------
the aggregate Class Principal Balance of the Group I-A Certificates and the
Residual Certificates divided by the aggregate Class Principal Balance of
the Group I Certificates (less the Class I-P Principal Balance) and the
Residual Certificates, in each case immediately prior to the
Distribution Date.
Group I Senior Prepayment Percentage: (i) On any Distribution Date
------------------------------------
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, 100%; (ii) on any other
Distribution Date on which the Group I Senior Percentage for such
Distribution Date exceeds the Group I Senior Percentage as of the Closing
Date, 100%; and (iii) on any other Distribution Date in each of the months
of the fifth anniversary of the first Distribution Date and thereafter,
100%, unless:
(a) the mean aggregate Principal Balance of Group I Loans which
are 60 or more days delinquent (including loans in
foreclosure and property held by 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 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
41
Date but before the eighth anniversary of the month of the first
Distribution Date, the Group I Senior Percentage for such Distribution
Date plus 40% of the Group I Subordinate Percentage for such Distribution
Date; (4) for any such Distribution Date in or after the month of the
eighth anniversary of the month of the first Distribution Date but before
the ninth anniversary of the month of the first Distribution Date, the
Group I Senior Percentage for such Distribution Date plus 20% of the Group
I Subordinate Percentage for such Distribution Date; and (5) for any such
Distribution Date thereafter, the Group I Senior Percentage for such
Distribution Date.
If on any Distribution Date the allocation to the Group I-L Senior
Regular Interests (other than the Class I-P-L Regular Interests) of
Principal Prepayments in the percentage required would reduce the sum of
the Class Principal Balances of such Regular Interests below zero, the
Group I Senior Prepayment Percentage for such Distribution Date shall be
limited to the percentage necessary to reduce such sum to zero.
Notwithstanding the foregoing, however, on each Distribution Date, the
Class I-P-L Regular Interests will receive the Class I-P Fraction of all
principal payments, including, without limitation, Principal
Prepayments, received in respect of each Class I-P Mortgage Loan.
Group I Senior Principal Distribution Amount: For any Distribution
--------------------------------------------
Date, the sum of (i) the Subgroup I-1 Senior Principal Distribution
Amount, (ii) the Subgroup I-2 Senior Principal Distribution Amount, (iii)
the Subgroup I-3 Senior Principal Distribution Amount and (iv) the
Subgroup I-4 Senior Principal Distribution Amount.
Group I Special Hazard Coverage: With respect to Loan Group I, the
-------------------------------
Special Hazard Coverage Initial Amount for such Loan Group less Special
Hazard Losses allocated to the Group I Certificates, and the amount of
any scheduled reduction in the amount of Group I Special Hazard Coverage
as follows: on each anniversary of the Cut-Off Date, the Group I Special
Hazard Coverage shall be reduced, but not increased, to an amount equal to
the lesser of (1) the greatest of (a) the aggregate principal balance of
the Mortgage Loans in Loan Group I located in the single California zip
code area containing the largest aggregate principal balance of such
Mortgage Loans, (b) 1% of the aggregate unpaid principal balance of the
Mortgage Loans in Loan Group I and (c) twice the unpaid principal balance
of the largest single Mortgage Loan in Loan Group I, in each case
calculated as of the Due Date in the immediately preceding month, and (2)
the Special Hazard Coverage Initial Amount as reduced by the Special
Hazard Losses allocated to the Group I Certificates since the Cut-Off
Date. The Group I Special Hazard Coverage may be reduced upon written
confirmation from the Rating Agencies that such reduction will not
adversely affect the then current ratings assigned to the Certificates
by the Rating Agencies.
Group I Subordinate Liquidation Amount: The excess, if any, of the
--------------------------------------
aggregate of Liquidation Principal for all Group I Loans which became
Liquidated Mortgage Loans during the Prior Period, over the Group I Senior
Liquidation Amount for such Distribution Date.
Group I Subordinate Percentage: With respect to any Distribution
------------------------------
Date, the excess of 100% over the Group I Senior Percentage for such
date.
Group I Subordinate Prepayment Percentage: On any Distribution
-----------------------------------------
Date, the excess of 100% over the Group I Senior Prepayment Percentage for
such Distribution Date; provided, however, that if the aggregate Class
Principal Balance of the Group I-A Certificates has been reduced to
zero, then the Group I Subordinate Prepayment Percentage shall equal 100%.
42
Group I Subordinate Principal Distribution Amount: On any
-------------------------------------------------
Distribution Date, the excess of (A) the sum of (i) the Group I
Subordinate Percentage of the Principal Payment Amount for Loan
Group I (exclusive of the portion thereof attributable to principal
distributions to the Class I-P-L Regular Interests pursuant to
clause (I)(a)(i) of the definition of "REMIC 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 the Class I-P-L Regular Interests
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.
Group I Subordinate Principal Prepayments Distribution Amount: On
-------------------------------------------------------------
any Distribution Date, the Group I Subordinate Prepayment Percentage of the
Principal Prepayment Amount for Loan Group I (exclusive of the portion
thereof attributable to principal distributions to the Class I-P-L Regular
Interests pursuant to clause (I)(a)(i) of the definition of "REMIC II
Distribution Amount").
Group I-A Certificates: The Class I-A-1, Class I-A-2, Class I-A-3,
----------------------
Class I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class I-A-8, Class
I-A-9, Class I-A-10, Class I-A-11, Class I-A-12, Class I-A-13, Class
I-A-14, Class I-A-15, Class I-A-16, Class I-A-17, Class I-A-18, Class
I-A-19, Class I-A-20, Class I-A-21, Class I-A-22, Class I-A-23, Class
I-A-24, Class I-A-25, Class I-A-26 and Class I-A-27 Certificates.
Group I-A-L Regular Interests: The Class I-A-1-L, Class I-A-3-L,
-----------------------------
Class I-A-4-L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L, Class I-A-8-L,
Class I-A-9-L, Class I-A-10-L, Class I-A-11-L, Class I-A-12-L, Class
I-A-13-L, Class I-A-14-L, Class I-A-15-L, Class I-A-16-L, Class I-A-17-L,
Class I-A-18-L, Class I-A-19-L, Class I-A-21-L and Class I-A-22-L, Class
I-A-24-L, Class I-A-25-L, Class I-A-26-L and Class I-A-27-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.
43
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-P-L, Class
---------------------------
I-X-1-L, Class I-X-2-L, Group I-B-L and Class R-3-L Regular Interests.
Group I-L Senior Regular Interests: The Group I-A-L, Class I-X-1-L,
----------------------------------
Class I-X-2-L and Class I-P-L Regular Interests.
Group II Bankruptcy Coverage: With respect to Loan Group II, the
----------------------------
Bankruptcy Coverage Initial Amount for such Loan Group less (a) any
scheduled or permissible reduction in the amount of the Group II
Bankruptcy Coverage pursuant to this definition and (b) Bankruptcy Losses
allocated to the Group II Certificates. The Group II Bankruptcy Coverage
may be reduced upon written confirmation from the Rating Agencies that
such reduction will not adversely affect the then current ratings assigned
to the Certificates by the Rating Agencies.
Group II Certificates: The Class II-A-1, Class II-X and Class II-P
---------------------
Certificates.
Group II Credit Support Depletion Date: The first Distribution Date
--------------------------------------
on which the aggregate Class Principal Balance of the Group II-B
Certificates has been or will be reduced to zero as a result of principal
distributions thereon and the allocation of Realized Losses on such
Distribution Date.
Group II Fraud Coverage: During the period prior to the first
-----------------------
anniversary of the Cut-Off Date and with respect to Loan Group II, the
Fraud Coverage Initial Amount for such Loan Group reduced by Fraud Losses
allocated to the Group II Certificates, and during the period from the
first anniversary of the Cut-Off Date to (but not including) the fifth
anniversary of the Cut-Off Date, the amount of the Group II Fraud Coverage
on the most recent previous anniversary of the Cut-Off Date (calculated in
accordance with the second sentence of this definition) reduced by Fraud
Losses allocated to the Group II Certificates since such anniversary; and
during the period on and after the fifth anniversary of the Cut-Off Date,
the Group II Fraud Coverage shall be zero. On each anniversary of the
Cut-Off Date, the Group II Fraud Coverage shall be reduced to the lesser
of (i) on the first, second, third and fourth anniversaries of the
Cut-Off Date, 1.00% of the aggregate principal balance of the Group II Loans
as of the Due Date in the preceding month and (ii) the excess of the Fraud
Coverage Initial Amount for Loan Group II over cumulative Fraud Losses
allocated to the Group II Certificates to date. The Group II Fraud
Coverage may be reduced upon written confirmation from the Rating Agencies
that such reduction will not adversely affect the then current ratings
assigned to the Group II Certificates by the Rating Agencies.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
--------------
Schedule as Group II Loans.
Group II Premium Rate Mortgage Loans: The Group II Loans having
------------------------------------
Pass-Through Rates in excess of 7.000% per annum.
Group II Senior Certificates: The Class II-A-1, Class II-X and
----------------------------
Class II-P Certificates.
44
Group II Senior Liquidation Amount: The aggregate, for each Group
----------------------------------
II Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group II Senior Percentage of the Principal Balance
of such Mortgage Loan (exclusive of the Class II-P Fraction thereof, with
respect to any Class II-P Mortgage Loan), and (ii) the Group II Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
Group II Senior Percentage: With respect to any Distribution Date,
--------------------------
the Class II-A-1 Principal Balance divided by the aggregate Class
Principal Balances of the Group II Certificates (less the Class II-P
Principal Balance), in each case immediately prior to the Distribution
Date.
Group II Senior Prepayment Percentage: (i) On any Distribution Date
-------------------------------------
occurring before the Distribution Date in the month of the fifth
anniversary of the first Distribution Date, 100%; (ii) on any other
Distribution Date on which the Group II Senior Percentage for such
Distribution Date exceeds the Group II Senior Percentage as of the Closing
Date, 100%; and (iii) on any other Distribution Date in each of the months
of the fifth anniversary of the first Distribution Date and thereafter,
100%, unless:
(a) the mean aggregate Principal Balance of Group II Loans which
are 60 or more days delinquent (including loans in
foreclosure and property held by 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 II-B Certificates as of such Distribution Date, and
(b) cumulative Realized Losses on the Group II Loans allocated to
the Group II-B Certificates are less than or equal to (1)
for
any Distribution Date before the month of the sixth
anniversary of the month of the first Distribution Date, 30%
of the sum of the Class Principal Balances of the Group II-B
Certificates as of the Cut-Off Date, (2) for any Distribution
Date in or after the month of the sixth anniversary of the
month of the first Distribution Date but before the seventh
anniversary of the month of the first Distribution Date, 35%
of the sum of the Class Principal Balances of the Group II-B
Certificates as of the Cut-Off Date, (3) for any Distribution
Date in or after the month of the seventh anniversary of the
month of the first Distribution Date but before the eighth
anniversary of the month of the first Distribution Date, 40%
of the sum of the Class Principal Balances of the Group II-B
Certificates as of the Cut-Off Date, (4) for any Distribution
Date in or after the month of the eighth anniversary of the
month of the first Distribution Date but before the ninth
anniversary of the month of the first Distribution Date, 45%
of the sum of the Class Principal Balances of the Group II-B
Certificates as of the Cut-Off Date, and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution Date, 50%
of the sum of the Class Principal Balances of the Group II-B
Certificates as of the Cut-Off Date,
in which case, as follows: (1) for any such Distribution Date in or after
the month of the fifth anniversary of the month of the first Distribution
Date but before the sixth anniversary of the month of the first
Distribution Date, the Group II Senior Percentage for such Distribution
Date plus 70% of the Group II Subordinate Percentage for such Distribution
Date; (2) for any such Distribution Date
45
in or after the month of the sixth anniversary of the month of the first
Distribution Date but before the seventh anniversary of the month of the
first Distribution Date, the Group II Senior Percentage for such
Distribution Date plus 60% of the Group II Subordinate Percentage for such
Distribution Date; (3) for any such Distribution Date in or after the
month of the seventh anniversary of the month of the first Distribution
Date but before the eighth anniversary of the month of the first
Distribution Date, the Group II Senior Percentage for such Distribution
Date plus 40% of the Group II Subordinate Percentage for such Distribution
Date; (4) for any such Distribution Date in or after the month of the
eighth anniversary of the month of the first Distribution Date but before
the ninth anniversary of the month of the first Distribution Date, the
Group II Senior Percentage for such Distribution Date plus 20% of the
Group II Subordinate Percentage for such Distribution Date; and (5) for
any such Distribution Date thereafter, the Group II Senior Percentage for
such Distribution Date.
If on any Distribution Date the allocation to the Class II-A-1-L
Regular Interests of Principal Prepayments in the percentage required
would reduce the Class II-A-1-L Principal Balance below zero, the Group II
Senior Prepayment Percentage for such Distribution Date shall be limited
to the percentage necessary to reduce such Class Principal Balance to
zero. Notwithstanding the foregoing, however, on each Distribution Date,
the Class II-P-L Regular Interests will receive the Class II-P Fraction of
all principal payments, including, without limitation, Principal
Prepayments, received in respect of each Class II-P Mortgage Loan.
Group II Senior Principal Distribution Amount: For any Distribution
--------------------------------------------- Date, an amount equal
to the sum of (a) the Group II Senior Percentage of the Principal Payment
Amount for Loan Group II (exclusive of the portion thereof attributable to
principal distributions to the Class II-P-L Regular Interests pursuant to
clauses (I)(b)(i) and (II)(b)(i) of the definition of "REMIC II
Distribution Amount"), (b) the Group II Senior Prepayment Percentage of
the Principal Prepayment Amount for Loan Group II (exclusive of the
portion thereof attributable to principal distributions to the Class
II-P-L Regular Interests pursuant to clauses (I)(b)(i) and (II)(b)(i) of
the definition of "REMIC II Distribution Amount") and (c) the Group II
Senior Liquidation Amount.
Group II Special Hazard Coverage: With respect to Loan Group II,
--------------------------------
the Special Hazard Coverage Initial Amount for such Loan Group less Special
Hazard Losses allocated to the Group II Certificates, and the amount of
any scheduled reduction in the amount of Group II Special Hazard Coverage
as follows: on each anniversary of the Cut-Off Date, the Group II Special
Hazard Coverage shall be reduced, but not increased, to an amount equal to
the lesser of (1) the greatest of (a) the aggregate principal balance of
the Mortgage Loans in Loan Group II located in the single California zip
code area containing the largest aggregate principal balance of such
Mortgage Loans, (b) 1% of the aggregate unpaid principal balance of the
Mortgage Loans in Loan Group II and (c) twice the unpaid principal balance
of the largest single Mortgage Loan in Loan Group II, in each case
calculated as of the Due Date in the immediately preceding month, and (2)
the Special Hazard Coverage Initial Amount as reduced by the Special
Hazard Losses allocated to the Group II Certificates since the Cut-Off
Date. The Group II Special Hazard Coverage may be reduced upon written
confirmation from the Rating Agencies that such reduction will not
adversely affect the then current ratings assigned to the Certificates by
the Rating Agencies.
46
Group II Subordinate Liquidation Amount: The excess, if any, of the
---------------------------------------
aggregate of Liquidation Principal for all Group II Loans which became
Liquidated Mortgage Loans during the Prior Period, over the Group II
Senior Liquidation Amount for such Distribution Date.
Group II Subordinate Percentage: With respect to any Distribution
-------------------------------
Date, the excess of 100% over the Group II Senior Percentage for such
date.
Group II Subordinate Prepayment Percentage: On any Distribution
------------------------------------------
Date, the excess of 100% over the Group II Senior Prepayment Percentage for
such Distribution Date; provided, however, that if the Class II-A-1 Principal
Balance has been reduced to zero, then the Group II Subordinate Prepayment
Percentage shall equal 100%.
Group II Subordinate Principal Distribution Amount: On any
--------------------------------------------------
Distribution Date, the excess of (A) the sum of (i) the Group II
Subordinate Percentage of the Principal Payment Amount for Loan Group II
(exclusive of the portion thereof attributable to principal
distributions to the Class II-P-L Regular Interests pursuant to clause
(I)(b)(i) of the definition of "REMIC II Distribution Amount"), (ii) the
Group II Subordinate Principal Prepayments Distribution Amount and (iii)
the Group II Subordinate Liquidation Amount over (B) the amounts required
to be distributed to the Class II-P-L Regular Interests pursuant to clauses
(I)(b)(v) and (I)(b)(vi) of the definition of "REMIC II Distribution
Amount" on such Distribution Date, as applicable. Any reduction in the
Group II 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 II Subordinate Principal Distribution Amount
shall be allocated pro rata, by Class Principal Balance, among the Classes
of Group II-X-X Regular Interests, and paid in the order of distribution
to such Classes pursuant to clause (I)(b) 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 II-X-X Regular Interests is less than such percentage as of the
Closing Date, the pro rata portion of the Group II Subordinate Principal
Prepayments Distribution Amount otherwise allocable to the Class or
Classes junior to such Class will be distributed to the most senior Class
of the Group II-X-X Regular Interests for which the Subordination Level is
less than such percentage as of the Closing Date, and to the Classes of
Group II-X-X Regular Interests senior thereto, pro rata according to the
Class Principal Balances of such Classes. For purposes of this definition
and the definition of "Subordination Level", the relative seniority, from
highest to lowest, of the Group II-X-X Regular Interests shall be as
follows: Class II-B-1-L, Class II-B-2-L, Class II-B-3-L, Class II-B-4-L,
Class II-B-5-L and Class II-B-6-L.
Group II Subordinate Principal Prepayments Distribution Amount: On
--------------------------------------------------------------
any Distribution Date, the Group II Subordinate Prepayment Percentage of
the Principal Prepayment Amount for Loan Group II (exclusive of the
portion thereof attributable to principal distributions to the Class
II-P-L Regular Interests pursuant to clause (I)(b)(i) of the definition of
"REMIC II Distribution Amount").
Group II-B Certificates: The Class II-B-1, Class II-B-2, Class
-----------------------
II-B-3, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
47
Group II-X-X Regular Interests: The Class II-B-1-L, Class II-B-2-L,
------------------------------
Class II-B-3-L, Class II-B-4-L, Class II-B-5-L and Class II-B-6-L Regular
Interests.
Group II-L Regular Interests: The Class II-A-1-L, Class II-X-L,
----------------------------
Class II-P-L, Group II-X-X and Class R-3-L Regular Interests.
Group II-L Senior Regular Interests: The Class II-A-1-L, Class
-----------------------------------
II-X-L and Class II-P-L Regular Interests.
Indirect DTC Participants: Entities such as banks, brokers, dealers
-------------------------
or trust companies, that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly.
Insurance Proceeds: Amounts paid or payable by the insurer under
------------------
any Primary Insurance Policy or any other insurance policy (including any
replacement policy permitted under this Agreement), covering any Mortgage
Loan or Mortgaged Property, including, without limitation, 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 and the
Residual Certificates (other than the Class R-3 Certificates), the amount
of interest accrued on the respective Class Principal Balance or Class
Notional Amount, as applicable, at the related Remittance Rate: with
respect to (i) the Class I-A-22-L Regular Interests, during the monthly
period from the 25th day of the month preceding such Distribution Date
through the 24th day of the month of such Distribution Date and (ii) any
Class of the REMIC I Regular Interests, the REMIC II Regular Interests
(other than the Class I-A-22-L Regular Interests) and the Residual
Certificates (other than the Class R-3 Certificates), during the Prior
Period, in each case before giving effect to allocations of Realized
Losses for the Prior Period or distributions to be made on such
Distribution Date, reduced by Uncompensated Interest Shortfall, interest
shortfalls related to the Relief Act and the interest portion of Realized
Losses allocated to such Class pursuant to the definitions of
"Uncompensated Interest Shortfall", "Relief Act" and "Realized Loss",
respectively. The Interest Distribution Amount for the Class I-A-14-L,
Class I-A-27-L and Class P-L Regular Interests and for the Components of
the Class I-A-19-L Regular Interests shall equal zero.
Investment Account: The commingled account (which shall be
------------------
commingled only with investment accounts related to series of pass-through
certificates with a class of certificates which has a rating equal to the
highest of the Ratings of the Certificates) maintained by the Master
Servicer in the trust department of the Investment Depository pursuant to
Section 3.03 and which bears a designation acceptable to the Rating
Agencies.
Investment Depository: Chemical Bank, New York, New York or another
---------------------
bank or trust company designated from time to time by the Master Servicer.
The Investment Depository shall at all times be an Eligible Institution.
Junior Subordinate Certificates: The Class I-B-4, Class I-B-5,
-------------------------------
Class I-B-6, Class II-B-4, Class II-B-5 and Class II-B-6 Certificates.
48
LIBOR: With respect to each Distribution Date, the London Interbank
-----
Offered Rate for one-month United States dollar deposits determined by the
Master Servicer on the LIBOR Determination Date on the basis of quotations
provided by each of the Reference Banks as of approximately 11:00 a.m.
(London time) on the LIBOR Determination Date as such quotations appear on
the Telerate Page 3750 (as defined in the International Swap Dealers
Association Inc. Code of 1987 Interest Rate and Currency Exchange
Definitions), as follows:
(A) in the event that only one or none of the Reference
Banks provides such quotations, the higher of:
(i) LIBOR as determined on the immediately preceding
LIBOR Determination Date (or, in the case of the first LIBOR
Determination Date, 5.656%) and
(ii) the Reserve Rate. The "Reserve Rate" will be the
rate per annum (rounded upward, if necessary, to the nearest
multiple of 1/16th of 1%) that the Master Servicer determines to
be either
(x) the arithmetic mean of the offered quotations
that the leading banks in New York City selected by the
Master Servicer in its sole discretion are then quoting on
the relevant LIBOR Determination Date for one-month United
States dollar deposits to the principal London office of
each of the Reference Banks or those of them (being at
least two in number) to which such offered quotations are,
in the opinion of the Master Servicer, being so made, or
(y) in the event that the Master Servicer can
determine no such arithmetic mean, the arithmetic mean of
the offered quotations that the leading banks in New York
City selected by the Master Servicer in its sole discretion
are quoting on such LIBOR Determination Date to leading
European banks for one-month United States dollar deposits,
provided, however, that if the banks selected by the Master
Servicer are not then so quoting, LIBOR shall be as
determined on the immediately preceding LIBOR Determination
Date (or, in the case of the first LIBOR Determination
Date, 5.656%, as specified above);
(B) otherwise, the arithmetic mean (rounded upward, if
necessary, to the nearest multiple of 1/16th of 1%) of such
offered quotations
the establishment of which, in each case, shall be final and binding in
the absence of manifest error.
LIBOR Determination Date: With respect to interest paid on any
------------------------
Distribution Date, other than the first Distribution Date, the second day
on which banks in London and New York City are open for the transaction of
international business prior to the 25th day of the month preceding the
Distribution Date.
Lender: An institution from which the Company purchased any
------
Mortgage Loans pursuant to a Selling and Servicing Contract.
49
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 the Class P-L Regular Interests pursuant to clauses
(I)(a)(i), (I)(b)(i), (II)(a)(i) and (II)(b)(i) of the definition of
"REMIC 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 Period.
Liquidation Proceeds: Amounts after deduction of amounts
--------------------
reimbursable under Section 3.05(a)(i) and (ii) received and retained in
connection with the liquidation of defaulted Mortgage Loans, whether
through foreclosure or otherwise, other than Insurance Proceeds.
Loan Group: Loan Group I or Loan Group II, as applicable.
----------
Loan Group I: The group of Mortgage Loans comprised of the Group I
------------
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group
-------------
II Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage
-------------------
Loan divided by the Original Value; however, references to "current
Loan-to-Value Ratio" shall mean the then current Principal Balance of a
Mortgage Loan divided by the Original Value.
Master Servicer: The Company, or any successor thereto appointed
---------------
as provided pursuant to Section 7.02, acting to service and administer the
Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer for
--------------------
supervising the mortgage servicing and advancing certain expenses, equal
to a per annum rate set forth for each Mortgage Loan in Exhibit D on the
outstanding Principal Balance of such Mortgage Loan, payable monthly from
the Certificate Account, the Investment Account or the Custodial Account
for P&I.
Monthly P&I Advance: An advance of funds by the Master Servicer
-------------------
pursuant to Section 4.02 or a Servicer pursuant to its Selling and
Servicing Contract to cover delinquent principal and interest
installments.
Monthly Payment: The scheduled payment of principal and interest on
---------------
a Mortgage Loan (including any amounts due from a Buydown Fund, if any)
which is due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
--------
a Mortgage Note.
Mortgaged Property: With respect to any Mortgage Loan, other than a
------------------
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan,
50
the related Cooperative Stock and Cooperative Lease, securing the
indebtedness of the Mortgagor under the related Mortgage Loan.
Mortgage File: The following documents or instruments with respect
-------------
to each Mortgage Loan transferred and assigned pursuant to Section 2.01,(X)
with respect to each Mortgage Loan that is not a Cooperative Loan:
(i) The original Mortgage Note endorsed to "State Street
Bank and Trust Company, as Custodian/Trustee, without recourse" or
"State Street Bank and Trust Company, as Trustee for the benefit of
the Holders from time to time of PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates, Series 1998-7, 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 "State Street Bank and Trust Company, as
Custodian/Trustee", or to "State Street Bank and Trust Company, as
Trustee for the Holders of PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates, Series 1998-7" and all intervening
assignments evidencing a complete chain of assignment, from the
originator to the name holder or the payee endorsing the related
Mortgage Note; or
(2) a copy of the Mortgage which represents a true and
correct reproduction of the original Mortgage and which has either
been certified (i) on the face thereof by the public recording office
in the appropriate jurisdiction in which the Mortgaged Property is
located, or (ii) by the originator or Lender as a true and correct
copy the original of which has been sent for recordation and an
original Mortgage assignment thereof duly executed and acknowledged
in recordable form to "State Street Bank and Trust Company, as
Custodian/Trustee" or to "State Street Bank and Trust Company, as
Trustee for the Holders of PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates, Series 1998-7" 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;
51
(iv) A copy of (a) the title insurance policy, or (b) in
lieu thereof, a title insurance binder, a copy of an attorney's title
opinion, certificate or other evidence of title acceptable to the
Company; and
(v) For any Mortgage Loan that has been modified or amended,
the original instrument or instruments effecting such modification or
amendment;
and (Y) with respect to each Cooperative Loan:
(i) the original Mortgage Note endorsed to "State Street
Bank and Trust Company, as Custodian/Trustee", or to "State Street
Bank and Trust Company, as Trustee for the Holders of PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series 1998-7"
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;
52
(ix) An executed UCC-1 financing statement showing the
Company as debtor and the Trustee as secured party, each in a form
sufficient for filing, evidencing the interest of such debtors in the
Cooperative Loans; and
(x) For any Cooperative Loan that has been modified or
amended, the original instrument or instruments effecting such
modification or amendment.
Mortgage Interest Rate: For any Mortgage Loan, the per annum rate at
----------------------
which interest accrues on such Mortgage Loan pursuant to the terms of the
related Mortgage Note.
Mortgage Loan Schedule: The schedule, as amended from time to time,
----------------------
of Mortgage Loans attached hereto as Exhibit D, which shall set forth as
to each Mortgage Loan the following, among other things:
(i) its loan number,
(ii) the address of the Mortgaged Property,
(iii) the name of the Mortgagor,
(iv) the Original Value of the property subject to
the Mortgage,
(v) the Principal Balance as of the Cut-Off Date,
(vi) the Mortgage Interest Rate borne by the Mortgage
Note,
(vii) whether a Primary Insurance Policy is in effect
as of the Cut-Off Date,
(viii) the maturity of the Mortgage Note,
(ix) the Servicing Fee and the Master Servicing Fee,
and
(x) its Loan Group and, if applicable, its Subgroup.
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 the indebtedness of a
-------------
Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
-------------
Mortgagor: The obligor on a Mortgage Note.
---------
53
Nonrecoverable Advance: With respect to any Mortgage Loan, any
----------------------
advance which the Master Servicer shall determine to be a Nonrecoverable
Advance pursuant to Section 4.03 and which was, or is proposed to be, made
by (i) the Master Servicer or (ii) a Servicer pursuant to its Selling and
Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
---------------
OTS: The Office of Thrift Supervision, or any successor thereto.
---
Officer's Certificate: A certificate signed by the Chairman of the
---------------------
Board, the President, a Vice President, or the Treasurer of the Master
Servicer and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who shall be
------------------
reasonably acceptable to the Trustee and who may be counsel (including
in-house counsel) for the Company or the Master Servicer.
Original Value: With respect to any Mortgage Loan other than a
--------------
Mortgage Loan originated for the purpose of refinancing an existing
mortgage debt, the lesser of (a) the Appraised Value (if any) of the
Mortgaged Property at the time the Mortgage Loan was originated or (b) the
purchase price paid for the Mortgaged Property by the Mortgagor. With
respect to a Mortgage Loan originated for the purpose of refinancing
existing mortgage debt, the Original Value shall be equal to the Appraised
Value of the Mortgaged Property at the time the Mortgage Loan was
originated or the appraised value at the time the refinanced mortgage debt
was incurred.
Ownership Interest: With respect to any Residual Certificate, any
------------------
ownership or security interest in such Residual Certificate, including any
interest in a Residual Certificate as the Holder thereof and any other
interest therein whether direct or indirect, legal or beneficial, as owner
or as pledgee.
Pass-Through Entity: Any regulated investment company, real estate
-------------------
investment trust, common trust fund, partnership, trust or estate, and any
organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a rate equal to the
-----------------
Mortgage Interest Rate for such Mortgage Loan less the applicable per
annum percentage rates related to each of the Servicing Fee and the Master
Servicing Fee. For each Mortgage Loan, any calculation of monthly interest
at such rate shall be based upon annual interest at such rate (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid
Principal Balance of the related Mortgage Loan divided by twelve, and any
calculation of interest at such rate by reason of a Payoff shall be based
upon annual interest at such rate on the outstanding Principal Balance of
the related Mortgage Loan multiplied by a fraction, the numerator of which
is the number of days elapsed from the Due Date of the last scheduled
payment of principal and interest to, but not including, the date of such
Payoff, and the denominator of which is (a) for Payoffs received on a Due
Date, 360, and (b) for all other Payoffs, 365.
Paying Agent: Any paying agent appointed by the Trustee pursuant to
------------
Section 8.12.
54
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 September 14, 1998, inclusive; and
with respect to any Distribution Date thereafter, the period from the 15th
day of the Prior Period through the 14th day of the month of such
Distribution Date, inclusive.
Percentage Interest: (a) With respect to the right of each
-------------------
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided
beneficial ownership interest evidenced by such Certificate of such Class,
which percentage shall equal:
(i) with respect to any Certificate (other than the
Residual, Class X, Class I-A-2, Class I-A-20 and Class I-A-23
Certificates), its Certificate Principal Balance divided by the
applicable Class Principal Balance;
(ii) with respect to the Class X, Class I-A-2, Class I-A-20
and Class I-A-23 Certificates, the portion of the respective Class
Notional Amount evidenced by such Certificate divided by the
respective Class Notional Amount; and
(iii) with respect to the Residual Certificates, the
percentage set forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection
with Sections 5.09, 7.01, 8.01(c), 8.02, 8.07, 10.01 and 10.03,
"Percentage Interest" shall mean the percentage undivided beneficial
interest evidenced by such Certificate in REMIC III, which for purposes of
such rights only shall equal:
(i) with respect to any Certificate (other than the Class X,
Class I-A-2, Class I-A-20, Class I-A-23 and Class R-3 Certificates),
the product of (x) ninety-four percent (94%)
55
and (y) the percentage calculated by dividing its Certificate
Principal Balance by the Aggregate Certificate Principal Balance of
the Certificates; provided, however, that the percentage in (x)
above shall be increased by one percent (1%) upon each retirement of
the Classes of Certificates referenced in the parenthetical above
(other than the Class R-3 Certificates);
(ii) with respect to any of the Class X, Class I-A-2, Class
I-A-20 and Class I-A-23 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.
Permitted Transferee: With respect to the holding or ownership of any
--------------------
Residual Certificate, any Person other than (i) the United States, a State
or any political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International
Organization or any agency or instrumentality of either of the foregoing,
(iii) an organization (except certain farmers' cooperatives described in
Code Section 521) which is exempt from the taxes imposed by Chapter 1 of
the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Code Section
1381(a)(2)(C), (v) any "electing large partnership" as defined in Section
775(a) of the Code, (vi) any Person from whom the Trustee has not received
an affidavit to the effect that it is not a "disqualified organization"
within the meaning of Section 860E(e)(5) of the Code, and (vii) any other
Person so designated by the Company based upon an Opinion of Counsel that
the transfer of an Ownership Interest in a Residual Certificate to such
Person may cause REMIC I, 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-10, Class I-A-11, Class I-A-12, Class I-A-13, Class I-A-22
and Class I-A-25 Certificates, which amount shall also constitute the
"Planned Principal Balance" for the Corresponding Classes.
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).
56
Principal Balance: Except as used in Sections 2.02, 3.09 and 9.01 and
-----------------
for purposes of the definition of Purchase Price, at the time of any
determination, the principal balance of a Mortgage Loan remaining to be
paid at the close of business on the Cut-Off Date, after application of
all scheduled principal payments due on or before the Cut-Off Date,
whether or not received, reduced by all amounts distributed or (except
when such determination occurs earlier in the month than the Distribution
Date) to be distributed to Certificateholders through the Distribution
Date in the month of determination that are reported as allocable to
principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used in
Sections 2.02, 3.09 and 9.01, at the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid at the close of
business on the Cut-Off Date, after deduction of all scheduled principal
payments due on or before the Cut-Off Date, whether or not received,
reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such Mortgage
Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance" shall
mean, at the time of any determination, the principal balance of such
Substitute Mortgage Loan transferred to the 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 or Subgroup, the sum with respect to the Mortgage Loans in such Loan
Group or Subgroup 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 or Subgroup, the sum with respect to the Mortgage Loans in such
Loan Group or Subgroup of (i)
57
Curtailments received during the Prior Period from such Mortgage Loans and
(ii) Payoffs received during the Payoff Period from such Mortgage Loans.
Prior Period: The calendar month immediately preceding any
------------
Distribution Date.
Pro Rata Allocation: (i) With respect to losses on Group I Loans, the
-------------------
allocation of the principal portion of Realized Losses to the outstanding
Classes of Group I-L Regular Interests (other than the Class I-P-L and
Class I-A-27-L Regular Interests), pro rata according to their respective
Class or Component Principal Balances, in reduction of their respective
Class or Component Principal Balances (except (x) if the loss is
recognized with respect to a Class I-P Mortgage Loan, in which case the
applicable Class I-P Fraction of such loss will first be allocated to the
Class I-P-L Regular Interests and (y) if the loss is recognized with
respect to a Subgroup I-1, Subgroup I-2 or Subgroup I-3 Loan, in which
case the applicable Class I-A-27 Fraction of such loss (or of the
remainder of such loss, if the applicable Class I-P Fraction of such loss
has been allocated to the Class I-P-L Regular Interests in accordance with
clause (x) above) will first be allocated to the Class I-A-27-L Regular
Interests, and the remainder of such loss will be allocated as set forth
above), and the allocation of the interest portion of Realized Losses to
the outstanding Group I-L Regular Interests (other than the Class I-P-L,
Class I-A-14-L, Class I-A-19-L and Class I-A-27-L Regular Interests), pro
rata according to the amount of interest accrued but unpaid on each such
Class in reduction thereof, and then in reduction of their respective
Class Principal Balances and (ii) with respect to losses on Group II
Loans, the allocation of the principal portion of Realized Losses relating
to a Group II Loan to the outstanding Classes of Group II-L Regular
Interests (other than the Class II-P-L Regular Interests), pro rata
according to their respective Class Principal Balances (except if the loss
is recognized with respect to a Class II-P Mortgage Loan, in which case
the applicable Class II-P Fraction of such loss will first be allocated to
the Class II-P-L Regular Interests, and the remainder of such loss will be
allocated as set forth above), and the allocation of the interest portion
of Realized Losses to the outstanding Classes of Group II-L Regular
Interests (other than the Class II-P-L Regular Interests), pro rata
according to the amount of interest accrued but unpaid on each such Class
in reduction thereof, and then in reduction of their related Class
Principal Balances. Any losses allocated among the outstanding Classes
and Components of REMIC II Regular Interests pursuant to this definition
of "Pro Rata Allocation" shall also be allocated to the Corresponding
Classes of Certificates and Components thereof in the same manner and
amounts as they reduce such attributes of such Classes and Components of
REMIC II Regular Interests; provided, however, that:
(i) the interest portion of such losses allocated to the
Class I-A-1-L Regular Interests and applied to reduce the Interest
Distribution Amount thereof shall be allocated to the Class I-A-1 and
Class I-A-2 Certificates in reduction of the distribution of interest
to such Certificates pursuant to the distributions set forth in
clause (a)(iii)(B) of the definition of "REMIC III Distribution
Amount", pro rata according to the allocation set forth in such
clause;
(ii) the interest portion of such losses allocated to the
Class I-A-25-L Regular Interests and applied to reduce the Interest
Distribution Amount thereof shall be allocated to the Class I-A-20
and Class I-A-25 Certificates in reduction of the distribution of
interest to such Certificates pursuant to the distributions set forth
in clause (a)(iv)(B) of the definition
58
of "REMIC III Distribution Amount", pro rata according to the
allocation set forth in such clause; and
(iii) the interest portion of such losses allocated to the
Class I-A-22-L Regular Interests and applied to reduce the Interest
Distribution Amount thereof shall be allocated to the Class I-A-22
and Class I-A-23 Certificates in reduction of the distribution of
interest to such Certificates pursuant to the distributions set forth
in clause (a)(v)(B) of the definition of "REMIC III Distribution
Amount", pro rata according to the allocation set forth in such
clause.
Prospectus: The Prospectus, dated June 24, 1998, and the Prospectus
----------
Supplement, dated August 26, 1998, of the Company.
Purchase Obligation: An obligation of the Company to repurchase
-------------------
Mortgage Loans under the circumstances and in the manner provided in
Section 2.02 or Section 2.03.
Purchase Price: With respect to any Mortgage Loan to be purchased
--------------
pursuant to a Purchase Obligation, an amount equal to the sum of the
Principal Balance thereof, and unpaid accrued interest thereon, if any, to
the last day of the calendar month in which the date of repurchase occurs
at a rate equal to the applicable Pass-Through Rate; provided, however,
that no Mortgage Loan shall be purchased or required to be purchased
pursuant to Section 2.03, or more than two years after the Closing Date
under Section 2.02, unless (a) the Mortgage Loan to be purchased is in
default, or default is in the judgment of the Company reasonably imminent,
or (b) the Company, at its expense, delivers to the Trustee an Opinion of
Counsel to the effect that the purchase of such Mortgage Loan will not
give rise to a tax on a prohibited transaction, as defined in Section
860F(a) of the Code.
Qualified Insurer: A mortgage guaranty insurance company duly
-----------------
qualified as such under the laws of the states in which the Mortgaged
Properties are located if such qualification is necessary to issue the
applicable insurance policy or bond, duly authorized and licensed in such
states to transact the applicable insurance business and to write the
insurance provided by the Primary Insurance Policies and approved as an
insurer by FHLMC or FNMA and the Master Servicer. A Qualified Insurer must
have the rating required by the Rating Agencies.
Rating Agency: Initially, each of S&P and Fitch and thereafter, each
-------------
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Company, or their respective
successors in interest.
Ratings: As of any date of determination, the ratings, if any, of the
-------
Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to any
-------------
Mortgage Loan which became a Liquidated Mortgage Loan during the related
Prior Period, the sum of (i) the principal balance of such Mortgage Loan
remaining outstanding and the principal portion of Nonrecoverable Advances
actually reimbursed with respect to such Mortgage Loan (the principal
portion of such Realized Loss), and (ii) the accrued interest on such
Mortgage Loan remaining unpaid and the interest portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
interest portion of such Realized Loss). For any Distribution Date, with
respect to any Mortgage Loan which
59
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
Z-2, Class Z-3, Class Z-4, Class Y-1, -2, Class Y-3, Class Y-4, Class
I-X-1-M and Class I-X-2-M Regular Interests is Loan Group I). Any interest
portion of Realized Losses in excess of the amount allocated pursuant to
the preceding sentence shall be treated as a principal portion of Realized
Losses not attributable to any specific Mortgage Loan in such Loan Group
and allocated pursuant to the succeeding sentences. The applicable Class P
Fraction of any principal portion of Realized Losses attributable to a
Class P Mortgage Loan 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, pro rata according to the applicable Class Y Principal Reduction
Amount, 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 of REMIC II Regular Interests or Component
thereof shall also be allocated to the Corresponding Class of Certificates
or Component thereof and applied to reduce the Class or Component
Principal Balance of such Corresponding Class or Component thereof in the
same manner and amounts as they reduce such attributes of such Class of
REMIC II Regular Interests or Component thereof; 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, (g)
seventh, if the loss is recognized with respect to a Subgroup I-1,
Subgroup I-2 or Subgroup I-3 Loan, to the Class I-A-27-L Regular
Interests, the applicable Class I-A-27 Fraction of such loss, until the
Class I-A-27-L Principal Balance has been reduced to zero, and (h) eighth,
to the Group I-A-L Regular Interests (other than the Class I-A-27-L
Regular Interests), the Class R-3-L Regular Interests and the Class R-2
Certificates, pro rata according to their respective Class Principal
Balances (or Component Principal Balances in the case of Component
I-A-19-1-L and Component I-A-19-2-L) in reduction of their respective
Class or Component Principal Balances, as applicable; provided, however,
that if the
60
loss is recognized with respect to a Class I-P Mortgage Loan, the Class
I-P Fraction of such loss will first be allocated to the Class I-P-L
Regular Interests and the remainder of such loss will be allocated as set
forth above in this clause (i); and (ii) for Realized Losses allocable to
interest (a) first, to the Class I-B-6-L Regular Interests, in reduction
of accrued but unpaid interest thereon and then in reduction of the Class
I-B-6-L Principal Balance, (b) second, to the Class I-B-5-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class I-B-5-L Principal Balance, (c) third, to the Class
I-B-4-L Regular Interests, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class I-B-4-L Principal Balance, (d)
fourth, to the Class I-B-3-L Regular Interests, in reduction of accrued
but unpaid interest thereon and then in reduction of the Class I-B-3-L
Principal Balance, (e) fifth, to the Class I-B-2-L Regular Interests, in
reduction of accrued but unpaid interest thereon and then in reduction of
the Class I-B-2-L Principal Balance, (f) sixth, to the Class I-B-1-L
Regular Interests, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class I-B-1-L Principal Balance, and (g) seventh,
to the Group I-A-L Regular Interests (other than the Class I-A-14-L, Class
I-A-19-L and Class I-A-27-L Regular Interests), the Class I-X-1-L, Class
I-X-2-L and Class R-3-L Regular Interests and the Class R-2 Certificates,
pro rata according to accrued but unpaid interest on such Classes and then
pro rata according to their Class Principal Balances in reduction thereof;
provided, however, that (X) if on any Distribution Date multiple losses
are to be allocated both to the Group I-B-L Regular Interests pursuant to
clauses (i)(a) through (i)(f) and to other Regular Interests and
Certificates pursuant to clauses (i)(g) through (i)(h), then each such
loss shall be so allocated, in the same proportions as such losses in the
aggregate; and (Y) if on any Distribution Date multiple losses are to be
allocated both to the Group I-B-L Regular Interests pursuant to clauses
(ii)(a) through (ii)(f) and to other Regular Interests and Certificates
pursuant to clause (ii)(g), then each such loss shall be so allocated, in
the same proportions as such losses in the aggregate.
If, as a result of the allocation of losses pursuant to the
immediately preceding paragraph, the Senior Component Balance for any
Subgroup becomes greater than the aggregate Principal Balance of the
Mortgage Loans in such Subgroup (reduced by the Class I-P Fraction of the
Principal Balance of any Class I-P Mortgage Loan), then such Senior
Component Balance shall be reduced by the amount of such excess, and such
excess shall be added to the Senior Component Balances for the other
Subgroups, pro rata according to the respective Subordinate Component
Balances for such other Subgroups.
Except for Special Hazard Losses in excess of the Group II Special
Hazard Coverage, Fraud Losses in excess of the Group II Fraud Coverage and
Bankruptcy Losses in excess of the Group II Bankruptcy Coverage, Realized
Losses with respect to the Group II Loans shall be allocated among the
Group II-L Regular Interests (i) for Realized Losses allocable to
principal (a) first, to the Class II-B-6-L Regular Interests, until the
Class II-B-6-L Principal Balance has been reduced to zero, (b) second, to
the Class II-B-5-L Regular Interests, until the Class II-B-5-L Principal
Balance has been reduced to zero, (c) third, to the Class II-B-4-L Regular
Interests, until the Class II-B-4-L Principal Balance has been reduced to
zero, (d) fourth, to the Class II-B-3-L Regular Interests, until the Class
II-B-3-L Principal Balance has been reduced to zero, (e) fifth, to the
Class II-B-2-L Regular Interests, until the Class II-B-2-L Principal
Balance has been reduced to zero, (f) sixth, to the Class II-B-1-L Regular
Interests, until the Class II-B-1-L Principal Balance has been reduced to
zero and (g) seventh, to the Class II-A-1-L Regular Interests in reduction
of the Class II-A-1-L Principal Balance; provided, however, that if the
loss is recognized with respect to a Class II-P Mortgage Loan, the
61
Class II-P Fraction of such loss will first be allocated to the Class
II-P-L Regular Interests, and the remainder of such loss will be allocated
as set forth above in this clause (i); and (ii) for Realized Losses
allocable to interest (a) first, to the Class II-B-6-L Regular Interests,
in reduction of accrued but unpaid interest thereon and then in reduction
of the Class II-B-6-L Principal Balance, (b) second, to the Class II-B-5-L
Regular Interests, in reduction of accrued but unpaid interest thereon and
then in reduction of the Class II-B-5-L Principal Balance, (c) third, to
the Class II-B-4-L Regular Interests, in reduction of accrued but unpaid
interest thereon and then in reduction of the Class II-B-4-L Principal
Balance, (d) fourth, to the Class II-B-3-L Regular Interests, in reduction
of accrued but unpaid interest thereon and then in reduction of the Class
II-B-3-L Principal Balance, (e) fifth, to the Class II-B-2-L Regular
Interests, in reduction of accrued but unpaid interest thereon and then in
reduction of the Class II-B-2-L Principal Balance, (f) sixth, to the Class
II-B-1-L Regular Interests, in reduction of accrued but unpaid interest
thereon and then in reduction of the Class II-B-1-L Principal Balance, and
(g) seventh, to the Class II-A-1-L and Class II-X-L Regular Interests pro
rata according to accrued but unpaid interest on such Classes and then in
reduction of the Class II-A-1-L Principal Balance.
Special Hazard Losses on Group I Loans in excess of the Group I
Special Hazard Coverage, Fraud Losses on Group I Loans in excess of the
Group I Fraud Coverage, and Bankruptcy Losses on Group I Loans in excess
of the Group I Bankruptcy Coverage shall be allocated among the Group I-L
Regular Interests by Pro Rata Allocation.
Special Hazard Losses on Group II Loans in excess of the Group II
Special Hazard Coverage, Fraud Losses on Group II Loans in excess of the
Group II Fraud Coverage, and Bankruptcy Losses on Group II Loans in excess
of the Group II Bankruptcy Coverage shall be allocated among the Group
II-L Regular Interests by Pro Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group I-L Regular Interests exceeds the
aggregate principal balance of the Group I Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal
in respect of each such Mortgage Loan that have been received or advanced
and included in the REMIC 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 Regular Interests exceeds the
aggregate principal balance of the Group II Loans remaining to be paid at
the close of business on the Cut-Off Date, after deduction of (i) all
principal payments due on or before the Cut-Off Date in respect of each
such Mortgage Loan whether or not paid and (ii) all amounts of principal
in respect of each such Mortgage Loan that have been received or advanced
and included in the REMIC II Available Distribution Amount for the Group
II-L Regular Interests, and all losses in respect of each such Mortgage
Loan
62
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 II-X-X Regular Interests, in reduction of the Class Principal Balance
thereof.
Record Date: The last Business Day of the month immediately preceding
-----------
the month of the related Distribution Date.
Reference Banks: Barclays Bank PLC, Bankers Trust Company and The
---------------
Bank of Tokyo, Ltd. or, if any such bank shall cease to provide quotations
for one-month United States dollar deposits, any other leading bank with
an established place of business in London engaged in transactions in
Eurodollar deposits in the international Eurocurrency market not
controlling, controlled by or under common control with the Company,
designated by the Company from time to time for the purpose of providing
quotations for one-month United States dollar-denominated deposits.
Regular Interests: (i) With respect to REMIC I, the REMIC I Regular
-----------------
Interests, (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 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 I shall
be allocated to the Class I-X-1-M, Class I-X-2-M, Class Y-1, Class Y-2,
Class Y-3, Class Y-4, Class Z-1, Class Z-2, Class Z-3 and Class Z-4
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 II shall
be allocated to the Class W and Class II-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.
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.
63
REMIC I Available Distribution Amount: On any Distribution Date, the
-------------------------------------
Class I-A-4 and Class I-A-9 Interest Amount, if any, and, with respect to
each Loan Group or Subgroup, the sum of the following amounts with respect
to the Mortgage Loans in such Loan Group or Subgroup:
(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 or Subgroup 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:
(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
64
(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 Class I-P Mortgage Loans of the product for
each Class I-P Mortgage Loan of the applicable Class I-P Fraction and
the sum of (x) scheduled payments of principal on such Class I-P
Mortgage Loan due on or before the related Due Date in respect of
which no distribution has been made on any previous Distribution Date
and which were received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to such
Distribution Date, (y) the principal portion received in respect of
such Class I-P Mortgage Loan during the Prior Period of (1)
Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any repurchase of a Mortgage Loan permitted hereunder
and (4) Liquidation Proceeds and (z) the principal portion of Payoffs
received in respect of such Class I-P Mortgage Loan during the Payoff
Period;
(ii) second, to the Class I-X-1-M, Class I-X-2-M, Class Y-1,
Class Y-2, Class Y-3, Class Y-4, Class Z-1, Class Z-2, Class Z-3 and
Class Z-4 Regular Interests and the Class R-1 Certificates,
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests and Certificates remaining unpaid from
previous Distribution Dates, pro rata according to their respective
shares of such unpaid amounts;
(iii) third, to the Class I-X-1-M, Class I-X-2-M, Class Y-1,
Class Y-2, Class Y-3, Class Y-4, Class Z-1, Class Z-2, Class Z-3 and
Class Z-4 Regular Interests and the Class R-1 Certificates,
concurrently, the sum of the Interest Distribution Amounts for such
Classes of Certificates for the current Distribution Date, pro rata
according to their respective Interest Distribution Amounts;
(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 Y-1, Class Y-2, Class Y-3, Class
Y-4, Class Z-1, Class Z-2, Class Z-3 and Class Z-4 Regular Interests,
the Class Y-1, Class Y-2, Class Y-3, Class Y-4, Class Z-1, Class Z-2,
Class Z-3 and Class Z-4 Principal Distribution Amount, respectively;
(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:
65
(i) first, to the Class II-P-M Regular Interests, the
aggregate for all of the Class II-P Mortgage Loans of the product for
each Class II-P Mortgage Loan of the applicable Class II-P Fraction
and the sum of (x) scheduled payments of principal on such Class II-P
Mortgage Loan due on or before the related Due Date in respect of
which no distribution has been made on any previous Distribution Date
and which were received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to such
Distribution Date, (y) the principal portion received in respect of
such Class II-P Mortgage Loan during the Prior Period of (1)
Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any repurchase of a Mortgage Loan permitted hereunder
and (4) Liquidation Proceeds and (z) the principal portion of Payoffs
received in respect of such Class II-P Mortgage Loan during the
Payoff Period;
(ii) second, to the Class W and Class II-X-M Regular
Interests, concurrently, the Interest Distribution Amounts for such
Classes of Regular Interests remaining unpaid from previous
Distribution Dates;
(iii) third, to the Class W and Class II-X-M Regular
Interests, concurrently, the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date;
(iv) fourth, to the Class W Regular Interests, until the
Class W Principal Balance has been reduced to zero; and
(v) fifth, to the Class R-1 Certificates, the Residual
Distribution Amount for Loan Group II 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
66
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-1-M, Class I-X-2-M, Class
I-P-M, Class Y-1, Class Y-2, Class Y-3, Class Y-4, Class Z-1, Class Z-2,
Class Z-3 and Class Z-4 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 II-P-M and Class W
Regular Interests.
REMIC II Distribution Amount: (I) For any Distribution Date prior to
----------------------------
the Group I Credit Support Depletion Date or the Group II 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 the Class I-P-L Regular Interests, the
aggregate for all Class I-P Mortgage Loans of the product for each
Class I-P Mortgage Loan of the applicable Class I-P Fraction and the
sum of (x) scheduled payments of principal on such Class I-P Mortgage
Loan due on or before the related Due Date in respect of which no
distribution has been made on any previous Distribution Date and
which were received by the Determination Date, or which have been
advanced as part of a Monthly P&I Advance with respect to such
Distribution Date, (y) the principal portion received in respect of
such Class I-P Mortgage Loan during the Prior Period of (1)
Curtailments, (2) Insurance Proceeds, (3) the amount, if any, of the
principal portion of the Purchase Price paid pursuant to a Purchase
Obligation or any repurchase of a Mortgage Loan permitted hereunder
and (4) Liquidation Proceeds and (z) the principal portion of Payoffs
received in respect of such Class I-P Mortgage Loan during the Payoff
Period;
(ii) second, to the Group I-A-L Regular Interests entitled
to interest, the Class I-X-1-L, Class I-X-2-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;
(iii) third, to the Group I-A-L Regular Interests entitled
to interest, the Class I-X-1-L, Class I-X-2-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 for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts;
67
(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 I
Senior Principal Distribution Amount, as follows:
(a) first, to the Class I-A-27-L Regular Interests, the
Class I-A-27-L Principal Distribution Amount, until the Class
I-A-27-L Principal Balance has been reduced to zero;
(b) second, to the Class I-A-5-L Regular Interests, an
amount, up to the amount of the Class I-A-5-L Lockout Priority
Amount for such Distribution Date, until the Class I-A-5-L
Principal Balance has been reduced to zero;
(c) third, concurrently, the portion of the Group I
Senior Principal Distribution Amount remaining after the
distributions described above, as follows:
(0) 00.0000000000%, sequentially, as follows:
(A) first, sequentially, to the Class
R-2 Certificates and the Class R-3-L Regular
Interests, until the Class Principal Balance of
each of such Class has been reduced to zero;
(B) second, to the Class I-A-1-L
Regular Interests, until the Class I-A-1-L
Principal Balance has been reduced to zero;
(C) third, to the Class I-A-3-L Regular
Interests, until the Class I-A-3-L Principal
Balance has been reduced to zero;
(D) fourth, to the Class I-A-6-L
Regular Interests, until the Class I-A-6-L
Principal Balance has been reduced to zero;
(E) fifth, to the Class I-A-21-L
Regular Interests and Component I-A-19-1-L, pro
rata, until the Class I-A-21-L Principal Balance
and Component I-A-19-1-L Principal Balance have
each been reduced to zero;
(F) sixth, to the Class I-A-7-L Regular
Interests, until the Class I-A-7-L Principal
Balance has been reduced to zero; and
(G) seventh, to the Class I-A-4-L,
Class I-A-8-L, Class I-A-9-L and Class I-A-26-L
Regular Interests, pro rata, until the respective
Class Principal Balances of such Classes have each
been reduced to zero; and
(0) 00.0000000000%, sequentially, as follows:
(A) first, to the Class I-A-25-L
Regular Interests, to the extent necessary to
reduce the Class I-A-25-L Principal Balance to its
Planned Principal Balance for such Distribution
Date;
68
(B) second, concurrently, to the extent
necessary to reduce the Class I-A-22-L Principal
Balance to its Planned Principal Balance for such
Distribution Date; as follows:
(x) 00.0000000000% to the
Class
I-A-22-L Regular Interests; and
(y) 78.1250012172%,
sequentially, as follows:
(I) first, to the
Class
I-A-11-L Regular Interests, to
the extent necessary to reduce
the Class I-A-11-L Principal
Balance to its Planned Principal
Balance for such Distribution
Date;
(II) second, to the
Class I-A-10-L Regular Interests,
to the extent necessary to reduce
the Class I-A-10-L Principal
Balance to the greater of (i)
$8,168,267 or (ii) its Planned
Principal Balance for such
Distribution Date; and
(III) third,
concurrently, 62.0299315012% to
the Class I-A-10-L Regular
Interests and 37.9700684988% to
the Class I-A-12-L Regular
Interests, to the extent
necessary to reduce the
respective Class Principal
Balances of such Classes to their
respective Planned Principal
Balances for such Distribution
Date;
(C) third, to the Class I-A-13-L
Regular Interests, to the extent necessary to
reduce the Class I-A-13-L Principal Balance to
its Planned Principal Balance for such
Distribution Date;
(D) fourth, to the Class I-A-14-L and
Class I-A-24-L Regular Interests, pro rata,
until the respective Class Principal Balances
of such Classes have each been reduced to
zero;
(E) fifth, to the Class I-A-13-L
Regular Interests, until the Class I-A-13-L
Principal Balance has been reduced to zero;
(F) sixth, to the Class I-A-25-L
Regular Interests, until the Class I-A-25-L
Principal Balance has been reduced to zero;
(G) seventh, concurrently, until the
Class I-A-22-L Principal Balance has been
reduced to zero, as follows:
(x) 00.0000000000% to the
Class I-A-22-L Regular Interests; and
69
(y) 78.1250012172%,
sequentially, as follows:
(I) first, to the Class
I-A-11-L Regular Interests, until the
Class I-A-11-L Principal Balance has
been reduced to zero;
(II) second, to the Class
I-A-10-L Regular Interests, until the
Class I-A-10-L Principal Balance has
been reduced to $8,168,267; and
(III) third, concurrently,
62.0299315012% to the Class I-A-10-L
Regular Interests and 37.9700684988%
to
the Class I-A-12-L Regular Interests,
until the respective Class Principal
Balances of such Classes have each been
reduced to zero; and
(H) eighth, concurrently, until the
Component I-A-19-2-L Principal Balance has
been reduced to zero, as follows:
(x) 0.0000000000% to
Component I-A-19-2-L; and
(y) 96.4285640012%,
sequentially, to the Class I-A-15-L,
Class I-A-16-L, Class I-A-17-L and Class
I-A-18-L Regular Interests, in that
order, until the respective Class
Principal Balances of such Classes have
each been reduced to zero; and
(d) fourth, to the Class I-A-5-L Regular Interests, the
portion of the Group I Senior Principal Distribution Amount remaining
after the distributions described above, until the Class I-A-5-L
Principal Balance has been reduced to zero;
(v) fifth, to the Class I-P-L Regular Interests, to the
extent of amounts otherwise available to pay the Group I Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, the amount payable to
the Class I-P-L Regular Interests on previous Distribution Dates
pursuant to clause (I)(a)(vi) of this definition of "REMIC II
Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(vi) sixth, to the Class I-P-L Regular Interests, to the
extent of amounts otherwise available to pay the Group I Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, an amount equal to the
Class I-P Fraction of any Realized Loss on a Class I-P Mortgage Loan,
other than a Special Hazard Loss, Fraud Loss or Bankruptcy Loss in
excess of the Group I Special Hazard Coverage, Group I Fraud Coverage
or Group I Bankruptcy Coverage, as applicable, provided that any
amounts distributed in respect of losses pursuant to paragraph
(I)(a)(v) or this paragraph
70
(I)(a)(vi) of this definition of "REMIC II Distribution Amount"
shall
not cause a further reduction in the Class I-P-L Principal Balance;
(vii) seventh, to the Class I-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class I-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(ix) ninth, to the Class I-B-1-L Regular Interests, the
portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-1-L Principal Balance has been reduced to zero;
(x) tenth, to the Class I-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(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
71
pursuant to the definition of "Group I Subordinate Principal
Distribution Amount", until the Class I-B-4-L Principal Balance has
been reduced to zero;
(xix) nineteenth, to the Class I-B-5-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xx) twentieth, to the Class I-B-5-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xxi) twenty-first, to the Class I-B-5-L Regular Interests,
the portion of the Group I Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group I Subordinate Principal Distribution Amount",
until the Class I-B-5-L Principal Balance has been reduced to zero;
(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; and
(b) With respect to the Group II-L Regular Interests and the
Class R-2 Certificates, on any Distribution Date prior to the Group II
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 Class II-P-L Regular Interests, the
aggregate for all Class II-P Mortgage Loans of the product for each
Class II-P Mortgage Loan of the applicable Class II-P Fraction and
the sum of (x) scheduled payments of principal on such Class II-P
Mortgage Loan due on or before the related Due Date in respect of
which no distribution has been made
72
on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly
P&I Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class II-P Mortgage Loan during
the Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the
amount, if any, of the principal portion of the Purchase Price paid
pursuant to a Purchase Obligation or any repurchase of a Mortgage
Loan permitted hereunder and (4) Liquidation Proceeds and (z) the
principal portion of Payoffs received in respect of such Class II-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
(iii) third, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group II-A-1-L Regular Interests, as
principal, the Group II Senior Principal Distribution Amount;
(v) fifth, to the Class II-P-L Regular Interests, to the
extent of amounts otherwise available to pay the Group II Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, the amount payable to
the Class II-P-L Regular Interests on previous Distribution Dates
pursuant to clause (I)(b)(vi) of this definition of "REMIC II
Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(vi) sixth, to the Class II-P-L Regular Interests, to the
extent of amounts otherwise available to pay the Group II Subordinate
Principal Distribution Amount (without regard to clause (B) of the
definition thereof) on such Distribution Date, an amount equal to the
Class II-P Fraction of any Realized Loss on a Class II-P Mortgage
Loan, other than a Special Hazard Loss, Fraud Loss or Bankruptcy Loss
in excess of the Group II Special Hazard Coverage, Group II Fraud
Coverage or Group II Bankruptcy Coverage, as applicable, provided
that any amounts distributed in respect of losses pursuant to
paragraph (I)(b)(v) or this paragraph (I)(b)(vi) of this definition
of "REMIC II Distribution Amount" shall not cause a further reduction
in the Class II-P-L Principal Balance;
(vii) seventh, to the Class II-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(viii) eighth, to the Class II-B-1-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
73
(ix) ninth, to the Class II-B-1-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group II Subordinate Principal Distribution Amount",
until the Class II-B-1-L Principal Balance has been reduced to zero;
(x) tenth, to the Class II-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xi) eleventh, to the Class II-B-2-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
(xii) twelfth, to the Class II-B-2-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group II Subordinate Principal Distribution Amount",
until the Class II-B-2-L Principal Balance has been reduced to zero;
(xiii) thirteenth, to the Class II-B-3-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xiv) fourteenth, to the Class II-B-3-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
for the current Distribution Date;
(xv) fifteenth, to the Class II-B-3-L Regular Interests, the
portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group II Subordinate Principal Distribution Amount",
until the Class II-B-3-L Principal Balance has been reduced to zero;
(xvi) sixteenth, to the Class II-B-4-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xvii) seventeenth, to the Class II-B-4-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
for the current Distribution Date;
(xviii) eighteenth, to the Class II-B-4-L Regular Interests,
the portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group II Subordinate Principal Distribution Amount",
until the Class II-B-4-L Principal Balance has been reduced to zero;
(xix) nineteenth, to the Class II-B-5-L Regular Interests,
the Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xx) twentieth, to the Class II-B-5-L Regular Interests, the
Interest Distribution Amount for such Class of Regular Interests for
the current Distribution Date;
74
(xxi) twenty-first, to the Class II-B-5-L Regular Interests,
the portion of the Group II Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the
definition of "Group II Subordinate Principal Distribution Amount",
until the Class II-B-5-L Principal Balance has been reduced to zero;
(xxii) twenty-second, to the Class II-B-6-L Regular
Interests, the Interest Distribution Amount for such Class of Regular
Interests remaining unpaid from previous Distribution Dates;
(xxiii) twenty-third, to the Class II-B-6-L Regular
Interests, the Interest Distribution Amount for such Class of Regular
Interests for the current Distribution Date;
(xxiv) twenty-fourth, to the Class II-B-6-L Regular
Interests, the portion of the Group II Subordinate Principal
Distribution Amount allocable to such Class of Regular Interests
pursuant to the definition of "Group II Subordinate Principal
Distribution Amount", until the Class II-B-6-L Principal Balance has
been reduced to zero;
(xxv) twenty-fifth, to each Class of Group II-X-X Regular
Interests in the order of seniority, the remaining portion, if any,
of the REMIC II Available Distribution Amount for the Group II-L
Regular Interests, up to the amount of unreimbursed Realized Losses
previously allocated to such Class, if any, provided that any amounts
distributed pursuant to this paragraph (I)(b)(xxv) of this definition
of "REMIC II Distribution Amount" shall not cause a further reduction
in the Class Principal Balances of the Group II-X-X Regular
Interests; and
(xxvi) twenty-sixth, to the Class R-2 Certificates, the
Residual Distribution Amount for the Group II-L Regular Interests for
such Distribution Date.
(II) For any Distribution Date on or after the Group I Credit
Support Depletion Date or the Group II 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 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 the Class I-P-L Regular Interests, principal
in the amount that would otherwise be distributed to such Class on
such Distribution Date pursuant to clause (I)(a)(i) of this
definition of "REMIC II Distribution Amount";
(ii) second, to the Group I-A-L Regular Interests entitled
to interest, the Class I-X-1-L, Class I-X-2-L and Class R-3-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
75
Amount", and remaining unpaid, pro rata according to such amount
payable to the extent of amounts available;
(iii) third, to the Group I-A-L Regular Interests entitled
to interest, the Class I-X-1-L, Class I-X-2-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 for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts;
(iv) fourth, to the Class I-A-27-L Regular Interests, the
Class I-A-27-L Principal Distribution Amount;
(v) fifth, to the Group I-A-L Regular Interests (other than
the Class I-A-27-L Regular Interests), the Class R-3-L Regular
Interests and the Class R-2 Certificates, the Group I Senior
Principal Distribution Amount (reduced by the Class I-A-27-L
Principal Distribution Amount), pro rata according to their
respective Class Principal Balances; and
(vi) sixth, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I-L Regular Interests for such
Distribution Date; and
(b) With respect to the Group II-L Regular Interests and the
Class R-2 Certificates, on each Distribution Date on or after the Group II
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 Class II-P-L Regular Interests, principal
in the amount that would otherwise be distributed to such Class on
such Distribution Date pursuant to clause (I)(b)(i) of this
definition of "REMIC II Distribution Amount";
(ii) second, to the Class II-A-1-L and Class II-X-L Regular
Interests, the amount payable to each such Class of Regular Interests
on prior Distribution Dates pursuant to clause (I)(b)(ii) or
(II)(b)(iii) of this definition of "REMIC II Distribution Amount",
and remaining unpaid, pro rata according to such amount;
(iii) third, to the Class II-A-1-L and Class II-X-L Regular
Interests, the sum of the Interest Distribution Amounts for such
Classes of Regular Interests for the current Distribution Date, pro
rata according to their respective Interest Distribution Amounts;
(iv) fourth, to the Group II-A-1-L Regular Interests, the
Group II Senior Principal Distribution Amount; and
(v) fifth, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group II-L Regular Interests for such
Distribution Date.
REMIC II Regular Interest: The Classes of Regular Interests in the
-------------------------
REMIC II Trust Fund and Components thereof designated as "regular
interests" in the table titled "REMIC II Trust Fund" in the Preliminary
Statement hereto.
76
REMIC II Trust Fund: The REMIC II Trust Fund created pursuant to
-------------------
Section 2.05 of this Agreement. The REMIC II Trust Fund consists of the
REMIC I Regular Interests to be held by the Trustee for the benefit of the
Holders from time to time of the REMIC II Regular Interests and Class R-2
Certificates issued hereunder.
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
---------------------------------------
and Class R-3 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 and Class R-3 Certificates, on any Distribution
Date, the aggregate of all distributions with respect to the Group II-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-19,
Class I-A-20, Class I-A-22, Class I-A-23 and Class I-A-25
Certificates, the amounts distributed to its Corresponding Class on
such Distribution Date;
(ii) to each of Component I-A-19-1 and Component I-A-19-2,
the amounts distributed to its Corresponding Component on such
Distribution Date;
(iii) (A) to the Class I-A-1 Certificates, the amount
distributed as principal to the Class I-A-1-L Regular Interests on
such Distribution Date and (B) to the Class I-A-1 and Class I-A-2
Certificates, the amount distributed as interest to the Class I-A-1-L
Regular Interests on such Distribution Date concurrently as follows:
(I) to the Class I-A-1 Certificates, an amount equal to the product
of 1/12 of the Class I-A-1 Remittance Rate and the Class I-A-1
Principal Balance (before allocating Realized Losses of principal and
giving effect to distributions of principal, in each case, on such
Distribution Date) and (II) to the Class I-A-2 Certificates, an
amount equal to the product of 1/12 of the Class I-A-2 Remittance
Rate and the Class I-A-2 Notional Amount;
(iv) (A) to the Class I-A-25 Certificates, the amount
distributed as principal to the Class I-A-25-L Regular Interests on
such Distribution Date and (B) to the Class I-A-20 and Class I-A-25
Certificates, the amount distributed as interest to the Class
I-A-25-L Regular Interests on such Distribution Date concurrently as
follows: (I) to the Class I-A-20 Certificates, an amount equal to the
product of 1/12 of the Class I-A-20 Remittance Rate and the Class
I-A-20 Notional Amount and (II) to the Class I-A-25 Certificates, an
amount equal to the product of 1/12 of the Class I-A-25 Remittance
Rate and the Class I-A-25 Principal
77
Balance (before allocating Realized Losses of principal and giving
effect to distributions of principal, in each case, on such
Distribution Date);
(v) (A) to the Class I-A-22 Certificates, the amount
distributed as principal to the Class I-A-22-L Regular Interests on
such Distribution Date and (B) to the Class I-A-22 and Class I-A-23
Certificates, the amount distributed as interest to the Class
I-A-22-L Regular Interests on such Distribution Date concurrently as
follows: (I) to the Class I-A-22 Certificates, an amount equal to the
product of 1/12 of the Class I-A-22 Remittance Rate and the Class
I-A-22 Principal Balance (before allocating Realized Losses of
principal and giving effect to distributions of principal, in each
case, on such Distribution Date) and (II) to the Class I-A-23
Certificates, an amount equal to the product of 1/12 of the Class
I-A-23 Remittance Rate and the Class I-A-23 Notional Amount; and
(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
Senior Certificates:
(i) to each Class of Group II Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-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 or Component in the
Preliminary Statement hereto.
Reserve Fund: The separate trust account maintained by the Master
------------
Servicer and held by the Trustee, which account shall bear a designation
clearly indicating that the funds deposited therein are held in trust for
the benefit of the Trustee on behalf of the Certificateholders, or any
other account serving a similar function acceptable to the Rating Agencies
and the Trustee, and which account provides that the Trustee may make, or
cause to be made, withdrawals therefrom in accordance with Section 3.17.
Reserve Fund Initial Amount: $135,750.
---------------------------
78
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.
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) and (b)(i) through (b)(iv), 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)(b)(i) through (I)(b)(xxv), (II)(a)(i) through (II)(a)(v)
or (II)(b)(i) through (II)(b)(iv), 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)(v) or clause (b)(i), as applicable, 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
---
XxXxxx-Xxxx Companies, Inc., provided that at any time it be a Rating
Agency.
Securities Act: The Securities Act of 1933, as amended.
--------------
Security Agreement: With respect to a Cooperative Loan, the agreement
------------------
or mortgage creating a security interest in favor of the originator of the
Cooperative Loan in the related Cooperative Stock.
Selling and Servicing Contract: (a) The contract (including the PNC
------------------------------
Mortgage Securities Corp. Selling Guide and PNC Mortgage Securities Corp.
Servicing Guide to the extent incorporated by reference therein) between
the Company and a Person relating to the sale of the Mortgage Loans to the
Company and the servicing of such Mortgage Loans for the benefit of the
Certificateholders, which contract is substantially in the form of Exhibit
E hereto, as such contract may be amended or modified from time to time;
provided, however, that any such amendment or modification shall not
materially adversely affect the interests and rights of Certificateholders
and (b) any other similar
79
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 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,
--------------------------------------
$4,713,725 and with respect to and Loan Group II, $3,364,662.
Special Hazard Loss: The occurrence of any direct physical loss or
-------------------
damage to a Mortgaged Property not covered by a standard hazard
maintenance policy with extended coverage which is caused by or results
from any cause except: (i) fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, vandalism, aircraft,
vehicles, smoke, sprinkler leakage, except to the extent of that portion
of the loss which was uninsured because of the application of a
co-insurance clause of any insurance policy covering these perils; (ii)
normal wear and tear, gradual deterioration, inherent vice or inadequate
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether controlled
or uncontrolled and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or aggravated
by a peril covered by this definition of Special Hazard Loss; (v) hostile
or warlike action in time of peace or war, including action in hindering,
combating or defending against an actual, impending or expected attack (a)
by any government of sovereign power (de jure or de facto), or by an
authority maintaining or using military, naval 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;
80
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:
Distribution Date Occurring In Step Down Percentage
------------------------------ --------------------
September 1998 through August 2003 0%
September 2003 through August 2004 30%
September 2004 through August 2005 40%
September 2005 through August 2006 60%
September 2006 through August 2007 80%
September 2007 and thereafter 100%
Stripped Interest Rate: For each Subgroup I-1 Loan, the excess, if
----------------------
any, of the Pass-Through Rate for such Mortgage Loan over 6.375%. For each
Subgroup I-2 Loan, the excess, if any, of the Pass-Through Rate for such
Mortgage Loan over 6.500%. For each Subgroup I-3 Loan, the excess, if any,
of the Pass-Through Rate for such Mortgage Loan over 6.625%. For each
Subgroup I-4 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 7.000%.
Subgroup: Subgroup I-1, Subgroup I-2, Subgroup I-3 or Subgroup I-4,
--------
as applicable.
Subgroup I-1: The subgroup of Mortgage Loans comprised of the
------------
Subgroup I-1 Loans.
Subgroup I-1 Initial Senior Component Balance: $42,380,981.50.
---------------------------------------------
Subgroup I-1 Loans: The Mortgage Loans designated on the Mortgage
------------------
Loan Schedule as Subgroup I-1 Loans, which are all of the Group I Loans
with Pass-Through Rates less than 6.500% per annum.
Subgroup I-1 Senior Component Balance: For any date of
-------------------------------------
determination, an amount equal to the Subgroup I-1 Initial Senior
Component Balance (i) reduced by (a) all principal distributed
previously
to the Group I-A and Residual Certificates derived from Subgroup I-1 and
(b) all principal losses allocated to such Certificates derived from
Subgroup I-1 and (ii) reduced or increased, as applicable, by any
reduction or addition thereto made on any Distribution Date in accordance
with the fifth paragraph of the definition of "Realized Loss".
Subgroup I-1 Senior Liquidation Amount: The aggregate, for each
--------------------------------------
Subgroup I-1 Loan which became a Liquidated Mortgage Loan during the Prior
Period, of the lesser of: (i) the Subgroup I-1 Senior Percentage of the
Principal Balance of such Mortgage Loan (exclusive of the Class I-P
Fraction thereof, with respect to any Class I-P Mortgage Loan) and (ii)
the Subgroup I-1 Senior Prepayment Percentage of the Liquidation Principal
with respect to such Mortgage Loan.
Subgroup I-1 Senior Percentage: For any Distribution Date, the
------------------------------
Subgroup I-1 Senior Component Balance divided by the aggregate Principal
Balance of the Subgroup I-1 Loans (less the Class I-P Principal Balance)
immediately prior to the Distribution Date.
81
Subgroup I-1 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 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 Subgroup I-1 Senior Percentage for such
Distribution Date plus 70% of the Subgroup I-1 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 Subgroup I-1 Senior Percentage for such Distribution Date plus
60% of the Subgroup I-1 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
Subgroup I-1 Senior Percentage for such Distribution Date plus 40% of the
Subgroup I-1 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 Subgroup I-1
Senior Percentage for such Distribution Date plus 20% of the Subgroup I-1
Subordinate Percentage
82
for such Distribution Date; and (5) for any such Distribution Date
thereafter, the Subgroup I-1 Senior Percentage for such Distribution
Date.
If on any Distribution Date the allocation to the Subgroup I-1 Senior
Component Balance of Principal Prepayments in the percentage required
would reduce the Subgroup I-1 Senior Component Balance below zero, the
Subgroup I-1 Senior Prepayment Percentage for such Distribution Date shall
be limited to the percentage necessary to reduce the Subgroup I-1 Senior
Component Balance to zero. Notwithstanding the foregoing, however, on each
Distribution Date, the Class I-P-L Regular Interests will receive the
Class I-P Fraction of all principal payments, including, without
limitation, Principal Prepayments, received in respect of each Class I-P
Mortgage Loan.
Subgroup I-1 Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Subgroup I-1
Senior Percentage of the Principal Payment Amount for Subgroup I-1
(exclusive of the portion thereof attributable to principal distributions
to the Class I-P-L Regular Interests pursuant to clauses (I)(a)(i) and
(II)(a)(i) of the definition of "REMIC II Distribution Amount"), (b) the
Subgroup I-1 Senior Prepayment Percentage of the Principal Prepayment
Amount for Subgroup I-1 (exclusive of the portion thereof attributable to
principal distributions to the Class I-P-L Regular Interests pursuant to
clauses (I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Subgroup I-1 Senior Liquidation
Amount.
Subgroup I-1 Subordinate Component Balance: For any date of
------------------------------------------
determination, an amount equal to the then outstanding aggregate Principal
Balance of the Subgroup I-1 Loans reduced by (i) the Subgroup I-1 Senior
Component Balance and (ii) the Class I-P Fraction of any Class I-P
Mortgage Loan.
Subgroup I-1 Subordinate Percentage: For any Distribution Date, the
-----------------------------------
excess of 100% over the Subgroup I-1 Senior Percentage for such date.
Subgroup I-2: The subgroup of Mortgage Loans comprised of the Subgroup
I-2 Loans.
Subgroup I-2 Initial Senior Component Balance: $45,638,642.43.
---------------------------------------------
Subgroup I-2 Loans: The Mortgage Loans designated on the Mortgage
------------------
Loan Schedule as Subgroup I-2 Loans, which are all of the Group I Loans
with Pass-Through Rates greater than or equal to 6.500% per annum but less
than 6.625% per annum.
Subgroup I-2 Senior Component Balance: For any date of
-------------------------------------
determination, an amount equal to the Subgroup I-2 Initial Senior
Component Balance (i) reduced by (a) all principal distributed previously
to the Group I-A and Residual Certificates derived from Subgroup I-2 and
(b) all principal losses allocated to such Certificates derived from
Subgroup I-2 and (ii) reduced or increased, as applicable, by any
reduction or addition thereto made on any Distribution Date in
accordance with the fifth paragraph of the definition of "Realized Loss".
Subgroup I-2 Senior Liquidation Amount: The aggregate, for each
--------------------------------------
Subgroup I-2 Loan which became a Liquidated Mortgage Loan during the Prior
Period, of the lesser of: (i) the Subgroup I-2 Senior Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Subgroup I-2 Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
83
Subgroup I-2 Senior Percentage: For any Distribution Date, the
------------------------------
Subgroup I-2 Senior Component Balance divided by the aggregate Principal
Balance of the Subgroup I-2 Loans immediately prior to the Distribution
Date.
Subgroup I-2 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 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 Subgroup I-2 Senior Percentage for such Distribution Date plus 70% of
the Subgroup I-2 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 Subgroup I-2 Senior Percentage for
such Distribution Date plus 60% of the Subgroup I-2 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
Subgroup I-2 Senior Percentage for such Distribution Date plus
84
40% of the Subgroup I-2 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
Subgroup I-2 Senior Percentage for such Distribution Date plus 20% of
the Subgroup I-2 Subordinate Percentage for such Distribution Date; and (5)
for any such Distribution Date thereafter, the Subgroup I-2 Senior
Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Subgroup I-2
Senior Component Balance of Principal Prepayments in the percentage
required would reduce the Subgroup I-2 Senior Component Balance below zero,
the Subgroup I-2 Senior Prepayment Percentage for such Distribution Date
shall be limited to the percentage necessary to reduce the Subgroup I-2
Senior Component Balance to zero.
Subgroup I-2 Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Subgroup I-2
Senior Percentage of the Principal Payment Amount for Subgroup I-2, (b)
the Subgroup I-2 Senior Prepayment Percentage of the Principal
Prepayment Amount for Subgroup I-2 and (c) the Subgroup I-2 Senior Liquidation
Amount.
Subgroup I-2 Subordinate Component Balance: For any date of
------------------------------------------
determination, an amount equal to the then outstanding aggregate
Principal Balance of the Subgroup I-2 Loans reduced by the Subgroup I-2 Senior
Component Balance.
Subgroup I-2 Subordinate Percentage: For any Distribution Date, the
-----------------------------------
excess of 100% over the Subgroup I-2 Senior Percentage for such date.
Subgroup I-3: The subgroup of Mortgage Loans comprised of the Subgroup I-3
Loans.
Subgroup I-3 Initial Senior Component Balance: $33,038,048.72.
---------------------------------------------
Subgroup I-3 Loans: The Mortgage Loans designated on the Mortgage
------------------
Loan Schedule as Subgroup I-3 Loans, which are all of the Group I Loans
with Pass-Through Rates greater than or equal to 6.625% per annum but
less than 6.750% per annum.
Subgroup I-3 Senior Component Balance: For any date of
-------------------------------------
determination, an amount equal to the Subgroup I-3 Initial Senior
Component Balance (i) reduced by (a) all principal distributed
previously to the Group I-A and Residual Certificates derived from Subgroup I-3
and (b) all principal losses allocated to such Certificates derived from
Subgroup I-3 and (ii) reduced or increased, as applicable, by any
reduction or addition thereto made on any Distribution Date in
accordance with the fifth paragraph of the definition of "Realized Loss".
Subgroup I-3 Senior Liquidation Amount: The aggregate, for each
--------------------------------------
Subgroup I-3 Loan which became a Liquidated Mortgage Loan during the
Prior Period, of the lesser of: (i) the Subgroup I-3 Senior Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Subgroup I-3 Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
85
Subgroup I-3 Senior Percentage: For any Distribution Date, the
------------------------------
Subgroup I-3 Senior Component Balance divided by the aggregate Principal
Balance of the Subgroup I-3 Loans immediately prior to the Distribution
Date.
Subgroup I-3 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 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 Subgroup I-3 Senior Percentage for such
Distribution Date plus 70% of the Subgroup I-3 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 Subgroup I-3 Senior Percentage for such Distribution Date plus
60% of the Subgroup I-3 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
Subgroup I-3 Senior Percentage for such Distribution Date plus
96
40% of the Subgroup I-3 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
Subgroup I-3 Senior Percentage for such Distribution Date plus 20% of the
Subgroup I-3 Subordinate Percentage for such Distribution Date; and (5)
for any such Distribution Date thereafter, the Subgroup I-3 Senior
Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Subgroup I-3 Senior
Component Balance of Principal Prepayments in the percentage required
would reduce the Subgroup I-3 Senior Component Balance below zero, the
Subgroup I-3 Senior Prepayment Percentage for such Distribution Date shall
be limited to the percentage necessary to reduce the Subgroup I-3 Senior
Component Balance to zero.
Subgroup I-3 Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Subgroup I-3
Senior Percentage of the Principal Payment Amount for Subgroup I-3, (b)
the Subgroup I-3 Senior Prepayment Percentage of the Principal Prepayment
Amount for Subgroup I-3 and (c) the Subgroup I-3 Senior Liquidation Amount.
Subgroup I-3 Subordinate Component Balance: For any date of
------------------------------------------
determination, an amount equal to the then outstanding aggregate Principal
Balance of the Subgroup I-3 Loans reduced by the Subgroup I-3 Senior
Component Balance.
Subgroup I-3 Subordinate Percentage: For any Distribution Date, the
-----------------------------------
excess of 100% over the Subgroup I-3 Senior Percentage for such date.
Subgroup I-4: The subgroup of Mortgage Loans comprised of the
------------
Subgroup I-4 Loans.
Subgroup I-4 Initial Senior Component Balance: $305,205,589.89.
---------------------------------------------
Subgroup I-4 Loans: The Mortgage Loans designated on the Mortgage
------------------
Loan Schedule as Subgroup I-4 Loans, which are all of the Group I Loans
with Pass-Through Rates greater than or equal to 6.750% per annum.
Subgroup I-4 Senior Component Balance: For any date of
-------------------------------------
determination, an amount equal to the Subgroup I-4 Initial Senior
Component Balance (i) reduced by (a) all principal distributed previously
to the Group I-A and Residual Certificates derived from Subgroup I-4 and
(b) all principal losses allocated to such Certificates derived from
Subgroup I-4 and (ii) reduced or increased, as applicable, by any
reduction or addition thereto made on any Distribution Date in accordance
with the fifth paragraph of the definition of "Realized Loss".
Subgroup I-4 Senior Liquidation Amount: The aggregate, for each
--------------------------------------
Subgroup I-4 Loan which became a Liquidated Mortgage Loan during the Prior
Period, of the lesser of: (i) the Subgroup I-4 Senior Percentage of the
Principal Balance of such Mortgage Loan and (ii) the Subgroup I-4 Senior
Prepayment Percentage of the Liquidation Principal with respect to such
Mortgage Loan.
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Subgroup I-4 Senior Percentage: For any Distribution Date, the
------------------------------
Subgroup I-4 Senior Component Balance divided by the aggregate Principal
Balance of the Subgroup I-4 Loans immediately prior to the Distribution
Date.
Subgroup I-4 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 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 Subgroup I-4 Senior Percentage for such
Distribution Date plus 70% of the Subgroup I-4 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 Subgroup I-4 Senior Percentage for such Distribution Date plus
60% of the Subgroup I-4 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
Subgroup I-4 Senior Percentage for such Distribution Date plus
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40% of the Subgroup I-4 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
Subgroup I-4 Senior Percentage for such Distribution Date plus 20% of the
Subgroup I-4 Subordinate Percentage for such Distribution Date; and (5)
for any such Distribution Date thereafter, the Subgroup I-4 Senior
Percentage for such Distribution Date.
If on any Distribution Date the allocation to the Subgroup I-4 Senior
Component Balance of Principal Prepayments in the percentage required
would reduce the Subgroup I-4 Senior Component Balance below zero, the
Subgroup I-4 Senior Prepayment Percentage for such Distribution Date shall
be limited to the percentage necessary to reduce the Subgroup I-4 Senior
Component Balance to zero.
Subgroup I-4 Senior Principal Distribution Amount: For any
-------------------------------------------------
Distribution Date, an amount equal to the sum of (a) the Subgroup I-4
Senior Percentage of the Principal Payment Amount for Subgroup I-4, (b)
the Subgroup I-4 Senior Prepayment Percentage of the Principal Prepayment
Amount for Subgroup I-4 and (c) the Subgroup I-4 Senior Liquidation
Amount.
Subgroup I-4 Subordinate Component Balance: For any date of
------------------------------------------
determination, an amount equal to the then outstanding aggregate Principal
Balance of the Subgroup I-4 Loans reduced by the Subgroup I-4 Senior
Component Balance.
Subgroup I-4 Subordinate Percentage: For any Distribution Date, the
-----------------------------------
excess of 100% over the Subgroup I-4 Senior Percentage for such date.
Subordinate Certificates: The Group I-B and Group II-B Certificates.
------------------------
Subordination Level: On any specified date, with respect to any of
-------------------
the Group I-B-L Regular Interests, the percentage obtained by dividing the
sum of the Class Principal Balances of the Classes of Group I-B-L Regular
Interests which are subordinate in right of payment to such Class
(provided that no Class of Group I-B-L Regular Interests shall be
subordinate in right of payment to the Class I-B-6-L Regular Interests) by
the aggregate Class Principal Balances of the Group I-L Regular Interests
as of such date prior to giving effect to distributions of principal or
interest or allocations of Realized Losses on the Group I Loans on such
date. On any specified date, with respect to any of the Group II-X-X
Regular Interests, the percentage obtained by dividing the sum of the
Class Principal Balances of the Classes of Group II-X-X Regular Interests
which are subordinate in right of payment to such Class (provided that no
Class of Group II-X-X Regular Interests shall be subordinate in right of
payment to the Class II-B-6-L Regular Interests) by the aggregate Class
Principal Balances of the Group II-L Regular Interests as of such date
prior to giving effect to distributions of principal or interest or
allocations of Realized Losses on the Group II Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for
------------------------
another Mortgage Loan pursuant to and in accordance with the provisions of
Section 2.02.
Tax Matters Person: A Holder of the Class R-1 Certificate, with
------------------
respect to REMIC I, a Holder of the Class R-2 Certificate, with respect to
REMIC II and a holder of the Class R-3
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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.
Transferee Affidavit and Agreement: An affidavit and agreement in the
----------------------------------
form attached hereto as Exhibit J.
Trustee: State Street Bank and Trust Company, or its
-------
successor-in-interest as provided in Section 8.09, or any successor
trustee appointed as herein provided.
Uncollected Interest: With respect to any Distribution Date for any
--------------------
Mortgage Loan on which a Payoff was made by a Mortgagor during the related
Payoff Period, except for Payoffs received during the period from the
first through the 14th day of the month of such Distribution Date, an
amount equal to one month's interest at the applicable Pass-Through Rate
on such Mortgage Loan less the amount of interest actually paid by the
Mortgagor with respect to such Payoff.
Uncompensated Interest Shortfall: 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.
90
Uncompensated Interest Shortfall for Loan Group II shall be allocated
to the Group II-L Regular Interests pro rata according to the amount of
the Interest Distribution Amount to which each such Class would otherwise
be entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be allocated
to the Class I-X-1-M, Class I-X-2-M, Class Y-1, Class Y-2, Class Y-3,
Class Y-4, Class Z-1, Class Z-2, Class Z-3 and Class Z-4 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 II shall be allocated
to the Class II-X-M and Class W 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.
Underwriting Standards: The underwriting standards of the Company,
----------------------
Old Kent Mortgage Company, Headlands Mortgage Company, HomeSide Lending,
Inc., Peoples Heritage Bank, Washington Mutual Savings Bank, Commerce
Security Bank, Universal American Mortgage Company, First Nationwide
Mortgage Corporation, Prism Mortgage Company and PNC Mortgage Corp. of
America.
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
----------
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.
91
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 State
Street Bank and Trust Company 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:
(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, the Reserve Fund, and all money or other
property held therein; and (iii) amounts paid or payable by the insurer
under any FHA
92
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
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,
93
and the Company shall cause to be filed the Form UCC-3 assignment and Form
UCC-1 financing statement referred to in clause (Y)(vii) and (ix),
respectively, of the definition of "Mortgage File." In connection with its
servicing of Cooperative Loans, the Master Servicer will use its best
efforts to file timely continuation statements, if necessary, with regard
to each financing statement and assignment relating to Cooperative
Loans.
In instances where the original recorded Mortgage or any intervening
assignment thereof (recorded or in recordable form) relating to a Mortgage
Loan cannot be delivered by the Company to the Trustee prior to or
concurrently with the execution and delivery hereof (due to a delay on the
part of the recording office), the Company may, in lieu of delivering such
original documents, deliver to the Trustee a fully legible reproduction of
the original Mortgage or intervening assignment provided that the related
Lender or originator certifies on the face of such reproduction(s) or copy
as follows: "Certified true and correct copy of original which has been
transmitted for recordation." For purposes hereof, transmitted for
recordation means having been mailed or otherwise delivered for
recordation to the appropriate authority. In all such instances, the
Company shall transmit the original recorded Mortgage and any intervening
assignments with evidence of recording thereon (or a copy of such original
Mortgage or intervening assignment certified by the applicable recording
office)(collectively, "Recording Documents") to the Trustee within 270
days after the execution and delivery hereof. In instances where, due to a
delay on the part of the recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents
cannot be delivered to the Trustee within 270 days after execution and
delivery hereof, the Company shall deliver to the Trustee within such time
period a certificate (a "Company Officer's Certificate") signed by the
Chairman of the Board, President, any Vice President or Treasurer of the
Company stating the date by which the Company expects to receive such
Recording Documents from the applicable recording office. In the event
that Recording Documents have still not been received by the Company and
delivered to the Trustee by the date specified in its previous Company
Officer's Certificate delivered to the Trustee, the Company shall deliver
to the Trustee by such date an additional Company Officer's Certificate
stating a revised date by which the Company expects to receive the
applicable Recording Documents. This procedure shall be repeated until the
Recording Documents have been received by the Company and delivered to the
Trustee.
In instances where, due to a delay on the part of the title insurer,
a copy of the title insurance policy for a particular Mortgage Loan cannot
be delivered to the Trustee prior to or concurrently with the execution
and delivery hereof, the Company shall provide a copy of such title
insurance policy to the Trustee within 90 days after the Company's receipt
of the Recording Documents necessary to issue such title insurance policy.
In addition, the Company shall, subject to the limitations set forth in
the preceding sentence, provide to the Trustee upon request therefor a
duplicate title insurance policy for any Mortgage Loan.
For Mortgage Loans for which the Company has received a Payoff after
the Cut-Off Date and prior to the date of execution and delivery hereof,
the Company, in lieu of delivering the 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
94
Custodian of the documents or instruments referred to above in this
Section 2.01, and to enter into a Custodial Agreement for such purpose,
provided, however, that the Trustee shall be and remain liable for the
acts of any such Custodian only to the extent that it is responsible for
its own acts hereunder.
The Company and the Trustee agree that the Company, as agent for
the Tax Matters Person, shall, on behalf of the REMIC I Trust Fund, elect to
treat the REMIC I Trust Fund as a REMIC within the meaning of Section
860D of the Code and, if necessary, under applicable state laws. Such
election shall be included in the Form 1066 and any appropriate state return to
be filed on behalf of REMIC I for its first taxable year.
The Closing Date is hereby designated as the "startup day" of REMIC
I within the meaning of Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC I Trust Fund are
hereby designated as "regular interests" for purposes of Section
860G(a)(1) of the Code. The Class R-1 Certificates are being issued in a
single Class, which is hereby designated as the sole class of "residual
interest" in the REMIC I Trust Fund for purposes of Section 860G(a)(2)
of the Code.
The parties intend that the affairs of the REMIC I Trust Fund
formed hereunder shall constitute, and that the affairs of the REMIC I
Trust Fund shall be conducted so as to qualify the REMIC I Trust Fund
as a REMIC. In furtherance of such intention, the Company covenants
and agrees that it shall act as agent for the Tax Matters Person (and
the Company is hereby appointed to act as agent for such Tax Matters
Person) on behalf of the REMIC I Trust Fund and that in such capacity
it shall: (a) prepare and file, or cause to be prepared and filed, a
federal tax return using a calendar year as the taxable year and using
an accrual method of accounting for the REMIC I Trust Fund when and as
required by the REMIC Provisions and other applicable federal income
tax laws; (b) make an election, on behalf of the trust, for the REMIC
I Trust Fund to be treated
as a REMIC on the federal tax return of the REMIC I Trust Fund for its
first taxable year, in accordance with the REMIC Provisions; (c) prepare
and forward, or cause to be prepared and forwarded, to the Holders of
the
REMIC I Regular Interests and the Class R-1 Certificates and the
Trustee,
all information reports as and when required to be provided to them in
accordance with the REMIC Provisions, and make available the information
necessary for the application of Section 860E(e) of the Code; (d)
conduct
the affairs of the REMIC I Trust Fund at all times that any REMIC I
Regular Interests are outstanding so as to maintain the status of the
REMIC I Trust Fund as a REMIC under the REMIC Provisions; (e) not
knowingly or intentionally take any action or omit to take any action
that
would cause the termination of the REMIC status of the REMIC I Trust
Fund;
and (f) pay the amount of any federal prohibited transaction penalty
taxes
imposed on the REMIC I Trust Fund when and as the same shall be due and
payable (but such obligation shall not prevent the Company or any other
appropriate person from contesting any 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.
95
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 hereto, to the effect that all documents
required (in the case of instruments described in clauses (X)(v) and
(Y)(x) of the definition of "Mortgage File", known by the Trustee to be
required) pursuant to the third paragraph of Section 2.01 have been
executed and received, and that such documents relate to the Mortgage
Loans identified in the Mortgage Loan Schedule. In performing such
review,
the Trustee may rely upon the purported genuineness and due execution of
any such document, and on the purported genuineness of any signature
thereon. The Trustee shall not be 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
96
documents constituting a part of a Mortgage File not to have been
executed
or received, or to be unrelated to the Mortgage Loans identified in the
Mortgage Loan Schedule, the Trustee shall promptly so notify the
Company.
The Company hereby covenants and agrees that, if any such defect cannot
be
corrected or cured, the Company shall, not later than 60 days after the
Trustee's notice to it respecting such defect, within the three-month
period commencing on the Closing Date (or within the two-year period
commencing on the Closing Date if the related Mortgage Loan is a
"defective obligation" within the meaning of Section 860G(a)(4)(B)(ii)
of
the Code and Treasury Regulation Section 1.860G-2(f)), either (i)
repurchase the related Mortgage Loan from the Trustee at the Purchase
Price, or (ii) substitute for any Mortgage Loan to which such defect
relates a different mortgage loan (a "Substitute Mortgage Loan") which
is
a "qualified replacement mortgage" (as defined in the Code) and, (iii)
after such three-month or two-year period, as applicable, the Company
shall repurchase the Mortgage Loan from the Trustee at the Purchase
Price
but only if the Mortgage Loan is in default or default is, in the
judgment
of the Company, reasonably imminent. If such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" (as defined in the
Code), then notwithstanding the previous sentence, repurchase or
substitution must occur within the sooner of (i) 90 days from the date
the
defect was discovered or (ii) in the case of substitution, two years
from
the Closing Date.
Such Substitute Mortgage Loan shall mature no later than, and not
more than two years earlier than, have a principal balance and
Loan-to-Value Ratio equal to or less than, and have a Pass-Through Rate
on
the date of substitution equal to or no more than 1% greater than the
Mortgage Loan being substituted for. If the aggregate of the principal
balances of the Substitute Mortgage Loans substituted for a Mortgage
Loan
is less than the Principal Balance of such Mortgage Loan, the Company
shall pay the difference in cash to the Trustee for deposit into the
Certificate Account, and such payment by the Company shall be treated in
the same manner as proceeds of the repurchase by the Company of a
Mortgage
Loan pursuant to this Section 2.02. Furthermore, such Substitute
Mortgage
Loan shall otherwise have such characteristics so that the
representations
and warranties of the Company set forth in Section 2.03 hereof would not
have been incorrect had such Substitute Mortgage Loan originally been a
Mortgage Loan, and the Company shall be deemed to have made such
representations and warranties as to such Substitute Mortgage Loan. A
Substitute Mortgage Loan may be substituted for a defective Mortgage
Loan
whether or not such defective Mortgage Loan is itself a Substitute
Mortgage Loan.
The Purchase Price for each repurchased Mortgage Loan shall be
deposited by the Company in the Certificate Account and, upon receipt by
the Trustee of written notification of such deposit signed by a
Servicing
Officer, the Trustee shall release to the Company the related Mortgage
File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as shall be necessary to vest
in the Company or its designee or assignee title to any Mortgage Loan
released pursuant hereto. The obligation of the Company to 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,
97
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 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
98
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 99.2% (by Principal
Balance) of the Group I Loans and not less than approximately 80.0%
(by Principal Balance) of the Group II Loans with Loan-to-Value
Ratios as of the Cut-Off Date in excess of 80% were covered by a
Primary Insurance Policy or an FHA insurance policy or a VA
guaranty,
and such policy or guaranty is valid and remains in full force and
effect;
(xii) As of the Closing Date, all policies of insurance
required by this Agreement or by a Selling and Servicing Contract
have been validly issued and remain in full force and effect,
including such policies covering the Company, the Master Servicer
or
any Servicer;
(xiii) As of the Closing Date, each insurer issuing a
Primary Insurance Policy holds a rating acceptable to the Rating
Agencies;
(xiv) Each Mortgage was documented by appropriate
FNMA/FHLMC
mortgage instruments in effect at the time of origination, or other
instruments approved by the Company;
(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
99
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 Group I Loans and Group II Loans are
Buydown Loans;
(xix) Based solely on representations of the Mortgagors
obtained at the origination of the related Mortgage Loans,
approximately 98.8% (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 1.2%
(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 0.1% (by Principal Balance) of the
Group I Loans will be secured by Mortgaged Properties which were
investor properties of the related Mortgagors; approximately 68.2%
(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 3.0% (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 28.7% (by Principal Balance) of the Group II Loans
will
be secured by Mortgaged Properties which were investor properties
of
the related Mortgagors; and none of the Group I Loans and Group II
Loans will be secured by interests in Cooperative Apartments;
(xx) Prior to origination or refinancing, an appraisal of
each Mortgaged Property was made by an appraiser on a form
satisfactory to FNMA or FHLMC;
(xxi) The Mortgage Loans have been underwritten
substantially in accordance with the applicable Underwriting
Standards;
(xxii) All of the Mortgage Loans have due-on-sale clauses;
by the terms of the Mortgage Notes, however, the due on sale
provisions may not be exercised at the time of a transfer if
prohibited by law;
(xxiii) The Company used no adverse selection procedures
in
selecting the Mortgage Loans from among the outstanding fixed-rate
conventional mortgage loans 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 88.8% (by Principal
Balance) of the Group I Loans had a current Loan-to-Value Ratio
less
than or equal to 80%, approximately 11.2% (by Principal Balance) of
the Group I Loans had a current Loan-to-Value Ratio greater than
80%
but less than or equal to 95% and no Group I Loan had a current
Loan-to-Value Ratio greater than 95%; and
100
approximately 84.6% (by Principal Balance) of the Group II Loans
had
a current Loan-to-Value Ratio less than or equal to 80%,
approximately 15.4% (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%;
(xxvi) Approximately 56.3% (by Principal Balance) of the
Group I Loans and approximately 49.7% (by Principal Balance) of the
Group II Loans were originated for the purpose of refinancing
existing mortgage debt, including cash-out refinancings, and
approximately 43.7% (by Principal Balance) of the Group I Loans and
approximately 50.3% (by Principal Balance) of the Group II Loans
were
originated for the purpose of purchasing the Mortgaged Property;
(xxvii) Not less than approximately 89.7% and 39.6% (by
Principal Balance) of the Group I Loans and Group II 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
101
within 45 days pursuant to Section 2.02, and, as of the Closing Date,
shall cause to be authenticated and delivered to or upon the order of
the
Company, the Class R-1 Certificates in Authorized Denominations
evidencing
the residual beneficial ownership interest in the REMIC I Trust Fund.
SECTION 2.05. CONVEYANCE OF REMIC II; REMIC ELECTION AND DESIGNATIONS.
A
------------ -------------------------------------------------------
trust ("REMIC II") of which the Trustee is the trustee is hereby created
under the laws of the State of New York for the benefit of the Holders
of
the REMIC II Regular Interests and the Class R-2 Certificates. The
purpose of REMIC II is to hold the REMIC II Trust Fund and provide for
the
issuance, execution and delivery of the REMIC II Regular Interests and
the
Class R-2 Certificates. The assets of REMIC II shall consist of the
REMIC
II Trust Fund. REMIC II shall be irrevocable.
The assets of REMIC II shall remain in the custody of the Trustee,
on
behalf of REMIC II, and shall be kept in REMIC II. Moneys to the credit
of REMIC II shall be held by the Trustee and invested as provided
herein.
All assets received and held in REMIC II will not be subject to any
right,
charge, security interest, lien or claim of any kind in favor of State
Street Bank and Trust Company in its own right, or any Person claiming
through it. The Trustee, on behalf of REMIC II, shall not have the
power
or authority to transfer, assign, hypothecate, pledge or otherwise
dispose
of any of the assets of REMIC II to any Person, except as permitted
herein. No creditor of a beneficiary of REMIC II, of the Trustee, of
the
Master Servicer or of the Company shall have any right to obtain
possession of, or otherwise exercise legal or equitable 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:
102
(I) All accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices of
credit
and investment property consisting of, arising from or relating to
any of the property described below: The uncertificated REMIC I
Regular Interests, including without limitation all rights
represented thereby in and to (i) the Mortgage Loans identified on
the Mortgage Loan Schedule, including the related Mortgage Notes,
Mortgages, Cooperative Stock Certificates, and Cooperative Leases,
all Substitute Mortgage Loans and all distributions with respect to
such Mortgage Loans and Substitute Mortgage Loans payable on and
after the Cut-Off Date, (ii) the Certificate Account, the
Investment
Account, the Custodial Accounts for P&I, the Custodial Accounts for
Reserves, the Reserve Fund, 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
103
term of this Agreement. In connection herewith, the Trustee shall have
all
of the rights and remedies of a secured party and creditor under the
Uniform Commercial Code as in force in the relevant jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.05, and to enter into a
Custodial Agreement for such purpose; provided, however, that the
Trustee
shall be and remain liable for actions of any such Custodian only to the
extent it would otherwise be responsible for such acts hereunder.
The Company and the Trustee agree that the Company, on behalf of
the
REMIC II Trust Fund, shall elect to treat the REMIC II Trust Fund as a
REMIC within the meaning of Section 860D of the Code and, if necessary,
under applicable state laws. Such election shall be included in the Form
1066 and any appropriate state return to be filed on behalf of the REMIC
constituted by the REMIC II Trust Fund for its first taxable year.
The Closing Date is hereby designated as the "startup day" of the
REMIC constituted by the REMIC II Trust Fund within the meaning of
Section
860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC II Trust Fund are
hereby designated as "regular interests" for purposes of Section
860G(a)(1) of the Code. The Class R-2 Certificates are being issued in a
single Class, which is hereby designated as the sole class of "residual
interest" in the REMIC II Trust Fund for purposes of Section 860G(a)(2)
of
the Code.
The parties intend that the affairs of the REMIC II Trust Fund
formed
hereunder shall constitute, and that the affairs of the REMIC II Trust
Fund shall be conducted so as to qualify it as, a REMIC. In furtherance
of
such intention, the Company covenants and agrees that it shall act as
agent for the Tax Matters Person (and the Company is hereby appointed to
act as Tax Matters Person) on behalf of the REMIC II Trust Fund and that
in such capacity it shall: (a) prepare and file, or cause to be prepared
and filed, a federal tax return using a calendar year as the taxable
year
for the REMIC II Trust Fund when and as required by the REMIC provisions
and other applicable federal income tax laws; (b) make an election, on
behalf of the REMIC II Trust Fund, to be treated as a REMIC on the
federal
tax return of the REMIC II Trust Fund for its first taxable year, in
accordance with the 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
104
by law, pending the outcome of such proceedings); provided, that the
Company shall be entitled to be indemnified from the REMIC II Trust Fund
for any such prohibited transaction penalty taxes if the Company's
failure
to exercise reasonable care was not the primary cause of the imposition
of
such prohibited transaction penalty taxes.
In the event that any tax is imposed on "prohibited transactions"
of
the REMIC II Trust Fund as defined in Section 860F of the Code and not
paid by the Company pursuant to clause (f) of the preceding paragraph,
such tax shall be charged against amounts otherwise distributable to the
Holders of the Class R-2 Certificates. Notwithstanding anything to the
contrary contained herein, the Company is hereby authorized to retain
from
amounts otherwise distributable to the Holders of the Class R-2
Certificates on any Distribution Date sufficient funds to reimburse the
Company for the payment of such tax (to the extent that the Company has
not been previously reimbursed therefor and is entitled to such
reimbursement).
SECTION 2.06. ACCEPTANCE BY TRUSTEE; AUTHENTICATION OF
CERTIFICATES.
------------ -----------------------------------------------------
The Trustee acknowledges and accepts the assignment to it of the
property
constituting the REMIC II Trust Fund and declares that as of the Closing
Date it holds and shall hold any documents constituting a part of the
REMIC II Trust Fund, and the REMIC II Trust Fund, as Trustee in trust,
upon the trusts herein set forth, for the use and benefit of all present
and future Holders of the 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 State Street Bank and Trust Company 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.
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
105
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, the Reserve Fund, 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
106
(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.
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.
107
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 and is entitled to such
reimbursement).
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 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.
108
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 Interests and the Class R-1
Certificateholders, and the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full
release, discharge or modification, assignments of Mortgages and
endorsements of Mortgage Notes in connection with refinancings (in
jurisdictions where such assignments are the customary and usual
standard
of practice of mortgage lenders) and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged
Properties. The Trustee shall execute and furnish to the Master
Servicer,
at the Master
109
Servicer's direction, any powers of attorney and other documents
prepared
by the Master Servicer and determined by the Master Servicer to be
necessary or appropriate to enable the Master Servicer to carry out its
supervisory, servicing and administrative duties under this Agreement.
The Master Servicer and each Servicer shall obtain (to the extent
generally commercially available from time to time) and maintain
fidelity
bond and errors and omissions coverage acceptable to FNMA or FHLMC with
respect to their obligations under this Agreement and the applicable
Selling and Servicing Contract, respectively. The Master Servicer or
each
Servicer, as applicable, shall establish escrow accounts for, or pay
when
due (by means of an advance), any tax liens in connection with the
Mortgaged Properties that are not paid by the Mortgagors when due to the
extent that any such payment would not constitute a Nonrecoverable
Advance
when made. Notwithstanding the foregoing, the Master Servicer shall not
permit any modification with respect to any Mortgage Loan that would
both
constitute a sale or exchange of such Mortgage Loan within the meaning
of
Section 1001 of the Code (including any proposed, temporary or final
regulations promulgated thereunder) (other than in connection with a
proposed conveyance or assumption of such Mortgage Loan that is treated
as
a Principal Prepayment or in a default situation) and cause 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, 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.
110
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.
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
111
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.
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
112
(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 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;
113
(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 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
114
required pursuant to such applicable laws and regulations as shall at
any
time be in force and as shall require such additional insurance. Where
any
part of any improvement to the Mortgaged Property (other than a
Mortgaged
Property secured by a Cooperative Loan) is located in a federally
designated special flood hazard area and in a community which
participates
in the National Flood Insurance Program at the time of origination of
the
related Mortgage Loan, the Master Servicer shall cause flood insurance
to
be provided. The hazard insurance coverage required by this Section 3.07
may be met with blanket policies providing protection equivalent to
individual policies otherwise required. The Master Servicer or the
applicable Servicer shall be responsible for paying any deductible
amount
on any such blanket policy. The Master Servicer agrees to present, or
cause to be presented, on behalf of and for the benefit of the Trustee
and
Certificateholders, claims under the hazard insurance policy respecting
any Mortgage Loan, and in this regard to take such reasonable actions as
shall be necessary to permit recovery under such policy.
SECTION 3.08. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
------------ ----------------------------------------------
AGREEMENTS. When any Mortgaged Property is about to be conveyed by the
----------
Mortgagor, the Master Servicer shall, to the extent it has knowledge of
such prospective conveyance and prior to the time of the consummation of
such conveyance, exercise on behalf of the Trustee the Trustee's rights
to
accelerate the maturity of such Mortgage Loan, to the extent that such
acceleration is permitted by the terms of the related Mortgage Note,
under
any "due-on-sale" clause applicable thereto; provided, however, that the
Master Servicer shall not exercise any such right if the due-on-sale
clause, in the reasonable belief of the Master Servicer, is not
enforceable under applicable law or if such exercise would result in
non-coverage of any resulting loss that would otherwise be covered under
any insurance policy. In the event the Master Servicer is prohibited
from
exercising such right, the Master Servicer is authorized to take or
enter
into an assumption and modification agreement from or with the Person to
whom a Mortgaged Property has been or is about to be conveyed, pursuant
to
which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law or unless the Mortgage Note contains
a
provision allowing a qualified borrower to assume the Mortgage Note, the
Mortgagor remains liable thereon; provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters
such agreement) by any related Primary Insurance Policy. The Master
Servicer is also authorized to enter into a substitution of liability
agreement with such Person, pursuant to which the original Mortgagor is
released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. The Master Servicer shall not
enter into any substitution or assumption with respect to a Mortgage
Loan
if such substitution or assumption shall (i) both constitute a
"significant modification" effecting an exchange or reissuance of such
Mortgage Loan under the Code (or Treasury 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.
115
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 shall report such
information to the Internal Revenue Service and the Mortgagor in the
manner required by applicable law.
With respect to each of the Group I-B Certificates and the Group
II-B
Certificates, the Master Servicer may enter into one or more special
servicing agreements with unaffiliated holders of a 100% Percentage
Interest of the Class B Certificate with the lowest priority or holders
of
a 100% interest in a class of securities representing such interests in
such Class, subject to each Rating Agency's acknowledgment that the
Ratings of the Certificates in effect immediately prior to the entering
into of such agreement would not be qualified, downgraded or withdrawn
and
the Certificates would not be placed on credit review status (except for
possible upgrading) as a result of such agreement. Any such agreement
may
contain provisions whereby such holder may (a) instruct the Master
Servicer to instruct a Servicer to the extent provided in the applicable
Selling and Servicing Contract to commence or delay foreclosure
proceedings with respect to delinquent Mortgage Loans provided that the
holder deposits cash with the Master Servicer that will be available for
distribution to Certificateholders if Liquidation Proceeds are less than
they otherwise may have been had the
116
Servicer acted in accordance with its normal servicing procedures, (b)
purchase delinquent Mortgage Loans from the REMIC I Trust Fund
immediately
prior to the commencement of foreclosure proceedings at a price equal to
the aggregate outstanding Principal Balance of such Mortgage Loans plus
accrued interest thereon at the applicable Mortgage Interest Rates
through
the last day of the month in which such Mortgage Loans are purchased or
(c) assume all of the servicing rights and obligations with respect to
delinquent Mortgage Loans so long as (i) the Master Servicer has the
right
to transfer the servicing rights and obligations of such Mortgage Loans
to
another servicer and (ii) such holder will service such Mortgage Loans
in
accordance with the applicable Selling and Servicing Contract.
REMIC I shall not acquire any real property (or personal property
incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. In the event that REMIC I acquires
any real property (or personal property incident to such real property)
in
connection with a default or imminent default of a Mortgage Loan, such
property shall be disposed of by the Master Servicer within two years
after its acquisition by the Master Servicer for REMIC I, unless the
Master Servicer provides to the Trustee an Opinion of Counsel to the
effect that the holding by REMIC I of such Mortgaged Property subsequent
to two years after its acquisition will not result in the imposition of
taxes on "prohibited transactions" of REMIC I as defined in Section 860F
of the Code or under the law of any state in which real property
securing
a Mortgage Loan owned by REMIC I is located or cause REMIC I to fail to
qualify as a REMIC for federal income tax purposes or for state tax
purposes under the laws of any state in which real property securing a
Mortgage Loan owned by REMIC I is located at any time that any
Certificates are outstanding. The Master Servicer shall manage,
conserve,
protect and operate each such property for the Certificateholders solely
for the purpose of its prompt disposition and sale in a manner which
does
not cause such property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) or result in the receipt by the
REMIC of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under the REMIC Provisions.
Pursuant to its efforts to sell such property, the Master Servicer shall
either itself or through an agent selected by the Master Servicer
protect
and conserve such property in the same manner and to such extent as is
customary in the locality where such property is located and may,
incident
to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Master
Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such property.
Additionally, the Master Servicer shall perform the tax withholding and
shall file information returns with respect to the receipt of mortgage
interests received in a trade or business, the reports of foreclosures
and
abandonments of any Mortgaged Property and the information returns
relating to cancellation of indebtedness income with respect to any
Mortgaged Property required by Sections 6050H, 6050J and 6050P,
respectively, of the Code, and deliver to the Trustee an Officers'
Certificate on or before March 31 of each year stating that such reports
have been filed. Such reports shall be in form and substance sufficient
to meet the reporting requirements imposed by Sections 6050H, 6050J and
6050P of the Code.
Notwithstanding any other provision of this Agreement, the Master
Servicer and the Trustee, as applicable, shall comply with all federal
withholding requirements with respect to payments to Certificateholders
of
interest or original issue discount that the Master Servicer or the
Trustee reasonably believes are applicable under the Code. The consent
of
Certificateholders shall not be
117
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 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
000
X&X 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 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
MasterServicer,
at its expense, shall cause a firm of independent public accountants to
furnish
119
a statement to the Trustee to the effect that, in connection with the
firm's examination of the financial statements as of the previous
December
31 of the Master Servicer's parent corporation (which shall include a
limited examination of the Master Servicer's financial statements),
nothing came to their attention that indicated that the Master Servicer
was not in compliance with Section 3.02, Section 3.03, Section 3.04,
Section 3.05, Section 3.11, Section 3.12 and Section 3.13 of this
Agreement, except for (i) such exceptions as such firm believes to be
immaterial, and (ii) such other exceptions as are set forth in such
statement.
SECTION 3.16. [Reserved].
------------
SECTION 3.17. MAINTENANCE OF THE RESERVE FUND; COLLECTIONS
------------ --------------------------------------------
THEREUNDER. On or prior to the Closing Date, the Master Servicer shall
----------
cause to be established and maintained the Reserve Fund in the Reserve
Fund Initial Amount (such amount to be contributed by Xxxxxxxxx, Xxxxxx
&
Xxxxxxxx Securities Corporation) to provide coverage with respect to the
Class I-A-4 Interest Amount and the Class I-A-9 Interest Amount. For
each
of the first twenty-four Distribution Dates, the Master Servicer shall
calculate the Class I-A-4 and Class I-A-9 Interest Amount, and for each
of
the twenty-fifth through thirty-sixth Distribution Dates, the Master
Servicer shall calculate the Class I-A-4 Interest Amount, and shall
notify
the Trustee by Noon New York City time two Business Days prior to the
Distribution Date of such amount or amounts. On each such Distribution
Date, the Trustee shall then withdraw from the Reserve Fund, to the
extent
funds are available therein, the Class I-A-4 and Class I-A-9 Interest
Amount, as applicable, and deposit such amount or amounts in the
Certificate Account. After the thirty-sixth Distribution Date, the
Trustee shall withdraw from the Reserve Fund and pay to Xxxxxxxxx,
Lufkin
& Xxxxxxxx Securities Corporation any amounts then remaining in the
Reserve Fund.
Amounts on deposit in the Reserve Fund shall not be invested and
shall not be held in an interest-bearing account.
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
obligations under the Selling and Servicing Contracts with respect to
the
Master Servicer's duties to be performed prior to its termination
hereunder.
120
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. The Master Servicer's obligation to
make any advance or advances described in this Section 4.02 is effective
only to the extent that such advance is, in the good faith judgment of
the
Master Servicer made on or before the Business Day immediately following
the Withdrawal Date, reimbursable from Insurance Proceeds or Liquidation
Proceeds of the related Mortgage Loans or recoverable as late Monthly
Payments with respect to the related Mortgage Loans or otherwise.
Prior to the close of business on the Business Day immediately
following each Withdrawal Date, the Master Servicer shall determine
whether or not it will make a Monthly P&I Advance on the Business Day
prior to the next succeeding Distribution Date (in the event that the
applicable Servicer fails to make such advances) and shall furnish a
statement to the Trustee, the Paying Agent, if any, and to any
Certificateholder requesting the same, setting forth the aggregate
amount
to be distributed on the next succeeding Distribution Date on account of
principal and interest in respect of the
121
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, if any, to be withdrawn from the Reserve
Fund pursuant to Section 3.17 and the amount of principal and interest,
the Residual Distribution Amount and the Excess Liquidation Proceeds to
be
distributed to each Class of REMIC I Regular Interests, each Class of
REMIC II Regular Interests and each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definitions of "REMIC I Distribution Amount", "REMIC II Distribution
Amount" and "REMIC III Distribution Amount", Section 4.01, Section 4.04
and Section 4.05 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
122
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 Holder, or by any other means of payment acceptable to each such
Holder 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 Holder 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 (i) 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 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.
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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
4.05(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
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distribution from the Certificate Account on a Distribution Date, the
Master Servicer shall prepare and forward to the Trustee (and to the
Company if the Company is no longer acting as Master Servicer), and the
Trustee shall forward to each Certificateholder, a statement setting
forth, to the extent applicable: the amount of the distribution payable
to
the applicable Class that represents principal and the amount that
represents interest, and the applicable Class Principal Balance after
giving effect to such distribution.
Upon request by any Certificateholder or the Trustee, the Master
Servicer shall forward to such Certificateholder, the Trustee and the
Company (if the Company is no longer acting as Master Servicer) an
additional report which sets forth with respect to the Mortgage Loans:
(a) The number and aggregate Principal Balance of the
Mortgage Loans delinquent one, two and three months or more;
(b) The (i) number and aggregate Principal Balance of
Mortgage Loans with respect to which foreclosure proceedings have
been initiated, and (ii) the number and aggregate book value of
Mortgaged Properties acquired through foreclosure, deed in lieu of
foreclosure or other exercise of rights respecting the Trustee's
security interest in the Mortgage Loans, in each case, by Loan
Group;
(c) The amount of the Group I Special Hazard Coverage and
the Group II Special Hazard Coverage available to the Senior
Certificates remaining as of the close of business on the
applicable
Determination Date;
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(d) The amount of the Group I Bankruptcy Coverage and the
Group II Bankruptcy Coverage available to the Senior Certificates
remaining as of the close of business on the applicable
Determination
Date;
(e) The amount of the Group I Fraud Coverage and Group II
Fraud Coverage available to the Senior Certificates remaining as of
the close of business on the applicable Determination Date;
(f) The amount of Realized Losses incurred in respect of
each Loan Group allocable to the Certificates on the related
Distribution Date and the cumulative amount of Realized Losses
incurred in respect of each Loan Group allocated to such
Certificates
since the Cut-Off Date; and
(g) The amounts on deposit in the Reserve Fund.
Upon request by any Certificateholder, the Master Servicer, as soon
as reasonably practicable, shall provide the requesting
Certificateholder
with such information as is necessary and appropriate, in the Master
Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A of the Securities Act.
ARTICLE V
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THE CERTIFICATES
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SECTION 5.01. THE CERTIFICATES.
(a) The Certificates shall be substantially in the forms set forth
in
Exhibit A, B and C with the additional insertion from Exhibit H attached
hereto, and shall be executed by the Trustee, authenticated by the
Trustee
(or any duly appointed Authenticating Agent) and delivered to or upon
the
order of the Company upon receipt by the Trustee of the documents
specified in Section 2.01. The Certificates shall be issuable in
Authorized Denominations evidencing Percentage Interests. Certificates
shall be executed by manual or facsimile signature on behalf of the
Trustee by authorized officers of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were at the time of
execution the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such
Certificates
or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form provided for
herein executed by the Trustee or any Authenticating Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated
the
date of their authentication.
(b) The following definitions apply for purposes of this Section
5.01: "Disqualified Organization" means any Person which is not a
Permitted Transferee, but does not include any "Pass-Through Entity"
which
owns or holds a Residual Certificate and of which a Disqualified
Organization,
125
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 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
126
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.
(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
127
due, if any, shall be remitted by the Company to such
purported
Transferee. The terms and conditions of any sale under this
clause (iii)(B) shall be determined in the sole discretion of
the Company, and the Company shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion.
(iv) The Company, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information
necessary to compute any tax imposed (A) as a result of the
Transfer
of an Ownership Interest in a Residual Certificate to any Person
who
is not a Permitted Transferee, including the information regarding
"excess inclusions" of such Residual Certificates required to be
provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulation Section 1.860D-1(b)(5), and (B) as
a
result of any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate or
organizations
described in Section 1381 of the Code having as among its record
holders at any time any Person who is not a Permitted Transferee.
Reasonable compensation for providing such information may be
required by the Company from such Person.
(v) The provisions of this Section 5.01 set forth prior to
this Section (v) may be modified, added to or eliminated by the
Company and the Trustee, provided that there shall have been
delivered to the Trustee the following:
(A) written notification from each Rating Agencies to
the effect that the modification, addition to or elimination
of
such provisions will not cause such Rating Agencies to
downgrade its then-current Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Company (as evidenced by a certificate of
the Company), to the effect that such modification, addition
to
or absence of such provisions will not cause REMIC I, 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.
(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
128
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 or Residual Certificates presented
for
registration in the name of any Person, the Trustee shall require either
(i) an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee and the Company to the effect that the
purchase or holding of a Class B or Residual Certificate is permissible
under applicable law, will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code, and will not subject the Trustee, the Master Servicer or the
Company
to any obligation or liability (including obligations or liabilities
under
Section 406 of ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Master Servicer or the Company or (ii) only
in
the case of a Class B Certificate, an officer's certificate
substantially
in the form of Exhibit N attached hereto acceptable to and in form and
substance satisfactory to the Trustee and the Company, which officer's
certificate shall not be an expense of the Trustee, the Master Servicer
or
the Company.
(e) No transfer, sale, pledge or other disposition of a Junior
Subordinate Certificate shall be made unless such transfer, sale, pledge
or other disposition is made in accordance with this Section 5.01(e) or
Section 5.01(f); provided that any transfer, sale, pledge or other
disposition of a Junior Subordinate Certificate shall be exempt from the
requirements of this Section 5.01(e) and Section 5.01(f) if each of the
Certificateholders desiring to effect such transfer and such
Certificateholder's transferee are among the following: (i) DLJ Mortgage
Capital, Inc., (ii) Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
and (iii) DLJ Mortgage Acceptance Corp. Each Person who, at any time,
129
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 may be transferred, sold, pledged or otherwise disposed of
in
accordance with the requirements set forth in Section 5.01(f).
(f) To effectuate a Certificate transfer of a Junior Subordinate
Certificate in accordance with this Section 5.01(f), the proposed
transferee of such Certificate must provide the Trustee and the Company
with an investment letter substantially in the form of Exhibit L
attached
hereto, which investment letter shall not be an expense of the Trustee
or
the Company, and which investment letter states that, among other
things,
such transferee (i) is a "qualified institutional buyer" as defined
under
Rule 144A, acting for its own account or the accounts of other
"qualified
institutional buyers" as defined under Rule 144A, and (ii) is aware that
the proposed transferor intends to rely on the exemption from
registration
requirements under the Securities Act provided by Rule 144A.
Notwithstanding the foregoing, the proposed transferee of such
Certificate
shall not be required to provide the Trustee or the Company with Annex 1
or Annex 2 to the form of Exhibit L attached hereto if the Company so
consents prior to each such transfer. Such transfers shall be deemed to
have complied with the requirements of this Section 5.01(f). The Holder
of
a Certificate desiring to effect such transfer does hereby agree to
indemnify the Trustee, the Company, and the Certificate Registrar
against
any liability that may result if transfer is not made in accordance with
this Agreement.
SECTION 5.02. CERTIFICATES ISSUABLE IN CLASSES; DISTRIBUTIONS OF
------------ --------------------------------------------------
PRINCIPAL AND INTEREST; AUTHORIZED DENOMINATIONS. The aggregate
principal
------------------------------------------------
amount of the Certificates that may be authenticated and delivered under
this Agreement is limited to the aggregate Principal Balance of the
Mortgage Loans as of the Cut-Off Date, as specified in the Preliminary
Statement to this Agreement, except for Certificates authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu
of, other Certificates pursuant to Section 5.03. Such aggregate
principal
amount shall be allocated among one or more Classes having designations,
types of interests, initial per annum
130
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 Corporate Trust Office of the Trustee or at the office of
State Street Bank and Trust Company, N.A., 00 Xxxxxxxx, Xxx Xxxx, XX
00000, Attention: Corporate Trust Window, or such other address or
agency
as may hereafter be provided to the Master Servicer in writing by the
Trustee, the Trustee shall execute, and the Trustee or any
Authenticating
Agent shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of Authorized
Denominations of like Percentage Interest. At the option of the
Certificateholders, Certificates may be exchanged for other Certificates
in Authorized Denominations of like Percentage Interest, upon surrender
of
the Certificates to be exchanged at any such office or agency. Whenever
any Certificates are so surrendered for exchange, the Trustee shall
execute, and the Trustee, or any Authenticating Agent, shall
authenticate
and deliver, the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or
surrendered for transfer shall (if so required by the Trustee or any
Authenticating Agent) be duly endorsed by, or be accompanied by a
written
instrument of transfer in form satisfactory to the Trustee or any
Authenticating Agent and duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in
connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be
cancelled by the Trustee or any Authenticating Agent.
SECTION 5.04. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
------------ -------------------------------------------------
(i) any mutilated Certificate is surrendered to the Trustee or any
Authenticating Agent, or (ii) the Trustee or any Authenticating Agent
receives evidence to their satisfaction of the destruction, loss or
theft
of any Certificate, and there is delivered to the Trustee or any
Authenticating Agent 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
131
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 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:
132
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 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.
133
SECTION 5.09. DEFINITIVE CERTIFICATES. If (a) the Master Servicer
------------ -----------------------
notifies the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
Depositary Agreement with respect to the Book-Entry Certificates and the
Trustee or the Master Servicer is unable to locate a qualified
successor,
(b) the Master Servicer, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system with respect to the
Book-Entry Certificates through the Clearing Agency or (c) after the
occurrence of an Event of Default, Certificateholders holding Book-Entry
Certificates evidencing Percentage Interests aggregating not less than
66%
of the aggregate Class Principal Balance of such Certificates advise the
Trustee and the Clearing Agency through DTC Participants in writing that
the continuation of a book-entry system with respect to the Book-Entry
Certificates through the Clearing Agency is no longer in the best
interests of the Certificateholders with respect to such Certificates,
the
Trustee shall notify all Certificateholders of Book-Entry Certificates
of
the occurrence of any such event and of the availability of Definitive
Certificates. Upon surrender to the Trustee of the Book-Entry
Certificates
by the Clearing Agency, accompanied by registration instructions from
the
Clearing Agency for registration, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver the
Definitive Certificates. Neither the Company, the Master Servicer nor
the
Trustee shall be liable for any delay in delivery of such instructions
and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for all of
the
Certificates all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.
SECTION 5.10. OFFICE FOR TRANSFER OF CERTIFICATES. The Trustee
shall
------------ -----------------------------------
maintain in Massachusetts and in New York, New York, an office or agency
where Certificates may be surrendered for registration of transfer or
exchange. State Street Bank and Trust Company, N.A., 00 Xxxxxxxx, Xxx
Xxxx, XX 00000, Attention: Corporate Trust Window, and the Corporate
Trust
Office are initially designated for said purposes.
ARTICLE VI
----------
THE COMPANY AND THE MASTER SERVICER
SECTION 6.01. LIABILITY OF THE COMPANY AND THE MASTER SERVICER. The
------------ ------------------------------------------------
Company and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and
undertaken by the Company or the Master Servicer, as applicable, herein.
SECTION 6.02. MERGER OR CONSOLIDATION OF THE COMPANY, OR THE MASTER
------------ -----------------------------------------------------
SERVICER. Any corporation into which the Company or the Master Servicer
--------
may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Company or the Master
Servicer shall be a party, or any corporation succeeding to the business
of the Company or the Master Servicer, shall be the successor of the
Company or the Master Servicer hereunder, without the execution or
filing
of any paper or any further act on the part of any of the parties
hereto,
anything herein to the contrary notwithstanding.
134
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 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.
135
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 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
136
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 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
137
(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 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
138
may, if it shall be unwilling to so act, or shall if it is unable to so
act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution having a net worth
of
not less than $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Pending any such
appointment, the Trustee is obligated to act in such capacity. In
connection with such appointment and assumption, the Trustee may make
such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however,
that no such compensation shall, together with the compensation to the
Trustee, be in excess of that permitted the Master Servicer hereunder.
The
Trustee and such successor shall take such actions, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 7.03. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any such
------------ ----------------------------------
termination or appointment of a successor to the Master Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders
at
their respective addresses appearing in the Certificate Register.
ARTICLE VIII
------------
CONCERNING THE TRUSTEE
----------------------
SECTION 8.01. DUTIES OF TRUSTEE.
------------ -----------------
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically
set forth in this Agreement. In case an Event of Default has occurred
(which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
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
139
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
------------ -------------------------------------
otherwise provided in Section 8.01:
(i) The Trustee may request and rely upon and shall
be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request,
consent, order, approval, bond or other paper or document believed
by
it to be genuine and to have been signed or presented by the proper
party or parties;
(ii) The Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by
it hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) The Trustee shall not be personally liable for
any
action taken or omitted by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) Prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default which may
have occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by the Holders of Certificates
evidencing Percentage Interests aggregating not less than 25% of
the
REMIC III Trust Fund; provided, however, that if the payment within
a
reasonable time to the Trustee of the costs, expenses
140
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security, if any, afforded to it by
the
terms of this Agreement, the Trustee may require reasonable
indemnity
against such expense or liability as a condition to proceeding;
(v) The Trustee may execute the trust or any of the
powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys; and
(vi) The Trustee shall not be deemed to have
knowledge
or notice of any matter, including without limitation an Event of
Default, unless actually known by a Responsible Officer, or unless
written notice thereof referencing this Agreement or the
Certificates
is received at the Corporate Trust Office at the address set forth
in
Section 10.06.
SECTION 8.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE
LOANS.
------------ -----------------------------------------------------
The recitals contained herein (other than those relating to the due
organization, power and authority of the Trustee) and in the
Certificates
(other than the execution of, and certificate of authentication on, the
Certificates) shall be taken as the statements of the Company and the
Trustee assumes no responsibility for their correctness. The Trustee
makes
no representations as to the validity or sufficiency of this Agreement
or
of the Certificates or any Mortgage Loan. The Trustee shall not be
accountable for the use or application by the Company of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Master Servicer, the Servicers or
the
Company in respect of the Mortgage Loans or deposited into the Custodial
Accounts for P&I, any Buydown Fund Account, or the Custodial Accounts
for
P&I by any Servicer or into the Investment Account, or the Certificate
Account by the Master Servicer or the Company.
SECTION 8.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee or any
agent
------------ ----------------------------
or affiliate of the Trustee, in its individual or any other capacity,
may
become the owner or pledgee of Certificates with the same rights it
would
have if it were not Trustee.
SECTION 8.05. THE MASTER SERVICER TO PAY TRUSTEE'S FEES AND
------------ ---------------------------------------------
EXPENSES. 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.
141
SECTION 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
------------ ------------------------------------
hereunder shall at all times be (i) an institution insured by the FDIC,
(ii) a corporation or association organized and doing business under the
laws of the United States of America or of any state, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of
any
aforementioned supervising or examining authority, then for the purposes
of this Section 8.06, the combined capital and surplus of such
corporation
shall be deemed to be its combined capital and surplus as set forth in
its
most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee shall resign immediately in the manner
and
with the effect specified in Section 8.07.
SECTION 8.07. RESIGNATION AND REMOVAL OF TRUSTEE. The Trustee may
at
------------ ----------------------------------
any time resign and be discharged from the trusts hereby created by
giving
written notice thereof to the Master Servicer. Upon receiving such
notice
of resignation, the Master Servicer shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which
instrument
shall be delivered to the resigning Trustee and one copy to the
successor
trustee. If no successor trustee shall have been so appointed and shall
have accepted appointment within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after
written
request therefor by the Master Servicer, or if at any time the Trustee
shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Master Servicer may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Trustee
so removed, one copy to the successor.
The Holders of Certificates evidencing Percentage Interests
aggregating more than 50% of the REMIC 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
142
predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein.
The
predecessor shall deliver to the successor trustee all Mortgage Files,
related documents, statements and all other property held by it
hereunder,
and the Master Servicer and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the
successor trustee all such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such appointment such successor
trustee
shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided
in
this Section 8.08, the Master Servicer shall mail notice of the
succession
of such trustee hereunder to (i) all Certificateholders at their
addresses
as shown in the Certificate Register and (ii) the Rating Agencies. If
the
Master Servicer fails to mail such notice within ten days after
acceptance
of appointment by the successor trustee, the successor trustee shall
cause
such notice to be mailed.
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation
or
------------ ----------------------------------
association into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a
party,
or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
resulting or successor corporation shall be eligible under the
provisions
of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
------------ ---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the
purpose
of meeting any legal requirements of any jurisdiction in which any part
of
the REMIC I Trust Fund, 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.
143
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 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
144
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
4.05(a) and Section 9.01(b) to the extent directed to do so by the
Master
Servicer. Wherever reference is made in this Agreement to the withdrawal
from the Certificate Account by the Trustee, such reference shall be
deemed to include such a withdrawal on behalf of the Trustee by a Paying
Agent. Whenever reference is made in this Agreement to a distribution by
the Trustee or the furnishing of a statement to Certificateholders by
the
Trustee, such reference shall be deemed to include such a distribution
or
furnishing on behalf of the Trustee by a Paying Agent. Each Paying Agent
shall provide to the Trustee such information concerning the Certificate
Account as the Trustee shall request from time to time. Each Paying
Agent
must be reasonably acceptable to the Master Servicer and must be a
corporation or banking association organized and doing business under
the
laws of the United States of America or of any state, having a principal
office and place of business in New York, New York, having a combined
capital and surplus of at least $15,000,000, authorized under such laws
to
do a trust business and subject to supervision or examination by federal
or state authorities.
Any corporation into which any Paying Agent may be merged or
converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which any Paying Agent shall be a
party, or any corporation succeeding to the corporate 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
145
written notice of termination to such Paying Agent and to the Master
Servicer.
Upon receiving a notice of resignation or upon such a termination, or in
case
at any time any Paying Agent shall cease to be eligible in accordance
with the
provisions of the first paragraph of this Section 8.12, the Trustee may
appoint, upon prior written approval of the Master Servicer, a successor
Paying Agent, shall give written notice of such appointment to the
Master
Servicer and shall mail notice of such appointment to all
Certificateholders.
Any successor Paying Agent upon acceptance of its appointment hereunder
shall
become vested with all the rights, powers, duties and responsibilities
of its
predecessor hereunder, with like effect as if originally named as Paying
Agent. Any reasonable compensation paid to any Paying Agent shall be a
reimbursable expense pursuant to Section 8.05 if paid by the Trustee.
ARTICLE IX
----------
TERMINATION
-----------
SECTION 9.01. TERMINATION UPON REPURCHASE BY THE COMPANY OR
LIQUIDATION
------------
---------------------------------------------------------
OF ALL MORTGAGE LOANS.
---------------------
(a) Except as otherwise set forth in this Article IX, including,
without
limitation, the obligation of the Master Servicer to make payments to
Certificateholders as hereafter set forth, the respective obligations
and
responsibilities of the Company, the Master Servicer and the Trustee
created hereby shall terminate upon (i) the repurchase by the Company
pursuant to the following paragraph of this Section 9.01(a) of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the REMIC I Trust Fund at a price equal, after the
deduction
of related advances, to the sum of (x) the excess of (A) 100% of the
aggregate outstanding Principal Balance of such Mortgage Loans (other
than
Liquidated Mortgage Loans) plus accrued interest at the applicable
Pass-Through Rate with respect to such Mortgage Loan (other than a
Liquidated Mortgage Loan) through the last day of the month of such
repurchase, over (B) with respect to any Mortgage Loan which is not a
Liquidated Mortgage Loan, the amount of the Bankruptcy Loss incurred
with
respect to such Mortgage Loan as of the date of such repurchase by the
Company to the extent that the Principal Balance of such Mortgage Loan
has
not been previously reduced by such Bankruptcy Loss, and (y) the
appraised
fair market value as of the effective date of the termination of the
trust
created hereby of (A) all property in the 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 Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, 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
146
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 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:
147
(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.
148
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 placed on,
a
Certificate shall not be deemed any amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
Master
Servicer, the Company and the Trustee with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than
66%
of the REMIC 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
149
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
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
150
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, 00 Xxxxx Xxxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxxxxx
00000, 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, 00
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxx,
or such other address as may hereafter be furnished to the Trustee and
Master Servicer in writing by S&P and (e) in the case of Fitch, 0 Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Xxxxxx Xxxxxx, 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
151
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;
(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;
152
(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 4.06, Section 3.12, Section 3.13 or Section 3.15
or
any other statements or reports to the Rating Agencies in such time and
manner that such statements or determinations are required to be
provided
to Certificateholders. With respect to the reports described in the
second
paragraph of Section 4.05, the Master Servicer shall provide such
reports
to the Rating Agencies in respect of each Distribution Date, without
regard to whether any Certificateholder or the Trustee has requested
such
report for such Distribution Date.
153
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\Xxxxxxx X. Xxxxxx
------------------------
Its: Assistant Vice President
------------------------
STATE STREET BANK AND TRUST
COMPANY,
-----------------------------------
as TRUSTEE
(SEAL)
By: \s\Xxxxx Xxxxxx
------------------------
Its: Assistant Vice President
------------------------
ACKNOWLEDGEMENT OF CORPORATION
STATE OF ILLINOIS )
) SS.
COUNTY OF LAKE )
On this 28th day of August, 1998 before me, a Notary Public in and for
said
State, personally appeared Xxxxxxx X. Xxxxxx, known to me to be the
Assistant
Secretary 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\Xxxxx X. Xxxxxx
-------------------
Notary Public
(SEAL)
CERTIFICATE OF ACKNOWLEDGEMENT
STATE OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 28th day of August, 1998 before me, a Notary Public in and for
said
State, personally appeared Xxxxx Xxxxxx, personally known to me (or
proved to
me on the basis of satisfactory evidence) to be the person(s) whose
name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies),
and
that by his/her/their signature(s) on the instrument the person(s), or
the
entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and affixed my official seal.
Signature \s\Xxxxx X. Xxxxx (SEAL)
------------------
XXXXX X. XXXXX, NOTARY PUBLIC
MY COMMISSION EXPIRES AUGUST 14, 2003
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 August 28, 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 1998-7 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: 6.710%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-1 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-1
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 August 28, 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 1998-7 Portion of the Class I-A-2 Notional
Amount as of the Cut-Off Date
Evidenced
by this Certificate:
$
------------------------------------
Class I-A-2 Remittance Rate: 6.750% applied to the Class I-A-2
Notional Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-2 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-2 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-2
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 August 28, 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 1998-7 Portion of the Class I-A-3
Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------------
Class I-A-3 Remittance Rate: 6.750%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-3 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-3
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 August 28, 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 1998-7 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: For the first twelve Distribution Dates, 8.000%;
for the thirteenth through the twenty-fourth
Distribution Dates, 7.500%; for the twenty-fifth
through the thirty-sixth Distribution Dates,
7.000%; and thereafter, 6.500%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-4 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-4
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 August 28, 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 1998-7 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: 6.750%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-5 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-5
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 August 28, 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 1998-7 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: 6.750%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-6 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-6
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 August 28, 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 1998-7 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: 6.750%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-7 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-7
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-8 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-8
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 August 28, 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 1998-7 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: For the first twelve Distribution Dates,
7.500%; for the thirteenth through the
twenty-fourth Distribution Dates, 7.000%; and
thereafter, 6.500%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-9 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-9
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 August 28, 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 1998-7 Portion of the Class I-A-10 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
-----------------------------------
Class I-A-10 Remittance Rate: 6.400%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-10 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 6.400%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-11 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 6.400%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-12 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 6.750%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-13 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 0.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-14 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 Portion of the Class I-A-15 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
------------------------------
Class I-A-15 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-15 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-16 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-17 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-18 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 0.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-19 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 Portion of the Class I-A-20
Notional Amount as of the
Cut-Off Date Evidenced by
this Certificate:
$
---------------------------
Class I-A-20 Remittance Rate: 6.750% applied to the Class I-A-20 Notional
Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-20 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-20 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-21 Principal Balance
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 Portion of the Class I-A-22 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
---------------------------------
Class I-A-22 Remittance Rate: For the initial Distribution Date, 6.006%;
and thereafter, LIBOR plus 0.350%, subject
to a minimum and maximum Remittance
Rate of 0.350% and 8.000%, respectively
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-22 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 Portion of the Class I-A-23
Notional Amount as of
the Cut-Off Date Evidenced by
this Certificate:
$
-----------------------------
Class I-A-23 Remittance Rate: For the initial Distribution Date, 1.994%;
and thereafter, 7.650% minus LIBOR, subject
to a minimum and maximum Remittance
Rate of 0.000% and 7.650%, respectively;
in each case applied to the Class
I-A-23 Notional Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-23 Principal Balance
as of the Cut-Off Date: $0.00
Class I-A-23 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
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 August 28, 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 1998-7 Portion of the Class I-A-24 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
--------------------------------
Class I-A-24 Remittance Rate: 7.250%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-24 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-25
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 August 28, 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 1998-7 Portion of the Class I-A-25 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------------
Class I-A-25 Remittance Rate: 6.400%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-25 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-26
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 August 28, 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 1998-7 Portion of the Class I-A-26 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
---------------------------------
Class I-A-26 Remittance Rate: 6.500%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-26 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-00
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-A-27
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 August 28, 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 1998-7 Portion of the Class I-A-27 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------------
Class I-A-27 Remittance Rate: 0.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-A-27 Principal Balance
as of the Cut-Off Date: $
Cede & Co.
Registered Owner
A-27
Exhibit A-I-X-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is August 28, 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 1998-7 Portion of the Class I-X-1 Notional
Amount as of the Cut-Off Date
Evidenced by this Certificate:
$
-------------------------------
Class I-X-1 Remittance Rate: 6.750% applied to the Class I-X-1
Notional Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-X-1 Principal Balance
as of the Cut-Off Date: $0.00
Class I-X-1 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-28
Exhibit A-I-X-2
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is August 28, 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 1998-7 Portion of the Class I-X-2 Notional
Amount as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------------
Class I-X-2 Remittance Rate: 6.750% applied to the Class I-X-2
Notional Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-X-2 Principal Balance
as of the Cut-Off Date: $0.00
Class I-X-2 Notional Amount
as of the Cut-Off Date: $[ ]
Cede & Co.
Registered Owner
A-29
Exhibit A-I-P
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is August 28, 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 1998-7 Portion of the Class I-P Principal
Balance as of the Cut-Off
Date evidenced by this Certificate:
$
--------------------------------
Class I-P Remittance Rate: 0.00%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-P Principal Balance as of the Cut-Off Date:
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-X-X-0
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 August
28, 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 1998-7 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: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-1 Principal Balance
as of the Cut-Off Date: $[ ]
-----------------
Registered Owner
Certificate No.
---------
X-00
Xxxxxxx X-X-X-0
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 August
28, 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 1998-7 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: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-2 Principal Balance
as of the Cut-Off Date: $[ ]
----------------
Registered Owner
Certificate No.
------
X-00
Xxxxxxx X-X-X-0
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 August
28, 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 1998-7 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: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-3 Principal Balance
as of the Cut-Off Date: $[ ]
--------------------
Registered Owner
Certificate No.
--------
X-00
Xxxxxxx X-X-X-0
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 August 28,
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 1998-7 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: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-4 Principal Balance
as of the Cut-Off Date: $[ ]
-------------------
Registered Owner
Certificate No.
-----
X-00
Xxxxxxx X-X-X-0
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 August 28,
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 1998-7 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: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-5 Principal Balance
as of the Cut-Off Date: $[ ]
-------------------
Registered Owner
Certificate No.
---------
X-00
Xxxxxxx X-X-X-0
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 August 28,
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 1998-7 Portion of the Class I-B-6 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------
Class I-B-6 Remittance Rate: Variable
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class I-B-6 Principal Balance
as of the Cut-Off Date: $[ ]
---------------------
Registered Owner
Certificate No.
-------
A-36
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 August 28, 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 1998-7 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: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-A-1 Principal Balance as
of the Cut-Off Date:
Cede & Co.
Registered Owner
A-37
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 August 28, 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 1998-7 Portion of the Class II-X Notional
Amount as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------
Class II-X Remittance Rate: 7.000% applied to the Class
II-X Notional Amount
Cut-Off Date: August 1, 1998
First Distribution Date: September 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-38
Exhibit A-II-P
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended.
The issue date (the "Issue Date") of this Certificate is August 28, 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 1998-7 Portion of the Class II-P Principal
Balance as of the Cut-Off Date
evidenced by this Certificate:
Class II-P Remittance Rate: 0.00% $
------------------------------
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-P Principal Balance
as of the Cut-Off Date:
Cede & Co.
Registered Owner
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is August
28, 1998. [Assuming that the Mortgage Loans underlying the Certificates prepay
at the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-1 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT
THE PURCHASE OR HOLDING OF A CLASS II-B-1 CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE)
IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
MASTER SERVICER OR THE COMPANY.
The Class II-B-1 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-1
Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
---------------------------
Class II-B-1 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-1 Principal Balance
as of the Cut-Off Date: $
------------------
Registered Owner
Certificate No.
---------
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is August
28, 1998. [Assuming that the Mortgage Loans underlying the Certificates prepay
at the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-2 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS OTHERWISE
SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN OPINION OF
COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
A CLASS II-B-2 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY
(INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE
TRUSTEE, THE MASTER SERVICER OR THE COMPANY.
The Class II-B-2 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-2
Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
-----------------------------
Class II-B-2 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-2 Principal Balance
as of the Cut-Off Date: $
------------------
Registered Owner
Certificate No.
------
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Issue Date") of this Certificate is August
28, 1998. [Assuming that the Mortgage Loans underlying the Certificates prepay
at the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-3 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS II-B-3 CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS
OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE)
IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY.
The Class II-B-3 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
---------------------------
Class II-B-3 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-3 Principal Balance
as of the Cut-Off Date: $
------------------
Registered Owner
Certificate No.
--------
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Date") of this Certificate is August 28,
1998. [Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-4 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY
TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING
OF A CLASS II-B-4 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL
NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT
THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN
IN THE POOLING AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE MASTER SERVICER OR THE COMPANY. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES
ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING
AGREEMENT.
The Class II-B-4 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-4
Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------
Class II-B-4 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-4 Principal Balance
as of the Cut-Off Date: $
-------------------
Registered Owner
Certificate No.
--------
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Date") of this Certificate is August 28,
1998. [Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-5 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY
TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF A CLASS II-B-5 CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE
LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE)
IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES MAY
NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE WITH
SECTION 5.01(e) OF THE POOLING AGREEMENT.
The Class II-B-5 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-5 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
---------------------------------
Class II-B-5 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-5 Principal Balance
as of the Cut-Off Date: $
---------------------
Registered Owner
Certificate No.
--------
X-00
Xxxxxxx X-XX-X-0
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class II-B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consists of, among other things,
a pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in Sections
860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended
(the "Code"). The issue date (the "Date") of this Certificate is August 28,
1998. [Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 100% of the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue discount
("OID") of no more than $ per $100,000 of initial Certificate
-----------
Principal Balance, the yield to maturity is %, and the amount of OID
----
attributable to the short period is not more than $ per $100,000 of
-----------
initial Certificate Principal Balance, computed under the exact method. No
representation is made that the Mortgage Loans will prepay at a rate based on
the Basic Prepayment Assumption or any other rate.]
IN THE CASE OF ANY CLASS II-B-6 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT,
AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT
THE PURCHASE OR HOLDING OF A CLASS II-B-6 CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR
THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE)
IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN
ACCORDANCE WITH SECTION 5.01(e) OF THE POOLING AGREEMENT.
The Class II-B-6 Certificates will be subordinate in right of payment to and
provide credit support to certain Classes of Certificates, as described in the
Pooling Agreement.
Series 1998-7 Portion of the Class II-B-6 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$
----------------------------
Class II-B-6 Remittance Rate: 7.000%
Cut-Off Date: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class II-B-6 Principal Balance
as of the Cut-Off Date: $
-------------------
Registered Owner
Certificate No.
------
A-45
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 1998-7 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: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class R Principal Balance as of the Cut-Off Date: $50.00
------------------------
Registered Owner
Certificate No.
------
B-1
Exhibit C-R-1
CUSIP
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-1
Evidencing a Percentage Interest in certain distributions with respect to a
pool of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE COMPANY AND
THE CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY
OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE
DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED
BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R-1 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO
BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A CLASS
R-1 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE
CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
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 1998-7 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: August 1, 1998
First Distribution Date: September 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
This Certificate does not represent an obligation of or interest in PNC
Mortgage Securities Corp. or any of its affiliates, including PNC Bank Corp.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed by
any agency or instrumentality of the United States.
This certifies that the above-named Registered Owner is the registered
owner
of certain interests in a trust fund (the "REMIC I Trust Fund") whose assets
consist of, among other things, a pool (the "Mortgage Pool") of conventional
one- to four-family mortgage loans (the "Mortgage Loans"), formed and
administered by PNC Mortgage Securities Corp. (the "Company"), which term
includes any successor entity under the Pooling Agreement referred to below.
The Mortgage Pool was created pursuant to a Pooling and Servicing Agreement,
dated as of the Cut-Off Date stated above (the "Pooling Agreement"), between
the Company and State Street Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month immediately preceding the month of such distribution
(the "Record Date"), to the extent of such Certificateholder's Percentage
Interest represented by this Certificate in the portion of the REMIC I
Available Distribution Amount for such Distribution Date then distributable on
the Certificates of this Class, as specified in Section 4.01 of the Pooling
Agreement.
Distributions on this Certificate will be made by the Trustee by wire
transfer or check mailed to the address of the Person entitled thereto, as
such
name and address shall appear on the Certificate Register. Notwithstanding the
above, the final distribution on this Certificate will be made after due
notice by the Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this Certificate
set
forth below, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or
on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling Agreement or be valid for any
purpose.
C-1
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
-----------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
--------------------------
Dated:
-----------------------
C-1
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
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
C-1
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-1
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
----------------------------------------
----------------------------------------
----------------------------------------
(Please print or typewrite name and address, including postal zip code of
assignee. Please insert social security or other identifying number of
assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
----------------------------------------
----------------------------------------
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:
------------------------
-------------------------------
Signature Guaranteed
-----------------------------------
NOTICE: The signature to this assignment
must correspond with the name as
written upon the face of the within
instrument in every particular,
without alteration or enlargement
or
any change whatever. This
Certificate does not represent an
obligation of or an interest in PNC
Mortgage Securities Corp. or
any of its affiliates, including
PNC
Bank Corp. Neither this
Certificate
nor the underlying Mortgage Loans
are
guaranteed by any agency or
instrumentality of the United
States.
C-1
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 1998-7 Percentage Interest evidenced
by this Class R-2 Certificate
in the distributions to be made
with respect to the Class R-2
Certificates:
-----------%
Class R-2 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: August 1, 1998
First Distribution Date: September 25, 1998
Last Scheduled Distribution Date:
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
--------------------
Registered Owner
Certificate No.
-----
C-2
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 State Street Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month immediately preceding the month of such distribution
(the "Record Date"), to the extent of such Certificateholder's Percentage
Interest represented by this Certificate in the portion of the REMIC II
Available Distribution Amount for such Distribution Date then distributable on
the Certificates of this Class, as specified in Section 4.06 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-2
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
---------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned Pooling
Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-----------------------
Dated:
-------------------
C-2
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
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
C-2
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-2
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-2
Exhibit D
MORTGAGE LOAN SCHEDULE
Copies of the Mortgage Loan Schedules (which have been intentionally
omitted from this filing) may be obtained from PNC Mortgage Securities Corp.
or State Street Bank and Trust Company by contacting,
in the case of PNC Mortgage Securities Corp.,
Xxxxxx Xxxxx
Master Servicing Department
PNC Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
in the case of State Street Bank and Trust Company,
Xxxxx Xxxxxx
Corporate Trust Department
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
D-1
Exhibit E
SELLING AND SERVICING
---------------------
CONTRACT
--------
This Selling and Servicing Contract (this "Agreement") is made and entered
into by PNC Mortgage Securities Corp. and its successors and assigns ("PNC
Mortgage") and the entity identified below and its successors and assigns (the
"Company").
WITNESSETH:
-----------
WHEREAS, this Company wishes to sell first lien residential mortgage
-------
loans to, and service first lien residential mortgage loans on behalf of, PNC
Mortgage; and
WHEREAS, the Company has submitted a Seller Application to PNC Mortgage
-------
and has been approved by PNC Mortgage for participation in the PNC Mortgage
Purchase Programs; and
WHEREAS, the Company has received and reviewed the PNC Mortgage Purchase
-------
Programs Seller Guide (the "Seller Guide"), as well as the PNC Mortgage
Servicing Guide (the "Servicing Guide" and, together with the Seller Guide,
the "Guides"), and understands each and every provision thereof;
NOW, THEREFORE, in consideration of the premises and of the mutual
--------------
agreements herein contained, PNC Mortgage and the Company hereby agree as
follows:
1. GUIDES. The Guides, which set forth the terms and conditions
------
under which PNC Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of PNC
Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by PNC Mortgage, are incorporated
into this Agreement in full by reference and made a part hereof as fully as if
set forth at length herein. All capitalized terms used and not defined herein
have the meanings ascribed to them in the Guides.
2. COMPANY'S DUTIES. The Company shall diligently perform all duties
----------------
incident to the origination, sale and servicing of the mortgage loans subject
to this Agreement. In the performance of its servicing duties, the Company
shall exercise the same degree of care it exercises when servicing mortgage
loans for its own account, but in no event shall the Company exercise less
care than a reasonable prudent servicer would exercise under similar
circumstances. In addition, the Company shall comply with all of the
provisions of the Guides and with all other requirements and instructions of
PNC Mortgage. The Company shall perform such duties at its sole expense,
except as otherwise expressly provided in the Guides.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY; REMEDIES
------------------------------------------------------------------
OF PNC MORTGAGE. With respect to each mortgage loan sold by the Company to
---------------
PNC Mortgage pursuant to the terms of this Agreement, the Company shall make
all of the representations, warranties and covenants set forth in the Guide
and, in the event of the breach of any of such representations, warranties and
covenants, PNC Mortgage shall have all of the remedies available at law or in
equity, as well as all of the remedies set forth in the Guide, including, but
not limited to, repurchase and indemnification. The representations and
warranties made by the Company with respect to any mortgage loan subject to
this Agreement, as well as the remedies available to PNC Mortgage upon the
breach thereof, shall survive: (a) any investigation regarding the mortgage
loan conducted by PNC Mortgage, its assignees or designees, (b) the
liquidation of the mortgage loan, (c) the purchase of the mortgage loan by PNC
Mortgage, its assignee or designee, (d) the repurchase of the mortgage loan by
the Company and (e) the termination of this Agreement.
4. COMPENSATION. The Company shall be compensated for its services
------------
hereunder as specified in the Guides.
E-1
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.
------------------------------ ------------------------------
Name of the Company Company I.D. Number
------------------------------ ------------------------------
Type of organization Organized under laws of
E-2
-------------------------------------------------------------------
Principal place of business: xxxxxx xxxxxxx, xxxx, xxxxx, zip code
-------------------------------------------------------------------
Typed name and title of the Company's authorized officer
--------------------------------------------- ------------------
Signature of the Company's authorized officer Date
AGREED TO AND ACCEPTED BY PNC MORTGAGE SECURITIES CORP.
-------------------------------------------------------
-------------------------------------------------------------------
Typed name and title of authorized representative
------------------------------------------------ ----------------
Signature of authorized representative Date
E-3
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Re: Purchase of PNC Mortgage Securities Corp. Mortgage
Pass-Through Certificates Series 1998-7, 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
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
PNC Mortgage Securities Corp.
00 X. Xxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
The undersigned (the "Purchaser") proposes to purchase Class [ ]
Certificates evidencing an undivided interest in PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates, Series 1998-7 (the "Purchased
Certificates") in the principal amount of $______________. In doing so, the
Purchaser hereby acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not
otherwise defined herein shall have the meaning ascribed to it in the Pooling
and
Servicing Agreement, dated as of August 1, 1998 (the "Pooling Agreement"), by
and between PNC Mortgage Securities Corp. ("PNC") and State Street Bank and
Trust Company, as trustee (the "Trustee"), of the PNC Mortgage Securities
Corp. Mortgage Pass-Through Certificates, Series 1998-7.
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;
G-1
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from
PNC
concerning the trust funds created pursuant to the Pooling Agreement (the
"Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates
and all matters relating thereto that PNC possesses or can acquire
without
unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will continue
to comply, with the guidelines established by Thrift Bulletin 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
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
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 1998-7
-------------------------------------------------
(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
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
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 State Street Bank and Trust Company, as Trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing herein
shall be deemed inconsistent with such meanings, and in the event of any
conflict between the Pooling Agreement and the terms of this Certificate, the
Pooling Agreement shall control. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Pooling Agreement, to
which Pooling Agreement the Holder of this Certificate, by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Distributions will be made, pursuant to the Pooling Agreement, on the
25th
day of each month or, if such 25th day is not a Business Day, the Business Day
immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month immediately preceding the month of such distribution
(the "Record Date"), to the extent of such Certificateholder's Percentage
Interest represented by this Certificate in the portion of the REMIC 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.
H-1
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
--------------------------------
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-mentioned
Pooling
Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
-------------------------
Dated:
---------------------
H-2
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, 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.
H-3
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
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
Exhibit I
TRANSFEROR CERTIFICATE
----------------------
[Date]
State Street Bank and Trust Company, as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Structured Finance
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
---------------------------------------------------
Certificates, Series 1998-7, 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 1998-7, 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 August 1, 1998 among PNC Mortgage Securities Corp., as depositor
and master servicer (the "Company") and State Street Bank and Trust Company,
as trustee (the "Trustee"). All terms used herein and not otherwise defined
shall have the meanings set forth in the Pooling Agreement. The Seller
hereby certifies, represents and warrants to, and covenants with, the Company
and the Trustee that:
1. No purpose of the Seller relating to the sale of the Certificate by
the
Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee
and the Company a transferee affidavit and agreement in the form attached to
the Pooling Agreement as Exhibit J. The Seller does not know or believe that
any representation contained therein is false.
3. The Seller has no actual knowledge that the proposed Transferee is
not
a
Permitted Transferee.
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. The Seller has conducted a reasonable investigation of the financial
condition of the Purchaser and, as a result of the investigation, found that
the Purchaser has historically paid its debts as they came due, and found no
significant evidence to indicate that the Purchaser will not continue to pay
its debts as they come due in the future.
I-1
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
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
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, 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.
J-2
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
Exhibit K
[RESERVED]
K-1
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 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Seller,
the Trustee and the Master Servicer (as defined in the Pooling and Servicing
Agreement (the "Agreement") dated as of August 1, 1998 between PNC Mortgage
Securities Corp., as Depositor and Master Servicer and State Street Bank and
Trust Company, as Trustee) pursuant to Section 5.01(f) of the Agreement, as
follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Rule 144A Securities.
c. The Buyer has received and reviewed the Private Placement
Memorandum dated as of 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 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
L-1
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]
[3.
The Buyer warrants and represents to, and covenants with, the Trustee, the
Master
Servicer and the Company that (1) the Buyer is not an employee benefit plan
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), subject to the prohibited transaction
provisions of ERISA ("Plan"), or a plan (within the meaning of Section
4975(e)(1) of the Internal Revenue Code of 1986 ("Code")) subject to Section
4975 of the Code (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with "plan assets" of any Plan, (2) the
Buyer's purchase of the Rule 144A Securities is permissible under applicable
law, will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code and will not subject
the Trustee, the Master Servicer or the Company to any obligation or liability
(including obligations or liabilities under Section 406 of ERISA or Section
4975 of the Code) in addition to those undertaken in this Agreement and the
Buyer has provided an Opinion of Counsel to such effect in accordance with
Section 5.01(d) of the Agreement or (3) the Buyer is an insurance company, the
source of funds to be used by it to purchase the Rule 144A Securities is an
"insurance company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase is
being made in reliance upon the availability of the exemptive relief afforded
under Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts and by
the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the
date set forth below.
L-2
----------------------------- ------------------------------
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.: No.:
Date: Date:
L-3
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $ 1 in securities (except for the
---------------
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A)
and (ii) the Buyer satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a bank,
---- -----------------
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code.
---- Bank. The Buyer (a) is a national bank or banking institution
-----
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
---- Savings and Loan. The Buyer (a) is a savings and loan
association,
----------------
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements.
---- Broker-Dealer. The Buyer is a dealer registered pursuant to
Section
--------------
15 of the Securities Exchange Act of 1934.
---- Insurance Company. The Buyer is an insurance company whose
primary
-----------------
and predominant business activity is the writing of insurance or
the
reinsuring of risks underwritten by insurance companies and which
is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
---- State or Local Plan. The Buyer is a plan established and
maintained
--------------------
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for
the benefit of its employees.
---------------------------------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,l000
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
---- 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
-------- -------- 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
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
Print Name of Buyer
By:
Name:
Title:
Date:
IF AN ADVISER:
-----------------------
Print Name of Buyer
By:
Name:
Title:
Date:
(SEAL)
L-2-2
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of August 1, 1998
by and between PNC Mortgage Securities Corp., as Depositor
and Master Servicer, and State Street Bank and Trust
Company,
as Trustee, relating to PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates, Series 1998-7
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
----------------------
State Street Bank and Trust Company, as Trustee
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Structured Finance
PNC Mortgage Securities Corp.
00 Xxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1998-7
(THE "TRUST") CLASS [_-B-_] CERTIFICATES
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, , declare that, to
the
----------------------
best of my knowledge and belief, the following representations are true,
correct and complete; and
1. That I am the of (the
"Purchaser"),
--------------- ------------------
whose taxpayer identification number is , and on behalf of which I
------------
have the authority to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate representing
an
interest in the Trust Funds.
3. That the Purchaser is either:
(a) not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Plan") or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting directly or indirectly on behalf of, or
purchasing any of the Purchased Certificates with "plan assets" of, any
Plan within the meaning of the Department of Labor ("DOL") regulation at
29 C.F.R. Section 2510.3-101; or
(b) an insurance company, the source of funds to be used by it
to
purchase the Purchased Certificates is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class
Exemption
("PTCE") 95-60), and the purchase is being made in reliance upon the
availability of the exemptive relief afforded under Sections I and III of
PTCE 95-60.
N-1
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
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
