1
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$990,819,514
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1999-4
Cut-Off Date: April 1, 1999
This Pooling and Servicing Agreement, dated and effective as of
April 1, 1999 (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 PNC Mortgage
Loans and the other property being conveyed by it to the Trustee for
inclusion in the Trust Fund. On the Closing Date, the Company will
acquire the REMIC I Regular Interests and the Class R-1 Certificates
from the REMIC I Trust Fund as consideration for its transfer to the
Trust Fund of the PNC Mortgage Loans and certain other assets and the
deposit into the Certificate Account of the Clipper Mortgage Loan
Purchase Amount and will be the owner of the 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 PNC 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 Clipper
Mortgage Loans pursuant to the Clipper Loan Sale Agreement and (iii) 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
interest of REMIC II and (iv) the conveyance to the Trustee of the REMIC
II Regular Interests and the issuance to the Company 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
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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 January 27, 1999, and a Prospectus Supplement, dated
April 27, 1999, of the Company (together, the "Prospectus"). The Junior
Subordinate Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated April 29, 1999. The 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 Certificate Interest Rate,
initial Class Principal Balance, initial Class Notional Amount, initial
Component Principal Balance, initial Component Notional Amount and Final
Maturity Date for the REMIC I Regular Interests, the REMIC II Regular
Interests and the Certificates:
REMIC I Trust Fund
Class Designation
for each REMIC I
Regular Interest
and the Class R-1 Type of Remittance Initial Class Final
Maturity
Certificates Interest Rate (1) Principal Balance Date*
----------------- -------- ------------- ----------------- ------------
--
Class C-Y-1 Regular 6.750% 221,189.09 June 2029
Class C-Y-2 Regular 6.500% 75,181.67 May 2029
Class C-Z-1 Regular 6.750% 442,156,991.45 June 2029
Class C-Z-2 Regular 6.500% 151,216,182.60 May 2029
Class D-Y-1 Regular 7.000% 87,600.27 June 2029
Class D-Y-2 Regular 7.250% 108,604.63 June 2029
Class D-Z-1 Regular 7.000% 175,412,413.90 June 2029
Class D-Z-2 Regular 7.250% 217,100,652.19 June 2029
Class I-X-M Regular 6.750% (2) ------------- June 2029
Class II-X-M Regular 7.000% (2) ------------- June 2029
Class III-X-M Regular 7.250% (2) ------------- June 2029
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Class I-P-M Regular (3) 2,730,470.04 June 2029
Class II-P-M Regular (3) 597,787.46 June 2029
Class III-P-M Regular (3) 1,112,392.28 June 2029
Class R-1+ Residual 6.500% 50.00 May 2029
*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 any 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
Certificate Interest Rate on the Class Principal Balance or Class
Notional Amount outstanding following the immediately prior Distribution
Date (or with respect to the first Distribution Date, as of the Closing
Date).
(2) 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.
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.
REMIC II
Class Designation
for each REMIC II
Regular Interest
and the Class R-2 Type of Remittance Initial Class Final
Maturity
Certificates Interest Rate (1) Principal Balance Date*
----------------- -------- ------------- ----------------- ------------
--
Class I-A-1-L (2) (2) 80,830,470.00 June 2029
Class I-A-2-1-L Regular 6.750% 44,961,328.65 June 2029
Class I-A-2-2-L Regular 6.750% 13,539,671.35 June 2029
Class I-A-3-L Regular 6.750% 144,551,000.00 June 2029
Class I-A-4-L Regular 6.750% (3) 13,627,000.00 June 2029
Class I-A-5-1-L Regular 6.750% 6,024,080.09 June 2029
Class I-A-5-2-L Regular 6.750% 3,710,919.91 June 2029
Class I-A-6-L Regular 6.750% 47,746,000.00 June 2029
Class I-A-7-1-L Regular 6.750% 11,142,769.06 June 2029
Class I-A-7-2-L Regular 6.750% 5,010,292.94 June 2029
Class I-A-8-1-L Regular 6.750% 19,904,525.94 June 2029
Class I-A-8-2-L Regular 6.750% 34,644,474.06 June 2029
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Class I-A-10-L Regular 6.750% 499,000.00 June 2029
Class II-A-1-L Regular 7.000% 160,971,945.00 June 2029
Class III-A-1-L Regular 7.250% 199,197,720.00 June 2029
Class IV-A-1-L Regular 6.500% 83,477,000.00 May 2029
Class IV-A-2-L Regular 6.500% 10,097,000.00 May 2029
Class IV-A-3-L Regular 6.500% 10,046,000.00 May 2029
Class IV-A-4-L Regular 6.500% 14,484,686.00 May 2029
Class IV-A-5-L Regular 6.750% 1,010,000.00 May 2029
Class IV-A-6-L Regular 6.750% 2,277,000.00 May 2029
Class IV-A-7-L Regular 6.750% 2,061,000.00 May 2029
Class IV-A-8-L Regular (4) 205,693.00 May 2029
Class IV-A-9-L Regular 6.500% 21,203,000.00 May 2029
Class I-X-L Regular 6.750% (5) -------------- June 2029
Class II-X-L Regular 7.000% (5) -------------- June 2029
Class III-X-L Regular 7.250% (5) -------------- June 2029
Class II-P-L Regular (4) 597,787.46 June 2029
Class III-P-L Regular (4) 1,112,392.28 June 2029
Class C-B-1-L Regular Variable (6) 11,629,801.00 June 2029
Class C-B-2-L Regular Variable (6) 6,262,201.00 June 2029
Class C-B-3-L Regular Variable (6) 2,385,600.00 June 2029
Class C-B-4-L Regular Variable (6) 2,087,401.00 June 2029
Class C-B-5-L Regular Variable (6) 1,490,999.00 June 2029
Class C-B-6-L Regular Variable (6) 1,491,001.73 June 2029
Class D-B-1-L Regular Variable (7) 13,804,680.00 June 2029
Class D-B-2-L Regular Variable (7) 7,493,970.00 June 2029
Class D-B-3-L Regular Variable (7) 4,141,404.00 June 2029
Class D-B-4-L Regular Variable (7) 3,155,355.00 June 2029
Class D-B-5-L Regular Variable (7) 1,774,888.00 June 2029
Class D-B-6-L Regular Variable (7) 2,169,308.25 June 2029
Class R-3-L Regular 6.500% 50.00 May 2029
Class R-2+ Residual 6.500% 50.00 May 2029
*The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group (or Loan Groups, as
applicable) matures.
+The Class R-2 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1)Interest distributed to the REMIC II Regular Interests (other than the
Class P-L and Class IV-A-8-L Regular Interests and Component I-A-1-4-L
of the Class I-A-1-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
Certificate Interest Rate on the Class Principal Balance, Class Notional
Amount or Component Principal Balance outstanding following the
immediately prior Distribution Date (or, with respect to the first
Distribution Date, as of the Closing Date).
(2)For purposes of calculating distributions, Class I-A-1-L will be
comprised of two Components having the designations, initial Component
Principal Balances and Certificate Interest Rates set forth below:
Initial ComponentCertificate
DesignationPrincipal BalanceInterest Rate
Component I-A-1-4-L 2,730,470.04 (A)
Component I-A-1-5-L 78,100,000 6.750% (B)
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Each of the Components listed here will be a regular interest in REMIC
II.
(A) Component I-A-1-4-L will not be entitled to receive any
distributions of interest.
(B) On each Distribution Date on or before the Component I-A-1-5
Accretion Termination Date, an amount equal to the Component I-A-1-5
Accrual Amount will be added to the Component I-A-1-5-L Principal
Balance, and such amount will be distributed as principal to certain
Group I-A-L Regular Interests as set forth herein and will not be
distributed as interest to Component I-A-1-5-L.
(3) On each Distribution Date on or before the Class I-A-4 Accretion
Termination Date, an amount equal to the Class I-A-4 Accrual Amount will
be added to the Class I-A-4-L Principal Balance, and such amount will be
distributed as principal to certain Classes of Group I-A-L Regular
Interests and will not be distributed as interest to the Class I-A-4-L
Regular Interests.
(4)The Class P-L and Class IV-A-8-L Regular Interests shall not be
entitled to receive any distributions of interest.
(5)Each of the Class X-L Regular Interests shall accrue interest on the
related Class Notional Amount. The Class X-L Regular Interests shall
not be entitled to receive any distributions of principal.
(6)The Certificate Interest Rate on each Class of the Group C-B-L Regular
Interests shall equal, on any Distribution Date, the weighted average of
the Certificate Interest Rates on the Class C-Y-1 and Class C-Y-2
Regular Interests.
(7)The Certificate Interest Rate on each Class of the Group D-B-L Regular
Interests shall equal, on any Distribution Date, the weighted average of
the Certificate Interest Rates on the Class D-Y-1 and Class D-Y-2
Regular Interests.
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.
REMIC III
Class Designation
for each REMIC III
Regular Interest
and the Class R-3 Type of Remittance Initial Class Final
Maturity
Certificates Interest Rate (1) Principal Balance Date*
----------------- -------- ------------- ----------------- ------------
--
Class I-A-1 (2) (2) 80,830,470.04 June 2029
Class I-A-2 Regular 6.200% 58,501,000.00 June 2029
Class I-A-3 Regular 6.150% 144,551,000.00 June 2029
Class I-A-4 Regular 6.750% (3) 13,627,000.00 June 2029
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Class I-A-5 Regular 6.200% 9,735,000.00 June 2029
Class I-A-6 Regular 6.050% 47,746,000.00 June 2029
Class I-A-7 Regular 6.400% 16,153,062.00 June 2029
Class I-A-8 Regular 6.200% 54,549,000.00 June 2029
Class I-A-9 Regular 6.750% (4) ---------------- June 2029
Class I-A-10 Regular 6.750% 499,000.00 June 2029
Class II-A-1 Regular 7.000% 160,971,945.00 June 2029
Class III-A-1 Regular 7.250% 199,197,720.00 June 2029
Class IV-A-1 Regular 6.500% 83,477,000.00 May 2029
Class IV-A-2 Regular 6.500% 10,097,000.00 May 2029
Class IV-A-3 Regular 6.500% 10,046,000.00 May 2029
Class IV-A-4 Regular 6.500% 14,484,686.00 May 2029
Class IV-A-5 Regular 6.750% 1,010,000.00 May 2029
Class IV-A-6 Regular 6.750% 2,277,000.00 May 2029
Class IV-A-7 Regular 6.750% 2,061,000.00 May 2029
Class IV-A-8 Regular (5) 205,693.00 May 2029
Class IV-A-9 Regular 6.500% 21,203,000.00 May 2029
Class I-X Regular 6.750% (4) -------------- June 2029
Class II-X Regular 7.000% (4) -------------- June 2029
Class III-X Regular 7.250% (4) -------------- June 2029
Class II-P Regular (5) 597,787.46 June 2029
Class III-P Regular (5) 1,112,392.28 June 2029
Class C-B-1 Regular Variable (6) 11,629,801.00 June 2029
Class C-B-2 Regular Variable (6) 6,262,201.00 June 2029
Class C-B-3 Regular Variable (6) 2,385,600.00 June 2029
Class C-B-4 Regular Variable (6) 2,087,401.00 June 2029
Class C-B-5 Regular Variable (6) 1,490,999.00 June 2029
Class C-B-6 Regular Variable (6) 1,491,001.73 June 2029
Class D-B-1 Regular Variable (7) 13,804,680.00 June 2029
Class D-B-2 Regular Variable (7) 7,493,970.00 June 2029
Class D-B-3 Regular Variable (7) 4,141,404.00 June 2029
Class D-B-4 Regular Variable (7) 3,155,355.00 June 2029
Class D-B-5 Regular Variable (7) 1,774,888.00 June 2029
Class D-B-6 Regular Variable (7) 2,169,308.25 June 2029
Class R-3+ Residual 6.500% 50.00 May 2029
*The Distribution Date in the month following the month the latest
maturing Mortgage Loan in the related Loan Group (or Loan Groups)
matures.
+ The Class R-3 Certificates are entitled to receive the applicable
Residual Distribution Amount.
(1) Interest distributed to the Certificates (other than the Class P and
Class IV-A-8 Certificates and Component I-A-1-4, which will not be
entitled to receive any distributions of interest) and the Class R-3
Certificates on each Distribution Date will have accrued at the
applicable per annum Certificate Interest Rate on the Class Principal
Balance, Class Notional Amount, Component Principal Balance or Component
Notional Amount outstanding following the immediately prior Distribution
Date (or, with respect to the first Distribution Date, as of the Closing
Date).
(2)For purposes of calculating distributions, Class I-A-1 will be
comprised of five Components having the designations, initial Component
Principal Balances and Certificate Interest Rates set forth below:
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Initial ComponentCertificate
Designation Principal Balance Interest Rate
Component I-A-1-1 --------------- 6.750% (A)
Component I-A-1-2 --------------- 6.750% (A)
Component I-A-1-3 --------------- 6.750% (A)
Component I-A-1-4 2,730,470.04 (B)
Component I-A-1-5 78,100,000.00 6.750% (C)
Each of the Components listed here will be a regular interest in
REMIC III.
(A) Component I-A-1-1, Component I-A-1-2 and Component I-A-1-3 will each
accrue interest on the related Component Notional Amount.
(B) Component I-A-1-4 will not be entitled to receive any
distributions of interest.
(C) On each Distribution Date on or before the Component I-A-1-5
Accretion Termination Date, an amount equal to the Component I-
A-1-5 Accrual Amount will be added to the Component I-A-1-5
Principal Balance, and such amount will be distributed as
principal to certain Group I-A Certificates as set forth
herein and will not be distributed as interest to Component I-
A-1-5.
(3) On each Distribution Date on or before the Class I-A-4 Accretion
Termination Date, an amount equal to the Class I-A-4 Accrual Amount will
be added to the Class I-A-4 Principal Balance, and such amount will be
distributed as principal to certain Classes of Group I-A Certificates
and will not be distributed as interest to the Class I-A-4 Certificates.
(4) Each of the Class X and Class I-A-9 Certificates shall accrue
interest on the related Class Notional Amount. The Class X and Class I-
A-9 Certificates shall not be entitled to receive any distributions of
principal.
(5)The Class P and Class IV-A-8 Certificates shall not be entitled to
receive any distributions of interest.
(6)The Certificate Interest Rate on each Class of the Group C-B
Certificates shall equal, on any Distribution Date, the Certificate
Interest Rate on their respective Corresponding Class.
(7)The Certificate Interest Rate on each Class of the Group D-B
Certificates shall equal, on any Distribution Date, the Certificate
Interest Rate on their respective Corresponding Class.
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 $990,819,514.84 and the
Certificates have an Aggregate Certificate Principal Balance of
$990,819,514.04.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized and existing
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under and by virtue of the laws of the State of Delaware and has full
corporate power and authority to enter into this Agreement and to
undertake the obligations undertaken by it herein;
WHEREAS, the Company is the owner of the PNC Mortgage Loans
identified in the Mortgage Loan Schedule hereto having unpaid Principal
Balances on the Cut-Off Date as stated therein;
WHEREAS, the Company has been duly authorized to (i) create a trust
(the "Trust Fund") to hold the PNC Mortgage Loans, the Clipper Mortgage
Loans and certain other property and (ii) sell undivided beneficial
ownership interests in REMIC I and in order to do so is selling the
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;
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 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:
Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following
meanings:
Accretion Directed Classes: The Class I-A-3 and Class I-A-4
Certificates and their Corresponding Classes.
Accretion Directed Component: Component I-A-1-5 and its
Corresponding Component.
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
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Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the Certificates (other
than the Class X, Class I-A-9, Class IV-A-3, Class IV-A-5, Class IV-A-6,
Class IV-A-7 and Residual Certificates), an initial Certificate
Principal Balance equal to $25,000 and multiples of $1 in excess
thereof. With respect to the Class IV-A-3, Class IV-A-5, Class IV-A-6
and Class IV-A-7 Certificates, an initial Certificate Principal Balance
equal to $1,000 and multiples of $1 in excess thereof. With respect to
the Class X and Class I-A-9 Certificates, a Class Notional Amount as of
the Cut-Off Date equal to $100,000 and multiples of $1 in excess
thereof, except that one Certificate of each Class of Class X and Class
I-A-9 Certificates may be offered in a different amount. With respect to
each Class of the Residual Certificates, one Certificate with a
Percentage Interest equal to 0.01% and one Certificate with a Percentage
Interest equal to 99.99%.
Bankruptcy Coverage: With respect to Loan Group I and Loan Group
IV, $186,986 less (a) any scheduled or permissible reduction in the
amount of Bankruptcy Coverage for such Loan Groups pursuant to this
definition and (b) Bankruptcy Losses allocated to the Group I-L, Group
IV-L and Group C-B-L Regular Interests and the Class R-1 and Class R-2
Certificates.
With respect to Loan Group II and Loan Group III, $153,275 less (a)
any scheduled or permissible reduction in the amount of Bankruptcy
Coverage for such Loan Groups pursuant to this definition and (b)
Bankruptcy Losses allocated to the Group II-L, Group III-L and Group D-B-
L Regular Interests.
The Bankruptcy Coverage for Loan Group I and Loan Group IV and the
Bankruptcy Coverage for Loan Group II and Loan Group III may be reduced
upon written confirmation from the Rating Agencies that such reduction
will not adversely affect the then current ratings assigned to the
Certificates by the Rating Agencies.
Bankruptcy Loss: A loss on a Mortgage Loan arising out of (i) a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a
court of competent jurisdiction in a case under the United States
Bankruptcy Code, other than any such reduction that arises out of clause
(ii) of this definition of "Bankruptcy Loss", including, without
limitation, any such reduction that results in a permanent forgiveness
of principal, or (ii) with respect to any Mortgage Loan, a valuation, by
a court of competent jurisdiction in a case under such Bankruptcy Code,
of the related Mortgaged Property in an amount less than the then
outstanding Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect
DTC Participant or a Person holding a beneficial interest in any
Definitive Certificate.
Book-Entry Certificates: The Class A (other than the Class I-A-10
Certificates), Class X and Class P Certificates, beneficial ownership
and transfers of which shall be made through book entries as described
in Section 5.07; provided that the Class I-A-1 Certificates shall be
issued initially in definitive form and thereafter will be issued as
"Book-Entry Certificates" upon the order of the Company.
Business Day: Any day other than a Saturday, a Sunday, or a day on
10
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, Group III, Group IV,
Group C-B, Group D-B or Residual Certificates, issued pursuant to this
Agreement, executed by the Trustee and authenticated by or on behalf of
the Trustee hereunder in substantially one of the forms set forth in
Exhibit A and B hereto. The additional matter appearing in Exhibit H
shall be deemed incorporated into Exhibit A as though set forth at the
end of such Exhibit.
Certificate Account: The separate trust account created and
maintained with the Trustee, the Investment Depository or any other bank
or trust company acceptable to the Rating Agencies which is incorporated
under the laws of the United States or any state thereof pursuant to
Section 3.04, which account shall bear a designation clearly indicating
that the funds deposited therein are held in trust for the benefit of
the Trustee on behalf of the Certificateholders or any other account
serving a similar function acceptable to the Rating Agencies. Funds in
the Certificate Account in respect of the Mortgage Loans in each of the
Loan Groups and amounts withdrawn from the Certificate Account
attributable to each of such Loan Groups shall be accounted for
separately. Funds in the Certificate Account may be invested in
Eligible Investments pursuant to Section 3.04(b) and reinvestment
11
earnings thereon shall be paid to the Master Servicer as additional
servicing compensation. Funds deposited in the Certificate Account
(exclusive of the Master Servicing Fee) shall be held in trust for the
Certificateholders and for the uses and purposes set forth in Section
2.01, Section 3.04, Section 3.05, 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 Interest Rate: For each Class or Component of
Certificates and REMIC I and REMIC II Regular Interests, the per annum
rate set forth as the Certificate Interest Rate for such Class or
Component in the Preliminary Statement hereto.
Certificate Principal Balance: For each Certificate of any Class,
the portion of the related Class Principal Balance, if any, represented
by such Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed, respectively, pursuant to
Section 5.03.
Class: All REMIC I Regular Interests or the Class R-1 Certificates
having the same priority and rights to payments on the Mortgage Loans
from the REMIC I Available Distribution Amount, all REMIC II Regular
Interests or the Class R-2 Certificates having the same priority and
rights to payments on the REMIC I Regular Interests from the REMIC II
Available Distribution Amount, and all REMIC III Regular Interests or
the Class R-3 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 REMIC I Regular Interests,
REMIC II Regular Interests, REMIC III Regular Interests and Residual
Certificates, as applicable, shall be designated as a separate Class,
and which, in the case of the Certificates, shall be set forth in the
applicable forms of Certificates attached hereto as Exhibits A and B.
Each Class of REMIC I Regular Interests and the Class R-1 Certificates
shall be entitled to receive the amounts allocated to such Class
pursuant to the definition of "REMIC I Distribution Amount" only to the
extent of the REMIC I Available Distribution Amount for such
Distribution Date remaining after distributions in accordance with prior
clauses of the definition of "REMIC I Distribution Amount," 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
12
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, Class II-A-1, Class III-A-1
and Group IV-A Certificates.
Class A-L Regular Interests: The Group I-A-L, Class II-A-1-L, Class
III-A-1-L and Group IV-A-L Regular Interests.
Class B Certificates: The Group C-B and Group D-B Certificates.
Class ▇-▇ Regular Interests: The Group C-B-L and Group D-B-L
Regular Interests.
Class C-B-1 Certificates: The Certificates designated as "Class C-B-
1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-1-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class C-B-2 Certificates: The Certificates designated as "Class C-B-
2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class C-B-3 Certificates: The Certificates designated as "Class C-B-
3" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-3-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class C-B-4 Certificates: The Certificates designated as "Class C-B-
4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-4-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class C-B-5 Certificates: The Certificates designated as "Class C-B-
5" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-5-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
13
Class C-B-6 Certificates: The Certificates designated as "Class C-B-
6" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class C-B-6-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class C-Y Regular Interests: The Class C-Y-1 and Class C-Y-2
Regular Interests.
Class C-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 C-Y-1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class C-Y-1 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class C-Y-1 Regular Interest on such Distribution Date.
Class C-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 C-Y-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class C-Y-2 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class C-Y-2 Regular Interest on such Distribution Date.
Class C-Y Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Class Principal Balances of the Class C-Y-1 and
Class C-Y-2 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 Group I Subordinate Balance after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
PIVB = the Group IV Subordinate Balance after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
R = the Certificate Interest Rate on the Group C-B Certificates =
(6.75%PIB + 6.50%PIVB)/(PIB + PIVB)
CY1 = the Class C-Y-1 Principal Balance after distributions on the
prior Distribution Date.
CY2 = the Class C-Y-2 Principal Balance after distributions on the
prior Distribution Date.
DELTACY1 = the Class C-Y-1 Principal Reduction Amount.
DELTACY2 = the Class C-Y-2 Principal Reduction Amount.
P1 = the aggregate Class Principal Balance of the Class C-Y-1 and
14
Class C-Z-1 Regular Interests after distributions on the prior
Distribution Date.
P2 = the aggregate Class Principal Balance of the Class C-Y-2 and
Class C-Z-2 Regular Interests after distributions on the prior
Distribution Date.
DELTAP1 = the aggregate of the Class C-Y-1 and Class C-Z-1 Principal
Reduction Amounts.
DELTAP2= the aggregate of the Class C-Y-2 and Class C-Z-2 Principal
Reduction Amounts.
▇▇▇▇▇▇ .▇▇▇▇
▇▇▇▇▇▇ = (R - 6.50%)/(6.75% - R). gamma1 is a non-negative number
unless its denominator is zero, in which event it is undefined.
If gamma1 is zero, DELTACY1 = CY1 and DELTACY2 = (CY2/P2)DELTAP2.
If gamma1 is undefined, DELTACY2 = CY2, DELTACY1 = (CY1/P1)DELTAP1.
In the remaining situations, DELTACY1 and DELTACY2 shall be defined as
follows:
1. If CY1 - alpha(P1 - DELTAP1) 0, CY2- alpha(P2 - DELTAP2) 0, and
gamma1(P2 - DELTAP2) < (P1 - DELTAP1), DELTACY1 = CY1 - alphagamma1(P2 -
DELTAP2) and DELTACY2 = CY2 - alpha(P2 - DELTAP2).
2. If CY1 - alpha(P1 - DELTAP1) 0, CY2 - alpha(P2 - DELTAP2) 0, and
gamma1(P2 - DELTAP2) (P1 - DELTAP1),
DELTACY1 = CY1 - alpha(P1 - DELTAP1) and
DELTACY2 = CY2 - (alpha/gamma1)(P1 - DELTAP1).
3. If CY1 - alpha(P1 - DELTAP1) < 0, CY2 - alpha(P2 - DELTAP2) 0, and
CY2 - alpha(P2 - DELTAP2) CY2 - (CY1/gamma1),
DELTACY1 = CY1 - alphagamma1(P2 - DELTAP2) and
DELTACY2 = CY2 - alpha(P2 - DELTAP2).
4. If CY1 - alpha(P1 - DELTAP1) < 0, CY2 - (CY1/gamma1) 0, and
CY2 - alpha(P2 - DELTAP2) CY2 - (CY1/gamma1), DELTACY1 = 0 and
DELTACY2 = CY2 - (CY1/gamma1).
5. If CY2 - alpha(P2 - DELTAP2) < 0, CY2 - (CY1/gamma1) < 0, and
CY1 - alpha(P1 - DELTAP1) CY1 - (gamma1CY2),
DELTACY1 = CY1 - (gamma1CY2) and DELTACY2 = 0.
6. If CY2 - alpha(P2 - DELTAP2) < 0, CY1 - alpha(P1 - DELTAP1) 0, and
CY1 - alpha(P1 - DELTAP1) CY1 - (gamma1CY2),
DELTACY1 = CY1 - alpha(P1 - DELTAP1) and
DELTACY2 = CY2 - (alpha/gamma1)(P1 - DELTAP1).
15
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class C-Y
and Class C-Z Principal Distribution Amounts is to accomplish the
following goals in the following order of priority:
1. Making the ratio of CY1 to CY2 equal to gamma1 after taking account
of the allocation of 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 C-Y-1, Class C-Y-2, Class C-Z-1 and Class C-Z-2 Regular Interests
is greater than or equal to zero for such Distribution Date;
2. Making the Class C-Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class C-Y-1 and Class C-Z-1 Principal Balances
and the Class C-Y-2 Principal Balance less than or equal to 0.0005 of
the sum of the Class C-Y-2 and Class C-Z-2 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 CY2 and
whose denominator is the sum of CY2 and the Class C-Z-2 Principal
Balance and (b) the fraction whose numerator is CY2 and whose
denominator is the sum of CY2 and the Class C-Z-1 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 C-Y Principal Reduction Amount to accomplish both of goals 1 and 2
above, the amounts thereof should be adjusted so as to accomplish such
goals within the requirement that each Class C-Y Principal Reduction
Amount must be less than or equal to the sum of (a) the principal
portion of Realized Losses to be allocated on the related Distribution
Date for the related Loan Group remaining after the allocation of such
Realized Losses to the related Class P-M Regular Interest and (b) the
remainder of the REMIC I Available Distribution Amount for the related
Loan Group or after reduction thereof by the distributions to be made on
such Distribution Date (i) to the related Class P-M Regular Interest, if
any, (ii) to the related Class X-M Regular Interest, if any, and (iii)
in respect of interest on the related Class C-Y and Class C-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 C-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.
In the execution copy of this Agreement, symbols are represented by
the following labels; in any conformed copy of this Agreement, such
symbols may be represented by characters other than numerals and the
upper and lower case letters of the alphabet and standard punctuation,
including, without limitation, Greek letters and mathematical symbols.
16
Example:
alpha symbol alpha
delta symbol DELTA
gamma symbol Gamma
To calculate the initial Class Principal Balances for the Class C-Y-
1, Class C-Y-2, Class C-Z-1 and Class C-Z-2 Regular Interests, first
calculate the Group I and Group IV Subordinate Balances as of the Cut-
Off Date. Then calculate R according to the definition above.
Calculate gamma1 according to the definition above. Calculate P1 as the
aggregate Class Principal Balance of the Group I Certificates reduced by
the Component I-A-1-4 Principal Balance. Calculate P2 as the aggregate
Class Principal Balance of the Group IV Certificates.
If 0.0005 gamma1 P2 0.0005 P1, CY2 = 0.0005 P2, and
CY1 = 0.0005 gamma1 P2.
If 0.0005 gamma1 P2 > 0.0005 P1, CY1 = 0.0005 P1 and
CY2 = 0.0005 P1/gamma1.
Then Z1 = P1 - CY1 and Z2 = P2 - CY2.
Class C-Z Regular Interests: The Class C-Z-1 and Class C-Z-2
Regular Interests.
Class C-Z Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Class Principal Balances of the Class C-Z-1 and
Class C-Z-2 Regular Interests, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the
distribution of principal, which shall be in each case the excess of (A)
the sum of (x) the excess of the REMIC I Available Distribution Amount
for the related Loan Group (i.e. the "related Loan Group" for the Class
C-Z-1 Regular Interest is Loan Group I and the "related Loan Group" for
the Class C-Z-2 Regular Interest is Loan Group IV) over the sum of the
amounts thereof distributable (i) to the related Class P-M Regular
Interest, (ii) to the related Class X-M Regular Interest, (iii) in
respect of interest on the related Class C-Y and Class C-Z Regular
Interests and (iv) to the Class R-1 Certificates (in the case of Loan
Group IV) and (y) the excess of the Realized Losses allocable to
principal for the related Loan Group over the portion of such Realized
Losses allocable to the related Class P-M Regular Interest over (B) the
Class C-Y Principal Reduction Amount for the related Loan Group.
Class C-Z-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 C-Z-1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class C-Z-1 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class C-Z-1 Regular Interest on such Distribution Date.
Class C-Z-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.
17
Class C-Z-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class C-Z-2 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class C-Z-2 Regular Interest on such Distribution Date.
Class D-B-1 Certificates: The Certificates designated as "Class D-B-
1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-B-2 Certificates: The Certificates designated as "Class D-B-
2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-B-3 Certificates: The Certificates designated as "Class D-B-
3" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-B-4 Certificates: The Certificates designated as "Class D-B-
4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-B-5 Certificates: The Certificates designated as "Class D-B-
5" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-B-6 Certificates: The Certificates designated as "Class D-B-
6" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class D-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 D-Y Regular Interests: The Class D-Y-1 and Class D-Y-2
Regular Interests.
Class D-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 D-Y-1 Principal Distribution Amount: For any Distribution
18
Date, the excess, if any, of the Class D-Y-1 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class D-Y-1 Regular Interests on such Distribution
Date.
Class D-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 D-Y-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class D-Y-2 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class D-Y-2 Regular Interests on such Distribution
Date.
Class D-Y Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Class Principal Balances of the Class D-Y-1 and
Class D-Y-2 Regular Interests respectively will be reduced on such
Distribution Date by the allocation of Realized Losses and the
distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
PIIB = the Group II Subordinate Balance after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
PIIIB = the Group III Subordinate Balance after the allocation of
Realized Losses and distributions of principal on such Distribution
Date.
R = the Certificate Interest Rate on the Group D-B Certificates =
(7.0%PIIB + 7.25%PIIIB)/(PIIB + PIIIB)
DY1 = the Class D-Y-1 Principal Balance after distributions on the
prior Distribution Date.
DY2 = the Class D-Y-2 Principal Balance after distributions on the
prior Distribution Date.
DELTADY1 = the Class D-Y-1 Principal Reduction Amount.
DELTADY2 = the Class D-Y-2 Principal Reduction Amount.
P1 = the aggregate Class Principal Balance of the Class D-Y-1 and
Class D-Z-1 Regular Interests after distributions on the prior
Distribution Date.
P2 = the aggregate Class Principal Balance of the Class D-Y-2 and
Class D-Z-2 Regular Interests after distributions on the prior
Distribution Date.
DELTAP1 = the aggregate of the Class D-Y-1 and Class D-Z-1 Principal
Reduction Amounts.
19
DELTAP2= the aggregate of the Class D-Y-2 and Class D-Z-2 Principal
Reduction Amounts.
alpha = .0005
gamma1 = (R - 7.00%)/(7.25% - R). gamma1 is a non-negative number
unless its denominator is zero, in which event it is undefined.
If gamma1 is zero, DELTADY2 = DY2 and DELTADY1 = (DY1/P1)DELTAP1.
If gamma1 is undefined, DELTADY1 = DY1, DELTADY2 = (DY2/P2)DELTAP2.
In the remaining situations, DELTADY2 and DELTADY1 shall be defined as
follows:
1. If DY2 - alpha(P2 - DELTAP2) 0, DY1- alpha(P1 - DELTAP1) 0, and
gamma1(P1 - DELTAP1) < (P2 - DELTAP2), DELTADY2 = DY2 - alphagamma1(P1 -
DELTAP1) and DELTADY1 = DY1 - alpha(P1 - DELTAP1).
2. If DY2 - alpha(P2 - DELTAP2) 0, DY1 - alpha(P1 - DELTAP1) 0, and
gamma1(P1 - DELTAP1) (P2 - DELTAP2),
DELTADY2 = DY2 - alpha(P2 - DELTAP2) and
DELTADY1 = DY1 - (alpha/gamma1)(P2 - DELTAP2).
3. If DY2 - alpha(P2 - DELTAP2) < 0, DY1 - alpha(P1 - DELTAP1) 0, and
DY1 - alpha(P1 - DELTAP1) DY1 - (DY2/gamma1),
DELTADY2 = DY2 - alphagamma1(P1 - DELTAP1) and
DELTADY1 = DY1 - alpha(P1 - DELTAP1).
4. If DY2 - alpha(P2 - DELTAP2) < 0, DY1 - (DY2/gamma1) 0, and
DY1 - alpha(P1 - DELTAP1) DY1 - (DY2/gamma1), DELTADY2 = 0 and
DELTADY1 = DY1 - (DY2/gamma1).
5. If DY1 - alpha(P1 - DELTAP1) < 0, DY1 - (DY2/gamma1) < 0, and
DY2 - alpha(P2 - DELTAP2) DY2 - (gamma1DY1),
DELTADY2 = DY2 - (gamma1DY1) and DELTADY1 = 0.
6. If DY1 - alpha(P1 - DELTAP1) < 0, DY2 - alpha(P2 - DELTAP2) 0, and
DY2 - alpha(P2 - DELTAP2) DY2 - (gamma1DY1),
DELTADY2 = DY2 - alpha(P2 - DELTAP2) and
DELTADY1 = DY1 - (alpha/gamma1)(P2 - DELTAP2).
The purpose of the foregoing definitional provisions together with the
related provisions allocating Realized Losses and defining the Class D-Y
and Class D-Z Principal Distribution Amounts is to accomplish the
following goals in the following order of priority:
1. Making the ratio of DY2 to DY1 equal to gamma1 after taking account
of the allocation of 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 D-Y-1, Class D-Y-2, Class D-Z-1 and Class D-Z-2 Regular Interests
20
is greater than or equal to zero for such Distribution Date;
2. Making the Class D-Y-1 Principal Balance less than or equal to
0.0005 of the sum of the Class D-Y-1 and Class D-Z-1 Principal Balances
and the Class D-Y-2 Principal Balance less than or equal to 0.0005 of
the sum of the Class D-Y-2 and Class D-Z-2 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 DY2 and
whose denominator is the sum of DY2 and the Class D-Z-2 Principal
Balance and (b) the fraction whose numerator is DY1 and whose
denominator is the sum of DY1 and the Class D-Z-1 Principal 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 D-Y Principal Reduction Amount to accomplish both of goals 1 and 2
above, the amounts thereof should be adjusted so as to accomplish such
goals within the requirement that each Class D-Y Principal Reduction
Amount must be less than or equal to the sum of (a) the principal
portion of Realized Losses to be allocated on the related Distribution
Date for the related Loan Group remaining after the allocation of such
Realized Losses to the related Class P-M Regular Interest and (b) the
remainder of the REMIC I Available Distribution Amount for the related
Loan Group or after reduction thereof by the distributions to be made on
such Distribution Date (i) to the related Class P-M Regular Interest,
(ii) to the related Class X-M Regular Interest and (iii) in respect of
interest on the related Class D-Y and Class D-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 D-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.
In the execution copy of this Agreement, symbols are represented by
the following labels; in any conformed copy of this Agreement, such
symbols may be represented by characters other than numerals and the
upper and lower case letters of the alphabet and standard punctuation,
including, without limitation, Greek letters and mathematical symbols.
Example:
alpha symbol alpha
delta symbol DELTA
gamma symbol gamma
To calculate the initial Class Principal Balances for the Class D-Y-
1, Class D-Y-2, Class D-Z-1 and Class D-Z-2 Regular Interests, first
calculate the Group II and Group III Subordinate Balances as of the Cut-
Off Date. Then calculate R according to the definition above.
Calculate gamma1 according to the definition above. Calculate P1 and P2
21
as the aggregate Class Principal Balance of the Group II Certificates
and the aggregate Class Principal Balance of the Group III Certificates,
respectively.
If 0.0005 gamma1 P1 0.0005 P2, DY1 = 0.0005 P1, and
DY2 = 0.0005 gamma1 P1.
If 0.0005 gamma1 P1 > 0.0005 P2, DY2 = 0.0005 P2 and
DY1 = 0.0005 P2/gamma1.
Then Z2 = P2 - DY2 and Z1 = P1 - DY1.
Class D-Z Regular Interests: The Class D-Z-1 and Class D-Z-2
Regular Interests.
Class D-Z Principal Reduction Amounts: For any Distribution Date,
the amounts by which the Class Principal Balances of the Class D-Z-1 and
Class D-Z-2 Regular Interests, respectively, will be reduced on such
Distribution Date by the allocation of Realized Losses and the
distribution of principal, which shall be in each case the excess of (A)
the sum of (x) the excess of the REMIC I Available Distribution Amount
for the related Loan Group (i.e. the "related Loan Group" for the Class
D-Z-1 Regular Interest is Loan Group II and the "related Loan Group" for
the Class D-Z-2 Regular Interest is Loan Group III) over the sum of the
amounts thereof distributable (i) to the Class P-M Regular Interest in
respect of principal on related Class P Mortgage Loans, (ii) to the
related Class X-M Regular Interests and (iii) in respect of interest on
the related Class D-Y and Class D-Z Regular Interests and (y) the excess
of the Realized Losses allocable to principal for the related Loan Group
over the portion of such Realized Losses allocable to the Class P-M
Regular Interest over (B) the Class D-Y Principal Reduction Amount for
the related Loan Group.
Class D-Z-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 D-Z-1 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class D-Z-1 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class D-Z-1 Regular Interest on such Distribution Date.
Class D-Z-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 D-Z-2 Principal Distribution Amount: For any Distribution
Date, the excess, if any, of the Class D-Z-2 Principal Reduction Amount
for such Distribution Date over the principal portion of Realized Losses
allocated to the Class D-Z-2 Regular Interest on such Distribution Date.
Class P Certificates: The Class II-P and Class III-P Certificates
and Component I-A-1-4 of the Class I-A-1 Certificates.
Class P Fraction: Any of the Class I-P, Class II-P or Class III-P
Fractions, as applicable.
Class P Mortgage Loan: Any of the Class I-P, Class II-P or Class
III-P Mortgage Loans.
Class P-L Regular Interests: The Class II-P-L and Class III-P-L
22
Regular Interests and the Component I-A-1-4-L Regular Interest.
Class P-M Regular Interests: The Class I-P-M, Class II-P-M and
Class III-P-M Regular Interests.
Class R-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 X Certificates: The Class I-X, Class II-X and Class III-X
Certificates.
Class X-L Regular Interests: The Class I-X-L, Class II-X-L and
Class III-X-L Regular Interests.
Class X-M Regular Interests: The Class I-X-M, Class II-X-M and
Class III-X-M Regular Interests.
Class I-A-1 Certificates: The Certificates designated as "Class I-A-
1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-1-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which is comprised
of REMIC II Regular Interests as specified in the Preliminary Statement
and is entitled to distributions as set forth herein.
Class I-A-2 Certificates: The Certificates designated as "Class I-A-
2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-2-L Regular Interests: The Class I-A-2-1-L Regular
Interest and the Class I-A-2-2-L regular Interest.
Class I-A-2-1-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-2-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-3 Certificates: The Certificates designated as "Class I-A-
3" on the face thereof in substantially the form attached hereto as
Exhibit A.
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 Accretion Termination Date: The earlier to occur of (i)
the Distribution Date on which the Class I-A-3 Principal Balance and the
Component I-A-1-5 Principal Balance have each been reduced to zero and
(ii) the Group C-B Credit Support Depletion Date.
Class I-A-4 Accrual Amount: On any Distribution Date, an amount
equal to the amount allocable to the Class I-A-4-L Regular Interests on
such Distribution Date pursuant to the definition of "Interest
Distribution Amount", without regard to the proviso at the end of the
first sentence of such definition. Notwithstanding the foregoing, for
any Distribution Date after the Class I-A-4 Accretion Termination Date,
the Class I-A-4 Accrual Amount shall be zero.
Class I-A-4 Certificates: The Certificates designated as "Class I-A-
4" on the face thereof in substantially the form attached hereto as
23
Exhibit A.
Class I-A-4-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-5 Certificates: The Certificates designated as "Class I-A-
5" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-5-L Regular Interests: The Class I-A-5-1-L Regular
Interest and the Class I-A-5-2-L regular Interest.
Class I-A-5-1-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-5-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-6 Certificates: The Certificates designated as "Class I-A-
6" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-6-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-7 Certificates: The Certificates designated as "Class I-A-
7" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-7-L Regular Interests: The Class I-A-7-1-L Regular
Interest and the Class I-A-7-2-L regular Interest.
Class I-A-7-1-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-7-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-8 Certificates: The Certificates designated as "Class I-A-
8" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-8-L Regular Interests: The Class I-A-8-1-L Regular
Interest and the Class I-A-8-2-L regular Interest.
Class I-A-8-1-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-8-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class I-A-9 Certificates: The Certificates designated as "Class I-A-
24
9" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-9 Notional Amount: For any Distribution Date,
9.▇▇▇▇▇▇▇▇▇▇% of the sum of (i) 55/675 of the Class I-A-2-2-L Principal
Balance, (ii) 55/675 of the Class I-A-5-2-L Principal Balance, (iii)
35/675 of the Class I-A-7-2-L Principal Balance and (iv) 55/675 of the
Class I-A-8-2-L Principal Balance.
Class I-A-10 Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in May 2004, 0%; and for the
Distribution Date occurring in May 2004 and any Distribution Date
thereafter, the Class I-A-10 Percentage.
Class I-A-10 Certificates: The Certificates designated as "Class I-
A-10" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class I-A-10 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-10 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-10 Percentage of the
Liquidation Principal with respect to such Mortgage Loan.
Class I-A-10 Percentage: For any Distribution Date, the lesser of
(a) 100% and (b) the Class I-A-10 Principal Balance divided by the
aggregate Principal Balance of the Group I Loans (less the Class I-P
Fraction of each Class I-P Mortgage Loan), in each case immediately
prior to such Distribution Date.
Class I-A-10 Prepayment Percentage: For any Distribution Date, the
product of the Class I-A-10 Percentage and the Step Down Percentage.
Class I-A-10 Priority Amount: For any Distribution Date, the sum of
(i) the Class I-A-10 Adjusted Percentage of the Principal Payment Amount
for Loan Group I (exclusive of the portion thereof attributable to
principal distributions to the Component I-A-1-4-L Regular Interest
pursuant to clause (I)(a)(i) of the definition of "REMIC II Distribution
Amount"), (ii) the Class I-A-10 Prepayment Percentage of the Principal
Prepayment Amount for Loan Group I (exclusive of the portion thereof
attributable to principal distributions to the Component I-A-1-4-L
Regular Interest pursuant to clause (I)(a)(i) of the definition of
"REMIC II Distribution Amount") and (iii) the Class I-A-10 Liquidation
Amount.
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-P Fraction: For each Class I-P Mortgage Loan, a fraction,
the numerator of which is 6.750% less the Pass-Through Rate on such
Class I-P Mortgage Loan and the denominator of which is 6.750%.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-Through Rate
of less than 6.750% per annum.
Class I-P-M Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class I-X Certificates: The Certificates designated as "Class I-X"
25
on the face thereof in substantially the form attached hereto as Exhibit
A.
Class I-X Notional Amount: With respect to any Distribution Date,
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to
be received as of such Due Date, whether or not received (and after
giving effect to Principal Prepayments, Monthly P&I Advances and the
principal portion of Realized Losses applied prior to such Due Date), or
with respect to the initial Distribution Date, as of the Cut-Off Date,
of the Group I Premium Rate Mortgage Loans and (y) a fraction, the
numerator of which is the weighted average of the Stripped Interest
Rates for the Group I Premium Rate Mortgage Loans as of such Due Date
and the denominator of which is 6.750%.
Class I-X-L Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC II which constitutes a REMIC II
Regular Interest and is entitled to distributions as set forth herein.
Class I-X-M Regular Interest: The uncertificated partial undivided
beneficial ownership interest in REMIC I which constitutes a REMIC I
Regular Interest and is entitled to distributions as set forth herein.
Class II-A-1 Certificates: The Certificates designated as "Class II-
A-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class II-A-1-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
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-X Certificates: The Certificates designated as "Class II-
X" on the face thereof in substantially the form attached hereto as
Exhibit A.
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 (and after
giving effect to Principal Prepayments, Monthly P&I Advances and the
principal portion of Realized Losses applied prior to such Due Date), or
with respect to the initial Distribution Date, as of the Cut-Off Date,
of the 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 and is entitled to distributions as set forth herein.
Class III-A-1 Certificates: The Certificates designated as "Class
26
III-A-1" on the face thereof in substantially the form attached hereto
as Exhibit A.
Class III-A-1-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class III-P Certificates: The Certificates designated as "Class III-
P" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class III-P Fraction: For each Class III-P Mortgage Loan, a
fraction, the numerator of which is 7.250% less the Pass-Through Rate on
such Class III-P Mortgage Loan and the denominator of which is 7.250%.
Class III-P Mortgage Loan: Any Group III Loan with a Pass-Through
Rate of less than 7.250% per annum.
Class III-P-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class III-P-M Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which constitutes a
REMIC I Regular Interest and is entitled to distributions as set forth
herein.
Class III-X Certificates: The Certificates designated as "Class III-
X" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class III-X Notional Amount: With respect to any Distribution Date,
the product of (x) the aggregate scheduled principal balance, as of the
second preceding Due Date after giving effect to payments scheduled to
be received as of such Due Date, whether or not received (and after
giving effect to Principal Prepayments, Monthly P&I Advances and the
principal portion of Realized Losses applied prior to such Due Date), or
with respect to the initial Distribution Date, as of the Cut-Off Date,
of the Group III Premium Rate Mortgage Loans and (y) a fraction, the
numerator of which is the weighted average of the Stripped Interest
Rates for the Group III Premium Rate Mortgage Loans as of such Due Date
and the denominator of which is 7.250%.
Class III-X-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class III-X-M Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which constitutes a
REMIC I Regular Interest and is entitled to distributions as set forth
herein.
Class IV-A-1 Certificates: The Certificates designated as "Class IV-
A-1" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-A-1-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class IV-A-2 Certificates: The Certificates designated as "Class IV-
27
A-2" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-A-2-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class IV-A-3 Certificates: The Certificates designated as "Class IV-
A-4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 IV-A-4 Adjusted Percentage: For any Distribution Date
occurring prior to the Distribution Date in May 2004, 0%; and for the
Distribution Date occurring in May 2004 and any Distribution Date
thereafter, the Class IV-A-4 Percentage.
Class IV-A-4 Certificates: The Certificates designated as "Class IV-
A-4" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-A-4 Liquidation Amount: The aggregate, for each Group IV
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 IV-A-4 Percentage of the Principal Balance of such Mortgage Loan
and (ii) the Class IV-A-4 Percentage of the Liquidation Principal with
respect to such Mortgage Loan.
Class IV-A-4 Percentage: For any Distribution Date, the lesser of
(a) 100% and (b) the Class IV-A-4 Principal Balance divided by the
aggregate Principal Balance of the Group IV Loans, in each case
immediately prior to such Distribution Date.
Class IV-A-4 Prepayment Percentage: For any Distribution Date, the
product of the Class IV-A-4 Percentage and the Step Down Percentage.
Class IV-A-4 Priority Amount: For any Distribution Date, the sum of
(i) the Class IV-A-4 Adjusted Percentage of the Principal Payment Amount
for Loan Group IV, (ii) the Class IV-A-4 Prepayment Percentage of the
Principal Prepayment Amount for Loan Group IV and (iii) the Class IV-A-4
Liquidation Amount.
Class IV-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 IV-A-5 Certificates: The Certificates designated as "Class IV-
A-5" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 IV-A-5 Rounding Account: The separate trust account
established by DLJ by deposit as of the Closing Date of $999.99 and
maintained by the Master Servicer with the Trustee, the Investment
Depository or any other bank or trust company acceptable to the Rating
28
Agencies which is incorporated under the laws of the United States or
any state thereof pursuant to Section 3.21, which account shall bear a
designation clearly indicating that the funds deposited therein are held
in trust for the benefit of the Trustee on behalf of the Class IV-A-5
Certificateholders or any other account serving a similar function
acceptable to the Rating Agencies, and which account provides that the
Trustee may make, or cause to be made, withdrawals as provided in
Section 3.21 hereof, to the extent of the amount then remaining in the
Class IV-A-5 Rounding Account.
Class IV-A-6 Certificates: The Certificates designated as "Class IV-
A-6" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-A-6-L Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC II which constitutes a
REMIC II Regular Interest and is entitled to distributions as set forth
herein.
Class IV-A-6 Rounding Account: The separate trust account
established by DLJ by deposit as of the Closing Date of $999.99 and
maintained by the Master Servicer with the Trustee, the Investment
Depository or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or
any state thereof pursuant to Section 3.21, which account shall bear a
designation clearly indicating that the funds deposited therein are held
in trust for the benefit of the Trustee on behalf of the Class IV-A-6
Certificateholders or any other account serving a similar function
acceptable to the Rating Agencies, and which account provides that the
Trustee may make, or cause to be made, withdrawals as provided in
Section 3.21 hereof, to the extent of the amount then remaining in the
Class IV-A-6 Rounding Account.
Class IV-A-7 Certificates: The Certificates designated as "Class IV-
A-7" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 IV-A-7 Rounding Account: The separate trust account
established by DLJ by deposit as of the Closing Date of $999.99 and
maintained by the Master Servicer with the Trustee, the Investment
Depository or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or
any state thereof pursuant to Section 3.21, which account shall bear a
designation clearly indicating that the funds deposited therein are held
in trust for the benefit of the Trustee on behalf of the Class IV-A-7
Certificateholders or any other account serving a similar function
acceptable to the Rating Agencies, and which account provides that the
Trustee may make, or cause to be made, withdrawals as provided in
Section 3.21 hereof, to the extent of the amount then remaining in the
Class IV-A-7 Rounding Account.
Class IV-A-8 Certificates: The Certificates designated as "Class IV-
A-8" on the face thereof in substantially the form attached hereto as
Exhibit A.
29
Class IV-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 IV-A-9 Certificates: The Certificates designated as "Class IV-
A-9" on the face thereof in substantially the form attached hereto as
Exhibit A.
Class IV-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 Notional Amount: With respect to any of the Class X
Certificates, the Class X-L Regular Interests, the Class X-M Regular
Interests and the Class I-A-9 Certificates, the related notional amount
for any such Class, as specified herein (i.e. the "Class Notional
Amount" for each of the Class I-X Certificates, the Class I-X-L Regular
Interest and the Class I-X-M Regular Interest is the Class I-X Notional
Amount).
Class Principal Balance: For any Class of Certificates and for any
Class of Regular Interests (other than the Class I-A-1 Certificates and
its Corresponding Class), 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 Holders of the Regular Interests from
principal payments on the Mortgage Loans, the REMIC I Regular Interests
or the REMIC II Regular Interests, as applicable, as reduced from time
to time by (x) distributions of principal to Certificateholders or the
Holders of the Regular Interests of such Class (including, with respect
to the Accretion Directed Classes, the portions of the Class I-A-4
Accrual Amount and the Component I-A-1-5 Accrual Amount distributed to
such Classes) 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 definitions
of "REMIC I Distribution Amount," "REMIC II Distribution Amount" and
"REMIC III Distribution Amount." In addition to the foregoing, (i) on
each Distribution Date on or before the Class I-A-4 Accretion
Termination Date, the Class Principal Balance for each of the Class I-A-
4-L Regular Interest and the Class I-A-4 Certificates will be increased
by the Class I-A-4 Accrual Amount for such Distribution Date.
Notwithstanding the foregoing, any amounts distributed in respect of
losses pursuant to paragraph (I)(e)(ii) or (I)(f)(ii) 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 and any
amounts distributed in respect of losses pursuant to paragraph
(I)(e)(xxi) or (I)(f)(xxi) of the definition of "REMIC II Distribution
Amount" shall not cause a further reduction in the Class Principal
Balances of the Group C-B-L Regular Interests or the Group D-B-L Regular
Interests, as applicable. The Class Principal Balance for the Class I-A-
30
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
Interest shall be referred to as the "Class I-A-1-L Principal Balance"
and so on. The Class Principal Balances for the Class X Certificates,
the Class X-L Regular Interests, the Class X-M Regular Interests and the
Class I-A-6 Certificates shall each be zero. The Class I-A-1-L and Class
I-A-1 Principal Balances shall equal the sum of the Component Principal
Balances of the 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
B, which have been designated as the single class of "residual interest"
in REMIC I pursuant to Section 2.01.
Class R-2 Certificates: The Certificates designated as "Class R-2"
on the face thereof in substantially the form attached hereto as Exhibit
B, 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
A, which have been designated as the single class of "residual interest"
in REMIC III pursuant to Section 2.07.
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.
Clipper: Clipper Receivables Corporation, a Delaware corporation.
Clipper Loan Sale Agreement: The Loan Sale Agreement, substantially
in the form of Exhibit O hereto, to be entered into between Clipper and
the Trustee pursuant to Section 2.01.
Clipper Mortgage Loans: The Mortgage Loans identified as Clipper
Mortgage Loans on the Mortgage Loan Schedule and conveyed by Clipper to
the Trustee pursuant to the Clipper Loan Sale Agreement.
Clipper Mortgage Loan Purchase Amount: The amount of
$353,896,665.89, which shall be deposited by the Company into the
Certificate Account on the Closing Date and withdrawn therefrom and
applied by the Trustee in payment of the purchase price for the Clipper
Mortgage Loans pursuant to Section 2.01.
Closing Date: April 29, 1999, 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-1 Certificates and the Class
I-A-1-L Regular Interests representing parts of the entitlement of each
such Class to principal and/or interest, in each case as set forth in
the Preliminary Statement hereto and the remainder of the Agreement.
Component I-A-1-1: A portion of the Class I-A-1 Certificates
31
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-1 Notional Amount: For any Distribution Date, the
sum of (i) the product of (x) 55/675 and (y) the Class I-A-2-1-L
Principal Balance, (ii) the product of (x) 55/675 and (y) the Class I-A-
5-1-L Principal Balance, (iii) the product of (x) 70/675 and (y) the
Class I-A-6 Principal Balance, (iv) the product of (x) 35/675 and (y)
the Class I-A-7-1-L Principal Balance and (v) the product of (x) 55/675
and (y) the Class I-A-8-1-L Principal Balance.
Component I-A-1-2: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-2 Notional Amount: For any Distribution Date,
90.0000730684% of the sum of (i) 55/675 of the Class I-A-2-2-L Principal
Balance, (ii) 55/675 of the lesser of the Class I-A-5-2-L Principal
Balance, (iii) 35/675 of the Class I-A-7-2-L Principal Balance and (iv)
55/675 of the Class I-A-8-2-L Principal Balance.
Component I-A-1-3: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to interest as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-3 Notional Amount: For any Distribution Date, the
Class I-A-3 Principal Balance multiplied by 60/675.
Component I-A-1-4: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to principal as set
forth in the Preliminary Statement hereto and the remainder of the
Agreement.
Component I-A-1-4-L: A portion of the Class I-A-1-L Regular
Interest representing part of the entitlement of such Class to principal
as set forth in the Preliminary Statement hereto and the remainder of
the Agreement.
Component I-A-1-5: A portion of the Class I-A-1 Certificates
representing part of the entitlement of such Class to principal and
interest as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Component I-A-1-5-L: A portion of the Class I-A-1-L Regular
Interest representing part of the entitlement of such Class to principal
and interest as set forth in the Preliminary Statement hereto and the
remainder of the Agreement.
Component I-A-1-5 Accretion Termination Date: The earlier to occur
of (i) the Distribution Date on which the Class I-A-3 Principal Balance
has been reduced to zero and (ii) the Group C-B Credit Support Depletion
Date.
Component I-A-1-5 Accrual Amount: On any Distribution Date, an
amount equal to the amount allocable to Component I-A-1-5-L on such
Distribution Date pursuant to the definition of "Interest Distribution
Amount", without regard to the proviso at the end of the first sentence
of such definition. Notwithstanding the foregoing, for any Distribution
Date after the Component I-A-1-5 Accretion Termination Date, the
Component I-A-1-5 Accrual Amount shall be zero.
32
Component Notional Amount: With respect to Component I-A-1-1, the
Component I-A-1-1 Notional Amount, with respect to Component I-A-1-2,
the Component I-A-1-2 Notional Amount and with respect to Component I-A-
1-3, the Component I-A-1-3 Notional Amount.
Component Principal Balance: For Component I-A-1-4 and Component I-
A-1-5 of the Class I-A-1 Certificates and for the Corresponding
Components of the Class I-A-1-L Regular Interests, the applicable
initial Component Principal Balance therefor set forth in the
Preliminary Statement hereto, corresponding to the rights of such
Component in payments of principal due to be passed through to the
Component from principal payments on the REMIC I Regular Interests or
the REMIC II Regular Interests, as applicable, as reduced from time to
time by (x) distributions of principal to the Class I-A-1 Certificates
or the Class I-A-1-L Regular Interests, as applicable, in respect of
such Components (including, with respect to the Accretion Directed
Components, the portion of the Class I-A-4 Accrual Amount distributed to
such Components) and (y) the portion of Realized Losses allocated to the
Component Principal Balance in respect of such Component pursuant to the
definition of "Realized Loss" with respect to a given Distribution Date.
In addition to the foregoing, on each Distribution Date on or before the
Component I-A-1-5 Accretion Termination Date, the Component I-A-1-5 and
Component I-A-1-5-L Principal Balance will be increased by the Component
I-A-1-5 Accrual Amount for such Distribution Date. For any Distribution
Date, the reduction of the Component Principal Balance of any Component
pursuant to the definition of "Realized Loss" shall be deemed effective
prior to the determination and distribution of principal on such
Component pursuant to the definition of "REMIC II Distribution Amount"
or "REMIC III Distribution Amount". The Component Principal Balance for
Component I-A-1-5 and Component I-A-1-5-L shall be referred to as the
"Component I-A-1-5 Principal Balance" and likewise for Component I-A-1-
5. The Component Principal Balances for Component I-A-1-1, Component I-
A-1-2 and Component I-A-1-3 shall be zero and likewise for the
Corresponding Components.
Cooperative: A private, cooperative housing corporation organized
under the laws of, and headquartered in, the States of California, New
York, New Jersey, North Carolina, Washington, Virginia or Hawaii which
owns or leases land and all or part of a building or buildings located
in any such state, including apartments, spaces used for commercial
purposes and common areas therein and whose board of directors
authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building
owned or leased by a Cooperative, which unit the Mortgagor has an
exclusive right to occupy pursuant to the terms of a proprietary lease
or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the
proprietary lease or occupancy agreement with respect to the Cooperative
Apartment occupied by the Mortgagor and relating to the related
Cooperative Stock, which lease or agreement confers an exclusive right
to the holder of such Cooperative Stock to occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate,
33
(iii) an assignment or mortgage of the Cooperative Lease, (iv) financing
statements and (v) a stock power (or other similar instrument), and
ancillary thereto, a recognition agreement between the Cooperative and
the originator of the Cooperative Loan, each of which was transferred
and assigned to the Trustee pursuant to Section 2.01 and are from time
to time held as part of the Trust Fund created hereunder.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership
instrument in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan,
the stock certificate or other instrument evidencing the related
Cooperative Stock.
Corporate Trust Office: The corporate trust office of the Trustee
in the Commonwealth of Massachusetts, at which at any particular time
its corporate trust business with respect to this Agreement shall be
administered, which office at the date of the execution of this
Agreement is located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Corporate Trust PNC 1999-4.
Corresponding Class: With respect to the Group I Certificates and
the Group I-L Regular Interests, the "Corresponding Class" shall be as
indicated in the following table or as set forth below:
Class I-A-3-L Class I-A-3
Class I-A-4-L Class I-A-4
Class I-A-6-L Class I-A-6
Class I-A-10-L Class I-A-10
Class I-X-L Class I-X
With respect to the Class I-A-2 Certificates, the "Corresponding
Class" will be both of the Class I-A-2-1-L Regular Interest and the
Class I-A-2-2-L Regular Interest. With respect to the Class I-A-5
Certificates, the "Corresponding Class" will be both of the Class I-A-5-
1-L Regular Interest and the Class I-A-5-2-L Regular Interest. With
respect to the Class I-A-7 Certificates, the "Corresponding Class" will
be both of the Class I-A-7-1-L Regular Interest and the Class I-A-7-2-L
Regular Interest. With respect to the Class I-A-8 Certificates, the
"Corresponding Class" will be both of the Class I-A-8-1-L Regular
Interest and the Class I-A-8-2-L Regular Interest.
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
With respect to the Group III Certificates and the Group III-L
Regular Interests, the "Corresponding Class" shall be as indicated in
the following table:
Class III-A-1-L Class III-A-1
Class III-X-L Class III-X
Class III-P-L Class III-P
With respect to the Group IV and Class R-3 Certificates and the
34
Group IV-L Regular Interests, the "Corresponding Class" shall be as
indicated in the following table:
Class IV-A-1-L Class IV-A-1
Class IV-A-2-L Class IV-A-2
Class IV-A-3-L Class IV-A-3
Class IV-A-4-L Class IV-A-4
Class IV-A-5-L Class IV-A-5
Class IV-A-6-L Class IV-A-6
Class IV-A-7-L Class IV-A-7
Class IV-A-8-L Class IV-A-8
Class IV-A-9-L Class IV-A-9
Class R-3-L Class R-3
With respect to the Group C-B Certificates and the Group C-B-L
Regular Interests, the "Corresponding Class" shall be as indicated in
the following table:
Class C-B-1-L Class C-B-1
Class C-B-2-L Class C-B-2
Class C-B-3-L Class C-B-3
Class C-B-4-L Class C-B-4
Class C-B-5-L Class C-B-5
Class C-B-6-L Class C-B-6
With respect to the Group D-B Certificates and the Group D-B-L
Regular Interests, the "Corresponding Class" shall be as indicated in
the following table:
Class D-B-1-L Class D-B-1
Class D-B-2-L Class D-B-2
Class D-B-3-L Class D-B-3
Class D-B-4-L Class D-B-4
Class D-B-5-L Class D-B-5
Class D-B-6-L Class D-B-6
Corresponding Component: With respect to each of Component I-A-1-4-
L and Component I-A-1-5-L, the following shall be the "Corresponding
Component", respectively: Component I-A-1-4 and Component I-A-1-5, and
vice-versa.
Curtailment: Any payment of principal (exclusive of any prepayment
penalty) 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
35
Master Servicer, the Trustee and the Certificateholders thereto shall be
fully protected against the claims of any creditors of the applicable
Servicer and of any creditors or depositors of the institution in which
such account is maintained, (b) within FDIC insured accounts (or other
accounts with comparable insurance coverage acceptable to the Rating
Agencies) created, maintained and monitored by a Servicer or (c) in a
separate non-trust account without FDIC or other insurance in an
Eligible Institution. In the event that a Custodial Account for P&I is
established pursuant to clause (b) of the preceding sentence, amounts
held in such Custodial Account for P&I shall not exceed the level of
deposit insurance coverage on such account; accordingly, more than one
Custodial Account for P&I may be established. Any amount that is at any
time not protected or insured in accordance with the first sentence of
this definition of "Custodial Account for P&I" shall promptly be
withdrawn from such Custodial Account for P&I and be remitted to the
Investment Account.
Custodial Account for Reserves: The Custodial Account for Reserves
established and maintained by each Servicer pursuant to its Selling and
Servicing Contract and caused by the Master Servicer to be established
and maintained pursuant to Section 3.02 (a) with the corporate trust
department of the Trustee or another financial institution approved by
the Master Servicer such that the rights of the Master Servicer, the
Trustee and the Certificateholders thereto shall be fully protected
against the claims of any creditors of the applicable Servicer and of
any creditors or depositors of the institution in which such account is
maintained, (b) within FDIC insured accounts (or other accounts with
comparable insurance coverage acceptable to the Rating Agencies)
created, maintained and monitored by a Servicer or (c) in a separate non-
trust account without FDIC or other insurance in an Eligible
Institution. In the event that a Custodial Account for Reserves is
established pursuant to clause (b) of the preceding sentence, amounts
held in such Custodial Account for Reserves shall not exceed the level
of deposit insurance coverage on such account; accordingly, more than
one Custodial Account for Reserves may be established. Any amount that
is at any time not protected or insured in accordance with the first
sentence of this definition of "Custodial Account for Reserves" shall
promptly be withdrawn from such Custodial Account for Reserves and be
remitted to the Investment Account.
Custodial Agreement: The agreement, if any, among the Master
Servicer, the Trustee and a Custodian providing for the safekeeping of
the Mortgage Files on behalf of the Certificateholders.
Custodian: A custodian (other than the Trustee) which is not an
affiliate of the Master Servicer or the Company and which is appointed
pursuant to a Custodial Agreement. Any Custodian so appointed shall act
as agent on behalf of the Trustee, and shall be compensated by the
Trustee at no additional charge to the Master Servicer. The Trustee
shall remain at all times responsible under the terms of this Agreement,
notwithstanding the fact that certain duties have been assigned to a
Custodian.
Cut-Off Date: April 1, 1999.
DCR: Duff and ▇▇▇▇▇▇ Credit Rating Co., provided that at any time
it be a Rating Agency.
36
Deceased Holder: A Beneficial Holder of a Special Retail
Certificate who was living at the time such Certificate was acquired and
whose authorized personal representative, surviving tenant by the
entirety, surviving joint tenant or surviving tenant in common or other
person empowered to act on behalf of such Beneficial Holder causes to be
furnished to DTC evidence of such Beneficial Holder's death satisfactory
to the Trustee and any tax waivers requested by the Trustee.
Definitive Certificates: Certificates in definitive, fully
registered and certificated form.
Depositary Agreement: The Letter of Representations, dated April
28, 1999 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 May 25, 1999. The "related Due Date" for any
Distribution Date is the Due Date immediately preceding such
Distribution Date.
DLJ: ▇▇▇▇▇▇▇▇▇, Lufkin and ▇▇▇▇▇▇▇▇ Securities Corporation.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial
institution or other Person for whom DTC effects book-entry transfers
and pledges of securities deposited with DTC.
Due Date: The day on which the Monthly Payment for each Mortgage
Loan is due.
Eligible Institution: An institution having (i) the highest short-
term debt rating, and one of the two highest long-term debt ratings of
the Rating Agencies, (ii) with respect to any Custodial Account for P&I
and special Custodial Account for Reserves, an unsecured long-term debt
rating of at least one of the two highest unsecured long-term debt
ratings of the Rating Agencies, (iii) with respect to any Buydown Fund
Account or Custodial Account which also serves as a Buydown Fund
Account, the highest unsecured long-term debt rating by the Rating
Agencies, or (iv) the approval of the Rating Agencies. Such institution
may be the Servicer if the applicable Selling and Servicing Contract
requires the Servicer to provide the Master Servicer with written notice
on the Business Day following the date on which the Servicer determines
that such Servicer's short-term debt and unsecured long-term debt
ratings fail to meet the requirements of the prior sentence.
Eligible Investments: Any one or more of the obligations or
securities listed below in which funds deposited in the Investment
Account, the Certificate Account, the Custodial Account for P&I and the
Custodial Account for Reserves may be invested:
Obligations of, or guaranteed as to principal and interest by, the
37
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
Repurchase agreements on obligations described in clause (i) of this
definition of "Eligible Investments", provided that the unsecured
obligations of the party (including the Trustee in its commercial
capacity) agreeing to repurchase such obligations have at the time one
of the two highest short term debt ratings of the Rating Agencies and
provided that such repurchaser's unsecured long term debt has one of the
two highest unsecured long term debt ratings of the Rating Agencies;
Federal funds, certificates of deposit, time deposits and bankers'
acceptances of any U.S. bank or trust company incorporated under the
laws of the United States or any state (including the Trustee in its
commercial capacity), provided that the debt obligations of such bank or
trust company (or, in the case of the principal bank in a bank holding
company system, debt obligations of the bank holding company) at the
date of acquisition thereof have one of the two highest short term debt
ratings of the Rating Agencies and unsecured long term debt has one of
the two highest unsecured long term debt ratings of the Rating Agencies;
Obligations of, or obligations guaranteed by, any state of the United
States or the District of Columbia, provided that such obligations at
the date of acquisition thereof shall have the highest long-term debt
ratings available for such securities from the Rating Agencies;
Commercial paper of any corporation incorporated under the laws of the
United States or any state thereof, which on the date of acquisition has
the highest commercial paper rating of the Rating Agencies, provided
that the corporation has unsecured long term debt that has one of the
two highest unsecured long term debt ratings of the Rating Agencies;
Securities (other than stripped bonds or stripped coupons) bearing
interest or sold at a discount that are issued by any corporation
incorporated under the laws of the United States or any state thereof
and have the highest long-term unsecured rating available for such
securities from the Rating Agencies; provided, however, that securities
issued by any such corporation will not be investments to the extent
that investment therein would cause the outstanding principal amount of
securities issued by such corporation that are then held as part of the
Investment Account or the Certificate Account to exceed 20% of the
aggregate principal amount of all Eligible Investments then held in the
Investment Account and the Certificate Account;
Units of taxable money market funds (which may be 12b-1 funds, as
contemplated under the rules promulgated by the Securities and Exchange
Commission under the Investment Company Act of 1940), which funds have
the highest rating available for such securities from the Rating
Agencies or which have been designated in writing by the Rating Agencies
as Eligible Investments; and
Such other investments the investment in which will not, as evidenced by
a letter from each of the Rating Agencies, result in 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.
38
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.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal National
Mortgage Association, 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.
Fraud Coverage: During the period prior to the first anniversary of
the Cut-Off Date and with respect to Loan Group I and Loan Group IV,
2.00% of the aggregate principal balance of the Group I and Group IV
Loans as of the Cut-Off Date (the "Initial Group I and Group IV Fraud
Coverage"), reduced by Fraud Losses allocated to the Group I-L, Group IV-
L and Group C-B-L Regular Interests and the Class R-1 and Class R-2
Certificates; during the period from the first anniversary of the Cut-
Off Date to (but not including) the fifth anniversary of the Cut-Off
Date, the amount of the Fraud Coverage for Loan Group I and Loan Group
IV on the most recent previous anniversary of the Cut-Off Date
(calculated in accordance with the second sentence of this paragraph)
reduced by Fraud Losses allocated to the Group I-L, Group IV-L and Group
C-B-L Regular Interests and the Class R-1 and Class R-2 Certificates
since such anniversary; and during the period on and after the fifth
anniversary of the Cut-Off Date, zero. On each anniversary of the Cut-
Off Date, the Fraud Coverage for Loan Group I and Loan Group IV shall be
reduced to the lesser of (i) on the first, second, third and fourth
anniversaries of the Cut-Off Date, 1.00% of the aggregate principal
balance of the Group I and Group IV Loans as of the Due Date in the
preceding month and (ii) the excess of the Initial Group I and Group IV
Fraud Coverage over cumulative Fraud Losses allocated to the Group I-L,
Group IV-L and Group C-B-L Regular Interests and the Class R-1 and Class
R-2 Certificates.
During the period prior to the first anniversary of the Cut-Off
Date and with respect to Loan Group II and Loan Group III, 2.00% of the
aggregate principal balance of the Group II and Group III Loans as of
the Cut-Off Date (the "Initial Group II and Group III Fraud Coverage"),
reduced by Fraud Losses allocated to the Group II-L, Group III-L and
Group D-B-L Regular Interests; during the period from the first
39
anniversary of the Cut-Off Date to (but not including) the fifth
anniversary of the Cut-Off Date, the amount of the Fraud Coverage for
Loan Group II and Loan Group III on the most recent previous anniversary
of the Cut-Off Date (calculated in accordance with the second sentence
of this paragraph) reduced by Fraud Losses allocated to the Group II-L,
Group III-L and Group D-B-L Regular Interests since such anniversary;
and during the period on and after the fifth anniversary of the Cut-Off
Date, zero. On each anniversary of the Cut-Off Date, the Fraud Coverage
for Loan Group II and Loan Group III 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 and Group
III Loans as of the Due Date in the preceding month and (ii) the excess
of the Initial Group II and Group III Fraud Coverage over cumulative
Fraud Losses allocated to the Group II-L, Group III-L and Group D-B-L
Regular Interests.
The Fraud Coverage for Loan Group I and Loan Group IV and the Fraud
Coverage for Loan Group II and Loan Group III may be reduced upon
written confirmation from the Rating Agencies that such reduction will
not adversely affect the then current ratings assigned to the
Certificates by the Rating Agencies.
Fraud Loss: The occurrence of a loss on a Mortgage Loan arising
from any action, event or state of facts with respect to such Mortgage
Loan which, because it involved or arose out of any dishonest,
fraudulent, criminal, negligent or knowingly wrongful act, error or
omission by the Mortgagor, originator (or assignee thereof) of such
Mortgage Loan, Lender, a Servicer or the Master Servicer, would result
in an exclusion from, denial of, or defense to coverage which otherwise
would be provided by a Primary Insurance Policy previously issued with
respect to such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
Group C-B Certificates: The Class C-B-1, Class C-B-2, Class C-B-3,
Class C-B-4, Class C-B-5 and Class C-B-6 Certificates.
Group C-B-L Regular Interests: The Class C-B-1-L, Class C-B-2-L,
Class C-B-3-L, Class C-B-4-L, Class C-B-5-L and Class C-B-6-L Regular
Interests.
Group C-B Credit Support Depletion Date: The first Distribution
Date on which the aggregate Class Principal Balance of the Group C-B
Certificates has been or will be reduced to zero as a result of
principal distributions thereon and the allocation of Realized Losses on
such Distribution Date.
Group C-B Percentage: At any time, the aggregate Class Principal
Balance of the Group C-B Certificates divided by the then outstanding
aggregate Principal Balance of the Group I and Group IV Loans.
Group C-B Subordinate Liquidation Amount: The excess, if any, of
the aggregate of Liquidation Principal for all Group I and Group IV
Loans which became Liquidated Mortgage Loans during the Prior Period,
over the sum of the Group I Senior Liquidation Amount and the Group IV
Senior Liquidation Amount for such Distribution Date.
Group C-B Subordinate Principal Distribution Amount: On any
Distribution Date, the excess of (A) the sum of (i) the Group I
Subordinate Percentage of the Principal Payment Amount for Loan Group I
40
(exclusive of the portion thereof attributable to principal
distributions to the Component I-A-1-4-L Regular Interest pursuant to
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount"),
(ii) the Group IV Subordinate Percentage of the Principal Payment Amount
for Loan Group IV, (iii) the Group C-B Subordinate Principal Prepayments
Distribution Amount and (iv) the Group C-B Subordinate Liquidation
Amount over (B) the sum of (x) the amounts required to be distributed to
the Component I-A-1-4-L Regular Interest pursuant to clauses (I)(e)(i)
and (I)(e)(ii) of the definition of "REMIC II Distribution Amount" on
such Distribution Date, (y) in the event that either the aggregate Class
Principal Balance of the Group I-A-L Regular Interests or the Group IV-A-
L Regular Interests has been reduced to zero, principal paid from the
REMIC II Available Distribution Amount related to such Class A-L Regular
Interests to the remaining Class A-L Regular Interests as set forth in
clause (X) of the last sentence of paragraph (I)(e) of the definition of
"REMIC II Distribution Amount", and (z) the amounts in respect of
principal paid from the REMIC II Available Distribution Amount for the
Regular Interest Group related to an Overcollateralized Group to the
Regular Interest Group related to an Undercollateralized Group pursuant
to clause (Y) of the last sentence of paragraph (I)(e) of the definition
of "REMIC II Distribution Amount." Any reduction in the Group C-B
Subordinate Principal Distribution Amount pursuant to clause (B) of this
definition shall offset: (i) first, the amount calculated pursuant to
clause (A)(i) and clause (A)(ii) of this definition, pro rata, (ii)
second, the amount calculated pursuant to clause (A)(iv) of this
definition and (iii) third, the amount calculated pursuant to clause
(A)(iii) of this definition.
On any Distribution Date, the Group C-B Subordinate Principal
Distribution Amount shall be allocated pro rata, by Class Principal
Balance, among the Classes of Group C-B-L Regular Interests and paid in
the order of distribution to such Classes pursuant to clause (I)(e) of
the definition of "REMIC II Distribution Amount" except as otherwise
stated in such definition. Notwithstanding the foregoing, on any
Distribution Date prior to distributions on such date, if the
Subordination Level for any Class of Group C-B-L Regular Interests is
less than such percentage as of the Closing Date, the pro rata portion
of the Group C-B Subordinate Principal Prepayments Distribution Amount
otherwise allocable to the Class or Classes of Group C-B-L Regular
Interests junior to such Class will be distributed to the most senior
Class of Group C-B-L Regular Interests for which the Subordination Level
is less than such percentage as of the Closing Date, and to the Class or
Classes of Group C-B-L Regular Interests senior thereto, pro rata
according to the Class Principal Balances of such Classes. For purposes
of this definition and the definition of "Subordination Level," the
relative seniority, from highest to lowest, of the Group C-B-L Regular
Interests shall be as follows: Class C-B-1-L, Class C-B-2-L, Class C-B-3-
L, Class C-B-4-L, Class C-B-5-L and Class C-B-6-L.
Group C-B Subordinate Principal Prepayments Distribution Amount: On
any Distribution Date, the sum of (i) 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 Component I-A-1-4-L Regular Interest pursuant to
41
clause (I)(a)(i) of the definition of "REMIC II Distribution Amount")
and (ii) the Group IV Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group IV.
Group D-B Certificates: The Class D-B-1, Class D-B-2, Class D-B-3,
Class D-B-4, Class D-B-5 and Class D-B-6 Certificates.
Group D-B-L Regular Interests: The Class D-B-1-L, Class D-B-2-L,
Class D-B-3-L, Class D-B-4-L, Class D-B-5-L and Class D-B-6-L Regular
Interests.
Group D-B Credit Support Depletion Date: The first Distribution
Date on which the aggregate Class Principal Balance of the Group D-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 D-B Percentage: At any time, the aggregate Class Principal
Balance of the Group D-B Certificates divided by the then outstanding
aggregate Principal Balance of the Group II and Group III Loans.
Group D-B Subordinate Liquidation Amount: The excess, if any, of
the aggregate of Liquidation Principal for all Group II and Group III
Loans which became Liquidated Mortgage Loans during the Prior Period,
over the sum of the Group II Senior Liquidation Amount and the Group III
Senior Liquidation Amount for such Distribution Date.
Group D-B Subordinate Principal Distribution Amount: On any
Distribution Date, the excess of (A) the sum of (i) the Group II
Subordinate Percentage of the Principal Payment Amount for Loan Group II
(exclusive of the portion thereof attributable to principal
distributions to the Class II-P-L Regular Interest pursuant to clause
(I)(b)(i) of the definition of "REMIC II Distribution Amount"), (ii) the
Group III Subordinate Percentage of the Principal Payment Amount for
Loan Group III (exclusive of the portion thereof attributable to
principal distributions to the Class III-P-L Regular Interest pursuant
to clause (I)(c)(i) of the definition of "REMIC II Distribution
Amount"), (iii) the Group D-B Subordinate Principal Prepayments
Distribution Amount and (iv) the Group D-B Subordinate Liquidation
Amount over (B) the sum of (x) the amounts required to be distributed to
the Class II-P-L and Class III-P-L Regular Interests pursuant to clauses
(I)(f)(i) and (I)(f)(ii) of the definition of "REMIC II Distribution
Amount" on such Distribution Date, (y) in the event that either the
Class II-A-1-L Principal Balance or the Class III-A-1-L Principal
Balance has been reduced to zero, principal paid from the REMIC II
Available Distribution Amount related to such Class A-L Regular
Interests to the remaining Class A-L Regular Interests as set forth in
clause (X) of the last sentence of paragraph (I)(f) of the definition of
"REMIC II Distribution Amount", and (z) the amounts in respect of
principal paid from the REMIC II Available Distribution Amount for the
Regular Interest Group related to an Overcollateralized Group to the
Regular Interest Group related to an Undercollateralized Group pursuant
to clause (Y) of the last sentence of paragraph (I)(f) of the definition
of "REMIC II Distribution Amount." Any reduction in the Group D-B
Subordinate Principal Distribution Amount pursuant to clause (B) of this
definition shall offset: (i) first, the amount calculated pursuant to
clause (A)(i) and clause (A)(ii) of this definition, pro rata, (ii)
second, the amount calculated pursuant to clause (A)(iv) of this
42
definition and (iii) third, the amount calculated pursuant to clause
(A)(iii) of this definition.
On any Distribution Date, the Group D-B Subordinate Principal
Distribution Amount shall be allocated pro rata, by Class Principal
Balance, among the Classes of Group D-B-L Regular Interests and paid in
the order of distribution to such Classes pursuant to clause (I)(f) 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 D-B-L Regular Interests is
less than such percentage as of the Closing Date, the pro rata portion
of the Group D-B Subordinate Principal Prepayments Distribution Amount
otherwise allocable to the Class or Classes of Group D-B-L Regular
Interests junior to such Class will be distributed to the most senior
Class of Group D-B-L Regular Interests for which the Subordination Level
is less than such percentage as of the Closing Date, and to the Class or
Classes of Group D-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 D-B-L Regular
Interests shall be as follows: Class D-B-1-L, Class D-B-2-L, Class D-B-3-
L, Class D-B-4-L, Class D-B-5-L and Class D-B-6-L.
Group D-B Subordinate Principal Prepayments Distribution Amount: On
any Distribution Date, the sum of (i) 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 Interest pursuant to clause
(I)(b)(i) of the definition of "REMIC II Distribution Amount") and (ii)
the Group III Subordinate Prepayment Percentage of the Principal
Prepayment Amount for Loan Group III (exclusive of the portion thereof
attributable to principal distributions to the Class III-P-L Regular
Interest pursuant to clause (I)(c)(i) of the definition of "REMIC II
Distribution Amount").
Group I Certificates: The Group I-A and Class I-X Certificates and
Component I-A-1-4 of the Class I-A-1 Certificates.
Group I-L Regular Interests: The Group I-A-L and Class I-X-L
Regular Interests and the Component I-A-1-4-L Regular Interest.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group I Premium Rate Mortgage Loans: The Group I Loans having Pass-
Through Rates in excess of 6.750% per annum.
Group I Senior Liquidation Amount: The aggregate, for each Group I
Loan which became a Liquidated Mortgage Loan during the Prior Period, of
the lesser of: (i) the Group I Senior Percentage of the Principal
Balance of such Mortgage Loan (exclusive of the Class I-P Fraction
thereof, with respect to any Class I-P Mortgage Loan) and (ii) the Group
I Senior Prepayment Percentage of the Liquidation Principal with respect
to such Mortgage Loan.
Group I Senior Percentage: With respect to any Distribution Date,
the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of
the Group I-A Certificates divided by the aggregate Principal Balance of
the Group I Loans (less the Component I-A-1-4 Principal Balance), in
43
each case immediately prior to the Distribution Date.
Group I Senior Prepayment Percentage or Group IV Senior Prepayment
Percentage: (i) On any Distribution Date occurring before the
Distribution Date in the month of the fifth anniversary of the first
Distribution Date, each of the Group I Senior Prepayment Percentage and
the Group IV Senior Prepayment Percentage shall equal 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 or the Group IV Senior Percentage for such Distribution
Date exceeds the Group IV Senior Percentage as of the Closing Date, each
of the Group I Senior Prepayment Percentage and the Group IV Senior
Prepayment Percentage shall equal 100%; and (iii) on any other
Distribution Date in each of the months of the fifth anniversary of the
first Distribution Date and thereafter, each of the Group I Senior
Prepayment Percentage and the Group IV Senior Prepayment Percentage
shall equal 100%, unless the following tests specified in clauses (a)
through (d) are met with respect to each of Loan Group I and Loan Group
IV:
(a) the mean aggregate Principal Balance of the 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 Subordinate Component Balance for Loan
Group I as of such Distribution Date,
(b) the mean aggregate Principal Balance of the Group IV Loans
which are 60 or more days delinquent (including loans in
foreclosure and property held by REMIC I) for each of the
immediately preceding six calendar months is less than or
equal to 50% of the Subordinate Component Balance for Loan
Group IV as of such Distribution Date,
(c) cumulative Realized Losses on the Group I Loans allocated to
the Group C-B Regular Interests 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 Subordinate Component Balance for Loan Group I as of
the Closing Date, (2) for any Distribution Date in or after
the month of the sixth anniversary of the month of the first
Distribution Date but before the seventh anniversary of the
month of the first Distribution Date, 35% of the Subordinate
Component Balance for Loan Group I as of the Closing Date, (3)
for any Distribution Date in or after the month of the seventh
anniversary of the month of the first Distribution Date but
before the eighth anniversary of the month of the first
Distribution Date, 40% of the Subordinate Component Balance
for Loan Group I as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date but
before the ninth anniversary of the month of the first
Distribution Date, 45% of the Subordinate Component Balance
for Loan Group I as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution Date, 50%
44
of the Subordinate Component Balance for Loan Group I as of
the Closing Date, and
(d) cumulative Realized Losses on the Group IV Loans allocated to
the Group C-B Regular Interests 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 Subordinate Component Balance for Loan Group IV as of
the Closing Date, (2) for any Distribution Date in or after
the month of the sixth anniversary of the month of the first
Distribution Date but before the seventh anniversary of the
month of the first Distribution Date, 35% of the Subordinate
Component Balance for Loan Group IV as of the Closing Date,
(3) for any Distribution Date in or after the month of the
seventh anniversary of the month of the first Distribution
Date but before the eighth anniversary of the month of the
first Distribution Date, 40% of the Subordinate Component
Balance for Loan Group IV as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date but
before the ninth anniversary of the month of the first
Distribution Date, 45% of the Subordinate Component Balance
for Loan Group IV as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution Date, 50%
of the Subordinate Component Balance for Loan Group IV as of
the Closing Date,
in which case the Group I Senior Prepayment Percentage and the Group IV
Senior Prepayment Percentage will be calculated 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 or the Group IV Senior Percentage, as applicable, for
such Distribution Date plus 70% of the Subordinate Percentage for the
related Loan Group for such Distribution Date; (2) for any such
Distribution Date in or after the month of the sixth anniversary of the
month of the first Distribution Date but before the seventh anniversary
of the month of the first Distribution Date, the Group I Senior
Percentage or the Group IV Senior Percentage, as applicable, for such
Distribution Date plus 60% of the Subordinate Percentage for the related
Loan Group for such Distribution Date; (3) for any such Distribution
Date in or after the month of the seventh anniversary of the month of
the first Distribution Date but before the eighth anniversary of the
month of the first Distribution Date, the Group I Senior Percentage or
the Group IV Senior Percentage, as applicable, for such Distribution
Date plus 40% of the Subordinate Percentage for the related Loan Group
for such Distribution Date; (4) for any such Distribution Date in or
after the month of the eighth anniversary of the month of the first
Distribution Date but before the ninth anniversary of the month of the
first Distribution Date, the Group I Senior Percentage or the Group IV
Senior Percentage, as applicable, for such Distribution Date plus 20% of
the Subordinate Percentage for the related Loan Group for such
Distribution Date; and (5) for any such Distribution Date thereafter,
45
the Group I Senior Percentage or the Group IV Senior Percentage, as
applicable, for such Distribution Date.
If on any Distribution Date the allocation to the Group I-L or
Group IV-L Regular Interests (other than the Component I-A-1-4-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 or the Group IV
Senior Prepayment Percentage, as applicable, for such Distribution Date
shall be limited to the percentage necessary to reduce such sum to zero.
Notwithstanding the foregoing, however, on each Distribution Date, the
Component I-A-1-4-L Regular Interest will receive the applicable Class I-
P Fraction of all principal payments, including, without limitation,
Principal Prepayments, received in respect of the Class I-P Mortgage
Loans.
Group I Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group I Senior Percentage of
the Principal Payment Amount for Loan Group I (exclusive of the portion
thereof attributable to principal distributions to the Component I-A-1-4-
L Regular Interests pursuant to clauses (I)(a)(i) and (II)(a)(i) of the
definition of "REMIC II Distribution Amount"), (b) the Group I Senior
Prepayment Percentage of the Principal Prepayment Amount for Loan Group
I (exclusive of the portion thereof attributable to principal
distributions to the Component I-A-1-4-L Regular Interests pursuant to
clauses (I)(a)(i) and (II)(a)(i) of the definition of "REMIC II
Distribution Amount") and (c) the Group I Senior Liquidation Amount.
Group I Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the
Group I Loans reduced by the aggregate Class Principal Balance of the
Group I-A Certificates and Component I-A-1-4.
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 (other than
Component I-A-1-5 of the Class I-A-1 Certificates) has been reduced to
zero, then the Group I Subordinate Prepayment Percentage shall equal
100%.
Group I-A Certificates: The Class I-A-1 (other than Component I-A-1-
4 thereof), 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 and Class I-A-10
Certificates.
Group I-A-L Regular Interests: The Class I-A-1-L (other than
Component I-A-1-4-L thereof), Class I-A-2-L, Class I-A-3-L, Class I-A-4-
L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L, Class I-A-8-L and Class
I-A-10-L Regular Interests.
Group II Certificates: The Class II-A-1, Class II-P and Class II-X
Certificates.
Group II-L Regular Interests: The Class II-A-1-L, Class II-P-L and
Class II-X-L Regular Interests.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan
46
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 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 lesser of (i) 100% and (ii) the Class II-A-1 Principal Balance
divided by the aggregate Principal Balance of the Group II Loans (less
the Class II-P Fraction of each Class II-P Mortgage Loan), in each case
immediately prior to the Distribution Date.
Group II Senior Prepayment Percentage or Group III Senior
Prepayment Percentage: (i) On any Distribution Date occurring before the
Distribution Date in the month of the fifth anniversary of the first
Distribution Date, each of the Group II Senior Prepayment Percentage and
the Group III Senior Prepayment Percentage shall equal 100%; (ii) on any
other Distribution Date on which the Group II Senior Percentage for such
Distribution Date exceeds the Group II Senior Percentage as of the
Closing Date or the Group III Senior Percentage for such Distribution
Date exceeds the Group III Senior Percentage as of the Closing Date,
each of the Group II Senior Prepayment Percentage and the Group III
Senior Prepayment Percentage shall equal 100%; and (iii) on any other
Distribution Date in each of the months of the fifth anniversary of the
first Distribution Date and thereafter, each of the Group II Senior
Prepayment Percentage and the Group III Senior Prepayment Percentage
shall equal 100%, unless the following tests specified in clauses (a)
through (d) are met with respect to each of Loan Group II and Loan Group
III:
(a) the mean aggregate Principal Balance of the Group II Loans
which are 60 or more days delinquent (including loans in
foreclosure and property held by REMIC I) for each of the
immediately preceding six calendar months is less than or
equal to 50% of the Subordinate Component Balance for Loan
Group II as of such Distribution Date,
(b) the mean aggregate Principal Balance of the Group III Loans
which are 60 or more days delinquent (including loans in
foreclosure and property held by REMIC I) for each of the
immediately preceding six calendar months is less than or
equal to 50% of the Subordinate Component Balance for Loan
Group III as of such Distribution Date,
(c) cumulative Realized Losses on the Group II Loans allocated to
the Group D-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 Subordinate Component Balance for Loan Group II as of
the Closing Date, (2) for any Distribution Date in or after
the month of the sixth anniversary of the month of the first
Distribution Date but before the seventh anniversary of the
47
month of the first Distribution Date, 35% of the Subordinate
Component Balance for Loan Group II as of the Closing Date,
(3) for any Distribution Date in or after the month of the
seventh anniversary of the month of the first Distribution
Date but before the eighth anniversary of the month of the
first Distribution Date, 40% of the Subordinate Component
Balance for Loan Group II as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date but
before the ninth anniversary of the month of the first
Distribution Date, 45% of the Subordinate Component Balance
for Loan Group II as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution Date, 50%
of the Subordinate Component Balance for Loan Group II as of
the Closing Date, and
(d) cumulative Realized Losses on the Group III Loans allocated to
the Group D-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 Subordinate Component Balance for Loan Group III as of
the Closing Date, (2) for any Distribution Date in or after
the month of the sixth anniversary of the month of the first
Distribution Date but before the seventh anniversary of the
month of the first Distribution Date, 35% of the Subordinate
Component Balance for Loan Group III as of the Closing Date,
(3) for any Distribution Date in or after the month of the
seventh anniversary of the month of the first Distribution
Date but before the eighth anniversary of the month of the
first Distribution Date, 40% of the Subordinate Component
Balance for Loan Group III as of the Closing Date, (4) for any
Distribution Date in or after the month of the eighth
anniversary of the month of the first Distribution Date but
before the ninth anniversary of the month of the first
Distribution Date, 45% of the Subordinate Component Balance
for Loan Group III as of the Closing Date and (5) for any
Distribution Date in or after the month of the ninth
anniversary of the month of the first Distribution Date, 50%
of the Subordinate Component Balance for Loan Group III as of
the Closing Date,
in which case the Group II Senior Prepayment Percentage and the Group
III Senior Prepayment Percentage shall be calculated 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 or the Group III Senior Percentage, as applicable,
for such Distribution Date plus 70% of the Subordinate Percentage for
the related Loan Group for such Distribution Date; (2) for any such
Distribution Date in or after the month of the sixth anniversary of the
month of the first Distribution Date but before the seventh anniversary
of the month of the first Distribution Date, the Group II Senior
Percentage or the Group III Senior Percentage, as applicable, for such
48
Distribution Date plus 60% of the Subordinate Percentage for the related
Loan Group for such Distribution Date; (3) for any such Distribution
Date in or after the month of the seventh anniversary of the month of
the first Distribution Date but before the eighth anniversary of the
month of the first Distribution Date, the Group II Senior Percentage or
the Group III Senior Percentage, as applicable, for such Distribution
Date plus 40% of the Subordinate Percentage for the related Loan Group
for such Distribution Date; (4) for any such Distribution Date in or
after the month of the eighth anniversary of the month of the first
Distribution Date but before the ninth anniversary of the month of the
first Distribution Date, the Group II Senior Percentage or the Group III
Senior Percentage, as applicable, for such Distribution Date plus 20% of
the Subordinate Percentage for the related Loan Group for such
Distribution Date; and (5) for any such Distribution Date thereafter,
the Group II Senior Percentage or the Group III Senior Percentage, as
applicable, for such Distribution Date.
If on any Distribution Date the allocation to the Group II-L or
Group III-L Regular Interests (other than the Class II-P-L and Class III-
P-L Regular Interests) of Principal Prepayments in the percentage
required would reduce the sum of the Class Principal Balances of such
Regular Interests below zero, the Group II Senior Prepayment Percentage
or the Group III Senior Prepayment Percentage, as applicable, for such
Distribution Date shall be limited to the percentage necessary to reduce
such sum to zero. Notwithstanding the foregoing, however, on each
Distribution Date, the Class II-P-L Regular Interest will receive the
applicable Class II-P Fraction of all principal payments, including,
without limitation, Principal Prepayments, received in respect of Class
II-P Mortgage Loans and the Class III-P-L Regular Interest will receive
the applicable Class III-P Fraction of all principal payments,
including, without limitation, Principal Prepayments, received in
respect of Class III-P Mortgage Loans.
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 Interest 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 Interest 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 Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the
Group II Loans reduced by the aggregate Class Principal Balance of the
Class II-A-1 and Class II-P Certificates.
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
49
Principal Balance has been reduced to zero, then the Group II
Subordinate Prepayment Percentage shall equal 100%.
Group III Certificates: The Class III-A-1, Class III-X and Class
III-P Certificates.
Group III-L Regular Interests: The Class III-A-1-L, Class III-X-L
and Class III-P-L Regular Interests.
Group III Loans: The Mortgage Loans designated on the Mortgage
Loan Schedule as Group III Loans.
Group III Premium Rate Mortgage Loans: The Group III Loans having
Pass-Through Rates in excess of 7.250% per annum.
Group III Senior Liquidation Amount: The aggregate, for each Group
III Loan which became a Liquidated Mortgage Loan during the Prior
Period, of the lesser of: (i) the Group III Senior Percentage of the
Principal Balance of such Mortgage Loan (exclusive of the Class III-P
Fraction thereof, with respect to any Class III-P Mortgage Loan) and
(ii) the Group III Senior Prepayment Percentage of the Liquidation
Principal with respect to such Mortgage Loan.
Group III Senior Percentage: With respect to any Distribution Date,
the lesser of (i) 100% and (ii) the Class III-A-1 Principal Balance
divided by the aggregate Principal Balance of the Group III Loans (less
the Class III-P Principal Balance), in each case immediately prior to
the Distribution Date.
Group III Senior Prepayment Percentage: See the definition of
"Group II Senior Prepayment Percentage."
Group III Senior Principal Distribution Amount: For any
Distribution Date, an amount equal to the sum of (a) the Group III
Senior Percentage of the Principal Payment Amount for Loan Group III
(exclusive of the portion thereof attributable to principal
distributions to the Class III-P-L Regular Interest pursuant to clauses
(I)(c)(i) and (II)(c)(i) of the definition of "REMIC II Distribution
Amount"), (b) the Group III Senior Prepayment Percentage of the
Principal Prepayment Amount for Loan Group III (exclusive of the portion
thereof attributable to principal distributions to the Class III-P-L
Regular Interest pursuant to clauses (I)(c)(i) and (II)(c)(i) of the
definition of "REMIC II Distribution Amount") and (c) the Group III
Senior Liquidation Amount.
Group III Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the
Group III Loans reduced by the aggregate Class Principal Balance of the
Class III-A-1 and Class III-P Certificates.
Group III Subordinate Percentage: With respect to any Distribution
Date, the excess of 100% over the Group III Senior Percentage for such
date.
Group III Subordinate Prepayment Percentage: On any Distribution
Date, the excess of 100% over the Group III Senior Prepayment Percentage
for such Distribution Date; provided, however, that if the Class III-A-1
Principal Balance has been reduced to zero, then the Group III
Subordinate Prepayment Percentage shall equal 100%.
Group IV Certificates: The Group IV-A Certificates.
Group IV-L Regular Interests: The Group IV-A-L and Class R-3-L
Regular Interests.
Group IV Loans: The Mortgage Loans designated on the Mortgage Loan
50
Schedule as Group IV Loans.
Group IV Senior Liquidation Amount: The aggregate, for each Group
IV Loan which became a Liquidated Mortgage Loan during the Prior Period,
of the lesser of: (i) the Group IV Senior Percentage of the Principal
Balance of such Mortgage Loan and (ii) the Group IV Senior Prepayment
Percentage of the Liquidation Principal with respect to such Mortgage
Loan.
Group IV Senior Percentage: With respect to any Distribution Date,
the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of
the Group IV-A and Residual Certificates divided by the aggregate
Principal Balance of the Group IV Loans, in each case immediately prior
to the Distribution Date.
Group IV Senior Prepayment Percentage: See the definition of "Group
I Senior Prepayment Percentage."
Group IV Senior Principal Distribution Amount: For any Distribution
Date, an amount equal to the sum of (a) the Group IV Senior Percentage
of the Principal Payment Amount for Loan Group IV, (b) the Group IV
Senior Prepayment Percentage of the Principal Prepayment Amount for Loan
Group IV and (c) the Group IV Senior Liquidation Amount.
Group IV Subordinate Balance: For any date of determination, an
amount equal to the then outstanding aggregate Principal Balance of the
Group IV Loans reduced by sum of (i) the aggregate Class Principal
Balance of the Group IV-A and Residual Certificates and (ii) the amount
by which $2999.97 exceeds the amounts on deposit in the Rounding
Accounts.
Group IV Subordinate Percentage: With respect to any Distribution
Date, the excess of 100% over the Group IV Senior Percentage for such
date.
Group IV Subordinate Prepayment Percentage: On any Distribution
Date, the excess of 100% over the Group IV Senior Prepayment Percentage
for such Distribution Date; provided, however, that if the aggregate
Class Principal Balance of the Group IV-A and Residual Certificates has
been reduced to zero, then the Group IV Subordinate Prepayment
Percentage shall equal 100%.
Group IV-A Certificates: The Class IV-A-1, Class IV-A-2, Class IV-A-
3, Class IV-A-4, Class IV-A-5, Class IV-A-6, Class IV-A-7, Class IV-A-8
and Class IV-A-9 Certificates.
Group IV-A-L Regular Interests: The Class IV-A-1-L, Class IV-A-2-L,
Class IV-A-3-L, Class IV-A-4-L, Class IV-A-5-L, Class IV-A-6-L, Class IV-
A-7-L, Class IV-A-8-L and Class IV-A-9-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
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(or the Components thereof in the case of the Class I-A-1-L Regular
Interest), the Class R-1 Certificates and the Class R-2 Certificates,
the amount of interest accrued on the respective Class Principal
Balance, Component Principal Balance or Class Notional Amount, as
applicable, at the related Certificate Interest Rate for such Class or
Component during the Prior Period, in each case before giving effect to
allocations of Realized Losses for the Prior Period or distributions to
be made on such Distribution Date, reduced by Uncompensated Interest
Shortfall, interest shortfalls related to the Relief Act and the
interest portion of Realized Losses allocated to such Class pursuant to
the definitions of "Uncompensated Interest Shortfall", "Relief Act" and
"Realized Loss", respectively. The Interest Distribution Amount for the
Class IV-A-8-L, Class P-L and Class P-M Regular Interests shall equal
zero. The Interest Distribution Amount for Component I-A-1-4-L shall
equal zero.
Interest Transfer Amount: On any Distribution Date for each
Undercollateralized Group, an amount equal to one month's interest on
the applicable Principal Transfer Amount at 6.750% per annum if the
Undercollateralized Group is Loan Group I, at 7.000% per annum if the
Undercollateralized Group is Loan Group II, at 7.250% per annum if the
Undercollateralized Group is Loan Group III and at 6.500% per annum if
the Undercollateralized Group is Loan Group IV, plus any shortfall of
interest on the Senior Certificates of an Undercollateralized Group from
prior Distribution Dates.
Investment Account: The commingled account (which shall be
commingled only with investment accounts related to series of pass-
through certificates with a class of certificates which has a rating
equal to the highest of the Ratings of the Certificates) maintained by
the Master Servicer in the trust department of the Investment Depository
pursuant to Section 3.03 and which bears a designation acceptable to the
Rating Agencies.
Investment Depository: The Chase Manhattan Bank, New York, New York
or another bank or trust company designated from time to time by the
Master Servicer. The Investment Depository shall at all times be an
Eligible Institution.
Junior Subordinate Certificates: The Class C-B-4, Class C-B-5,
Class C-B-6, Class D-B-4, Class D-B-5 and Class D-B-6 Certificates.
Lender: An institution from which the Company purchased any
Mortgage Loans pursuant to a Selling and Servicing Contract.
Liquidated Mortgage Loan: A Mortgage Loan as to which the Master
Servicer or the applicable Servicer has determined in accordance with
its customary servicing practices that all amounts which it expects to
recover from or on account of such Mortgage Loan, whether from Insurance
Proceeds, Liquidation Proceeds or otherwise, have been recovered. For
purposes of this definition, acquisition of a Mortgaged Property by the
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 and the Component I-A-1-
4-L Regular Interest pursuant to clauses (I)(a)(i), (I)(b)(i),
(I)(c)(i), (I)(d)(i), (II)(a)(i), (II)(b)(i), (II)(c)(i) and (II)(d)(i)
52
of the definition of "REMIC II Distribution Amount") with respect to
each Mortgage Loan which became a Liquidated Mortgage Loan (but not in
excess of the principal balance thereof) during the Prior Period.
Liquidation Proceeds: Amounts after deduction of amounts
reimbursable under Section 3.05(a)(i) and (ii) received and retained in
connection with the liquidation of defaulted Mortgage Loans, whether
through foreclosure or otherwise.
Living Holder: A Beneficial Holder of a Special Retail Certificate
other than a Deceased Holder.
Loan Group: Loan Group I, Loan Group II, Loan Group III or Loan
Group IV, as applicable.
Loan Group I: The group of Mortgage Loans comprised of the Group I
Loans.
Loan Group II: The group of Mortgage Loans comprised of the Group
II Loans.
Loan Group III: The group of Mortgage Loans comprised of the Group
III Loans.
Loan Group IV: The group of Mortgage Loans comprised of the Group
IV Loans.
Loan-to-Value Ratio: The original principal amount of a Mortgage
Loan divided by the Original Value; however, references to "current Loan-
to-Value Ratio" shall mean the then current Principal Balance of a
Mortgage Loan divided by the Original Value.
Master Servicer: The Company, or any successor thereto appointed
as provided pursuant to Section 7.02, acting to service and administer
the Mortgage Loans pursuant to Section 3.01.
Master Servicing Fee: The fee charged by the Master Servicer for
supervising the mortgage servicing and advancing certain expenses, equal
to a per annum rate set forth for each Mortgage Loan in Exhibit D on the
outstanding Principal Balance of such Mortgage Loan, payable monthly
from the Certificate Account, the Investment Account or the Custodial
Account for P&I.
Monthly P&I Advance: An advance of funds by the Master Servicer
pursuant to Section 4.02 or a Servicer pursuant to its Selling and
Servicing Contract to cover delinquent principal and interest
installments.
Monthly Payment: The scheduled payment of principal and interest on
a Mortgage Loan (including any amounts due from a Buydown Fund, if any)
which is due on the related Due Date for such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note.
Mortgaged Property: With respect to any Mortgage Loan, other than a
Cooperative Loan, the real property, together with improvements thereto,
and, with respect to any Cooperative Loan, the related Cooperative Stock
and Cooperative Lease, securing the indebtedness of the Mortgagor under
the related Mortgage Loan.
Mortgage File: The following documents or instruments with respect
to each PNC Mortgage Loan transferred and assigned by the Company
pursuant to Section 2.01 and each Clipper Mortgage Loan transferred and
assigned by Clipper pursuant to the Clipper Loan Sale Agreement, (X)
with respect to each Mortgage Loan that is not a Cooperative Loan:
(i) The original Mortgage Note endorsed to "State Street Bank and
53
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 1999-4, without recourse" and all intervening
endorsements evidencing a complete chain of endorsements from the
originator to the Trustee, or, in the event of any Destroyed Mortgage
Note, a copy or a duplicate original of the Mortgage Note, together with
an original lost note affidavit from the originator of the related
Mortgage Loan or the Company or Clipper, as applicable, stating that the
original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note; in the event the Mortgage Notes are
endorsed in blank as of the Closing Date, the Company shall, within 45
days of the Closing Date, cause such Mortgage Notes to be endorsed
pursuant to the terms set forth herein; provided, that, with respect to
any Mortgage Note whereby the related Mortgaged Property is located in
California, such original Mortgage Note may be endorsed in blank and the
Company shall not be required to endorse such Mortgage Notes pursuant to
the terms otherwise set forth in this clause (i);
(ii) The Buydown Agreement, if applicable;
(iii) A Mortgage that is either
(1) the original recorded Mortgage with recording
information thereon for the jurisdiction in which the
Mortgaged Property is located and a Mortgage assignment
thereof in recordable form to "State Street Bank and Trust
Company, as Custodian/Trustee", or to "State Street Bank and
Trust Company, as Trustee for the Holders of PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series
1999-4" 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 1999-4" and all intervening assignments
evidencing a complete chain of assignment from the originator
to the name holder or the payee endorsing the related Mortgage
Note; provided, that in the event the assignments are executed
in blank as of the Closing Date, the Company shall, within 45
days of the Closing Date, cause such assignments to be
executed pursuant to the terms set forth herein; provided,
that, with respect to any Mortgage whereby the related
Mortgaged Property is located in California, the Mortgage
assignment may be executed and acknowledged in blank and the
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Company shall not be required to deliver such Mortgage
assignment in the form otherwise set forth in clause (iii)(1)
or this clause (iii)(2);
(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 1999-4" and all intervening
endorsements evidencing a complete chain of endorsements, from the
originator to the Trustee, or, in the event of any Destroyed Mortgage
Note, a copy or a duplicate original of the Mortgage Note, together with
an original lost note affidavit from the originator of the related
Mortgage Loan or the Company or Clipper, as applicable, stating that the
original Mortgage Note was lost, misplaced or destroyed, together with a
copy of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative
Loan as secured party, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement
and the Assignment of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security
interest referenced in clause (vi) above showing an unbroken chain of
title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in
the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an
unbroken chain of title from the originator to the Trustee;
(ix) An executed UCC-1 financing statement showing the Company or
Clipper, as applicable, as debtor and the Trustee as secured party, each
in a form sufficient for filing, evidencing the interest of such debtors
in the Cooperative Loans; and
55
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,
(x) its Loan Group, and
(xi) whether it is a PNC Mortgage Loan or a Clipper Mortgage Loan.
Mortgage Loans: With respect to each Cooperative Loan, the related
Mortgage Note, Security Agreement, Assignment of Proprietary Lease,
Cooperative Stock Certificate and Cooperative Lease, and, with respect
to each Mortgage Loan other than a Cooperative Loan, the Mortgages and
the related Mortgage Notes, each transferred and assigned to the Trustee
pursuant to the provisions hereof or of the Clipper Loan Sale Agreement
as from time to time are held as part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan Schedule.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: With respect to any Mortgage Loan, any
advance which the Master Servicer shall determine to be a Nonrecoverable
Advance pursuant to Section 4.03 and which was, or is proposed to be,
made by (i) the Master Servicer or (ii) a Servicer pursuant to its
Selling and Servicing Contract.
Non-U.S. Person: A Person that is not a U.S. Person.
OTS: The Office of Thrift Supervision, or any successor thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the President, a Vice President, or the Treasurer of the Master
Servicer and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who shall be
reasonably acceptable to the Trustee and who may be counsel (including
in-house counsel) for the Company or the Master Servicer.
Original Value: With respect to any Mortgage Loan other than a
Mortgage Loan originated for the purpose of refinancing an existing
mortgage debt, the lesser of (a) the Appraised Value (if any) of the
Mortgaged Property at the time the Mortgage Loan was originated or (b)
the purchase price paid for the Mortgaged Property by the Mortgagor.
With respect to a Mortgage Loan originated for the purpose of
refinancing existing mortgage debt, the Original Value shall be equal to
56
the Appraised Value of the Mortgaged Property at the time the Mortgage
Loan was originated or the appraised value at the time the refinanced
mortgage debt was incurred.
Overcollateralized Group: Either of Loan Group I or Loan Group IV,
if on any Distribution Date such Loan Group is not an
Undercollateralized Group and the other of such Loan Groups is an
Undercollateralized Group. Either of Loan Group II or Loan Group III, if
on any Distribution Date such Loan Group is not an Undercollateralized
Group and the other of such Loan Groups is an Undercollateralized Group.
Ownership Interest: With respect to any Residual Certificate, any
ownership or security interest in such Residual Certificate, including
any interest in a Residual Certificate as the Holder thereof and any
other interest therein whether direct or indirect, legal or beneficial,
as owner or as pledgee.
PNC Mortgage Loans: The Mortgage Loans identified as PNC Mortgage
Loans on the Mortgage Loan Schedule and conveyed by the Company to the
Trustee pursuant to Section 2.01.
Pass-Through Entity: Any regulated investment company, real estate
investment trust, common trust fund, partnership, trust or estate, and
any organization to which Section 1381 of the Code applies.
Pass-Through Rate: For each Mortgage Loan, a rate equal to the
Mortgage Interest Rate for such Mortgage Loan less the applicable per
annum percentage rates related to each of (i) the Servicing Fee and (ii)
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.
Payoff: Any Mortgagor payment of principal (exclusive of any
prepayment penalty) 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
57
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 May 14, 1999, inclusive; and with
respect to any Distribution Date thereafter, the period from the 15th
day of the Prior Period through the 14th day of the month of such
Distribution Date, inclusive
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such
Class, "Percentage Interest" shall mean the percentage undivided
beneficial ownership interest evidenced by such Certificate of such
Class, which percentage shall equal:
(i) with respect to any Certificate (other than the Residual,
Class I-A-1, Class I-A-9 and Class X Certificates), its Certificate
Principal Balance divided by the applicable Class Principal Balance;
(ii) with respect to the Class X and Class I-A-9 Certificates, the
portion of the respective Class Notional Amount evidenced by such
Certificate divided by the respective Class Notional Amount;
(iii) with respect to the Class I-A-1 Certificates, its Certificate
Principal Balance divided by the applicable Class Principal Balance;
provided that if the Class I-A-1 Principal Balance has been reduced to
zero but the respective Component Notional Amounts thereof are greater
than zero, the aggregate of the Component Notional Amounts evidenced by
such Certificate divided by the aggregate of the Component Notional
Amounts of Component I-A-1; and
(iv) 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:
(A) if the Class I-A-1 Principal Balance is greater than zero or if the
Class I-A-1 Principal Balance and the Component Notional Amounts of
Component I-A-1-1, Component I-A-1-2 and Component I-A-1-3 have all been
reduced to zero;
(i) with respect to any Certificate (other than any Class of
the Class X Certificates, the Class I-A-9 and Class R-3
Certificates), the product of (x) ninety-six percent (96%) and (y)
the percentage calculated by dividing its Certificate Principal
Balance by the Aggregate Certificate Principal Balance of the
Certificates; provided, however, that the percentage in (x) above
shall be increased by one percent (1%) upon each retirement of the
Certificates referenced in the parenthetical above (other than the
Class R-3 Certificates);
(ii) with respect to any of Class of the Class X Certificates
and the Class I-A-9 Certificates, one percent (1%) of such
58
Certificate's Percentage Interest as calculated by paragraph
(a)(ii) of this definition; and
(iii) with respect to the Class R-3 Certificates, zero; or
(B) if the Class I-A-1 Principal Balance has been reduced to zero but
the Component Notional Amounts of Component I-A-1-1, Component I-A-1-2
or Component I-A-1-3 are greater than zero;
(i) with respect to any Certificate (other than any Class of
the Class X Certificates, the Class I-A-1, Class I-A-9 and Class R-
3 Certificates), the product of (x) ninety-five percent (95%) and
(y) the percentage calculated by dividing its Certificate Principal
Balance by the Aggregate Certificate Principal Balance; provided,
however, that the percentage in (x) above shall be increased by one
percent (1%) upon each retirement of the Certificates referenced in
the parenthetical above (other than the Class R-3 Certificates);
(ii) with respect to any of Class of the Class X, Class I-A-1
and Class I-A-9 Certificates, one percent (1%) of such
Certificate's Percentage Interest as calculated by paragraph
(a)(ii) of this definition (with the "Class Notional Amount" of the
Class I-A-1 Certificates equal to the sum of the Component Notional
Amounts of the Components thereof); and
(iii) with respect to the Class R-3 Certificates, zero.
Permitted Transferee: With respect to the holding or ownership of
any Residual Certificate, any Person other than (i) the United States, a
State or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of
the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Code Section 521) which is exempt from the
taxes imposed by Chapter 1 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 ▇▇▇▇▇▇▇
Mac, a majority of its board of directors is not selected by such
governmental unit.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Planned Principal Balance: The combined amount set forth in the
59
table attached as Appendix C to the Prospectus, for the applicable
Distribution Date, for the Class I-A-2, Class I-A-5, Class I-A-6, Class
I-A-7 and Class I-A-8 Certificates, which amount shall also constitute
the "Planned Principal Balance" for the Corresponding Classes in the
aggregate.
Prepaid Monthly Payment: Any Monthly Payment received prior to its
scheduled Due Date, which is intended to be applied to a Mortgage Loan
on its scheduled Due Date and held in the related Custodial Account for
P&I until the Withdrawal Date following its scheduled Due Date.
Primary Insurance Policy: A policy of mortgage guaranty insurance,
if any, on an individual Mortgage Loan or on pools of mortgage loans
that include an individual Mortgage Loan, providing coverage as required
by Section 2.03(xi).
Principal Balance: Except as used in Sections 2.02, 3.09 and 9.01
and for purposes of the definition of Purchase Price, at the time of any
determination, the principal balance of a Mortgage Loan remaining to be
paid at the close of business on the Cut-Off Date, after application of
all scheduled principal payments due on or before the Cut-Off Date,
whether or not received, reduced by all amounts distributed or (except
when such determination occurs earlier in the month than the
Distribution Date) to be distributed to Certificateholders through the
Distribution Date in the month of determination that are reported as
allocable to principal of such Mortgage Loan.
For purposes of the definition of Purchase Price and as used in
Sections 2.02, 3.09 and 9.01, at the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid at the close
of business on the Cut-Off Date, after deduction of all scheduled
principal payments due on or before the Cut-Off Date, whether or not
received, reduced by all amounts distributed or to be distributed to
Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
Mortgage Loan.
In the case of a Substitute Mortgage Loan, "Principal Balance"
shall mean, at the time of any determination, the principal balance of
such Substitute Mortgage Loan transferred to the Trust Fund, on the date
of substitution, reduced by all amounts distributed or to be distributed
to Certificateholders through the Distribution Date in the month of
determination that are reported as allocable to principal of such
Substitute Mortgage Loan.
The Principal Balance of a Mortgage Loan (including a Substitute
Mortgage Loan) shall not be adjusted solely by reason of any bankruptcy
or similar proceeding or any moratorium or similar waiver or grace
period. Whenever a Realized Loss has been incurred with respect to a
Mortgage Loan during a calendar month, the Principal Balance of such
Mortgage Loan shall be reduced by the amount of such Realized Loss as of
the Distribution Date next following the end of such calendar month
after giving effect to the allocation of Realized Losses and
distributions of principal to the Certificates.
Principal Payment: Any payment of principal on a Mortgage Loan
other than a Principal Prepayment.
Principal Payment Amount: On any Distribution Date and for any Loan
Group, the sum with respect to the Mortgage Loans in such Loan Group of
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(i) the scheduled principal payments on the Mortgage Loans due on the
related Due Date, (ii) the principal portion of proceeds received with
respect to any Mortgage Loan which was purchased or repurchased 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. In addition, in the event that all or a portion
of the Clipper Mortgage Loan Purchase Amount has not been applied to the
purchase of Clipper Mortgage Loans under the Clipper Loan Sale Agreement
in accordance with Section 2.01, such remaining portion shall on the
first Distribution Date be included in the Principal Payment Amount for
each Loan Group, pro rata according to the aggregate Principal Balance
of the Clipper Mortgage Loans not so purchased but intended for
inclusion in such Loan Group.
Principal Prepayment: Any payment of principal on a Mortgage Loan
which constitutes a Payoff or a Curtailment.
Principal Prepayment Amount: On any Distribution Date and for any
Loan Group, the sum with respect to the Mortgage Loans in such Loan
Group of (i) Curtailments received during the Prior Period from such
Mortgage Loans and (ii) Payoffs received during the Payoff Period from
such Mortgage Loans.
Principal Transfer Amount: For any Distribution Date for each
Undercollateralized Group, the excess, if any, of the aggregate Class
Principal Balance of the Class A-L Regular Interests related to such
Undercollateralized Group over the aggregate Principal Balance of the
Mortgage Loans in the such Loan Group (less the applicable Class P
Fraction of any Class P Mortgage Loans in such Loan Group), in each case
immediately prior to such Distribution Date.
Prior Period: The calendar month immediately preceding any
Distribution Date.
Pro Rata Allocation: (i) With respect to Realized Losses on Group I
Loans and Group IV Loans, the allocation of the principal portion of
such losses to all Classes (or, in the case of the Class I-A-1-L Regular
Interests, Component I-A-1-5-L thereof) of the Group I-L, Group IV-L and
Group C-B-L Regular Interests (other than the related Class P-L Regular
Interests) and the Class R-1 and Class R-2 Certificates pro rata
according to their respective Class or Component Principal Balances in
reduction thereof (except if the loss is recognized with respect to a
Class I-P Mortgage Loan, in which case the applicable Class I-P Fraction
of such loss will first be allocated to the Component I-A-1-4-L Regular
Interest, and the remainder of such loss will be allocated as set forth
above), and the allocation of the interest portion of such losses to all
Classes (or, in the case of the Class I-A-1-L Regular Interests,
Component I-A-1-5-L thereof) of the Group I-L, Group IV-L and Group C-B-
L Regular Interests (other than the related Class P-L Regular Interests
and the Class IV-A-8-L Regular Interest) and the Class R-1 and Class R-2
Certificates pro rata according to the amount of interest accrued but
unpaid on each such Class or Component, in reduction thereof, and then
to such Classes and Components (other than the related Class P-L and
Class IV-A-8-L Regular Interests) pro rata according to their respective
Class or Component Principal Balances in reduction thereof; provided,
61
however that all Realized Losses that would otherwise be allocable to
the Class I-A-1-L Regular Interests (other than Component I-A-1-4-L
thereof) will instead be allocated to the Class I-A-10-L Regular
Interests until the Class I-A-10-L Principal Balance has been reduced to
zero; and (ii) with respect to Realized Losses on Group II Loans and
Group III Loans, the allocation of the principal portion of such losses
to all Classes of the Group II-L, Group III-L and Group D-B-L Regular
Interests pro rata according to their respective Class Principal
Balances in reduction thereof (except if the loss is recognized with
respect to a Class II-P or Class III-P Mortgage Loan, in which case the
applicable Class P Fraction of such loss will first be allocated to the
related Class 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 such losses to all Classes of the Group II-L, Group III-L and
Group D-B-L Regular Interests (other than the related Class P-L Regular
Interests) pro rata according to the amount of interest accrued but
unpaid on each such Class, in reduction thereof, and then to such
Classes pro rata according to their respective Class Principal Balances
in reduction thereof. Any losses allocated among the outstanding Classes
of REMIC II Regular Interests pursuant to this definition of "Pro Rata
Allocation" shall also be allocated to the Corresponding Classes of
Certificates in the same manner and amounts as they reduce such
attributes of such Classes of REMIC II Regular Interests; provided,
however, that (i) the interest portion of such losses allocated to the
Class I-A-2-L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L and Class I-A-
8-L Regular Interests and applied to reduce the Interest Distribution
Amount thereof shall be allocated to the Class I-A-2, Class I-A-5, Class
I-A-6, Class I-A-7, Class I-A-8 and Class I-A-9 Certificates and
Component I-A-1-1, Component I-A-1-2 and Component I-A-1-3 in reduction
of the distribution of interest to such Certificates and Component
pursuant to the distributions set forth in clause (a)(iv) of the
definition of "REMIC III Distribution Amount", pro rata according to the
allocation set forth in such clause and (ii) the interest portion of
such losses allocated to the Class I-A-3-L Regular Interests and applied
to reduce the Interest Distribution Amount thereof shall be allocated to
the Class I-A-3 Certificates and Component I-A-1-3 in reduction of the
distribution of interest to such Certificates pursuant to the
distributions set forth in clause (a)(iii) of the definition of "REMIC
III Distribution Amount", pro rata according to the allocation set forth
in such clause.
Prospectus: The Prospectus, dated January 27, 1999, and the
Prospectus Supplement, dated April 27, 1999, of the Company.
Protective Transfer Agreement: The Protective Transfer Agreement,
substantially in the form of Exhibit P hereto, to be entered into
between Fairway Drive Funding Corp. and the Trustee pursuant to Section
2.01.
Purchase Obligation: An obligation of the Company to purchase or
repurchase Mortgage Loans under the circumstances and in the manner
provided in Section 2.02 or Section 2.03.
Purchase Price: With respect to any Mortgage Loan to be purchased
pursuant to a Purchase Obligation, an amount equal to the sum of the
Principal Balance thereof, and unpaid accrued interest thereon, if any,
62
to the last day of the calendar month in which the date of purchase or
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 ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae and the Master Servicer. A
Qualified Insurer must have the rating required by the Rating Agencies.
Random Lot: With respect to any Distribution Date on which a
mandatory distribution is to be made on the Special Retail Certificates
(as described in Section 4.07), the method by which DTC will determine
which Special Retail Certificates of such Class will be paid principal,
using its established random lot procedures or, if the such Certificates
are no longer represented by a Book-Entry Certificate, using the
Trustee's procedures.
Rating Agency: Initially, each of S&P and DCR and thereafter, each
nationally recognized statistical rating organization that has rated the
Certificates at the request of the Company, or their respective
successors in interest.
Ratings: As of any date of determination, the ratings, if any, of
the Certificates as assigned by the Rating Agencies.
Realized Loss: For any Distribution Date, with respect to any
Mortgage Loan which became a Liquidated Mortgage Loan during the related
Prior Period, the sum of (i) the principal balance of such Mortgage Loan
remaining outstanding and the principal portion of Nonrecoverable
Advances actually reimbursed with respect to such Mortgage Loan (the
principal portion of such Realized Loss), and (ii) the accrued interest
on such Mortgage Loan remaining unpaid and the interest portion of
Nonrecoverable Advances actually reimbursed with respect to such
Mortgage Loan (the interest portion of such Realized Loss). For any
Distribution Date, with respect to any Mortgage Loan which is not a
Liquidated Mortgage Loan, the amount of the Bankruptcy Loss incurred
with respect to such Mortgage Loan as of the related Due Date.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
Losses on Group I, Group II, Group III and Group IV Loans 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 Groups pro rata
according to the amount of interest accrued but unpaid thereon, in
reduction thereof (i.e. the "related" Loan Group for the Class C-Y-1,
Class C-Z-1, Class I-X-M and Class I-P-M Regular Interests is Loan Group
I, the "related" Loan Group for the Class D-Y-1, Class D-Z-1, Class II-P-
63
M and Class II-X-M Regular Interests is Loan Group II, the "related"
Loan Group for the Class D-Y-2, Class D-Z-2, Class III-X-M and Class III-
P-M Regular Interests is Loan Group III and the "related" Loan Group for
the Class C-Y-2 and Class C-Z-2 Regular Interests is Loan Group IV). 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 shall be
allocated to the related Class P-M Regular Interest in reduction of the
principal balance thereof. The remainder of the principal portion of
Realized Losses with respect to Loan Group I and Loan Group IV shall be
allocated, first, to the Class C-Y Regular Interest related to the Loan
Group to the extent of the applicable Class C-Y Principal Reduction
Amount in reduction of the Class Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion
of Realized Losses shall be allocated to the related Class C-Z Regular
Interest in reduction of the Class Principal Balance thereof. The
remainder of the principal portion of Realized Losses with respect to
Loan Group II and Loan Group IIII shall be allocated, first, to the
Class D-Y Regular Interest related to the Loan Group to the extent of
the applicable Class D-Y Principal Reduction Amount in reduction of the
Class Principal Balance of such Regular Interest and, second, the
remainder, if any, of such principal portion of Realized Losses shall be
allocated to the related Class D-Z Regular Interest in reduction of the
Class Principal Balance thereof.
Realized Losses, Special Hazard Losses, Fraud Losses and Bankruptcy
Losses allocated to any Class and Component of REMIC II Regular
Interests shall also be allocated to the Corresponding Class or
Component of Certificates thereof and applied to reduce the Class or
Component Principal Balance of such Corresponding Class or Corresponding
Component in the same manner and amounts as they reduce such attributes
of such Class or Component of REMIC II Regular Interests; provided,
however, that the allocation of the interest portion of such losses is
subject to the proviso contained in the last sentence of the definition
of "Pro Rata Allocation" herein.
Except for Special Hazard Losses in excess of the Special Hazard
Coverage for Loan Group I and Loan Group IV, Fraud Losses in excess of
the Fraud Coverage for Loan Group I and Loan Group IV and Bankruptcy
Losses in excess of the Bankruptcy Coverage for Loan Group I and Loan
Group IV, Realized Losses with respect to the Group I and Group IV Loans
shall be allocated among the Group I-L, Group IV-L and Group C-B-L
Regular Interests (i) for Realized Losses allocable to principal (a)
first, to the Class C-B-6-L Regular Interest, until the Class C-B-6-L
Principal Balance has been reduced to zero, (b) second, to the Class C-B-
5-L Regular Interest, until the Class C-B-5-L Principal Balance has been
reduced to zero, (c) third, to the Class C-B-4-L Regular Interest, until
the Class C-B-4-L Principal Balance has been reduced to zero, (d)
fourth, to the Class C-B-3-L Regular Interest, until the Class C-B-3-L
Principal Balance has been reduced to zero, (e) fifth, to the Class C-B-
2-L Regular Interest, until the Class C-B-2-L Principal Balance has been
64
reduced to zero, (f) sixth, to the Class C-B-1-L Regular Interest, until
the Class C-B-1-L Principal Balance has been reduced to zero, and (g)
seventh, to (I) the Group I-A-L Regular Interests, pro rata according to
the Class Principal Balances thereof (or, in the case of the Class I-A-1-
L Regular Interest, the Component Principal Balance of Component I-A-1-5-
L thereof), in reduction thereof, or (II) the Group IV-A-L and Class R-3-
L Regular Interests and the Class R-1 and Class R-2 Certificates, in
reduction of the Class Principal Balances thereof, as applicable;
provided, however, that if the loss is recognized with respect to a
Class I-P Mortgage Loan, the applicable Class I-P Fraction of such loss
will first be allocated to the Component I-A-1-4-L Regular Interest and
the remainder of such loss will be allocated as set forth above in this
clause (i); and (ii) for Realized Losses allocable to interest (a)
first, to the Class C-B-6-L Regular Interest, in reduction of accrued
but unpaid interest thereon and then in reduction of the Class C-B-6-L
Principal Balance, (b) second, to the Class C-B-5-L Regular Interest, in
reduction of accrued but unpaid interest thereon and then in reduction
of the Class C-B-5-L Principal Balance, (c) third, to the Class C-B-4-L
Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class C-B-4-L Principal Balance, (d)
fourth, to the Class C-B-3-L Regular Interest, in reduction of accrued
but unpaid interest thereon and then in reduction of the Class C-B-3-L
Principal Balance, (e) fifth, to the Class C-B-2-L Regular Interest, in
reduction of accrued but unpaid interest thereon and then in reduction
of the Class C-B-2-L Principal Balance, (f) sixth, to the Class C-B-1-L
Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class C-B-1-L Principal Balance, and (g)
seventh, to (I) the Group I-A-L (or, in the case of the Class I-A-1-L
Regular Interests, only Component I-A-1-5-L thereof) and Class I-X-L
Regular Interests or (II) the Group IV-A-L and Class R-3-L Regular
Interests and the Class R-1 and Class R-2 Certificates, as applicable,
pro rata according to accrued but unpaid interest on such Classes (or,
in the case of the Class I-A-1-L Regular Interests, only Component I-A-1-
5-L thereof), and then to the Group I-A-L Regular Interests (or, in the
case of the Class I-A-1-L Regular Interests, only Component I-A-1-5-L
thereof) or the Group IV-A-L Regular Interests, as applicable, pro rata
according to the Class or Component Principal Balances thereof in
reduction thereof. In the case of clauses (i)(g) and (ii)(g) of this
paragraph, losses on Group I Loans will only be allocated to the Group I-
L Regular Interests and losses on Group IV Loans will only be allocated
to the Group IV-L Regular Interests and the Class R-1 and Class R-2
Certificates. Notwithstanding the foregoing, all Realized Losses
allocated to principal and interest that would otherwise be allocable to
the Class I-A-1-L Regular Interests (other than Component I-A-1-4-L
thereof) shall be allocated instead to the Class I-A-10-L Regular
Interests, until the Class I-A-10-L Principal Balance has been reduced
to zero.
Except for Special Hazard Losses in excess of the Special Hazard
Coverage for Loan Group II and Loan Group III, Fraud Losses in excess of
the Fraud Coverage for Loan Group II and Loan Group III and Bankruptcy
Losses in excess of the Bankruptcy Coverage for Loan Group II and Loan
Group III, Realized Losses with respect to the Group II and Group III
65
Loans shall be allocated among the Group II-L, Group III-L and Group D-B-
L Regular Interests (i) for Realized Losses allocable to principal (a)
first, to the Class D-B-6-L Regular Interest, until the Class D-B-6-L
Principal Balance has been reduced to zero, (b) second, to the Class D-B-
5-L Regular Interest, until the Class D-B-5-L Principal Balance has been
reduced to zero, (c) third, to the Class D-B-4-L Regular Interest, until
the Class D-B-4-L Principal Balance has been reduced to zero, (d)
fourth, to the Class D-B-3-L Regular Interest, until the Class D-B-3-L
Principal Balance has been reduced to zero, (e) fifth, to the Class D-B-
2-L Regular Interest, until the Class D-B-2-L Principal Balance has been
reduced to zero, (f) sixth, to the Class D-B-1-L Regular Interest, until
the Class D-B-1-L Principal Balance has been reduced to zero, and (g)
seventh, to (I) the Class II-A-1-L Regular Interest, in reduction of the
Class Principal Balance thereof or (II) the Class III-A-1-L Regular
Interest, in reduction of the Class Principal Balances thereof, as
applicable; provided, however, that if the loss is recognized with
respect to a Class II-P Mortgage Loan, the applicable Class II-P
Fraction of such loss will first be allocated to the Class II-P-L
Regular Interest, and if the loss is recognized with respect to a Class
III-P Mortgage Loan, the applicable Class III-P Fraction of such loss
will first be allocated to the Class III-P-L Regular Interest, and in
each case 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 D-B-6-L Regular Interest, in reduction
of accrued but unpaid interest thereon and then in reduction of the
Class D-B-6-L Principal Balance, (b) second, to the Class D-B-5-L
Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class D-B-5-L Principal Balance, (c) third,
to the Class D-B-4-L Regular Interest, in reduction of accrued but
unpaid interest thereon and then in reduction of the Class D-B-4-L
Principal Balance, (d) fourth, to the Class D-B-3-L Regular Interest, in
reduction of accrued but unpaid interest thereon and then in reduction
of the Class D-B-3-L Principal Balance, (e) fifth, to the Class D-B-2-L
Regular Interest, in reduction of accrued but unpaid interest thereon
and then in reduction of the Class D-B-2-L Principal Balance, (f) sixth,
to the Class D-B-1-L Regular Interest, in reduction of accrued but
unpaid interest thereon and then in reduction of the Class D-B-1-L
Principal Balance, and (g) seventh, to (I) the Class II-A-1-L and Class
II-X-L Regular Interests or (II) the Class III-A-1-L and Class III-X-L
Regular Interests, as applicable, pro rata according to accrued but
unpaid interest on such Classes and then to the Class II-A-1-L Regular
Interest or the Class III-A-1-L Regular Interest, as applicable, in
reduction of the Class Principal Balance thereof. In the case of clause
(i)(g) and (ii)(g) of this paragraph, losses on Group II Loans will only
be allocated to the Group II-L Regular Interests and losses on Group III
Loans will only be allocated to the Group III-L Regular Interests.
Special Hazard Losses on Group I Loans and Group IV Loans in excess
of the Special Hazard Coverage for Loan Group I and Loan Group IV, Fraud
Losses on Group I Loans and Group IV Loans in excess of the Fraud
Coverage for Loan Group I and Loan Group IV and Bankruptcy Losses on
Group I Loans and Group IV Loans in excess of the Bankruptcy Coverage
for Loan Group I and Loan Group IV shall be allocated among the Group I-
66
L, Group IV-L and Group C-B-L Regular Interests and the Class R-1 and
Class R-2 Certificates by Pro Rata Allocation.
Special Hazard Losses on Group II Loans and Group III Loans in
excess of the Special Hazard Coverage for Loan Group II and Loan Group
III, Fraud Losses on Group II Loans and Group III Loans in excess of the
Fraud Coverage for Loan Group II and Loan Group III and Bankruptcy
Losses on Group II Loans and Group III Loans in excess of the Bankruptcy
Coverage for Loan Group II and Loan Group III shall be allocated among
the Group II-L, Group III-L and Group D-B-L Regular Interests by Pro
Rata Allocation.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group I-L, Group IV-L and Group C-B-L Regular
Interests and the Class R-1 and Class R-2 Certificates exceeds the
aggregate principal balance of the Group I and Group IV Loans remaining
to be paid at the close of business on the Cut-Off Date, after deduction
of (i) all principal payments due on or before the Cut-Off Date in
respect of each such Mortgage Loan whether or not paid and (ii) all
amounts of principal in respect of each such Mortgage Loan that have
been received or advanced and included in the REMIC II Available
Distribution Amount for the Group I-L and Group IV-L Regular Interests,
and all losses in respect of each such Mortgage Loan that have been
allocated to the Group I-L, Group IV-L and Group C-B-L Regular Interests
and the Residual Certificates on such Distribution Date or prior
Distribution Dates, then such excess will be deemed a principal loss and
will be allocated to the most junior Class of Group C-B-L Regular
Interests, in reduction of the Class Principal Balance thereof.
On each Distribution Date, after giving effect to the principal
distributions and allocations of losses as provided in this Agreement
(without regard to this paragraph), if the aggregate Class Principal
Balance of all outstanding Group II-L, Group III-L and Group D-B-L
Regular Interests exceeds the aggregate principal balance of the Group
II and Group III Loans remaining to be paid at the close of business on
the Cut-Off Date, after deduction of (i) all principal payments due on
or before the Cut-Off Date in respect of each such Mortgage Loan whether
or not paid and (ii) all amounts of principal in respect of each such
Mortgage Loan that have been received or advanced and included in the
REMIC II Available Distribution Amount for the Group II-L and Group III-
L Regular Interests, and all losses in respect of each such Mortgage
Loan that have been allocated to the Group II-L, Group III-L and Group D-
▇-▇ 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 D-B-L Regular Interests, in
reduction of the Class Principal Balance thereof.
Record Date: The last Business Day of the month immediately
preceding the month of the related Distribution Date.
Regular Interest Group: The Group I-L, Group II-L, Group III-L,
Group IV-L, Group C-B-L or Group D-B-L Regular Interests, as applicable.
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 REMIC III, the REMIC III Regular Interests.
67
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended. Interest shortfalls related to the Relief Act shall be
allocated in the same manner as Realized Losses attributable to interest
are allocated.
REMIC: A real estate mortgage investment conduit, as such term is
defined in the Code.
REMIC Provisions: Sections 860A through 860G of the Code, related
Code provisions and regulations promulgated thereunder, as the foregoing
may be in effect from time to time.
REMIC I: The segregated pool of assets consisting of the REMIC I
Trust Fund, with respect to which a separate REMIC election is to be
made.
REMIC I Available Distribution Amount: With respect to each Loan
Group on any Distribution Date, the sum of the following amounts with
respect to the Mortgage Loans in such Loan Group:
(1) the total amount of all cash received by or on behalf of the
Master Servicer with respect to such Mortgage Loans by the Determination
Date for such Distribution Date and not previously distributed,
including Monthly P&I Advances made by Servicers, Liquidation Proceeds
and scheduled amounts of distributions from Buydown Funds respecting
Buydown Loans, if any, except:
(a) all scheduled payments of principal and interest
collected but due on or subsequent to such Distribution Date;
(b) all Curtailments received after the Prior Period
(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 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
(3) the total amount, to the extent not previously distributed, of
68
all cash received by the Distribution Date by the Trustee or the Master
Servicer, in respect of a Purchase Obligation under Section 2.02 and
Section 2.03 or any permitted purchase or repurchase of a Mortgage Loan.
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 Interest, 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 purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class I-P
Mortgage Loan during the Payoff Period;
second, to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, concurrently, the sum of the Interest Distribution Amounts
for such Classes of Regular Interests remaining unpaid from previous
Distribution Dates, pro rata according to their respective shares of
such unpaid amounts;
third, to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, concurrently, the sum of the Interest Distribution Amounts
for such Classes of Regular Interests for the current Distribution Date,
pro rata according to their respective Interest Distribution Amounts;
fourth, to the Class C-Y-1 and Class C-Z-1 Regular Interests, the Class
C-Y-1 Principal Distribution Amount and the Class C-Z-1 Principal
Distribution Amount, respectively; and
fifth, 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:
(i) first, to the Class II-P-M Regular Interest, 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 purchase or repurchase of a
69
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-X-M, Class D-Y-1 and Class D-Z-1
Regular Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests remaining unpaid from
previous Distribution Dates, pro rata according to their respective
shares of such unpaid amounts;
(iii) third, to the Class II-X-M, Class D-Y-1 and Class D-Z-1
Regular Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests for the current
Distribution Date, pro rata according to their respective Interest
Distribution Amounts;
(iv) fourth, to the Class D-Y-1 and Class D-Z-1 Regular Interests,
the Class D-Y-1 Principal Distribution Amount and the Class D-Z-1
Principal Distribution Amount, respectively; and
(v) fifth, to the Class R-1 Certificates, the Residual Distribution
Amount for Loan Group II for such Distribution Date.
(c) To the extent of the REMIC I Available Distribution Amount for
Loan Group III:
(i) first, to the Class III-P-M Regular Interest, the aggregate for
all of the Class III-P Mortgage Loans of the product for each Class III-
P Mortgage Loan of the applicable Class III-P Fraction and the sum of
(x) scheduled payments of principal on such Class III-P Mortgage Loan
due on or before the related Due Date in respect of which no
distribution has been made on any previous Distribution Date and which
were received by the Determination Date, or which have been advanced as
part of a Monthly P&I Advance with respect to such Distribution Date,
(y) the principal portion received in respect of such Class III-P
Mortgage Loan during the Prior Period of (1) Curtailments, (2) Insurance
Proceeds, (3) the amount, if any, of the principal portion of the
Purchase Price paid pursuant to a Purchase Obligation or any purchase or
repurchase of a Mortgage Loan permitted hereunder and (4) Liquidation
Proceeds and (z) the principal portion of Payoffs received in respect of
such Class III-P Mortgage Loan during the Payoff Period;
(ii) second, to the Class III-X-M, Class D-Y-2 and Class D-Z-2
Regular Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests remaining unpaid from
previous Distribution Dates, pro rata according to their respective
shares of such unpaid amounts;
(iii) third, to the Class III-X-M, Class D-Y-2 and Class D-Z-2
Regular Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests for the current
Distribution Date, pro rata according to their respective Interest
Distribution Amounts;
fourth, to the Class D-Y-2 and Class D-Z-2 Regular Interests, the Class
D-Y-2 Principal Distribution Amount and the Class D-Z-2 Principal
Distribution Amount, respectively; and
fifth, to the Class R-1 Certificates, the Residual Distribution Amount
for Loan Group III for such Distribution Date.
(d) To the extent of the REMIC I Available Distribution Amount for
Loan Group IV:
70
(i) first, to the Class C-Y-2 and Class C-Z-2 Regular Interests and
the Class R-1 Certificates, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Certificates and Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the Class C-Y-2 and Class C-Z-2 Regular Interests
and the Class R-1 Certificates, concurrently, the sum of the Interest
Distribution Amounts for such Classes of Regular Interests and
Certificates for the current Distribution Date, pro rata according to
their respective Interest Distribution Amounts;
(iii) third, to the Class R-1 Certificates, until the Class
Principal Balance thereof has been reduced to zero;
(iv) fourth, to the Class C-Y-2 and Class C-Z-2 Regular Interests,
the Class C-Y-2 Principal Distribution Amount and the Class C-Z-2
Principal Distribution Amount, respectively; and
(v) fifth, to the Class R-1 Certificates, the Residual Distribution
Amount for Loan Group IV for such Distribution Date.
REMIC I Regular Interests: The Classes of Regular Interests in the
REMIC I Trust Fund designated as "regular interests" in the table titled
"REMIC I Trust Fund" in the Preliminary Statement hereto.
REMIC I Trust Fund: All of the assets in the Trust Fund other than
the Rounding Accounts.
REMIC II: The segregated pool of assets consisting of the REMIC II
Trust Fund conveyed in trust to the Trustee for the benefit of the
Holders of the REMIC II Regular Interests and the Class R-2
Certificateholders pursuant to Section 2.05, with respect to which a
separate REMIC election is to be made.
REMIC II Available Distribution Amount: For the Group I-L Regular
Interests, on any Distribution Date, the aggregate of all distributions
to the Class I-X-M, Class I-P-M, Class C-Y-1 and Class C-Z-1 Regular
Interests (which amount shall be available for distributions to the
Group I-L and Group C-B-L Regular Interests and the Class R-2
Certificates as provided herein). For the Group II-L Regular Interests,
on any Distribution Date, the aggregate of all distributions to the
Class II-X-M, Class II-P-M, Class D-Y-1 and Class D-Z-1 Regular
Interests (which amount shall be available for distributions to the
Group II-L and Group D-B-L Regular Interests and the Class R-2
Certificates as provided herein). For the Group III-L Regular Interests,
on any Distribution Date, the aggregate of all distributions to the
Class III-X-M, Class III-P-M, Class D-Y-2 and Class D-Z-2 Regular
Interests (which amount shall be available for distributions to the
Group III-L and Group D-B-L Regular Interests and the Class R-2
Certificates as provided herein). For the Group IV-L Regular Interests,
on any Distribution Date, the aggregate of all distributions to the
Class C-Y-2 and Class C-Z-2 Regular Interests (which amount shall be
available for distributions to the Group IV-L and Group C-B-L Regular
Interests and the Class R-2 Certificates as provided herein).
REMIC II Distribution Amount: (I) For any Distribution Date prior
to the Group C-B Credit Support Depletion Date or the Group D-B Credit
Support Depletion Date, as applicable, the REMIC II Available
Distribution Amount shall be distributed to the REMIC II Regular
Interests and the Class R-2 Certificates in the following amounts and
71
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 C-B 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 Component I-A-1-4-L Regular Interest, 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 purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class I-P
Mortgage Loan during the Payoff Period;
(ii) second, to the Group I-A-L and Class I-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; provided,
however, that (A) on or before the Class I-A-4 Accretion Termination
Date, the amount that would otherwise be payable to the Class I-A-4-L
Regular Interests pursuant to this clause (I)(a)(ii) will be paid
instead as principal as set forth in clause (I)(a)(iii) of this
definition of "REMIC II Distribution Amount" and (B) on or before the
Component I-A-1-5 Accretion Termination Date, the amount that would
otherwise be payable to Component I-A-1-5-L pursuant to this clause
(I)(a)(ii) will be paid instead as principal as set forth in clause
(I)(a)(iii) of this definition of "REMIC II Distribution Amount";
(iii) third,
(a) to the Group I-A-L and Class I-X-L Regular
Interests, concurrently, the sum of the Interest Distribution
Amounts for such Classes of Regular Interests for the current
Distribution Date, pro rata according to their respective
Interest Distribution Amounts provided, however, that (A) on
or before the Class I-A-4 Accretion Termination Date, the
amount that would otherwise be payable to the Class I-A-4-L
Regular Interests pursuant to this clause (I)(a)(iii)(a) will
be paid instead as principal as set forth in clause
(I)(a)(iii)(b) of this definition of "REMIC II Distribution
Amount" and (B) on or before the Component I-A-1-5 Accretion
Termination Date, the amount that would otherwise be payable
to Component I-A-1-5-L pursuant to this clause (I)(a)(iii)(a)
will be paid instead as principal as set forth in clause
(I)(a)(iii)(c) of this definition of "REMIC II Distribution
Amount";
(b) on or before the Class I-A-4 Accretion Termination Date,
72
the Class I-A-4 Accrual Amount, as principal, as follows:
(1) first, up to the amount necessary to reduce the
sum of the Class I-A-3-L Principal Balance and the
Component I-A-1-5-L Principal Balance to the Targeted
Principal Balance for such Distribution Date, with such
amount to be distributed to the Class I-A-3-L Regular
Interest and the Component I-A-1-5-L Regular Interest
sequentially, as follows:
(A) first, to the Class I-A-3-L Regular
Interest, until the Class I-A-3-L Principal Balance
has been reduced to zero; and
(B) second, to the Component I-A-1-5-L Regular
Interest, until the Component I-A-1-5-L Principal
Balance has been reduced to zero; and
(2) second, to the Class I-A-4-L Regular Interest;
(c) on or before the Component I-A-1-5 Accretion Termination
Date, the Component I-A-1-5 Accrual Amount, as principal, as
follows:
(1) first, to the Class I-A-3-L Regular Interest,
until the Class I-A-3-L Principal Balance (after taking
into account the distribution of the Class I-A-4 Accrual
Amount above) has been reduced to zero;
(2) second, to the Component I-A-1-5-L Regular
Interest;
(iv) fourth, to the Group I-A-L Regular Interests, as principal,
the Group I Senior Principal Distribution Amount, as follows:
(a) first, to the Class I-A-10-L Regular Interest, an
amount, up to the amount of the Class I-A-10 Priority Amount
for such Distribution Date, until the Class I-A-10-L Principal
Balance has been reduced to zero;
(b) second, up to the amount necessary to reduce the
aggregate Class Principal Balance of the Class I-A-2-L, Class
I-A-5-L, Class I-A-6-L, Class I-A-7-L and Class I-A-8-L
Regular Interests to the Planned Principal Balance for such
Distribution Date, with such amount to be distributed to the
Class I-A-2-L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L and
Class I-A-8-L Regular Interests sequentially, as follows:
(1) first, until the aggregate Class Principal
Balance of the Class I-A-2-L Regular Interests has been
reduced to $19,627,719.97, concurrently, as follows:
(A) 34.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the Class
I-A-2-1-L and Class I-A-2-2-L Regular Interests, in
that order; and
(B) 65.6948003589%, sequentially, as follows:
(x) first, to the Class I-A-6-L Regular
Interest, until the Class I-A-6-L Principal
Balance has been reduced to zero;
(y) second, sequentially, to the Class I-
A-8-1-L and Class I-A-8-2-L Regular Interests,
in that order, until the aggregate Class
Principal Balance of the Class I-A-8-L Regular
Interests has been reduced to $32,166,000.00;
73
and
(z) third, concurrently, until the
aggregate Class Principal Balance of the Class
I-A-5-L and Class I-A-8-L Regular Interests
have each been reduced to zero, as follows:
(I) 23.2333357199%, sequentially, to
the Class I-A-5-1-L and Class I-A-5-2-L
Regular Interests, in that order; and
(II) 76.7666642801%, sequentially, to
the Class I-A-8-1-L and Class I-A-8-2-L
Regular Interests, in that order; and
(2) second, until the aggregate Class Principal
Balance of the Class I-A-7-L Regular Interests has been
reduced to zero, concurrently, as follows:
(A) 22.0164763245%, sequentially, to the Class
I-A-7-1-L and Class I-A-7-2-L Regular Interests, in
that order;
(B) 26.7524034840%, sequentially, to the Class
I-A-2-1-L and Class I-A-2-2-L Regular Interests, in
that order, until the aggregate Class Principal
Balance thereof has been reduced to zero; and
(C) 51.2311201915%, sequentially, as follows:
(x) first, to the Class I-A-6-L Regular
Interest, until the Class I-A-6-L Principal
Balance has been reduced to zero;
(y) second, sequentially, to the Class I-
A-8-1-L and Class I-A-8-2-L Regular Interests,
in that order, until the aggregate Class
Principal Balance thereof has been reduced to
$32,166,000.00; and
(z) third, concurrently, until the
aggregate Class Principal Balance of the Class
I-A-5-L and Class I-A-8-L Regular Interests
have each been reduced to zero, as follows:
(I) 23.2333357199%, sequentially, to
the Class I-A-5-1-L and Class I-A-5-2-L
Regular Interests, in that order; and
(II) 76.7666642801%,
sequentially, to the Class I-A-8-1-L and
Class I-A-8-2-L Regular Interests, in that
order;
(c) third, up to the amount necessary to reduce the sum
of the Class I-A-3-L Principal Balance and the Component I-A-1-
5-L Principal Balance to the Targeted Principal Balance for
such Distribution Date, with such amount to be distributed to
the Class I-A-3-L and Component I-A-1-5-L Regular Interests
sequentially, as follows:
(1) first, to the Class I-A-3-L Regular Interest,
until the Class I-A-3-L Principal Balance has been
reduced to zero; and
(2) second, to the Component I-A-1-5-L Regular
Interest, until the Component I-A-1-5-L Principal Balance
74
has been reduced to zero;
(d) fourth, to the Class I-A-4-L Regular Interest, until
the Class I-A-4-L Principal Balance has been reduced to zero;
(e) fifth, to the Class I-A-3-L Regular Interest, until
the Class I-A-3-L Principal Balance has been reduced to zero;
(f) sixth, to the Component I-A-1-5-L Regular Interest,
until the Component I-A-1-5-L Principal Balance has been
reduced to zero;
(g) seventh, until the aggregate Class Principal Balance
of the Class I-A-2-L Regular Interests has been reduced to
$19,627,719.97, concurrently, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the Class I-A-
2-1-L and Class I-A-2-2-L Regular Interests, in that
order; and
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, as follows:
(A) first, to the Class I-A-6-L Regular
Interest, until the Class I-A-6-L Regular Interest
has been reduced to zero;
(B) second, sequentially, to the Class I-A-8-1-
L and Class I-A-8-2-L Regular Interests, in that
order, until the aggregate Class Principal Balance
thereof has been reduced to $32,166,000.00; and
(C) third, concurrently, until the aggregate
Class Principal Balance of the Class I-A-5-L and
Class I-A-8-L Regular Interests have each been
reduced to zero, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the
Class I-A-5-1-L and Class I-A-5-2-L Regular
Interests, in that order; and
(y) 76.7666642801%, sequentially, to the
Class I-A-8-1-L and Class I-A-8-2-L Regular
Interests, in that order;
(h) eighth, until the aggregate Class Principal Balance
of the Class I-A-7-L Regular Interests has been reduced to
zero, concurrently, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the Class I-A-
7-1-L and Class I-A-7-2-L Regular Interests, in that
order;
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the Class I-A-
2-1-L and Class I-A-2-2-L Regular Interests, in that
order, until the aggregate Class Principal Balance
thereof has been reduced to zero; and
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, as follows:
(A) first, to the Class I-A-6-L Regular
Interest, until the Class I-A-6-L Principal Balance
has been reduced to zero;
(B) second, sequentially, to the Class I-A-8-1-
L and Class I-A-8-2-L Regular Interests, in that
order, until the aggregate Class Principal Balance
thereof has been reduced to $32,166,000.00; and
(C) third, concurrently, until the aggregate
Class Principal Balance of the Class I-A-5-L and
75
Class I-A-8-L Regular Interests have each been
reduced to zero, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, to the
Class I-A-5-1-L and Class I-A-5-2-L Regular
Interests, in that order; and
(y) 76.7666642801%, sequentially, to the
Class I-A-8-1-L and Class I-A-8-2-L Regular
Interests, in that order; and
(i) ninth, to the Class I-A-10-L Regular Interest, until
the Class I-A-10-L Principal Balance has been reduced to zero;
(b) With respect to the Group II-L Regular Interests, on any
Distribution Date prior to the Group D-B 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 Interest, the aggregate for
all Class II-P Mortgage Loans of the product for each Class II-P Mortgage
Loan of the applicable Class II-P Fraction and the sum of (x) scheduled
payments of principal on such Class II-P Mortgage Loan due on or before
the related Due Date in respect of which no distribution has been made
on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly P&I
Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class II-P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the
amount, if any, of the principal portion of the Purchase Price paid
pursuant to a Purchase Obligation or any purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class II-P
Mortgage Loan during the Payoff Period;
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;
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; and
fourth, to the Class II-A-1-L Regular Interest, as principal, the Group
II Senior Principal Distribution Amount;
(c) With respect to the Group III-L Regular Interests, on any
Distribution Date prior to the Group D-B Credit Support Depletion Date,
to the extent of the REMIC II Available Distribution Amount for the
Group III-L Regular Interests remaining following prior distributions,
if any, on such Distribution Date:
(i) first, to the Class III-P-L Regular Interest, the aggregate for
all Class III-P Mortgage Loans of the product for each Class III-P Mortgage
Loan of the applicable Class III-P Fraction and the sum of (x) scheduled
payments of principal on such Class III-P Mortgage Loan due on or before
the related Due Date in respect of which no distribution has been made
on any previous Distribution Date and which were received by the
Determination Date, or which have been advanced as part of a Monthly P&I
76
Advance with respect to such Distribution Date, (y) the principal
portion received in respect of such Class III-P Mortgage Loan during the
Prior Period of (1) Curtailments, (2) Insurance Proceeds, (3) the
amount, if any, of the principal portion of the Purchase Price paid
pursuant to a Purchase Obligation or any purchase or repurchase of a
Mortgage Loan permitted hereunder and (4) Liquidation Proceeds and (z)
the principal portion of Payoffs received in respect of such Class III-P
Mortgage Loan during the Payoff Period;
second, to the Class III-A-1-L and Class III-X-L Regular Interests, the
sum of the Interest Distribution Amounts for such Classes of Regular
Interests remaining unpaid from previous Distribution Dates, pro rata
according to their respective shares of such unpaid amounts;
third, to the Class III-A-1-L and Class III-X-L Regular Interests, the
sum of the Interest Distribution Amounts for such Classes of Regular
Interests for the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts; and
fourth, to the Class III-A-1-L Regular Interest, as principal, the Group
III Senior Principal Distribution Amount;
(d) With respect to the Group IV-L Regular Interests and the Class
R-2 Certificates, on any Distribution Date prior to the Group C-B Credit
Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Group IV-L Regular Interests remaining
following prior distributions, if any, on such Distribution Date:
(i) first, to the Group IV-A-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;
second, to the Group IV-A-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; and
third, to the Group IV-A-L and Class R-3-L Regular Interests and the
Class R-2 Certificates, as principal, the Group IV Senior Principal
Distribution Amount, as follows:
(a) first, to the Class IV-A-4-L Regular Interests, an
amount, up to the amount of the Class IV-A-4 Priority Amount
for such Distribution Date, until the Class IV-A-4-L Principal
Balance has been reduced to zero;
(b) second, sequentially, to the Class R-2 Certificates
and the Class R-3-L Regular Interest, in that order, until
their respective Class Principal Balances have each been
reduced to zero;
(c) third, concurrently, until the Class IV-A-2-L Principal
Balance has been reduced to zero, as follows:
(▇) ▇.▇▇▇▇▇▇▇▇▇▇% to the Class IV-A-2-L Regular
Interest;
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, as follows:
(A) first, to the Class IV-A-1-L Regular
Interest, until the Class IV-A-1-L Regular Interest
has received $14,003,000.00 pursuant to this
77
paragraph (I)(d)(iii)(c)(2)(A);
(B) second, concurrently, until the Class IV-A-
9-L Principal Balance has been reduced to zero,
74.9964629315% to the Class IV-A-9-L Regular
Interest and 25.0035370685% to the Class IV-A-1-L
Regular Interest; and
(C) third, to the Class IV-A-1-L Regular Interest,
until the Class IV-A-1-L Principal Balance has been
reduced to zero; and
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, as follows:
(A) first, to the Class IV-A-1-L Regular Interest,
until the Class IV-A-1-L Regular Interest has
received $54,768,000.00 pursuant to this paragraph
(I)(d)(iii)(c)(3)(A);
(B) second, concurrently, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, to the Class IV-A-3-L
Regular Interest, until the Class IV-A-3-L
Principal Balance has been reduced to zero;
(y) 1.3185708206%, to the Class IV-A-8-L
Regular Interest, until the Class IV-A-8-L
Principal Balance has been reduced to zero; and
(z) 34.2827259485%, sequentially, as follows:
(I) first, to the Class IV-A-5-L Regular
Interest, until the Class IV-A-5-L
Principal Balance has been reduced to
zero;
(II) second, to the Class IV-A-6-L Regular
Interest, until the Class IV-A-6-L
Principal Balance has been reduced to
zero; and
(III) third, to the Class IV-A-7-L
Regular Interest, until the Class IV-A-7-L
Principal Balance has been reduced to
zero;
(d) fourth, concurrently, as follows:
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇% to the Class IV-A-3-L Regular
Interest, until the Class IV-A-3-L Principal Balance has
been reduced to zero;
(▇) ▇.▇▇▇▇▇▇▇▇▇▇% to the Class IV-A-8-L Regular
Interest, until the Class IV-A-8-L Principal Balance has
been reduced to zero; and
(▇) ▇▇.▇▇▇▇▇▇▇▇▇▇%, sequentially, as follows:
(A) first, to the Class IV-A-5-L Regular Interest,
until the Class IV-A-5-L Principal Balance has been
reduced to zero;
(B) second, to the Class IV-A-6-L Regular Interest,
until the Class IV-A-6-L Principal Balance has been
reduced to zero; and
(C) third, to the Class IV-A-7-L Regular Interest,
until the Class IV-A-7-L Principal Balance has been
reduced to zero; and
(e) fifth, to the Class IV-A-4-L Regular Interest, until the
78
Class IV-A-4-L Principal Balance has been reduced to zero;
(e) With respect to the Group C-B-L and Component I-A-1-4-L
Regular Interests and the Class R-2 Certificates, on any Distribution
Date prior to the Group C-B Credit Support Depletion Date and subject to
the payment of the amounts pursuant to paragraph (I)(a) and paragraph
(I)(d) of this definition of "REMIC II Distribution Amount", and to the
extent of the REMIC II Available Distribution Amounts for the Group I-L
and Group IV-L Regular Interests remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Component I-A-1-4-L Regular Interests, to the
extent of amounts otherwise available to pay the Group C-B Subordinate
Principal Distribution Amount (without regard to clause (B)(x) of the
definition thereof) on such Distribution Date, the amount payable to
such Class of Regular Interests on previous Distribution Dates pursuant
to clause (I)(e)(ii) of this definition of "REMIC II Distribution
Amount" and remaining unpaid from such previous Distribution Dates;
(ii) second, to the Component I-A-1-4-L Regular Interest, to the
extent of amounts otherwise available to pay the Group C-B Subordinate
Principal Distribution Amount (without regard to clause (B)(x) of the
definition thereof) on such Distribution Date, principal in an amount
equal to the Class I-P Fraction of any Realized Loss on a Class I-P
Mortgage Loan (other than a Realized Loss which, pursuant to the
definition of "Realized Loss", is allocated by Pro Rata Allocation);
provided, that any amounts distributed in respect of losses pursuant to
paragraph (I)(e)(i) or this paragraph (I)(e)(ii) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in
the Component I-A-1-4-L Principal Balance;
(iii) third, to the Class C-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(iv) fourth, to the Class C-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(v) fifth, to the Class C-B-1-L Regular Interest, the portion of
the Group C-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class C-B-1-L
Principal Balance has been reduced to zero;
(vi) sixth, to the Class C-B-2-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(vii) seventh, to the Class C-B-2-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(viii) eighth, to the Class C-B-2-L Regular Interest, the portion
of the Group C-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class C-B-2-L
Principal Balance has been reduced to zero;
(ix) ninth, to the Class C-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
79
(x) tenth, to the Class C-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xi) eleventh, to the Class C-B-3-L Regular Interest, the portion
of the Group C-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class C-B-3-L
Principal Balance has been reduced to zero;
(xii) twelfth, to the Class C-B-4-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xiii) thirteenth, to the Class C-B-4-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xiv) fourteenth, to the Class C-B-4-L Regular Interest, the
portion of the Group C-B Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group C-B Subordinate Principal Distribution Amount", until the
Class C-B-4-L Principal Balance has been reduced to zero;
(xv) fifteenth, to the Class C-B-5-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xvi) sixteenth, to the Class C-B-5-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xvii) seventeenth, to the Class C-B-5-L Regular Interest, the
portion of the Group C-B Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group C-B Subordinate Principal Distribution Amount", until the
Class C-B-5-L Principal Balance has been reduced to zero;
(xviii) eighteenth, to the Class C-B-6-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xix)nineteenth, to the Class C-B-6-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xx) twentieth, to the Class C-B-6-L Regular Interest, the portion
of the Group C-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group C-B
Subordinate Principal Distribution Amount", until the Class C-B-6-L
Principal Balance has been reduced to zero;
(xxi) twenty-first, to each Class of Group C-B-L Regular Interests
in the order of seniority, the remaining portion, if any, of the REMIC
II Available Distribution Amount for the Group I-L and Group IV-L
Regular Interests, up to the amount of unreimbursed Realized Losses
previously allocated to such Class, if any, provided that any amounts
distributed pursuant to this paragraph (I)(e)(xxi) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in
the Class Principal Balances of the Group C-B-L Regular Interests; and
(xxii) twenty-second, to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I-L and Group IV-L Regular Interests
for such Distribution Date.
80
Notwithstanding the foregoing paragraphs (I)(a), (I)(d) and (I)(e)
of this definition of "REMIC II Distribution Amount,"
(X) on any Distribution Date occurring after the date on which
either the aggregate Class Principal Balance of the Group I-A-L Regular
Interests or the Group IV-A-L Regular Interests has been reduced to
zero, all principal received or advanced with respect to the Mortgage
Loans in the Loan Group related to the Class A-L Regular Interests that
have been paid in full (after distributions of principal to the
Component I-A-1-4-L Regular Interest pursuant to paragraph (I)(a)(i)
above, if it is the Group I-A-L Regular Interests that have been paid in
full) shall be paid as principal to the remaining Class A-L Regular
Interests of such other Regular Interest Group in accordance with
paragraph (I)(a)(iv) or (I)(d)(iii) above (with such amounts being added
to the Group I or Group IV Senior Principal Distribution Amount, as
applicable) to the extent of and in reduction of the Class Principal
Balances thereof, prior to any distributions of principal to the
Component I-A-1-4-L and Group C-B-L Regular Interests pursuant to
paragraph (I)(e) above; provided, however, that principal will not be
distributed as set forth above if on such Distribution Date (a) the
Group C-B Percentage for such Distribution Date is greater than or equal
to 200% of the Group C-B Percentage as of the Closing Date and (b) the
average outstanding principal balance of the Mortgage Loans in either of
Loan Group I or Loan Group IV delinquent 60 days or more over the last
six months (including Mortgage Loans in foreclosure and Mortgage Loans
the property of which is held by REMIC I and acquired by foreclosure or
deed in lieu of foreclosure), as a percentage of the related Subordinate
Component Balance, is less than 50%, and
(Y) if on any Distribution Date either of Loan Group I or Loan
Group IV is an Undercollateralized Group and the other such Loan Group
is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group related to the Overcollateralized
Group, to the extent remaining after distributions to the Class A-L
Regular Interests of such Regular Interest Group (and the Class I-X-L
and Component I-A-1-4-L Regular Interests, if Loan Group I is the
Overcollateralized Group) pursuant to paragraph (I)(a) or paragraph
(I)(d), as applicable, will be paid in the following priority: (i) an
amount equal to the applicable Interest Transfer Amount will be
distributed to the Class A-L Regular Interests of the Regular Interest
Group related to the Undercollateralized Group (and the Class I-X-L
Regular Interest, if Loan Group I is the Undercollateralized Group) in
the amounts and in the priority described in clause (I)(a) or clause
(I)(d), as applicable; (ii) an amount equal to the applicable Principal
Transfer Amount will be distributed to the Class A-L Regular Interests
of the Regular Interest Group related to the Undercollateralized Group
in the amounts and in the priority described in clause (I)(a) or clause
(I)(d), as applicable (with such Principal Transfer Amount being added
to the Group I or Group IV Senior Principal Distribution Amount, as
applicable); and (iii) any remaining amount will be distributed pursuant
to paragraph (I)(e) of this definition of "REMIC II Distribution
Amount."
(f) With respect to the Group D-B-L, Class II-P-L and Class III-P-
L Regular Interests and the Class R-2 Certificates, on any Distribution
81
Date prior to the Group D-B Credit Support Depletion Date and subject to
the payment of the amounts pursuant to paragraph (I)(b) and paragraph
(I)(c) of this definition of "REMIC II Distribution Amount", and to the
extent of the REMIC II Available Distribution Amounts for the Group II-L
and Group III-L Regular Interests remaining following prior
distributions, if any, on such Distribution Date:
(i) first, to the Class II-P-L and Class III-P-L Regular Interests,
to the extent of amounts otherwise available to pay the Group D-B
Subordinate Principal Distribution Amount (without regard to clause
(B)(x) of the definition thereof) on such Distribution Date, the amount
payable to such Classes of Regular Interests on previous Distribution
Dates pursuant to clause (I)(f)(ii) of this definition of "REMIC II
Distribution Amount" and remaining unpaid from such previous
Distribution Dates;
(ii) second, to the Class II-P-L and Class III-P-L Regular
Interests, to the extent of amounts otherwise available to pay the Group
D-B Subordinate Principal Distribution Amount (without regard to clause
(B)(x) of the definition thereof) on such Distribution Date, principal
in an amount equal to the Class II-P or Class III-P Fraction, as
applicable, of any Realized Loss on a Class II-P Mortgage Loan or a
Class III-P Mortgage Loan (other than a Realized Loss which, pursuant to
the definition of "Realized Loss", is allocated by Pro Rata Allocation);
provided, that any amounts distributed in respect of losses pursuant to
paragraph (I)(f)(i) or this paragraph (I)(f)(ii) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in
either of the Class II-P-L Principal Balance or the Class III-P-L
Principal Balance; provided, further, that if the amounts otherwise
available to pay the Group D-B Subordinate Principal Distribution Amount
(without regard to clause (B)(x) of the definition thereof) for any such
Distribution Date are insufficient to cover such outstanding principal
losses for the Class II-P-L and Class III-P-L Regular Interests as
provided in paragraph (I)(f)(i) or this paragraph (I)(f)(ii) of this
definition of "REMIC II Distribution Amount", then such amounts will be
allocated pro rata to the Class II-P-L and Class III-P-L Regular
Interests based on the amount such Regular Interests are entitled to
receive pursuant to paragraph (I)(f)(i) or this paragraph (I)(f)(ii) of
this definition of "REMIC II Distribution Amount";
(iii) third, to the Class D-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(iv) fourth, to the Class D-B-1-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(v) fifth, to the Class D-B-1-L Regular Interest, the portion of
the Group D-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group D-B
Subordinate Principal Distribution Amount", until the Class D-B-1-L
Principal Balance has been reduced to zero;
(vi) sixth, to the Class D-B-2-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(vii) seventh, to the Class D-B-2-L Regular Interest, the Interest
82
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(viii) eighth, to the Class D-B-2-L Regular Interest, the portion
of the Group D-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group D-B
Subordinate Principal Distribution Amount", until the Class D-B-2-L
Principal Balance has been reduced to zero;
(ix) ninth, to the Class D-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(x) tenth, to the Class D-B-3-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests for the current
Distribution Date;
(xi) eleventh, to the Class D-B-3-L Regular Interest, the portion
of the Group D-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group D-B
Subordinate Principal Distribution Amount", until the Class D-B-3-L
Principal Balance has been reduced to zero;
(xii) twelfth, to the Class D-B-4-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xiii) thirteenth, to the Class D-B-4-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xiv) fourteenth, to the Class D-B-4-L Regular Interest, the
portion of the Group D-B Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group D-B Subordinate Principal Distribution Amount", until the
Class D-B-4-L Principal Balance has been reduced to zero;
(xv) fifteenth, to the Class D-B-5-L Regular Interest, the Interest
Distribution Amount for such Class of Regular Interests remaining unpaid
from previous Distribution Dates;
(xvi) sixteenth, to the Class D-B-5-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xvii) seventeenth, to the Class D-B-5-L Regular Interest, the
portion of the Group D-B Subordinate Principal Distribution Amount
allocable to such Class of Regular Interests pursuant to the definition
of "Group D-B Subordinate Principal Distribution Amount", until the
Class D-B-5-L Principal Balance has been reduced to zero;
(xviii) eighteenth, to the Class D-B-6-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests
remaining unpaid from previous Distribution Dates;
(xix) nineteenth, to the Class D-B-6-L Regular Interest, the
Interest Distribution Amount for such Class of Regular Interests for the
current Distribution Date;
(xx) twentieth, to the Class D-B-6-L Regular Interest, the portion
of the Group D-B Subordinate Principal Distribution Amount allocable to
such Class of Regular Interests pursuant to the definition of "Group D-B
Subordinate Principal Distribution Amount", until the Class D-B-6-L
Principal Balance has been reduced to zero;
(xxi) twenty-first, to each Class of Group D-B-L Regular Interests
83
in the order of seniority, the remaining portion, if any, of the REMIC
II Available Distribution Amount for the Group II-L and Group III-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)(f)(xxi) of this definition of
"REMIC II Distribution Amount" shall not cause a further reduction in
the Class Principal Balances of the Group D-B Regular Interests; and
twenty-second, to the Class R-2 Certificates, the Residual Distribution
Amount for the Group II-L and Group III-L Regular Interests for such
Distribution Date.
Notwithstanding the foregoing paragraphs (I)(b), (I)(c) and (I)(f)
of this definition of "REMIC II Distribution Amount,"
(X) on any Distribution Date occurring after the date on which
either the Class II-A-1-L Principal Balance or the Class III-A-1-L
Principal Balance has been reduced to zero, all principal received or
advanced with respect to the Mortgage Loans in the Loan Group related to
the Class A-L Regular Interests that have been paid in full (after
distributions of principal to the Class II-P-L or Class III-P-L Regular
Interests pursuant to paragraph (I)(b)(i) or (I)(c)(i) above, if
applicable) shall be paid as principal to the remaining Class A-L
Regular Interests of such other Regular Interest Group in accordance
with paragraph (I)(b)(iv) or (I)(c)(iv) above (with such amounts being
added to the Group II or Group III Senior Principal Distribution Amount,
as applicable) to the extent of and in reduction of the Class Principal
Balances thereof, prior to any distributions of principal to the Class
II-P-L, Class III-P-L and Group D-B-L Regular Interests pursuant to
paragraph (I)(f) above; provided, however, that principal will not be
distributed as set forth above if on such Distribution Date (a) the
Group D-B Percentage for such Distribution Date is greater than or equal
to 200% of the Group D-B Percentage as of the Closing Date and (b) the
average outstanding principal balance of the Mortgage Loans in either of
Loan Group II or Loan Group III delinquent 60 days or more over the last
six months (including Mortgage Loans in foreclosure and Mortgage Loans
the property of which is held by REMIC I and acquired by foreclosure or
deed in lieu of foreclosure), as a percentage of the related Subordinate
Component Balance, is less than 50%, and
(Y) if on any Distribution Date either of Loan Group II or Loan
Group III is an Undercollateralized Group and the other such Loan Group
is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group related to the Overcollateralized
Group, to the extent remaining after distributions to the Class A-L,
Class P-L and Class X-L Regular Interests of such Regular Interest Group
pursuant to paragraph (I)(b) or paragraph (I)(c), as applicable, will be
paid in the following priority: (i) an amount equal to the applicable
Interest Transfer Amount will be distributed to the Class A-L and Class
X-L Regular Interests of the Regular Interest Group related to the
Undercollateralized Group in the amounts and in the priority described
in clause (I)(b) or clause (I)(c), as applicable; (ii) an amount equal
to the applicable Principal Transfer Amount will be distributed to the
Class A-L Regular Interests of the Regular Interest Group related to the
Undercollateralized Group in the amounts and in the priority described
in clause (I)(b) or clause (I)(c), as applicable (with such Principal
84
Transfer Amount being added to the Group II or Group III Senior
Principal Distribution Amount, as applicable); and (iii) any remaining
amount will be distributed pursuant to paragraph (I)(f) of this
definition of "REMIC II Distribution Amount."
(II) For any Distribution Date on or after the Group C-B or Group D-
B Credit Support Depletion Date, as applicable, the REMIC II Available
Distribution Amount shall be distributed to the outstanding REMIC II
Regular Interests and the Class R-2 Certificates in the following
amounts and priority:
(a) With respect to the Group I-L Regular Interests and the Class
R-2 Certificates, on each Distribution Date on or after the Group C-B
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 Component I-A-1-4-L Regular Interest, 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 and Class I-X-L Regular Interests,
the amount payable to each such Class of Regular Interests and
Certificates on prior Distribution Dates pursuant to clause (I)(a)(ii)
or (II)(a)(iii) of this definition of "REMIC II Distribution Amount",
and remaining unpaid, pro rata according to such amount payable to the
extent of amounts available;
(iii) third, to the Group I-A-L and Class I-X-L Regular Interests,
the Interest Distribution Amount for each such Class of Regular
Interests for the current Distribution Date, pro rata according to their
respective Interest Distribution Amounts;
(iv) fourth, to the Group I-A-L Regular Interests, pro rata, the
Group I Senior Principal Distribution Amount; and
fifth, after any payments to the Group IV-L Regular Interests pursuant
to the second to last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Certificates, the Residual
Distribution Amount for the Group I-L Regular Interests for such
Distribution Date.
(b) With respect to the Group II-L Regular Interests and the Class
R-2 Certificates, on each Distribution Date on or after the Group D-B
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 Interest, 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 payable to the extent of
amounts available;
(iii) third, to the Class II-A-1-L and Class II-X-L Regular
Interests, the Interest Distribution Amount for each such Class of
85
Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Class II-A-1-L Regular Interest, the Group II
Senior Principal Distribution Amount; and
fifth, after any payments to the Group III-L Regular Interests pursuant
to the last paragraph of this definition of "REMIC II Distribution
Amount," to the Class R-2 Certificates, the Residual Distribution Amount
for the Group II-L Regular Interests for such Distribution Date.
(c) With respect to the Group III-L Regular Interests and the
Class R-2 Certificates, on each Distribution Date on or after the Group
D-B Credit Support Depletion Date, to the extent of the REMIC II
Available Distribution Amount for the Group III-L Regular Interests
remaining following prior distributions, if any, on such Distribution
Date:
(i) first, to the Class III-P-L Regular Interest, principal in the
amount that would otherwise be distributed to such Class on such
Distribution Date pursuant to clause (I)(c)(i) of this definition of
"REMIC II Distribution Amount";
(ii) second, to the Class III-A-1-L and Class III-X-L Regular
Interests, the amount payable to each such Class of Regular Interests on
prior Distribution Dates pursuant to clause (I)(c)(ii) or (II)(c)(iii)
of this definition of "REMIC II Distribution Amount", and remaining
unpaid, pro rata according to such amount payable to the extent of
amounts available;
(iii) third, to the Class III-A-1-L and Class III-X-L Regular
Interests, the Interest Distribution Amount for each such Class of
Regular Interests for the current Distribution Date, pro rata according
to their respective Interest Distribution Amounts;
(iv) fourth, to the Class III-A-1-L Regular Interest, the Group III
Senior Principal Distribution Amount; and
(v) fifth, after any payments to the Group II-L Regular Interests
pursuant to the last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Certificates, the Residual
Distribution Amount for the Group III-L Regular Interests for such
Distribution Date.
(d) With respect to the Group IV-L Regular Interests and the Class
R-2 Certificates, on each Distribution Date on or after the Group D-B
Credit Support Depletion Date, to the extent of the REMIC II Available
Distribution Amount for the Group IV-L Regular Interests remaining
following prior distributions, if any, on such Distribution Date:
(i) first, to the Group IV-A-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)(d)(ii) or (II)(d)(iii) of this definition of "REMIC II
Distribution Amount", and remaining unpaid, pro rata according to such
amount payable to the extent of amounts available;
(ii) second, to the Group IV-A-L and Class R-3-L Regular Interests
and the Class R-2 Certificates, the Interest Distribution Amount for
each such Class of Regular Interests and Certificates for the current
Distribution Date, pro rata according to their respective Interest
Distribution Amounts;
(iii) third, to the Group IV-A-L and Class R-3-L Regular Interests
86
and the Class R-2 Certificates, pro rata, the Group IV Senior Principal
Distribution Amount; and
(iv) fourth, after any payments to the Group I-L Regular Interests
pursuant to the second to last paragraph of this definition of "REMIC II
Distribution Amount," to the Class R-2 Certificates, the Residual
Distribution Amount for the Group IV-L Regular Interests for such
Distribution Date.
Notwithstanding the foregoing paragraphs (II)(a) and (II)(d) of
this definition of "REMIC II Distribution Amount" and prior to
distributions pursuant to paragraph (II)(a)(v) and paragraph
(II)(d)(iv), if on any Distribution Date either of Loan Group I or Loan
Group IV is an Undercollateralized Group and the other such Loan Group
is an Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group related to the Overcollateralized
Group, to the extent remaining after distributions to the Class A-L
Regular Interests of such Regular Interest Group (and, if the
Overcollateralized Group is Loan Group I, to the Component I-A-1-4-L and
Class I-X-L Regular Interests) pursuant to paragraph (II)(a)(i) through
(II)(a)(iv) or paragraph (II)(d)(i) though (II)(d)(iii), as applicable,
will be paid in the following priority: (i) an amount equal to the
applicable Interest Transfer Amount will be distributed to the Class A-L
Regular Interests (and the Class I-X-L Regular Interest, if the
Undercollateralized Group is Loan Group I) of the Regular Interest Group
related to the Undercollateralized Group in the amounts and in the
priority described in clause (II)(a) or clause (II)(d), as applicable,
and (ii) an amount equal to the applicable Principal Transfer Amount
will be distributed to the Class A-L Regular Interests of the Regular
Interest Group related to the Undercollateralized Group in the amounts
and in the priority described in clause (II)(a) or clause (II)(d), as
applicable (with such Principal Transfer Amount being added to the Group
I or Group IV Senior Principal Distribution Amount, as applicable).
Notwithstanding the foregoing paragraphs (II)(b) and (II)(c) of
this definition of "REMIC II Distribution Amount" and prior to
distributions pursuant to paragraph (II)(b)(v) and paragraph (II)(c)(v),
if on any Distribution Date either of Loan Group II or Loan Group III is
an Undercollateralized Group and the other such Loan Group is an
Overcollateralized Group, then the REMIC II Available Distribution
Amount for the Regular Interest Group related to the Overcollateralized
Group, to the extent remaining after distributions to the Class A-L,
Class P-L and Class X-L Regular Interests of such Regular Interest Group
pursuant to paragraph (II)(b)(i) through (II)(b)(iv) or paragraph
(II)(c)(i) though (II)(c)(iv), as applicable, will be paid in the
following priority: (i) an amount equal to the applicable Interest
Transfer Amount will be distributed to the Class A-L and Class X-L
Regular Interests of the Regular Interest Group related to the
Undercollateralized Group in the amounts and in the priority described
in clause (II)(b) or clause (II)(c), as applicable, and (ii) an amount
equal to the applicable Principal Transfer Amount will be distributed to
the Class A-L Regular Interests of the Regular Interest Group related to
the Undercollateralized Group in the amounts and in the priority
described in clause (II)(b) or clause (II)(c), as applicable (with such
Principal Transfer Amount being added to the Group II or Group III
87
Senior Principal Distribution Amount, as applicable).
REMIC II Regular Interests: The Classes of Regular Interests in the
REMIC II Trust Fund designated as "regular interests" in the table
titled "REMIC II Trust Fund" in the Preliminary Statement hereto.
REMIC II Trust Fund: The REMIC II Trust Fund created pursuant to
Section 2.05 of this Agreement. The REMIC II Trust Fund consists of (i)
the REMIC I Regular Interests and (ii) the Rounding Accounts and such
assets as may be held from time to time therein, in each case to be held
by the Trustee for the benefit of the Holders from time to time of the
REMIC II Regular Interests and the Class R-2 Certificates issued
hereunder.
REMIC III: The segregated pool of assets consisting of the REMIC
III Trust Fund conveyed in trust to the Trustee for the benefit of the
Holders of the REMIC III Regular Interests and the Class R-3
Certificateholders pursuant to Section 2.07, with respect to which a
separate REMIC election is to be made.
REMIC III Available Distribution Amount: For the Group I
Certificates, on any Distribution Date, the aggregate of all
distributions to the Group I-L Regular Interests (which amount shall be
available for distributions to the Group I Certificates as provided
herein). For the Group II Certificates, on any Distribution Date, the
aggregate of all distributions to the Group II-L Regular Interests
(which amount shall be available for distributions to the Group II
Certificates as provided herein). For the Group III Certificates, on any
Distribution Date, the aggregate of all distributions to the Group III-L
Regular Interests (which amount shall be available for distributions to
the Group III Certificates as provided herein). For the Group IV
Certificates, on any Distribution Date, the aggregate of all
distributions to the Group IV-L Regular Interests (which amount shall be
available for distributions to the Group IV and Class R-3 Certificates
as provided herein). For the Group C-B Certificates, on any
Distribution Date, the aggregate of all distributions to the Group C-B-L
Regular Interests (which amount shall be available for distributions to
the Group C-B and Class R-3 Certificates as provided herein). For the
Group D-B Certificates, on any Distribution Date, the aggregate of all
distributions to the Group D-B-L Regular Interests (which amount shall
be available for distributions to the Group D-B and Class R-3
Certificates as provided herein).
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 Certificates, to the extent of the
REMIC III Available Distribution Amount for the Group I Certificates:
(i) to each Class of Group I Certificates (other than the Class I-A-
1, Class I-A-2, Class I-A-3, Class I-A-5, Class I-A-6, Class I-A-7,
Class I-A-8 and Class I-A-9 Certificates), the amounts distributed to
its Corresponding Class on such Distribution Date;
(ii) to each of Component I-A-1-4 and Component I-A-1-5, the
amounts distributed to its Corresponding Component on such Distribution
Date;
(A) to the Class I-A-3 Certificates, the amount distributed as
principal to the Class I-A-3-L Regular Interest on such Distribution
88
Date and (B) to the Class I-A-3 Certificates and Component I-A-1-3, the
amount distributed as interest to the Class I-A-3-L Regular Interest on
such Distribution Date concurrently as follows: (I) to the Class I-A-3
Certificates, an amount equal to the product of 1/12 of the Class I-A-3
Certificate Interest Rate and the Class I-A-3 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 Component I-A-1-3, an amount equal to the product of 1/12 of the
Component I-A-1-3 Certificate Interest Rate and the Component I-A-1-3
Notional Amount; and
(A) to each of the Class I-A-2, Class I-A-5, Class I-A-6, Class I-A-
7 and Class I-A-8 Certificates, the amount distributed as principal to
the I-A-2-L, Class I-A-5-L, Class I-A-6-L, Class I-A-7-L and Class I-A-8-
L Regular Interests, respectively and (B) to the Class I-A-2, Class I-A-
5, Class I-A-6, Class I-A-7, Class I-A-8 and Class I-A-9 Certificates
and to Component I-A-1-1, Component I-A-1-2 and Component I-A-1-3, the
amount distributed as interest to the Class I-A-2-L, Class I-A-5-L,
Class I-A-6-L, Class I-A-7-L and Class I-A-8-L Regular Interests on such
Distribution Date concurrently as follows: (I) to the Class I-A-2
Certificates, an amount equal to the product of 1/12 of the Class I-A-2
Certificate Interest Rate and the Class I-A-2 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such Distribution Date);
(II) to the Class I-A-5 Certificates, an amount equal to the product of
1/12 of the Class I-A-5 Certificate Interest Rate and the Class I-A-5
Principal Balance (before allocating Realized Losses of principal and
giving effect to distributions of principal, in each case, on such
Distribution Date); (III) to the Class I-A-6 Certificates, an amount
equal to the product of 1/12 of the Class I-A-6 Certificate Interest
Rate and the Class I-A-6 Principal Balance (before allocating Realized
Losses of principal and giving effect to distributions of principal, in
each case, on such Distribution Date); (IV) to the Class I-A-7
Certificates, an amount equal to the product of 1/12 of the Class I-A-7
Certificate Interest Rate and the Class I-A-7 Principal Balance (before
allocating Realized Losses of principal and giving effect to
distributions of principal, in each case, on such Distribution Date);
(V) to the Class I-A-8 Certificates, an amount equal to the product of
1/12 of the Class I-A-8 Certificate Interest Rate and the Class I-A-8
Principal Balance (before allocating Realized Losses of principal and
giving effect to distributions of principal, in each case, on such
Distribution Date); (VI) to the Class I-A-9 Certificates, an amount
equal to the product of 1/12 of the Class I-A-9 Certificate Interest
Rate and the Class I-A-9 Notional Amount; (VII) to Component I-A-1-1, an
amount equal to the product of 1/12 of the Component I-A-1-1 Certificate
Interest Rate and the Component I-A-1-1 Notional Amount; (VIII) to
Component I-A-1-2, an amount equal to the product of 1/12 of the
Component I-A-1-2 Certificate Interest Rate and the Component I-A-1-2
Notional Amount; and (IX) to Component I-A-1-3, an amount equal to the
product of 1/12 of the Component I-A-1-3 Certificate Interest Rate and
the Component I-A-1-3 Notional Amount;
(b) With respect to the Group II Certificates, to the extent of
the REMIC III Available Distribution Amount for the Group II
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Certificates, to each Class of Group II Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date.
(c) With respect to the Group III Certificates, to the extent of
the REMIC III Available Distribution Amount for the Group III
Certificates, to each Class of Group III Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date.
(d) With respect to the Group IV and Class R-3 Certificates, to
the extent of the REMIC III Available Distribution Amount for the Group
IV Certificates, to each Class of Group IV Certificates and the Class R-
3 Certificates, the amounts distributed to its Corresponding Class on
such Distribution Date.
(e) With respect to the Group C-B Certificates and the Class R-3
Certificates, to the extent of the REMIC III Available Distribution
Amount for the Group C-B Certificates:
(i) to each Class of Group C-B Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-3 Certificates, the Residual Distribution
Amount for the Group I, Group IV and Group C-B Certificates.
(f) With respect to the Group D-B Certificates and the Class R-3
Certificates, to the extent of the REMIC III Available Distribution
Amount for the Group D-B Certificates:
(i) to each Class of Group D-B Certificates, the amounts
distributed to its Corresponding Class on such Distribution Date; and
(ii) to the Class R-3 Certificates, the Residual Distribution
Amount for the Group II, Group III and Group D-B Certificates.
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 Regular Interests: The Classes of Regular Interests in
the REMIC III Trust Fund designated as "regular interests" in the table
titled "REMIC III Trust Fund" in the Preliminary Statement hereto.
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 REMIC III Regular Interests and the
Class R-3 Certificates issued hereunder.
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 and for Loan Group I, Loan Group
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II, Loan Group III and Loan Group IV, any portion of the REMIC I
Available Distribution Amount for Loan Group I, Loan Group II, Loan
Group III and Loan Group IV, respectively, remaining after all
distributions of such REMIC I Available Distribution Amount pursuant to
clauses (a)(i) through (a)(iv), (b)(i) through (b)(iv), (c)(i) through
(c)(iv) and (d)(i) through (d)(iv), as applicable, of the definition of
"REMIC I Distribution Amount." On any Distribution Date, with respect to
the Class R-2 Certificates and for the Group I-L, Group II-L, Group III-
L and Group IV-L Regular Interests, any portion of the REMIC II
Available Distribution Amount for the Group I-L, Group II-L, Group III-L
and Group IV-L Regular Interests, respectively, remaining after all
distributions of such REMIC II Available Distribution Amount pursuant to
clauses (I)(a), (I)(b), (I)(c), (I)(d), (I)(e)(i) though (I)(e)(xxi),
(I)(f)(i) though (I)(f)(xxi), (II)(a)(i) through (II)(a)(iv), (II)(b)(i)
through (II)(b)(iv), (II)(c)(i) through (II)(c)(iv) and (II)(d)(i)
through (II)(d)(iii), as applicable, of the definition of "REMIC II
Distribution Amount." On any Distribution Date, with respect to the
Class R-3 Certificates and for the Group I, Group IV and Group C-B
Certificates, any portion of the REMIC III Available Distribution
Amounts for the Group I, Group IV and Group C-B Certificates remaining
after all distributions of such REMIC III Available Distribution Amounts
pursuant to clauses (a), (d) and (e)(i) of the definition of "REMIC III
Distribution Amount". On any Distribution Date, with respect to the
Class R-3 Certificates and for the Group II, Group III and Group D-B
Certificates, any portion of the REMIC III Available Distribution
Amounts for the Group II, Group III and Group D-B Certificates remaining
after all distributions of such REMIC III Available Distribution Amounts
pursuant to clauses (b), (c) and (f)(i) of the definition of "REMIC III
Distribution Amount". Upon termination of the obligations created by
this Agreement and the REMIC I Trust Fund, the REMIC II Trust Fund and
the REMIC III Trust Fund created hereby, the amounts which remain on
deposit in the Certificate Account after payment to the Holders of the
REMIC I Regular Interests of the amounts set forth in Section 9.01 of
this Agreement, and subject to the conditions set forth therein, shall
be distributed to the Class R-1, Class R-2 and Class R-3 Certificates in
accordance with the preceding sentence of this definition as if the date
of such distribution were a Distribution Date.
Responsible Officer: When used with respect to the Trustee, any
officer assigned to and working in its Corporate Trust Department or
similar group and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Rounding Accounts: Any or all of the Class IV-A-5, Class IV-A-6
and Class IV-A-7 Rounding Accounts.
Rounding Amount: With respect to the Class IV-A-5 Certificates, the
amount of funds, if any, needed to be withdrawn from the Class IV-A-5
Rounding Account and used to round the amount of any distributions in
reduction of the Class IV-A-5 Principal Balance on any Distribution Date
upward to the next higher integral multiple of $1,000. With respect to
the Class IV-A-6 Certificates, the amount of funds, if any, needed to be
withdrawn from the Class IV-A-6 Rounding Account and used to round the
amount of any distributions in reduction of the Class IV-A-6 Principal
91
Balance on any Distribution Date upward to the next higher integral
multiple of $1,000. With respect to the Class IV-A-7 Certificates, the
amount of funds, if any, needed to be withdrawn from the Class IV-A-7
Rounding Account and used to round the amount of any distributions in
reduction of the Class IV-A-7 Principal Balance on any Distribution Date
upward to the next higher integral multiple of $1,000.
S&P: Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-
▇▇▇▇ Companies, Inc., provided that at any time it be a Rating Agency.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the
agreement or mortgage creating a security interest in favor of the
originator of the Cooperative Loan in the related Cooperative Stock.
Selling and Servicing Contract: (a) The contract (including the PNC
Mortgage Securities Corp. Selling Guide and PNC Mortgage Securities
Corp. Servicing Guide to the extent incorporated by reference therein)
between the Company and a Person relating to the sale of the Mortgage
Loans to the Company and the servicing of such Mortgage Loans for the
benefit of the Certificateholders, which contract is substantially in
the form of Exhibit E hereto, as such contract may be amended or
modified from time to time; provided, however, that any such amendment
or modification shall not materially adversely affect the interests and
rights of Certificateholders and (b) any other similar contract
providing substantially similar rights and benefits as those provided by
the forms of contract attached as Exhibit E hereto.
Senior Certificates: The Group I Certificates, the Group II
Certificates, the Group III Certificates, the Group IV Certificates and
the Residual Certificates.
Senior Subordinate Certificates: The Subordinate Certificates
other than the Junior Subordinate Certificates.
Servicer: A mortgage loan servicing institution to which the Master
Servicer has assigned servicing duties with respect to any Mortgage Loan
under a Selling and Servicing Contract; provided, however, the Master
Servicer may designate itself or one or more other mortgage loan
servicing institutions as Servicer upon termination of an initial
Servicer's servicing duties.
Servicing Fee: For each Mortgage Loan, the fee paid to the Servicer
thereof to perform primary servicing functions for the Master Servicer
with respect to such Mortgage Loan, equal to the per annum rate set
forth for each Mortgage Loan in the Mortgage Loan Schedule on the
outstanding Principal Balance of such Mortgage Loan. In addition, any
prepayment penalty received on a Mortgage Loan will be paid as
additional servicing compensation to the related Servicer.
Servicing Officer: Any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage
Loans or the Certificates, as applicable, whose name and specimen
signature appear on a list of servicing officers furnished to the
Trustee by the Master Servicer, as such list may from time to time be
amended.
Special Hazard Coverage: With respect to Loan Group I and Loan
Group IV, the Special Hazard Coverage for Loan Group I and Loan Group IV
on the most recent anniversary of the Cut-Off Date (calculated in
accordance with the second sentence of this paragraph) or, if prior to
92
the first such anniversary, $5,964,001, in each case reduced by Special
Hazard Losses allocated to the Group I-L, Group IV-L and Group C-B-L
Regular Interests and the Class R-1 and Class R-2 Certificates since the
most recent anniversary of the Cut-Off Date (or, if prior to the first
such anniversary, since the Cut-Off Date). On each anniversary of the
Cut-Off Date, the Special Hazard Coverage for Loan Group I and Loan
Group IV 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 such Loan Groups located in the single California zip
code area containing the largest aggregate principal balance of such
Mortgage Loans, (b) 1.0% of the aggregate unpaid principal balance of
the Mortgage Loans in such Loan Groups and (c) twice the unpaid
principal balance of the largest single Mortgage Loan in such Loan
Groups, in each case calculated as of the Due Date in the immediately
preceding month, and (2) $5,964,001 as reduced by the Special Hazard
Losses allocated to the Group I-L, Group IV-L and Group C-B-L Regular
Interests and the Class R-1 and Class R-2 Certificates since the Cut-Off
Date.
With respect to Loan Group II and Loan Group III, the Special
Hazard Coverage for Loan Group II and Loan Group III on the most recent
anniversary of the Cut-Off Date (calculated in accordance with the
second sentence of this paragraph) or, if prior to the first such
anniversary, $3,944,194, in each case reduced by Special Hazard Losses
allocated to the Group II-L, Group III-L and Group D-B-L Regular
Interests since the most recent anniversary of the Cut-Off Date (or, if
prior to the first such anniversary, since the Cut-Off Date). On each
anniversary of the Cut-Off Date, the Special Hazard Coverage for Loan
Group II and Loan Group III 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 such Loan Groups located in
the single California zip code area containing the largest aggregate
principal balance of such Mortgage Loans, (b) 1.0% of the aggregate
unpaid principal balance of the Mortgage Loans in such Loan Groups and
(c) twice the unpaid principal balance of the largest single Mortgage
Loan in such Loan Groups, in each case calculated as of the Due Date in
the immediately preceding month, and (2) $3,944,194 as reduced by the
Special Hazard Losses allocated to the Group II-L, Group III-L and Group
D-B-L Regular Interests since the Cut-Off Date.
The Special Hazard Coverage for Loan Group I and Loan Group IV and
the Special Hazard Coverage for Loan Group II and Loan Group III may be
reduced upon written confirmation from the Rating Agencies that such
reduction will not adversely affect the then current ratings assigned to
the Certificates by the Rating Agencies.
Special Hazard Loss: 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
93
maintenance of all or part thereof; (iii) errors in design, faulty
workmanship or materials, unless the collapse of the property or a part
thereof ensues and then only for the ensuing loss; (iv) nuclear reaction
or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by, contributed to
or aggravated by a peril covered by this definition of Special Hazard
Loss; (v) hostile or warlike action in time of peace or war, including
action in hindering, combating or defending against an actual, impending
or expected attack (a) by any government of sovereign power (de jure or
de facto), or by an authority maintaining or using military, naval or
air forces, (b) by military, naval or air forces, or (c) by an agent of
any such government, power, authority or forces; (vi) any weapon of war
employing atomic fission or radioactive force whether in time of peace
or war; (vii) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such occurrence; or (viii) seizure or destruction
under quarantine or customs regulations, or confiscation by order of any
government or public authority.
Step Down Percentage: For any Distribution Date, the percentage
indicated below:
Distribution Date Occurring In Step
Down Percentage
May 1999 through April 2004 0%
May 2004 through April 2005 30%
May 2005 through April 2006 40%
May 2006 through April 2007 60%
May 2007 through April 2008 80%
May 2008 and thereafter 100%
Stripped Interest Rate: For each Group I Loan, the excess, if any,
of the Pass-Through Rate for such Mortgage Loan over 6.750% per annum.
For each Group II Loan, the excess, if any, of the Pass-Through Rate for
such Mortgage Loan over 7.000% per annum. For each Group III Loan, the
excess, if any, of the Pass-Through Rate for such Mortgage Loan over
7.250% per annum.
Subordinate Certificates: The Group C-B and Group D-B
Certificates.
Subordinate Component Balance: With respect to Loan Group I at any
time, the then outstanding aggregate Principal Balance of the Group I
Loans (less the applicable Class I-P Fraction of any Class I-P Mortgage
Loan) minus the then outstanding aggregate Class Principal Balance of
the Group I-A Certificates. With respect to Loan Group II at any time,
the then outstanding aggregate Principal Balance of the Group II Loans
(less the applicable Class II-P Fraction of any Class II-P Mortgage
Loan) minus the then outstanding Class II-A-1 Principal Balance. With
respect to Loan Group III at any time, the then outstanding aggregate
Principal Balance of the Group III Loans (less the applicable Class III-
P Fraction of any Class III-P Mortgage Loan) minus the then outstanding
Class III-A-1 Principal Balance. With respect to Loan Group IV at any
time, the then outstanding aggregate Principal Balance of the Group IV
Loans minus the then outstanding aggregate Class Principal Balance of
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the Group IV-A and Residual Certificates.
Subordinate Percentage: The Group I Subordinate Percentage, the
Group II Subordinate Percentage, the Group III Subordinate Percentage or
the Group IV Subordinate Percentage, as applicable.
Subordination Level: On any specified date, with respect to any
Class of Group C-B-L Regular Interests, the percentage obtained by
dividing the sum of the Class Principal Balances of the Classes of Group
C-B-L Regular Interests which are subordinate in right of payment to
such Class by the sum of the Class Principal Balances of the Group I-L,
Group IV-L and Group C-B-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 and Group IV Loans on such date. On
any specified date, with respect to any Class of Group D-B-L Regular
Interests, the percentage obtained by dividing the sum of the Class
Principal Balances of the Classes of Group D-B-L Regular Interests which
are subordinate in right of payment to such Class by the sum of the
Class Principal Balances of the Group II-L, Group III-L and Group D-B-L
Regular Interests and the Residual Certificates as of such date prior to
giving effect to distributions of principal or interest or allocations
of Realized Losses on the Group II and Group III Loans on such date.
Substitute Mortgage Loan: A Mortgage Loan which is substituted for
another Mortgage Loan pursuant to and in accordance with the provisions
of Section 2.02.
Targeted Principal Balance: The combined amount set forth in the
table attached as Appendix C to the Prospectus, for the applicable
Distribution Date, for the Class I-A-3 Certificates and Component I-A-1-
5, which amount shall also constitute the "Targeted Principal Balance"
for the Corresponding Class or Component (as applicable) in the
aggregate.
Tax Matters Person: A Holder of the Class R-1 Certificate, with
respect to REMIC I, a Holder of the Class R-2 Certificate, with respect
to REMIC II, and a Holder of the Class R-3 Certificate, with respect to
REMIC III, in each case holding a Certificate having an Authorized
Denomination of at least 0.01% or any Permitted Transferee of such Class
R-1, Class R-2 or Class R-3 Certificateholder designated as succeeding
to the position of Tax Matters Person with respect to the applicable
trust fund in a notice to the Trustee signed by authorized
representatives of the transferor and transferee of such Class R-1,
Class R-2 or Class R-3 Certificate. If the Tax Matters Person for REMIC
I, REMIC II or REMIC III becomes a Disqualified Organization, the last
preceding Holder of such Authorized Denomination of the Class R-1, Class
R-2 or Class R-3 Certificate, as applicable, that is not a Disqualified
Organization shall be Tax Matters Person for such trust pursuant to
Section 5.01(c). If any Person is appointed as tax matters person by the
Internal Revenue Service pursuant to the Code, such Person shall be Tax
Matters Person.
Termination Date: The date upon which final payment of the
Certificates will be made pursuant to the procedures set forth in
Section 9.01(b).
Termination Payment: The final payment delivered to the
Certificateholders on the Termination Date pursuant to the procedures
set forth in Section 9.01(b).
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Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
Transferee Affidavit and Agreement: An affidavit and agreement in
the form attached hereto as Exhibit J.
Trust: The pool of assets consisting of the Trust Fund conveyed
pursuant to Section 2.01 of this Agreement.
Trustee: State Street Bank and Trust Company, or its successor-in-
interest as provided in Section 8.09, or any successor trustee appointed
as herein provided.
Trust Fund: The corpus of the trust created pursuant to Section
2.01 of this Agreement. The Trust Fund consists of (i) the PNC Mortgage
Loans and (upon purchase thereof by the Trustee pursuant to Section
2.01) the Clipper Mortgage Loans and all rights pertaining thereto; (ii)
such assets as from time to time may be held by the Trustee (or its duly
appointed agent) in the Certificate Account (including (a) an initial
deposit therein on the Closing Date by the Company in the amount of
$90,727.70 for the payment of interest on Mortgage Loans which do not
have a Due Date until June 1, 1999 and (b) an initial deposit therein on
the Closing Date by the Company in the amount of the Clipper Mortgage
Loan Purchase Amount for the purchase by the Trustee of the Clipper
Mortgage Loans pursuant to Section 2.01, which initial deposits shall be
irrevocable) or the Investment Account (except amounts representing the
Master Servicing Fee or the Servicing Fee); (iii) such assets as from
time to time may be held by Servicers in a Custodial Account for P&I or
Custodial Account for Reserves or a Buydown Fund Account related to the
Mortgage Loans (except amounts representing the Master Servicing Fee or
the Servicing Fee); (iv) property which secured a Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure
or, in the case of a Cooperative Loan, a similar form of conversion,
after the Cut-Off Date; (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; and (vi) such assets as from time to time may
be held by the Trustee (or its duly appointed agent) in the Rounding
Accounts.
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 and the portion of the
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Group C-B-L Regular Interests that derives its Interest Distribution
Amount from the Group I Loans pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Group II-L Regular Interests and the portion of the
Group D-B-L Regular Interests that derives its Interest Distribution
Amount from the Group II Loans pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be
allocated to the Group III-L Regular Interests and the portion of the
Group D-B-L Regular Interests that derives its Interest Distribution
Amount from the Group III Loans pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be
allocated to the Group IV-L Regular Interests and the portion of the
Group C-B-L Regular Interests that derives its Interest Distribution
Amount from the Group IV Loans pro rata according to the amount of the
Interest Distribution Amount to which each such Class would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group I shall be
allocated to the Class I-X-M, Class C-Y-1 and Class C-Z-1 Regular
Interests, pro rata according to the amount of the Interest Distribution
Amount to which each such Class of Regular Interests would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group II shall be
allocated to the Class II-X-M, Class D-Y-1 and Class D-Z-1 Regular
Interests, pro rata according to the amount of the Interest Distribution
Amount to which each such Class of Regular Interests would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group III shall be
allocated to the Class III-X-M, Class D-Y-2 and Class D-Z-2 Regular
Interests, pro rata according to the amount of the Interest Distribution
Amount to which each such Class of Regular Interests would otherwise be
entitled in reduction thereof.
Uncompensated Interest Shortfall for Loan Group IV shall be
allocated to the Class C-Y-2 and Class C-Z-2 Regular Interests, pro rata
according to the amount of the Interest Distribution Amount to which
each such Class of Regular Interests would otherwise be entitled in
reduction thereof.
Undercollateralized Group: For any Distribution Date, Loan Group I,
if immediately prior to such Distribution Date the aggregate Class
Principal Balance of the Group I-A Certificates is greater than the
aggregate Principal Balance of the Mortgage Loans in Loan Group I (less
the applicable Class I-P Fraction of each Class I-P Mortgage Loan); for
any Distribution Date, Loan Group II, if immediately prior to such
Distribution Date the Class II-A-1 Principal Balance is greater than the
aggregate Principal Balance of the Mortgage Loans in Loan Group II (less
the applicable Class II-P Fraction of each Class II-P Mortgage Loan);
for any Distribution Date, Loan Group III, if immediately prior to such
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Distribution Date the Class III-A-1 Principal Balance is greater than
the aggregate Principal Balance of the Mortgage Loans in Loan Group III
(less the applicable Class III-P Fraction of each Class III-P Mortgage
Loan); and for any Distribution Date, Loan Group IV, if immediately
prior to such Distribution Date the aggregate Class Principal Balance of
the Group IV-A and Residual Certificates is greater than the aggregate
Principal Balance of the Mortgage Loans in Loan Group IV.
Underwriting Standards: The underwriting standards of the Company,
Bank of America, NT&SA, Crestar Mortgage Company, Prism Mortgage
Company, CTX Mortgage Company, PNC Mortgage Corp. of America, Flagstar
Bank, FSB, Old Kent Mortgage Company, Headlands Mortgage Company,
▇▇▇▇▇▇▇▇▇ Mortgage Corporation, Fairbanks Mortgage Corporation, Western
Financial Savings Bank, Impac Funding Corporation, North American
Mortgage Company, HomeSide Lending, Inc., IndyMac, Inc., Ohio Savings
Bank, Temple Inland Mortgage Corporation, Penn Federal Savings Bank,
Universal American Mortgage, GreenPoint Mortgage Corp., Mortgage
Network, Inc. and Temple Inland Mortgage Company.
Uninsured Cause: Any cause of damage to a Mortgaged Property, the
cost of the complete restoration of which is not fully reimbursable
under the hazard insurance policies required to be maintained pursuant
to Section 3.07.
U.S. Person: A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or
under the laws of the United States, any state thereof or the District
of Columbia, or an estate or trust that is subject to U.S. federal
income tax regardless of the source of its income.
VA: The Department of Veterans Affairs, formerly known as the
Veterans Administration, or any successor thereto.
Withdrawal Date: Any day during the period commencing on the 18th
day of the month of the related Distribution Date (or if such day is not
a Business Day, the immediately preceding Business Day) and ending on
the last Business Day prior to the 21st day of the month of such
Distribution Date. The "related Due Date" for any Withdrawal Date is the
Due Date immediately preceding the related Distribution Date.
ARTICLE II
Conveyance of the Trust Funds; REMIC Election and Designations;
Original Issuance of Certificates
Section 2.01. Conveyance of the Trust Fund; REMIC Election and
Designations. The Trust of which the Trustee is the trustee is hereby
created under the laws of the State of New York for the benefit of the
Holders of the REMIC I Regular Interests and the Class R-1 Certificates.
The purpose of the Trust is to hold the Trust Fund and provide for the
issuance, execution and delivery of the Class R-1 Certificates. The
assets of the Trust shall consist of the Trust Fund. The Trust shall be
irrevocable.
The assets of the Trust shall remain in the custody of the Trustee,
on behalf of the Trust, and shall be kept in the Trust except as
otherwise expressly set forth herein. Moneys to the credit of the Trust
shall be held by the Trustee and invested as provided herein. All
assets received and held in the Trust will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of State
Street Bank and Trust Company in its own right, or any Person claiming
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through it. The Trustee, on behalf of the Trust, shall not have the
power or authority to transfer, assign, hypothecate, pledge or otherwise
dispose of any of the assets of the Trust to any Person, except as
permitted herein. No creditor of a beneficiary of the Trust, of the
Trustee, of the Master Servicer or of the Company shall have any right
to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the Trust, except in
accordance with the terms of this Agreement.
Concurrently with the execution and delivery hereof, the Company
(i) does hereby irrevocably sell, transfer, assign, set over and
otherwise convey to the Trustee, in trust for the benefit of the Holders
of REMIC I Regular Interests and the Class R-1 Certificates, without
recourse, all the Company's right, title and interest in and to the
Trust Fund (other than the Clipper Mortgage Loans), including but not
limited to all scheduled payments of principal and interest due after
the Cut-Off Date and received by the Company with respect to the PNC
Mortgage Loans at any time, and all Principal Prepayments received by
the Company after the Cut-Off Date with respect to the PNC Mortgage
Loans (such transfer and assignment by the Company to be referred to
herein as the "Conveyance", and the assets so transferred and assigned
to be referred to herein as the "PNC Conveyed Assets") and (ii) shall
deposit into the Certificate Account the Clipper Mortgage Loan Purchase
Amount. Concurrently with the execution and delivery hereof, the Trustee
shall (a) execute and deliver the Clipper Loan Sale Agreement, and
withdraw from the Certificate Account the Clipper Mortgage Loan Purchase
Amount and apply such amount to payment of the purchase price for the
assets conveyed to the Trustee under the Clipper Loan Sale Agreement and
(b) execute and deliver the Protective Transfer Agreement. The Trustee
shall have no duty to review or otherwise determine the adequacy of the
Clipper Loan Sale Agreement and the Protective Transfer Agreement. The
Clipper Mortgage Loans and the other assets conveyed to the Trustee
under the Clipper Loan Sale Agreement and the Protective Transfer
Agreement shall become part of the Trust Fund. The Trustee hereby
accepts the Trust created hereby and accepts delivery of the Trust Fund
on behalf of the Trust and acknowledges that it holds the Mortgage Loans
for the benefit of the Holders of the 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 PNC Conveyed Assets to the Trustee by the Company as provided in
this Section 2.01 be, and be construed as, an absolute sale of the PNC
Conveyed Assets. It is, further, not the intention of the parties that
such Conveyance be deemed a pledge of the PNC Conveyed Assets by the
Company to the Trustee to secure a debt or other obligation of the
Company. However, in the event that, notwithstanding the intent of the
parties, the PNC Conveyed Assets are held to be the property of the
Company, or if for any other reason this Agreement is held or deemed to
create a security interest in the PNC Conveyed Assets, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the Conveyance provided for in this Section 2.01 shall be
deemed to be a grant by the Company to the Trustee of a security
interest in all of the Company's right, title, and interest, whether now
owned or hereafter acquired, in and to:
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(I) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit and investment
property consisting of, arising from or relating to any of the
property described in (i), (ii) and (iii) below: (i) the PNC
Mortgage Loans identified on the Mortgage Loan Schedule, including
the related Mortgage Notes, Mortgages, Cooperative Stock
Certificates, and Cooperative Leases, all related Substitute
Mortgage Loans and all distributions with respect to such PNC
Mortgage Loans and related Substitute Mortgage Loans payable on and
after the Cut-Off Date; (ii) the Certificate Account, the
Investment Account, the Rounding Accounts and all money or other
property held therein, and the Custodial Accounts for P&I and the
Custodial Accounts for Reserves (to the extent of the amounts on
deposit or other property therein attributable to the Mortgage
Loans); and (iii) amounts paid or payable by the insurer under any
FHA insurance policy or any Primary Insurance Policy and proceeds
of any VA guaranty and any other insurance policy related to any
Mortgage Loan or the Mortgage Pool;
(II) All accounts, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of
deposit, goods, letters of credit, advices of credit, investment
property, and other rights arising from or by virtue of the
disposition of, or collections with respect to, or insurance
proceeds payable with respect to, or claims against other persons
with respect to, all or any part of the collateral described in (I)
above (including any accrued discount realized on liquidation of
any investment purchased at a discount); and
(III) All cash and non-cash proceeds of the collateral
described in (I) and (II) above;
(c) the possession by the Trustee of the Mortgage Notes, the
Mortgages, the Security Agreements, Assignments of Proprietary Lease,
Cooperative Stock Certificates and Cooperative Leases related to the PNC
Mortgage Loans 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 PNC Conveyed Assets, such security interest
would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term
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of the Agreement. In connection herewith, the Trustee shall have all of
the rights and remedies of a secured party and creditor under the
Uniform Commercial Code as in force in the relevant jurisdiction.
In connection with the sale, transfer and assignment referred to in
the third paragraph of this Section 2.01, the Company, concurrently with
the execution and delivery hereof, does deliver to, and deposit with, or
cause to be delivered to and deposited with, the Trustee or Custodian
the Mortgage Files for the PNC Mortgage Loans, which shall on original
issuance thereof and at all times be registered in the name of the
Trustee. In the event that the Mortgage Files delivered or caused to be
delivered by Clipper to the Trustee with respect to the Clipper Mortgage
Loans pursuant to the Clipper Loan Sale Agreement do not include all the
documents or instruments required to be included therein pursuant to the
definition of "Mortgage File" herein, the Company shall deliver or cause
to be delivered to the Trustee or Custodian such missing documents or
instruments.
Concurrently with the execution and delivery hereof, the Company
shall cause assignments of the Mortgage Loans to the Trustee to be
recorded or filed, except in states where, in the opinion of counsel
admitted to practice in such state acceptable to the Company, the
Trustee and the Rating Agencies submitted in lieu of such recording or
filing, such recording or filing is not required to protect the
Trustee's interest in such Mortgage Loans against creditors of, or
against sale, further assignments, satisfaction or discharge by the
Lender, a Servicer, Clipper, the Company or the Master Servicer, and the
Company shall cause to be filed the Form UCC-3 assignment and Form UCC-1
financing statement referred to in clause (Y)(vii) and (ix),
respectively, of the definition of "Mortgage File." Notwithstanding the
immediately preceding sentence, in the event that any Mortgage Loan is
delivered to the Trustee by a custodian which is not an affiliate of the
Company and the related Mortgage File does not contain an assignment of
the Mortgage as required by clause (X)(iii)(1) or clause (X)(iii)(2) of
the definition of "Mortgage File," the Company shall cause such
custodian promptly to deliver such an assignment, but in no event later
than 30 days after the Closing Date. In connection with its servicing
of Cooperative Loans, the Master Servicer will use its best efforts to
file timely continuation statements, if necessary, with regard to each
financing statement and assignment relating to Cooperative Loans.
In instances where the original recorded Mortgage or any
intervening assignment thereof (recorded or in recordable form) relating
to a Mortgage Loan is not included in the Mortgage File delivered to the
Trustee prior to or concurrently with the execution and delivery hereof
or of the Clipper Loan Sale Agreement, as applicable (due to a delay on
the part of the recording office), the Company shall deliver to the
Trustee a fully legible reproduction of the original Mortgage or
intervening assignment provided that the related Lender or originator
certifies on the face of such reproduction(s) or copy as follows:
"Certified true and correct copy of original which has been transmitted
for recordation." For purposes hereof, transmitted for recordation means
having been mailed or otherwise delivered for recordation to the
appropriate authority. In all such instances, the Company shall transmit
the original recorded Mortgage and any intervening assignments with
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evidence of recording thereon (or a copy of such original Mortgage or
intervening assignment certified by the applicable recording office)
(collectively, "Recording Documents") to the Trustee within 270 days
after the execution and delivery hereof. In instances where, due to a
delay on the part of the recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents
cannot be delivered to the Trustee within 270 days after execution and
delivery hereof, the Company shall deliver to the Trustee within such
time period a certificate (a "Company Officer's Certificate") signed by
the Chairman of the Board, President, any Vice President or Treasurer of
the Company stating the date by which the Company expects to receive
such Recording Documents from the applicable recording office. In the
event that Recording Documents have still not been received by the
Company and delivered to the Trustee by the date specified in its
previous Company Officer's Certificate delivered to the Trustee, the
Company shall deliver to the Trustee by such date an additional Company
Officer's Certificate stating a revised date by which the Company
expects to receive the applicable Recording Documents. This procedure
shall be repeated until the Recording Documents have been received by
the Company and delivered to the Trustee.
In instances where, due to a delay on the part of the title
insurer, a copy of the title insurance policy for a particular Mortgage
Loan is not included in the Mortgage File delivered to the Trustee prior
to or concurrently with the execution and delivery hereof or of the
Clipper Loan Sale Agreement, as applicable, the Company shall provide a
copy of such title insurance policy to the Trustee within 90 days after
the Company's receipt of the Recording Documents necessary to issue such
title insurance policy. In addition, the Company shall, subject to the
limitations set forth in the preceding sentence, provide to the Trustee
upon request therefor a duplicate title insurance policy for any
Mortgage Loan.
For Mortgage Loans for which the Company or Clipper, as applicable,
has received a Payoff after the Cut-Off Date and prior to the date of
execution and delivery hereof, the Company, in lieu of delivering the
above documents, herewith delivers to the Trustee a certification of a
Servicing Officer of the nature set forth in Section 3.10.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.01, and to enter into a
Custodial Agreement for such purpose, provided, however, that the
Trustee shall be and remain liable for the acts of any such Custodian
only to the extent that it is responsible for its own acts hereunder.
The Company and the Trustee agree that the Company, as agent for
the Tax Matters Person, shall, on behalf of the REMIC I Trust Fund,
elect to treat the REMIC I Trust Fund as a REMIC within the meaning of
Section 860D of the Code and, if necessary, under applicable state laws.
Such election shall be included in the Form 1066 and any appropriate
state return to be filed on behalf of REMIC I for its first taxable
year.
The Closing Date is hereby designated as the "startup day" of REMIC
I within the meaning of Section 860G(a)(9) of the Code.
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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.
The Trustee and the Master Servicer shall promptly provide the
Company with such information in the possession of the Trustee or the
Master Servicer, respectively, as the Company may from time to time
request for the purpose of enabling the Company to prepare tax returns.
In the event that a Mortgage Loan is discovered to have a defect
which, had such defect been discovered before the startup day, would
have prevented such Mortgage Loan from being a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, and the Company
does not purchase or repurchase such Mortgage Loan within 90 days of
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such date, the Master Servicer, on behalf of the Trustee, shall within
90 days of the date such defect is discovered sell such Mortgage Loan at
such price as the Master Servicer in its sole discretion, determines to
be the greatest price that will result in the purchase thereof within 90
days of such date, unless the Master Servicer delivers to the Trustee an
Opinion of Counsel to the effect that continuing to hold such Mortgage
Loan will not adversely affect the status of the electing portion of the
REMIC I Trust Fund as a REMIC for federal income tax purposes.
In the event that any tax is imposed on "prohibited transactions"
of the REMIC I Trust Fund as defined in Section 860F of the Code and not
paid by the Company pursuant to clause (f) of the third preceding
paragraph, such tax shall be charged against amounts otherwise
distributable to the Class R-1 Certificateholders. Notwithstanding
anything to the contrary contained herein, the Trustee is hereby
authorized to retain from amounts otherwise distributable to the Class R-
1 Certificateholders on any Distribution Date sufficient funds to
reimburse the Company in its capacity as agent for the Tax Matters
Person for the payment of such tax (upon the written request of the
Company, to the extent reimbursable, and to the extent that the Company
has not been previously reimbursed therefor).
Section 2.02. Acceptance by Trustee. The Trustee acknowledges
receipt (or with respect to any Mortgage Loan subject to a Custodial
Agreement, receipt by the Custodian thereunder) of the documents (or
certified copies thereof as specified in Section 2.01) referred to in
Section 2.01 above, but without having made the review required to be
made within 45 days pursuant to this Section 2.02, and declares that as
of the Closing Date it holds and will hold such documents and the other
documents constituting a part of the Mortgage Files delivered to it, and
the Trust Fund, as Trustee in trust, upon the trusts herein set forth,
for the use and benefit of the Holders from time to time of the REMIC I
Regular Interests and Class R-1 Certificates. The Trustee agrees, for
the benefit of the Holders of the REMIC I Regular Interests and Class R-
1 Certificates, to review or cause the Custodian to review each Mortgage
File within 45 days after the Closing Date and deliver to the Company a
certification in the form attached as Exhibit M hereto, to the effect
that, except as noted, all documents required (in the case of
instruments described in clauses (X)(v) and (Y)(x) of the definition of
"Mortgage File", known by the Trustee to be required) pursuant to the
definition of "Mortgage File" and Section 2.01 have been executed and
received, and that such documents relate to the Mortgage Loans
identified in the Mortgage Loan Schedule. In performing such review, the
Trustee may rely upon the purported genuineness and due execution of any
such document, and on the purported genuineness of any signature
thereon. The Trustee shall not be required to make any independent
examination of any documents contained in each Mortgage File beyond the
review specifically required herein. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or
suitability of any Mortgage Loan. If the Trustee finds any document or
documents constituting a part of a Mortgage File not to have been
executed or received, or to be unrelated to the Mortgage Loans
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identified in the Mortgage Loan Schedule, the Trustee shall promptly so
notify the Company. The Company hereby covenants and agrees that, if any
such defect cannot be corrected or cured, the Company shall, not later
than 60 days after the Trustee's notice to it respecting such defect,
within the three-month period commencing on the Closing Date (or within
the two-year period commencing on the Closing Date if the related
Mortgage Loan is a "defective obligation" within the meaning of Section
860G(a)(4)(B)(ii) of the Code and Treasury Regulation Section 1.860G-
2(f)), either (i) purchase or repurchase the related Mortgage Loan from
the Trustee at the Purchase Price, or (ii) substitute for any Mortgage
Loan to which such defect relates a different mortgage loan (a
"Substitute Mortgage Loan") which is a "qualified replacement mortgage"
(as defined in the Code) and, (iii) after such three-month or two-year
period, as applicable, the Company shall purchase or repurchase the
Mortgage Loan from the Trustee at the Purchase Price but only if the
Mortgage Loan is in default or default is, in the judgment of the
Company, reasonably imminent. If such defect would cause the Mortgage
Loan to be other than a "qualified mortgage" (as defined in the Code),
then notwithstanding the previous sentence, purchase, repurchase or
substitution must occur within the sooner of (i) 90 days from the date
the defect was discovered or (ii) in the case of substitution, two years
from the Closing Date.
Such Substitute Mortgage Loan shall mature no later than, and not
more than two years earlier than, have a principal balance and Loan-to-
Value Ratio equal to or less than, and have a Pass-Through Rate on the
date of substitution equal to or no more than 1% greater than the
Mortgage Loan being substituted for. If the aggregate of the principal
balances of the Substitute Mortgage Loans substituted for a Mortgage
Loan is less than the Principal Balance of such Mortgage Loan, the
Company shall pay the difference in cash to the Trustee for deposit into
the Certificate Account, and such payment by the Company shall be
treated in the same manner as proceeds of the purchase or repurchase by
the Company of a Mortgage Loan pursuant to this Section 2.02.
Furthermore, such Substitute Mortgage Loan shall otherwise have such
characteristics so that the representations and warranties of the
Company set forth in Section 2.03 hereof would not have been incorrect
had such Substitute Mortgage Loan originally been a Mortgage Loan, and
the Company shall be deemed to have made such representations and
warranties as to such Substitute Mortgage Loan. A Substitute Mortgage
Loan may be substituted for a defective Mortgage Loan whether or not
such defective Mortgage Loan is itself a Substitute Mortgage Loan.
Notwithstanding anything herein to the contrary, each Substitute
Mortgage Loan shall be deemed to have the same Pass-Through Rate as the
Mortgage Loan for which it was substituted.
The Purchase Price for each purchased or repurchased Mortgage Loan
shall be deposited by the Company in the Certificate Account and, upon
receipt by the Trustee of written notification of such deposit signed by
a Servicing Officer, the Trustee shall release to the Company the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be
necessary to vest in the Company or its designee or assignee title to
any Mortgage Loan released pursuant hereto. The obligation of the
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Company to purchase or repurchase or substitute any Mortgage Loan as to
which such a defect in a constituent document exists shall constitute
the sole remedy respecting such defect available to the 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 PNC
Mortgage Loans provided for in Section 2.01 herein and the conveyance of
the Clipper Mortgage Loans provided for in the Clipper Loan Sale
Agreement, the Company hereby represents and warrants to the Trustee
that as of the Cut-Off Date unless otherwise indicated:
(ii) 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;
(iii) As of the Closing Date, each Mortgage relating to a Mortgage
Loan that is not a Cooperative Loan is a valid and enforceable (subject
to Section 2.03(xvi)) first lien on an unencumbered estate in fee simple
or leasehold estate in the related Mortgaged Property subject only to
(a) liens for current real property taxes and special assessments; (b)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in the
appraisal obtained in connection with the origination of the Mortgage
Loan; (c) exceptions set forth in the title insurance policy relating to
such Mortgage, such exceptions being acceptable to mortgage lending
institutions generally; and (d) other matters to which like properties
are commonly subject which do not materially interfere with the benefits
of the security intended to be provided by the Mortgage;
(iv) Immediately upon the transfer and assignment contemplated herein
and in the Clipper Loan Sale Agreement, the Trustee shall have good
title to, and will be the sole legal owner of, each PNC Mortgage Loan
and Clipper Mortgage Loan, respectively, free and clear of any
encumbrance or lien (other than any lien under this Agreement);
(v) 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;
(vi) As of the Closing Date, there is no late assessment for delinquent
taxes outstanding against any Mortgaged Property;
(vii) 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;
(viii) As of the Closing Date, each Mortgaged Property is free of
damage and in good repair, ordinary wear and tear excepted;
(ix) 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;
(x) Each Mortgage Loan was originated by a savings association, savings
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bank, credit union, insurance company, or similar institution which is
supervised and examined by a federal or state authority or by a
mortgagee approved by the FHA and will be serviced by an institution
which meets the servicer eligibility requirements established by the
Company;
(xi) As of the Closing Date, each Mortgage Loan which is not a
Cooperative Loan is covered by an ALTA form or CLTA form of mortgagee
title insurance policy or other form of policy of insurance which, as of
the origination date of such Mortgage Loan, was acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac, and has been issued by, and is the valid and binding
obligation of, a title insurer which, as of the origination date of such
Mortgage Loan, was acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified
to do business in the state in which the related Mortgaged Property is
located. Such policy insures the originator of the Mortgage Loan, its
successors and assigns as to the first priority lien of the Mortgage in
the original principal amount of the Mortgage Loan subject to the
exceptions set forth in such policy. Such policy is in full force and
effect and will be in full force and effect and inure to the benefit of
the 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;
(xii) Not less than approximately 99.9% (by Principal Balance) of
the Group I Loans, not less than approximately 86.5% (by Principal
Balance) of the Group II Loans, not less than approximately 83.1% (by
Principal Balance) of the Group III Loans and all of the Group IV Loans
with Loan-to-Value Ratios as of the Cut-Off Date in excess of 80% were
covered by a Primary Insurance Policy or an FHA insurance policy or a VA
guaranty, and such policy or guaranty is valid and remains in full force
and effect;
(xiii) 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;
(xiv) As of the Closing Date, each insurer issuing a Primary
Insurance Policy holds a rating acceptable to the Rating Agencies;
(xv) Each Mortgage was documented by appropriate ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇ Mac
mortgage instruments in effect at the time of origination, or other
instruments approved by the Company;
(xvi) As of the Closing Date, the Mortgaged Property securing each
Mortgage relating to a Mortgage Loan that is not a Cooperative Loan is
improved with a one- to four-family dwelling unit, including units in a
duplex, condominium project, townhouse, a planned unit development or a
de minimis planned unit development;
(xvii) 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;
(xviii) As of the date of origination, as to Mortgaged Properties
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which are units in condominiums or planned unit developments, all of
such units met ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac requirements, are located in a
condominium or planned unit development projects which have received
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac approval, or are approvable by ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac or have otherwise been approved by the Company;
(xix) One Group II Loan is a Buydown Loan and none of the Group I,
Group III or Group IV Loans are Buydown Loans;
(xx) Based solely on representations of the Mortgagors obtained at the
origination of the related Mortgage Loans, approximately 97.46% (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 1.43% (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
1.10% (by Principal Balance) of the Group I Loans will be secured by
Mortgaged Properties which were investor properties of the related
Mortgagors; approximately 63.82% (by Principal Balance) of the Group II
Loans will be secured by owner occupied Mortgaged Properties which are
the primary residences of the related Mortgagors, approximately 2.84%
(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 33.34% (by Principal Balance) of the Group
II Loans will be secured by Mortgaged Properties which were investor
properties of the related Mortgagors; approximately 80.61% (by Principal
Balance) of the Group III Loans will be secured by owner occupied
Mortgaged Properties which are the primary residences of the related
Mortgagors, approximately 2.16% (by Principal Balance) of the Group III
Loans will be secured by owner occupied Mortgaged Properties which were
second or vacation homes of the Mortgagors and approximately 17.23% (by
Principal Balance) of the Group III Loans will be secured by Mortgaged
Properties which were investor properties of the related Mortgagors;
approximately 99.61% (by Principal Balance) of the Group IV Loans will
be secured by owner occupied Mortgaged Properties which are the primary
residences of the related Mortgagors, none of the Group IV Loans will be
secured by owner occupied Mortgaged Properties which were second or
vacation homes of the Mortgagors and approximately 0.39% (by Principal
Balance) of the Group IV Loans will be secured by Mortgaged Properties
which were investor properties of the related Mortgagors;
(xxi) Prior to origination or refinancing, an appraisal of each
Mortgaged Property was made by an appraiser on a form satisfactory to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(xxii) The Mortgage Loans have been underwritten substantially in
accordance with the applicable Underwriting Standards;
(xxiii) 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;
(xxiv) 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;
(xxv) With respect to each Cooperative Loan, the Cooperative Stock
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that is pledged as security for the Cooperative Loan is held by a person
as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(xxvi) Each Cooperative Loan is secured by a valid, subsisting and
enforceable (except as such enforcement may be limited by laws affecting
the enforcement of creditors' rights generally and principles of equity)
perfected first lien and security interest in the related Cooperative
Stock securing the related Mortgage Note, subject only to (a) liens of
the Cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the Cooperative's payments for its blanket mortgage,
current and future real property taxes, insurance premiums, maintenance
fees and other assessments to which like collateral is commonly subject,
and (b) other matters to which like collateral is commonly subject which
do not materially interfere with the benefits of the security intended
to be provided by the Security Agreement;
(xxvii) 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;
(xxviii) Based upon an appraisal of the Mortgaged Property securing
each Mortgage Loan, approximately 88.08% (by Principal Balance) of the
Group I Loans had a current Loan-to-Value Ratio less than or equal to
80%, approximately 11.92% (by Principal Balance) of the Group I Loans
had a current Loan-to-Value Ratio greater than 80% but less than or
equal to 95% and no Group I Loan had a current Loan-to-Value Ratio
greater than 95%; approximately 69.22% (by Principal Balance) of the
Group II Loans had a current Loan-to-Value Ratio less than or equal to
80%, approximately 30.78% (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 none of the Group II Loans had a current Loan-to-Value
Ratio greater than 95%; approximately 63.55% (by Principal Balance) of
the Group III Loans had a current Loan-to-Value Ratio less than or equal
to 80%, approximately 35.89% (by Principal Balance) of the Group III
Loans had a current Loan-to-Value Ratio greater than 80% but less than
or equal to 95% and approximately 0.56% (by Principal Balance) of the
Group III Loans had a current Loan-to-Value Ratio greater than 95%; and
approximately 89.46% (by Principal Balance) of the Group IV Loans had a
current Loan-to-Value Ratio less than or equal to 80%, approximately
10.54% (by Principal Balance) of the Group IV Loans had a current Loan-
to-Value Ratio greater than 80% but less than or equal to 95% and no
Group IV Loan had a current Loan-to-Value Ratio greater than 95%;
(xxix) Approximately 58.04% (by Principal Balance) of the Group I
Loans, approximately 45.95% (by Principal Balance) of the Group II
Loans, approximately 46.60% (by Principal Balance) of the Group III
Loans and approximately 64.23% (by Principal Balance) of the Group IV
Loans were originated for the purpose of refinancing existing mortgage
debt, including cash-out refinancings; and approximately 41.96% (by
Principal Balance) of the Group I Loans, approximately 54.05% (by
Principal Balance) of the Group II Loans, approximately 53.40% (by
Principal Balance) of the Group III Loans and approximately 35.78% (by
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Principal Balance) of the Group IV Loans were originated for the purpose
of purchasing the Mortgaged Property;
(xxx) Not less than approximately 79.64%, 43.19%, 22.84% and 77.17%
(by Principal Balance) of the Group I Loans, Group II Loans, Group III
Loans and Group IV Loans, respectively, were originated under full
documentation programs; and
(xxxi) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regul1ations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties
set forth in this Section 2.03 shall survive delivery of the respective
Mortgage Files to the Trustee or the Custodian, as the case may be, and
shall continue throughout the term of this Agreement. Upon discovery by
any of the Company, the Master Servicer, the Trustee or the Custodian of
a breach of any of the foregoing representations and warranties which
materially and adversely affects the value of the related Mortgage Loans
or the interests of the Certificateholders in the related Mortgage
Loans, the Company, the Master Servicer, the Trustee or the Custodian,
as the case may be, discovering such breach shall give prompt written
notice to the others. Within 90 days of its discovery or its receipt of
notice of breach, the Company shall purchase or repurchase, subject to
the limitations set forth in the definition of "Purchase Price", or
substitute for the affected Mortgage Loan or Mortgage Loans or any
property acquired in respect thereof from the Trustee, unless it has
cured such breach in all material respects. After the end of the three-
month period beginning on the "start-up day", any such substitution
shall be made only if the Company provides to the Trustee an Opinion of
Counsel reasonably satisfactory to the Trustee that each Substitute
Mortgage Loan will be a "qualified replacement mortgage" within the
meaning of Section 860G(a)(4) of the Code. Such substitution shall be
made in the manner and within the time limits set forth in Section 2.02.
Any such purchase or repurchase by the Company shall be accomplished in
the manner and at the Purchase Price, if applicable, but shall not be
subject to the time limits, set forth in Section 2.02. It is understood
and agreed that the obligation of the Company to provide such
substitution or to make such purchase or repurchase of any affected
Mortgage Loan or Mortgage Loans or any property acquired in respect
thereof as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders or the Trustee on behalf of the Holders of the REMIC
I Regular Interests and the Class R-1 Certificateholders.
Section 2.04. Acknowledgment of Transfer of Trust Fund;
Authentication of Class R-1 Certificates. The Trustee acknowledges the
transfer and assignment to it of the property constituting the Trust
Fund, but without having made the review required to be made within 45
days pursuant to Section 2.02, and, as of the Closing Date, does hereby
convey to the Company the REMIC I Regular Interests, and shall cause to
be authenticated and delivered, upon and pursuant to the order of the
Company, the Class R-1 Certificates in Authorized Denominations
evidencing the residual beneficial ownership interest in the REMIC I
Trust Fund.
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Section 2.05. Conveyance of REMIC II; REMIC Election and
Designations. A trust ("REMIC II") of which the Trustee is the trustee
is hereby created under the laws of the State of New York for the
benefit of the Holders of the REMIC II Regular Interests and the Class R-
2 Certificates. The purpose of REMIC II is to hold the REMIC II Trust
Fund and provide for the issuance, execution and delivery of the REMIC
II Regular Interests and the Class R-2 Certificates. The assets of
REMIC II shall consist of the REMIC II Trust Fund. REMIC II shall be
irrevocable.
The assets of REMIC II shall remain in the custody of the Trustee,
on behalf of REMIC II, and shall be kept in REMIC II. Moneys to the
credit of REMIC II shall be held by the Trustee and invested as provided
herein. All assets received and held in REMIC II will not be subject to
any right, charge, security interest, lien or claim of any kind in favor
of 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 irrevocably sell, transfer, assign, set over, and otherwise
convey to the Trustee in trust for the benefit of the Holders of the
REMIC II Regular Interests and the Class R-2 Certificates, without
recourse, all the Company's right, title and interest in and to the
REMIC II Trust Fund, including all interest and principal received by
the Company on or with respect to the REMIC I Regular Interests after
the Cut-Off Date. The Trustee hereby accepts REMIC II created hereby and
accepts delivery of the REMIC II Trust Fund on behalf of REMIC II and
acknowledges that it holds the REMIC I Regular Interests for the benefit
of the Holders of the REMIC II Regular Interests and the Class R-2
Certificates issued pursuant to this Agreement. It is the express intent
of the parties hereto that the conveyance of the REMIC II Trust Fund to
the Trustee by the Company as provided in this Section 2.05 be, and be
construed as, an absolute sale of the REMIC II Trust Fund. It is,
further, not the intention of the parties that such conveyance be deemed
a pledge of the REMIC II Trust Fund by the Company to the Trustee to
secure a debt or other obligation of the Company. However, in the event
that, notwithstanding the intent of the parties, the REMIC II Trust Fund
is held to be the property of the Company, or if for any other reason
this Agreement is held or deemed to create a security interest in the
REMIC II Trust Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.05 shall be
deemed to be a grant by the Company to the Trustee of a security
interest in all of the Company's right, title, and interest, whether now
owned or hereafter acquired, in and to:
(I) All accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts,
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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 Rounding Accounts and all money or other
property held therein, and the Custodial Accounts for P&I and the
Custodial Accounts for Reserves (to the extent of the amounts on
deposit therein attributable to the Mortgage Loans); (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
112
Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. In connection
herewith, the Trustee shall have all of the rights and remedies of a
secured party and creditor under the Uniform Commercial Code as in force
in the relevant jurisdiction.
The Trustee is authorized, with the Master Servicer's consent, to
appoint any bank or trust company approved by and unaffiliated with each
of the Company and the Master Servicer as Custodian of the documents or
instruments referred to above in this Section 2.05, and to enter into a
Custodial Agreement for such purpose; provided, however, that the
Trustee shall be and remain liable for actions of any such Custodian
only to the extent it would otherwise be responsible for such acts
hereunder.
The Company and the Trustee agree that the Company, on behalf of
the REMIC II Trust Fund, shall elect to treat the REMIC II Trust Fund as
a REMIC within the meaning of Section 860D of the Code and, if
necessary, under applicable state laws. Such election shall be included
in the Form 1066 and any appropriate state return to be filed on behalf
of the REMIC constituted by the REMIC II Trust Fund for its first
taxable year.
The Closing Date is hereby designated as the "startup day" of the
REMIC constituted by the REMIC II Trust Fund within the meaning of
Section 860G(a)(9) of the Code.
The regular interests (as set forth in the table contained in the
Preliminary Statement hereto) relating to the REMIC II Trust Fund are
hereby designated as "regular interests" for purposes of Section
860G(a)(1) of the Code. The Class R-2 Certificates are being issued in a
single Class, which is hereby designated as the sole class of "residual
interest" in the REMIC II Trust Fund for purposes of Section 860G(a)(2)
of the Code.
The parties intend that the affairs of the REMIC II Trust Fund
formed hereunder shall constitute, and that the affairs of the REMIC II
Trust Fund shall be conducted so as to qualify it as, a REMIC. In
furtherance of such intention, the Company covenants and agrees that it
shall act as agent for the Tax Matters Person (and the Company is hereby
appointed to act as Tax Matters Person) on behalf of the REMIC II Trust
Fund and that in such capacity it shall: (a) prepare and file, or cause
to be prepared and filed, a federal tax return using a calendar year as
the taxable year for the REMIC II Trust Fund when and as required by the
REMIC provisions and other applicable federal income tax laws; (b) make
an election, on behalf of the REMIC II Trust Fund, to be treated as a
REMIC on the federal tax return of the REMIC II Trust Fund for its first
taxable year, in accordance with the 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
113
omit to take any action that would cause the termination of the REMIC
status of the REMIC II Trust Fund; and (f) pay the amount of any federal
prohibited transaction penalty taxes imposed on the REMIC II Trust Fund
when and as the same shall be due and payable (but such obligation shall
not prevent the Company or any other appropriate person from contesting
any such tax in appropriate proceedings and shall not prevent the
Company from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); provided, that the Company
shall be entitled to be indemnified from the REMIC II Trust Fund for any
such prohibited transaction penalty taxes if the Company's failure to
exercise reasonable care was not the primary cause of the imposition of
such prohibited transaction penalty taxes.
In the event that any tax is imposed on "prohibited transactions"
of the REMIC II Trust Fund as defined in Section 860F of the Code and
not paid by the Company pursuant to clause (f) of the preceding
paragraph, such tax shall be charged against amounts otherwise
distributable to the Holders of the Class R-2 Certificates.
Notwithstanding anything to the contrary contained herein, the Company
is hereby authorized to retain from amounts otherwise distributable to
the Holders of the Class R-2 Certificates on any Distribution Date
sufficient funds to reimburse the Company for the payment of such tax
(to the extent that the Company has not been previously reimbursed
therefor).
Section 2.06. Acceptance by Trustee; Authentication of Class R-2
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 does hereby convey to the Company, in
exchange for the property constituting the REMIC II Trust Fund, the
REMIC II Regular Interests and the Trustee shall cause to be
authenticated and delivered, upon and pursuant to the order of the
Company, 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,
114
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 irrevocably sell, transfer, assign, set over, and otherwise
convey to the Trustee in trust for the benefit of the Certificateholders
(other than the Class R-1 and Class R-2 Certificateholders), without
recourse, all the Company's right, title and interest in and to the
REMIC III Trust Fund, including all interest and principal received by
the Company on or with respect to the REMIC II Regular Interests after
the Cut-Off Date. The Trustee hereby accepts REMIC III created hereby
and accepts delivery of the REMIC III Trust Fund on behalf of REMIC III
and acknowledges that it holds the REMIC II Regular Interests for the
benefit of the Holders of the Certificates (other than the Class R-1 and
Class R-2 Certificates) issued pursuant to this Agreement. It is the
express intent of the parties hereto that the conveyance of the REMIC
III Trust Fund to the Trustee by the Company as provided in this Section
2.07 be, and be construed as, an absolute sale of the REMIC III Trust
Fund. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of the REMIC III Trust Fund by the Company
to the Trustee to secure a debt or other obligation of the Company.
However, in the event that, notwithstanding the intent of the parties,
the REMIC III Trust Fund is held to be the property of the Company, or
if for any other reason this Agreement is held or deemed to create a
security interest in the REMIC III Trust Fund, then
(a) this Agreement shall be deemed to be a security agreement;
(b) the conveyance provided for in this Section 2.07 shall be
deemed to be a grant by the Company to the Trustee of a security
interest in all of the Company's right, title, and interest, whether now
owned or hereafter acquired, in and to:
(I) All accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money, deposit accounts,
certificates of deposit, goods, letters of credit, advices of
credit and investment property consisting of, arising from or
relating to any of the property described below: The uncertificated
REMIC II Regular Interests, including without limitation all rights
represented thereby in and to (i) the Mortgage Loans identified on
the Mortgage Loan Schedule, including the related Mortgage Notes,
Mortgages, Cooperative Stock Certificates, and Cooperative Leases,
all Substitute Mortgage Loans and all distributions with respect to
such Mortgage Loans and Substitute Mortgage Loans payable on and
after the Cut-Off Date, (ii) the Certificate Account, the
Investment Account, the Rounding Accounts and all money or other
property held therein, and the Custodial Accounts for P&I and the
Custodial Accounts for Reserves (to the extent of the amounts on
deposit therein attributable to the Mortgage Loans); (iii) amounts
paid or payable by the insurer under any FHA insurance policy or
115
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
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
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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.
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
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paragraph, such tax shall be charged against amounts otherwise
distributable to the Holders of the Class R-3 Certificates.
Notwithstanding anything to the contrary contained herein, the Company
is hereby authorized to retain from amounts otherwise distributable to
the Holders of the Class R-3 Certificates on any Distribution Date
sufficient funds to reimburse the Company for the payment of such tax
(to the extent that the Company has not been previously reimbursed
therefor).
Section 2.08. Acceptance by Trustee; Authentication of
Certificates. The Trustee acknowledges and accepts the assignment to it
of the property constituting the REMIC III Trust Fund and declares that
as of the Closing Date it holds and shall hold any documents
constituting a part of the REMIC III Trust Fund, and the REMIC III Trust
Fund, as Trustee in trust, upon the trusts herein set forth, for the use
and benefit of all present and future Certificateholders (other than the
Class R-1 and Class R-2 Certificateholders). In connection therewith,
as of the Closing Date, the Trustee shall cause to be authenticated and
delivered, upon and pursuant to the order of the Company, in exchange
for the property constituting the REMIC III Trust Fund, the Certificates
(other than the Class R-1 and Class R-2 Certificates) in Authorized
Denominations evidencing the entire ownership of the REMIC III Trust
Fund.
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. The Company to Act as Master Servicer. The Company
shall act as Master Servicer to service and administer the Mortgage
Loans on behalf of the Trustee and for the benefit of the
Certificateholders in accordance with the terms hereof and in the same
manner in which, and with the same care, skill, prudence and diligence
with which, it services and administers similar mortgage loans for other
portfolios, and shall have full power and authority to do or cause to be
done any and all things in connection with such servicing and
administration which it may deem necessary or desirable, including,
without limitation, the power and authority to bring actions and defend
the Trust Fund on behalf of the Trustee in order to enforce the terms of
the Mortgage Notes. The Master Servicer may perform its master
servicing responsibilities through agents or independent contractors,
but shall not thereby be released from any of its responsibilities
hereunder and the Master Servicer shall diligently pursue all of its
rights against such agents or independent contractors.
The Master Servicer shall make reasonable efforts to collect or
cause to be collected all payments called for under the terms and
provisions of the Mortgage Loans and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and
provisions of any Primary Insurance Policy, any FHA insurance policy or
VA guaranty, any hazard insurance policy, and federal flood insurance,
cause to be followed such collection procedures as are followed with
respect to mortgage loans comparable to the Mortgage Loans and held in
portfolios of responsible mortgage lenders in the local areas where each
Mortgaged Property is located. The Master Servicer shall enforce "due-on-
sale" clauses with respect to the related Mortgage Loans, to the extent
permitted by law, subject to the provisions set forth in Section 3.08.
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Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive or cause to be waived any assumption fee or late
payment charge in connection with the prepayment of any Mortgage Loan
and (ii) only upon determining that the coverage of any applicable
insurance policy or guaranty related to a Mortgage Loan will not be
materially adversely affected, arrange a schedule, running for no more
than 180 days after the first delinquent Due Date, for payment of any
delinquent installment on any Mortgage Note or for the liquidation of
delinquent items. The Master Servicer shall have the right, but not the
obligation, to purchase or repurchase any 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 purchased or repurchased shall not exceed one-half
of one percent (0.50%) of the aggregate Principal Balance, as of the Cut-
Off Date, of all Mortgage Loans.
Consistent with the terms of this Section 3.01, the Master Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if it has determined,
exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected by such waiver, modification,
postponement or indulgence; provided, however, that (unless the
Mortgagor is in default with respect to the Mortgage Loan or in the
reasonable judgment of the Master Servicer such default is imminent) the
Master Servicer shall not permit any modification with respect to any
Mortgage Loan that would (i) change the applicable Mortgage Interest
Rate, defer or forgive the payment of any principal or interest, reduce
the outstanding principal balance (except for actual payments of
principal) or extend the final maturity date with respect to such
Mortgage Loan, or (ii) be inconsistent with the terms of any applicable
Primary Insurance Policy, FHA insurance policy, VA guaranty, hazard
insurance policy or federal flood insurance policy. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would both constitute a sale or
exchange of such Mortgage Loan within the meaning of Section 1001 of the
Code (including any proposed, temporary or final regulations promulgated
thereunder) (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal
Prepayment or in a default situation) and cause any REMIC to fail to
qualify as such under the Code.
The Master Servicer is hereby authorized and empowered by the
Trustee to execute and deliver or cause to be executed and delivered on
behalf of the Holders of the REMIC I Regular Interests and the Class R-1
Certificateholders, and the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full
release, discharge or modification, assignments of Mortgages and
endorsements of Mortgage Notes in connection with refinancings (in
jurisdictions where such assignments are the customary and usual
standard of practice of mortgage lenders) and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
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Mortgaged Properties. The Trustee shall execute and furnish to the
Master Servicer, at the Master Servicer's direction, any powers of
attorney and other documents prepared by the Master Servicer and
determined by the Master Servicer to be necessary or appropriate to
enable the Master Servicer to carry out its supervisory, servicing and
administrative duties under this Agreement.
The Master Servicer and each Servicer shall obtain (to the extent
generally commercially available from time to time) and maintain
fidelity bond and errors and omissions coverage acceptable to ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac with respect to their obligations under this Agreement
and the applicable Selling and Servicing Contract, respectively. The
Master Servicer or each Servicer, as applicable, shall establish escrow
accounts for, or pay when due (by means of an advance), any tax liens in
connection with the Mortgaged Properties that are not paid by the
Mortgagors when due to the extent that any such payment would not
constitute a Nonrecoverable Advance when made. Notwithstanding the
foregoing, the Master Servicer shall not permit any modification with
respect to any Mortgage Loan that would both constitute a sale or
exchange of such Mortgage Loan within the meaning of Section 1001 of the
Code (including any proposed, temporary or final regulations promulgated
thereunder) (other than in connection with a proposed conveyance or
assumption of such Mortgage Loan that is treated as a Principal
Prepayment or in a default situation) and cause any of the REMICs to
fail to qualify as such under the Code. The Master Servicer shall be
entitled to approve a request from a Mortgagor for a partial release of
the related Mortgaged Property, the granting of an easement thereon in
favor of another Person, any alteration or demolition of the related
Mortgaged Property or other similar matters if it has determined,
exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collectability of, such Mortgage
Loan would not be adversely affected thereby and that the applicable
trust fund would not fail to continue to qualify as a REMIC under the
Code as a result thereof and that no tax on "prohibited transactions" or
"contributions" after the startup day would be imposed on either REMIC
as a result thereof.
In connection with the servicing and administering of each Mortgage
Loan, the Master Servicer and any affiliate of the Master Servicer (i)
may perform services such as appraisals, default management and
brokerage services that are not customarily provided by servicers of
mortgage loans, and shall be entitled to reasonable compensation
therefor and (ii) may, at its own discretion and on behalf of the
Trustee, obtain credit information in the form of a "credit score" from
a credit repository.
Section 3.02. Custodial Accounts. The Master Servicer shall cause
to be established and maintained by each Servicer under the Master
Servicer's supervision the Custodial Account for P&I, Buydown Fund
Accounts (if any) and special Custodial Account for Reserves and shall
deposit or cause to be deposited therein daily the amounts related to
the Mortgage Loans required by the Selling and Servicing Contracts to be
so deposited. Proceeds received with respect to individual Mortgage
Loans from any title, hazard, or FHA insurance policy, VA guaranty,
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Primary Insurance Policy or other insurance policy covering such
Mortgage Loans shall be deposited first in the Custodial Account for
Reserves if required for the restoration or repair of the related
Mortgaged Property. Proceeds from such insurance policies not so
deposited in the Custodial Account for Reserves shall be deposited in
the Custodial Account for P&I, and shall be applied to the balances of
the related Mortgage Loans as payments of interest and principal.
The Master Servicer is hereby authorized to make withdrawals from
and to issue drafts against the Custodial Accounts for P&I and the
Custodial Accounts for Reserves for the purposes required or permitted
by this Agreement. Each Custodial Account for P&I and each Custodial
Account for Reserves shall bear a designation clearly showing the
respective interests of the applicable Servicer, as trustee, and of the
Master Servicer, in substantially one of the following forms:
(a) With respect to the Custodial Account for P&I: (i)
[Servicer's Name], as agent, trustee and/or bailee of principal and
interest custodial account for PNC Mortgage Securities Corp., its
successors and assigns, for various owners of interests in PNC
Mortgage Securities Corp. mortgage-backed pools or (ii) [Servicer's
Name] in trust for PNC Mortgage Securities Corp.;
(b) With respect to the Custodial Account for Reserves: (i)
[Servicer's Name], as agent, trustee and/or bailee of taxes and
insurance custodial account for PNC Mortgage Securities Corp., its
successors and assigns for various mortgagors and/or various owners
of interests in PNC Mortgage Securities Corp. mortgage-backed pools
or (ii) [Servicer's Name] in trust for PNC Mortgage Securities
Corp. and various Mortgagors.
The Master Servicer hereby undertakes to assure remittance to the
Certificate Account of all amounts relating to the Mortgage Loans that
have been collected by any Servicer and are due to the Certificate
Account pursuant to Section 4.01 of this Agreement.
Section 3.03. The Investment Account; Eligible Investments. (a)
Not later than the Withdrawal Date, the Master Servicer shall withdraw
or direct the withdrawal of funds in the Custodial Accounts for P&I, for
deposit in the Investment Account, in an amount representing:
(i) Scheduled installments of principal and interest on the
Mortgage Loans received or advanced by the applicable Servicers which
were due on the related Due Date, net of Servicing Fees due the
applicable Servicers and less any amounts to be withdrawn later by the
applicable Servicers from the applicable Buydown Fund Accounts;
(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
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2.02 or Section 2.03 or in connection with the exercise of the option to
terminate this Agreement pursuant to Section 9.01) for its own account
and at its own risk, during any period prior to their deposit in the
Certificate Account. Such funds, as well as any funds which were
withdrawn from the Custodial Accounts for P&I on or before the
Withdrawal Date, but not yet deposited into the Certificate Account,
shall immediately be deposited by the Master Servicer with the
Investment Depository in an Investment Account in the name of the Master
Servicer and the Trustee for investment only as set forth in this
Section 3.03. The Master Servicer shall bear any and all losses incurred
on any investments made with such funds and shall be entitled to retain
all gains realized on such investments as additional servicing
compensation. Not later than the Business Day prior to the Distribution
Date, the Master Servicer shall deposit such funds, net of any gains
(except Payoff Earnings) earned thereon, in the Certificate Account.
(b) Funds held in the Investment Account shall be invested in (i)
one or more Eligible Investments which shall in no event mature later
than the Business Day prior to the related Distribution Date (except if
such Eligible Investments are obligations of the Trustee, such Eligible
Investments may mature on the Distribution Date), or (ii) such other
instruments as shall be required to maintain the Ratings.
Section 3.04. The Certificate Account.
(a) Not later than the Business Day prior to the related
Distribution Date, the Master Servicer shall direct the Investment
Depository to deposit the amounts previously deposited into the
Investment Account (which may include a deposit of Eligible Investments)
to which the Holders of the REMIC I Regular Interests and the 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
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deposited therein in respect of the Certificates, as follows:
(i) To reimburse itself or the applicable Servicer for Monthly P&I
Advances made pursuant to Section 4.02 or a Selling and Servicing
Contract, such right to reimbursement pursuant to this paragraph (i)
being limited to amounts received on particular Mortgage Loans
(including, for this purpose, Insurance Proceeds and Liquidation
Proceeds) which represent late recoveries of principal and/or interest
respecting which any such Monthly P&I Advance was made;
(ii) To reimburse itself or the applicable Servicer for amounts
expended by or for the account of the Master Servicer pursuant to
Section 3.09 or amounts expended by such Servicer pursuant to the
Selling and Servicing Contracts in connection with the restoration of
property damaged by an Uninsured Cause or in connection with the
liquidation of a Mortgage Loan;
(iii) To pay to itself, with respect to the related Mortgage Loans,
the Master Servicing Fee (net of Compensating Interest reduced by Payoff
Earnings and Payoff Interest) as to which no prior withdrawals from
funds deposited by the Master Servicer have been made;
(iv) To reimburse itself or the applicable Servicer for advances
made with respect to related Mortgage Loans which the Master Servicer
has determined to be Nonrecoverable Advances;
(v) To pay to itself reinvestment earnings deposited or earned in
the Investment Account and the Certificate Account to which it is
entitled and to reimburse itself for expenses incurred by and
reimbursable to it pursuant to Section 6.03;
(vi) To deposit to the Investment Account amounts in the
Certificate Account not required to be on deposit therein at the time of
such withdrawal;
(vii) To deposit in the Certificate Account, not later than the
Business Day prior to the related Distribution Date, the amounts
specified in Section 3.04(a); and
(viii) after making or providing for the above withdrawals
To clear and terminate the Investment Account and the Certificate
Account following termination of this Agreement pursuant to Section
9.01.
Since, in connection with withdrawals pursuant to paragraphs (i)
and (ii), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer or the applicable Servicer shall keep and maintain separate
accounting for each Mortgage Loan, for the purpose of justifying any
such withdrawals.
(b) The Master Servicer (or the applicable Servicer, if such
Servicer holds and maintains a Buydown Fund Account) is authorized to
make withdrawals, from time to time, from the Buydown Fund Account or
Custodial Account for P&I established by any Servicer under its
supervision of the following amounts of Buydown Funds:
(i) To deposit each month in the Investment Account the amount
necessary to supplement payments received on Buydown Loans;
(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
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amounts to the Person entitled thereto);
(iii) In the event of foreclosure or liquidation of any Mortgage
Loan having a Buydown Fund, to deposit remaining Buydown Fund amounts in
the Investment Account as Liquidation Proceeds; and
(iv) To clear and terminate the portion of any account representing
Buydown Funds following termination of this Agreement pursuant to
Section 9.01;
(c) The Trustee is authorized to make withdrawals from time to
time from the Certificate Account to reimburse itself for advances it
has made pursuant to Section 7.01(a) hereof that it has determined to be
Nonrecoverable Advances.
Section 3.06. Maintenance of Primary Insurance Policies;
Collections Thereunder. The Master Servicer shall use commercially
reasonable efforts to keep, and to cause the Servicers to keep, in full
force and effect each Primary Insurance Policy required with respect to
a Mortgage Loan, in the manner set forth in the applicable Selling and
Servicing Contract, until no longer required. Notwithstanding the
foregoing, the Master Servicer shall have no obligation to maintain any
Primary Insurance Policy for a Mortgage Loan for which the outstanding
Principal Balance thereof at any time subsequent to origination was 80%
or less of the 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
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. Other additional insurance may be required of
a Mortgagor, in addition to that required pursuant to such applicable
laws and regulations as shall at any time be in force and as shall
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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
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and instruments constituting a part thereof. In connection with any such
assumption or substitution agreement, the terms of the related Mortgage
Note shall not be changed. Any fee collected by the applicable Servicer
for entering into an assumption or substitution of liability agreement
shall be retained by such Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by
reason of any assumption of a Mortgage Loan by operation of law or any
assumption which the Master Servicer may be restricted by law from
preventing, for any reason whatsoever.
Section 3.09. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall foreclose upon or otherwise comparably convert, or cause
to be foreclosed upon or comparably converted, the ownership of any
Mortgaged Property securing a Mortgage Loan which comes into and
continues in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.01. In
lieu of such foreclosure or other conversion, and taking into
consideration the desirability of maximizing net Liquidation Proceeds
after taking into account the effect of Insurance Proceeds upon
Liquidation Proceeds, the Master Servicer may, to the extent consistent
with prudent mortgage loan servicing practices, accept a payment of less
than the outstanding Principal Balance of a delinquent Mortgage Loan in
full satisfaction of the indebtedness evidenced by the related Mortgage
Note and release the lien of the related Mortgage upon receipt of such
payment. The Master Servicer shall not foreclose upon or otherwise
comparably convert a Mortgaged Property if the Master Servicer is aware
of evidence of toxic waste, other hazardous substances or other evidence
of environmental contamination thereon and the Master Servicer
determines that it would be imprudent to do so. In connection with such
foreclosure or other conversion, the Master Servicer shall cause to be
followed such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in general mortgage servicing
activities. The foregoing is subject to the provision that, in the case
of damage to a Mortgaged Property from an Uninsured Cause, the Master
Servicer shall not be required to advance its own funds towards the
restoration of the property unless it shall be determined in the sole
judgment of the Master Servicer, (i) that such restoration will increase
the proceeds of liquidation of the Mortgage Loan to Certificateholders
after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable to it through Liquidation Proceeds. The
Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall
be entitled to reimbursement thereof (as well as its normal servicing
compensation) as an advance. The Master Servicer shall maintain
information required for tax reporting purposes regarding any Mortgaged
Property which is abandoned or which has been foreclosed or otherwise
comparably converted. The Master Servicer 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 Class B Certificates, the Master
Servicer may enter into one or more special servicing agreements with
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unaffiliated holders of a 100% Percentage Interest of the Class B
Certificate with the lowest priority or holders of a 100% interest in a
class of securities representing such interests in such Class, subject
to each Rating Agency's acknowledgment that the Ratings of the
Certificates in effect immediately prior to the entering into of such
agreement would not be qualified, downgraded or withdrawn and the
Certificates would not be placed on credit review status (except for
possible upgrading) as a result of such agreement. Any such agreement
may contain provisions whereby such holder may (a) instruct the Master
Servicer to instruct a Servicer to the extent provided in the applicable
Selling and Servicing Contract to commence or delay foreclosure
proceedings with respect to delinquent Mortgage Loans, provided that the
holder deposits cash with the Master Servicer that will be available for
distribution to Certificateholders if Liquidation Proceeds are less than
they otherwise may have been had the Servicer acted in accordance with
its normal servicing procedures or (b) purchase delinquent Mortgage
Loans from the REMIC I Trust Fund immediately prior to the commencement
of foreclosure proceedings at a price equal to the aggregate outstanding
Principal Balance of such Mortgage Loans plus accrued interest thereon
at the applicable Mortgage Interest Rate through the last day of the
month in which such Mortgage Loans are purchased and/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 three
years after its acquisition by the Master Servicer for REMIC I, unless
the Master Servicer provides to the Trustee an Opinion of Counsel to the
effect that the holding by REMIC I of such Mortgaged Property subsequent
to three years after its acquisition will not result in the imposition
of taxes on "prohibited transactions" of REMIC I as defined in Section
860F of the Code or under the law of any state in which real property
securing a Mortgage Loan owned by REMIC I is located or cause REMIC I to
fail to qualify as a REMIC for federal income tax purposes or for state
tax purposes under the laws of any state in which real property securing
a Mortgage Loan owned by REMIC I is located at any time that any
Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each such property for the
Certificateholders solely for the purpose of its prompt disposition and
sale in a manner which does not cause such property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) or
result in the receipt by the REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code or any
"net income from foreclosure property" which is subject to taxation
under the REMIC Provisions. Pursuant to its efforts to sell such
property, the Master Servicer shall either itself or through an agent
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selected by the Master Servicer protect and conserve such property in
the same manner and to such extent as is customary in the locality where
such property is located and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or
any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the
period prior to the sale of such property. Additionally, the Master
Servicer shall perform the tax withholding and shall file information
returns with respect to the receipt of mortgage interests received in a
trade or business, the reports of foreclosures and abandonments of any
Mortgaged Property and the information returns relating to cancellation
of indebtedness income with respect to any Mortgaged Property required
by Sections 6050H, 6050J and 6050P, respectively, of the Code, and
deliver to the Trustee an Officers' Certificate on or before March 31 of
each year stating that such reports have been filed. Such reports shall
be in form and substance sufficient to meet the reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code.
Notwithstanding any other provision of this Agreement, the Master
Servicer and the Trustee, as applicable, shall comply with all federal
withholding requirements with respect to payments to Certificateholders
of interest or original issue discount that the Master Servicer or the
Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for any such withholding.
Without limiting the foregoing, the Master Servicer agrees that it will
not withhold with respect to payments of interest or original issue
discount in the case of a Certificateholder that has furnished or caused
to be furnished an effective Form W-8 or an acceptable substitute form
or a successor form and who is not a "10 percent shareholder" within the
meaning of Code Section 871(h)(3)(B) or a "controlled foreign
corporation" described in Code Section 881(c)(3)(C) with respect to
REMIC I, REMIC II, 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
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with a refinancing covering the Mortgaged Property, which satisfaction,
endorsed Mortgage Note or assigning document shall be delivered by the
Master Servicer to the person or persons entitled thereto. No expenses
incurred in connection with such satisfaction or assignment shall be
payable to the Master Servicer by the Trustee or from the Certificate
Account, the related Investment Account or the related Custodial Account
for P&I. From time to time as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose,
collection under any Primary Insurance Policy, the Trustee shall, upon
request of the Master Servicer and delivery to it of a trust receipt
signed by a Servicing Officer, release not later than the fifth Business
Day following the date of receipt of such request and trust receipt the
related Mortgage File to the Master Servicer or the related Servicer as
indicated by the Master Servicer and shall execute such documents as
shall be necessary to the prosecution of any such proceedings. Such
trust receipt shall obligate the Master Servicer to return the Mortgage
File to the Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan shall be liquidated, in which
case, upon receipt of a certificate of a Servicing Officer similar to
that herein above specified, the trust receipt shall be released by the
Trustee to the Master Servicer.
Section 3.11. Compensation to the Master Servicer and the
Servicers. As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive from the Investment Account or the
Certificate Account the amounts provided for by Section 3.05(a)(iii).
The Master Servicer shall be required to pay all expenses incurred by it
in connection with its activities hereunder and shall not be entitled to
reimbursement therefor, except as specifically provided herein.
As compensation for its activities under the applicable Selling and
Servicing Contract, the applicable Servicer shall be entitled to
withhold or withdraw from the related Custodial Account for P&I the
amounts provided for in such Selling and Servicing Contract. Each
Servicer is required to pay all expenses incurred by it in connection
with its servicing activities under its Selling and Servicing Contract
(including payment of premiums for Primary Insurance Policies, if
required) and shall not be entitled to reimbursement therefor except as
specifically provided in such Selling and Servicing Contract and not
inconsistent with this Agreement.
Section 3.12. Reports to the Trustee; Certificate Account
Statement. Not later than 15 days after each Distribution Date, the
Master Servicer shall forward a statement, certified by a Servicing
Officer, to the Trustee setting forth the status of the Certificate
Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate of
deposits into and withdrawals from the Certificate Account for each
category of deposit specified in Section 3.04 and each category of
withdrawal specified in Section 3.05, and stating that all distributions
required by this Agreement have been made (or if any required
distribution has not been made, specifying the nature and amount
thereof). The Trustee shall provide such statements to any
Certificateholder upon request at the expense of the Master Servicer.
Such statement shall also, to the extent available, include information
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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 Master
Servicer, at its expense, shall cause a firm of independent public
accountants to furnish a statement to the Trustee to the effect that, in
connection with the firm's examination of the financial statements as of
the previous December 31 of the Master Servicer's parent corporation
(which shall include a limited examination of the Master Servicer's
financial statements), nothing came to their attention that indicated
that the Master Servicer was not in compliance with Section 3.02,
Section 3.03, Section 3.04, Section 3.05, Section 3.11, Section 3.12 and
Section 3.13 of this Agreement, except for (i) such exceptions as such
firm believes to be immaterial, and (ii) such other exceptions as are
set forth in such statement.
Section 3.16. [Reserved.]
Section 3.17. [Reserved.]
Section 3.18. [Reserved.]
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Section 3.19. [Reserved.]
Section 3.20. Assumption or Termination of Selling and Servicing
Contracts by Trustee. In the event the Master Servicer, or any successor
Master Servicer, shall for any reason no longer be the Master Servicer
(including by reason of an Event of Default), the Trustee as trustee
hereunder or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer under the Selling and Servicing
Contracts with respect to the related Mortgage Loans unless the Trustee
elects to terminate the Selling and Servicing Contracts with respect to
such Mortgage Loans in accordance with the terms thereof. The Trustee,
its designee or the successor servicer for the Trustee shall be deemed
to have assumed all of the Master Servicer's interest therein with
respect to the related Mortgage Loans and to have replaced the Master
Servicer as a party to the Selling and Servicing Contracts to the same
extent as if the rights and duties under the Selling and Servicing
Contracts relating to such Mortgage Loans had been assigned to the
assuming party, except that the Master Servicer shall not thereby be
relieved of any liability or obligations under the Selling and Servicing
Contracts with respect to the Master Servicer's duties to be performed
prior to its termination hereunder.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records
relating to the Selling and Servicing Contracts and the Mortgage Loans
then being master serviced by the Master Servicer and an accounting of
amounts collected and held by the Master Servicer and otherwise use its
best efforts to effect the orderly and efficient transfer of the rights
and duties under the related Selling and Servicing Contracts relating to
such Mortgage Loans to the assuming party.
Section 3.21. Maintenance of the Rounding Accounts; Collections
Thereunder. On or prior to the Closing Date, the Trustee shall
establish the Class IV-A-5, Class IV-A-6 and Class IV-A-7 Rounding
Accounts, and DLJ shall deposit $999.99 in each such Rounding Account.
The Master Servicer shall maintain such accounts to provide, if needed,
the applicable Rounding Amount on any Distribution Date. For each Class
of Special Retail Certificates, on the first Distribution Date with
respect to which the Master Servicer determines that principal is
required to be distributed to such Class pursuant to Section 4.05, and
the aggregate amount of such principal is not an amount equal to an
integral multiple of $1,000, the Master Servicer shall notify the
Trustee by Noon New York City time two Business Days prior to such
Distribution Date of the applicable Rounding Amount, and the Trustee
shall withdraw such Rounding Amount from the applicable Rounding
Account. On each succeeding Distribution Date, prior to the earlier of
(i) the Group C-B Credit Support Depletion Date and (ii) the date on
which any loss is allocated to such Class of Special Retail Certificates
by Pro Rata Allocation, with respect to which the Master Servicer
determines that principal is required to be distributed to such Class
pursuant to Section 4.05, the aggregate amount of such principal will be
applied first to repay any funds withdrawn from the applicable Rounding
Account on prior Distribution Dates which have not been repaid. If the
remainder of such aggregate amount of principal is not an amount equal
to an integral multiple of $1,000, the Master Servicer shall notify the
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Trustee by Noon New York City time two Business Days prior to such
Distribution Date of the applicable Rounding Amount, and the Trustee
shall withdraw from the applicable Rounding Account, to the extent funds
are available therein, the amount so notified by the Master Servicer.
Any amounts withdrawn by the Trustee from any Rounding Account
shall be deposited in the Certificate Account for distribution to the
Holders of the applicable Class of Special Retail Certificates as
described in the immediately preceding paragraph (and shall be deemed to
have been distributed to the Corresponding Class of REMIC II Regular
Interests and deposited for their benefit into the Certificate Account
in accordance with Section 4.04).
Amounts on deposit in the Rounding Accounts shall not be invested.
On the first Distribution Date after the earliest of (i) the Group
C-B Credit Support Depletion Date, (ii) the date on which any loss is
allocated to the Special Retail Certificates by Pro Rata Allocation and
(iii) the date on which the applicable Class Principal Balance of such
Class of Special Retail Certificates has been reduced to zero, the
Trustee shall remit any amounts then remaining on deposit in the
applicable Rounding Account or Accounts to the Holders of the Class R-2
Certificates.
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 amounts for their benefit into the Certificate Account and (ii)
from the Certificate Account shall distribute to the Class R-1
Certificateholders the sum of (a) the Excess Liquidation Proceeds and
(b) the amounts to be distributed to the Class R-1 Certificateholders
pursuant to the definition of "REMIC I Distribution Amount" for such
Distribution Date, all in accordance with written statements received
from the Master Servicer pursuant to Section 4.02(b), by wire transfer
in immediately available funds for the account of each such Holder and
the Class R-1 Certificateholder, or by any other means of payment
acceptable to each such Holder and the Class R-1 Certificateholder of
record on the immediately preceding Record Date (other than as provided
in Section 9.01 respecting the final distribution), as specified by each
such Certificateholder and at the address of such Holder appearing in
the Certificate Register. Notwithstanding any other provision of this
Agreement, no actual distributions pursuant to clause (i) of this
Section 4.01 shall be made on account of the deemed distributions
described in this paragraph except in the event of a liquidation of
REMIC 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
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obligation to make any advance or advances described in this Section
4.02 is effective only to the extent that such advance is, in the good
faith judgment of the Master Servicer made on or before the Business Day
immediately following the Withdrawal Date, reimbursable from Insurance
Proceeds or Liquidation Proceeds of the related Mortgage Loans or
recoverable as late Monthly Payments with respect to the related
Mortgage Loans or otherwise.
Prior to the close of business on the Business Day immediately
following each Withdrawal Date, the Master Servicer shall determine
whether or not it will make a Monthly P&I Advance on the Business Day
prior to the next succeeding Distribution Date (in the event that the
applicable Servicer fails to make such advances) and shall furnish a
written statement to the Trustee, the Paying Agent, if any, and to any
Certificateholder requesting the same, setting forth the aggregate
amount to be distributed on the next succeeding Distribution Date on
account of principal and interest in respect of the Mortgage Loans,
stated separately. In the event that full scheduled amounts of principal
and interest in respect of the Mortgage Loans shall not have been
received by or on behalf of the Master Servicer prior to such
Determination Date and the Master Servicer shall have determined that a
Monthly P&I Advance shall be made in accordance with this Section 4.02,
the Master Servicer shall so specify and shall specify the aggregate
amount of such advance.
In the event that the Master Servicer shall be required to make a
Monthly P&I Advance, it shall on the Business Day prior to the related
Distribution Date either (i) deposit in the Certificate Account an
amount equal to such Monthly P&I Advance, (ii) make an appropriate entry
in the records of the Certificate Account that funds in such account
being held for future distribution or withdrawal have been, as permitted
by this Section 4.02, used by the Master Servicer to make such Monthly
P&I Advance, or (iii) make advances in the form of any combination of
(i) and (ii) aggregating the amount of such Monthly P&I Advance. Any
funds being held for future distribution to Certificateholders and so
used shall be replaced by the Master Servicer by deposit in the
Certificate Account on the Business Day immediately preceding any future
Distribution Date to the extent that funds in the Certificate Account on
such Distribution Date with respect to the Mortgage Loans shall be less
than payments to Certificateholders required to be made on such date
with respect to the Mortgage Loans. Under each Selling and Servicing
Contract, the Master Servicer is entitled to receive from the Custodial
Accounts for P&I established by the Servicers amounts received by the
applicable Servicers on particular Mortgage Loans as late payments of
principal and interest or as Liquidation or Insurance Proceeds and
respecting which the Master Servicer has made an unreimbursed advance of
principal and interest. The Master Servicer is also entitled to receive
other amounts from the related Custodial Accounts for P&I established by
the Servicers to reimburse itself for prior Nonrecoverable Advances
respecting Mortgage Loans serviced by such Servicers. The Master
Servicer shall deposit these amounts in the Investment Account prior to
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
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or the Certificate Account to the extent that the Master Servicer shall
determine that any such advances previously made are Nonrecoverable
Advances pursuant to Section 4.03.
(b) Prior to noon New York City time two Business Days prior to
each Distribution Date, the Master Servicer shall provide the Trustee
with a statement in writing regarding the amount, if any, of the
applicable Rounding Amounts to be withdrawn from any of the Rounding
Accounts pursuant to Section 3.21, and the amount of principal and
interest, the Residual Distribution Amount and the Excess Liquidation
Proceeds to be distributed to each Class of REMIC I Regular Interests,
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 Mortgage Loan or recoverable as late Monthly
Payments with respect to such Mortgage Loan shall be a Nonrecoverable
Advance. The determination by the Master Servicer that it or the
applicable Servicer has made a Nonrecoverable Advance or that any
advance would constitute a Nonrecoverable Advance, shall be evidenced by
an Officer's Certificate of the Master Servicer delivered to the Trustee
on the Determination Date and detailing the reasons for such
determination. Notwithstanding any other provision of this Agreement,
any insurance policy relating to the Mortgage Loans, or any other
agreement relating to the Mortgage Loans to which the Company or the
Master Servicer is a party, (a) the Master Servicer and each Servicer
shall not be obligated to, and shall not, make any advance that, after
reasonable inquiry and in its sole discretion, the Master Servicer or
such Servicer shall determine would be a Nonrecoverable Advance, and (b)
the Master Servicer and each Servicer shall be entitled to reimbursement
for any advance as provided in Section 3.05(a)(i), (ii) and (iv) of this
Agreement.
Section 4.04. 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 (a) the REMIC II
Distribution Amount to the Holders of the REMIC II Regular Interests and
(b) the applicable Rounding Amounts, if any, to the holders of the
applicable Classes which constitute Corresponding Classes of Special
Retail Certificates, and to have deposited such amounts for their
benefit into the Certificate Account and (ii) from the Certificate
Account shall distribute to the Class R-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
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available funds for the account of each such Holder and the Class R-2
Certificateholder, or by any other means of payment acceptable to each
such Holder and the Class R-2 Certificateholder of record on the
immediately preceding Record Date (other than as provided in Section
9.01 respecting the final distribution), as specified by each such
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.
(a) On each Distribution Date, the Trustee (or any duly appointed
paying agent) shall withdraw from the Certificate Account (i) the REMIC
III Available Distribution Amount for such Distribution Date and
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)
(provided that any portion of such amount distributable to any Class of
Special Retail Certificates shall be used first to pay any amount
payable to the applicable Rounding Account or Accounts pursuant to
Section 3.21) and (ii) the Rounding Amount or Amounts deposited therein
for distribution on such date pursuant to Section 3.21 and distribute
the amount so withdrawn to the applicable Class of Special Retail
Certificates entitled thereto in accordance with such Section 3.21, all
in accordance with written statements received from the Master Servicer
pursuant to Section 4.02(b), by wire transfer in immediately available
funds for the account of, or by check mailed to, each such
Certificateholder of record on the immediately preceding Record Date
(other than as provided in Section 9.01 respecting the final
distribution), as specified by each such Certificateholder and at the
address of such Holder appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal and all allocations
of Realized Losses made on any Distribution Date shall be binding upon
all Holders of such Certificates and of any Certificates issued upon the
registration of transfer or exchange therefor or in lieu thereof,
whether or not such distribution is noted on such Certificate. The final
distribution of principal of each Certificate (and the final
distribution upon the Class R-1, Class R-2 and Class R-3 Certificates
upon the termination of REMIC I, REMIC II and REMIC III) 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
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Distribution Date, mail or cause to be mailed to each Person in whose
name a Certificate to be so retired is registered at the close of
business on the Record Date and to the Rating Agencies a notice to the
effect that:
it is expected that funds sufficient to make such final distribution
will be available in the Certificate Account on such Distribution Date,
and
if such funds are available, (A) such final distribution will be payable
on such Distribution Date, but only upon presentation and surrender of
such Certificate at the office or agency of the Certificate Registrar
maintained for such purpose (the address of which shall be set forth in
such notice), and (B) no interest shall accrue on such Certificate after
such Distribution Date.
Section 4.06. Statements to Certificateholders. With each
distribution from the Certificate Account on a Distribution Date, the
Master Servicer shall prepare and forward to the Trustee (and to the
Company if the Company is no longer acting as Master Servicer), and the
Trustee shall forward to each Certificateholder, a statement setting
forth, to the extent applicable: the amount of the distribution payable
to the applicable Class that represents principal and the amount that
represents interest, and the applicable Class Principal Balance after
giving effect to such distribution. With the written approval of the
Company, the Trustee shall be authorized and may make available to
Certificateholders such statements and other information (as directed by
the Company) through the Trustee's Corporate Trust home page on the
world wide web and/or by facsimile through the Trustee's Street Fax
automated fax-back system. In such event, such web page shall be located
at "▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇". Certificateholders shall be able to
register for Street Fax by calling (▇▇▇) ▇▇▇-▇▇▇▇ and requesting an
account application by following the instructions provided by the
system.
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 Special Hazard Coverage for Loan Group
I and Loan Group IV and the amount of the Special Hazard Coverage
for Loan Group II and Loan Group III available to the Senior
Certificates remaining as of the close of business on the
applicable Determination Date;
(d) The amount of the Bankruptcy Coverage for Loan Group I
and Loan Group IV and the amount of the Bankruptcy Coverage for
Loan Group II and Loan Group III available to the Senior
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Certificates remaining as of the close of business on the
applicable Determination Date;
(e) The amount of the Fraud Coverage for Loan Group I and
Loan Group IV and the amount of the Fraud Coverage for Loan Group
II and Loan Group III available to the Senior Certificates
remaining as of the close of business on the applicable
Determination Date; and
(f) The amount of Realized Losses incurred in respect of each
Loan Group allocable to the Certificates on the related
Distribution Date and the cumulative amount of Realized Losses
incurred in respect of each Loan Group allocated to such
Certificates since the Cut-Off Date.
Upon request by any Certificateholder, the Master Servicer, as soon as
reasonably practicable, shall provide the requesting Certificateholder
with such information as is necessary and appropriate, in the Master
Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A of the Securities Act.
Section 4.07. Principal Distributions on the Special Retail
Certificates. With respect to each Class of Special Retail Certificates,
prior to the earlier of (i) the Group C-B Credit Support Depletion Date
and (ii) the date on which any loss is allocated to such Class by Pro
Rata Allocation, distributions in reduction of the Class Principal
Balance of such Class will be made in integral multiples of $1,000 at
the request of the appropriate representatives of Deceased Holders of
Certificates of such Class and at the request of Living Holders of
Certificates of such Class or by mandatory distributions, pursuant to
Section 4.07(a) and Section 4.07(d). On and after the earlier of (i) the
Group C-B Credit Support Depletion Date and (ii) the date on which any
loss is allocated to such Class of Special Retail Certificates by Pro
Rata Allocation, distributions in reduction of the Class Principal
Balance of such Class will be made on a pro rata basis pursuant to
Section 4.07(e).
(a) On each Distribution Date on which principal distributions to a
Class of Special Retail Certificates are made, such distributions will
be made in the following priority:
(i) first, to requesting Deceased Holders, in the order in which
such requests are received by DTC, but not exceeding an aggregate
amount of $25,000 for each requesting Deceased Holder; and
(ii) second, to requesting Living Holders, in the order in which
such requests are received by DTC, but not exceeding an aggregate
amount of $10,000 for each requesting Living Holder.
Thereafter, distributions will be made, with respect to such Class of
Special Retail Certificates, as provided in clauses (i) and (ii) above
up to a second $25,000 and $10,000, respectively. This sequence of
priorities will be repeated until all requests for principal
distributions by Deceased Holders and Living Holders of such Class have
been honored, to the extent of amounts available for principal
distributions to such Class.
All requests for principal distributions to Special Retail
Certificates will be accepted in accordance with the provisions set
forth in Section 4.07(c). Requests for principal distributions that are
received by the Trustee after the related Record Date and requests for
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principal distributions received in a timely manner but not accepted
with respect to any Distribution Date, will be treated as requests for
principal distributions to Special Retail Certificates on the next
succeeding Distribution Date, and each succeeding Distribution Date
thereafter, until each such request is accepted or is withdrawn as
provided in Section 4.07(c). Such requests as are not so withdrawn shall
retain their order of priority without the need for any further action
on the part of the appropriate Holder of the related Special Retail
Certificate, all in accordance with the procedures of DTC and the
Trustee. Upon the transfer of beneficial ownership of any Special
Retail Certificate, any distribution request previously submitted with
respect to such Certificate will be deemed to have been withdrawn only
upon the receipt by the Trustee on or before the Record Date for such
Distribution Date of notification of such withdrawal in the manner set
forth in Section 4.07(c) using a form required by DTC.
Distributions in reduction of the Class Principal Balance of any
Class of Special Retail Certificates will be applied in an amount equal
to the portion of the Group IV Senior Principal Distribution Amount
allocable to such Class pursuant to Section 4.05, plus any amounts
available for distribution from the applicable Rounding Account
established as provided in Section 3.21, provided that the aggregate
distribution of principal to such Class on any Distribution Date shall
be made in an integral multiple of $1,000.
To the extent that the portion of the Group IV Senior Principal
Distribution Amount allocable to any Class of Special Retail
Certificates on any Distribution Date exceeds the aggregate Certificate
Principal Balance of Special Retail Certificates of such Class with
respect to which principal distribution requests, as set forth above,
have been received, principal distributions in reduction of the Class
Principal Balance of such Class will be made by mandatory distribution
pursuant to Section 4.07(d).
(b) A Special Retail Certificate shall be deemed to be held by a
Deceased Holder for purposes of this Section 4.07 if the death of the
Holder thereof is deemed to have occurred. Special Retail Certificates
beneficially owned by tenants by the entirety, joint tenants or tenants
in common will be considered to be beneficially owned by a single owner.
The death of a tenant by the entirety, joint tenant or tenant in common
will be deemed to be the death of the Holder, and the Special Retail
Certificates so beneficially owned will be eligible for priority with
respect to principal distributions, subject to the limitations stated
above. Special Retail Certificates beneficially owned by a trust will
be considered to be beneficially owned by each beneficiary of the trust
to the extent of such beneficiary's beneficial interest therein, but in
no event will a trust's beneficiaries collectively be deemed to be
Holders of a number of Special Retail Certificates greater than the
number of Special Retail Certificates of which such trust is the owner.
The death of a beneficiary of a trust will be deemed to be the death of
a Holder of the Special Retail Certificates beneficially owned by the
trust to the extent of such beneficiary's beneficial interest in such
trust. The death of an individual who was a tenant by the entirety,
joint tenant or tenant in common in a tenancy which is the beneficiary
of a trust will be deemed to be the death of the beneficiary of such
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trust. The death of a person who, during his or her lifetime, was
entitled to substantially all of the beneficial ownership interests in a
Special Retail Certificate will be deemed to be the death of the Holder
of such Special Retail Certificate regardless of the registration of
ownership, if such beneficial ownership interest can be established to
the satisfaction of the Trustee. Such beneficial interest will be
deemed to exist in typical cases of street name or nominee ownership,
ownership by a trustee, ownership under the Uniform Gifts to Minors Act
and community property or other joint ownership arrangements between a
husband and wife. Beneficial interest shall include the power to sell,
transfer or otherwise dispose of a Special Retail Certificate and the
right to receive the proceeds therefrom, as well as interest and
principal distributions, as applicable, payable with respect thereto.
The Trustee may rely entirely upon documentation delivered to it in
establishing beneficial ownership interests in Special Retail
Certificates. The Trustee shall not be under any duty to determine
independently the occurrence of the death of any deceased Holder. The
Trustee may rely entirely upon documentation delivered to it pursuant to
Section 4.07(c) in establishing the eligibility of any Holder to receive
the priority accorded Deceased Holders in Section 4.07(a).
(c) Requests for principal distributions to any Special Retail
Certificate must be made by delivering a written request therefor to the
DTC Participant or Indirect DTC Participant that maintains the account
evidencing such Holder's interest in such Certificate. In the case of a
request on behalf of a Deceased Holder, appropriate evidence of death
and any tax waivers are required to be forwarded to the Trustee under
separate cover. The DTC Participant should in turn make the request of
DTC (or, in the case of an Indirect DTC Participant, such Indirect DTC
Participant must notify the related DTC Participant of such request,
which DTC Participant should make the request of DTC) on a form required
by DTC and provided to the DTC Participant. Upon receipt of such
request, DTC will date and time stamp such request and forward such
request to the Trustee. DTC may establish such procedures as it deems
fair and equitable to establish the order of receipt of requests for
such distributions received by it on the same day. None of the Company,
the Master Servicer or the Trustee shall be liable for any delay in
delivery of requests for distributions or withdrawals of such requests
by DTC, a DTC Participant or any Indirect DTC Participant.
The Trustee shall maintain a list of those DTC Participants representing
the appropriate Holders of Special Retail Certificates that have
submitted requests for principal distributions, together with the order
of receipt and the amounts of such requests. Subject to the priorities
described in Section 4.07(a) above, DTC will honor requests for
distributions in the order of their receipt. The Trustee shall notify
DTC as to which requests should be honored on each Distribution Date at
least two Business Days prior to such Distribution Date and shall notify
DTC as to the portion of the Group IV Senior Principal Distribution
Amount (together with any amounts available for distribution from the
applicable Rounding Account), to be distributed to the Special Retail
Certificates by mandatory distribution pursuant to Section 4.07(d).
Requests shall be honored by DTC in accordance with the procedures, and
subject to the priorities and limitations, described in this Section
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4.07. The exact procedures to be followed by the Trustee and DTC for
purposes of determining such priorities and limitations will be those
established from time to time by the Trustee or DTC, as the case may be.
The decisions of the Trustee and DTC concerning such matters will be
final and binding on all affected persons.
Special Retail Certificates that have been accepted for a distribution
shall be due and payable on the applicable Distribution Date. Such
Certificates shall cease to bear interest after the last calendar day of
the month preceding the month in which such Distribution Date occurs.
Any Holder of a Special Retail Certificate that has requested a
principal distribution may withdraw its request by so notifying in
writing the DTC Participant or Indirect DTC Participant that maintains
such Holder's account. In the event that such account is maintained by
an Indirect DTC Participant, such Indirect DTC Participant must notify
the related DTC Participant which in turn must forward the withdrawal of
such request, on a form required by DTC, to DTC to be forwarded to the
Trustee. If such notice of withdrawal of a request for distribution has
not been received by DTC and forwarded to the Trustee on or before the
Record Date for the next Distribution Date, the previously made request
for a principal distribution will be irrevocable with respect to the
making of principal distributions on such Distribution Date.
In the event any requests for principal distributions are rejected by
the Trustee for failure to comply with the requirements of this Section
4.07, the Trustee shall return such request to the appropriate DTC
Participant with a copy to DTC with an explanation as to the reason for
such rejection.
(d) To the extent, if any, that principal distributions to be made to
any Class of Special Retail Certificates on a Distribution Date exceed
the aggregate amount of principal distribution requests for such Class
which have been received on or before the applicable Record Date, as
provided in Section 4.07(a) above, additional Special Retail
Certificates of such Class will be selected to receive mandatory
principal distributions in lots equal to $1,000 in accordance with the
then-applicable Random Lot procedures of DTC, and the then-applicable
procedures of the DTC Participants and Indirect DTC Participants
representing the Holders (which procedures may or may not be by random
lot). The Trustee shall notify DTC of the aggregate amount of the
mandatory principal distribution to be made on the next Distribution
Date. DTC shall then allocate such aggregate amount among the DTC
Participants on a Random Lot basis. Each DTC Participant and, in turn,
each Indirect DTC Participant will then select, in accordance with its
own procedures, Special Retail Certificates from among those held in its
accounts to receive mandatory principal distributions, such that the
total amount of principal distributed to the Special Retail Certificates
so selected is equal to the aggregate amount of such mandatory
distributions allocated to such DTC Participant by DTC and to such
Indirect DTC Participant by its related DTC Participant, as the case may
be. DTC Participants and Indirect DTC Participants that hold Special
Retail Certificates selected for mandatory principal distributions are
required to provide notice of such mandatory distributions to the
affected Holders. The Master Servicer shall notify the Trustee of the
amount of principal distributions to be made on each Distribution Date
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in a timely manner such that the Trustee may fulfill its obligations
under the Depositary Agreement.
(e) Notwithstanding any provisions herein to the contrary, on each
Distribution Date on and after the earlier of (i) the Group C-B Credit
Support Depletion Date and (ii) the date on which any loss is allocated
to a Class of Special Retail Certificates by Pro Rata Allocation,
distributions in reduction of the Class Principal Balance of such Class
will be made pro rata among the Holders of the Certificates of such
Class and will not be made in integral multiples of $1,000 nor pursuant
to requests for distribution as permitted by Section 4.07(a) or by
mandatory distributions as provided for by Section 4.07(d).
(f) In the event that Definitive Certificates representing Special
Retail Certificates are issued pursuant to Section 5.09, an amendment to
this Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in
which distributions in reduction of the Class Principal Balance of each
Class of Special Retail Certificates are to be made; provided that such
procedures shall be consistent, to the extent practicable and customary
for certificates similar to the Special Retail Certificates, with the
provisions of this Section 4.07.
ARTICLE V
The Certificates
Section 5.01 The Certificates.
(a) The Certificates shall be substantially in the forms set forth
in Exhibit A and B with the additional insertion from Exhibit H attached
hereto, and shall be executed by the Trustee, authenticated by the
Trustee (or any duly appointed Authenticating Agent) and delivered upon
and pursuant to the order of the Company upon receipt by the Trustee of
the documents specified in Section 2.01. The Certificates shall be
issuable in Authorized Denominations evidencing Percentage Interests.
Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by authorized officers of the Trustee.
Certificates bearing the manual or facsimile signatures of individuals
who were at the time of execution the proper officers of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date
of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears
on such Certificate a certificate of authentication substantially in the
form provided for herein executed by the Trustee or any Authenticating
Agent by manual signature, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The following definitions apply for purposes of this Section
5.01: "Disqualified Organization" means any Person which is not a
Permitted Transferee, but does not include any "Pass-Through Entity"
which owns or holds a Residual Certificate and of which a Disqualified
Organization, directly or indirectly, may be a stockholder, partner or
beneficiary; "Pass-Through Entity" means any regulated investment
company, real estate investment trust, common trust fund, partnership,
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trust or estate, and any organization to which Section 1381 of the Code
applies; "Ownership Interest" means, with respect to any Residual
Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the
Holder thereof and any other interest therein whether direct or
indirect, legal or beneficial, as owner or as pledgee; "Transfer" means
any direct or indirect transfer or sale of, or directly or indirectly
transferring or selling any Ownership Interest in a Residual
Certificate; and "Transferee" means any Person who is acquiring by
Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on Transfers of the Residual Certificates to
Disqualified Organizations are set forth in this Section 5.01(c).
Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or 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
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of an Ownership Interest in a Residual Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership
Interest in a Residual Certificate agrees by holding or
acquiring such Ownership Interest (i) to require a Transferee
Affidavit and Agreement from any other Person to whom such
Person attempts to transfer its Ownership Interest and to
provide a certificate to the Trustee in the form attached
hereto as Exhibit J; (ii) to obtain the express written
consent of the Company prior to any transfer of such Ownership
Interest, which consent may be withheld in the Company's sole
discretion; and (iii) to provide a certificate to the Trustee
in the form attached hereto as Exhibit I.
The Trustee shall register the Transfer of any Residual Certificate only
if it shall have received the Transferee Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit J and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such registration.
(A) If any "disqualified organization" (as defined in Section
860E(e)(5) of the Code) shall become a holder of a Residual
Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Residual
Certificate. If any Non-U.S. Person shall become a holder of a
Residual Certificate, then the last preceding holder which is
a U.S. Person shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof
retroactive to the date of registration of the Transfer to
such Non-U.S. Person of such Residual Certificate. If a
transfer of a Residual Certificate is disregarded pursuant to
the provisions of Treasury Regulations Section 1.860E-1 or
Section 1.860G-3, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all
rights and obligations as Holder thereof retroactive to the
date of registration of such Transfer of such Residual
Certificate. The Trustee shall be under no liability to any
Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section
5.01(c) or for making any payments due on such Certificate to
the holder thereof or for taking any other action with respect
to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of
a Residual Certificate in violation of the restrictions in
this Section 5.01(c) and to the extent that the retroactive
restoration of the rights of the Holder of such Residual
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Company shall have
the right, without notice to the Holder or any prior Holder of
such Residual Certificate, to sell such Residual Certificate
to a purchaser selected by the Company on such terms as the
Company may choose. Such purported Transferee shall promptly
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endorse and deliver each Residual Certificate in accordance
with the instructions of the Company. Such purchaser may be
the Company itself or any affiliate of the Company. The
proceeds of such sale, net of the commissions (which may
include commissions payable to the Company or its affiliates),
expenses and taxes due, if any, shall be remitted by the
Company to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in
the sole discretion of the Company, and the Company shall not
be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such
discretion.
The Company, on behalf of the Trustee, shall make available, upon
written request from the Trustee, all information necessary to compute
any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is not a Permitted
Transferee, including the information regarding "excess inclusions" of
such Residual Certificates required to be provided to the Internal
Revenue Service and certain Persons as described in Treasury Regulation
Section 1.860D-1(b)(5), and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust, estate or organizations described in Section 1381 of the Code
having as among its record holders at any time any Person who is not a
Permitted Transferee. Reasonable compensation for providing such
information may be required by the Company from such Person.
The provisions of this Section 5.01 set forth prior to this Section (v)
may be modified, added to or eliminated by the Company and the Trustee,
provided that there shall have been delivered to the Trustee the
following:
(A) written notification from each of the Rating
Agencies to the effect that the modification, addition to or
elimination of such provisions will not cause such Rating
Agency to downgrade its then-current Ratings of the
Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Company (as evidenced by a certificate of
the Company), to the effect that such modification, addition
to or absence of such provisions will not cause REMIC I, 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.
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
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ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY
CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE
TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION
DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D)
AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS
[R-1] [R-2] [R-3] CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE
DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON
SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THE CLASS [R-1]
[R-2] [R-3] CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
The Tax Matters Person for each of REMIC I, REMIC II and REMIC III,
while not a Disqualified Organization, shall be the tax matters person
for the related REMIC within the meaning of Section 6231(a)(7) of the
Code and Treasury Regulation Section 1.860F-4(d).
(d) In the case of any Class B, Class I-A-10 or Residual
Certificates presented for registration in the name of any Person, the
Trustee shall require either (i) an Opinion of Counsel acceptable to and
in form and substance satisfactory to the Trustee and the Company to the
effect that the purchase or holding of a Class B, Class I-A-10 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 or Class I-A-10 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
Certificateholder desiring to effect such transfer and such
Certificateholder's transferee are among the following: (i) DLJ Mortgage
145
Capital, Inc., (ii) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
and (iii) DLJ Mortgage Acceptance Corp. Each Person who, at any time,
acquires any ownership interest in any Junior Subordinate Certificate
shall be deemed by the acceptance or acquisition of such ownership
interest to have agreed to be bound by the following provisions of this
Section 5.01(e) and Section 5.01(f), as applicable. No transfer of a
Junior Subordinate Certificate shall be deemed to be made in accordance
with this Section 5.01(e) unless such transfer is made pursuant to an
effective registration statement under the Securities Act or unless the
Trustee is provided with the certificates and an Opinion of Counsel, if
required, on which the Trustee may conclusively rely, which establishes
or establish to the Trustee's satisfaction that such transfer is exempt
from the registration requirements under the Securities Act, as follows:
In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act, the Trustee shall require, in order to assure
compliance with the Securities Act, that the Certificateholder desiring
to effect such transfer certify to the Trustee in writing, in
substantially the form attached hereto as Exhibit F, the facts
surrounding the transfer, with such modifications to such Exhibit F as
may be appropriate to reflect the actual facts of the proposed transfer,
and that the Certificateholder's proposed transferee certify to the
Trustee in writing, in substantially the form attached hereto as Exhibit
G, the facts surrounding the transfer, with such modifications to such
Exhibit G as may be appropriate to reflect the actual facts of the
proposed transfer. If such certificate of the proposed transferee does
not contain substantially the substance of Exhibit G, the Trustee shall
require an Opinion of Counsel satisfactory to it that such transfer may
be made without registration, which Opinion of Counsel shall not be
obtained at the expense of the Trustee, the REMIC I Trust Fund, the
REMIC II Trust Fund, the REMIC III Trust Fund or the Company. Such
Opinion of Counsel shall allow for the forwarding, and the Trustee shall
forward, a copy thereof to the Rating Agencies. Notwithstanding the
foregoing, any Junior Subordinate Certificate 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
146
such transfer does hereby agree to indemnify the Trustee, the Company,
and the Certificate Registrar against any liability that may result if
transfer is not made in accordance with this Agreement.
Section 5.02. Certificates Issuable in Classes; Distributions of
Principal and Interest; Authorized Denominations. The aggregate
principal amount of the Certificates that may be authenticated and
delivered under this Agreement is limited to the aggregate Principal
Balance of the Mortgage Loans as of the Cut-Off Date, as specified in
the Preliminary Statement to this Agreement, except for Certificates
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section
5.03. Such aggregate principal amount shall be allocated among one or
more Classes having designations, types of interests, initial per annum
Certificate Interest Rates, initial Class Principal Balances and Final
Maturity Dates as specified in the Preliminary Statement to this
Agreement. The aggregate Percentage Interest of each Class of
Certificates of which the Class Principal Balance equals zero as of the
Cut-Off Date that may be authenticated and delivered under this
Agreement is limited to 100%. Certificates shall be issued in Authorized
Denominations.
Section 5.03. Registration of Transfer and Exchange of
Certificates. The Trustee shall cause to be maintained at one of its
offices or at its designated agent, a Certificate Register in which
there shall be recorded the name and address of each Certificateholder.
Subject to such reasonable rules and regulations as the Trustee may
prescribe, the Certificate Register shall be amended from time to time
by the Trustee or its agent to reflect notice of any changes received by
the Trustee or its agent pursuant to Section 10.06. The Trustee hereby
appoints itself as the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate to
the Trustee at the Corporate Trust Office of the Trustee or at the
office of State Street Bank and Trust Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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
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sufficient to cover any tax or governmental charge that may be imposed
in connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be
cancelled by the Trustee or any Authenticating Agent.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates. If
(i) any mutilated Certificate is surrendered to the Trustee or any
Authenticating Agent, or (ii) the Trustee or any Authenticating Agent
receives evidence to their satisfaction of the destruction, loss or
theft of any Certificate, and there is delivered to the Trustee or any
Authenticating Agent such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to
the Trustee or any Authenticating Agent that such Certificate has been
acquired by a bona fide purchaser, the Trustee shall execute and the
Trustee or any Authenticating Agent shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Percentage Interest. Upon the
issuance of any new Certificate under this Section 5.04, the Trustee or
any Authenticating Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses
of the Trustee or any Authenticating Agent) connected therewith. Any
replacement Certificate issued pursuant to this Section 5.04 shall
constitute complete and indefeasible evidence of ownership in the REMIC
III Trust Fund (or with respect to the Class R-1 and Class R-2
Certificates, the residual ownership interests in the REMIC I Trust Fund
and REMIC II Trust Fund, respectively) as if originally issued, whether
or not the lost or stolen Certificate shall be found at any time.
Section 5.05. Persons Deemed Owners. The Company, the Master
Servicer, the Trustee and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to
Section 4.01, Section 4.04 and Section 4.05 and for all other purposes
whatsoever, and neither the Company, the Master Servicer, the Trustee,
the Certificate Registrar nor any agent of the Company, the Master
Servicer or the Trustee shall be affected by notice to the contrary.
Section 5.06. Temporary Certificates. Upon the initial issuance of
the Certificates, the Trustee may execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver, temporary
Certificates which are printed, lithographed, typewritten or otherwise
produced, in any Authorized Denomination, of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations
in form from the forms of the Certificates set forth as Exhibits A, B, C
and H hereto as the Trustee's officers executing such Certificates may
determine, as evidenced by their execution of the Certificates.
Notwithstanding the foregoing, the Certificates may remain in the form
of temporary Certificates.
If temporary Certificates are issued, the Trustee shall cause
definitive Certificates to be prepared within ten Business Days of the
Closing Date or as soon as practicable thereafter. After preparation of
definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee to be maintained as
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provided in Section 5.10 hereof, without charge to the holder. Any tax
or governmental charge that may be imposed in connection with any such
exchange shall be borne by the Master Servicer. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee
shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates of Authorized Denominations. Until so exchanged,
the temporary Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Certificates.
Section 5.07. Book-Entry for Book-Entry Certificates.
Notwithstanding the foregoing, the Book-Entry Certificates, upon
original issuance, shall be issued in the form of one or more
typewritten Certificates of Authorized Denomination representing the
Book-Entry Certificates, to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Company. The Book-Entry Certificates
shall initially be registered on the Certificate Register in the name of
Cede & Co., the nominee of DTC, as the initial Clearing Agency, and no
Beneficial Holder shall receive a definitive certificate representing
such Beneficial Holder's interest in any Class of Book-Entry
Certificate, except as provided above and in Section 5.09. Each Book-
Entry Certificate shall bear the following legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for
registration of transfer, exchange, or payment, and any
Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Unless and until definitive, fully registered Book-Entry Certificates
(the "Definitive Certificates") have been issued to the Beneficial
Holders pursuant to Section 5.09:
(a) the provisions of this Section 5.07 shall be in full
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
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the DTC Participants and receive and transmit distributions of
principal and interest on the related Class of Book-Entry
Certificates to such DTC Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders
of Book-Entry Certificates evidencing a specified Percentage Interest,
such direction or consent may be given by the Clearing Agency at the
direction of Beneficial Holders owning Book-Entry Certificates
evidencing the requisite Percentage Interest represented by the Book-
Entry Certificates. The Clearing Agency may take conflicting actions
with respect to the Book-Entry Certificates to the extent that such
actions are taken on behalf of the Beneficial Holders.
Section 5.08. Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been
issued to the related Certificateholders pursuant to Section 5.09, the
Trustee shall give all such notices and communications specified herein
to be given to Holders of the Book-Entry Certificates to the Clearing
Agency which shall give such notices and communications to the related
DTC Participants in accordance with its applicable rules, regulations
and procedures.
Section 5.09. Definitive Certificates. If (a) the Master Servicer
notifies the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
Depositary Agreement with respect to the Book-Entry Certificates and the
Trustee or the Master Servicer is unable to locate a qualified
successor, (b) the Master Servicer, at its option, advises the Trustee
in writing that it elects to terminate the book-entry system with
respect to the Book-Entry Certificates through the Clearing Agency or
(c) after the occurrence of an Event of Default, Certificateholders
holding Book-Entry Certificates evidencing Percentage Interests
aggregating not less than 66% of the aggregate Class Principal Balance
of such Certificates advise the Trustee and the Clearing Agency through
DTC Participants in writing that the continuation of a book-entry system
with respect to the Book-Entry Certificates through the Clearing Agency
is no longer in the best interests of the Certificateholders with
respect to such Certificates, the Trustee shall notify all
Certificateholders of Book-Entry Certificates of the occurrence of any
such event and of the availability of Definitive Certificates. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall execute and the Trustee or
any Authenticating Agent shall authenticate and deliver the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for all of
the Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon
and performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates, and the Trustee shall recognize the
Holders of Definitive Certificates as Certificateholders hereunder.
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Section 5.10. Office for Transfer of Certificates. The Trustee shall
maintain in Massachusetts and in New York, New York, an office or agency
where Certificates may be surrendered for registration of transfer or
exchange. The Corporate Trust Office and State Street Bank and Trust
Company, N.A., ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Window are initially designated for said purposes.
ARTICLE VI
The Company and the Master Servicer
Section 6.01. Liability of the Company and the Master Servicer. The
Company and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and
undertaken by the Company or the Master Servicer, as applicable, herein.
Section 6.02. Merger or Consolidation of the Company, or the Master
Servicer. Any corporation into which the Company or the Master Servicer
may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Company or the Master
Servicer shall be a party, or any corporation succeeding to the business
of the Company or the Master Servicer, shall be the successor of the
Company or the Master Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 6.03. Limitation on Liability of the Company, the Master
Servicer and Others. Neither the Company nor the Master Servicer nor any
of the directors, officers, employees or agents of the Company or the
Master Servicer shall be under any liability to the Trust Fund or the
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 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
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deem necessary or desirable with respect to the Mortgage Loans, this
Agreement, the Certificates or the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund and the Company and the Master Servicer shall be entitled to
be reimbursed therefor out of the Certificate Account, as provided by
Section 3.05.
Section 6.04. The Company and the Master Servicer not to Resign. The
Company shall not resign from the obligations and duties (including,
without limitation, its obligations and duties as initial Master
Servicer) hereby imposed on it except upon determination that its duties
hereunder are no longer permissible under applicable law. Any successor
Master Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination
permitting the resignation of the Company or any successor Master
Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor Master Servicer shall have assumed the
Master Servicer's responsibilities and obligations in accordance with
Section 7.02 hereof.
If the Company is no longer acting as Master Servicer, then the
successor Master Servicer shall give prompt written notice to the
Company of any information received by such successor Master Servicer
which affects or relates to an ongoing obligation or right of the
Company under this Agreement.
Section 6.05. Trustee Access. The Master Servicer shall afford the
Company and the Trustee, upon reasonable notice, during normal business
hours access to all records maintained by the Master Servicer, in
respect of its rights and obligations hereunder and access to such of
its officers as are responsible for such obligations. Upon reasonable
request, the Master Servicer, shall furnish the Company and the Trustee
with its most recent financial statements (or, for so long as the
Company is the Master Servicer, the most recent consolidated financial
statements for the Company appearing in the audited financial statements
of PNC Bank Corp., or the entity with whose financial statements the
financial statements of the Company are consolidated) and such other
information as it possesses, and which it is not prohibited by law or,
to the extent applicable, binding obligations to third parties with
respect to confidentiality from disclosing, regarding its business,
affairs, property and condition, financial or otherwise.
ARTICLE VII
Default
Section 7.01. Events of Default. (a) In case one or more of the
following Events of Default by the Master Servicer or by a successor
Master Servicer shall occur and be continuing, that is to say:
(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
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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 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
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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, subject to the last sentence of this paragraph, shall permit
the Master Servicer to resume its rights and obligations as Master
Servicer hereunder. The Master Servicer agrees that it will reimburse
the Trustee for actual, necessary and reasonable costs incurred by the
Trustee because of action taken pursuant to clause (vi) of this Section
7.01(a). The Master Servicer agrees that if an Event of Default as
described in clause (vi) of this Section 7.01(a) shall occur more than
two times in any twelve month period, the Trustee shall be under no
obligation to permit the Master Servicer to resume its rights and
obligations as Master Servicer hereunder.
(b) In case one or more of the following Events of Default by the
Company shall occur and be continuing, that is to say:
(i) Failure on the part of the Company duly to observe or perform in
any material respect any of the covenants or agreements on the part of
the Company contained in the Certificates or in this Agreement which
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Company by the Trustee, or to the Company and the
Trustee by the Holders of Certificates evidencing Percentage Interests
aggregating not less than 25% of the REMIC III Trust Fund; or
(ii) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a trustee in
bankruptcy, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
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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 may, if
it shall be unwilling to so act, or shall if it is unable to so act,
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appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution having a net worth of
not less than $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Pending any such
appointment, the Trustee is obligated to act in such capacity. In
connection with such appointment and assumption, the Trustee may make
such arrangements for the compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall, together with the compensation
to the Trustee, be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such actions,
consistent with this Agreement, as shall be necessary to effectuate any
such succession.
Section 7.03. Notification to Certificateholders. Upon any such
termination or appointment of a successor to the Master Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders
at their respective addresses appearing in the Certificate Register.
ARTICLE VIII
Concerning the Trustee
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default
has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Agreement,
and use the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that the Trustee shall not be responsible for the
accuracy or content of any such certificate, statement, opinion, report,
or other order or instrument furnished by the Company or Master Servicer
to the Trustee pursuant to this Agreement.
(c) No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided,
however, that:
Prior to the occurrence of an Event of Default and after the curing of
all such Events of Default which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express
provisions of this Agreement,
the Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this Agreement
against the Trustee, and, in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of the
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statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement; and
The Trustee shall not be personally liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Certificateholders holding Certificates which evidence
Percentage Interests aggregating not less than 25% of the REMIC 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 or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
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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;
(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;
and
(vii) In no event shall the Trustee be held liable for acts or
omissions of the Master Servicer (excepting the Trustee's own actions as
Master Servicer). No provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (except for
the giving of required notices), or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing the
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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
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loss, liability or expense incurred by it hereunder (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such
expense or disbursement as may arise from its negligence or bad faith.
Such obligation shall survive the termination of this Agreement or
resignation or removal of the Trustee. The Company shall, at its
expense, prepare or cause to be prepared all federal and state income
tax and franchise tax and information returns relating to the REMIC I
Trust Fund, the REMIC II Trust Fund or the REMIC III Trust Fund required
to be prepared or filed by the Trustee and shall indemnify the Trustee
for any liability of the Trustee arising from any error in such returns.
Section 8.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC,
(ii) a corporation or association organized and doing business under the
laws of the United States of America or of any state, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (iii) acceptable to the
Rating Agencies. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of
any aforementioned supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Master Servicer. Upon receiving
such notice of resignation, the Master Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Master Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, 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
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or instruments, in triplicate, signed by such Holders or their attorneys
in-fact duly authorized, one complete set of which instruments shall be
delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07
shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08. Any expenses associated with the
resignation of the Trustee shall be borne by the Trustee, and any
expenses associated with the removal of the Trustee shall be borne by
the Master Servicer.
Section 8.08. Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Master Servicer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of
the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein. The predecessor shall deliver to the successor trustee
all Mortgage Files, related documents, statements and all other property
held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such appointment such successor
trustee shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Master Servicer shall mail notice of the
succession of such trustee hereunder to (i) all Certificateholders at
their addresses as shown in the Certificate Register and (ii) the Rating
Agencies. If the Master Servicer fails to mail such notice within ten
days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed.
Section 8.09. Merger or Consolidation of Trustee. Any corporation
or association into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided
such resulting or successor corporation shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper
or any 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 the 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
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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 the 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 the REMIC III Trust
Fund, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable;
provided, that the Trustee shall remain liable for all of its
obligations and duties under this Agreement. If the Master Servicer
shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment; provided, that the Trustee shall remain
liable for all of its obligations and duties under this Agreement. No co-
trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 8.06 hereunder
and no notice to Certificateholders of the appointment of co-trustee(s)
or separate trustee(s) shall be required under Section 8.08 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly and severally, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed by the Trustee (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the REMIC I Trust Fund, the REMIC II Trust Fund or the REMIC
III Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustee(s) and co-
trustee(s), as effectively as if given to each of them. Every instrument
appointing any separate trustee(s) or co-trustee(s) shall refer to this
Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be
provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. Every such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any 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
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trust shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 8.11. Authenticating Agents. The Trustee may appoint one or
more Authenticating Agents which shall be authorized to act on behalf of
the Trustee in authenticating Certificates. Wherever reference is made
in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent must be acceptable to the Master Servicer and must be a
corporation or banking association organized and doing business under
the laws of the United States of America or of any state, having a
principal office and place of business in New York, New York, having a
combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or
examination by federal or state authorities.
Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to
the corporate agency business of any Authenticating Agent, shall
continue to be the Authenticating Agent so long as it shall be eligible
in accordance with the provisions of the first paragraph of this Section
8.11 without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Master Servicer. The
Trustee may, upon prior written approval of the Master Servicer, at any
time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Master
Servicer. Upon receiving a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease
to be eligible in accordance with the provisions of the first paragraph
of this Section 8.11, the Trustee may appoint, upon prior written
approval of the Master Servicer, a successor Authenticating Agent, shall
give written notice of such appointment to the Master Servicer and shall
mail notice of such appointment to all Certificateholders. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall
become vested with all the rights, powers, duties and responsibilities
of its predecessor hereunder, with like effect as if originally named as
Authenticating Agent. Any reasonable compensation paid to an
Authenticating Agent shall be a reimbursable expense pursuant to Section
8.05 if paid by the Trustee.
Section 8.12. Paying Agents. The Trustee may appoint one or more
Paying Agents which shall be authorized to act on behalf of the Trustee
in making withdrawals from the Certificate Account, and distributions to
Certificateholders as provided in Section 4.01, Section 4.04, Section
4.05(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
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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 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 purchase or
repurchase by the Company pursuant to the following paragraph of this
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Section 9.01(a) of all Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund at a price
equal, after the deduction of related advances, to the sum of (x) the
excess of (A) 100% of the aggregate outstanding Principal Balance of
such Mortgage Loans (other than Liquidated Mortgage Loans) plus accrued
interest at the applicable Pass-Through Rate with respect to such
Mortgage Loan (other than a Liquidated Mortgage Loan) through the last
day of the month of such purchase or repurchase, over (B) with respect
to any Mortgage Loan which is not a Liquidated Mortgage Loan, the amount
of the Bankruptcy Loss incurred with respect to such Mortgage Loan as of
the date of such purchase or repurchase by the Company to the extent
that the Principal Balance of such Mortgage Loan has not been previously
reduced by such Bankruptcy Loss, and (y) the appraised fair market value
as of the effective date of the termination of the trust created hereby
of (A) all property in the Trust Fund which secured a Mortgage Loan and
which was acquired by foreclosure or deed in lieu of foreclosure after
the Cut-Off Date, including related Insurance Proceeds, and (B) all
other property in the Trust Fund, any such appraisal to be conducted by
an appraiser mutually agreed upon by the Company and the Trustee, or
(ii) the later of the final payment or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund or the disposition of all property acquired upon foreclosure in
respect of any Mortgage Loan, and the payment to 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
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to the Court
of St. ▇▇▇▇▇, living on the date hereof.
The Company may purchase or repurchase the outstanding Mortgage
Loans and any Mortgaged Properties acquired by the Trust Fund at the
price stated in clause (i) of the preceding paragraph provided that the
aggregate Principal Balance of the Mortgage Loans at the time of any
such purchase or 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 purchase or repurchase
the Mortgage Loans have been deposited in the Certificate Account) and
the Trustee shall promptly execute all instruments as may be necessary
to release and assign to the Company the Mortgage Files and any
foreclosed Mortgaged Property pertaining to the Trust Fund.
In no event shall the Company be required to expend any amounts
other than those described in the first paragraph of this Section
9.01(a) in order to terminate the Trust Fund or purchase or repurchase
the Mortgage Loans under this Section 9.01.
(b) Notice of any termination, specifying the date upon which the
Certificateholders may surrender their Certificates to the Trustee for
payment and cancellation, shall be given promptly by letter from the
Trustee to Certificateholders mailed not less than 30 days prior to such
final distribution, specifying (i) the date upon which final payment of
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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:
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
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
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complete liquidation upon the written request of the Company and to take
such other action in connection therewith as may be reasonably requested
by the Company.
Section 9.03. Trusts Irrevocable. Except as expressly provided herein,
the trusts created hereby are irrevocable.
ARTICLE X
Miscellaneous Provisions
Section 10.01. Amendment.
(a) This Agreement may be amended from time to time by the Master
Servicer, the Company and the Trustee, without the consent of any of the
Certificateholders: (i) to cure any ambiguity; (ii) to correct or
supplement any provision herein which may be defective or inconsistent
with any other provisions herein; (iii) to comply with any requirements
imposed by the Code or any regulations thereunder; (iv) to correct the
description of any property at any time included in the 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 Certificate
Interest Rate or the Termination Payment with respect to any of the
Certificates, (ii) reduce the percentage of Percentage Interests
specified in this Section 10.01 which are required to amend this
Agreement, (iii) create or permit the creation of any lien against any
part of the REMIC I Trust Fund, 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
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under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 10.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all
appropriate public offices for real property records in all the counties
or the comparable jurisdictions in which any Mortgaged Property is
situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Company and at its
expense on direction by the Trustee, but only upon direction accompanied
by an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.
Without limiting the foregoing, the Trustee shall make the filings
required by Chapter 182 of the Massachusetts General Laws.
Section 10.03. Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to
terminate this Agreement, 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
167
extraordinary trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby. It is understood and intended, and
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing of any provision of this Agreement to affect, disturb or
prejudice the rights of the Holders of any other of such Certificates,
or to obtain or seek to obtain priority over or preference to any other
such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.03, each and every Certificateholder and
the Trustee shall be entitled to such relief as can be given either at
law or in equity.
Section 10.04. Access to List of Certificateholders. The
Certificate Registrar shall furnish or cause to be furnished to the
Trustee, within 30 days after receipt of a request by the Trustee in
writing, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Certificateholders as of the most recent
Record Date for payment of distributions to such Certificateholders.
If three or more Certificateholders (hereinafter referred to as
"applicants") apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or
under the Certificates and is accompanied by a copy of the communication
which such applicants propose to transmit, then the Trustee shall,
within five Business Days after the receipt of such list from the
Certificate Registrar, afford such applicants access during normal
business hours to the most recent list of Certificateholders held by the
Trustee. If such a list is as of a date more than 90 days prior to the
date of receipt of such applicants' request, the Trustee shall promptly
request from the Certificate Registrar a current list as provided above,
and shall afford such applicants access to such list promptly upon
receipt.
Every Certificateholder, by receiving and holding the same, agrees
with the Master Servicer and the Trustee that neither the Master
Servicer nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 10.05. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations,
rights and remedies of the parties hereunder shall be determined in
accordance with such laws without giving effect to conflict of laws
principles.
Section 10.06. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly
168
given if personally delivered at or mailed by registered or certified
mail to (a) in the case of the Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other address as may
hereafter be furnished to the Trustee and Master Servicer in writing by
S&P and (e) in the case of DCR, ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, or such other
address as may hereafter be furnished to the Trustee and Master Servicer
in writing by DCR. Notices to the Rating Agencies shall also be deemed
to have been duly given if mailed by first class mail, postage prepaid,
to the above listed addresses of the Rating Agencies. Any notice
required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 10.07. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of the Certificates or the rights of the
Holders thereof.
Section 10.08. Counterpart Signatures. For the purpose of
facilitating the recordation of this Agreement as herein provided and
for other purposes, this Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 10.09. Benefits of Agreement. Nothing in this Agreement or
in any Certificate, expressed or implied, shall give to any Person,
other than the parties hereto and their respective successors hereunder,
any separate trustee or co-trustee appointed under Section 8.10 and the
Certificateholders, any benefit or any legal or equitable right, remedy
or claim under this Agreement.
Section 10.10. Notices and Copies to Rating Agencies.
(a) The Trustee shall notify the Rating Agencies of the occurrence
of any of the following events, in the manner provided in Section 10.06:
the occurrence of an Event of Default pursuant to Section 7.01, subject
to the provisions of Section 8.01(d);
the appointment of a successor Master Servicer pursuant to Section 7.02;
(b) The Master Servicer shall notify the Rating Agencies of the
occurrence of any of the following events, or in the case of clauses
169
(iii), (iv), (vii) and (viii) promptly upon receiving notice thereof, in
the manner provided in Section 10.06:
(i) any amendment of this Agreement pursuant to Section 10.01;
(ii) the appointment of a successor Trustee pursuant to Section 8.08;
(iii) the filing of any claim under or the cancellation or
modification of any fidelity bond and errors and omissions coverage
pursuant to Section 3.01 and Section 3.06 with respect to the Master
Servicer or any Servicer;
(iv) any change in the location of the Certificate Account, any
Custodial Account for P&I or any Custodial Account for Reserves;
(v) the purchase or repurchase of any Mortgage Loan pursuant to a
Purchase Obligation or the purchase or 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.
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- - - - - - - - - - - - - -
Its: Second Vice President
STATE STREET BANK AND TRUST COMPANY,
as Trustee
(SEAL)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
- - - - - - - - - - - - - -
Its: Vice President
ACKNOWLEDGEMENT OF CORPORATION
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) SS.
COUNTY OF LAKE )
On this 29th day of April 1999 before me, a Notary Public in and
for said State, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ known to me to be
the second vice president of PNC MORTGAGE SECURITIES CORP., one of the
corporations that executed the within instrument, 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
- - - - - - - - - - - - - -
Notary Public
(SEAL)
CERTIFICATE OF ACKNOWLEDGEMENT
STATE OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK )
On this 29th day of April, 1999, before me, a Notary Public in and
for said State, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇, 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 executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
- - - - - - - -
▇▇▇▇▇ ▇▇▇▇▇▇▇
My Commission Expires August 13, 2004
Exhibit A
CUSIP 69348R KT 2
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 consist of interests in
171
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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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 Company or its agent for registration of transfer,
exchange, or payment, and any Certificate issued is registered in the
name of Cede & Co. or such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.
Series 1999-4 Portion of the Class I-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$80,830,470.04
Class I-A-1 Certificate Interest Rate: Based on the following five
Components: (i) Component I-A-1-1: 6.750% applied to the Component I-A-1-
1 Notional Amount; (ii) Component I-A-1-2: 6.750% applied to the
Component I-A-1-2 Notional Amount; (iii) Component I-A-1-3: 6.750%
applied to the Component I-A-1-3 Notional Amount; (iv) Component I-A-1-
4: 0.000%; and (v) Component I-A-1-5: 6.750% applied to the Component I-
A-1-5 Principal Balance
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class I-A-1 Principal Balance
as of the Cut-Off Date: $80,830,470.04
172
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JE 7
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-2 Principal
Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$58,501,000.00
Class I-A-2 Certificate Interest
Rate: 6.200%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-A-2 Principal Balance
as of the Cut-Off Date:
$58,501,000.00
173
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JF 4
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$144,551,000.00
Class I-A-3 Certificate Interest Rate: 6.150%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class I-A-3 Principal Balance
as of the Cut-Off Date: $144,551,000.00
174
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JG 2
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-4 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$13,627,000.00
Class I-A-4 Certificate Interest Rate: 6.750%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class I-A-4 Principal Balance
as of the Cut-Off Date: $13,627,000.00
175
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JH 0
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-5 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$9,735,000.00
Class I-A-5 Certificate Interest Rate: 6.200%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class I-A-5 Principal Balance
as of the Cut-Off Date: $9,735,000.00
Cede & Co.
176
Registered Owner
Exhibit A
CUSIP 69348R JJ 6
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-6 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$47,746,000.00
Class I-A-6 Certificate Interest Rate: 6.050%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class I-A-6 Principal Balance
as of the Cut-Off Date: $47,746,000.00
Cede & Co.
177
Registered Owner
Exhibit A
CUSIP 69348R JK 3
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-7 Principal
Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$16,153,062.00
Class I-A-7 Certificate Interest
Rate: 6.400%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-A-7 Principal Balance
as of the Cut-Off Date:
$16,153,062.00
178
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JL 1
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-8 Principal
Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$54,549,000.00
Class I-A-8 Certificate Interest
Rate: 6.200%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-A-8 Principal Balance
as of the Cut-Off Date:
$54,549,000.00
179
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JM 9
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-A-9 Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$379,367.00
Class I-A-9 Certificate Interest
Rate: 6.750% applied to the Class I-
A-9 Notional Amount
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-A-9 Principal Balance
as of the Cut-Off Date: $0.00
180
Class I-A-9 Notional Amount
as of the Cut-Off Date: $379,367.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JN 7
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 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% of the Standard Prepayment Assumption as described in the
Prospectus Supplement), this Certificate has been issued with original
issue discount ("OID") of no more than $ per $100,000 of
initial Certificate Principal Balance, the yield to maturity is %,
and the amount of OID attributable to the short period is not more than
$ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Standard Prepayment
Assumption or any other rate.]
IN THE CASE OF ANY CLASS I-A-10 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 D-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-A-10 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 1999-4 Portion of the Class I-A-10 Principal
Balance as of the
Cut-Off Date Evidenced by this
Certificate:
$499,000.00
Class I-A-10 Certificate Interest
181
Rate: 6.750%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-A-10 Principal Balance
as of the Cut-Off Date: $499,000.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No. 1
Exhibit A
CUSIP 69348R KA 3
MORTGAGE PASS-THROUGH CERTIFICATE
Class I-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 of this Certificate is April 29, 1999.
Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class I-X Notional
Amount as of the
Cut-Off Date Evidenced by this
182
Certificate:
$4,027,551.00
Class I-X Certificate Interest Rate:
6.750% applied to the Class I-X
Notional Amount
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class I-X Principal Balance
as of the Cut-Off Date: $0.00
Class I-X Notional Amount
as of the Cut-Off Date:
$4,027,551.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JP 2
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 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 of this Certificate is April 29, 1999.
[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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
183
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 1999-4 Portion of the Class II-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$160,971,945.00
Class II-A-1 Certificate Interest Rate: 7.000%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date: June 25,
2029
Class II-A-1 Principal Balance as of the Cut-Off Date: $160,971,945.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R KB 1
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 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 of this Certificate is April 29, 1999.
[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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
184
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 1999-4 Portion of the Class II-X Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$6,374,781.00
Class II-X Certificate Interest Rate:
7.000% applied to the Class II-X
Notional Amount
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class II-X Principal Balance
as of the Cut-Off Date: $0.00
Class II-X Notional Amount
as of the Cut-Off Date:
$6,374,781.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R KF 2
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 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 of this Certificate is April 29, 1999.
Interest is not payable with respect to this Certificate. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e., 100% of
the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than
$ per $100,000 of initial Certificate Principal Balance,
185
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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class II-P Principal
Balance as of the Cut-Off Date evidenced
by this Certificate:
Class II-P Certificate Interest Rate: 0.00% $597,787.00
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class II-P Principal Balance as of the Cut-Off Date: $597,787.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JQ 0
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 of this Certificate is April 29, 1999.
[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
186
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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class III-A-1
Principal Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$199,197,720.00
Class III-A-1 Certificate Interest Rate: 7.250%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class III-A-1 Principal Balance
as of the Cut-Off Date: $199,197,720.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R KC 9
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-X
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
187
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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class III-X Notional
Amount as of the
Cut-Off Date Evidenced by this
Certificate:
$7,666,137.00
Class III-X Certificate Interest
Rate: 7.250% applied to the Class
III-X Notional Amount
Cut-Off Date: April 1, 1999
First Distribution Date: May 25,
1999
Last Scheduled Distribution Date:
June 25, 2029
Class III-X Principal Balance
as of the Cut-Off Date: $0.00
Class III-X Notional Amount
as of the Cut-Off Date:
$7,666,137.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R KG 0
MORTGAGE PASS-THROUGH CERTIFICATE
Class III-P
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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.
188
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
Interest is not payable with respect to this Certificate. [Assuming that
the Mortgage Loans underlying the Certificates prepay at the prepayment
assumption used by the issuer in pricing this Certificate (i.e., 100% of
the Basic Prepayment Assumption as described in the Prospectus
Supplement), this Certificate has been issued with original issue
discount ("OID") of no more than $ per $100,000 of initial
Certificate Principal Balance, the yield to maturity is %, and the
amount of OID attributable to the short period is not more than
$ per $100,000 of initial Certificate Principal Balance,
computed under the exact method. No representation is made that the
Mortgage Loans will prepay at a rate based on the Basic Prepayment
Assumption or any other rate.]
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class III-P Principal
Balance as of the Cut-Off Date evidenced
by this Certificate:
Class III-P Certificate Interest Rate: 0.00% $1,112,392.00
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class III-P Principal Balance as of the Cut-Off Date: $1,112,392.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JR 8
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets consist of interests in
another trust fund whose assets consists of, among other things, a pool
189
of conventional one- to four-family mortgage loans formed and
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-1 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$83,477,000.00
Class IV-A-1 Certificate Interest Rate: 6.500%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-1 Principal Balance
as of the Cut-Off Date: $83,477,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JS 6
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
190
administered by
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-2 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$10,097,000.00
Class IV-A-2 Certificate Interest Rate: 6.500%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-2 Principal Balance
as of the Cut-Off Date: $10,097,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JT 4
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
191
PNC MORTGAGE SECURITIES CORP.
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-3 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$10,046,000.00
Class IV-A-3 Certificate Interest Rate: 6.500%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-3 Principal Balance
as of the Cut-Off Date: $10,046,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JU 1
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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.
192
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-4 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$14,484,686.00
Class IV-A-4 Certificate Interest Rate: 6.500%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-4 Principal Balance
as of the Cut-Off Date: $14,484,686.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JV 9
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
193
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-5 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$1,010,000.00
Class IV-A-5 Certificate Interest Rate: 6.750%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-5 Principal Balance
as of the Cut-Off Date: $1,010,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JW 7
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
194
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-6 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$2,277,000.00
Class IV-A-6 Certificate Interest Rate: 6.750%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-6 Principal Balance
as of the Cut-Off Date: $2,277,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JX 5
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-7
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
195
1986, as amended. The issue date of this Certificate is April 29, 1999.
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-7 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$2,061,000.00
Class IV-A-7 Certificate Interest Rate: 6.750%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-7 Principal Balance
as of the Cut-Off Date: $2,061,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JY 3
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-8
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 of this Certificate is April 29, 1999.
196
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., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-8 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$205,693.00
Class IV-A-8 Certificate Interest Rate: 0.000%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-8 Principal Balance
as of the Cut-Off Date: $205,693.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R JZ 0
MORTGAGE PASS-THROUGH CERTIFICATE
Class IV-A-9
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 of this Certificate is April 29, 1999.
197
[Assuming that the Mortgage Loans underlying the Certificates prepay at
the prepayment assumption used by the issuer in pricing this Certificate
(i.e., 250% 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
Company or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
Series 1999-4 Portion of the Class IV-A-9 Principal
Balance as of
the Cut-Off Date Evidenced by this
Certificate:
$21,203,000.00
Class IV-A-9 Certificate Interest Rate: 6.500%
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: May 25, 2029
Class IV-A-9 Principal Balance
as of the Cut-Off Date: $21,203,000.00
Cede & Co.
Registered Owner
Exhibit A
CUSIP 69348R KJ 4
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 of this Certificate is
198
April 29, 1999. [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 C-B-1 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-1 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY.
The Class C-B-1 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-1 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$11,629,801.00
Class C-B-1 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-1 Principal Balance
as of the Cut-Off Date: $11,629,801.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KK 1
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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
199
PNC MORTGAGE SECURITIES CORP
This Certificate represents ownership of a "regular interest" in a "real
estate mortgage investment conduit," as those terms are defined in
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
April 29, 1999. [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 C-B-2 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-2 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY.
The Class C-B-2 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-2 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$6,262,201.00
Class C-B-2 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-2 Principal Balance
as of the Cut-Off Date: $6,262,201.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KL 9
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-3
200
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 of this Certificate is
April 29, 1999. [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 C-B-3 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-3 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY.
The Class C-B-3 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$2,385,600.00
Class C-B-3 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-3 Principal Balance
as of the Cut-Off Date: $2,385,600.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
201
Exhibit A
CUSIP 69348R KU 9
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 April 29, 1999. 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 C-B-4 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-4 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE
WITH SECTION 5.01(e) OF THE POOLING AGREEMENT.
The Class C-B-4 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-4
Principal Balance as of the Cut-
Off Date Evidenced by this
Certificate:
202
$2,087,401.00
Class C-B-4 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-4 Principal Balance
as of the Cut-Off Date: $2,087,401.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KV 7
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 April 29, 1999. 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 C-B-5 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-5 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
203
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE
WITH SECTION 5.01(e) OF THE POOLING AGREEMENT.
The Class C-B-5 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-5
Principal Balance as of the Cut-
Off Date Evidenced by this
Certificate:
$1,490,999.00
Class C-B-5 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-5 Principal Balance
as of the Cut-Off Date: $1,490,999.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KW 5
MORTGAGE PASS-THROUGH CERTIFICATE
Class C-B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another trust fund whose assets 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 April 29, 1999. 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 C-B-6 CERTIFICATE PRESENTED FOR REGISTRATION
IN THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE, EXCEPT AS
OTHERWISE SET FORTH IN SECTION 5.01(d) OF THE POOLING AGREEMENT, AN
OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
204
SATISFACTORY TO THE TRUSTEE AND THE COMPANY TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF A CLASS C-B-6 CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER OR THE
COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR
LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE) IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT, WHICH OPINION
OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE MASTER SERVICER
OR THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF REGISTRATION OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND EXCEPT IN ACCORDANCE
WITH SECTION 5.01(e) OF THE POOLING AGREEMENT.
The Class C-B-6 Certificates will be subordinate in right of payment to
and provide credit support to certain Classes of Certificates, as
described in the Pooling Agreement.
Series 1999-4 Portion of the Class C-B-6
Principal Balance as of the Cut-
Off Date Evidenced by this
Certificate:
$1,491,001.73
Class C-B-6 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class C-B-6 Principal Balance
as of the Cut-Off Date: $1,491,001.73
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KM 7
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-1
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 of this Certificate is
April 29, 1999. [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
205
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 D-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 D-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 D-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 1999-4 Portion of the Class D-B-1 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$13,804,680.00
Class D-B-1 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-1 Principal Balance
as of the Cut-Off Date: $13,804,680.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KN 5
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-2
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 of this Certificate is
April 29, 1999. [Assuming that the Mortgage Loans underlying the
Certificates prepay at the prepayment assumption used by the issuer in
206
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 D-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 D-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 D-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 1999-4 Portion of the Class D-B-2 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$7,493,970.00
Class D-B-2 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-2 Principal Balance
as of the Cut-Off Date: $7,493,970.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KP 0
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-3
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
207
Sections 860G and 860D, respectively, of the Internal Revenue Code of
1986, as amended (the "Code"). The issue date of this Certificate is
April 29, 1999. [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 D-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 D-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 D-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 1999-4 Portion of the Class D-B-3 Principal
Balance as of the Cut-Off Date
Evidenced by this Certificate:
$4,141,404.00
Class D-B-3 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-3 Principal Balance
as of the Cut-Off Date: $4,141,404.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KX 3
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-4
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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
208
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 April 29, 1999. 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 D-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 D-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 D-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 1999-4 Portion of the Class D-B-4
Principal Balance as of the Cut-
Off Date Evidenced by this
Certificate:
$3,155,355.00
Class D-B-4 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-4 Principal Balance
as of the Cut-Off Date: $3,155,355.00
DLJ Mortgage Capital, Inc.
209
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KY 1
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-5
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 April 29, 1999. 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 D-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 D-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 D-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 1999-4 Portion of the Class D-B-5
Principal Balance as of the Cut-
210
Off Date Evidenced by this
Certificate:
$1,774,888.00
Class D-B-5 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-5 Principal Balance
as of the Cut-Off Date: $1,774,888.00
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KZ 8
MORTGAGE PASS-THROUGH CERTIFICATE
Class D-B-6
Evidencing a Percentage Interest in a trust fund whose assets consist of
interests in another 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 April 29, 1999. 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 D-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 D-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
211
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 D-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 1999-4 Portion of the Class D-B-6
Principal Balance as of the Cut-
Off Date Evidenced by this
Certificate:
$2,169,308.25
Class D-B-6 Certificate Interest Rate: Variable
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class D-B-6 Principal Balance
as of the Cut-Off Date: $2,169,308.25
DLJ Mortgage Capital, Inc.
Registered Owner
Certificate No.
Exhibit A
CUSIP 69348R KS 4
MORTGAGE PASS-THROUGH CERTIFICATE
Class R-3
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-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.
212
EACH HOLDER OF A CLASS R-3 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R-3 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND
THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-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, THE
REMIC III 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 1999-4 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 Certificate Interest
Rate: 6.500%. Additionally the
Class R-3 Certificates are entitled
to the Residual Distribution Amount
as defined in the Pooling
Agreement.
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class R-3 Principal Balance as of the Cut-Off Date: $50.00
Registered Owner
Certificate No.
Exhibit B
CUSIP 69348R KQ 8
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
213
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER
IS TO ENABLE THE TRANSFER TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX.
SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION
OF THIS CLASS R-1 CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT
OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF A CLASS R-1 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
IN THE CASE OF ANY CLASS R-1 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND
THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-1
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
MASTER SERVICER, THE REMIC I TRUST FUND, THE REMIC II TRUST FUND, THE
REMIC III 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 1999-4 Percentage Interest evidenced by
this Class R-1 Certificate in
the distributions to be made
with respect to the Class R-1
Certificates:
%
Class R-1 Certificate Interest Rate: 6.500%.
Additionally the Class R-1 Certificates are
entitled to Excess Liquidation Proceeds and
the Residual Distribution Amount as defined
in the Pooling Agreement.
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
214
Class R-1 Principal Balance as of the Cut-Off Date: $50.00
Registered Owner
Certificate No.
This Certificate does not represent an obligation of or interest
in PNC Mortgage Securities Corp. or any of its affiliates, including PNC
Bank Corp. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed by any agency or instrumentality of the United States.
This certifies that the above-named Registered Owner is the
registered owner of certain interests in a trust fund (the "REMIC I
Trust Fund") whose assets consist of, among other things, a pool (the
"Mortgage Pool") of conventional one- to four-family mortgage loans (the
"Mortgage Loans"), formed and administered by PNC Mortgage Securities
Corp. (the "Company"), which term includes any successor entity under
the Pooling Agreement referred to below. The Mortgage Pool was created
pursuant to a Pooling and Servicing Agreement, dated as of the Cut-Off
Date stated above (the "Pooling Agreement"), between the Company and
State Street Bank and Trust Company, as Trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling Agreement. Nothing
herein shall be deemed inconsistent with such 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
215
shall not be entitled to any benefit under the Pooling Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC I Trust Fund.
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. 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
216
Certificate Registrar or the office maintained by the Trustee in the
City and State of New York, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth
hereinabove will be issued to the designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws. In the event that a transfer is to be
made without registration or qualification under applicable laws, (i) in
the event such transfer is made pursuant to Rule 144A under the
Securities Act, the Company and the Trustee shall require the transferee
to execute an investment letter in substantially the form attached as
Exhibit L to the Pooling Agreement, which investment letter shall not be
an expense of the Company, the Master Servicer or the Trustee and (ii)
in the event that such a transfer is not made pursuant to Rule 144A
under the Securities Act, the Company may require an Opinion of Counsel
satisfactory to the Company that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an
expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the
Securities Act, qualify the Certificate under any state securities law
or provide registration rights to any purchaser. Any Holder desiring to
effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company and the Master Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Certificates are issuable only as registered Certificates
without coupons in Authorized Denominations specified in the Pooling
Agreement. As provided in the Pooling Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of Authorized Denominations evidencing the same aggregate
interest in the portion of the REMIC I Available Distribution Amount
distributable on this Class of Certificate, as requested by the Holder
surrendering the same.
A reasonable service charge may be made for any such registration
of transfer or exchange, and the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company, the Trustee and the Certificate Registrar and any
agent of the Company, the Trustee or the Certificate Registrar may treat
the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Company, the Trustee, the
Certificate Registrar nor any such agent shall be affected by notice to
the contrary.
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
217
all property acquired upon foreclosure or deed in lieu of foreclosure of
any Mortgage Loan, and (ii) the payment to Certificateholders of all
amounts held by the Trustee and required to be paid to them pursuant to
the Pooling Agreement. In the event that the Company repurchases any
Mortgage Loan pursuant to the Pooling Agreement, such Pooling Agreement
generally requires that the Trustee distribute to the Certificateholders
in the aggregate an amount equal to 100% of the unpaid Principal Balance
of such Mortgage Loan, plus accrued interest at the applicable Pass-
Through Rate to the next scheduled Due Date for the Mortgage Loan. The
Pooling Agreement permits, but does not require, the Company to
repurchase from the REMIC I Trust Fund all Mortgage Loans at the time
subject thereto and all property acquired in respect of any Mortgage
Loan upon payment to the Certificateholders of the amounts specified in
the Pooling Agreement. The exercise of such right will effect early
retirement of the Certificates, the Company's right to repurchase being
subject to the aggregate unpaid Principal Balance of the Mortgage Loans
at the time of repurchase being less than five percent (5%) of the
aggregate unpaid Principal Balance of the Mortgage Loans as of the Cut-
Off Date.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
(Please print or typewrite name and address, including postal zip code
of assignee. Please insert social security or other identifying number
of assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE:The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate
does not represent an obligation of or an
interest in PNC Mortgage Securities Corp. or
any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed by
any agency or instrumentality of the United
States.
Exhibit B
CUSIP 69348R KR 8
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
218
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.
IN THE CASE OF ANY CLASS R-2 CERTIFICATE PRESENTED FOR REGISTRATION IN
THE NAME OF ANY PERSON, THE TRUSTEE SHALL REQUIRE AN OPINION OF COUNSEL
ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE AND
THE COMPANY TO THE EFFECT THAT THE PURCHASE OR HOLDING OF A CLASS R-2
CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER
SERVICER OR THE COMPANY TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AGREEMENT,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE
MASTER SERVICER, THE REMIC I TRUST FUND, THE REMIC II TRUST FUND, THE
REMIC III 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 1999-4 Percentage Interest evidenced by
this Class R-2 Certificate in
the distributions to be made
with respect to the Class R-2
Certificates:
%
Class R-2 Certificate Interest Rate: 6.500%.
Additionally the Class R-2 Certificates are
219
entitled the Residual Distribution Amount as
defined in the Pooling Agreement.
Cut-Off Date: April 1, 1999
First Distribution Date: May 25, 1999
Last Scheduled Distribution Date: June 25, 2029
Class R-2 Principal Balance as of the Cut-Off Date: $50.00
Registered Owner
Certificate No.
This Certificate does not represent an obligation of or interest in
PNC Mortgage Securities Corp. or any of its affiliates, including PNC
Bank Corp. Neither this Certificate nor the underlying Mortgage Loans
are guaranteed by any agency or instrumentality of the United States.
This certifies that the above-named Registered Owner is the
registered owner of certain interests in a trust fund (the "REMIC 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 II Available Distribution
Amount for such Distribution Date then distributable on the Certificates
of this Class, as specified in Section 4.04 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by
wire transfer or check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency
220
of such distribution and only upon presentation and surrender of this
Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC 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
221
66% of the REMIC III Trust Fund. The Pooling Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent
of the Holders of any of the Certificates.
As provided in the Pooling Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices of the
Certificate Registrar or the office maintained by the Trustee in the
City and State of New York, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in
form satisfactory to the Trustee or any Authenticating Agent duly
executed by, the Holder hereof or such Holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of Authorized
Denominations evidencing the same Percentage Interest set forth
hereinabove will be issued to the designated transferee or transferees.
No transfer of a Certificate will be made unless such transfer is
exempt from or is made in accordance with the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act") and any
applicable state securities laws. In the event that a transfer is to be
made without registration or qualification under applicable laws, (i) in
the event such transfer is made pursuant to Rule 144A under the
Securities Act, the Company and the Trustee shall require the transferee
to execute an investment letter in substantially the form attached as
Exhibit L to the Pooling Agreement, which investment letter shall not be
an expense of the Company, the Master Servicer or the Trustee and (ii)
in the event that such a transfer is not made pursuant to Rule 144A
under the Securities Act, the Company may require an Opinion of Counsel
satisfactory to the Company that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be an
expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the
Securities Act, qualify the Certificate under any state securities law
or provide registration rights to any purchaser. Any Holder desiring to
effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company and the Master Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Certificates are issuable only as registered Certificates
without coupons in Authorized Denominations specified in the Pooling
Agreement. As provided in the Pooling Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of Authorized Denominations evidencing the same aggregate
interest in the portion of the REMIC 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
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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.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
(Please print or typewrite name and address, including postal zip code
of assignee. Please insert social security or other identifying number
of assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever. This
Certificate does not represent an obligation of or an interest in PNC
Mortgage Securities Corp. or any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed by any agency or instrumentality of the United States.
Exhibit D
MORTGAGE LOAN SCHEDULE
223
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.,
▇▇▇▇▇▇ ▇▇▇▇▇
Master Servicing Department
PNC Mortgage Securities Corp.
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
in the case of State Street Bank and Trust Company
▇▇▇▇▇ ▇▇▇▇▇▇
Corporate Trust Department
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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;
224
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, PNC Mortgage and the Company hereby agree
as follows:
1. Guides. The Guides, which set forth the terms and conditions
under which PNC Mortgage may elect to purchase mortgage loans from the
Company, and the Company shall service mortgage loans on behalf of PNC
Mortgage, are a supplement to this Agreement and such Guides, as may be
amended or supplemented from time to time by PNC Mortgage, are
incorporated into this Agreement in full by reference and made a part
hereof as fully as if set forth at length herein. All capitalized terms
used and not defined herein have the meanings ascribed to them in the
Guides.
2. Company's Duties. The Company shall diligently perform all
duties incident to the origination, sale and servicing of the mortgage
loans subject to this Agreement. In the performance of its servicing
duties, the Company shall exercise the same degree of care it exercises
when servicing mortgage loans for its own account, but in no event shall
the Company exercise less care than a reasonable prudent servicer would
exercise under similar circumstances. In addition, the Company shall
comply with all of the provisions of the Guides and with all other
requirements and instructions of PNC Mortgage. The Company shall
perform such duties at its sole expense, except as otherwise expressly
provided in the Guides.
3. Representations, Warranties and Covenants of the Company;
Remedies of PNC Mortgage. With respect to each mortgage loan sold by
the Company to PNC Mortgage pursuant to the terms of this Agreement, the
Company shall make all of the representations, warranties and covenants
set forth in the Guide and, in the event of the breach of any of such
representations, warranties and covenants, PNC Mortgage shall have all
of the remedies available at law or in equity, as well as all of the
remedies set forth in the Guide, including, but not limited to,
repurchase and indemnification. The representations and warranties made
by the Company with respect to any mortgage loan subject to this
Agreement, as well as the remedies available to PNC Mortgage upon the
breach thereof, shall survive: (a) any investigation regarding the
mortgage loan conducted by PNC Mortgage, its assignees or designees, (b)
the liquidation of the mortgage loan, (c) the purchase of the mortgage
loan by PNC Mortgage, its assignee or designee, (d) the repurchase of
the mortgage loan by the Company and (e) the termination of this
Agreement.
4. Compensation. The Company shall be compensated for its
services hereunder as specified in the Guides.
5. No Assignment. This Agreement may not be assigned by the
Company without the prior written consent of PNC Mortgage. The Company
hereby consents to the assignment by PNC Mortgage of all or any part of
its rights and obligations under this Agreement to any affiliate
designated by PNC Mortgage. Any other transfer by PNC Mortgage will be
225
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
226
Agreement may be executed in one or more counterparts, each of which
shall constitute an original and all of which shall constitute the same
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by
proper officials duly authorized on the dates hereinafter set forth.
This Agreement shall take effect as of the date of its execution in
original or facsimile signature by a duly authorized officer of PNC
Mortgage.
Name of the Company Company I.D. Number
Type of organization Organized under laws of
Principal place of business: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇, 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
Exhibit F
FORM OF TRANSFEROR CERTIFICATE FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department, PNC 1999-4
Re: Purchase of PNC Mortgage Securities Corp. Mortgage Pass-
227
Through Certificates Series 1999-4, Class [ ] (the
"Certificates")
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act") and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, and (b) we have not offered or sold any
certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act.
Very truly yours,
[Name of Transferor]
By:
Authorized Officer
Exhibit G
FORM OF TRANSFEREE'S AGREEMENT FOR
JUNIOR SUBORDINATE CERTIFICATES
[Date]
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department, PNC 1999-4
PNC Mortgage Securities Corp.
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned (the "Purchaser") proposes to purchase Class [
] Certificates evidencing an undivided interest in PNC Mortgage
Securities Corp. Mortgage Pass-Through Certificates, Series 1999-4 (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 April 1, 1999 (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 1999-4.
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
228
its own account as principal and not with a view to the distribution
thereof, in whole or in part;
(c) The Purchaser is an "accredited investor" as such term is
defined in paragraph (a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) of Section
501 of Regulation D under the Securities Act of 1933, as amended (the
"Act"), has knowledge of financial and business matters and is capable
of evaluating the merits and risks of an investment in the Purchased
Certificates; the Purchaser has sought such accounting, legal and tax
advice as it has considered necessary to make an informed investment
decision; and the Purchaser is able to bear the economic risk of an
investment in the Purchased Certificates and can afford a complete loss
of such investment;
(d) The Purchaser is not affiliated with the Trustee;
(e) The Purchaser confirms that PNC has made available to the
Purchaser the opportunity to ask questions of, and receive answers from
PNC concerning the trust funds created pursuant to the Pooling Agreement
(the "Trust Funds"), the purchase by the Purchaser of the Purchased
Certificates and all matters relating thereto that PNC possesses or can
acquire without unreasonable effort or expense; and
(f) If applicable, the Purchaser has complied, and will
continue to comply, with the guidelines established by Thrift Bulletin
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
229
or other plan or arrangement subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended, or comparable provisions of any subsequent enactments
(a "Plan"), a trustee of any Plan, or any other Person who is using the
"plan assets" of any Plan to effect such acquisition or (y) is an
insurance company, the source of funds to be used by it to purchase the
Purchased Certificates is an "insurance company general account" (within
the meaning of Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance
upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60, or (b) a Benefit Plan Opinion (as defined in
Exhibit A hereto).
(c) The Purchaser acknowledges that its Purchased
Certificates bear a legend setting forth the applicable restrictions on
transfer.
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be validly executed by its duly authorized representative as of the
day and the year first above written.
[Purchaser]
By:
Its:
Exhibit A to Form of Transferee Agreement (Exhibit G)
PNC MORTGAGE SECURITIES CORP.
BENEFIT PLAN AFFIDAVIT
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-4
(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
230
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:
Personally appeared before me , known or proved to me to be
the same person who executed the foregoing instrument and to be a of
the Purchaser, and acknowledged to me that (s)he executed the same as
his/her free act and deed and as the free act and deed of the Purchaser.
SUBSCRIBED and SWORN to before me this day of , 19.
Notary Public
Exhibit H
FORM OF ADDITIONAL MATTER INCORPORATED INTO
THE FORM OF THE CERTIFICATES (OTHER THAN THE CLASS R-1 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
231
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 4.05 of the Pooling Agreement.
Distributions on this Certificate will be made by the Trustee by
wire transfer or check mailed to the address of the Person entitled
thereto, as such name and address shall appear on the Certificate
Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate to the Certificate Registrar.
Reference is hereby made to the further provisions of this
Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate
shall not be entitled to any benefit under the Pooling Agreement or be
valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
STATE STREET BANK AND TRUST COMPANY, as
Trustee
By:
(TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
This is one of the Certificates referred to in the within-
mentioned Pooling Agreement.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
Dated:
PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATE
This Certificate is one of a duly authorized issue of Certificates
designated as Mortgage Pass-Through Certificates of the Series and Class
specified hereon (herein called the "Certificates") and representing
certain interests in the REMIC 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
232
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. 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
233
registration or qualification, which Opinion of Counsel shall not be an
expense of the Company, the Master Servicer or the Trustee. Neither the
Company nor the Trustee will register the Certificate under the
Securities Act, qualify the Certificate under any state securities law
or provide registration rights to any purchaser. Any Holder desiring to
effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Company and the Master Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Certificates are issuable only as registered Certificates
without coupons in Authorized Denominations specified in the Pooling
Agreement. As provided in the Pooling Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of Authorized Denominations evidencing the same aggregate
interest in the portion of the REMIC 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.
ASSIGNMENT
234
FOR VALUE RECEIVED the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
(Please print or typewrite name and address, including postal zip code
of assignee. Please insert social security or other identifying number
of assignee.)
the within Mortgage Pass-Through Certificate and hereby irrevocably
constitutes and appoints
Attorney to transfer said Certificate on the Certificate Register, with
full power of substitution in the premises.
Dated:
Signature Guaranteed
NOTICE:The signature to this assignment must
correspond with the name as written upon the
face of the within instrument in every
particular, without alteration or enlargement
or any change whatever. This Certificate
does not represent an obligation of or an
interest in PNC Mortgage Securities Corp. or
any of its affiliates, including PNC Bank
Corp. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed by
any agency or instrumentality of the United
States.
Exhibit I
TRANSFEROR CERTIFICATE
[Date]
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department, PNC 1999-4
Re: PNC Mortgage Securities Corp. Mortgage Pass-Through
Certificates, Series 1999-4, 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 1999-4, 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 April 1, 1999 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
235
attached to the Pooling Agreement as Exhibit J. The Seller does not know
or believe that any representation contained therein is false.
3. The Seller has no actual knowledge that the proposed
Transferee is not a Permitted Transferee.
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.
5. The Seller has conducted a reasonable investigation of the
financial condition of the Purchaser and, as a result of the
investigation, found that the Purchaser has historically paid its debts
as they came due, and found no significant evidence to indicate that the
Purchaser will not continue to pay its debts as they come due in the
future.
6. The Purchaser has represented to the Seller that, if the
Certificates constitute a noneconomic residual interest, it (i)
understands that as holder of a noneconomic residual interest it may
incur tax liabilities in excess of any cash flows generated by the
interest, and (ii) intends to pay taxes associated with its holding of
the Certificates as they become due.
Very truly yours,
[Seller]
By:
Name:
Title:
Exhibit J
TRANSFEREE AFFIDAVIT AND AGREEMENT
STATE OF )
) ss:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record
or beneficial owner of the Class [R-1][R-2][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
236
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.)
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.
237
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.
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:
238
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and
Acknowledged to me that he executed the same as his free act and deed
and the free act and deed of the Owner.
Subscribed and sworn before me this day of , 19.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the
day
of , 19
Exhibit K
[Reserved]
Exhibit L
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
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 ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling
239
and Servicing Agreement (the "Agreement") dated as of April 1, 1999
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 March , 1999 relating to the Rule 144A
Securities and has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the
Trustee, the Company or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner
with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has (1)
completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2, or (2) obtained the waiver
of the Company with respect to Annex 1 and Annex 2 pursuant to
Section 5.01(f) of the Agreement. The Buyer is aware that the sale
to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the
accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given
that the resale, pledge or transfer is being made in reliance on
Rule 144A, or (ii) pursuant to another exemption from registration
under the 1933 Act.
f. The Buyer is not affiliated with (i) the Trustee or
(ii) any Rating Agency that rated the Rule 144A Securities.
g. If applicable, the Buyer has complied, and will continue
240
to comply, with the guidelines established by Thrift Bulletin 12
issued December 13, 1988, by the Office of Regulatory Activities of
the Federal Home Loan Bank System.
[Required only in the case of a transfer of a Class B Certificate]
[3. The Buyer warrants and represents to, and covenants with, the
Trustee, the Master Servicer and the Company that (1) the Buyer is not
an employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
subject to the prohibited transaction provisions of ERISA ("Plan"), or a
plan (within the meaning of Section 4975(e)(1) of the Internal Revenue
Code of 1986 ("Code")) subject to Section 4975 of the Code (also a
"Plan"), and the Buyer is not directly or indirectly purchasing the Rule
144A Securities on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with "plan assets" of any Plan, (2) the
Buyer's purchase of the Rule 144A Securities is permissible under
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code and
will not subject the Trustee, the Master Servicer or the Company to any
obligation or liability (including obligations or liabilities under
Section 406 of ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement and the Buyer has provided an Opinion of
Counsel to such effect in accordance with Section 5.01(d) of the
Agreement or (3) the Buyer is an insurance company, the source of funds
to be used by it to purchase the Rule 144A Securities is an "insurance
company general account" (within the meaning of Department of Labor
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase
is being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60.]
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.: No.:
Date: Date:
Annex 1 to Exhibit L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
241
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of
the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933 ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis $ (the Buyer must own
and/or invest on a discretionary basis at least $100,000,000 in
securities unless the Buyer is a dealer, and, in that case, the Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities) in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A) and (ii) the Buyer
satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue
Code.
Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest annual
financial statements.
Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State or
territory or the District of Columbia.
State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Section 3(3) of the Employee Retirement Income Security
242
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.
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"
243
within the meaning of Rule 144A. In addition, the Buyer agrees that the
Buyer will not purchase securities for a third party unless the Buyer
has obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to conclude that
such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of
the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i)
the Buyer is an investment company registered under the Investment
Company Act of 1940, 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
244
two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same
parent or because one investment adviser is a majority owned subsidiary
of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of
the Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement
and (vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales
to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities
will constitute a reaffirmation of this certification by the undersigned
as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
IF AN ADVISER:
Print Name of Buyer
By:
Name:
Title:
Date:
(SEAL)
Exhibit M
[Date]
[Company]
Re: Pooling and Servicing Agreement dated as of April 1, 1999
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,
245
Series 1999-4
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that,
except as noted on the attachment hereto, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in full or listed on the attachment hereto) it or the Custodian on its
behalf has reviewed the documents delivered to it or to the Custodian on
its behalf pursuant to Section 2.01 of the Pooling and Servicing
Agreement and has determined that (i) all documents required (in the
case of instruments described in clauses (X)(v) and (Y)(x) of the
definition of "Mortgage File," known by the Trustee to be required)
pursuant to the definition of "Mortgage File" and Section 2.01 of the
Pooling and Servicing Agreement have been executed and received as of
the date hereof are in its possession or in the possession of the
Custodian on its behalf and (ii) all such documents have been executed
and relate to the Mortgage Loans identified in the Mortgage Loan
Schedule. The Trustee has made no independent examination of such
documents beyond the review specifically required in the above
referenced Pooling and Servicing Agreement and has relied upon the
purported genuineness and due execution of any such documents and upon
the purported genuineness of any signature thereon. The Trustee makes no
representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File or
any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of
any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
as Trustee
By:
Name:
Title:
EXHIBIT N
BENEFIT PLAN AFFIDAVIT
State Street Bank and Trust Company, as Trustee
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department, PNC 1999-4
PNC Mortgage Securities Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: PNC MORTGAGE SECURITIES CORP.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-4
(THE "TRUST") CLASS [-B-] CERTIFICATES
246
(THE "PURCHASED CERTIFICATES")
Under penalties of perjury, I, , declare that, to the best of my
knowledge and belief, the following representations are true, correct
and complete; and
1. That I am the of (the "Purchaser"), whose taxpayer
identification number is , and on behalf of which I have the authority
to make this affidavit.
2. That the Purchaser is acquiring a Purchased Certificate
representing an interest in the Trust Funds.
3. That the Purchaser is either:
(a) not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Plan") or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting directly or indirectly on behalf of, or
purchasing any of the Purchased Certificates with "plan assets" of, any
Plan within the meaning of the Department of Labor ("DOL") regulation at
29 C.F.R. Section 2510.3-101; or
(b) an insurance company, the source of funds to be used by it to
purchase the Purchased Certificates is an "insurance company general
account" (within the meaning of DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the purchase is being made in reliance
upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60.
IN WITNESS WHEREOF, the Purchaser has caused this instrument
to be duly executed on its behalf, by its duly authorized officer this
day of , 199.
[Purchaser]
By:
Its:
Personally appeared before me , known or proved to me to be the same
person who executed the foregoing instrument and to be a of the
Purchaser, and acknowledged to me that (s)he executed the same as
his/her free act and deed and as the free act and deed of the Purchaser.
SUBSCRIBED and SWORN to before me this day of , 19.
Notary Public
Exhibit O
FORM OF LOAN SALE AGREEMENT
CLIPPER RECEIVABLES CORPORATION,
as Seller
STATE STREET BANK AND TRUST COMPANY,
as Trustee
247
LOAN SALE AGREEMENT
Dated as of April 1, 1999
This Loan Sale Agreement (this "Agreement") is dated as of April 1,
1999, by and between Clipper Receivables Corporation ("Clipper"), as
seller (the "Seller"), and State Street Bank and Trust Company ("State
Street"), as trustee (the "Trustee") under a Pooling and Servicing
Agreement, dated April 1, 1999 (the "Pooling Agreement") by and between
PNC Mortgage Securities Corp. ("PNC") and the Trustee. Pursuant to a
Revolving Loan Purchase Agreement, dated as of December 30, 1998 (the
"Revolving Loan Purchase Agreement"), among Fairway Drive Funding Corp.
("Fairway"), as seller, Clipper, as purchaser, State Street Capital
Corporation, as administrator, State Street, as relationship bank, and
PNC, as servicer, the Seller has purchased the Conveyed Mortgage Loans
(as defined herein) from Fairway. On the terms and conditions set forth
herein, the Seller desires to sell and the Trustee desires to purchase
the Conveyed Mortgage Loans and certain related rights.
In consideration of the premises and the mutual agreements hereinafter
set forth, the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms
Whenever used in this Agreement, the following words and phrases shall
have the following meanings specified in this Article:
Agreement: This Loan Sale Agreement, including all exhibits and
schedules hereto, amendments hereof and supplements hereto.
Clipper: The meaning given in the introductory paragraph hereto.
Closing Date: April 29, 1999.
Conveyance: The meaning given in Section 2.1.
Conveyed Assets: The meaning given in Section 2.1.
Conveyed Mortgage Loans: The Mortgage Loans sold, transferred, assigned
and conveyed to the Trustee by the Seller pursuant to Section 2.1 and
identified in the Mortgage Loan Schedule.
Custodian: State Street, or any other party appointed as Custodian
under the Revolving Loan Purchase Agreement.
Cut-Off Date: April 1, 1999.
Fairway: The meaning given in the introductory paragraph hereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note.
Mortgage Loan: An individual mortgage loan, including the related
Mortgage Note and Mortgage.
Mortgage Loan File: With respect to any Conveyed Mortgage Loan, the
documents described in the definition of "Mortgage Loan File" in the
Revolving Loan Purchase Agreement.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto
as Schedule I.
Mortgage Note: The note or other evidence of the indebtedness of a
248
Mortgagor under a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
PNC: The meaning given in the introductory paragraph hereto.
Person: any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company,
trust, unincorporated organization, or government or any agency or
political subdivision thereof.
Pooling Agreement: The meaning given in the introductory paragraph
hereto.
Purchase Price: The meaning given in Section 2.1.
Revolving Loan Purchase Agreement: The meaning given in the introductory
paragraph hereto.
Seller: The meaning given in the introductory paragraph hereto.
State Street: The meaning given in the introductory paragraph hereto.
Trustee: The meaning given in the introductory paragraph hereto.
ARTICLE II
SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Sale and Conveyance of Mortgage Loans
Concurrently with the execution and delivery hereof, the Seller does
hereby irrevocably sell, transfer, assign, set over and otherwise convey
to the Trustee, without representation, warranty or recourse, and the
Trustee hereby accepts delivery of, all the Seller's right, title and
interest in and to (i) the Conveyed Mortgage Loans and all rights
pertaining thereto, (ii) all scheduled payments of principal and
interest due after the Cut-Off Date and received by the Seller with
respect to the Conveyed Mortgage Loans at any time, (iii) all principal
prepayments received by the Seller after the Cut-Off Date with respect
to the Conveyed Mortgage Loans, and (iv) any property which secured a
Conveyed Mortgage Loan and which has been acquired by foreclosure or
deed in lieu of foreclosure after the Cut-Off Date (such assets
described in clauses (i) through (iv) collectively referred to herein as
the "Conveyed Assets," and the transfer and assignment by the Seller
thereof referred to herein as the "Conveyance").
Notwithstanding anything herein to the contrary, the transfer of the
Conveyed Assets shall not constitute the Trustee as an intended third-
party beneficiary under the Revolving Loan Purchase Agreement and
nothing herein shall entitle the Trustee to the benefit of any
representation, warranty, covenant or remedy contained therein or
assigned thereby.
The price for the Conveyed Assets to be paid by the Trustee on the
Closing Date shall be an amount equal to $ (the "Purchase Price").
Section 2.2 Custodial Agreement; Release of Mortgage Loan Files
As of the Closing Date, the ownership of all records and documents with
respect to any Conveyed Mortgage Loan which come into the possession of
the Seller shall immediately vest in the Trustee and shall be promptly
forwarded to the Trustee.
Concurrently herewith, the Seller shall notify the Custodian of the
Conveyance of the Conveyed Mortgage Loans and cause the Custodian to
release the related Mortgage Loan Files to or upon the order of the
Trustee by executing a Notice and Instruction to Custodian in the form
attached hereto as Exhibit A.
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ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.1 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York (including Section 5-1401 of the New York
General Obligations Law) and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws
without giving effect to conflict of laws principles other than Section
5-1401 of the New York General Obligations Law.
Section 3.2 Notices
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at
or mailed by registered or certified mail to (a) in the case of the
Trustee, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Department, PNC Series 1999-4, or such other address as
may hereafter be furnished to the Seller in writing by the Trustee, or
(b) in the case of the Seller, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, facsimile no.: (617) 350-
4020, with a copy to State Street Capital Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, facsimile no.:
(▇▇▇) ▇▇▇-▇▇▇▇, or such other address as may hereafter be furnished to
the Trustee in writing by the Seller.
Section 3.3 Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms
of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 3.4 Waivers and Amendments, Non-contractual Remedies;
Preservation of Remedies
This Agreement may be amended, superseded, canceled, renewed or extended
and the terms hereof may be waived, only by a written instrument signed
by authorized representatives of the parties or, in the case of a
waiver, by an authorized representative of the party waiving compliance.
No such written instrument shall be effective unless it expressly
recites that it is intended to amend, supersede, cancel, renew or extend
this Agreement or to waive compliance with one or more of the terms
hereof, as the case may be. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any
such right, power or privilege, or any single or partial exercise of any
such right, power or privilege, preclude any further exercise thereof or
the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative to, and not exclusive of,
any rights or remedies that any party may otherwise have at law or in
equity.
Section 3.5 Captions
All section titles or captions contained in this Agreement or in any
Schedule or Exhibit annexed hereto or referred to herein, and the table
of contents to this Agreement, are for convenience only, shall not be
250
deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.
Section 3.6 Counterparts
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and
the same instrument.
Section 3.7 Entire Agreement
This Agreement (including any Schedule or Exhibit annexed hereto or
referred to herein) between the parties hereto contains the entire
agreement between the parties with respect to the sale of the Conveyed
Assets and the transactions contemplated hereby and supersedes all prior
agreements, written or oral, with respect thereto.
Section 3.8 Condition Precedent
The Trustee's obligation to purchase the Conveyed Assets hereunder is
conditioned upon and subject to the Trustee's receipt of available funds
from PNC pursuant to the Pooling Agreement in an amount equal to the
Purchase Price.
Section 3.9 No Recourse
No recourse under any obligation, covenant or agreement of Clipper
contained in this Agreement shall be had against ▇ ▇ Management
Corporation ("JHM") or any incorporator, stockholder, officer, director
or employee of Clipper or JHM, by the enforcement of any assessment or
by any legal or equitable proceeding, by virtue of any statute or
otherwise, it being expressly agreed and understood that this Agreement
is solely a corporate obligation of Clipper, and that no personal
liability whatever shall attach to or be incurred by the incorporators,
stockholders, officers, directors or employees of Clipper or JHM, or any
of them under or by reason of any of the obligations, covenants or
agreements of Clipper contained in this Agreement, or implied therefrom.
Trustee expressly waives, as a condition of and in consideration for the
execution of this Agreement, any and all personal liability against JHM
and every such incorporator, stockholder, officer, director or employee
arising from breaches by Clipper of any such obligations, covenants or
agreements, either at common law or at equity, or by statute or
constitution.
Section 3.10 No Petition
The Trustee agrees that it shall not institute against, or join any
other Person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or
other proceeding under any federal or state bankruptcy or similar law,
for one year and one day after the latest maturing Commercial Paper Note
(as defined in the Program Administration Agreement, dated as of
September 24, 1992, between Clipper and State Street Boston Capital
Corporation, as program administrator, as it may be amended from time to
time) is paid.
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as
of the date first above written.
CLIPPER RECEIVABLES CORPORATION
251
By: STATE STREET CAPITAL CORPORATION, as Program Administrator
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY, solely in its capacity as Trustee
and not individually
By:
Name:
Title:
CONSENTED TO BY:
STATE STREET CAPITAL CORPORATION, as Program Administrator
By:
Name:
Title:
Schedule I to Exhibit O
Mortgage Loan Schedule
Exhibit A to Exhibit O
FORM OF NOTICE AND INSTRUCTION TO CUSTODIAN
[Closing Date]
State Street Bank and Trust
Company, as Custodian
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Revolving Loan Purchase Agreement, dated as of December 30,
1998 (the "Revolving Loan Purchase Agreement"), among Fairway
Drive Funding Corp., as seller, Clipper Receivables
Corporation, as purchaser, State Street Capital Corporation,
as administrator, State Street Bank and Trust Company, as
relationship bank, and PNC Mortgage Securities Corp., as
servicer
252
Ladies and Gentlemen:
We hereby advise you that the mortgage loans specified on Schedule
I hereto (the "Conveyed Mortgage Loans") have been transferred and
assigned, pursuant to a Loan Sale Agreement dated as of April 1, 1999
between Clipper Receivables Corporation, as seller (the "Seller"), and
State Street Bank and Trust Company, as trustee (the "Trustee") under a
Pooling and Servicing Agreement dated as of April 1, 1999 by and between
PNC Mortgage Securities Corp. and the Trustee, by the Seller to the
Trustee, and you are hereby instructed to deliver the Mortgage Loan
Files (as defined in the Revolving Loan Purchase Agreement) relating to
such Conveyed Mortgage Loans to the Trustee pursuant to such
instructions as it may provide to you.
Very truly yours,
CLIPPER RECEIVABLES CORPORATION
By: STATE STREET CAPITAL CORPORATION,
as Program Administrator
By:
Name:
Title:
ACKNOWLEDGED:
STATE STREET BANK AND TRUST
COMPANY, as Custodian
By:
Name:
Title:
Schedule I to Notice and Instruction to Custodian
Exhibit P
FORM OF PROTECTIVE TRANSFER AGREEMENT
This Protective Transfer Agreement (this "Agreement"), dated as of
April 1, 1999, is by and between Fairway Drive Funding Corp. ("Funding")
and State Street Bank and Trust Company (the "Trustee Bank"), as trustee
(in such capacity, the "Trustee") under a Pooling and Servicing
Agreement dated April 1, 1999 by and between PNC Mortgage Securities
Corp. ("PNC") and the Trustee.
W I T N E S S E T H:
WHEREAS, Funding sold certain mortgage loans and related property
(as defined below, the "Conveyed Assets") to Clipper Receivables
Corporation ("Clipper") pursuant to a Revolving Loan Purchase Agreement,
dated as of December 30, 1998 (the "Funding Sale Agreement"), among
Funding, as Seller, Clipper, as Purchaser, State Street Capital
Corporation, as Administrator, the Trustee Bank, as Relationship Bank
253
and PNC, as Servicer;
WHEREAS, pursuant to a Loan Sale Agreement (the "Clipper Loan Sale
Agreement"), dated as of April 1, 1999, between Clipper and the Trustee,
Clipper is selling all of its right, title and interest in and to the
Conveyed Assets to the Trustee;
WHEREAS, the Trustee requires assurance of good title to the
Conveyed Assets, and pursuant to Section 13.2(a) of the Funding Sale
Agreement, Funding is obligated to take any action necessary to protect
the interest of Clipper in the Conveyed Assets.
NOW, THEREFORE, in consideration of the covenants made herein
and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. The Funding Sale Agreement provides that it is the express
intent of the parties thereto that the sale, assignment and transfer of
the Conveyed Assets pursuant to the Funding Sale Agreement constituted a
sale of all of Fairway's right, title, and interest in and to the
Conveyed Assets to Clipper.
2. Notwithstanding the foregoing, to the extent that Funding has
retained any interest in the Conveyed Assets, Funding hereby irrevocably
sells, transfers, assigns, sets over and otherwise conveys to the
Trustee, without representation, warranty or recourse, and the Trustee
hereby accepts delivery of, all of Funding's right, title and interest,
if any, in and to (i) the Mortgage Loans identified on the schedule of
Mortgage Loans attached as Schedule I to the Clipper Loan Sale Agreement
(the "Conveyed Mortgage Loans") and all rights pertaining thereto, (ii)
all scheduled payments of principal and interest due after April 1, 1999
(the "Cut-Off Date") and received by Funding with respect to the
Conveyed Mortgage Loans at any time, (iii) all principal prepayments
received by Funding after the Cut-Off Date with respect to the Conveyed
Mortgage Loans, and (iv) any property which secured a Conveyed Mortgage
Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure after the Cut-Off Date (such assets described in clauses (i)
through (iv) collectively referred to herein as the "Conveyed Assets").
3. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (including Section 5-
1401 of the New York General Obligations Law) and the obligations,
rights and remedies of the parties hereunder shall be determined in
accordance with such laws without giving effect to conflict of laws
principles other than Section 5-1401 of the New York General Obligations
Law.
4. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused their names to
254
be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
FAIRWAY DRIVE FUNDING CORP.
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
not in its individual capacity, but
solely as Trustee
By:
Name:
Title: