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EXHIBIT 7.1
EXECUTION VERSION
PNC MORTGAGE SECURITIES CORP.,
as Depositor and Master Servicer
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
POOLING AND SERVICING AGREEMENT
$1,967,029,084.27
PNC Mortgage Securities Corp.
Mortgage Pass-Through Certificates
Series 1998-12
Cut-Off Date: November 1, 1998
This Pooling and Servicing Agreement, dated and
effective as of November 1, 1998 (this "Agreement"), is
executed by and between PNC Mortgage Securities Corp., as
Depositor and Master Servicer (the "Company") and State
Street Bank and Trust Company, as Trustee (the "Trustee").
Capitalized terms used in this Agreement and not otherwise
defined have the meanings ascribed to such terms in Article
I hereof.
PRELIMINARY STATEMENT
The Company at the Closing Date is the owner of the
Mortgage Loans and the other property being conveyed by it
to the Trustee for inclusion in the Trust Fund. On the
Closing Date, the Company will acquire the REMIC I Regular
Interests and the Class R-1 Certificates from the REMIC I
Trust Fund as consideration for its transfer to the Trust
Fund of the Mortgage Loans and certain other assets and will
be the owner of the REMIC I Regular Interests and the Class
R-1 Certificates. Thereafter on the Closing Date, the
Company will acquire the 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
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consideration for its transfer to REMIC III of the REMIC II
Regular Interests and will be the owner of the Certificates.
The Company has duly authorized the execution and delivery
of this Agreement to provide for (i) the conveyance to the
Trustee of the Mortgage Loans and the issuance to the
Company of the REMIC I Regular Interests and the Class R-1
Certificates representing in the aggregate the entire
beneficial ownership of REMIC I, (ii) the conveyance to the
Trustee of the REMIC I Regular Interests and the issuance to
the Company of the REMIC II Regular Interests and the Class
R-2 Certificates representing in the aggregate the entire
beneficial interest of REMIC II and (iii) 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 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 November 25, 1998, and a
Prospectus Supplement, dated November 25, 1998, of the
Company (together, the "Prospectus"). The Junior Subordinate
Certificates have been offered for sale pursuant to a
Private Placement Memorandum, dated November 30, 1998. 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 and Final Maturity Date for
the REMIC I Regular Interests, the REMIC II Regular
Interests and the Certificates:
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REMIC I
Class Designation
for each REMIC I
Regular Interest
and the Class R-1 Type of Remittance Initial Class Final Maturity
Certificates Interest Rate (1) Principal Balance Date*
Class Y-1 Regular 7.00% 351,071.67 January 2029
Class Y-2 Regular 6.00% 54,656.39 January 2029
Class Y-3 Regular 7.00% 26,159.04 January 2029
Class Y-4 Regular 6.50% 206,984.72 January 2029
Class Z-1 Regular 7.00% 701,792,260.33 January 2029
Class Z-2 Regular 6.00% 109,842,826.61 January 2029
Class Z-3 Regular 7.00% 52,291,911.96 January 2029
Class Z-4 Regular 6.50% 415,976,743.28 January 2029
Class W Regular 6.25% 681,907,802.00 December 2028
Class I-X-M Regular (2) -------- December 2028
Class II-X-1-M Regular (2) -------- January 2029
Class II-X-2-M Regular (2) -------- January 2029
Class III-X-1-M Regular (2) -------- January 2029
Class C-X-M Regular (2) -------- January 2029
Class IV-X-1-M Regular (2) -------- January 2029
Class IV-X-2-M Regular (2) -------- January 2029
Class I-P-M Regular (3) 154,340.00 December 2028
Class II-P-M Regular (3) 3,718,727.00 January 2029
Class III-P-M Regular (3) 513,104.00 January 2029
Class IV-P-M Regular (3) 192,497.00 January 2029
Class R-1+ Residual 6.50% 50.00 January 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-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 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
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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 Regular 6.250% 366,069,132.00 December 2028
Class I-A-2-L Regular 5.750% 45,685,500.00 December 2028
Class I-A-3-L Regular 6.250% 64,981,300.00 December 2028
Class I-A-4-L Regular 7.000% 10,319,000.00 December 2028
Class I-A-5-L Regular 7.000% 8,666,000.00 December 2028
Class I-A-6-L Regular 7.000% 5,548,000.00 December 2028
Class I-A-7-L Regular 7.000% 6,685,000.00 December 2028
Class I-A-8-L Regular 7.000% 3,184,000.00 December 2028
Class I-A-9-L Regular 6.250% 81,849,736.00 December 2028
Class I-A-10-L Regular (2) 2,201,280.00 December 2028
Class I-A-11-L Regular 7.000% 3,775,000.00 December 2028
Class I-A-12-L Regular 7.000% 5,903,000.00 December 2028
Class I-A-13-L Regular 6.250% 43,332,213.00 December 2028
Class I-A-14-L Regular 7.000% 4,721,000.00 December 2028
Class II-A-1-L Regular 7.000% 740,336,980.00 January 2029
Class II-A-2-L Regular (2) 14,600,666.00 January 2029
Class III-A-1-L Regular 7.000% 48,619,888.00 January 2029
Class IV-A-1-L Regular 6.500% 68,590,100.00 January 2029
Class IV-A-2-L Regular 6.750% 976,000.00 January 2029
Class IV-A-3-L Regular 6.500% 10,959,100.00 January 2029
Class IV-A-4-L Regular 6.500% 52,250,100.00 January 2029
Class IV-A-5-L Regular 6.475% 227,861,534.00 January 2029
Class IV-A-7-L Regular 6.500% 23,750,100.00 January 2029
Class IV-A-8-L Regular (2) 134,308.00 January 2029
Class IV-A-9-L Regular 6.750% 2,516,000.00 January 2029
Class I-X-L Regular 6.250% (3) ---- December 2028
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Class II-X-1-L Regular 7.000% (3) ---- January 2029
Class II-X-2-L Regular 7.000% (3) ---- January 2029
Class III-X-1-L Regular 7.000% (3) ---- January 2029
Class C-X-L Regular 7.000% (3) ---- January 2029
Class IV-X-1-L Regular 6.500% (3) ---- January 2029
Class IV-X-2-L Regular 6.500% (3) ---- January 2029
Class I-P-L Regular (2) 154,340.00 December 2028
Class II-P-L Regular (2) 3,718,727.00 January 2029
Class III-P-L Regular (2) 513,104.00 January 2029
Class IV-P-L Regular (2) 192,497.00 January 2029
Class I-B-1-L Regular 6.250% 14,323,305.00 December 2028
Class I-B-2-L Regular 6.250% 6,138,559.00 December 2028
Class I-B-3-L Regular 6.250% 2,728,249.00 December 2028
Class I-B-4-L Regular 6.250% 2,387,217.00 December 2028
Class I-B-5-L Regular 6.250% 1,364,125.00 December 2028
Class I-B-6-L Regular 6.250% 2,046,186.00 December 2028
Class C-B-1-L Regular Variable (4) 41,761,425.00 January 2029
Class C-B-2-L Regular Variable (4) 19,916,987.00 January 2029
Class C-B-3-L Regular Variable (4) 10,922,219.00 January 2029
Class C-B-4-L Regular Variable (4) 7,067,318.00 January 2029
Class C-B-5-L Regular Variable (4) 3,854,900.00 January 2029
Class C-B-6-L Regular Variable (4) 6,424,839.46 January 2029
Class R-2+ Residual 6.500% 50.00 January 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-2 Certificates are entitled to receive the
applicable Residual Distribution Amount.
(1) Interest distributed to the REMIC II Regular Interests
(other than the Class I-A-10-L, Class II-A-2-L, Class
IV-A-8-L and Class P-L Regular Interests, which will
not be entitled to receive any distributions of
interest) and the Class R-2 Certificates on each
Distribution Date will have accrued at the applicable
per annum Certificate Interest Rate on the Class
Principal Balance or Class Notional Amount outstanding
following the immediately prior Distribution Date (or,
with respect to the first Distribution Date, as of the
Closing Date).
(2) The Class I-A-10-L, Class II-A-2-L, Class IV-A-8-L and
Class P-L Regular Interests shall not be entitled to
receive any distributions of interest.
(3) Each of the Class X-L Regular Interests shall accrue
interest on the related Class Notional Amount. The
Class X-L Regular Interests shall not be entitled to
receive any distributions of principal.
(4) The Certificate Interest Rate on the Group C-B-L
Regular Interests shall equal, on any Distribution
Date, the weighted average of the Certificate Interest
Rates on the Class Y-1, Class Y-2, Class Y-3 and Class
Y-4 Regular Interests.
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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 Regular 6.250% 366,069,132.00 December 2028
Class I-A-2 Regular 5.750% 45,685,500.00 December 2028
Class I-A-3 Regular 6.250% 64,981,300.00 December 2028
Class I-A-4 Regular 7.000% 10,319,000.00 December 2028
Class I-A-5 Regular 7.000% 8,666,000.00 December 2028
Class I-A-6 Regular 7.000% 5,548,000.00 December 2028
Class I-A-7 Regular 7.000% 6,685,000.00 December 2028
Class I-A-8 Regular 7.000% 3,184,000.00 December 2028
Class I-A-9 Regular 6.250% 81,849,736.00 December 2028
Class I-A-10 Regular (2) 2,201,280.00 December 2028
Class I-A-11 Regular 7.000% 3,775,000.00 December 2028
Class I-A-12 Regular 7.000% 5,903,000.00 December 2028
Class I-A-13 Regular 6.250% 43,332,213.00 December 2028
Class I-A-14 Regular 7.000% 4,721,000.00 December 2028
Class II-A-1 Regular 7.000% 740,336,980.00 January 2029
Class II-A-2 Regular (2) 14,600,666.00 January 2029
Class III-A-1 Regular 7.000% 48,619,888.00 January 2029
Class IV-A-1 Regular 6.500% 68,590,100.00 January 2029
Class IV-A-2 Regular 6.750% 976,000.00 January 2029
Class IV-A-3 Regular 6.500% 10,959,100.00 January 2029
Class IV-A-4 Regular 6.500% 52,250,100.00 January 2029
Class IV-A-5 Regular 6.475% 227,861,534.00 January 2029
Class IV-A-6 Regular 6.500% (3) -- January 2029
Class IV-A-7 Regular 6.100% 23,750,100.00 January 2029
Class IV-A-8 Regular (2) 134,308.00 January 2029
Class IV-A-9 Regular 6.750% 2,516,000.00 January 2029
Class I-X Regular 6.250% (3) -- December 2028
Class II-X-1 Regular 7.000% (3) -- January 2029
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Class II-X-2 Regular 7.000% (3) -- January 2029
Class III-X-1 Regular 7.000% (3) -- January 2029
Class C-X Regular 7.000% (3) -- January 2029
Class IV-X-1 Regular 6.500% (3) -- January 2029
Class IV-X-2 Regular 6.500% (3) -- January 2029
Class I-P Regular (2) 154,340.00 December 2028
Class II-P Regular (2) 3,718,727.00 January 2029
Class III-P Regular (2) 513,104.00 January 2029
Class IV-P Regular (2) 192,497.00 January 2029
Class I-B-1 Regular 6.250% 14,323,305.00 December 2028
Class I-B-2 Regular 6.250% 6,138,559.00 December 2028
Class I-B-3 Regular 6.250% 2,728,249.00 December 2028
Class I-B-4 Regular 6.250% 2,387,217.00 December 2028
Class I-B-5 Regular 6.250% 1,364,125.00 December 2028
Class I-B-6 Regular 6.250% 2,046,186.00 December 2028
Class C-B-1 Regular Variable (4) 41,761,425.00 January 2029
Class C-B-2 Regular Variable (4) 19,916,987.00 January 2029
Class C-B-3 Regular Variable (4) 10,922,219.00 January 2029
Class C-B-4 Regular Variable (4) 7,067,318.00 January 2029
Class C-B-5 Regular Variable (4) 3,854,900.00 January 2029
Class C-B-6 Regular Variable (4) 6,424,839.46 January 2029
Class R-3+ Residual 6.500% 50.00 January 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 I-A-10, Class II-A-2, Class IV-A-8 and Class
P Certificates, which will not be entitled to receive
any distributions of interest) on each Distribution
Date will have accrued at the applicable per annum
Certificate Interest Rate on the Class Principal
Balance or Class Notional Amount outstanding following
the immediately prior Distribution Date (or, with
respect to the first Distribution Date, as of the
Closing Date).
(2) The Class I-A-10, Class II-A-2, Class IV-A-8 and Class
P Certificates shall not be entitled to receive any
distributions of interest.
(3) Each of the Class X Certificates and the Class IV-A-6
Certificates shall accrue interest on the related
Class Notional Amount. The Class X and Class IV-A-6
Certificates shall not be entitled to receive any
distributions of principal.
(4) The Certificate Interest Rate on each Class of the
Group C-B Certificates shall equal the Certificate
Interest Rate on the Corresponding Class of Group C-B-L
Regular Interests.
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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 $1,967,029,087.14 and the Certificates have an
Aggregate Certificate Principal Balance of
$1,967,029,084.27.
W I T N E S S E T H :
WHEREAS, the Company is a corporation duly organized
and existing under and by virtue of the laws of the State of
Delaware and has full corporate power and authority to enter
into this Agreement and to undertake the obligations
undertaken by it herein;
WHEREAS, the Company is the owner of the Mortgage Loans
identified in the Mortgage Loan Schedule hereto having
unpaid Principal Balances on the Cut-Off Date as stated
therein;
WHEREAS, the Company has been duly authorized to (i)
create a trust (the "Trust Fund") to hold the Mortgage
Loans and certain other property and (ii) sell undivided
beneficial ownership interests in REMIC I and in order to do
so is selling the REMIC I Regular Interests issued hereunder
as hereinafter provided;
WHEREAS, the Company has been duly authorized to (i)
create a trust ("REMIC II") to hold the REMIC I Regular
Interests and (ii) sell undivided beneficial ownership
interests in REMIC II and in order to do so is selling the
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
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conditions upon which the Certificates are, and are to be,
authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the
Certificates by the Holders thereof, the Company covenants
and agrees with the Trustee, for the equal and proportionate
benefit of the respective Holders from time to time of the
Certificates, as follows:
ARTICLE I
Section 1.01. Definitions.
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall
have the following meanings:
Aggregate Certificate Principal Balance: At any given
time, the sum of the then current Class Principal Balances
of the Certificates.
Appraised Value: The amount set forth in an appraisal
made by or for the mortgage originator in connection with
its origination of each Mortgage Loan, or with respect to
certain Mortgage Loans originated to refinance mortgage
debt, the appraisal made by or for the mortgage originator
in connection with the origination of such mortgage debt.
Assignment of Proprietary Lease: With respect to a
Cooperative Loan, the assignment or mortgage of the related
Cooperative Lease from the Mortgagor to the originator of
the Cooperative Loan.
Authenticating Agent: Any authenticating agent
appointed by the Trustee pursuant to Section 8.11.
Authorized Denomination: With respect to the
Certificates (other than the Class X, Class I-A-4, Class I-A-
5, Class I-A-6, Class I-A-7, Class I-A-8, Class I-A-11,
Class I-A-12, Class I-A-14, Class IV-A-2, Class IV-A-6,
Class IV-A-9 and Residual Certificates), an initial
Certificate Principal Balance equal to $25,000 and integral
multiples of $1 in excess thereof. With respect to the
Class I-A-4, Class I-A-5, Class I-A-6, Class I-A-7, Class I-
A-8, Class I-A-11, Class I-A-12, Class I-A-14, Class IV-A-2
and Class IV-A-9 Certificates, an initial Certificate
Principal Balance equal to $1,000 and integral multiples of
$1 in excess thereof. With respect to the Class X and Class
IV-A-6 Certificates, a Class Notional Amount as of the Cut-
Off Date equal to $100,000 and multiples of $1 in excess
thereof. With respect to each Class of the Residual
Certificates, one Certificate with a Percentage Interest
equal to 0.01% and one Certificate with a Percentage
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Interest equal to 99.99%.
Balloon Loan: Any Mortgage Loan which, by its terms,
does not fully amortize the principal balance thereof by its
stated maturity and thus requires a payment at the stated
maturity larger than the monthly payments due thereunder.
Bankruptcy Coverage: The Group I Bankruptcy Coverage
and/or the Combined Bankruptcy Coverage, as applicable.
Bankruptcy Coverage Initial Amount: With respect to
Loan Group I, $230,001 and with respect to Loan Group II,
Loan Group III and Loan Group IV, $473,987.
Bankruptcy Loss: A loss on a Mortgage Loan arising out
of (i) a reduction in the scheduled Monthly Payment for such
Mortgage Loan by a court of competent jurisdiction in a case
under the United States Bankruptcy Code, other than any such
reduction that arises out of clause (ii) of this definition
of "Bankruptcy Loss", including, without limitation, any
such reduction that results in a permanent forgiveness of
principal, or (ii) with respect to any Mortgage Loan, a
valuation, by a court of competent jurisdiction in a case
under such Bankruptcy Code, of the related Mortgaged
Property in an amount less than the then outstanding
Principal Balance of such Mortgage Loan.
Beneficial Holder: A Person holding a beneficial
interest in any Book-Entry Certificate as or through a DTC
Participant or an Indirect DTC Participant or a Person
holding a beneficial interest in any Definitive Certificate.
Book-Entry Certificates: The Class A, Class X and Class
P Certificates, beneficial ownership and transfers of which
shall be made through book entries as described in Section
5.07.
Business Day: Any day other than a Saturday, a Sunday,
or a day on which the Certificate Insurer (with respect to
matters hereunder affecting the Certificate Insurer) or
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
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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, Class C-X 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 Subgroups and
amounts withdrawn from the Certificate Account attributable
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to each of such Loan Groups and Subgroups shall be accounted
for separately. Funds in the Certificate Account may be
invested in Eligible Investments pursuant to Section 3.04(b)
and reinvestment earnings thereon shall be paid to the
Master Servicer as additional servicing compensation. Funds
deposited in the Certificate Account (exclusive of the
Master Servicing Fee) shall be held in trust for the
Certificateholders and for the uses and purposes set forth
in Section 3.04, Section 3.05, Section 4.01, 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. For so long as no Certificate Insurer Default
exists (and whether or not any payments with respect to
Deficiency Amounts or Preference Amounts have been made),
the Certificate Insurer shall be deemed to be the sole
Holder of all outstanding Insured Certificates, subject to
Section 3.22; provided, that the Certificate Insurer shall
have no power without the consent of the Owner of each
Certificate affected thereby to: (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 Insured Certificateholder's Percentage Interest,
the Certificate Interest Rate or the Termination Payment
with respect to any of the Insured Certificates; (ii) reduce
the percentage of Percentage Interests specified in 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; (iv) modify any provision in any way
which would permit an earlier retirement of the
Certificates; or (v) amend this definition of
"Certificateholder" or "Holder". With respect to the REMIC
I Regular Interests, the owner of the REMIC I Regular
Interests, which as of the Closing Date shall be the
Trustee. With respect to the REMIC II Regular Interests, the
owner of the REMIC II Regular Interests, which as of the
Closing Date shall be the Trustee.
Certificate Group: The Group I, Group II, Group III,
13
Group IV and Group C-B Certificates.
Certificate Insurance Policy: The Certificate Guaranty
Insurance Policy No. 28048 issued by the Certificate Insurer
in respect of the Class IV-A-5 Certificates, a copy of which
is attached hereto as Exhibit K.
Certificate Insurer: MBIA Insurance Corporation or its
successors in interest.
Certificate Insurer Default: The existence and
continuance of any of the following: (a) a failure by the
Certificate Insurer to make a payment required under the
Certificate Insurance Policy in accordance with its terms;
(b) the entry of a decree or order of a court or agency
having jurisdiction in respect of the Certificate Insurer in
an involuntary case under any present or future Federal or
state bankruptcy, insolvency or similar law appointing a
conservator or receiver or liquidator or other similar
official of the Certificate Insurer or of any substantial
part of its property, or the entering of an order for the
winding up or liquidation of the affairs of the Certificate
Insurer and the continuance of any such decree or order
undischarged or unstayed and in force for a period of 90
consecutive days; (c) the Certificate Insurer shall consent
to the appointment of a conservator or receiver or
liquidator or other similar official in any insolvency,
readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Certificate
Insurer or of or relating to all or substantially all of its
property; or (d) the Certificate Insurer shall admit in
writing its inability to pay its debts generally as they
become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under
any applicable bankruptcy, insolvency, reorganization or
other similar statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment of its
obligations.
Certificate Insurer Premium: The meaning set forth in
the Insurance Agreement.
Certificate Interest Rate: For each Class of
Certificates, REMIC I Regular Interests and REMIC II Regular
Interests, the per annum rate set forth as the Certificate
Interest Rate for such Class in the Preliminary Statement
hereto.
Certificate Principal Balance: For each Certificate of
any Class, the portion of the related Class Principal
Balance, if any, represented by such Certificate.
14
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 definition of "REMIC II Distribution
Amount" only to the extent of the REMIC II Available
Distribution Amount for such Distribution Date remaining
after distributions in accordance with prior clauses of the
definition of "REMIC II Distribution Amount" and each Class
of Certificates (other than the Class R-1 and Class R-2
Certificates) shall be entitled to receive the amounts
allocated to such Class pursuant to the definition of "REMIC
III Distribution Amount" only to the extent of the REMIC III
Available Distribution Amount for such Distribution Date
remaining after distributions in accordance with prior
clauses of the definition of "REMIC III Distribution
Amount".
Class A Certificates: The Group I-A, Group II-A, Class
III-A-1 and Group IV-A Certificates.
Class A-L Regular Interests: The Group I-A-L, Group II-
A-L, Class III-A-1-L and Group IV-A-L Regular Interests.
Class B Certificates: The Group I-B and Group C-B
Certificates.
15
Class X-X Regular Interests: The Group I-B-L and Group
C-B-L Regular Interests.
Class C-B-1 Certificates: The Certificates designated
as "Class C-B-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-B-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-B-2 Certificates: The Certificates designated
as "Class C-B-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-B-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-B-3 Certificates: The Certificates designated
as "Class C-B-3" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-B-3-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-B-4 Certificates: The Certificates designated
as "Class C-B-4" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-B-4-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-B-5 Certificates: The Certificates designated
as "Class C-B-5" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class C-B-5-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-B-6 Certificates: The Certificates designated
as "Class C-B-6" on the face thereof in substantially the
form attached hereto as Exhibit A.
16
Class C-B-6-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as specified herein.
Class C-X Certificates: The Certificates designated as
"Class C-X" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class C-X Group II Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class C-X 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
Class C-X Group II Premium Rate Mortgage Loans as of such
Due Date and the denominator of which is 7.000%.
Class C-X Group II Premium Rate Mortgage Loans: The
Subgroup II-3 Loans having Pass-Through Rates in excess of
6.000% per annum.
Class C-X Group III Notional Amount: With respect to
any Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class C-X 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
Class C-X Group III Premium Rate Mortgage Loans as of such
Due Date and the denominator of which is 7.000%.
Class C-X Group III Premium Rate Mortgage Loans: The
Subgroup III-2 Loans having Pass-Through Rates in excess of
7.000% per annum.
Class C-X Notional Amount: With respect to any
Distribution Date, the sum of the Class C-X Group II
Notional Amount and the Class C-X Group III Notional Amount.
Class C-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 C-X-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
17
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class P Certificates: The Class I-P, Class II-P, Class
III-P and Class IV-P Certificates.
Class P-L Regular Interests: The Class I-P-L, Class II-
P-L, Class III-P-L and Class IV-P-L Regular Interests.
Class P-M Regular Interests: The Class I-P-M, Class II-
P-M, Class III-P-M and Class IV-P-M Regular Interests.
Class P Fraction: Any of the Class I-P, Class II-P,
Class III-P or Class IV-P Fractions, as applicable.
Class P Mortgage Loan: Any of the Class I-P, Class II-
P, Class III-P or the Class IV-P Mortgage Loans.
Class X Certificates: The Class I-X, Class II-X, Class
III-X, Class C-X and Class IV-X Certificates.
Class X-L Regular Interests: The Class I-X-L, Class II-
X-L, Class III-X-L, Class C-X-L and Class IV-X-L Regular
Interests.
Class X-M Regular Interests: The Class I-X-M, Class II-
X-M, Class III-X-M, Class C-X-M and Class IV-X-M Regular
Interests.
Class I-A-1 Certificates: The Certificates designated
as "Class I-A-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-2 Certificates: The Certificates designated
as "Class I-A-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-3 Adjusted Percentage: For any Distribution
Date occurring prior to the Distribution Date in December
2003, 0%, and for the December 2003 Distribution Date and
any Distribution Date thereafter, the Class I-A-3
Percentage.
18
Class I-A-3 Certificates: The Certificates designated
as "Class I-A-3" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-3 Liquidation Amount: The aggregate, for each
Group I Loan which became a Liquidated Mortgage Loan during
the calendar month preceding the month of the Distribution
Date, of the lesser of (i) the Class I-A-3 Percentage of the
Principal Balance of such Mortgage Loan (exclusive of the
Class I-P Fraction thereof, with respect to any Class I-P
Mortgage Loan) and (ii) the Class I-A-3 Percentage on any
Distribution Date occurring prior to the fifth anniversary
of the first Distribution Date, and the Class I-A-3
Prepayment Percentage on the fifth anniversary of the first
Distribution Date and each Distribution Date thereafter, in
each case, of the Liquidation Principal with respect to such
Mortgage Loan.
Class I-A-3 Priority Amount: For any Distribution Date,
the sum of (i) the Class I-A-3 Adjusted Percentage of the
Principal Payment Amount for Loan Group I (exclusive of the
portion thereof attributable to principal distributions to
the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC II Distribution
Amount"), (ii) the Class I-A-3 Prepayment Percentage of the
Principal Prepayment Amount for Loan Group I (exclusive of
the portion thereof attributable to principal distributions
to the Class I-P-L Regular Interests pursuant to clause
(I)(a)(i) of the definition of "REMIC II Distribution
Amount") and (iii) the Class I-A-3 Liquidation Amount.
Class I-A-3 Percentage: For any Distribution Date, the
Class I-A-3 Principal Balance divided by the aggregate Class
Principal Balance of the Group I Certificates (less the
Class I-P Principal Balance), in each case immediately prior
to such Distribution Date.
Class I-A-3 Prepayment Percentage: For any Distribution
Date, the product of the Class I-A-3 Percentage and the Step
Down Percentage.
Class I-A-3-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-4 Certificates: The Certificates designated
as "Class I-A-4" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-4-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
19
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 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 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 Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-9 Certificates: The Certificates designated
as "Class I-A-9" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-9-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-10 Certificates: The Certificates designated
as "Class I-A-10" on the face thereof in substantially the
form attached hereto as Exhibit A.
20
Class I-A-10-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-11 Certificates: The Certificates designated
as "Class I-A-11" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-11-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-12 Certificates: The Certificates designated
as "Class I-A-12" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-12-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-13 Certificates: The Certificates designated
as "Class I-A-13" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-13-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-14 Certificates: The Certificates designated
as "Class I-A-14" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-A-14-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-A-14 Rounding Account: The separate trust
account established by DLJ by deposit as of the Closing Date
of $999.99 and maintained by the Master Servicer with the
Trustee, the Investment Depository or any other bank or
trust company acceptable to the Rating Agencies which is
incorporated under the laws of the United States or any
state thereof pursuant to Section 3.21, which account shall
bear a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the
Trustee on behalf of the Class I-A-14 Certificateholders or
any other account serving a similar function acceptable to
21
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.
Class I-B-1 Certificates: The Certificates designated
as "Class I-B-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-B-2 Certificates: The Certificates designated
as "Class I-B-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-B-3 Certificates: The Certificates designated
as "Class I-B-3" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-3-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-B-4 Certificates: The Certificates designated
as "Class I-B-4" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-4-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-B-5 Certificates: The Certificates designated
as "Class I-B-5" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class I-B-5-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-B-6 Certificates: The Certificates designated
as "Class I-B-6" on the face thereof in substantially the
form attached hereto as Exhibit A.
22
Class I-B-6-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-P Certificates: The Certificates designated as
"Class I-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-P Fraction: For each Class I-P Mortgage Loan, a
fraction, the numerator of which is 6.250% less the Pass-
Through Rate on such Class I-P Mortgage Loan and the
denominator of which is 6.250%.
Class I-P-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class I-P-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class I-P Mortgage Loan: Any Group I Loan with a Pass-
Through Rate of less than 6.250% per annum.
Class I-X Certificates: The Certificates designated as
"Class I-X" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class I-X Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Group I Premium Rate Mortgage Loans and (y)
a fraction, the numerator of which is the weighted average
of the Stripped Interest Rates for the Group I Premium Rate
Mortgage Loans as of such Due Date and the denominator of
which is 6.250%.
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.
23
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-A-2 Certificates: The Certificates designated
as "Class II-A-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class II-A-2 Fraction: With respect to any Subgroup II-
3 Loan, 1/7.
Class II-A-2 Principal Distribution Amount: For any
Distribution Date, the Subgroup II-3 Senior Principal
Distribution Amount multiplied by 1/7.
Notwithstanding the foregoing,
(X) for any Distribution Date on which there has been
an increase (a "Component Increase") in the Senior Component
Balance for a Subgroup (each, an "Overcollateralized
Subgroup") in respect of Realized Losses in another Subgroup
(an "Undercollateralized Subgroup") pursuant to the seventh
paragraph of the definition of "Realized Loss", the Class II-
A-2 Principal Distribution Amount calculated in accordance
with the first paragraph of this definition shall be
adjusted as follows: (A) if the Overcollateralized Subgroup
is Subgroup II-3, then the Class II-A-2 Principal
Distribution Amount shall be reduced by the product of (x)
the Class II-A-2 Fraction and (y) the amount of the
applicable Component Increase, and (B) if the
Overcollateralized Subgroup is Subgroup II-1 or Subgroup II-
2, then the Class II-A-2 Principal Distribution Amount shall
be increased by the product of (x) the Class II-A-2 Fraction
and (y) the amount of the applicable Component Increase (the
net reduction or net increase in the Class II-A-2 Principal
Distribution Amount resulting from application of clauses
(A) and (B) to all Overcollateralized Subgroups referred to
herein as the "Net Reduction" or "Net Increase",
respectively); provided, however, that (i) if the Net
Reduction is greater than the Class II-A-2 Principal
Distribution Amount calculated in accordance with the first
paragraph of this definition, then the Class II-A-2
Principal Distribution Amount shall equal zero, and the
remainder of the Net Reduction shall be carried out on the
next Distribution Date or Distribution Dates, as necessary,
and (ii) if the Net Increase is greater than the Group II
Senior Principal Distribution Amount (less the Class II-A-2
24
Principal Distribution Amount calculated in accordance with
the first paragraph of this definition), then the Class II-A-
2 Principal Distribution Amount shall equal the Group II
Senior Principal Distribution Amount, and the remainder of
the Net Increase shall be carried out on the next
Distribution Date or Distribution Dates, as necessary, and
(Y) for any Distribution Date upon which the REMIC II
Available Distribution Amount for Loan Group II is increased
by (A) the Principal Transfer Amount pursuant to the
definition of "REMIC II Distribution Amount" herein or (B)
any payment of principal from the Loan Group related to the
Class A-L Regular Interests that have been paid in full as
set forth in clause (X) of the last sentence of paragraph
(I) of the definition of "REMIC II Distribution Amount"
herein, the Class II-A-2 Principal Distribution Amount
shall be increased by an amount equal to the product of (i)
the sum of the Principal Transfer Amount and the amount
specified in clause (B) above, in each case payable to Loan
Group II on such Distribution Date and (ii) a fraction, the
numerator of which is 1/7 of the Subgroup II-3 Senior
Component Balance and the denominator of which is the sum of
the Subgroup II-1 Senior Component Balance, the Subgroup II-
2 Senior Component Balance and the Subgroup II-3 Senior
Component Balance.
Class II-A-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-P Certificates: The Certificates designated as
"Class II-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class II-P Fraction: For each Class II-P Mortgage Loan,
a fraction, the numerator of which is 7.000% less the Pass-
Through Rate on such Class II-P Mortgage Loan and the
denominator of which is 7.000%.
Class II-P Mortgage Loan: Any Group II Loan with a Pass-
Through Rate of less than 7.000% per annum.
Class II-P-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-P-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
25
Class II-X Certificates: The Class II-X-1 and Class II-
X-2 Certificates.
Class II-X-L Regular Interests: The Class II-X-1-L and
Class II-X-2-L Regular Interests.
Class II-X-M Regular Interests: The Class II-X-1-M and
Class II-X-2-M Regular Interests.
Class II-X-1 Certificates: The Certificates designated
as "Class II-X-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class II-X-1 Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class II-X-1 Premium Rate Mortgage Loans
and (y) a fraction, the numerator of which is the weighted
average of the Stripped Interest Rates for the Class II-X-1
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 7.000%.
Class II-X-1 Premium Rate Mortgage Loans: The Subgroup
II-1 Loans having Pass-Through Rates in excess of 7.000% per
annum.
Class II-X-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-X-1-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class II-X-2 Certificates: The Certificates designated
as "Class II-X-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class II-X-2 Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class II-X-2 Premium Rate Mortgage Loans
and (y) a fraction, the numerator of which is the weighted
average of the Stripped Interest Rates for the Class II-X-2
26
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 7.000%.
Class II-X-2 Premium Rate Mortgage Loans: The Subgroup
II-2 Loans having Pass-Through Rates in excess of 7.000% per
annum.
Class II-X-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class II-X-2-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class III-A-1 Certificates: The Certificates designated
as "Class III-A-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class III-A-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC 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 7.000% less the
Pass-Through Rate on such Class III-P Mortgage Loan and the
denominator of which is 7.000%.
Class III-P Mortgage Loan: Any Group III Loan with a
Pass-Through Rate of less than 7.000% per annum.
Class III-P-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class III-P-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class III-X Certificates: The Class III-X-1
Certificates.
Class III-X-L Regular Interests: The Class III-X-1-L
27
Regular Interests.
Class III-X-M Regular Interests: The Class III-X-1-M
Regular Interests.
Class III-X-1 Certificates: The Certificates designated
as "Class III-X-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class III-X-1 Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class III-X-1 Premium Rate Mortgage Loans
and (y) a fraction, the numerator of which is the weighted
average of the Stripped Interest Rates for the Class III-X-1
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 7.000%.
Class III-X-1 Premium Rate Mortgage Loans: The Subgroup
III-1 Loans having Pass-Through Rates in excess of 7.000%
per annum.
Class III-X-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class III-X-1-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class 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-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.
28
Class IV-A-3 Adjusted Percentage: For any Distribution
Date occurring prior to the Distribution Date in December
2003, 0%, and for the December 2003 Distribution Date and
any Distribution Date thereafter, the Class IV-A-3
Percentage.
Class IV-A-3 Certificates: The Certificates designated
as "Class IV-A-3" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class IV-A-3 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-3
Percentage of the Principal Balance of such Mortgage Loan
(exclusive of the Class IV-P Fraction thereof, with respect
to any Class IV-P Mortgage Loan) and (ii) the Class IV-A-3
Percentage on any Distribution Date occurring prior to the
fifth anniversary of the first Distribution Date, and the
Class IV-A-3 Prepayment Percentage on the fifth anniversary
of the first Distribution Date and each Distribution Date
thereafter, in each case, of the Liquidation Principal with
respect to such Mortgage Loan.
Class IV-A-3 Priority Amount: For any Distribution
Date, the sum of (i) the Class IV-A-3 Adjusted Percentage of
the Principal Payment Amount for Loan Group IV (exclusive of
the portion thereof attributable to principal distributions
to the Class IV-P-L Regular Interests pursuant to clause
(I)(d)(i) of the definition of "REMIC II Distribution
Amount"), (ii) the Class IV-A-3 Prepayment Percentage of the
Principal Prepayment Amount for Loan Group IV (exclusive of
the portion thereof attributable to principal distributions
to the Class IV-P-L Regular Interests pursuant to clause
(I)(d)(i) of the definition of "REMIC II Distribution
Amount") and (iii) the Class IV-A-3 Liquidation Amount.
Class IV-A-3 Percentage: For any Distribution Date, the
lesser of (i) 100% and (ii) the Class IV-A-3 Principal
Balance divided by the aggregate Principal Balance of the
Group IV Loans (less the Class IV-P Principal Balance), in
each case immediately prior to such Distribution Date.
Class IV-A-3 Prepayment Percentage: For any
Distribution Date, the product of the Class IV-A-3
Percentage and the Step Down Percentage.
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.
29
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-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 Reimbursement Amount: The sum of (a) all
amounts previously paid by the Certificate Insurer under the
Certificate Insurance Policy which have not been previously
reimbursed and (b) interest on the foregoing at the Late
Payment Rate from the date such amount was paid by the
Certificate Insurer until paid in full.
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 Notional Amount: For any Distribution
Date, the Class I-A-7 Principal Balance immediately prior to
such Distribution Date multiplied by 40/650.
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-8 Certificates: The Certificates designated
as "Class IV-A-8" on the face thereof in substantially the
form attached hereto as Exhibit A.
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
30
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 IV-P Certificates: The Certificates designated as
"Class IV-P" on the face thereof in substantially the form
attached hereto as Exhibit A.
Class IV-P Fraction: For each Class IV-P Mortgage Loan,
a fraction, the numerator of which is 6.500% less the Pass-
Through Rate on such Class IV-P Mortgage Loan and the
denominator of which is 6.500%.
Class IV-P Mortgage Loan: Any Group IV Loan with a Pass-
Through Rate of less than 6.500% per annum.
Class IV-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 IV-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 IV-X Certificates: The Class IV-X-1 and Class IV-
X-2 Certificates.
Class IV-X-L Regular Interests: The Class IV-X-1-L and
Class IV-X-2-L Regular Interests.
Class IV-X-M Regular Interests: The Class IV-X-1-M and
Class IV-X-2-M Regular Interests.
Class IV-X-1 Certificates: The Certificates designated
as "Class IV-X-1" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class IV-X-1 Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class IV-X-1 Premium Rate Mortgage Loans
and (y) a fraction, the numerator of which is the weighted
average of the Stripped Interest Rates for the Class IV-X-1
31
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 6.500%.
Class IV-X-1 Premium Rate Mortgage Loans: The Subgroup
IV-1 Loans having Pass-Through Rates in excess of 6.500% per
annum.
Class IV-X-1-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class IV-X-1-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class IV-X-2 Certificates: The Certificates designated
as "Class IV-X-2" on the face thereof in substantially the
form attached hereto as Exhibit A.
Class IV-X-2 Notional Amount: With respect to any
Distribution Date, the product of (x) the aggregate
scheduled principal balance, as of the second preceding Due
Date after giving effect to payments scheduled to be
received as of such Due Date, whether or not received, or
with respect to the initial Distribution Date, as of the Cut-
Off Date, of the Class IV-X-2 Premium Rate Mortgage Loans
and (y) a fraction, the numerator of which is the weighted
average of the Stripped Interest Rates for the Class IV-X-2
Premium Rate Mortgage Loans as of such Due Date and the
denominator of which is 6.500%.
Class IV-X-2 Premium Rate Mortgage Loans: The Subgroup
IV-2 Loans having Pass-Through Rates in excess of 6.500% per
annum.
Class IV-X-2-L Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC II
which constitutes a REMIC II Regular Interest and is
entitled to distributions as set forth herein.
Class IV-X-2-M Regular Interest: The uncertificated
partial undivided beneficial ownership interest in REMIC I
which constitutes a REMIC I Regular Interest and is entitled
to distributions as set forth herein.
Class Notional Amount: With respect to any of the
Class X Certificates, the Class X-L Regular Interests, the
Class X-M Regular Interest and the Class IV-A-6
Certificates, the related notional amount for any such
Class, as specified herein (i.e. the "Class Notional Amount"
32
for the Class I-X Certificates, the Class I-X-L Regular
Interests and the Class I-X-M Regular Interests is the Class
I-X Notional Amount).
Class Principal Balance: For any Class of Certificates
and for any Class of Regular Interests, the applicable
initial Class Principal Balance therefor set forth in the
Preliminary Statement hereto, corresponding to the rights of
such Class in payments of principal due to be passed through
to Certificateholders or the Holders of the Regular
Interests from principal payments on the Mortgage Loans, the
REMIC I Regular Interests or the REMIC II Regular Interests,
as applicable, as reduced from time to time by (x)
distributions of principal to Certificateholders or the
Holders of the Regular Interests of such Class and (y) the
portion of Realized Losses allocated to the Class Principal
Balance of such Class pursuant to the definition of
"Realized Loss" with respect to a given Distribution Date.
For any Distribution Date, the reduction of the Class
Principal Balance of any Class of Certificates and Regular
Interests pursuant to the definition of "Realized Loss"
shall be deemed effective prior to the determination and
distribution of principal on such Class pursuant to the
definitions of "REMIC I Distribution Amount", "REMIC II
Distribution Amount" and "REMIC III Distribution Amount".
Notwithstanding the foregoing, any amounts distributed in
respect of losses pursuant to paragraph (I)(a)(vi) or
(I)(e)(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)(a)(xxv) or (I)(e)(xxii) of the definition of
"REMIC II Distribution Amount" shall not cause a further
reduction in the Class Principal Balances of the Group I-B-L
Regular Interests or the Group C-B-L Regular Interests, as
applicable. The Class Principal Balance for the Class I-A-1
Certificates shall be referred to as the "Class I-A-1
Principal Balance", the Class Principal Balance for the
Class I-A-1-L Regular Interests shall be referred to as the
"Class I-A-1-L Principal Balance" and so on. The Class
Principal Balances for the Class X Certificates, the Class X-
L Regular Interests, the Class X-M Regular Interests and the
Class IV-A-6 Certificates shall each be zero. Exclusively
for the purpose of determining any subrogation rights of the
Certificate Insurer arising under Section 3.22 hereof,
"Class Principal Balance" of the Class IV-A-5 Certificates
shall not be reduced by the amount of any payments made by
the Certificate Insurer in respect of principal on such
Certificates under the Certificate Insurance Policy, except
to the extent such payments have been reimbursed to the
Certificate Insurer pursuant to the provisions of this
Agreement.
33
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.
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 W Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y Regular Interests: The Class Y-1, Class Y-2 and
Class Y-3 Regular Interests.
Class Y-1 Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class Y-1
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class Y-1 Regular Interests on such Distribution Date.
Class Y-2 Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class Y-2
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class Y-2 Regular Interests on such Distribution Date.
34
Class Y-3 Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class Y-3
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class Y-3 Regular Interests on such Distribution Date.
Class Y-4 Regular Interest: The uncertificated partial
undivided beneficial ownership interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to
distributions as set forth herein.
Class Y-4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the Class Y-4
Principal Reduction Amount for such Distribution Date over
the principal portion of Realized Losses allocated to the
Class Y-4 Regular Interests on such Distribution Date.
Class Y Principal Reduction Amounts: For any
Distribution Date, the amounts by which the Class Principal
Balances of the Class Y-1, Class Y-2, Class Y-3 and Class Y-
4 Regular Interests respectively will be reduced on such
Distribution Date by the allocation of Realized Losses and
the distribution of principal, determined as follows:
For purposes of the succeeding formulas the following
symbols shall have the meanings set forth below:
PIIB = the Subgroup II-3 Subordinate Component Balance
after the allocation of Realized Losses and
distributions of principal on such Distribution Date.
PIIIB = the sum of the Subgroup II-1 Subordinate Component
Balance, the Subgroup II-2 Subordinate Component
Balance and the Group III 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 = (6.0%PIIB + 7%PIIIB + 6.5%PIVB)/(PIIB + PIIIB
+ PIVB)
R1 = the weighted average of the Subgroup II-3 and Group IV
Pass-Through Rates
35
= (6.0% (P2 - P2) + 6.5%
(P4 - DeltaP4))/(P2 - DeltaP2 + P4 - DeltaP4)
R2 = the weighted average of the Subgroup II-1, Subgroup II-
2, Group III and Group IV Pass-Through Rates
= (7% (P1 + X0 - XxxxxX0 - XxxxxX0) + 6.5%
(P4 - DeltaP4))/(P1 - DeltaP1 + P3 - DeltaP3 + P4
- DeltaP4)
r1 = the weighted average of the Class Y-2 and Class Y-4
Certificate Interest Rates
= (6.0% Y2 + 6.5% Y4)/(Y2 + Y4)
r2 = the weighted average of the Class Y-1, Class Y-3 and
Class Y-4 Certificate Interest Rates
= (7% (Y1 + Y3)+ 6.5% Y4)/(Y1 + Y3 + Y4)
Y1 = the principal balance of the Class Y-1 Regular
Interests after distributions on the prior Distribution
Date.
Y2 = the principal balance of the Class Y-2 Regular
Interests after distributions on the prior Distribution
Date.
Y3 = the principal balance of the Class Y-3 Regular
Interests after distributions on the prior Distribution
Date.
Y4 = the principal balance of the Class Y-4 Regular
Interests after distributions on the prior Distribution
Date.
DeltaY1 = the Class Y-1 Principal Reduction Amount.
DeltaY2 = the Class Y-2 Principal Reduction Amount.
DeltaY3 = the Class Y-3 Principal Reduction Amount.
DeltaY4 = the Class Y-4 Principal Reduction Amount.
P1 = the aggregate principal balance of the Class Y-1
and Class Z-1 Regular Interests after distributions on
the prior Distribution Date.
P2 = the aggregate principal balance of the Class Y-2
and Class Z-2 Regular Interests after distributions on
the prior Distribution Date.
P3 = the aggregate principal balance of the Class Y-3
and Class Z-3 Regular Interests after distributions on
the prior Distribution Date.
36
P4 = the aggregate principal balance of the Class Y-4
and Class Z-4 Regular Interests after distributions on
the prior Distribution Date.
DeltaP1 = the aggregate of the Class Y-1 and Class Z-1
Principal Reduction Amounts.
DeltaP2= the aggregate of the Class Y-2 and Class Z-2
Principal Reduction Amounts.
DeltaP3 = the aggregate of the Class Y-3 and Class Z-3
Principal Reduction Amounts.
DeltaP4 = the aggregate of the Class Y-4 and Class Z-4
Principal Reduction Amounts.
P9 = DIFF_P1 + P3
P9 = DIFF_P1 + DIFF_P3.
Y9 = Y1 + Y3
DIFF_Y9 = DIFF_Y1 + DIFF_Y3.
If DIFF_P1 = P1, DIFF_Y1 = Y1 and DIFF_Y3 = DIFF_Y9 -
DIFF_Y1.
If DIFF_P3 = P3, DIFF_Y3 = Y3 and DIFF_Y1 = DIFF_Y9 -
DIFF_Y3.
Otherwise, DIFF_Y1 = DIFF_Y9 (DIFF_P1 /DIFF_P9) and DIFF_Y3
= DIFF_Y9 (DIFF_P3 /DIFF_P9).
xxxxxx .0000
xxxxx0 = (R - R1)/(7% - R). If R6.5%, gamma1 is a non-
negative number unless its denominator is zero, in
which event it is undefined.
gamma2 = (R - 6.0%)/( R2 - R). If R<6.5%, gamma2 is a non-
negative number.
If gamma1 is undefined, DeltaY2 = X0, XxxxxX0 =
(Y9/P9)DeltaP9, and DeltaY4 = Y4.
If gamma2 is zero, DeltaY9 = X0, XxxxxX0 = (Y2/P2)DeltaP2,
and DeltaY4 = Y4.
In the remaining situations, DeltaY2, DeltaY9 and DeltaY4
shall be defined as follows:
I. If R6.5% and r1 R1, make the following additional
37
definitions:
kDeltaY4 = ((6.0% - R1)/(6.5% - R1))Y2 + X0
xXxxxxX0 is a number between Y4 and 0 such that (6.0%Y2 +
6.5%( Y4.- kDeltaY4))/(Y2 + Y4.- kDeltaY4) = R1.
Y8 = Y2 + Y4.- kDeltaY4
P8 = P2 + P4.
DIFF_Y8 = DIFF_Y2 + DIFF_Y4.- kDeltaY4
1. If Y9 - alpha(P9 - DeltaP9) 0, Y8- alpha(P8 - DeltaP8)
0, and gamma1(P8 - DeltaP8) < (P9 - DeltaP9), DeltaY9 = Y9 -
alphagamma1(P8 - DeltaP8) and DeltaY8 = Y8 - alpha(P8 -
DeltaP8).
2. If Y9 - alpha(P9 - DeltaP9) 0,
Y8 - alpha(P8 - DeltaP8) 0, and gamma1(P8 - DeltaP8)
(P9 - DeltaP9), DeltaY9 = Y9 - alpha(P9 - DeltaP9) and
DeltaY8 = Y8 - (alpha/gamma1)(P9 - DeltaP9).
3. If Y9 - alpha(P9 - DeltaP9) < 0,
Y8 - alpha(P8 - DeltaP8) 0, and Y8 - alpha(P8 - DeltaP8)
Y8 - (Y9/gamma1), DeltaY9 = Y9 - alphagamma1(P8 - DeltaP8)
and DeltaY8 = Y8 - alpha(P8 - DeltaP8).
4. If Y9 - alpha(P9 - DeltaP9) < 0, Y8 - (Y9/gamma1) 0,
and Y8 - alpha(P8 - DeltaP8) Y8 - (Y9/gamma1), DeltaY9 = 0
and DeltaY8 = Y8 - (Y9/gamma1).
5. If Y8 - alpha(P8 - DeltaP8) < 0, Y8 - (Y9/gamma1) < 0,
and Y9 - alpha(P9 - DeltaP9) Y9 - (gamma1Y8),
DeltaY9 = Y9 - (gamma1Y8) and DeltaY8 = 0.
6. If Y8 - alpha(P8 - DeltaP8) < 0,
Y9 - alpha(P9 - DeltaP9) 0, and Y9 - alpha(P9 - DeltaP9)
Y9 - (gamma1Y8), DeltaY9 = Y9 - alpha(P9 - DeltaP9) and
DeltaY8 = Y8 - (alpha/gamma1)(P9 - DeltaP9).
DIFF_Y2 = [Y2/(Y2 + Y4 - kDeltaY4)]DIFF_Y8
DIFF_Y4 = kDeltaY4 + [Y4/(Y2 + Y4 - kDeltaY4)]DIFF_Y8
The purpose of the foregoing definitional provisions
together with the related provisions allocating Realized
Losses and defining the Class Y and Class Z Principal
Distribution Amounts is to accomplish the following goals in
the following order of priority:
1. Making the ratio of Y9 to Y8 equal to gamma1 after
taking account of the allocation Realized Losses and the
distributions that will be made through end of the
38
Distribution Date to which such provisions relate and
assuring that the Principal Reduction Amount for each of the
Class Y-1, Class Y-2, Class Y-3, Class Y-4, Class Z-1 Class
Z-2, Class Z-3 and Class Z-4 Regular Interests is greater
than or equal to zero for such Distribution Date;
2. Making the Class Y-1 Principal Balance less than or
equal to 0.0005 of the sum of the Class Y-1 and Class Z-1
Principal Balances, the Class Y-2 Principal Balance less
than or equal to 0.0005 of the sum of the Class Y-2 and
Class Z-2 Principal Balances, the Class Y-3 Principal
Balance less than or equal to 0.0005 of the sum of the Class
Y-3 and Class Z-3 Principal Balances and the Class Y-4
Principal Balance less than or equal to 0.0005 of the sum of
the Class Y-4 and Class Z-4 Principal Balances in each case
after giving effect to allocations of Realized Losses and
distributions to be made through the end of the Distribution
Date to which such provisions relate; and
3. Making the larger of (a) the fraction whose numerator
is Y9 and whose denominator is the sum of Y9, the Class Z-1
Principal Balance and the Class Z-3 Principal Balance and
(b) the fraction whose numerator is Y8 and whose denominator
is the sum of Y8, the Class Z-2 Principal Balance and the
Class Z-4 Principal Balance as large as possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of Class Y Principal Reduction Amount to
accomplish both of goals 1 and 2 above, the amounts thereof
should be adjusted to so as to accomplish such goals within
the requirement that each Class Y Principal Reduction Amount
must be less than or equal to the sum of (a) the principal
portion of Realized Losses to be allocated on the related
Distribution Date for the related Loan Group remaining after
the allocation of such Realized Losses to the related Class
P-M Regular Interests and (b) the remainder of the REMIC I
Available Distribution Amount for the related Loan Group or
after reduction thereof by the distributions to be made on
such Distribution Date (i) to the related Class P-M Regular
Interests, (ii) to the related Class X-M Regular Interests
and (iii) in respect of interest on the related Class Y and
Class Z Regular Interests, or, if both of such goals cannot
be accomplished within such requirement, such adjustment as
is necessary shall be made to accomplish goal 1 within such
requirement. In the event of any conflict among the
provisions of the definition of the Class Y Principal
Reduction Amounts, such conflict shall be resolved on the
basis of the goals and their priorities set forth above
within the requirement set forth in the preceding sentence.
If the formula allocation of DIFF_Y8 between DIFF_Y2 and
DIFF_Y4 cannot be achieved because either DIFF_Y2 as so
defined is greater than DIFF_P2 or DIFF_Y4 as so defined is
greater than DIFF_P4, such an allocation shall be made as
39
close as possible to the formula allocation within the
requirement that DIFF_Y2 < DIFF_P2 and DIFF_Y4 < DIFF_P4.
II. If R6.5% and r1
