EXECUTION COPY
PHH MORTGAGE CAPITAL LLC,
Depositor
PHH MORTGAGE CORPORATION,
Master Servicer
CITIBANK, N.A.,
Trustee
POOLING AND SERVICING
AGREEMENT
Dated as of July 1, 2005
PHHMC Mortgage Pass-Through
Certificates, Series 2005-5
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
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Section 1.01
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Defined Terms.
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Section 1.02
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Accounting.
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ARTICLE II CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
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Section 2.01
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Conveyance of Mortgage
Loans.
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Section 2.02
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Acceptance of Trust Fund by the
Trustee.
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Section 2.03
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Repurchase or Substitution of
Mortgage Loans by the Sellers- Assignment of Interest in Additional
Collateral.
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Section 2.04
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Representations, Warranties and
Covenants of the Master Servicer.
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Section 2.05
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Representations and Warranties of
the Depositor.
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Section 2.06
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Purpose and Powers of the
Trust.
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Section 2.07
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Issuance of Certificates.
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ARTICLE III ADMINISTRATION AND
SERVICING OF THE TRUST FUND
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Section 3.01
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Master Servicer to Act as Master
Servicer.
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Section 3.02
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Sub-Servicing Agreements Between the
Master Servicer and Sub-Servicers.
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Section 3.03
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Successor Sub-Servicers.
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Section 3.04
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Liability of the Master
Servicer.
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Section 3.05
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No Contractual Relationship Between
Sub-Servicers and Trustee or Certificateholders.
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Section 3.06
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Assumption or Termination of
Sub-Servicing Agreements by Trustee.
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Section 3.07
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Collection of Certain Mortgage Loan
Payments.
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Section 3.08
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Sub-Servicing Accounts.
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Section 3.09
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Collection of Taxes, Assessments and
Similar Items; Servicing Accounts.
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Section 3.10
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Collection Account and Distribution
Account.
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Section 3.11
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Withdrawals from the Collection
Account and Distribution Account.
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Section 3.12
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Investment of Funds in the
Collection Account, Servicing Accounts and the Distribution
Account.
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Section 3.13
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Maintenance of the Primary Insurance
Policies; Collections Thereunder.
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Section 3.14
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Maintenance of Hazard Insurance and
Errors and Omissions and Fidelity Coverage.
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Section 3.15
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Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
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Section 3.16
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Realization Upon Defaulted Mortgage
Loans.
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Section 3.17
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Trustee to Cooperate; Release of
Mortgage Files.
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Section 3.18
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Servicing Compensation.
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Section 3.19
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Reports to the Trustee; Collection
Account Statements.
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Section 3.20
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Statement as to
Compliance.
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Section 3.21
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Independent Public
Accountants’ Servicing Report.
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Section 3.22
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Access to Certain
Documentation.
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Section 3.23
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Title, Management and Disposition of
REO Property.
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Section 3.24
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Obligations of the Master Servicer
in Respect of Prepayment Interest Shortfalls.
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Section 3.25
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Administration of Buydown
Funds.
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Section 3.26
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Obligations of the Master Servicer
in Respect of Loan Rates and Monthly Payments.
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ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS
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Section 4.01
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Distribution Account;
Distributions.
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Section 4.02
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Statements to
Certificateholders.
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Section 4.03
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Remittance Reports; Advances by the
Master Servicer.
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Section 4.04
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Allocation of Realized
Losses.
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Section 4.05
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Information Reports to Be Filed by
the Master Servicer.
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Section 4.06
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Compliance with Withholding
Requirements.
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Section 4.07
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[Reserved].
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Section 4.08
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Limited Purpose Surety
Bond.
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ARTICLE V THE
CERTIFICATES
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Section 5.01
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The Certificates.
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Section 5.02
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Registration of Transfer and
Exchange of Certificates.
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Section 5.03
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Mutilated. Destroyed. Lost or Stolen
Certificates.
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Section 5.04
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Persons Deemed Owners.
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Section 5.05
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Appointment of Paying
Agent.
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ARTICLE VI THE MASTER SERVICER AND
THE DEPOSITOR
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Section 6.01
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Liability of the Master Servicer and
the Depositor.
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Section 6.02
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Merger or Consolidation of or
Assumption of the Obligations of the Master Servicer or the
Depositor.
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Section 6.03
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Limitation on Liability of the
Master Servicer and Others.
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Section 6.04
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Master Servicer Not to
Resign.
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Section 6.05
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Delegation of Duties.
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ARTICLE VII DEFAULT
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Section 7.01
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Master Servicer Events of
Termination.
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Section 7.02
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Trustee to Act; Appointment of
Successor.
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Section 7.03
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Waiver of Master Servicer Events of
Termination.
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Section 7.04
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Notification to
Certificateholders.
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Section 7.05
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Survivability of Master Servicer
Liabilities.
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ARTICLE VIII THE TRUSTEE
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Section 8.01
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Duties of Trustee.
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Section 8.02
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Certain Matters Affecting the
Trustee.
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Section 8.03
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Trustee Not Liable for Certificates
or Mortgage Loans.
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Section 8.04
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Trustee May Own
Certificates.
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Section 8.05
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Master Servicer to Pay Trustee
Expenses; Trustee Fees.
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Section 8.06
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Eligibility Requirements for
Trustee.
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Section 8.07
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Resignation or Removal of
Trustee.
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Section 8.08
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Successor Trustee.
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Section 8.09
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Merger or Consolidation of
Trustee.
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Section 8.10
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Appointment of Co-Trustee or
Separate Trustee.
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Section 8.11
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Limitation of Liability.
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Section 8.12
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Trustee May Enforce Claims Without
Possession of Certificates.
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Section 8.13
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Suits for Enforcement.
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Section 8.14
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Waiver of Bond
Requirement.
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Section 8.15
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Waiver of Inventory. Accounting and
Appraisal Requirement.
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Section 8.16
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Right of Trustee in Capacity of
Certificate Registrar or Paying Agent.
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Section 8.17
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Periodic Filings.
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ARTICLE IX REMIC
ADMINISTRATION
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Section 9.01
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REMIC Administration.
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Section 9.02
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Prohibited Transactions and
Activities.
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Section 9.03
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Master Servicer and Trustee
Indemnification.
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ARTICLE X TERMINATION
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Section 10.01
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Termination.
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Section 10.02
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Additional Termination
Requirements.
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ARTICLE XI [RESERVED]
ARTICLE XII MISCELLANEOUS
PROVISIONS
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Section 12.01
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Amendment.
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Section 12.02
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Recordation of Agreement:
Counterparts.
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Section 12.03
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Limitation on Rights of
Certificateholders.
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Section 12.04
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Governing Law:
Jurisdiction.
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Section 12.05
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Notices.
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Section 12.06
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Severability of
Provisions.
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Section 12.07
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Article and Section
References.
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Section 12.08
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Notice to the Rating
Agency.
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Section 12.09
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Further Assurances.
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Section 12.10
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Benefits of Agreement.
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Section 12.11
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Acts of
Certificateholders.
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EXHIBITS :
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Exhibit A
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Form of Class A
Certificates
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Exhibit B
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[reserved]
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Exhibit C-1
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Form of Class R
Certificates
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Exhibit C-2
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Form of Class B
Certificates
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Exhibit D
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Mortgage Loan Schedule
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Exhibit E
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Form of Request for
Release
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Exhibit F-1
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Form of Rule 144A Representation
Letter
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Exhibit F-2
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Form of Transferor
Certificate
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Exhibit F-3
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Form of Transferee Representation
Letter
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Exhibit F-4
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Form of Transfer Affidavit and
Agreement and Form of Transferor Affidavit
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Exhibit G-1
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Form of ERISA Representation Letter
(Class B-4, Class B-5 and Class B-6)
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Exhibit G-2
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Form of ERISA Representation Letter
(Class B-1, Class B-2 and Class B-3)
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Exhibit H
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Form of Lost Note
Affidavit
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Exhibit I-1
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Form of Trustee’s Initial
Certification
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Exhibit I-2
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Form of Trustee’s Final
Certification
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Exhibit J
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Mortgage Loan Purchase
Agreement
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Exhibit K
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Assignment, Assumption and
Recognition Agreement (Additional Collateral Servicing
Agreement)
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Exhibit L
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Planned Principal
Balances
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Exhibit M
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Form of Form 10-K
Certificate
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Exhibit N
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Form of Back-up Certification to
Form 10-K Certificate
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This Pooling and Servicing Agreement
is dated as of July 1, 2005 (the “Agreement”), among
PHH MORTGAGE CAPITAL LLC, as depositor (the
“Depositor”), PHH MORTGAGE CORPORATION, as master
servicer (the “Master Servicer”) and CITIBANK, N.A., as
trustee (the “Trustee”).
PRELIMINARY STATEMENT:
The Depositor intends to sell
mortgage pass-through certificates (collectively, the
“Certificates”), to be issued hereunder in multiple
classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein). As
provided herein, the Trustee will make, in accordance with Section
9.01, an election to treat the entire segregated pool of assets
described in the definition of Trust Fund (as defined herein), and
subject to this Agreement (including the Mortgage Loans), as two
real estate mortgage investment conduits (each a
“REMIC”) for federal income tax purposes.
REMIC I
The following table sets forth (or
describes) the Class designation, Pass-Through Rate and
Uncertificated Principal Balance, for each Class of REMIC I Regular
Interest comprising the interests in REMIC I created
hereunder:
|
REMIC I Regular
Interest
|
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Uncertificated
Principal Balance
|
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Uncertificated
Pass-Through Rate
(1)
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Assumed Final
Maturity Date
(2)
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A-1
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$
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48,340,473.00
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Variable Rate
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August 18, 2035
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A-2
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$
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25,084,223.00
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Variable Rate
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August 18, 2035
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A-3
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$
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31,998,697.00
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Variable Rate
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August 18, 2035
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A-4
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$
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2,370,814.00
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Variable Rate
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August 18, 2035
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A-5
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$
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4,530,291.00
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Variable Rate
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August 18, 2035
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A-6
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$
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16,437,646.00
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Variable Rate
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August 18, 2035
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R-II Interest
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$
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100.00
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Variable Rate
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August 18, 2035
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B-1
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$
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6,164,155.00
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Variable Rate
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August 18, 2035
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B-2
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$
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890,378.00
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Variable Rate
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August 18, 2035
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B-3
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$
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410,944.00
|
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Variable Rate
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August 18, 2035
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B-4
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$
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342,453.00
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Variable Rate
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August 18, 2035
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B-5
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$
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205,472.00
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Variable Rate
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August 18, 2035
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B-6
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$
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205,469.76
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Variable Rate
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August 18, 2035
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(1)
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Calculated in accordance with the definition of
“Uncertificated Pass-Through Rate” herein.
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(2)
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For purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury regulations, the Distribution Date in the month
following the month of the maturity date for the Mortgage Loan with
the latest maturity date has been designated as the “latest
possible maturity date” for each REMIC I Regular
Interest.
|
REMIC II
The following table sets forth (or
describes) the Class designation, Pass-Through Rate and Original
Certificate Principal Balance for each Class of Certificates
comprising the interests in the Trust Fund created
hereunder:
|
Class
|
|
Original
Certificate
Principal Balance
|
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Initial Pass-
Through Rate
|
|
Assumed Final
Maturity Dates
(6)
|
|
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A-1
|
|
$
|
48,340,473.00
|
|
Variable Rate
(1)
|
|
August 18, 2035
|
|
|
A-2
|
|
$
|
25,084,223.00
|
|
Variable Rate
(2)
|
|
August 18, 2035
|
|
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A-3
|
|
$
|
31,998,697.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
A-4
|
|
$
|
2,370,814.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
A-5
|
|
$
|
4,530,291.00
|
|
Variable Rate
(3)
|
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August 18, 2035
|
|
|
A-6 (4)
|
|
$
|
16,437,646.00
|
|
Variable Rate
(5)
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August 18, 2035
|
|
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R-I
|
|
$
|
100.00
|
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Variable Rate
(3)
|
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August 18, 2035
|
|
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R-II
|
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$
|
100.00
|
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Variable Rate
(3)
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August 18, 2035
|
|
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B-1
|
|
$
|
6,164,155.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
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B-2
|
|
$
|
890,378.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
B-3
|
|
$
|
410,944.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
B-4
|
|
$
|
342,453.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
B-5
|
|
$
|
205,472.00
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
B-6
|
|
$
|
205,469.76
|
|
Variable Rate
(3)
|
|
August 18, 2035
|
|
|
(1)
|
Varies according to (i) the weighted average of
the Net Mortgage Rate on each Mortgage Loan minus (ii) 0.22% per
annum.
|
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(2)
|
Varies according to (i) the weighted average of
the Net Mortgage Rate on each Mortgage Loan minus (ii) 1.08% per
annum.
|
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(3)
|
Varies according to the weighted average of the
Net Mortgage Rate on each Mortgage Loan.
|
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(4)
|
Varies according to the sum of (i) the weighted
average of the Net Mortgage Rate on each Mortgage Loan, (ii) 0.22%
per annum multiplied by a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-1 Certificates and the
denominator of which is the Certificate Principal Balance of the
Class A-6 Certificates and (ii) 1.08% per annum multiplied by a
fraction, the numerator of which is the Certificate Principal
Balance of the Class A-2 Certificates and the denominator of which
is the Certificate Principal Balance of the Class A-6
Certificates.
|
|
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(5)
|
For federal income tax purposes, the Class A-6
Certificates represent ownership of three components which are
regular interests in REMIC II: the Class A-6A Component, the Class
A-6B Component and the Class A-6C Component. The Class A-6A
Component has a principal balance equal to the Certificate
Principal Balance of the Class A-6 Certificates and a Pass-Through
Rate as set forth herein. The Class A-6B Component is an interest
only component which has a Pass-Through Rate as set forth herein
and a notional amount equal to the Uncertificated Principal Balance
of REMIC I Regular Interest A-1. The Class A-6C Component is an
interest only component which has a Pass-Through Rate as set forth
herein and a notional amount equal to the Uncertificated Principal
Balance of REMIC I Regular Interest A-2.
|
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(6)
|
For purposes of Section 1.860G-1(a)(4)(iii) of
the Treasury regulations, the Distribution Date in the month
following the month of the maturity date for the Mortgage Loan with
the latest maturity date has been designated as the “latest
possible maturity date” for each Regular
Certificate.
|
ARTICLE I
DEFINITIONS
|
Section 1.01
|
Defined Terms.
|
Whenever used in this Agreement or
in the Preliminary Statement, the following words and phrases,
unless the context otherwise requires, shall have the meanings
specified in this Article. Unless otherwise specified, interest
will be calculated for all Certificates on the basis of a 360-day
year consisting of twelve 30-day months.
“1933 Act”: The
Securities Act of 1933, as amended.
“Account”: Any of the
Collection Account and Distribution Account.
“Accretion Termination
Date”: With respect to the Class A-4 Certificates, the Class
A-4 Accretion Termination Date, with respect to the Class A-5
Certificates, the Class A-5 Accretion Termination Date and with
respect to the Class A-6 Certificates, the Class A-6 Accretion
Termination Date.
“Accrual Distribution
Amount”: With respect to the Class A-4 Certificates, the
Class A-4 Accrual Distribution Amount, with respect to the Class
A-5 Certificates, the Class A-5 Accrual Distribution Amount and
with respect to the Class A-6 Certificates, the Class A-6 Accrual
Distribution Amount.
“Additional Collateral”:
(i) With respect to any Mortgage 100 K Loan, the Securities Account
and the financial assets held therein subject to a security
interest pursuant to the related Mortgage 100 K Pledge Agreement,
or (ii) with respect to any Parent Power® Mortgage Loan, the
related Parent Power® Agreement and collateral pledged
pursuant thereto.
“Additional Collateral
Agreements”: Each Mortgage 100 K Pledge Agreement, Parent
Power® Guaranty and Security Agreement for Securities Account
and Control Agreement, as applicable, for each Additional
Collateral Mortgage Loan.
“Additional Collateral
Mortgage Loan”: A Mortgage Loan that is supported by
Additional Collateral.
“Additional Collateral
Servicer”: MLCC.
“Additional Collateral
Servicing Agreement”: The Additional Collateral Transfer and
Servicing Agreement, dated as of November 1, 2001, between MLCC and
the Master Servicer.
“Advance”: As to any
Mortgage Loan or REO Property, any advance made by the Master
Servicer in respect of any Distribution Date pursuant to Section
4.03.
“Adverse REMIC Event”:
As defined in Section 9.01(f) hereof.
“Affiliate”: With
respect to any Person, any other Person controlling, controlled by
or under common control with such Person. For purposes of this
definition, “control” means the
power to direct the management and
policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise and
“controlling” and “controlled” shall have
meanings correlative to the foregoing.
“Agreement”: This
Pooling and Servicing Agreement and all amendments and supplements
hereto.
“Assignment”: An
assignment of Mortgage, notice of transfer or equivalent
instrument, in recordable form, which is sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is
located to reflect or record the sale of the Mortgage.
“Assumed Final Maturity
Date”: As to each Class of Certificates, the date set forth
as such in the Preliminary Statement.
“Available Distribution
Amount”: With respect to any Distribution Date and the
Mortgage Loans, an amount equal to the excess of (i) the sum of (a)
the aggregate of the related Monthly Payments received on or prior
to the related Determination Date, (b) Liquidation Proceeds,
Insurance Proceeds, Subsequent Recoveries and other unscheduled
recoveries of principal and interest in respect of the Mortgage
Loans, and Principal Prepayments during the related Prepayment
Period, (c) the aggregate of any amounts received in respect of a
related REO Property withdrawn from any REO Account and deposited
in the Collection Account for such Distribution Date, (d) the
aggregate of any amounts deposited in the Collection Account by the
Master Servicer in respect of related Prepayment Interest
Shortfalls for such Distribution Date and (e) the aggregate of any
related Advances made by the Master Servicer for such Distribution
Date, over (ii) the sum of (a) related amounts reimbursable or
payable to the Master Servicer pursuant to Section 3.10, (b)
related Stayed Funds, (c) related amounts deposited in the
Collection Account or the Distribution Account, as the case may be,
in error, (d) any Extraordinary Trust Fund Expenses and (e) the
Trustee Fee. The Available Distribution Amount shall also be
increased by any Required Surety Payment.
“Bankruptcy Amount”: As
of any date of determination prior to the first anniversary of the
Cut-off Date, an amount equal to the excess, if any, of (A) $50,000
over (B) the aggregate amount of Bankruptcy Losses allocated solely
to one or more specific Classes of Certificates in accordance with
Section 4.02. As of any date of determination on or after the first
anniversary of the Cut-off Date, an amount equal to the excess, if
any, of (1) the lesser of (a) the Bankruptcy Amount calculated as
of the close of business on the Business Day immediately preceding
the most recent anniversary of the Cut-off Date coinciding with or
preceding such date of determination (or, if such date of
determination is an anniversary of the Cut-off Date, the Business
Day immediately preceding such date of determination) (for purposes
of this definition, the “Relevant Anniversary”) and (b)
the greater of:
(A) the
greater of (i) 0.0006 times the aggregate principal balance of all
the Mortgage Loans in the Mortgage Pool as of the Relevant
Anniversary having a Loan-to-Value Ratio at origination which
exceeds 75% and (ii) $50,000; and (B) the greater of (i) the
product of (x) an amount equal to the largest difference in the
related Monthly Payment for any Non-Primary Residence Loan
remaining in the Mortgage Pool which had an original Loan-to-Value
Ratio greater than 80% that would result if the Net Mortgage Rate
thereof was equal to the greater of (I) 5% or (II) the weighted
average
(based on the principal balance of
the Mortgage Loans as of the Relevant Anniversary) of the Net
Mortgage Rates of all Mortgage Loans as of the Relevant Anniversary
less 1.25% per annum, (y) a number equal to the weighted average
remaining term to maturity, in months, of all Mortgage Loans with a
Loan-to-Value Ratio of greater than 80% remaining in the Mortgage
Pool as of the Relevant Anniversary, and (z) one plus the quotient
of the number of all Non-Primary Residence Loans with a
Loan-to-Value Ratio of greater than 80% remaining in the Mortgage
Pool divided by the total number of outstanding Mortgage Loans in
the Mortgage Pool as of the Relevant Anniversary, and (ii)
$50,000,
over (2) the aggregate amount of
Bankruptcy Losses allocated solely to one or more specific Classes
of Certificates in accordance with Section 4.02 since the Relevant
Anniversary.
The Bankruptcy Amount may be further
reduced by the Master Servicer (including accelerating the manner
in which such coverage is reduced) provided that prior to any such
reduction, the Master Servicer shall (i) obtain written
confirmation from the Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such
Rating Agency below the lower of the then current rating or the
rating assigned to such Certificates as of the Closing Date by such
Rating Agency and (ii) provide a copy of such written confirmation
to the Trustee.
“Bankruptcy Code”: The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code),
as amended.
“Bankruptcy Losses”:
Losses that are incurred as a result of Debt Service Reductions and
Deficient Valuations.
“Book-Entry
Certificates”: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the
ownership of which is reflected on the books of the Depository or
on the books of a Person maintaining an account with the Depository
(directly, as a “Depository Participant”, or
indirectly, as an indirect participant in accordance with the rules
of the Depository and as described in Section 5.02 hereof). On the
Closing Date, the Certificates (other than the Class R, Class B-4,
Class B-5 and Class B-6 Certificates) shall be Book-Entry
Certificates.
“Business Day”: Any day
other than (a) a Saturday or Sunday, (b) a legal holiday in the
State of New Jersey or the State of New York, or (c) a day on which
banking or savings and loan institutions in the State of New Jersey
or the State of New York are authorized or obligated by law or
executive order to be closed.
“Buydown Account”: The
custodial account or accounts created and maintained pursuant to
Section 3.25.
“Buydown Agreement”: An
agreement between the applicable originator and a Mortgagor, or an
agreement among such originator, a Mortgagor and an employer of a
relocated Mortgagor which, in each case, provides for the
application of Buydown Funds.
“Buydown Funds”: In
respect of any Buydown Mortgage Loan, any amount contributed by the
related originator or the employer of a relocated borrower in order
to enable the Mortgagor to reduce the payments required to be made
from the Mortgagor’s funds during the Buydown Period. The
Buydown Funds are not part of the Trust Fund prior to deposit into
the Collection Account or the Distribution Account.
“Buydown Mortgage Loan”:
Any Mortgage Loan in respect of which, pursuant to a Buydown
Agreement, (i) the Mortgagor pays less than the full monthly
payment specified in the Mortgage Note during the Buydown Period
and (ii) the difference between the payments required under such
Buydown Agreement and the Mortgage Note is paid from the related
Buydown Funds.
“Buydown Period”: The
period during which Buydown Funds are required to be applied to the
related Buydown Mortgage Loans as provided in Section
3.25.
“Cash-Out Refinancing”:
A Refinanced Mortgage Loan the proceeds of which were more than 2%
or $2,000 in excess of the principal balance of any existing first
mortgage or seasoned subordinate mortgage on the related Mortgaged
Property and related closing costs.
“Cash Liquidation”: As
to any defaulted Mortgage Loan other than REO Property which has
been acquired by the Master Servicer on behalf of the Trustee for
the benefit of the Certificateholders, a determination by the
Master Servicer that it has received all Insurance Proceeds,
Liquidation Proceeds and other payments or cash recoveries which
the Master Servicer reasonably or in good faith expects to be
finally recoverable with respect to such Mortgage Loan, plus, with
respect to a defaulted Mortgage Loan that is an Additional
Collateral Mortgage Loan, the amount realized on the related
Additional Collateral with respect to such Mortgage Loan in
accordance with Section 3.16.
“Certificate”: Any
Regular Certificate or Class R Certificate.
“Certificateholder” or
“Holder”: The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of a Class R
Certificate for any purpose hereof.
“Certificate Owner”:
With respect to each Book-Entry Certificate, any beneficial owner
thereof.
“Certificate Principal
Balance”: With respect to any Certificate as of any date of
determination, (x) the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date
of determination, plus (y) (i) in the case of the Class A-4
Certificates, an amount equal to the Monthly Interest Distributable
Amount added to the Certificate Principal Balance of the Class A-4
Certificates on the Distribution Date immediately prior to such
date of determination on or prior to the Class A-4 Accretion
Termination Date, (ii) in the case of the Class A-5 Certificates,
an amount equal to the Monthly Interest Distributable Amount added
to the Certificate Principal Balance of the Class A-5 Certificates
on the Distribution Date immediately prior to such date of
determination on or prior to the Class A-5 Accretion Termination
Date and (iii) in the case of the Class A-6 Certificates, an amount
equal to the Monthly Interest Distributable Amount added to the
Certificate Principal Balance of the
Class A-6 Certificates on the
Distribution Date immediately prior to such date of determination
on or prior to the Class A-6 Accretion Termination Date plus (z) in
the case of the Class B Certificates, any Subsequent Recoveries
added to the Certificate Principal Balance of any such Certificate
pursuant to Section 4.01(g), reduced by the aggregate of (a) all
distributions of principal made thereon on such immediately prior
Distribution Date and (b) without duplication of amounts described
in clause (a) above, reductions in the Certificate Principal
Balance thereof in connection with allocations thereto of Realized
Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses
on such immediately prior Distribution Date (or, in the case of any
date of determination up to and including the initial Distribution
Date, the initial Certificate Principal Balance of such
Certificate, as stated on the face thereon); provided, however,
that the Certificate Principal Balance of each Subordinate
Certificate of the Class of Subordinate Certificates outstanding
with the highest numerical designation at any given time shall be
calculated to equal the Percentage Interest evidenced by such
Certificate multiplied by the excess, if any, of (A) the then
aggregate Stated Principal Balance of the Mortgage Loans over (B)
the then aggregate Certificate Principal Balances of all other
Classes of Certificates then outstanding.
“Certificate Register”
and “Certificate Registrar”: The register maintained
and registrar appointed pursuant to Section 5.02 hereof.
“Class”: Collectively,
Certificates which have the same priority of payment and bear the
same class designation and the form of which is identical except
for variation in the Percentage Interest evidenced
thereby.
“Class A Certificate”:
Any of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 or
Class A-6 Certificates as designated on the face thereof
substantially in the form annexed hereto as Exhibit A, executed by
the Trustee and authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and
therein.
“Class A
Certificateholder”: Any Holder of a Class A
Certificate.
“Class A-4 Accretion
Termination Date”: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal
Balance of the Class A-2 Certificates and Class A-3 Certificates
has been reduced to zero and (ii) the Credit Support Depletion
Date.
“Class A-4 Accrual
Distribution Amount”: With respect to each Distribution Date
prior to the Class A-4 Accretion Termination Date, an amount equal
to the aggregate amount of Monthly Interest Distributable Amount on
the Class A-4 Certificates, for such date, to the extent added to
the Certificate Principal Balance thereof pursuant to Section
4.01(i); provided that, with respect to each Distribution Date on
or after the Class A-4 Accretion Termination Date, the Monthly
Interest Distributable Amount on the Class A-4 Certificates for
such date remaining after reduction of the aggregate Certificate
Principal Balance of the Class A-2 Certificates and Class A-3
Certificates to zero on the Class A-4 Accretion Termination Date
will be payable to the Class A-4 Certificateholders pursuant to
Section 4.01(c)(i) hereof; and provided further, that if the Class
A-4 Accretion Termination Date is the Credit Support Depletion
Date, the entire amount of Monthly Interest Distributable Amount on
the Class A-4 Certificates for that date will be payable to the
Class A-4 Certificateholders pursuant to Section 4.01(c)(i)
hereof.
“Class A-5 Accretion
Termination Date”: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal
Balance of the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates has been reduced to zero and (ii) the Credit Support
Depletion Date.
“Class A-5 Accrual
Distribution Amount”: With respect to each Distribution Date
prior to the Class A-5 Accretion Termination Date, an amount equal
to the aggregate amount of Monthly Interest Distributable Amount on
the Class A-5 Certificates, for such date, to the extent added to
the Certificate Principal Balance thereof pursuant to Section
4.01(j); provided that, with respect to each Distribution Date on
or after the Class A-5 Accretion Termination Date, the Monthly
Interest Distributable Amount on the Class A-5 Certificates for
such date remaining after reduction of the aggregate Certificate
Principal Balance of the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates to zero on the Class A-5 Accretion Termination
Date will be payable to the Class A-5 Certificateholders pursuant
to Section 4.01(c)(i) hereof; and provided further, that if the
Class A-5 Accretion Termination Date is the Credit Support
Depletion Date, the entire amount of Monthly Interest Distributable
Amount on the Class A-5 Certificates for that date will be payable
to the Class A-5 Certificateholders pursuant to Section 4.01(c)(i)
hereof.
“Class A-6 Accretion
Termination Date”: The earliest to occur of (i) the
Distribution Date on which the aggregate Certificate Principal
Balance of the Class A-1, Class A-2, Class A-3, Class A-4 and Class
A-5 Certificates has been reduced to zero, (ii) the Credit Support
Depletion Date and (iii) the Distribution Date occurring in August
2010.
“Class A-6 Accrual
Distribution Amount”: With respect to each Distribution Date
prior to the Class A-6 Accretion Termination Date, an amount equal
to the aggregate amount of Monthly Interest Distributable Amount on
the Class A-6 Certificates, for such date, to the extent added to
the Certificate Principal Balance thereof pursuant to Section
4.01(k); provided that, with respect to each Distribution Date on
or after the Class A-6 Accretion Termination Date, the Monthly
Interest Distributable Amount on the Class A-6 Certificates for
such date remaining after reduction of the aggregate Certificate
Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Certificates to zero on the Class A-6 Accretion
Termination Date will be payable to the Class A-6
Certificateholders pursuant to Section 4.01(c)(i) hereof; and
provided further, that if the Class A-6 Accretion Termination Date
is the Credit Support Depletion Date or the Distribution Date
occurring in August 2010, the entire amount of Monthly Interest
Distributable Amount on the Class A-6 Certificates for that date
will be payable to the Class A-6 Certificateholders pursuant to
Section 4.01(c)(i) hereof.
“Class A-6A Component”:
A regular interest in REMIC II which has a principal amount which
will at all times be equal to the Certificate Principal Balance of
the Class A-6 Certificates and a per annum Pass-Through Rate as set
forth herein.
“Class A-6A Component
Principal Amount”: An amount equal to the Certificate
Principal Balance of the Class A-6 Certificates.
“Class A-6B Component”:
A regular interest in REMIC II which has a notional amount which
will at all times be equal to the Uncertificated Principal Balance
of REMIC I Regular Interest A-1, a per annum Pass-Through Rate as
set forth herein, and no principal amount.
“Class A-6B Component Notional
Amount”: An amount equal to the Uncertificated Principal
Balance of REMIC I Regular Interest A-1.
“Class A-6C Component”:
A regular interest in REMIC II which has a notional amount which
will at all times be equal to the Uncertificated Principal Balance
of REMIC I Regular Interest A-2, a per annum Pass-Through Rate as
set forth herein, and no principal amount.
“Class A-6C Component Notional
Amount”: An amount equal to the Uncertificated Principal
Balance of REMIC I Regular Interest A-2.
“Class B Certificate”:
Any one of the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 or Class B-6 Certificates as designated on the face thereof
substantially in the form annexed hereto as Exhibit C-2, executed
by the Trustee and authenticated and delivered by the Trustee,
representing the right to distributions as set forth herein and
therein.
“Class B
Certificateholder”: Any Holder of a Class B
Certificate.
“Class B Percentage”:
The Class B-1 Percentage, Class B-2 Percentage, Class B-3
Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6
Percentage.
“Class B-1 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-1 Percentage
is approximately 4.50%.
“Class B-2 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-2 Percentage
is approximately 0.65%.
“Class B-3 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-3
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-3 Percentage
is approximately 0.30%.
“Class B-4 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-4
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-4 Percentage
is approximately 0.25%.
“Class B-5 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-5
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-5 Percentage
is approximately 0.15%.
“Class B-6 Percentage”:
With respect to any Distribution Date, the lesser of 100% and a
fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Class B-6
Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately
prior to such Distribution Date. The initial Class B-6 Percentage
is approximately 0.15%.
“Class R Certificates”:
The Class R-I Certificates and Class R-II Certificates executed by
the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-1
and each evidencing the ownership of an interest designated as the
Residual Interest in the related REMIC.
“Class Subordination
Percentage”: With respect to any Distribution Date and each
Class of Subordinate Certificates, the fraction (expressed as a
percentage) the numerator of which is the Certificate Principal
Balance of such Class of Subordinate Certificates immediately prior
to such Distribution Date and the denominator of which is the
aggregate of the Certificate Principal Balances of all Classes of
Certificates immediately prior to such Distribution
Date.
“Closing Date”: July 28,
2005.
“Code”: The Internal
Revenue Code of 1986, as amended.
“Collection Account”:
The account or accounts created and maintained by the Master
Servicer pursuant to Section 3.10, which shall be entitled
“PHH Mortgage Corporation, as Master Servicer for Citibank,
N.A., as Trustee, in trust for registered Holders of PHHMC Mortgage
Pass-Through Certificates, Series 2005-5”, and which must be
an Eligible Account.
“Commission”: The
Securities and Exchange Commission.
“Compensating Interest”:
As defined in Section 3.24 hereof.
“Condemnation Proceeds”:
All awards or settlements in respect of a taking of a Mortgaged
Property by exercise of the power of eminent domain or
condemnation.
“Control Agreement”:
With respect to each Mortgage 100 K Loan, the Merrill Lynch Pledged
Collateral Account Control Agreement between the guarantor or
mortgagor, as applicable, the Additional Collateral Servicer and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, pursuant to
which the guarantor or mortgagor, as applicable, has granted a
security interest in a Securities Account.
“Cooperative”: A
corporation that has been formed for the purpose of cooperative
apartment ownership.
“Cooperative Assets”:
Shares issued by Cooperatives, the related Cooperative Lease and
any other collateral securing the Cooperative Loans.
“Cooperative Building”:
The building and other property owned by a Cooperative.
“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
Assets, which lease or agreement confers an exclusive right to the
holder of such Cooperative Assets to occupy such
apartment.
“Cooperative Loan”: The
indebtedness of a Mortgagor evidenced by a Mortgage Note which is
secured by Cooperative Assets and which is being sold to the
Depositor pursuant to this Agreement, the Mortgage Loans so sold
being identified in the Mortgage Loan Schedule.
“Cooperative Unit”: A
specific dwelling unit in a Cooperative Building as to which
exclusive occupancy rights have been granted pursuant to a
Lease.
“Corporate Trust
Office”: The principal corporate trust office of the Trustee
at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office
at the date of the execution of this instrument is located, for
Certificate transfer purposes, at 111 Wall Street, 15 th
Floor, Attn: Securities Window, New York, New York 10005,
Attention: PHHMC, Series 2005-5, or at such other address as the
Trustee may designate from time to time by notice to the
Certificateholders, the Depositor and the Master
Servicer.
“Corresponding Certificated
Interests”: With respect to each REMIC I Regular Interest,
the Class with the same designation.
“Credit Support Depletion
Date”: The first Distribution Date on which the Senior
Percentage equals 100%.
“Curtailment”: Any
Principal Prepayment made by a Mortgagor which is not a Principal
Prepayment in Full.
“Cut-off Date”: July 1,
2005.
“Cut-off Date Principal
Balance”: With respect to any Mortgage Loan, the unpaid
principal balance thereof as of the Cut-off Date (or as of the
applicable date of substitution with respect to an Eligible
Substitute Mortgage Loan).
“Debt Service
Reduction”: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code,
except such a reduction resulting from a Deficient
Valuation.
“Defective Mortgage
Loan”: A Mortgage Loan replaced or to be replaced by one or
more Eligible Substitute Mortgage Loans.
“Deficient Valuation”:
With respect to any Mortgage Loan, a valuation of the related
Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the
Mortgage Loan, which valuation results from a proceeding initiated
under the Bankruptcy Code.
“Definitive
Certificates”: As defined in Section 5.02(c)
hereof.
“Delinquent”: As used
herein, a Mortgage Loan is considered to be: “one
month” delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last
Business Day immediately prior to the next following monthly
scheduled due date; “two months” delinquent when a
payment due on any scheduled due date remains unpaid as of the
close of business on the last Business Day immediately prior to the
second following monthly scheduled due date; and so on. The
determination as to whether a Mortgage Loan falls into these
categories is made as of the close of business on the last Business
Day of each month. For example, a Mortgage Loan with a payment due
on July 1 that remained unpaid as of the close of business on July
31 would then be considered to be one month delinquent. Delinquency
information as of the Cut-off Date is determined and prepared as of
the close of business on the last Business Day immediately prior to
the Cut-off Date.
“Depositor”: PHH
Mortgage Capital LLC, a Delaware limited liability company, or any
successor in interest.
“Depository”: The
initial Depository shall be The Depository Trust Company, whose
nominee is Cede & Co., or any other organization registered as
a “clearing agency” pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall
initially be the registered Holder of the Book-Entry Certificates.
The Depository shall at all times be a “clearing
corporation” as defined in Section 8-102(3) of the Uniform
Commercial Code of the State of New York.
“Depository Agreement”:
With respect to any Book-Entry Certificates, either of the
agreements among the Depositor, the Trustee and the initial
Depository, to be dated on or about the Closing Date.
“Depository
Participant”: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited
with the Depository.
“Determination Date”:
With respect to any Distribution Date, the 8th day of the calendar
month in which such Distribution Date occurs or, if such 8th day is
not a Business Day, the Business Day immediately preceding such 8th
day.
“Directly Operate”: With
respect to any REO Property, the furnishing or rendering of
services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon
or any use of such REO Property in a trade or business conducted by
the Trust Fund other than through an Independent Contractor,
provided, however, that the Trustee (or the Master Servicer on
behalf of the Trustee) shall not be considered to Directly Operate
an REO Property solely because the Trustee (or the Master Servicer
on behalf of the Trustee) establishes rental
terms, chooses tenants, enters into
or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to
such REO Property.
“Disqualified
Organization”: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the
foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the
Freddie Mac or any successor thereto, a majority of its board of
directors is not selected by such governmental unit), (ii) any
foreign government, any international organization, or any agency
or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers’ cooperatives described in
Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric
and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code or (v) any other Person so designated by the Trustee based
upon an Opinion of Counsel, which Opinion of Counsel shall not be
an expense of the Trustee, that the holding of an ownership
interest in a Residual Certificate by such Person may cause the
Trust or any Person having an ownership interest in the Residual
Certificate (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in a Residual
Certificate to such Person. The terms “United States,”
“State” and “international organization”
shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
“Distribution Account”:
The trust account or accounts created and maintained by the Trustee
pursuant to Section 3.10(b) which shall be entitled
“Distribution Account, Citibank, N.A., as Trustee, in trust
for the registered Holders of the PHHMC Mortgage Pass-Through
Certificates, Series 2005-5” and which must be an Eligible
Account.
“Distribution Date”: The
18th day of any calendar month, or if such 18th day is not a
Business Day, the Business Day immediately following such 18th day,
commencing in August 2005.
“Due Date”: With respect
to each Mortgage Loan and any Distribution Date, the first day of
the calendar month in which such Distribution Date occurs on which
the Monthly Payment for such Mortgage Loan was due, exclusive of
any days of grace.
“Due Period”: With
respect to any Distribution Date, the period commencing on the
second day of the month preceding the month in which such
Distribution Date (or with respect to the first Due Period, the day
following the Cut-off Date) occurs and ending on the first day of
the month in which such Distribution Date occurs.
“Effective Loan-to-Value
Ratio”: With respect to an Additional Collateral Mortgage
Loan, the ratio, expressed as a percentage, of (A) the principal
amount of the Mortgage Loan at origination less the value of any
Additional Collateral securing the Mortgage Loan, to (B) the lesser
of (1) the appraised value determined in an appraisal or other
collateral assessment tool obtained at origination of the Mortgage
Loan and (2) the sales price for the related Mortgaged
Property.
“Eligible Account”: Any
of (i) an account or accounts maintained with a depository
institution the short-term debt obligations of which have been
rated by the Rating Agency in its highest rating available, (ii) in
a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits
not so insured shall, to the extent acceptable to the Rating
Agency, as evidenced in writing, be maintained such that (as
evidenced by an Opinion of Counsel delivered to the Trustee and the
Rating Agency) the registered Holders of Certificates have a claim
with respect to the funds in such account or a perfected first
security interest against any collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository
institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a
federal or state chartered depository institution, national banking
association or trust company acting in its fiduciary capacity, (iv)
an account or accounts of a depository institution acceptable to
the Rating Agency (as evidenced in writing by the Rating Agency
that use of any such account will not reduce the rating assigned to
any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates
as of the Closing Date by such Rating Agency) or (v) an account or
accounts maintained with a federal or state chartered depository
institution or trust company that meet the depository requirements
of Fannie Mae or Freddie Mac. Eligible Accounts may bear
interest.
“Eligible Substitute Mortgage
Loan”: A mortgage loan substituted for a Defective Mortgage
Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal
balance, after application of all scheduled payments of principal
and interest due during or prior to the month of substitution, not
in excess of the outstanding principal balance of the Defective
Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, the amount of any shortfall to be
deposited by the Master Servicer in the Collection Account in the
month of substitution, (ii) have a Loan Rate, not less than the
Loan Rate of the Defective Mortgage Loan and not more than 1% in
excess of the Loan Rate of such Defective Mortgage Loan, (iii) have
a remaining term to maturity not greater than (and not more than
one year less than) that of the Defective Mortgage Loan, (iv) be
current as of the date of substitution, (v) have a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Defective Mortgage Loan as of such date
and (vi) conform to each representation and warranty set forth in
Section 2.04 hereof applicable to the Defective Mortgage Loan. In
the event that one or more mortgage loans are substituted for one
or more Defective Mortgage Loans, the amounts described in clause
(i) hereof shall be determined on the basis of aggregate principal
balances, the Loan Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Loan Rates, the terms
described in clause (iii) hereof shall be determined on the basis
of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (v) hereof shall be satisfied as to each
such mortgage loan and, except to the extent otherwise provided in
this sentence, the representations and warranties described in
clause (vi) hereof must be satisfied as to each Eligible Substitute
Mortgage Loan or in the aggregate, as the case may be. Any Mortgage
Loan substituted for a Mortgage Loan which has an arrearage due to
the application of any related forbearance plan with respect to
such Mortgage Loan, will be treated as having such an arrearage due
to the application of any related forbearance plan with respect to
such Mortgage Loan.
“ERISA”: The Employee
Retirement Income Security Act of 1974, as amended.
“ERISA-Restricted
Certificates”: Any of the Class B-4, Class B-5, Class B-6 and
Class R Certificates.
“Escrow Payments”: The
amounts constituting ground rents, taxes, assessments, water rates,
mortgage insurance premiums, fire and hazard insurance premiums and
other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
“Estate in Real
Property”: A fee simple estate in a parcel of real
property.
“Excess Losses”: (i)
Special Hazard Losses in excess of the Special Hazard Amount, (ii)
Bankruptcy Losses in excess of the Bankruptcy Amount, (iii) Fraud
Losses in excess of the Fraud Loss Amount and (iv) Extraordinary
Losses.
“Excess Subordinate Principal
Amount”: With respect to any Distribution Date on which the
Certificate Principal Balance of the Class or Classes of
Certificates then outstanding with the Lowest Priority is to be
reduced to zero and on which Realized Losses are to be allocated to
that Class or those Classes, the amount, if any, by which (i) the
amount of principal that would otherwise be distributable on that
Class or those Classes of Certificates on such Distribution Date is
greater than (ii) the excess, if any, of the aggregate Certificate
Principal Balance of that Class or those Classes of Certificates
immediately prior to such Distribution Date over the aggregate
amount of Realized Losses to be allocated to that Class or those
Classes of Certificates on such Distribution Date.
“Exchange Act”: The
Securities and Exchange Act of 1934, as amended.
“Extraordinary Loss”:
Any Realized Loss or portion thereof caused by or resulting
from:
(i) nuclear
or chemical reaction or nuclear radiation or radioactive or
chemical 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 the definition of the term “Special Hazard
Loss”
(ii) hostile
or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or
expected attack by any government or sovereign power, de
jure or de facto , or by any authority maintaining or
using military, naval or air forces, or by military, naval or air
forces, or by an agent of any such government, power, authority or
forces;
(iii) any
weapon of war employing atomic fission or radioactive forces
whether in time of peace or war, and
(iv) insurrection,
rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against
such an occurrence, seizure or destruction under quarantine or
customs regulations, confiscation by order of any government or
public authority, or risks of contraband or illegal transactions or
trade.
“Extraordinary Trust Fund
Expenses”: Any amounts reimbursable to the Master Servicer or
the Depositor pursuant to Section 6.03, any amounts reimbursable to
the Trustee from the
Trust Fund pursuant to this
Agreement, including but not limited to Section 8.05, and any other
costs, expenses, liabilities and losses borne by the Trust Fund
(exclusive of any cost, expense, liability or loss that is specific
to a particular Mortgage Loan or REO Property and is taken into
account in calculating a Realized Loss in respect thereof) for
which the Trust Fund has not and, in the reasonable good faith
judgment of the Trustee, shall not, obtain reimbursement or
indemnification from any other Person.
“Fannie Mae”: Federal
National Mortgage Association or any successor thereto.
“FDIC”: Federal Deposit
Insurance Corporation or any successor thereto.
“Fidelity Bond”: Shall
have the meaning assigned thereto in Section 3.14.
“Final Recovery
Determination”: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property
purchased by a Seller or the Master Servicer pursuant to or as
contemplated by Section 2.03 or 10.01), a determination made by the
Master Servicer that all Insurance Proceeds, Liquidation Proceeds
and other payments or recoveries which the Master Servicer, in its
reasonable good faith judgment, expects to be finally recoverable
in respect thereof have been so recovered. The Master Servicer
shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
“Fitch”: Fitch, Inc.,
doing business as Fitch Ratings, and any successor thereto or its
successor in interest.
“Foreclosure Price”: The
amount reasonably expected to be received from the sale of the
related Mortgaged Property net of any expenses associated with
foreclosure proceedings.
“Foreclosure Profits”:
As to any Distribution Date or related Determination Date and any
Mortgage Loan, the excess, if any, of Liquidation Proceeds,
Insurance Proceeds and proceeds from any REO Disposition (net of
all amounts reimbursable therefrom pursuant to Section
3.11(a)(iii)) in respect of each Mortgage Loan or REO Property for
which a Cash Liquidation or REO Disposition occurred in the related
Prepayment Period over the sum of the unpaid principal balance of
such Mortgage Loan or REO Property (determined, in the case of an
REO Disposition, in accordance with Section 3.16) plus accrued and
unpaid interest at the Mortgage Rate on such unpaid principal
balance from the Due Date to which interest was last paid by the
Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
“Fraud Loss Amount”: As
of any date of determination after the Cut-off Date, prior to the
third anniversary of the Cut-off Date, an amount equal to 1.00% of
the aggregate outstanding principal balance of all of the Mortgage
Loans as of the Cut-off Date minus the Fraud Losses allocated
solely to one or more specific Classes of Certificates in
accordance with Section 4.02 since the most recent anniversary of
the Cut-off Date up to such date of determination. On and after the
third anniversary of the Cut-off Date, the Fraud Loss Amount shall
be zero.
The Fraud Loss Amount may be further
reduced by the Master Servicer (including accelerating the manner
in which such coverage is reduced) provided that prior to any such
reduction, the Master Servicer shall (i) obtain written
conformation from the Rating Agency that
such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned
to such Certificates as of the Closing Date by such Rating Agency
and (ii) provide a copy of such written conformation to the
Trustee.
“Fraud Losses”: Losses
sustained on a Liquidated Mortgage Loan by reason of a default
arising from fraud, dishonesty or misrepresentation.
“Freddie Mac”: Federal
Home Loan Mortgage Corporation or any successor thereto.
“Highest Priority”: As
of any date of determination, the Class of Subordinate Certificates
then outstanding with the earliest priority for payments pursuant
to Section 4.01(c), in the following order: Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
“HUD”: The United States
Department of Housing and Urban Development, or any successor
thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under
the FHA Regulations.
“Independent”: When used
with respect to any specified Person, any such Person who (a) is in
fact independent of the Depositor, the Master Servicer and their
respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the
Depositor or the Master Servicer or any Affiliate thereof, and (c)
is not connected with the Depositor or the Master Servicer or any
Affiliate thereof as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions;
provided , however , that a Person shall not fail to
be Independent of the Depositor or the Master Servicer or any
Affiliate thereof merely because such Person is the beneficial
owner of 1% or less of any class of securities issued by the
Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
“Independent
Contractor”: Either (i) any Person (other than the Master
Servicer) that would be an “independent contractor”
with respect to the Trust Fund within the meaning of Section
856(d)(3) of the Code if the Trust Fund were a real estate
investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of
Certificates), so long as the Trust Fund does not receive or derive
any income from such Person and provided that the relationship
between such Person and the Trust Fund is at arm’s length,
all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master
Servicer) if the Trustee has received an Opinion of Counsel, which
Opinion of Counsel shall be an expense of the Trust Fund, to the
effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent
Contractor will not cause such REO Property to cease to qualify as
“foreclosure property” within the meaning of Section
860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause
any income realized in respect of such REO Property to fail to
qualify as rents from real property.
“Initial Certificate Principal
Balance”: With respect to any Regular Certificate, the amount
designated “Initial Certificate Principal Balance” on
the face thereof.
“Insurance Proceeds”:
Proceeds of any title policy, hazard policy or other insurance
policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing
mortgage loans held for its own account, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
“Interest Accrual
Period”: With respect to any Distribution Date and any Class
of Certificates, the calendar month immediately preceding the month
in which such Distribution Date occurs.
“Late Collections”: With
respect to any Mortgage Loan, all amounts received subsequent to
the Determination Date immediately following any related Due
Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest
due (without regard to any acceleration of payments under the
related Mortgage and Mortgage Note) but delinquent on a contractual
basis for such Due Period and not previously recovered.
“Limited Purpose Surety
Bond”: The Limited Purpose Surety Bond (Policy No. AB0039BE),
dated February 28, 1996 in respect to certain Additional Collateral
Mortgage Loans, issued by Ambac Assurance Corporation (f/k/a Ambac
Indemnity Corporation) for the benefit of certain beneficiaries,
including the Trustee for the benefit of the Certificateholders,
but only to the extent that such Limited Purpose Surety Bond covers
any Additional Collateral Mortgage Loans.
“Liquidated Mortgage
Loan”: As to any Distribution Date, any Mortgage Loan in
respect of which the Master Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of
the related Due Period, that all Liquidation Proceeds and Insurance
Proceeds which it expects to recover with respect to the
liquidation of the Mortgage Loan or disposition of the related REO
Property have been recovered.
“Liquidation Event”:
With respect to any Mortgage Loan, any of the following events: (i)
such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Fund by reason of its being
purchased, sold or replaced pursuant to or as contemplated by
Section 2.03 or Section 10.01. With respect to any REO Property,
either of the following events: (i) a Final Recovery Determination
is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or
purchased pursuant to Section 3.23 or Section 10.01.
“Liquidation Proceeds”:
The amount (other than amounts received in respect of the rental of
any REO Property prior to REO Disposition) received by the Master
Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan by
means of a trustee’s sale, foreclosure sale or otherwise
(including, with respect to a defaulted Mortgage Loan that is an
Additional Collateral Mortgage Loan, the amount realized on the
related Additional Collateral with respect to such Mortgage Loan in
accordance with Section 3.16), or
(iii) the repurchase, substitution
or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03, Section 3.16 or Section
10.01.
“Loan Balance”: As of
any date, the aggregate Stated Principal Balance of all of the
Mortgage Loans as of such date.
“Loan-to-Value Ratio”:
As of any date and Mortgage Loan (other than an Additional
Collateral Mortgage Loan), the fraction, expressed as a percentage,
the numerator of which is the Stated Principal Balance of the
Mortgage Loan, and the denominator of which is the Value of the
related Mortgaged Property. As of any date and any Additional
Collateral Mortgage Loan, the related Effective Loan-to-Value
Ratio.
“Loan Rate”: With
respect to each Mortgage Loan, the annual rate at which interest
accrues on such Mortgage Loan from time to time in accordance with
the provisions of the related Mortgage Note, which rate shall
remain constant at the rate set forth in the Mortgage Loan Schedule
as the Loan Rate in effect immediately following the Cut-off Date.
With respect to each Mortgage Loan that becomes an REO Property, as
of any date of determination, the annual rate determined in
accordance with the immediately preceding sentence as of the date
such Mortgage Loan became an REO Property.
“Lockout Percentage”:
With respect to any Distribution Date, the Certificate Principal
Balance of the Class A-6 Certificates, divided by the aggregate
Certificate Principal Balance of the Senior Certificates, in each
case immediately prior to any allocations of losses or
distributions on that Distribution Date.
“Lockout Prepayment
Percentage”: With respect to any Distribution Date, the
product of (i) the Lockout Percentage and (ii) the Stepdown
Percentage.
“Lockout Scheduled
Percentage”: With respect to any Distribution Date (i)
occurring prior to August 2010, 0% and (ii) occurring in or after
August 2010, the Lockout Percentage.
“Lost Note Affidavit”:
With respect to any Mortgage Loan as to which the original Mortgage
Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Depositor as applicable certifying
that the original Mortgage Note has been lost, misplaced or
destroyed (together with a copy of the related Mortgage Note and
indemnifying the Trust against any loss, cost or liability
resulting from the failure to deliver the original Mortgage Note)
in the form of Exhibit H hereto.
“Lower Priority”: As of
any date of determination and with respect to any Class of
Subordinate Certificates, any other Class of Subordinate
Certificates then outstanding with a later priority for payments
pursuant to Section 4.01(c).
“Lowest Priority”: As of
any date of determination, the Class of Subordinate Certificates
then outstanding with the latest priority for payments pursuant to
Section 4.01(c), in the following order: Class B-6, Class B-5,
Class B-4, Class B-3, Class B-2 and Class B-1
Certificates.
“Majority
Certificateholders”: The Holders of Certificates evidencing
at least 51% of the Voting Rights.
“Master Servicer
Affiliate”: A Person (i) controlling, controlled by or under
common control with the Master Servicer or which is 50% or more
owned by the Master Servicer and (ii) which is qualified to service
residential mortgage loans.
“Master Servicer Event of
Termination”: One or more of the events described in Section
7.01.
“Master Servicer Remittance
Date”: With respect to any Distribution Date, the Business
Day prior to such Distribution Date.
“MERS”: Mortgage
Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
“MERS® System”: The
system of recording transfers of Mortgages electronically
maintained by MERS.
“MIN”: The Mortgage
Identification Number for Mortgage Loans registered with MERS on
the MERS® System.
“MLCC”: Merrill Lynch
Credit Corporation and its successors in interest.
“MOM Loan”: With respect
to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage
Loan, solely as nominee for the originator of such Mortgage Loan
and its successors and assigns, at the origination
thereof.
“Monthly Interest
Distributable Amount”: An amount equal to the interest
accrued during the related Interest Accrual Period on the
Certificate Principal Balance of each Class of Certificates at the
then-applicable Pass-Through Rate. The Monthly Interest
Distributable Amount on any Class of Certificates will be reduced
by the amount of (i) Prepayment Interest Shortfalls (to the extent
not offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 3.24), (ii) the interest portion
(adjusted to the Net Mortgage Rate) of Realized Losses (including
Excess Losses and Extraordinary Losses) not allocated solely to one
or more specific Classes of Certificates pursuant to Section 4.02,
(iii) the interest portion of Advances previously made with respect
to a Mortgage Loan or REO Property which remained unreimbursed
following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property that were made with respect to delinquencies
that were ultimately determined to be Excess Losses or
Extraordinary Losses and (iv) any other interest shortfalls not
covered by the subordination provided by the Class B Certificates,
including Relief Act Shortfalls, with all such reductions allocated
among all of the Certificates in proportion to their respective
amounts of Monthly Interest Distributable Amount payable on such
Distribution Date which would have resulted absent such
reductions.
“Monthly Payment”: With
respect to any Mortgage Loan, the scheduled monthly payment of
principal and interest on such Mortgage Loan which is payable by
the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect
to (i) any Deficient Valuation
and/or Debt Service Reduction with respect to such Mortgage Loan
and (ii) any reduction in the amount of interest collectible from
the related Mortgagor pursuant to the Relief Act; (b) without
giving effect to any extension granted or agreed to by the Master
Servicer pursuant to Section 3.01; and (c) on the assumption that
all other amounts, if any, due under such Mortgage Loan are paid
when due.
“Moody’s”:
Moody’s Investors Service, Inc., and its
successors.
“Mortgage”: The
mortgage, deed of trust or other instrument creating a first lien
on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
“Mortgage 100 K Loan”: A
Mortgage Loan secured by Additional Collateral in the form of a
security interest in the Securities Account and the financial
assets held therein and having a value, as of the date of
origination of such Mortgage Loan, of at least equal to the related
Original Additional Collateral Requirement.
“Mortgage 100 K Pledge
Agreement”: With respect to each Mortgage 100 K Loan, the
Pledge Agreement for Securities Account between the related
mortgagor and the Additional Collateral Servicer pursuant to which
such mortgagor granted a security interest in the related
securities and other financial assets held therein.
“Mortgage File”: The
mortgage documents listed in Section 2.01(A) and (B) pertaining to
a particular Mortgage Loan and any additional documents required to
be added to the Mortgage File pursuant to this
Agreement.
“Mortgage Loan”: Each
mortgage loan (including the Cooperative Loans) transferred and
assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d)
as from time to time held as a part of the Trust Fund, the Mortgage
Loans so held being identified in the Mortgage Loan
Schedule.
“Mortgage Loan Purchase
Agreement”: The mortgage loan purchase agreement, dated as of
August 1, 2005, among the Sellers and the Depositor, regarding the
transfer of the Mortgage Loans.
“Mortgage Loan
Schedule”: As of any date, the list of Mortgage Loans
identifying the Mortgage Loans transferred from the Sellers, and
attached hereto as Exhibit D. The Mortgage Loan Schedule shall set
forth the following information with respect to each Mortgage
Loan:
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(i)
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the Sellers’ Mortgage Loan identifying
number;
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(ii)
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[reserved];
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(iii)
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the zip code of the related Mortgaged
Property;
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(iv)
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a code indicating whether the Mortgaged Property
is owner-occupied;
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(v)
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the type of Residential Dwelling constituting
the Mortgaged Property;
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(vi)
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the original months to maturity;
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(vii)
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the original date of the mortgage;
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(viii)
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the Loan-to-Value Ratio or Effective
Loan-to-Value Ratio, as applicable, at origination;
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(ix)
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the loan rate;
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(x)
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the date on which the first Monthly Payment was
due on the Mortgage Loan;
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(xi)
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the stated maturity date;
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(xii)
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the amount of the Monthly Payment at
origination;
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(xiii)
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the amount of the Monthly Payment as of the
Cut-off Date;
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(xiv)
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the next Due Date on which a Monthly Payment is
due;
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(xv)
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the original principal amount of the Mortgage
Loan;
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(xvi)
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the unpaid principal balance of the Mortgage
Loan as of the close of business on the Cut-off Date;
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(xvii)
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a code indicating the purpose of the Mortgage
Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
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(xviii)
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a code indicating the documentation style (i.e.,
full, alternative or reduced);
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(xix)
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a code indicating if the Mortgage Loan is
subject to a Primary Insurance Policy;
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(xx)
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the name of the Qualified Insurer and the
certificate number for any Primary Insurance Policy, if
applicable;
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(xxi)
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the depth of coverage of any Primary Insurance
Policy, if applicable;
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(xxii)
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the Value of the Mortgaged Property;
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(xxiii)
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the sale price of the Mortgaged Property, if
applicable;
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(xxiv)
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the Servicing Fee;
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(xxv)
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whether the Mortgage Loan is a Buydown Mortgage
Loan; and
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(xxvi)
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the amount of the Original Additional Collateral
Requirement, if any.
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The Mortgage Loan Schedule shall set
forth the following information with respect to the Mortgage Loans
in the aggregate as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current principal balance of the Mortgage Loans; (3)
the weighted average Loan Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Master Servicer
in accordance with the provisions of this Agreement. With respect
to any Eligible Substitute Mortgage Loan, Cut-off Date shall refer
to the related Cut-off Date for such Mortgage Loan, determined in
accordance with the definition of Cut-off Date herein.
“Mortgage Note”: The
original executed note or other evidence of indebtedness evidencing
the indebtedness of a Mortgagor under a Mortgage Loan.
“Mortgage Pool”: The
pool of Mortgage Loans, identified on Exhibit D from time to time,
and any REO Properties acquired in respect thereof.
“Mortgaged Property”:
The underlying property securing a Mortgage Loan, including any REO
Property, consisting of an Estate in Real Property improved by a
Residential Dwelling.
“Mortgagor”: The obligor
on a Mortgage Note.
“Net Liquidation
Proceeds”: With respect to any Liquidated Mortgage Loan or
any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances,
Servicing Advances, Servicing Fees and any other accrued and unpaid
Servicing Fees received and retained in connection with the
liquidation of such Mortgage Loan or Mortgaged Property
Rate.
“Net Mortgage Rate”:
With respect to any Mortgage Loan, (x) the Loan Rate minus (y) the
Servicing Fee Rate and the Trustee Fee Rate.
“New Lease”: Any lease
of REO Property entered into on behalf of the Trust, including any
lease renewed or extended on behalf of the Trust if the Trust has
the right to renegotiate the terms of such lease.
“Nonrecoverable
Advance”: Any Advance or Servicing Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property
that, in the good faith business judgment of the Master Servicer,
will not or, in the case of a proposed Advance or Servicing
Advance, would not be ultimately recoverable from Late Collections
on such Mortgage Loan or REO Property as provided
herein.
“Officers’
Certificate”: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice
president (however denominated), and by the Treasurer, the
Secretary, or one of the assistant treasurers or assistant
secretaries of the Master Servicer or the Depositor, as
applicable.
“Opinion of Counsel”: A
written opinion of counsel, who may, without limitation, be a
salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b)
compliance with the REMIC Provisions must be an opinion of
Independent counsel.
“Optional Termination
Date”: The first Distribution Date on which the Master
Servicer may opt to terminate the Trust Fund pursuant to Section
10.01.
“Original Additional
Collateral Requirement’: With respect to any Additional
Collateral Mortgage Loan, an amount equal to the Additional
Collateral required at the time of the origination of such
Additional Collateral Mortgage Loan in order to achieve an
Effective Loan-to-Value Ratio for such Additional Collateral
Mortgage Loan, generally equal to seventy percent (70%); for
purposes of the Required Surety Payment, in no event shall the
Original Additional Collateral Requirement for an Additional
Collateral Mortgage Loan exceed thirty percent (30%) of its
original principal balance.
“Original Certificate
Principal Balance”: With respect to each Class of the
Certificates, the Certificate Principal Balance thereof on the
Closing Date, as set forth opposite such Class above in the
Preliminary Statement.
“Original Subordinated
Principal Balance”: The aggregate of the Certificate
Principal Balances of the Subordinate Certificates as of the
Cut-off Date.
“Other Insurance
Proceeds”: Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, other than the
Primary Insurance Policy, if any, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing
mortgage loans held for its own account.
“Ownership Interest”: As
to any Certificate, any ownership or security interest in such
Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial, as owner or as pledgee.
“Parent Power®
Agreement”: With respect to each Parent Power® Mortgage
Loan, a Parent Power® Guaranty and Security Agreement for
Securities Account.
“Parent Power® Guaranty
and Security Agreement for Securities Account”: With respect
to a Parent Power® Mortgage Loan, an agreement between the
Additional Collateral Servicer and a guarantor on behalf of the
mortgagor under such Parent Power® Mortgage Loan pursuant to
which such guarantor guarantees the payment of certain losses under
such Parent Power® Mortgage Loan and has granted a security
interest to the Additional Collateral Servicer in certain
marketable securities to collateralize such guaranty. The required
amount of such collateral is at least equal to the Original
Additional Collateral Requirement for such Parent Power®
Mortgage Loan.
“Parent Power® Mortgage
Loan”: A Mortgage Loan having at the time of origination a
Loan-to-Value Ratio generally in excess of the Master
Servicer’s maximum acceptable Loan-to-Value Ratio for such
Mortgage Loan as set forth in the Underwriting Guide, which
Mortgage Loan is supported by a Parent Power®
Agreement.
“Pass-Through Rate”:
With respect to the Certificates (other than the Class A-1, Class
A-2 and Class A-6 Certificates) and any Distribution Date, a per
annum rate equal to the weighted average of the Net Mortgage Rates
on each Mortgage Loan. With respect to the Class A-1 Certificates
and any Distribution Date, a per annum rate equal to (i) the
weighted average of the Net Mortgage Rate on each Mortgage Loan
minus (ii) 0.22%. For federal income tax purposes, however, the
Class A-1 Certificates will have a per annum rate equal to (i) the
Uncertificated Pass-Through Rate on the REMIC I Regular Interest
A-1 minus (ii) 0.22%. With respect to the Class A-2 Certificates
and any Distribution Date, a per annum rate equal to (i) the
weighted average of the Net Mortgage Rate on each Mortgage Loan
minus (ii) 1.08%. For federal income tax purposes, however, the
Class A-2 Certificates will have a per annum rate equal to (i) the
Uncertificated Pass-Through Rate on the REMIC I Regular Interest
A-2 minus (ii) 1.08%. With respect to the Class A-6 Certificates
and any Distribution Date, a per annum rate equal to the sum of (i)
the weighted average of the Net Mortgage Rate on each Mortgage
Loan, (ii) 0.22% per annum multiplied by a fraction, the numerator
of which is the Certificate Principal Balance of the Class A-1
Certificates and the denominator of which is the Certificate
Principal Balance of the Class A-6 Certificates and (iii) 1.08% per
annum multiplied by a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-2 Certificates and the
denominator of which is the Certificate Principal Balance of the
Class A-6 Certificates. For federal income tax purposes, the Class
A-6 Certificates will represent ownership of the Class A-6A
Component, Class A-6B Component and Class A-6C Component; the
Pass-Through Rate with respect to the Class A-6A Component is a per
annum rate equal to the Uncertificated Pass-Through Rate on REMIC I
Regular Interest A-6, which will be applied to the Class A-6A
Component Principal Amount, the Pass-Through Rate with respect to
the Class A-6B Component is 0.22% per annum, which will be applied
to the Class A-6B Component Notional Amount and the Pass-Through
Rate with respect to the Class A-6C Component is 1.08% per annum,
which will be applied to the Class A-6C Component Notional
Amount.
“Paying Agent”: Any
paying agent appointed pursuant to Section 5.05.
“Percentage Interest”:
With respect to any Certificate (other than a Class R Certificate),
a fraction, expressed as a percentage, the numerator of which is
the Initial Certificate Principal
Balance, represented by such
Certificate and the denominator of which is the Original
Certificate Principal Balance of the related Class. With respect to
any Class of Class R Certificates, the portion of such Class
evidenced thereby, expressed as a percentage, as stated on the face
of such Certificate; provided, however, that the sum of all such
percentages for each such Class totals 100%.
“Permitted Investments”:
Any one or more of the following obligations or securities acquired
at a purchase price of not greater than par, regardless of whether
issued or managed by the Depositor, the Master Servicer, the
Trustee or any of their respective Affiliates or for which an
Affiliate of the Trustee serves as an advisor:
(i) obligations
of or guaranteed as to principal and interest by the United States
or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United
States;
(ii) repurchase
agreements on obligations specified in clause (i) maturing not more
than one month from the date of acquisition thereof, provided that
the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by the Rating Agency in its
highest short-term rating available;
(iii) federal
funds, certificates of deposit, demand deposits, time deposits and
bankers’ acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of
bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than
30 days) denominated in United States dollars of any U.S.
depository institution or trust company incorporated under the laws
of the United States or any state thereof or of any domestic branch
of a foreign depository institution or trust company; provided that
the debt obligations of such depository institution or trust
company (or, if the only Rating Agency is S&P, in the case of
the principal depository institution in a depository institution
holding company, debt obligations of the depository institution
holding company) at the date of acquisition thereof have been rated
by the Rating Agency in its highest short-term rating available;
and provided further that, if the only Rating Agency is S&P and
if the depository or trust company is a principal subsidiary of a
bank holding company and the debt obligations of such subsidiary
are not separately rated, the applicable rating shall be that of
the bank holding company; and, provided further that, if the
original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be
A-1+ in the case of S&P if S&P is the Rating
Agency;
(iv) commercial
paper and demand notes (having original maturities of not more than
365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition
has been rated by the Rating Agency in its highest short-term
rating available; provided that such commercial paper shall have a
remaining maturity of not more than 30 days;
(v) a
money market fund or a qualified investment fund rated by the
Rating Agency in its highest long-term rating available;
and
(vi) other
obligations or securities that are acceptable to the Rating Agency
as a Permitted Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing;
provided, that no instrument
described hereunder shall evidence either the right to receive (a)
only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and
principal payments with respect to such instrument provide a yield
to maturity at par greater than 120% of the yield to maturity at
par of the underlying obligations.
“Permitted Transferee”:
Any Person other than a Disqualified Organization, an
“electing large partnership” as defined in Section
775(a) of the Code, or a non-U.S. Person.
“Person”: Any
individual, corporation, partnership, joint venture, association,
joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or
political subdivision thereof.
“Planned Principal
Balance”: With respect to the Class A-2 Certificates and each
Distribution Date, the amount set forth for such Distribution Date
on Exhibit L hereto.
“Prepayment Distribution
Trigger”: With respect to any Distribution Date and any Class
of Subordinate Certificates (other than the Class B-1
Certificates), a test that shall be satisfied if the fraction
(expressed as a percentage) equal to the sum of the Certificate
Principal Balances of such Class and each Class of Subordinate
Certificates with a Lower Priority than such Class immediately
prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date is greater
than or equal to the sum of the related initial Class B Percentages
of such Classes of Subordinate Certificates.
“Prepayment Interest
Shortfall”: As to any Distribution Date and any Mortgage Loan
(other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the
related Prepayment Period, an amount equal to the excess of one
month’s interest at the Net Mortgage Rate on the Stated
Principal Balance of such Mortgage Loan over the amount of interest
(adjusted to the Net Mortgage Rate) paid by the Mortgagor for such
Prepayment Period to the date of such Principal Prepayment in Full
or (b) a Curtailment during the prior calendar month, an amount
equal to one month’s interest at the Net Mortgage Rate on the
amount of such Curtailment. The obligations of the Master Servicer
in respect of any Prepayment Interest Shortfall are set forth in
Section 3.24.
“Prepayment Period”:
With respect to any Distribution Date, the calendar month preceding
the month in which such Distribution Date occurs.
“Primary Insurance
Policy”: Each policy of primary guaranty mortgage insurance
issued by a Qualified Insurer in effect with respect to any
Mortgage Loan, or any replacement policy therefor obtained by the
Master Servicer pursuant to Section 3.13.
“Principal Prepayment”:
Any payment of principal made by the Mortgagor on a Mortgage Loan
which is received in advance of its scheduled Due Date and which is
not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or
months subsequent to the month of prepayment.
“Principal Prepayment in
Full”: Any Principal Prepayment made by a Mortgagor of the
entire unpaid principal balance of the Mortgage Loan.
“Private Certificates”:
Any of the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates.
“Property Insurance
Proceeds”: Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Master Servicer and are not to be
applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the Master
Servicer’s servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
“Purchase Price”: With
respect to any Mortgage Loan or REO Property to be purchased
pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers’ Certificate from the Master
Servicer to the Trustee, an amount equal to the sum of (i) 100% of
the Stated Principal Balance thereof as of the date of purchase (or
such other price as provided in Section 10.01), (ii) in the case of
(x) a Mortgage Loan, accrued interest on such Stated Principal
Balance at the applicable Loan Rate in effect from time to time
from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an advance by the Master Servicer,
which payment or advance had as of the date of purchase been
distributed pursuant to Section 4.01, through the end of the
calendar month in which the purchase is to be effected, and (y) an
REO Property, the sum of (1) accrued interest on such Stated
Principal Balance at the applicable Loan Rate in effect from time
to time from the Due Date as to which interest was last covered by
a payment by the Mortgagor or an advance by the Master Servicer
through the end of the calendar month immediately preceding the
calendar month in which such REO Property was acquired, plus (2)
REO Imputed Interest for such REO Property for each calendar month
commencing with the calendar month in which such REO Property was
acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income,
Insurance Proceeds, Liquidation Proceeds and Advances that as of
the date of purchase had been distributed as or to cover REO
Imputed Interest pursuant to Section 4.07, (iii) any unreimbursed
Servicing Advances and Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.23, and (v) in
the case of a Mortgage Loan required to be purchased pursuant to
Section 2.03, expenses reasonably incurred or to be incurred by the
Master Servicer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.
“Qualified Insurer”: Any
insurance company acceptable to Fannie Mae or Freddie
Mac.
“Rate/Term Refinancing”:
A Refinanced Mortgage Loan which is not a Cash-Out
Refinancing.
“Rating Agency”: Fitch
or its successors. If such agency or its successors are no longer
in existence, “Rating Agency” shall be such nationally
recognized statistical rating agency, or other comparable Person,
designated by the Depositor, notice of which designation shall be
given to the Trustee and Master Servicer.
“Realized Loss”: With
respect to a Liquidated Mortgage Loan, the amount by which the
remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of
the related Mortgage Loan. To the extent the Master Servicer
receives Subsequent Recoveries with respect to any Mortgage Loan,
the amount of the Realized Loss with respect to that Mortgage Loan
will be reduced to the extent such recoveries are applied to reduce
the Certificate Principal Balance of any Class of Certificates on
any Distribution Date.
“Record Date”: With
respect to all of the Certificates, the last Business Day of the
month immediately preceding the month in which the related
Distribution Date occurs.
“Refinanced Mortgage
Loan”: A Mortgage Loan the proceeds of which were used to
satisfy an existing mortgage loan on the Mortgaged
Property.
“Regular Certificate”:
Any of the Class A Certificates and Class B
Certificates.
“Related Documents”:
With respect to any Mortgage Loan, the related Mortgage Notes,
Mortgages and other related documents.
“Relief Act”: The
Servicemembers Civil Relief Act.
“Relief Act Interest
Shortfall”: With respect to any Distribution Date, for any
Mortgage Loan as to which there has been a reduction in the amount
of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Relief Act, the amount
by which (i) interest collectible on such Mortgage Loan during such
Due Period is less than (ii) one month’s interest on the
Stated Principal Balance of such Mortgage Loan at the Loan Rate for
such Mortgage Loan before giving effect to the application of the
Relief Act.
“REMIC”: A “real
estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
“REMIC I”: The
segregated pool of assets, with respect to which a REMIC election
is to be made, consisting of: (i) each Mortgage Loan (exclusive of
payments of principal and interest due on or before the Cut-off
Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust Fund) as from time to time are
subject to this Agreement and all payments under and proceeds of
such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all
documents included in the related Mortgage File, subject to Section
2.01; (ii) such funds or assets as from time to time are deposited
in the Collection Account or the Distribution Account and belonging
to the Trust Fund; (iii) any REO Property; (iv) the Primary Hazard
Insurance Policies, if any, the Primary Insurance Policies, if any,
and all other Insurance Policies with respect to the Mortgage
Loans; (v) the Depositor’s rights in respect of the
Additional Collateral and the Limited Purpose Surety Bond,
including the assignment of the Depositor’s rights under the
Additional Collateral
Servicing Agreement; and (vi) the
Depositor’s interest in respect of the representations and
warranties made by the Sellers in the Mortgage Loan Purchase
Agreement as assigned to the Trustee pursuant to Section 2.04
hereof. The Trust Fund shall not include the Buydown
Account.
“REMIC I Regular
Interests”: The uncertificated partial undivided beneficial
ownership interests in REMIC I, designated as REMIC I Regular
Interests A-1, A-2, A-3, A-4, A-5, A-6, B-1, B-2, B-3, B-4, B-5,
B-6 and R-II, with respect to which a REMIC election is to be
made.
“REMIC II”: The
segregated pool of assets consisting of the REMIC I Regular
Interests conveyed in trust to the Trustee for the benefit of the
holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5, Class B-6 and Class R-II Certificates pursuant to Section
9.01, with respect to which a separate REMIC election is to be made
pursuant to Section 9.01.
“REMIC Provisions”:
Provisions of the federal income tax law relating to real estate
mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as
the foregoing may be in effect from time to time.
“Remittance Report”: A
report prepared by the Master Servicer and delivered to the Trustee
pursuant to Section 4.03.
“Rents from Real
Property”: With respect to any REO Property, gross income of
the character described in Section 856(d) of the Code.
“REO Account”: The
account or accounts maintained by the Master Servicer in respect of
an REO Property pursuant to Section 3.23.
“REO Disposition”: The
sale or other disposition of an REO Property on behalf of the Trust
Fund.
“REO Imputed Interest”:
As to any REO Property, for any calendar month during which such
REO Property was at any time part of the Trust Fund, one
month’s interest at the applicable Net Mortgage Rate on the
Stated Principal Balance of such REO Property (or, in the case of
the first such calendar month, of the related Mortgage Loan if
appropriate) as of the close of business on the Distribution Date
in such calendar month.
“REO Principal
Amortization”: With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all
amounts received in respect of such REO Property during such
calendar month, whether in the form of rental income, sale proceeds
(including, without limitation, that portion of the Termination
Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is
allocable to such REO Property) or otherwise, net of any portion of
such amounts (i) payable pursuant to Section 3.23 in respect of the
proper operation, management and maintenance of such REO Property
or (ii) payable or reimbursable to the Master Servicer pursuant to
Section 3.23 for unpaid Servicing Fees in respect of the related
Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage
Loan, over (b) the REO Imputed
Interest in respect of such REO Property for such calendar
month.
“REO Property”: A
Mortgaged Property acquired by the Master Servicer on behalf of the
Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23 hereto.
“Request for Release”: A
release signed by a Servicing Officer, in the form of Exhibit E
attached
“Required Surety
Payment”: With respect to any Additional Collateral Mortgage
Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the
principal portion of the Realized Loss with respect to such
Mortgage Loan and (ii) the excess, if any, of (a) the Original
Additional Collateral Requirement with respect to such Mortgage
Loan over (b) the net proceeds realized by the Additional
Collateral Servicer from the related Additional Collateral as set
forth in Section 3.16.
“Residential Dwelling”:
Any one of the following: (i) an attached or detached one-family
dwelling unit, (ii) two- to four-family dwelling unit, (iii)
condominium, (iv) townhouse, (v) row house, or (vi) individual unit
in a planned unit development.
“Residual Certificate”:
Any of the Class R Certificates.
“Residual Interest”: The
sole class of “residual interests” in a REMIC within
the meaning of Section 860G(a)(2) of the Code.
“Responsible Officer”:
When used with respect to the Trustee, any officer, including any
Vice President, Assistant Vice President, Trust Officer, any
Assistant Secretary, any trust officer or any other officer of the
Trustee customarily performing functions similar to those performed
by any of the above designated officers and in each case having
direct responsibility for the administration of this
Agreement.
“Restricted Classes”:
With respect to any Class of Certificates, any Classes of
Certificates with a lower priority of payment relative to such
Class.
“S&P”: Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc.,
and its successors.
“Securities Account”:
With respect to any Additional Collateral Mortgage Loans, the
account, together with the financial assets held therein, that is
the subject of the related Mortgage 100 K Pledge
Agreement.
“Security Agreement”:
With respect to a Cooperative Loan, the agreement creating a
security interest in favor of the originator in the related
Cooperative Assets.
“Seller”: Either of (i)
PHH Mortgage Corporation, a New Jersey corporation, or any
successor in interest or (ii) Bishop’s Gate Residential
Mortgage Trust, a Delaware business trust, or any successor in
interest.
“Senior Certificates”:
The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A-6 and Class R Certificates.
“Senior Interest Distribution
Amount”: With respect to each Distribution Date, the
aggregate amount of the Monthly Interest Distributable Amount to be
distributed to the Holders of the Senior Certificates for such
Distribution Date.
“Senior Percentage”: As
of any Distribution Date, the lesser of 100% and a fraction,
expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Class A Certificates and Class
R Certificates immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of
all of the Mortgage Loans or related REO Properties immediately
prior to such Distribution Date.
“Senior Prepayment
Percentage”: With respect to any Distribution Date, the
percentage indicated below:
|
Distribution Date
|
Senior Prepayment
Percentage
|
|
August 2005 through July
2010
|
100%
|
|
August 2010 through July
2011
|
Senior Percentage, plus 70% of the
Subordinate Percentage
|
|
August 2011 through July
2012
|
Senior Percentage, plus 60% of the
Subordinate Percentage
|
|
August 2012 through July
2013
|
Senior Percentage, plus 40% of the
Subordinate Percentage
|
|
August 2013 through July
2014
|
Senior Percentage, plus 20% of the
Subordinate Percentage
|
|
August 2014 and
thereafter
|
Senior Percentage
|
provided, however, (i) that any
scheduled reduction to the Senior Prepayment Percentage described
above shall not occur as of any Distribution Date unless either
(a)(1)(x) the outstanding principal balance of Mortgage Loans
Delinquent 60 days or more (including Mortgage Loans in foreclosure
and REO Property) averaged over the last six months as a percentage
of the aggregate outstanding Certificate Principal Balance of the
Class B Certificates as of such Distribution Date, is less than
50%, or (y) the outstanding principal balance of Mortgage Loans
Delinquent 60 days or more (including Mortgage Loans in foreclosure
and REO Property) averaged over the last six months, as a
percentage of the aggregate outstanding principal balance of all
Mortgage Loans as of such Distribution Date, does not exceed 2% and
(2) Realized Losses on the Mortgage Loans to date for such
Distribution Date if occurring during the sixth, seventh, eighth,
ninth or tenth year (or any year thereafter) after the Closing Date
are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum
of the Initial Certificate Principal Balances of the Class B
Certificates or (b) (1) the aggregate outstanding principal balance
of the Mortgage Loans Delinquent 60 days or more (including
Mortgage Loans in foreclosure and REO Property) averaged over the
last six months, as a percentage of the aggregate outstanding
principal balance of all Mortgage Loans as of such Distribution
Date, does not exceed 4% and (2) Realized Losses on the Mortgage
Loans to date for such Distribution Date if occurring during the
sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the
Closing Date are less than 10%, 15%,
20%, 25% or 30%, respectively, of the sum of the Initial
Certificate Principal Balances of the Class B Certificates and (ii)
that for any Distribution Date on which the Senior Percentage is
greater than the Original Senior Percentage, the Senior Prepayment
Percentage for such Distribution Date shall be 100%.
Notwithstanding the foregoing, upon the reduction of the aggregate
Certificate Principal Balance of the Senior Certificates to zero,
the Senior Prepayment Percentage will equal 0%.
“Senior Principal Distribution
Amount”: As to any Distribution Date, the lesser of (a) the
balance of the Available Distribution Amount remaining after the
distribution of all amounts required to be distributed pursuant to
Section 4.01(c)(i) and (b) the sum of the following:
(A) the
Senior Percentage for such Distribution Date times the sum of the
following:
(1) the
principal portion of each Monthly Payment due during the related
Due Period on each Outstanding Mortgage Loan whether or not
received on or prior to the related Determination Date, minus the
principal portion of any Debt Service Reduction, which together
with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the
Stated Principal Balance of any Mortgage Loan repurchased during
the related Prepayment Period pursuant to Section 2.02, 2.03, 3.15
or 3.16; and
(3) the
principal portion of all other unscheduled collections (other than
Principal Prepayments in Full and Curtailments and amounts received
in connection with a Cash Liquidation or REO Disposition of a
Mortgage Loan, including without limitation Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and REO Proceeds),
received during the related Prepayment Period to the extent applied
by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16;
(B) with
respect to each Mortgage Loan for which a Cash Liquidation or a REO
Disposition occurred during the related Prepayment Period and did
not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount
equal to the lesser of (a) the Senior Percentage for such
Distribution Date times the Stated Principal Balance of such
Mortgage Loan and (b) the Senior Prepayment Percentage for such
Distribution Date times the related unscheduled collections
(including without limitation Insurance Proceeds, Liquidation
Proceeds and REO Proceeds) to the extent applied by the Master
Servicer as recoveries of principal of the related Mortgage Loan
pursuant to Section 3.16;
(C) the
Senior Prepayment Percentage for such Distribution Date times the
aggregate of all Principal Prepayments in Full and Curtailments
received in the related Prepayment Period with respect to the
Mortgage Loans;
|
(D)
|
any Excess Subordinate Principal
Amount for such Distribution Date; and
|
(E) any
amounts described in clauses (A), (B) or (C) of this definition, as
determined for any previous Distribution Date, which remain unpaid
after application of amounts previously distributed pursuant to
this clause (E) to the extent that such amounts are not
attributable to Realized Losses which have been allocated to the
Class B Certificates;
“Servicing Account”: The
account or accounts created and maintained pursuant to Section
3.09.
“Servicer Event of
Termination”: One or more of the events described in Section
7.01.
“Servicing Advances”:
The reasonable “out-of-pocket” costs and expenses
incurred by the Master Servicer in connection with a default,
delinquency or other unanticipated event by the Master Servicer in
the performance of its servicing obligations, including, but not
limited to, (a) reasonable attorneys’ fees and (b) the cost
of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Mortgage Loan, including
any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered on the MERS System,
(iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property, and (iv) the
performance of its obligations under Section 3.01, Section 3.09,
Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The
Master Servicer shall not be required to make any Servicing Advance
in respect of a Mortgage Loan or REO Property that, in the good
faith business judgment of the Master Servicer, would not be
ultimately recoverable from related Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
“Servicing Officer”: Any
officer of the Master Servicer involved in, or responsible for, the
administration and servicing of Mortgage Loans, whose name and
specimen signature appear on a list of servicing officers famished
by the Master Servicer to the Trustee and the Depositor on the
Closing Date, as such list may from time to time be
amended.
“Servicing Fee”: With
respect to each Mortgage Loan and for any calendar month, an amount
equal to one month’s interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made
by the Mortgagor during such calendar month, interest for the
number of days covered by such payment of interest) at the
applicable Servicing Fee Rate on the same principal amount on which
interest on such Mortgage Loan accrues for such calendar
month.
“Servicing Fee Rate”:
With respect to each Mortgage Loan, a rate equal to 0.25% per
annum.
“Special Hazard Amount”:
As of any Distribution Date, an amount equal to $794,492 minus the
sum of (i) the aggregate amount of Special Hazard Losses allocated
solely to one or more specific Classes of Certificates in
accordance with Section 4.02 and (ii) the Adjustment Amount (as
defined below) as most recently calculated. For each anniversary of
the Cut-off Date, the Adjustment Amount shall be equal to the
amount, if any, by which the amount calculated in accordance with
the preceding sentence (without giving effect to the deduction of
the Adjustment Amount for such anniversary) exceeds the greater of
(A) the greatest of (i) twice
the outstanding principal balance of
the Mortgage Loan in the Trust Fund which has the largest
outstanding principal balance on the Distribution Date immediately
preceding such anniversary, (ii) the product of 1.00% multiplied by
the outstanding principal balance of all Mortgage Loans on the
Distribution Date immediately preceding such anniversary and (iii)
the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans in any single
five-digit California zip code area with the largest amount of
Mortgage Loans by aggregate principal balance as of such
anniversary and (B) the greater of (i) the product of 0.50%
multiplied by the outstanding principal balance of all Mortgage
Loans on the Distribution Date immediately preceding such
anniversary multiplied by a fraction, the numerator of which is
equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage
Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate outstanding principal balance
(as of the immediately preceding Distribution Date) of all of the
Mortgage Loans, expressed as a percentage, and the denominator of
which is equal to 19.06% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged
Properties located in the State of California) and (ii) the
aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the largest Mortgage Loan secured
by a Mortgaged Property located in the State of
California.
The Special Hazard Amount may be
further reduced by the Master Servicer (including accelerating the
manner in which coverage is reduced) provided that prior to any
such reduction, the Master Servicer shall (i) obtain written
confirmation from the Rating Agency that such reduction shall not
reduce the rating assigned to any Class of Certificates by such
Rating Agency below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date by such
Rating Agency and (ii) provide a copy of such written confirmation
to the Trustee.
“Special Hazard Losses”:
Realized Losses in respect of Special Hazard Mortgage
Loans.
“Special Hazard Mortgage
Loan”: A Liquidated Mortgage Loan as to which the ability to
recover the full amount due thereunder was substantially unpaired
by a hazard not insured against under a standard hazard insurance
policy.
“Startup Day”: As
defined in Section 9.01(b) hereof.
“Stated Principal
Balance”: With respect to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date,
as specified in the amortization schedule at the time relating
thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period), after
giving effect to any previous partial prepayments and Liquidation
Proceeds received and to the payment of principal due on such Due
Date and irrespective of any delinquency in payment by the related
Mortgagor.
“Stayed Funds”: If the
Master Servicer is the subject of a proceeding under the federal
Bankruptcy Code and the mailing of a remittance by the Master
Servicer pursuant to this Agreement is prohibited by Section 362 of
the federal Bankruptcy Code, funds which are in the custody of the
Master Servicer, a trustee in bankruptcy or a federal bankruptcy
court and should have been the subject of such remittance absent
such prohibition.
“Stepdown Percentage”:
With respect to any Distribution Date, the percentage indicated
below:
|
Distribution Date
|
Stepdown
Percentage
|
|
August 2005 through July
2010
|
0%
|
|
August 2010 through July
2011
|
30%
|
|
August 2011 through July
2012
|
40%
|
|
August 2012 through July
2013
|
60%
|
|
August 2013 through July
2014
|
80%
|
|
August 2014 and
thereafter
|
100%
|
“Subordinate
Certificates”: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
“Subordinate
Percentage”: For any Distribution Date, the difference
between 100% and the Senior Percentage for such date.
“Subordinate Prepayment
Percentage”: With respect to any Distribution Date and each
Class of Subordinate Certificates, under the applicable
circumstances set forth below, the respective percentages set forth
below:
(i) For
any Distribution Date prior to the Distribution Date in August
2010, 0%.
(ii) For
any Distribution Date for which clause (i) does not apply, and on
which any Class of Subordinate Certificates are
outstanding:
(a) in
the case of the Class of Subordinate Certificates then outstanding
with the Highest Priority and each other Class of Subordinate
Certificates for which the related Prepayment Distribution Trigger
has been satisfied, a fraction, expressed as a percentage, the
numerator of which is the Certificate Principal Balance of such
Class immediately prior to such date and the denominator of which
is the sum of the Certificate Principal Balances immediately prior
to such date of (1) the Class of Subordinate Certificates then
outstanding with the Highest Priority and (2) all other Classes of
Subordinate Certificates for which the respective Prepayment
Distribution Triggers have been satisfied; and
(b) in
the case of each other Class of Subordinate Certificates for which
the Prepayment Distribution Triggers have not been satisfied, 0%;
and
(iii) Notwithstanding
the foregoing, if the application of the foregoing percentages on
any Distribution Date as provided in Section 4.01(c) of this
Agreement (determined without regard to the proviso to the
definition of “Subordinate Principal Distribution
Amount”) would result in a distribution in respect of
principal of any Class or Classes of Subordinate Certificates in an
amount greater than the remaining Certificate
Principal Balance thereof (any such
class, a “Maturing Class”), then: (a) the Subordinate
Prepayment Percentage of each Maturing Class shall be reduced to a
level that, when applied as described above, would exactly reduce
the Certificate Principal Balance of such Class to zero; (b) the
Subordinate Prepayment Percentage of each other Class of
Subordinate Certificates (any such Class, a “Non-Maturing
Class”) shall be recalculated in accordance with the
provisions in paragraph (ii) above, as if the Certificate Principal
Balance of each Maturing Class had been reduced to zero (such
percentage as recalculated, the “Recalculated
Percentage”); (c) the total amount of the reductions in the
Subordinate Prepayment Percentages of the Maturing Class or Classes
pursuant to clause (a) of this sentence, expressed as an aggregate
percentage, shall be allocated among the Non-Maturing Classes in
proportion to their respective Recalculated Percentages (the
portion of such aggregate reduction so allocated to any
Non-Maturing Class, the “Adjustment Percentage”); and
(d) for purposes of such Distribution Date, the Subordinate
Prepayment Percentage of each Non-Maturing Class shall be equal to
the sum of (1) the Subordinate Prepayment Percentage thereof,
calculated in accordance with the provisions in paragraph (ii)
above as if the Certificate Principal Balance of each Maturing
Class had not been reduced to zero, plus (2) the related Adjustment
Percentage.
“Subordinate Principal
Distribution Amount”: With respect to any Distribution Date
and each Class of Class B Certificates, the sum of the
following:
(i) the
product of (x) the related Class B Percentage for such Class and
(y) the aggregate of the following amounts:
(1) the
principal portion of each Monthly Payment due during the related
Due Period on each Outstanding Mortgage Loan, whether or not
received on or prior to the related Determination Date minus the
principal portion of any Debt Service Reduction, which together
with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(2) the
Stated Principal Balance of any Mortgage Loan repurchased during
the related Prepayment Period pursuant to Section 2.02, 2.03, 3.15
or 3.16; and
(3) the
principal portion of all other unscheduled collections (other than
Principal Prepayments in Full and Curtailments and amounts received
in connection with a Cash Liquidation or REO Disposition of a
Mortgage Loan, including without limitation Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and REO Proceeds)
received during the related Prepayment Period to the extent applied
by the Master Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.16;
(ii) such
Class’s pro rata share, based on the Certificate Principal
Balance of each Class of Class B Certificates then outstanding, of,
with respect to each Mortgage Loan, for which a Cash Liquidation or
a REO Disposition occurred during the related Prepayment Period and
did not result in any Excess Special Hazard Losses, Excess Fraud
Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount
equal to the related unscheduled collections (including without
limitation Insurance Proceeds,
Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as
recoveries of principal of the related Mortgage Loan pursuant to
Section 3.16, to the extent such collections are not otherwise
distributed to the Senior Certificates;
(iii) the
product of (x) the related Subordinate Prepayment Percentage for
such Distribution Date and (y) the aggregate of all Principal
Prepayments in Full and Curtailments on the Mortgage Loans received
in the related Prepayment Period, to the extent not payable to the
Senior Certificates; and
(iv) if
such Class is the Class of Class B Certificates then outstanding
with the Highest Priority, an amount equal to the Excess
Subordinate Principal Amount; and
(v) any
amounts described in clauses (i), (ii) and (iii) as determined for
any previous Distribution Date, that remain undistributed to the
extent that such amounts are not attributable to Realized Losses
which have been allocated to a Class of Subordinate
Certificates;
provided, however, that such amount
shall in no event exceed the outstanding Certificate Principal
Balance of such Class of Certificates immediately prior to such
date.
“Subsequent Recoveries”:
Any amount recovered by the Master Servicer (net of reimbursable
expenses) with respect to a Liquidated Mortgage Loan with respect
to which a Realized Loss was incurred after the liquidation or
disposition of such Mortgage Loan.
“Sub-Servicer”: Any
Person with which the Master Servicer has entered into a
Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
“Sub-Servicing Account”:
An account established by a Sub-Servicer which meets the
requirements set forth in Section 3.08 and is otherwise acceptable
to the Master Servicer.
“Sub-Servicing
Agreement”: The written contract between the Master Servicer
and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
“Substitution Shortfall
Amount”: As defined in Section 2.03(c) hereof.
“Tax Matters Person”:
The tax matters person appointed pursuant to Section 9.01(c)
hereof.
“Tax Returns”: The
federal income tax return on Internal Revenue Service Form 1066,
U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any
successor forms, to be filed on behalf of the Trust in its capacity
as a REMIC under the REMIC Provisions, together with any and all
other information reports or returns that may be required to be
famished to the Certificateholders or filed with the Internal
Revenue Service or any other governmental taxing authority under
any applicable provisions of federal, state or local tax
laws.
“Termination Price”: As
defined in Section 10.01(a) hereof.
“Transition Cost: Any
documented fees, expenses and allocated costs reasonably incurred
by a successor master servicer or the Trustee in connection with a
transfer of servicing from the Master Servicer to a successor
master servicer, including without limitation, any costs or
expenses associated with the complete transfer of all master
servicing data and the completion, correction or manipulation of
such master servicing data as may be required by the Trustee to
correct any errors or insufficiencies in the master servicing data
or otherwise to enable the Trustee to master service the Mortgage
Loans properly and effectively.
“Trustee Fee”: With
respect to each Mortgage Loan and for any calendar month, an amount
equal to one month’s interest at the applicable Trustee Fee
Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month. Notwithstanding the
foregoing, in no event shall the aggregate Trustee Fee in a
calendar year be less than $7,000.
“Trustee Fee Rate”: With
respect to any Mortgage Loan, a rate equal to 0.0125% per
annum.
“Trust Fund”: REMIC I
and REMIC II.
“Uncertificated Monthly
Interest Distributable Amount”: An amount equal to the
interest accrued during the related Interest Accrual Period on the
Uncertificated Principal Balance of each Class of REMIC I Regular
Interest at the then-applicable Uncertificated Pass-Through Rate.
The Uncertificated Monthly Interest Distributable Amount on any
Class of REMIC I Regular Interest will be reduced by the amount of
(i) Prepayment Interest Shortfalls (to the extent not offset by the
Master Servicer with a payment of Compensating Interest as provided
in Section 3.24), (ii) the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses (including Excess Losses) not
allocated solely to one or more specific Classes of Certificates
pursuant to Section 4.02, (iii) the interest portion of Advances
previously made with respect to a Mortgage Loan or REO Property
which remained unreimbursed following the Cash Liquidation or REO
Disposition of such Mortgage Loan or REO Property that were made
with respect to delinquencies that were ultimately determined to be
Excess Losses and (iv) any other interest shortfalls not covered by
the subordination provided by the Class B Certificates, including
Relief Act Shortfalls, with all such reductions allocated among all
of the REMIC I Regular Interests in proportion to their respective
amounts of Uncertificated Monthly Interest Distributable Amount
payable on such Distribution Date which would have resulted absent
such reductions.
“Uncertificated Pass-Through
Rate”: With respect to each REMIC I Regular Interest and any
Distribution Date, a per annum rate equal to the weighted average
of the Net Mortgage Rates on each mortgage loan as of the Due Date
in the related Due Period, weighted on the basis of the respective
Stated Principal Balances of such Mortgage Loans as of the day
immediately preceding such Distribution Date (or, with respect to
the initial Distribution Date, at the close of business on the
Cut-off Date).
“Uncertificated Principal
Balance”: The principal amount of any REMIC I Regular
Interest outstanding as of any date of determination. The
Uncertificated Principal Balance of each REMIC I Regular Interest
initially shall be equal to the amount set forth in the
Preliminary
Statement with respect to such REMIC
I Regular Interest, and thereafter shall be reduced by all
distributions of principal made on such REMIC I Regular Interest
and shall be further reduced by Realized Losses allocated thereto.
The Uncertificated Principal Balance of each REMIC I Regular
Interest shall never be less than zero.
“Underwriting Guide”:
The underwriting guide of the Master Servicer, as revised from time
to time.
“Uninsured Cause” Any
cause of damage to property subject to a Mortgage such that the
complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
“United States Person”
or “U.S. Person”: A citizen or resident of the United
States, a corporation or partnership (including an entity treated
as a corporation or partnership for federal income tax purposes)
created or organized in, or under the laws of, the United States or
any state thereof or the District of Columbia (except, in the case
of a partnership, to the extent provided in regulations), provided
that, for purposes solely of the Class R Certificates, no
partnership or other entity treated as a partnership for United
States federal income tax purposes shall be treated as a United
States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a
corporation for United States federal income tax purposes are
United States Persons, or an estate whose income is subject to
United States federal income tax regardless of its source, or a
trust if (i) a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more such United States Persons have the authority to control all
substantial decisions of the trust or (ii) it is a trust which was
in existence on August 20, 1996, and was treated as a United States
person, for federal income tax purposes, on the previous day, and
elected to continue to be so treated.
“Value”: With respect to
any Mortgaged Property, the value thereof as determined by an
independent appraisal (or other collateral assessment, permitted by
the Underwriting Guide) made at the time of the origination of the
related Mortgage Loan; except that, with respect to any Mortgage
Loan that is a purchase money mortgage loan, the lesser of (i) the
value thereof as determined by an independent appraisal (or other
collateral assessment, permitted by the Underwriting Guide) made at
the time of the origination of such Mortgage Loan, if any, and (ii)
the sales price of the related Mortgaged Property.
“Voting Rights”: The
portion of the voting rights of all of the Certificates which is
allocated to any Certificate. The Voting Rights allocated among
Holders of such Certificates outstanding shall be the fraction,
expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of all the Certificates of such Class
then outstanding and the denominator of which is the aggregate
Certificate Principal Balance of all the Certificates then
outstanding. 99% of all Voting Rights will be allocated among all
holders of the Certificates (other than the Class R Certificates)
in proportion to their then outstanding Certificate Principal
Balances, 0.50% and 0.50% of all Voting Rights will be allocated to
the holders of the Class R-I Certificates and Class R-II
Certificates, respectively, in proportion to the Percentage
Interests evidenced by their respective Certificates; provided,
however, that any Certificate registered in the name of the Master
Servicer, the Depositor or the Trustee or any of their respective
affiliates shall not be included in the calculation of Voting
Rights.
“Written Order to
Authenticate”: A written order by which the Depositor directs
the Trustee to issue the Certificates.
Unless otherwise specified herein,
for the purpose of any definition or calculation, whenever amounts
are required to be netted, subtracted or added or any distributions
are taken into account such definition or calculation and any
related definitions or calculations shall be determined without
duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF
CERTIFICATES
|
Section 2.01
|
Conveyance of Mortgage
Loans.
|
The Depositor, concurrently with the
execution and delivery hereof, does hereby transfer, assign, set
over and otherwise convey to the Trustee without recourse for the
benefit of the Certificateholders all the right, title and interest
of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified
on the Mortgage Loan Schedule, the rights of the Depositor under
the Mortgage Loan Purchase Agreement (except Section 3.2 thereof),
the interest in the Limited Purpose Surety Bond transferred to the
Trustee pursuant to Section 2.03(e) and all other assets included
or to be included in the Trust Fund. Such assignment includes all
interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (but excluding
any payments of principal and interest due on or prior to the
Cut-off Date). The Depositor herewith delivers to the Trustee an
executed copy of the Mortgage Loan Purchase Agreement.
The parties hereto agree that it is
not intended that any mortgage loan be included in the Trust that
is (i) a “High-Cost Home Loan” as defined in the New
Jersey Home Ownership Act effective November 27, 2003, (ii) a
“High-Cost Home Loan” as defined in the New Mexico Home
Loan Protection Act effective January 1, 2004, (iii) a “High
Cost Home Mortgage Loan” as defined in the Massachusetts
Predatory Home Practices Act effective November 7, 2004 or (iv) a
“High-Cost Home Loan” as defined in the Indiana High
Cost Home Loan Law effective January 1, 2005.
In connection with the transactions
contemplated by this Agreement, PHH Mortgage Corporation and the
Trustee shall enter into an Assignment, Assumption and Recognition
Agreement with MLCC, in the form of Exhibit K hereto, pursuant to
which PHH Mortgage Corporation shall assign to the Trustee, for the
benefit of the Certificateholders, all of its right, title and
interest in and to the Additional Collateral Servicing Agreement
with respect to the Additional Collateral Mortgage Loans, and the
Trustee shall assume all of PHH Mortgage Corporation’s
obligations under the Additional Collateral Servicing Agreement
with respect to the Additional Collateral Mortgage Loans from and
after the date hereof.
In connection with the transfer and
assignment described herein, the Master Servicer on behalf of the
Depositor, shall deliver to, and deposit with, the Trustee, the
following documents or instruments:
|
(A)
|
with respect to each Mortgage Loan,
other than a Cooperative Loan:
|
(i) the
original Mortgage Note endorsed “Pay to the order of
Citibank, N.A., as Trustee for the registered holders of the PHHMC
Mortgage Pass-Through Certificates, Series 2005-5, without
recourse”, or endorsed “Pay to the order
of_____________________ without recourse,” and signed in the
name of the last named endorsee by an authorized officer, together
with all prior and intervening
endorsements showing a complete
chain of endorsement from the originator to the Person so endorsing
to the last endorsee;
(ii) the
original Mortgage, noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording
thereon which have been recorded, with evidence of recording
thereon or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;
(iii) Unless
the Mortgage Loan is registered on the MERS® System, an
original Assignment of the Mortgage (A) executed in the following
form “Citibank, N.A., as Trustee for the registered holders
of the PHHMC Mortgage Pass-Through Certificates, Series
2005-5”, or (B) in blank, which assignment appears to be in
form and substance acceptable for recording;
(iv) the
original recorded Assignment or Assignments of the Mortgage showing
a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee (or to MERS, if the Mortgage
Loan is registered on the MERS® System and noting the presence
of a MIN) as contemplated by the immediately preceding clause
(iii), if applicable and only to the extent available to the
Depositor with evidence of recording thereon;
(v) the
originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon, if
any;
(vi) a
copy of any guarantee (other than Additional Collateral) executed
in connection with the Mortgage Note;
(vii) the
original of any security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage;
|
(viii)
|
the original power of attorney, if
applicable; and
|
(ix) if
such Mortgage Loan is a Buydown Mortgage Loan (as shown in the
Mortgage Loan Schedule), the original Buydown Agreement or a copy
thereof; and
(B) in
addition, with respect to each Mortgage Loan that is an Additional
Collateral Mortgage Loan (as indicated on the Mortgage Loan
Schedule):
(i) a
copy of the related Mortgage 100 K Pledge Agreement or Parent Power
Agreement, as applicable; and
(ii) a
copy of the related UCC-1, to the extent that MLCC was required to
deliver such UCC-1 to the Master Servicer, and an original form
UCC-3, if applicable, to the extent that MLCC was required to
deliver such UCC-3 to the Master Servicer; or
(C) with
respect to each Mortgage Loan that is a Cooperative Loan (as
indicated on the Mortgage Loan Schedule):
(i) the
original Mortgage Note endorsed “Pay to the order of
Citibank, N.A., as Trustee for the registered holders of the PHHMC
Mortgage Pass-Through Certificates, Series 2005-5, without
recourse”, or endorsed “Pay to the order of
_____________________ without recourse,” and signed in the
name of the last named endorsee by an authorized officer, together
with all prior and intervening endorsements showing a complete
chain of endorsement from the originator to the Person so endorsing
to the last endorsee;
(ii) the
original duly executed assignment of Security Agreement to the
Trustee;
(iii) the
acknowledgment copy of the original executed Form UCC-1 (or
certified copy thereof) with respect to the Security Agreement, and
any required continuation statements;
(iv) the
acknowledgment copy of the original executed Form UCC-3 with
respect to the security agreement, indicating the Trustee as the
assignee of the secured party;
(v) the
stock certificate representing the Cooperative Assets allocated to
the cooperative unit, with a stock power in blank
attached;
(vi) the
original collateral assignment of the proprietary lease by
Mortgagor to the originator;
|
(vii)
|
a copy of the recognition
agreement;
|
(viii) if
applicable and to the extent available, the original intervening
assignments, including warehousing assignments, if any, showing, to
the extent available, an unbroken chain of the related Mortgage
Loan to the Trustee, together with a copy of the related Form UCC-3
with evidence of filing thereon; and
(ix) the
originals of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loan;
provided, however, that in lieu of
the foregoing, the Depositor may deliver the following documents,
under the circumstances set forth below: (x) in lieu of the
original Mortgage, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered
or will, upon receipt of recording information relating to the
Mortgage required to be included thereon, be delivered to recording
offices for recording and have not been returned to the Depositor
within 270 days of the Closing Date, the Depositor may deliver a
true copy thereof with an Officer’s Certificate certifying
that such Mortgage, assignment to the Trustee or intervening
assignment has been delivered to the appropriate recording office
for recording; and (y) in lieu of the Mortgage, assignment to the
Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced
by a certification from the Depositor or the Master Servicer, to
such effect) the Depositor may deliver photocopies of such
documents containing an original certification by the judicial or
other governmental authority of the jurisdiction where such
documents were recorded; and provided, further,
however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off
Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, may deliver to the Trustee a
certification to such effect and shall deposit all amounts paid in
respect of such Mortgage Loans in the Distribution Account on the
Closing Date. The Depositor shall deliver such original documents
(including any original documents as to which certified copies had
previously been delivered) to the Trustee promptly after they are
received.
The Depositor may, in lieu of
delivering the original of the documents set forth in Section
2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section
2.01(C)(i)) (or copies thereof as permitted by this Section 2.01)
to the Trustee, deliver such documents to the Master Servicer, and
the Master Servicer shall hold such documents in trust for the use
and benefit of all present and future Certificateholders until such
time as is set forth in the next sentence. Within 60 days following
the earlier of (i) the receipt of the original of all of the
documents or instruments set forth in Section 2.01(A), (B) and (C)
(other than Section 2.01(A)(i) and Section 2.01(C)(i)) (or copies
thereof as permitted by such Section) for any Mortgage Loan and
(ii) a written request by the Trustee to deliver those documents
with respect to any or all of the Mortgage Loans then being held by
the Master Servicer, the Master Servicer shall deliver a complete
set of such documents to the Trustee.
The Depositor shall, at its expense,
cause the Assignment of the Mortgage to the Trustee to be recorded
not later than 270 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agency or an Opinion of
Counsel has been provided as set forth below in this Section 2.01
or (b) MERS is identified on the Mortgage or on a properly recorded
assignment of the Mortgage as the mortgagee of record. With respect
to the Cooperative Loans, the Depositor will, promptly after the
Closing Date, cause the related financing statements (if not yet
filed) and an assignment thereof from the Depositor to the Trustee
to be filed in the appropriate offices. The Depositor need not
cause to be recorded any assignment in any jurisdiction under the
laws of which, as evidenced by an Opinion of Counsel delivered by
the Depositor to the Trustee and the Rating Agency, the recordation
of such assignment is not necessary to protect the Trustee’s
interest in the related Mortgage Loan; provided, however,
notwithstanding the delivery of any Opinion of Counsel, each
assignment shall be submitted for recording by the Depositor in the
manner described above, at no expense to the Trust Fund or the
Trustee, upon the earliest to occur of: (i) reasonable direction by
the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust Fund, (ii) the
occurrence of a Master Servicer Event of Termination, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to
the Depositor, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof and (v) with respect to any one
assignment, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Depositor fails to pay the
cost of recording the assignments, such expense will be paid by the
Trustee and the Trustee shall be reimbursed for such expenses by
the Trust Fund in accordance with Section 8.05.
In connection with the assignment of
any Mortgage Loan registered on the MERS® System, the
Depositor further agrees that it will cause, at the
Depositor’s own expense, within 30 Business Days after the
Closing Date, the MERS® System to indicate that such Mortgage
Loans have been assigned by the Depositor to the Trustee in
accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the
field which identifies the specific
Trustee and (b) the code in the field “Pool Field”
which identifies the series of the Certificates issued in
connection with such Mortgage Loans. The Depositor further agrees
that it will not, and will not permit the Master Servicer to, and
the Master Servicer agrees that it will not, alter the codes
referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this
Agreement.
If any original Mortgage Note
referred to in Section 2.01(A)(i) or 2.01(C)(i) above cannot be
located, the obligations of the Depositor to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee of a
photocopy of such Mortgage Note, if available, with a Lost Note
Affidavit. If any of the original Mortgage Notes for which a Lost
Note Affidavit was delivered to the Trustee is subsequently
located, such original Mortgage Note shall be delivered to the
Trustee within three Business Days.
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Section 2.02
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Acceptance of Trust Fund by the
Trustee.
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Subject to the provisions of Section
2.01 and subject to any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges
receipt of the documents referred to in Section 2.01 above and
declares that it holds and will hold such documents and the other
documents delivered to it constituting the Mortgage File, and that
it holds or will hold all such assets and such other assets
included in the definition of the “Trust Fund” and the
rights of the Sellers with respect to any Additional Collateral and
the Limited Purpose Surety Bond assigned to the Trustee pursuant to
Section 2.03(e) in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees, for the benefit
of the Certificateholders, to review each Mortgage File on or
before the Closing Date and to certify on the Closing Date in
substantially the form attached hereto as Exhibit I-1 that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part
of such Mortgage File required to be delivered to it pursuant to
this Agreement are in its possession, provided that with respect to
the documents described in Section 2.01(A)(v), (vi) and (vii) and
2.01(C)(ix) to the extent the Trustee has actual knowledge that
such documents exist, (ii) such documents have been reviewed by it
and are not torn, mutilated, defaced or otherwise altered (except
if initialed by the obligor) and relate to such Mortgage Loan,
(iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that
corresponds to items (i) through (iii) (except the ZIP Code), (ix)
and (xv) of the definition of “Mortgage Loan Schedule”
accurately reflects information set forth in the Mortgage File.
Notwithstanding anything to the contrary in this Agreement, it is
herein acknowledged that, in conducting such review, the Trustee is
under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine
whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or
that they are other than what they purport to be on their face, or
to determine whether any Person executing any documents is
authorized to do so or whether any signature is genuine.
The Trustee agrees, for the benefit
of the Certificateholders, to review each Mortgage File within 60
days following the Closing Date and to certify in substantially the
form attached
hereto as Exhibit I-2 that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part
of such Mortgage File (other than such documents described in
Section 2.01(A)(v)) required to be delivered to it pursuant to this
Agreement are in its possession, provided that with respect to the
documents described in Section 2.01(A)(v), (vi) and (vii) and
2.01(C)(ix) to the extent the Trustee has actual knowledge that
such documents exist, (ii) such documents have been reviewed by it
and are not tom, mutilated, defaced or otherwise altered (except if
initialed by the obligor) and appear regular on their face and
relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage
Loan Schedule that corresponds to items (i) through (iii)(except
the ZIP code), (ix) and (xv) of the definition of “Mortgage
Loan Schedule” accurately reflects information set forth in
the Mortgage File. It is herein acknowledged that, in conducting
such review, the Trustee is under no duty or obligation (i) to
inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine,
enforceable, or appropriate for the represented purpose or whether
they have actually been recorded or that they are other than what
they purport to be on their face, or to determine whether any
Person executing any documents is authorized to do so or whether
any signature is genuine.
Prior to the first anniversary date
of this Agreement the Trustee shall deliver to the Depositor and
the Master Servicer a final certification in the form annexed
hereto as Exhibit I-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon, except with
respect to the documents described in Section 2.01(A)(v), (vi) and
(vii) and 2.01(C)(ix), to the extent the Trustee has actual
knowledge that such documents exist.
If in the process of reviewing the
Mortgage Files and making or preparing, as the case may be, the
certifications referred to above, the Trustee finds any document or
documents constituting a part of a Mortgage File to be missing or
defective in any material respect, at the conclusion of its review
the Trustee shall so notify the Depositor and the Master Servicer.
In addition, upon the discovery by the Depositor, the Master
Servicer or the Trustee of a breach of any of the representations
and warranties made by the Sellers in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially
adversely affects such Mortgage Loan or the interests of the
related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the
other parties.
The Trustee shall, at the written
request and expense of any Certificateholder, provide a written
report to such Certificateholder of all Mortgage Files released to
the Master Servicer for servicing purposes.
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Section 2.03
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Repurchase or Substitution of Mortgage Loans by
the Sellers- Assignment of Interest in Additional
Collateral.
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(a) Upon
discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File or of the
breach by a Seller of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan which materially adversely affects the value of such
Mortgage Loan or the interest therein of the Certificateholders, by
the Trustee, the Master Servicer or the Depositor shall promptly
notify such Seller and the Trustee, the Master Servicer and the
Depositor of such
defect, missing document or breach
and request that such Seller deliver such missing document or cure
such defect or breach within 90 days from the date such Seller was
notified of such missing document, defect or breach, and if such
Seller does not deliver such missing document or cure such defect
or breach in all material respects during such period, the Master
Servicer (or, in accordance with Section 3.02(b), the Trustee)
shall enforce the obligations of such Seller under the Mortgage
Loan Purchase Agreement to repurchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on
which such Seller was notified (subject to Section 2.03(d)) of such
missing document, defect or breach, if and to the extent that such
Seller is obligated to do so under the Mortgage Loan Purchase
Agreement. If such defect or breach can ultimately be cured but is
not reasonably expected to be cured within the 90-day period, then
the applicable Seller shall have such additional time, if any, as
is reasonable, to cure such defect or breach, provided that the
applicable Seller has commenced curing or correcting such defect or
breach and is diligently pursuing same. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection
Account, within three Business Days of expiration of the applicable
time period referred to above, and the Trustee, upon receipt of
written certification from the Master Servicer of such deposit,
shall release to the applicable Seller the related Mortgage File
and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as such Seller shall
furnish to it and as shall be necessary to vest in such Seller any
Mortgage Loan released pursuant hereto, and the Trustee shall have
no further responsibility with regard to such Mortgage File. In
lieu of repurchasing any such Mortgage Loan as provided above, if
so provided in the related Mortgage Loan Purchase Agreement, a
Seller may cause such Mortgage Loan to be removed from the Trust
Fund (in which case it shall become a Defective Mortgage Loan) and
substitute one or more Eligible Substitute Mortgage Loans in the
manner and subject to the limitations set forth in Section 2.03(d).
If the breach of representation and warranty that gave rise to the
obligation to repurchase or substitute a Mortgage Loan pursuant to
Section 3.2 of the Mortgage Loan Purchase Agreement was the
representation and warranty set forth in clause (xlvi) of Section
3.1 thereof, then the Master Servicer shall request that PHH
Mortgage pay to the Trust Fund, concurrently with and in addition
to the remedies provided in the preceding four sentences, an amount
equal to any liability, penalty or expense that was actually
incurred and paid out of or on behalf of the Trust Fund, and that
directly resulted from such breach, or if incurred and paid by the
Trust Fund thereafter, concurrently with such payment. In
furtherance of the foregoing, if the Seller that repurchases the
Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS® System, the Master Servicer, at its
own expense and without any right of reimbursement, shall cause
MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to such Seller
and shall cause such Mortgage to be removed from registration on
the MERS® System in accordance with MERS’ rules and
regulations. It is understood and agreed that the obligation of a
Seller to cure or to repurchase (or to substitute for) any Mortgage
Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has
occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the
Depositor, the Master Servicer or the Trustee on behalf of the
Certificateholders.
(b) Within
90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set
forth in Section 2.04 which materially and adversely affects the
interests of
the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all
material respects.
(c) Any
substitution of Eligible Substitute Mortgage Loans for Defective
Mortgage Loans made pursuant to Section 2.03(a), in the case of a
Seller, must be effected prior to the date which is two years after
the Closing Date.
As to any Defective Mortgage Loan
for which a Seller substitutes a Eligible Substitute Mortgage Loan
or Loans, such substitution shall be effected by such Seller
delivering to the Trustee, for such Eligible Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to
the Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01,
together with an Officers’ Certificate providing that each
such Eligible Substitute Mortgage Loan satisfies the definition
thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The
Trustee shall acknowledge receipt of the original Mortgage Note for
such Eligible Substitute Mortgage Loan or Loans and, within ten
Business Days thereafter, review such documents in the manner
specified in Section 2.02 and deliver to the Depositor and the
Master Servicer, with respect to such Eligible Substitute Mortgage
Loan or Loans, a certification substantially in the form attached
hereto as Exhibit I-1, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Trustee
shall deliver to the Depositor and the Master Servicer a
certification substantially in the form of Exhibit I-2 hereto with
respect to such Eligible Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with
respect to Eligible Substitute Mortgage Loans in the month of
substitution are not part of the Trust Fund and will be retained by
the related Seller. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such
Defective Mortgage Loan on or before the Due Date in the month of
substitution, and the related Seller shall thereafter be entitled
to retain all amounts subsequently received in respect of such
Defective Mortgage Loan. The Depositor shall give or cause to be
given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan
Schedule to reflect the removal of such Defective Mortgage Loan
from the terms of this Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Eligible Substitute Mortgage Loan or Loans shall
constitute part of the Mortgage Pool and shall be subject in all
respects to the terms of this Agreement and, in the case of a
substitution effected by a Seller, the Mortgage Loan Purchase
Agreement, including, in the case of a substitution effected by a
Seller, all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement in each case as of
the date of substitution.
For any month in which a Seller
substitutes one or more Eligible Substitute Mortgage Loans for one
or more Defective Mortgage Loans, the Master Servicer will
determine the amount (the “Substitution Shortfall
Amount”), if any, by which the aggregate principal balance of
all such Eligible Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of
all such Defective Mortgage Loans (in each case after application
of the principal portion of the Monthly Payments due in the month
of substitution that are to be distributed to the
Certificateholders in the month of substitution). On the date of
such substitution, the applicable Seller will deliver or cause to
be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if
any, and the Trustee, upon receipt of the related Eligible
Substitute Mortgage Loan or
Loans and certification by the
Master Servicer of such deposit, shall release to the applicable
Seller the related Mortgage File or Files and shall execute and
deliver such instruments of transfer or assignment, in each case
without recourse, as such Seller shall deliver to it and as shall
be necessary to vest therein any Defective Mortgage Loan released
pursuant hereto.
In addition, the applicable Seller
shall obtain at its own expense and deliver to the Trustee an
Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund,
including without limitation, any federal tax imposed on
“prohibited transactions” under Section 860F(a)(1) of
the Code or on “contributions after the startup date”
under Section 860G(d)(1) of the Code, or (b) any REMIC to fail to
qualify as a REMIC at any time that any Certificate is
outstanding.
(d) Upon
discovery by the Depositor, a Seller, the Master Servicer or the
Trustee that any Mortgage Loan does not constitute a
“qualified mortgage” within the meaning of Section
860G(a)(3) of the Code, the party discovering such fact shall
within two Business Days give written notice thereof to the other
parties. In connection therewith, the related Seller shall
repurchase or, subject to the limitations set forth in Section
2.03(c), substitute one or more Eligible Substitute Mortgage Loans
for the affected Mortgage Loan within 60 days of the earlier of
discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made by the
related Seller, as the case may be, if the affected Mortgage
Loan’s status as a non-qualified mortgage is or results from
a breach of any representation, warranty or covenant made by the
related Seller under the Mortgage Loan Purchase Agreement. Any such
repurchase or substitution shall be made in the same manner as set
forth in Sections 2.03(a), if made by the related Seller. The
Trustee shall reconvey to the related Seller the Mortgage Loan to
be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty.
(e) The
Depositor hereby assigns to the Trustee its security interest in
and to any Additional Collateral, its right to receive amounts due
or to become due in respect of any Additional Collateral, all of
its rights in each Additional Collateral Agreement, and its rights
as beneficiary under the Limited Purpose Surety Bond in respect of
any Additional Collateral Mortgage Loans. With respect to any
Additional Collateral Mortgage Loan, the Additional Collateral
Servicer shall cause to be filed in the appropriate recording
office a Form UCC-3 giving notice of the assignment of the related
security interest to the Trust Fund and shall thereafter cause the
timely filing of all necessary continuation statements with regard
to such financing statements.
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Section 2.04
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Representations, Warranties and
Covenants of the Master Servicer.
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The Master Servicer hereby
represents, warrants and covenants to the Trustee, for the benefit
of each of the Trustee and the Certificateholders, and to the
Depositor, that as of the Closing Date or as of such date
specifically provided herein:
(i) The
Master Servicer is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey and
is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is
located
or is otherwise not required under
applicable law to effect such qualification and, in any event, is
in compliance with the doing business laws of any such State, to
the extent necessary to ensure its ability to enforce each Mortgage
Loan and to service the Mortgage Loans in accordance with the terms
of this Agreement;
(ii) The
Master Servicer has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary corporate
action on the part of the Master Servicer the execution, delivery
and performance of this Agreement; and this Agreement, assuming the
due authorization, execution and delivery thereof by the Depositor
and the Trustee, constitutes a legal, valid and binding obligation
of the Master Servicer, enforceable against the Master Servicer in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors’ rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be
brought;
(iii) The
execution and delivery of this Agreement by the Master Servicer,
the servicing of the Mortgage Loans by the Master Servicer
hereunder, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms
hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a breach of any term or
provision of the charter or by-laws of the Master Servicer or (B)
conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material
agreement or instrument to which the Master Servicer is a party or
by which it may be bound, or any statute, order or regulation
applicable to the Master Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Master Servicer; and the Master Servicer is not a party to,
bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and
adversely affect, (x) the ability of the Master Servicer to perform
its obligations under this Agreement or (y) the business,
operations, financial condition, properties or assets of the Master
Servicer taken as a whole;
(iv) The
Master Servicer is an approved seller/servicer for Fannie Mae or
Freddie Mac in good standing and is a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act;
(v) No
litigation is pending against the Master Servicer that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master
Servicer to service the Mortgage Loans or to perform any of its
other obligations hereunder in accordance with the terms
hereof;
(vi) No
consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the
Master Servicer with, this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(vii) The
Master Servicer is a member of MERS in good standing, and will
comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans that
are registered with MERS.
It is understood and agreed that the
representations, warranties and covenants set forth in this Section
2.04 shall survive delivery of the Mortgage Files to the Trustee
and shall inure to the benefit of the Trustee, the Depositor and
the Certificateholders. Upon discovery by any of the Depositor, the
Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests
therein of the Certificateholders, the party discovering such
breach shall give prompt written notice (but in no event later than
two Business Days following such discovery) to the Trustee. Subject
to Section 7.01, the obligation of the Master Servicer set forth in
Section 2.03(c) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Certificateholders,
the Depositor or the Trustee on behalf of the Certificateholders
respecting a breach of the representations, warranties and
covenants contained in this Section 2.04.
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Section 2.05
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Representations and Warranties of
the Depositor.
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The Depositor represents and
warrants to the Trust and the Trustee on behalf of the
Certificateholders as follows:
(i) This
agreement constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of
creditors’ rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in
equity);
(ii) Immediately
prior to the sale and assignment by the Depositor to the Trustee on
behalf of the Trust of each Mortgage Loan, the Depositor had good
and marketable title to each Mortgage Loan (insofar as such title
was conveyed to it by a Seller, as set forth in the Mortgage Loan
Purchase Agreement) subject to no prior lien, claim, participation
interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;
(iii) As
of the Closing Date, the Depositor has transferred all right, title
and interest in the Mortgage Loans to the Trustee on behalf of the
Trust;
(iv) The
Depositor has not transferred the Mortgage Loans to the Trustee on
behalf of the Trust with any intent to hinder, delay or defraud any
of its creditors;
(v) The
Depositor has been duly formed and is validly existing as a limited
liability company in good standing under the laws of Delaware, with
full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The
Depositor is not in violation of its certificate of formation or
limited liability company agreement or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Depositor is a party or by which it or its properties may be
bound, which default might result in any material adverse changes
in the financial condition, earnings, affairs or business of the
Depositor or which might materially and adversely affect the
properties or assets, taken as a whole, of the
Depositor;
(vii) The
execution, delivery and performance of this Agreement by the
Depositor, and the consummation of the transactions contemplated
thereby, do not and will not result in a material breach or
violation of any of the terms or provisions of, or, to the
knowledge of the Depositor, constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Depositor is a party or by
which the Depositor is bound or to which any of the property or
assets of the Depositor is subject, nor will such actions result in
any violation of the provisions of the certificate of formation or
limited liability company agreement of the Depositor or, to the
best of the Depositor’s knowledge without independent
investigation, any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Depositor or any of its properties or assets (except for such
conflicts, breaches, violations and defaults as would not have a
material adverse effect on the ability of the Depositor to perform
its obligations under this Agreement);
(viii) To the
best of the Depositor’s knowledge without any independent
investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation
by the Depositor of the other transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as (a) may be required under State
securities or Blue Sky laws, (b) have been previously obtained or
(c) the failure of which to obtain would not have a material
adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this
Agreement; and
(ix) There
are no actions, proceedings or investigations pending before or, to
the Depositor’s knowledge, threatened by any court,
administrative agency or other tribunal to which the Depositor is a
party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material
adverse effect on the business, results of operations or financial
condition of the Depositor; (b) asserting the invalidity of this
Agreement or the Certificates; (c) seeking to prevent the issuance
of the Certificates or the consummation by the Depositor of any of
the transactions contemplated by this Agreement, as the case may
be; (d) which might
materially and adversely affect the
performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement.
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Section 2.06
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Purpose and Powers of the
Trust.
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The purpose of the trust, as created
hereunder, is to engage in the following activities:
(i) to
issue the Certificates to or at the direction of the Depositor in
exchange for the Mortgage Loans;
(ii) to
perform the activities of the trust that are expressly set forth in
this Agreement;
(iii) to
engage in those activities that are reasonably necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto
or connected therewith; and
(iv) subject
to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of
the Trust Fund and the making of distributions to the
Certificateholders.
The trust is hereby authorized to
engage in the foregoing activities.
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Section 2.07
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Issuance of
Certificates.
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(a) The
Trustee acknowledges the assignment to it on behalf of the Trust
Fund of the Mortgage Loans and the other assets comprising the
Trust Fund and, concurrently therewith, has signed, and
authenticated and delivered to the Depositor, in exchange therefor,
Certificates in such authorized denominations representing such
Percentage Interests as the Depositor has requested. The Trustee
agrees that it will hold the Mortgage Loans and such other assets
as may from time to time be delivered to it segregated on the books
of the Trustee in trust for the benefit of the
Certificateholders.
(b) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the assets of REMIC I for the
benefit of the holders of the REMIC I Regular Interests. The
Trustee acknowledges receipt of the assets of REMIC I and declares
that it holds and will hold the same in trust for the exclusive use
and benefit of the holders of the REMIC I Regular
Interests.
(c) The
Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the Depositor in and to the REMIC I Regular Interests
and the other assets of REMIC II for the benefit of the
Certificateholders. The Trustee acknowledges receipt of the REMIC I
Regular Interests (which are uncertificated) and the other assets
of REMIC II and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the
Certificateholders.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE
TRUST FUND
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Section 3.01
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Master Servicer to Act as Master
Servicer.
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The Master Servicer shall service
and administer the Mortgage Loans on behalf of the Trustee and in
the best interests of and for the benefit of the Certificateholders
(as determined by the Master Servicer in its reasonable judgment)
in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in
the same manner in which it services and administers similar
mortgage loans for its own portfolio, giving due consideration to
customary and usual standards of practice of prudent mortgage
lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any
relationship that the Master Servicer, any Sub-Servicer or any
Affiliate of the Master Servicer or any Sub-Servicer may have with
the related Mortgagor;
(ii) the
ownership of any Certificate by the Master Servicer or any
Affiliate of the Master Servicer;
(iii) the
Master Servicer’s obligation to make Advances or Servicing
Advances; or
(iv) the
Master Servicer’s or any Sub-Servicer’s right to
receive compensation for its services hereunder or with respect to
any particular transaction.
To the extent consistent with the
foregoing, the Master Servicer shall also seek to maximize the
timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the respective
Mortgage Loans, the Master Servicer shall have full power and
authority, acting alone or through Sub-Servicers as provided in
Section 3.02, 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. Without limiting the generality of the
foregoing, the Master Servicer in its own name or in the name of a
Sub-Servicer is hereby authorized and empowered by the Trustee when
the Master Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute
and deliver, on behalf of the Certificateholders and the Trustee,
and upon notice to the Trustee, any and all instruments of
satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to
the Mortgage Loans and the Mortgaged Properties and to institute
foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee
and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state
and federal law and shall provide to the Mortgagors any reports
required to be provided to them thereby. The Master Servicer shall
also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under each
Primary Insurance Policy and any standard hazard insurance policy.
Subject to Section 3.17, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer
and any Sub-Servicer such documents as are
necessary or appropriate to enable
the Master Servicer or any Sub-Servicer to carry out their
servicing and administrative duties hereunder, and the Trustee
hereby grants to the Master Servicer a power of attorney to carry
out such duties. The Trustee shall not be liable for the actions of
the Master Servicer or any Sub-Servicers under such powers of
attorney.
In accordance with the standards of
the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the
timely payment of taxes and assessments on the Mortgaged
Properties, which advances shall be Servicing Advances reimbursable
in the first instance from related collections from the Mortgagors
pursuant to Section 3.09, and further as provided in Section 3.11.
Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit.
The Master Servicer further is
authorized and empowered by the Trustee, on behalf of the
Certificateholders and the Trustee, in its own name or in the name
of the Sub-Servicer, when the Master Servicer or the Sub-Servicer,
as the case may be, believes it is appropriate in its best judgment
to register any Mortgage Loan on the MERS® System, or cause
the removal from the registration of any Mortgage Loan on the
MERS® System, to execute and deliver, on behalf of the Trustee
and the Certificateholders or any of them, any and all instruments
of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS,
solely as nominee for the Trustee and its successors and assigns.
Any expenses incurred in connection with the actions described in
the preceding sentence shall be borne by the Master Servicer in
accordance with Section 3.18, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming
unable to continue operations in connection with the MERS System,
it becomes necessary to remove any Mortgage Loan from registration
on the MERS System and to arrange for the assignment of the related
Mortgages to the Trustee, then any related expenses shall be
reimbursable to the Master Servicer.
Notwithstanding anything in this
Agreement to the contrary, the Master Servicer may not make any
future advances with respect to a Mortgage Loan (except as provided
in Section 4.06) and the Master Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change
the Loan Rate, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal) or change
the final maturity date on such Mortgage Loan (unless, as provided
in Section 3.07, the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master
Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan
under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause either
the Trust Fund to fail to qualify as a REMIC under the Code or the
imposition of any tax on “prohibited transactions” or
“contributions after the startup date” under the REMIC
Provisions.
Notwithstanding any other provision
of this Agreement or the Additional Collateral Servicing Agreement
to the contrary, except as provided below, the Master Servicer
shall have no duty or obligation to service and administer the
Additional Collateral and the Master Servicer shall not be deemed
to be the Additional Collateral Servicer, unless and until
MLCC’s
obligations to administer the
Additional Collateral under the Additional Collateral Servicing
Agreement have been terminated with respect to the Additional
Collateral Mortgage Loans, in which case, the Master Servicer shall
be bound to service and administer the Additional Collateral and
the Limited Purpose Surety Bond in accordance with the provisions
of this Agreement and the related Additional Collateral Agreements
from the date of such termination. The Trustee, as assignee of the
Additional Collateral Servicing Agreement, shall enforce the
obligations of MLCC to service and administer the Additional
Collateral as provided in the Additional Collateral Servicing
Agreement, and shall take appropriate action thereunder if MLCC
fails to substantially comply with its obligations to administer
the Additional Collateral. In the event the Trustee receives an
indemnification payment from MLCC under Section 3 of the Additional
Collateral Servicing Agreement that is attributable to losses
resulting from MLCC’s failure to administer the Additional
Collateral in accordance with the terms of the Additional
Collateral Servicing Agreement in connection with Additional
Collateral Mortgage Loans, the Trustee shall deposit such amount in
the Collection Account.
The Master Servicer may delegate its
responsibilities under this Agreement; provided, however, that no
such delegation shall release the Master Servicer from the
responsibilities or liabilities arising under this
Agreement.
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Section 3.02
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Sub-Servicing Agreements Between the Master
Servicer and Sub-Servicers.
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(a) The
Master Servicer may enter into Sub-Servicing Agreements (provided
that such agreements would not result in a withdrawal or a
downgrading by the Rating Agency of the rating on any Class of
Certificates) with Sub-Servicers, for the servicing and
administration of the Mortgage Loans. Notwithstanding any other
provision of this Agreement, the Master Servicer shall not be
precluded from selling all or part of the Servicing Fee relating to
any Mortgage Loans to any Sub-Servicer, provided that with respect
to any Mortgage Loan as to which the Master Servicer sells all or a
part of the related Servicing Fee, the Master Servicer shall retain
full responsibility under this Agreement for the servicing
activities relating to such Mortgage Loan.
Each Sub-Servicer shall be (i)
authorized to transact business in the state or states in which the
related Mortgaged Properties it is to service are situated, if and
to the extent required by applicable law to enable the Sub-Servicer
to perform its obligations hereunder and under the Sub-Servicing
Agreement, (ii) an institution approved as a mortgage loan
originator by the Federal Housing Administration or an institution
the deposit accounts of which are insured by the FDIC and (iii) a
Freddie Mac or Fannie Mae approved mortgage servicer. Each
Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section 3.08
and provide for servicing of the Mortgage Loans consistent with the
terms of this Agreement. The Master Servicer will examine each
Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The
Master Servicer and the Sub-Servicers may enter into and make
amendments to the Sub-Servicing Agreements or enter into different
forms of Sub-Servicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such
amendment or different form shall be made or entered into which
could be reasonably expected to be materially adverse to the
interests of the
Certificateholders, without the
consent of the Holders of Certificates entitled to at least 66% of
the Voting Rights. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights from
the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Sub-Servicing Accounts, or credits and
charges to the Sub-Servicing Accounts or the timing and amount of
remittances by the Sub-Servicers to the Master Servicer, are
conclusively deemed to be inconsistent with this Agreement and
therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments
or modifications thereof, promptly upon the Master Servicer’s
execution and delivery of such instruments.
(b) As
part of its servicing activities hereunder, the Master Servicer
(except as otherwise provided in the last sentence of this
paragraph), for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement and of each
Seller under the Mortgage Loan Purchase Agreement, including,
without limitation, any obligation to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement, or to
purchase a Mortgage Loan on account of missing or defective
documentation or on account of a breach of a representation,
warranty or covenant, as described in Section 2.03(a). Such
enforcement, including, without limitation, the legal prosecution
of claims, termination of Sub-Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds
all amounts due in respect of the related Mortgage Loans, or (ii)
from a specific recovery of costs, expenses or attorneys’
fees against the party against whom such enforcement is directed.
Enforcement of the obligations under the Mortgage Loan Purchase
Agreement against the Sellers shall be effected by the Master
Servicer, in accordance with the foregoing provisions of this
paragraph.
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Section 3.03
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Successor
Sub-Servicers.
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The Master Servicer shall be
entitled to terminate any Sub-Servicing Agreement and the rights
and obligations of any Sub-Servicer pursuant to any Sub-Servicing
Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub
Servicer, all servicing obligations of such Sub-Servicer shall be
assumed simultaneously by the Master Servicer without any act or
deed on the part of such Sub-Servicer or the Master Servicer, and
the Master Servicer either shall service directly the related
Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section
3.02.
Any Sub-Servicing Agreement
