|
Exhibit 4.1
==============================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
------------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2005-2
==============================================================================
<PAGE>
Table of Contents
-----------------
Page
----
ARTICLE I.
DEFINITIONS
Section 1.01 Defined
Terms..............................................8
Section 1.02 Certain Interpretive
Provisions...........................46
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans..............................47
Section 2.02 Acceptance by Trustee of the Mortgage
Loans...............54
Section 2.03 Representations, Warranties and Covenants of
the
Master Servicer and the Sellers...........................60
Section 2.04 Representations and Warranties of the
Depositor...........78
Section 2.05 Delivery of Opinion of Counsel in Connection
with
Substitutions and Repurchases.............................79
Section 2.06 Authentication and Delivery of
Certificates...............80
Section 2.07 Covenants of the Master
Servicer..........................80
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage
Loans.................81
Section 3.02 Subservicing; Enforcement of the Obligations of
Master Servicer...........................................82
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer and the Trustee
in Respect of the Master Servicer.........................83
Section 3.04 Trustee to Act as Master
Servicer.........................84
Section 3.05 Collection of Mortgage Loan Payments;
Certificate
Account; Distribution Account; Pre-Funding Account;
Seller Shortfall Interest Requirement.....................84
Section 3.06 Collection of Taxes, Assessments and Similar
Items;
Escrow Accounts...........................................88
Section 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans..............................88
Section 3.08 Permitted Withdrawals from the Certificate
Account,
Distribution Account, Carryover Reserve Fund and the
Principal Reserve Fund....................................89
Section 3.09
[Reserved]................................................91
Section 3.10 Maintenance of Hazard
Insurance...........................91
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements................................................92
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized Losses;
Repurchase of Certain Mortgage Loans......................93
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage
Files........97
Section 3.14 Documents, Records and Funds in Possession of
Master
Servicer to be Held for the Trustee.......................98
i
<PAGE>
Section 3.15 Servicing
Compensation....................................99
Section 3.16 Access to Certain
Documentation...........................99
Section 3.17 Annual Statement as to
Compliance.........................99
Section 3.18 Annual Independent Public Accountants'
Servicing
Statement; Financial Statements..........................100
Section 3.19 The Corridor
Contracts...................................100
Section 3.20 Prepayment
Charges.......................................101
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance
Reports.............................102
Section 4.02 Reduction of Servicing Compensation in
Connection
with Prepayment Interest Shortfalls......................103
Section 4.03
[Reserved]...............................................104
Section 4.04
Distributions............................................104
Section 4.05 Monthly Statements to
Certificateholders.................113
Section 4.06
[Reserved]...............................................116
Section 4.07
[Reserved]...............................................116
Section 4.08 Carryover Reserve
Fund...................................116
Section 4.09 Credit Comeback Excess
Account...........................117
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates.........................................118
Section 5.02 Certificate Register; Registration of Transfer
and
Exchange of Certificates.................................119
Section 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates........123
Section 5.04 Persons Deemed
Owners....................................123
Section 5.05 Access to List of Certificateholders' Names and
Addresses................................................123
Section 5.06 Book-Entry
Certificates..................................124
Section 5.07 Notices to
Depository....................................125
Section 5.08 Definitive
Certificates..................................125
Section 5.09 Maintenance of Office or
Agency..........................125
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the
Master
Servicer and the Sellers.................................126
Section 6.02 Merger or Consolidation of the Depositor, the
Master
Servicer or the Sellers..................................126
Section 6.03 Limitation on Liability of the Depositor, the
Sellers, the Master Servicer, the NIM Insurer and
Others...................................................126
Section 6.04 Limitation on Resignation of Master
Servicer.............127
Section 6.05 Errors and Omissions Insurance; Fidelity
Bonds...........127
ii
<PAGE>
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default........................................128
Section 7.02 Trustee to Act; Appointment of
Successor.................130
Section 7.03 Notification to
Certificateholders.......................131
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of
Trustee........................................131
Section 8.02 Certain Matters Affecting the
Trustee....................133
Section 8.03 Trustee Not Liable for Mortgage
Loans....................134
Section 8.04 Trustee May Own
Certificates.............................134
Section 8.05 Master Servicer to Pay Trustee's Fees and
Expenses.......134
Section 8.06 Eligibility Requirements for
Trustee.....................135
Section 8.07 Resignation and Removal of
Trustee.......................135
Section 8.08 Successor
Trustee........................................136
Section 8.09 Merger or Consolidation of
Trustee.......................137
Section 8.10 Appointment of Co-Trustee or Separate
Trustee............137
Section 8.11 Tax
Matters..............................................138
Section 8.12
Co-Trustee...............................................141
Section 8.13 Access to Records of the
Trustee.........................143
Section 8.14 Suits for
Enforcement....................................144
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of
all
Mortgage Loans...........................................144
Section 9.02 Final Distribution on the
Certificates...................145
Section 9.03 Additional Termination
Requirements......................146
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment................................................147
Section 10.02 Recordation of Agreement;
Counterparts...................149
Section 10.03 Governing
Law............................................149
Section 10.04 Intention of
Parties.....................................149
Section 10.05
Notices..................................................150
Section 10.06 Severability of
Provisions...............................151
Section 10.07
Assignment...............................................151
Section 10.08 Limitation on Rights of
Certificateholders...............151
Section 10.09 Inspection and Audit
Rights..............................152
Section 10.10 Certificates Nonassessable and Fully
Paid................152
Section 10.11 Rights of NIM
Insurer....................................153
iii
<PAGE>
Exhibits
EXHIBIT A-1 Form of Class 1-A-1 Certificate
EXHIBIT A-2 Form of Class 1-A-2 Certificate
EXHIBIT A-3 Form of Class 2-A-1 Certificate
EXHIBIT A-4 Form of Class 2-A-2 Certificate
EXHIBIT A-5 Form of Class 2-A-3 Certificate
EXHIBIT A-6 Form of Class 2-A-4 Certificate
EXHIBIT A-7 Form of Class M-1 Certificate
EXHIBIT A-8 Form of Class M-2 Certificate
EXHIBIT A-9 Form of Class M-3 Certificate
EXHIBIT A-10 Form of Class M-4 Certificate
EXHIBIT A-11 Form of Class M-5 Certificate
EXHIBIT A-12 Form of Class M-6 Certificate
EXHIBIT A-13 Form of Class M-7 Certificate
EXHIBIT B Form of Class P Certificates EXHIBIT C Form of Class
C
Certificates EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Initial Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related
Mortgage File is not Delivered to the Trustee on or
prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
(Initial
Mortgage Loans)
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee
(Subsequent
Mortgage Loans)
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I-1 Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1 Form of Transferor Certificate for Class A-R
Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private
Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Form of Request for Document Release
EXHIBIT N Form of Request for File Release
EXHIBIT O Copy of Depository Agreement
EXHIBIT P Form of Subsequent Transfer Agreement
EXHIBIT Q Form of Corridor Contracts
EXHIBIT Q-1 Form of Class 1-A Corridor Contract
EXHIBIT Q-2 Form of Class 2-A Corridor Contract
EXHIBIT Q-3 Form of Subordinate Corridor Contract
EXHIBIT R Form of Corridor Contract Administration Agreement
EXHIBIT S Form of Corridor Contract Assignment Agreement
iv
<PAGE>
EXHIBIT T Officer's Certificate with respect to Prepayments
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge
Summary
SCHEDULE II.Collateral Schedule
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2005, by
and
among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a
seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware corporation, as a seller
("Park
Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited
liability company,
as a seller ("Park Sienna" or a "Seller", and together with CHL
and Park
Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP, a
Texas limited
partnership, as master servicer (the "Master Servicer"), THE
BANK OF NEW YORK,
a New York banking corporation, as trustee (the "Trustee"), and
THE BANK OF
NEW YORK TRUST COMPANY, N.A. a national banking association, as
co-trustee
(the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The
Trust Fund
(excluding the Credit Comeback Excess Account, the Carryover
Reserve Fund, the
assets held in the Pre-Funding Account and the Trust Fund's
rights with
respect to payments received under the Corridor Contracts) for
federal income
tax purposes will consist of four REMICs ("REMIC 1," "REMIC 2,"
"REMIC 3" and
the "Master REMIC"). Each Certificate, other than the Class A-R
Certificate,
will represent ownership of one or more regular interests in the
Master REMIC
for purposes of the REMIC Provisions. The Class A-R Certificate
represents
ownership of the sole class of residual interest in REMIC 1,
REMIC 2, REMIC 3
and the Master REMIC. The Master REMIC will hold as assets the
several classes
of uncertificated REMIC 3 Interests. Each REMIC 3 Interest
(other than the
R-3-R Interest) is hereby designated as a regular interest in
REMIC 3. REMIC 3
will hold as assets the several classes of REMIC 2 Interests
(other than the
R-2-R Interest). Each REMIC 2 Interest (other than the R-2-R
Interest) is
hereby designated as a regular interest in REMIC 2. REMIC 2 will
hold as
assets the several classes of REMIC 1 Interests (other than the
R-1-R
Interest). Each REMIC 1 Interest (other than the R-1-R Interest)
is hereby
designated as a regular interest in REMIC 1. REMIC 1 will hold
as assets all
property of the Trust Fund (excluding the Credit Comeback Excess
Account, the
Carryover Reserve Fund, the assets held in the Pre-Funding
Account and the
Trust Fund's rights with respect to payments received under the
Corridor
Contracts). The latest possible maturity date of all REMIC
regular interests
created in this Agreement shall be the Latest Possible Maturity
Date.
<TABLE>
<CAPTION>
REMIC 1:
The REMIC 1 Interests will have the principal balances,
pass-through rates and Corresponding Loan Groups as set forth
below.
Initial Pass-Through Corresponding
REMIC 1 Interests Balance Rate Loan Group(s)
---------------------------------------------------
---------------- ------------------ ------------------------
<S> <C> <C> <C>
R-1-1-I....................... (1) (5) 1
R-1-1-S....................... (2) (6) 1
R-1-2-I....................... (1) (5) 2
R-1-2-S....................... (2) (6) 2
R-1-X......................... (3) (7) 1 and 2
R-1-R......................... (4) (4) N/A
</TABLE>
1
<PAGE>
------------------
(1) The principal balance of each REMIC 1 Interest having an "I"
designation
is the principal balance of all the Initial Mortgage Loans in
the
Corresponding Loan Group.
(2) The principal balance of each REMIC 1 Interest having an "S"
designation
is the principal balance of all the Subsequent Mortgage Loans in
the
Corresponding Loan Group.
(3) This REMIC 1 Interest pays no principal.
(4) The R-1-R Interest is the sole class of residual interest in
REMIC 2. It
has no principal balance and pays no principal or interest.
(5) The interest rate for this REMIC 1 Interest with respect to
any
Distribution Date (and the related Accrual Period) through
the
Distribution Date in June 2005 is a per annum rate equal to the
weighted
average of the Adjusted Net Mortgage Rates of the Initial
Mortgage Loans
in the Corresponding Loan Group. For any Distribution Date (and
the
related Accrual Period) following the Distribution Date in June
2005,
the interest rate for this REMIC 1 Interest is a per annum rate
equal to
the weighted average of the Adjusted Net Mortgage Rates of all
the
Mortgage Loans in the Corresponding Loan Group.
(6) The interest rate for this REMIC 1 Interest with respect to
any
Distribution Date (and the related Accrual Period) through
the
Distribution Date in June 2005 is a per annum rate equal to
0.00%. For
any Distribution Date (and the related Accrual Period) following
the
Distribution Date in June 2005, the interest rate for this REMIC
1
Interest is a per annum rate equal to the weighted average of
the
Adjusted Net Mortgage Rates of all the Mortgage Loans in the
Corresponding Loan Group.
(7) For any Distribution Date (and the related Accrual Period)
through the
Distribution Date in June 2005, this REMIC 1 Interest is
entitled to all
the interest payable with respect to the Subsequent Mortgage
Loans in
the Corresponding Loan Group (or Groups). For any Distribution
Date (and
the related Accrual Period) following the Distribution Date in
June
2005, the interest rate for this REMIC 1 Interest is a per annum
rate
equal to 0.00%.
On each Distribution Date, the Interest Funds and the
Principal
Distribution Amount of the Corresponding Loan Groups shall be
distributed with
respect to the REMIC 1 Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each
REMIC
1 Interest at the rate, or according to the formulas, described
above.
(2) Principal. For any Distribution Date (and the related
Accrual
Period) through the Distribution Date in June 2005, the
Principal Distribution
Amount with respect to the Initial Mortgage Loans in a Loan
Group shall be
allocated to its corresponding "I" REMIC 1 Interests, and the
Principal
Distribution Amount with respect to the Subsequent Mortgage
Loans in a Loan
Group shall be allocated to its corresponding "S" REMIC 1
Interests. For any
Distribution Date (and the related Accrual Period) after the
Distribution Date
in June 2005, the Principal Distribution Amount with respect to
all Mortgage
Loans in a Loan Group shall be allocated in proportion to its
corresponding
REMIC 1 Interests.
2
<PAGE>
<TABLE>
<CAPTION>
REMIC 2:
The REMIC 2 Interests will have the principal balances,
pass-through rates and Corresponding Loan Groups as set forth
below.
Pass-Through Corresponding
REMIC 2 Interests Initial Balance Rate Loan Group
------------------------------------------------ ---------------
------------------- -------------------
<S> <C> <C> <C>
R-2-A-1 (0.9% of SCB Group 2)............ (1) (2) 1
R-2-B-1 (0.1% of SCB Group 2)............ (1) (2) 1
R-2-C-1 (0.9% of ASCB Group 2)........... (1) (2) 1
R-2-D-1 (0.1% of ASCB Group 2)........... (1) (2) 1
R-2-E-1 (Excess of Group 2).............. (1) (2) 1
R-2-A-2 (0.9% of SCB Group 3)............ (1) (3) 2
R-2-B-2 (0.1% of SCB Group 3)............ (1) (3) 2
R-2-C-2 (0.9% of ASCB Group 3)........... (1) (3) 2
R-2-D-2 (0.1% of ASCB Group 3)........... (1) (3) 2
R-2-E-2 (Excess of Group 3).............. (1) (3) 2
R-2-P.................................... $100 (4) N/A
R-2-R.................................... (5) (5) N/A
R-2-X.................................... (6) (7) N/A
</TABLE>
------------------
(1) With respect to the Variable Interests, each REMIC 2
Interest having an
"R-2-A-" designation (each, an "R-2-A Interest") will have a
principal
balance initially equal to 0.9% of the Subordinate Component
Balance
("SCB") of its Corresponding Loan Group. Each REMIC 2 Interest
having an
"R-2-B-" designation (each, an "R-2-B Interest") will have a
principal
balance initially equal to 0.1% of the SCB of its Corresponding
Loan
Group. Each REMIC 2 Interest having an "R-2-C-" designation
(each, an
"R-2-C Interest") will have a principal balance initially equal
to 0.9%
of the Adjusted Subordinated Component Balance ("ASCB") of
its
Corresponding Loan Group. Each REMIC 2 Interest having an
"R-2-D-"
designation (each, an "R-2-D Interest") will have a principal
balance
initially equal to 0.1% of the ASCB of its Corresponding Loan
Group. The
initial principal balance of each REMIC 2 Interest having an
"R-2-E-"
designation (each, an "R-2-E Interest") will equal the excess of
its
Corresponding Loan Group over the initial aggregate principal
balances
of the R-2-A, R-2-B, R-2-C and R-2-D Interests corresponding to
such
Loan Group.
(2) A rate equal to the weighted average of the pass-through
rates of the
R-1-1-I and R-1-1-S Interests (the "Loan Group 1 Net Rate
Cap").
(3) A rate equal to the weighted average of the pass-through
rates of the
R-1-2-I and R-1-2-S Interests (the "Loan Group 2 Net Rate
Cap").
(4) The R-2-P Interest is entitled to all Prepayment Charges
collected with
respect to the Mortgage Loans in Loan Group 1 and Loan Group 2.
It pays
no interest.
(5) The R-2-R Interest is the sole class of residual interest in
REMIC 2. It
has no principal balance and pays no principal or interest.
(6) This REMIC 2 Interest pays no principal.
(7) This REMIC 2 Interest is entitled to all amounts payable
with respect to
the R-1-X Interest.
3
<PAGE>
On each Distribution Date, the Interest Funds and the
Principal
Distribution Amounts payable with respect to the REMIC 1
Interests shall be
payable with respect to the REMIC 2 Interests in the following
manner:
(1) Interest. Interest is to be distributed with respect to each
REMIC
2 Interest at the rate, or according to the formulas, described
above.
(2) Principal if no Cross-Over Situation Exists. If no
Cross-Over
Situation exists, then the Principal Distribution Amounts with
respect to each
Loan Group will be payable to the Loan Group's corresponding
R-2-A, R-2-B,
R-2-C and R-2-D Interests so that the Interests equal,
respectively, 0.9% of
the SCB, 0.1% of the SCB, 0.9% of the ASCB and 0.1% of the ASCB,
of the Loan
Group, and then to the Loan Group's corresponding R-2-E
Interest.
(3) Principal if a Cross-Over Situation Exists. If a
Cross-Over
Situation exists with respect to the R-2-A and R-2-B Interests
then:
(a) if the Calculation Rate in respect of the outstanding
R-2-A
and R-2-B Interests is less than the Subordinate Net Rate Cap,
Principal
Relocation Payments will be made proportionately to the
outstanding R-2-A
Interests prior to any other principal distributions from each
Loan Group; and
(b) if the Calculation Rate in respect of the outstanding
R-2-A
and R-2-B Interests is greater than the Subordinate Net Rate
Cap, Principal
Relocation Payments will be made proportionately to the
outstanding R-2-B
Interests prior to any other principal distributions from each
Loan Group.
In each case, Principal Relocation Payments will be made so as
to cause the
Calculation Rate in respect of the outstanding R-2-A and R-2-B
Interests to
equal the Subordinate Net Rate Cap. With respect to each Loan
Group, if (and
to the extent that) the sum of (a) the principal payments
comprising the
Principal Distribution Amount payable for the related
Distribution Date and
(b) the Realized Losses, are insufficient to make the necessary
reductions of
principal on the R-2-A and R-2-B Interests, then interest will
be added to the
Loan Group's R-2-E Interest.
(c) The outstanding aggregate R-2-A and R-2-B Interests for
the
Loan Groups will not be reduced below 1 percent of the excess of
(i) the
aggregate outstanding Stated Principal Balances of all Loan
Groups as of the
end of any Due Period over (ii) the Senior Certificates related
to the Loan
Groups as of the related Distribution Date (after taking into
account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (c)
prevents the
distribution of principal to the R-2-A and R-2-B Interests of a
Loan Group,
and if the Loan Group's corresponding R-2-E Interest has already
been reduced
to zero, then the excess principal from that Loan Group will be
paid to the
R-2-E Interest of the other Loan Group, the aggregate R-2-A and
R-2-B
Interests of which are less than one percent of the Subordinate
Component
Balance. If the Loan Group of the corresponding R-2-E Interest
that receives
such payment has a Group Net Rate Cap below the Group Net Rate
Cap of the Loan
Group making the payment, then the payment will be treated by
REMIC 2 as a
Realized Loss. Conversely, if the Loan Group of the R-2-E
Interest that
receives such payment has a Group Net Rate Cap above the Group
Net Rate Cap of
the Loan
4
<PAGE>
Group making the payment, then the payment will be treated by
REMIC 2 as a
reimbursement for prior Realized Losses.
If a Cross-Over Situation exists with respect to the R-2-C and
R-2-D Interests
then:
(d) if the Calculation Rate in respect of the outstanding
R-2-C
and R-2-D Interests is less than the Adjusted Subordinate Net
Rate Cap,
Principal Relocation Payments will be made proportionately to
the R-2-C
Interests prior to any other principal distributions from each
such Loan
Group; and
(e) if the Calculation Rate in respect of the outstanding
R-2-C
and R-2-D Interests is greater than the Adjusted Subordinate Net
Rate Cap,
Principal Relocation Payments will be made proportionately to
the outstanding
R-2-D Interests prior to any other principal distributions from
each such Loan
Group.
In each case, Principal Relocation Payments will be made so as
to cause the
Calculation Rate in respect of the outstanding R-2-C and R-2-D
Interests to
equal the Adjusted Subordinate Net Rate Cap. With respect to
each Loan Group,
if (and to the extent that) the sum of (a) the principal
payments comprising
the Principal Distribution Amount payable for the related
Distribution Date
and (b) the Realized Losses, are insufficient to make the
necessary reductions
of principal on the R-2-C and R-2-D Interests, then interest
will be added to
the Loan Group's R-2-E Interest.
(f) The outstanding aggregate R-2-C and R-2-D Interests for
all
Loan Groups will not be reduced below 1 percent of the excess of
(i) the
aggregate outstanding Stated Principal Balances of all Loan
Groups as of the
end of any Due Period over (ii) the Senior Certificates related
to the Loan
Groups as of the related Distribution Date (after taking into
account
distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (f)
prevents the
distribution of principal to the R-2-C and R-2-D Interests of a
Loan Group,
and if the Loan Group's R-2-E Interest has already been reduced
to zero, then
the excess principal from that Loan Group will be paid to the
R-2-E Interests
of the other Loan Group, the aggregate R-2-C and R-2-D Interests
of which are
less than one percent of the Adjusted Subordinate Component
Balance. If the
Loan Group of the R-2-E Interest that receives such payment has
a Group Net
Rate Cap below the Group Net Rate Cap of the Loan Group making
the payment,
then the payment will be treated by REMIC 2 as a Realized Loss.
Conversely, if
the Loan Group of the R-2- E Interest that receives such payment
has a Group
Net Rate Cap above the Group Net Rate Cap of the Loan Group
making the
payment, then the payment will be treated by REMIC 2 as a
reimbursement for
prior Realized Losses.
<TABLE>
<CAPTION>
REMIC 3:
The REMIC 3 Regular Interests will have the principal
balances,
pass-through rates and Corresponding Classes of Certificates as
set forth in
the following table:
5
<PAGE>
Initial Principal Pass-Through Corresponding Class
REMIC 3 Interests Balance Rate of Certificates
---------------------------- ------------------------------
------------------------ ----------------------------
<S> <C> <C> <C>
R-3-1-A-1..................... (1) (2) 1-A-1
R-3-1-A-2..................... (1) (2) 1-A-2
R-3-2-A-1..................... (1) (3) 1-A-1
R-3-2-A-2..................... (1) (3) 1-A-2
R-3-2-A-3..................... (1) (3) 1-A-1
R-3-2-A-4..................... (1) (3) 1-A-2
R-3-M-1....................... (1) (4) M-1
R-3-M-2....................... (1) (4) M-2
R-3-M-3....................... (1) (4) M-3
R-3-M-4....................... (1) (4) M-4
R-3-M-5....................... (1) (4) M-5
R-3-M-6....................... (1) (4) M-6
R-3-M-7....................... (1) (4) M-7
R-3-P......................... $100 (5) P
R-3-Accrual................... (1) (6) N/A
R-3-R......................... (7) (7) N/A
R-3-X......................... (8) (9) N/A
</TABLE>
------------------
(1) This REMIC 3 Interest has a principal balance that is
initially equal to
50% of its Corresponding Certificate Class issued by the Master
REMIC.
Principal payments, both scheduled and prepaid, Realized
Losses,
Subsequent Recoveries and interest accruing on the R-3-Accrual
Interest
will be allocated to this class to maintain its size relative to
its
Corresponding Certificate Class (that is, 50%) with any excess
payments
of principal, Realized Losses and Subsequent Recoveries being
allocated
to the R-3-Accrual Interest in such manner as to cause the
principal
balance of the R-3-Accrual Interest to have a principal balance
equal to
50% of the Loan Group 1 and Loan Group 2 principal balances plus
(b) 50%
of the Overcollateralized Amount for such Distribution
Date..
(2) The pass-through rate with respect to any Distribution Date
(and the
related Accrual Period) for this REMIC 3 Interest is a per annum
rate
equal to the Loan Group 1 Net Rate Cap.
(3) The pass-through rate with respect to any Distribution Date
(and the
related Accrual Period) for this REMIC 3 Interest is a per annum
rate
equal to the Loan Group 2 Net Rate Cap.
(4) The pass-through rate with respect to any Distribution Date
(and the
related Accrual Period) for this REMIC 3 Interest is a per annum
rate
equal to the Adjusted Subordinate Net Rate Cap. For federal
income tax
purposes the Adjusted Subordinate Net Rate Cap will equal
the
Calculation Rate with respect to the R-2-C and R-2-D
Interests.
(5) The R-3-P Interest is entitled to all amounts collected with
respect to
the R-2-P Interest. It pays no interest.
(6) The pass-through rate with respect to any Distribution Date
(and the
related Accrual Period) for this REMIC 3 Interest is a per annum
rate
equal to the weighted average of the Loan Group 1 Net Rate Cap
and the
Loan Group 2 Net Rate Cap (the "Loan Group 1/2 Net Rate
Cap").
(7) The R-3-R Interest is the sole class of residual interest in
REMIC 3. It
has no principal balance and pays no principal or interest.
6
<PAGE>
(8) This REMIC 3 Interest pays no principal.
(9) This REMIC 3 Interest is entitled to all amounts payable
with respect to
the R-2-X Interest.
On each Distribution Date, the Interest Funds and the
Principal
Distribution Amount payable with respect to the REMIC 2
Interests shall be
payable with respect to the REMIC 3 Interests in the following
manner:
(1) Interest. Interest is to be distributed with respect to each
REMIC 3
Interest at the rate, or according to the formulas, described
above.
(2) Principal. Principal Distribution Amounts shall be allocated
among
the REMIC 3 Interests in the same manner that such items are
allocated among
their corresponding Certificate Classes.
The following table specifies the class designation,
interest
rate, and principal amount for each class of Master REMIC
Interest:
<TABLE>
<CAPTION>
Original Certificate
Class Principal Balance Pass-Through Rate
------------------------------------------
--------------------------------------
--------------------------
<S> <C> <C>
Class 1-A-1...................... $344,288,000 (1)
Class 1-A-2...................... $86,072,000 (1)
Class 2-A-1...................... $259,184,000 (1)
Class 2-A-2...................... $100,935,000 (1)
Class 2-A-3...................... $126,927,000 (1)
Class 2-A-4...................... $56,994,000 (1)
Class M-1........................ $39,600,000 (1)
Class M-2........................ $36,600,000 (1)
Class M-3........................ $22,800,000 (1)
Class M-4........................ $58,800,000 (1)
Class M-5........................ $11,400,000 (1)
Class M-6........................ $16,800,000 (1)
Class M-7........................ $12,000,000 (1)
Class C.......................... (2) (3)
Class P.......................... $100 (4)
Class A-R........................ $100 (5)
</TABLE>
------------------
(1) The Certificates will accrue interest at the related
Pass-Through Rates
identified in this Agreement. For federal income tax purposes,
the pass
through rate in respect of (i) each of the Class 1-A will be
subject to
a cap equal to the Loan Group 1 Net Rate Cap, (ii) the Class
2-A
Certificates will be subject to a cap equal to the Loan Group 2
Net Rate
Cap, and (iii) the Class M Certificates will be subject to a cap
equal
to the Adjusted Subordinate Net Rate Cap. Any entitlement of any
class
of Certificates to Net Rate Carryover and any entitlement of the
Class M
Certificates to interest payments in excess of the Adjusted
Subordinate
Net Rate Cap, will be treated as paid by the Master REMIC to the
Class C
Certificates and then paid to such Class of Certificates
pursuant to a
limited recourse cap contract as described in Section 8.11
herein.
(2) The Class C Certificates have no Certificate Principal
Balance.
7
<PAGE>
(3) For each Interest Accrual Period the Class C Certificates
are entitled
to an amount (the "Class C Distributable Amount") equal to the
sum of
(a) the interest payable on the R-3-X Interests and (b) a
specified
portion of the interest on the REMIC 1 Group 1 and 2 Interests
equal to
the excess of the Loan Group 1/2 Net Rate Cap over the product
of two
and the weighted average interest rate of the REMIC 3 Regular
Interests
having an "A," "M" or "Accrual" designation in the column
entitled
"REMIC 3 Interests" with each such Class other than the
Accrual
Interest, subject to a cap equal to the Pass-Through Rate of
the
Corresponding Master REMIC Class and the Accrual Class subject
to a cap
of 0.00%. The Pass-Through Rate of the Class C Certificates
shall be a
rate sufficient to entitle it to all interest accrued on the
REMIC 1
Group 1 and Group 2 Interests less the interest accrued on the A
or M
interests issued by the Master REMIC . The Class C Distributable
Amount
for any Distribution Date is payable from current interest on
the Group
1 and Group 2 Mortgage Loans and any related OC Release Amount
for that
Distribution Date.
(4) For each Distribution Date the Class P Certificates are
entitled to all
Prepayment Charges distributed with respect to the R-3-P
Interests.
(5) The Class A-R Certificates represent the sole class of
residual interest
in each REMIC created hereunder. The Class A-R Certificates are
not
entitled to distributions of interest.
The foregoing REMIC structure is intended to cause all of the
cash
from the Mortgage Loans to flow through to the Master REMIC as
cash flow on a
REMIC regular interest, without creating any shortfall--actual
or potential
(other than for credit losses) to any REMIC regular interest. It
is not
intended that the Class A-R be entitled to any cash flows
pursuant to this
agreement except as provided in Sections 4.02(a)(1)(ii) and
(iv)(y) hereunder,
(that is, its entitlement to $100 in the waterfall).
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Accrual Period: With respect to any Distribution Date and
each
Class of Adjustable Rate Certificates, the period commencing on
the
immediately preceding Distribution Date (or, in the case of the
first
Distribution Date, the Closing Date) and ending on the day
immediately
preceding such Distribution Date. With respect to any
Distribution Date and
the Class C Certificates, the calendar month preceding the month
in which such
Distribution Date occurs. All calculations of interest on the
Adjustable Rate
Certificates will be made on the basis of the actual number of
days elapsed in
the related Accrual Period and on a 360 day year. All
calculations of interest
on the Class C Certificates will be made on the basis of a
360-day year
consisting of twelve 30-day months.
Adjustable Rate Certificates: The Class 1-A, Class 2-A and
Subordinate Certificates.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified
in
the Mortgage Loan Schedule as having a Mortgage Rate which is
adjustable in
accordance with the
8
<PAGE>
terms of the related Mortgage Note (for the avoidance of doubt,
excluding any
Credit Comeback Loans).
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate less the related Expense Fee Rate.
Adjusted Subordinate Component Balance: With respect to any
Distribution Date and for each Loan Group, (i) the principal
balance of such
Loan Group as of the first day of the related Due Period (after
giving effect
to Principal Prepayments received in the Prepayment Period
ending during such
Due Period) less (ii) the product of (a) the Overcollateralized
Amount and
(b)(I) the principal balance of such Loan Group, divided by (II)
the sum of
the principal balance of the Mortgage Loans, as of the first day
of the
related Due Period, less (iii) the aggregate Certificate
Principal Balance of
the related Classes of Senior Certificates in either case
immediately prior to
such Distribution Date.
Adjusted Subordinate Net Rate Cap: For each Distribution Date,
the
weighted average of the Group 1 Net Rate Cap and Group 2 Net
Rate Cap weighted
on the basis of the respective Adjusted Subordinate Component
Balance of their
corresponding Loan Groups. For federal income tax purposes, the
Adjusted
Subordinate Net Rate Cap will be the Calculation Rate in respect
of the Class
C and Class D Interests in REMIC 2.
Adjustment Date: As to each Adjustable Rate Mortgage Loan,
each
date on which the related Mortgage Rate is subject to
adjustment, as provided
in the related Mortgage Note.
Advance: The aggregate of the advances required to be made by
the
Master Servicer with respect to any Distribution Date pursuant
to Section
4.01, the amount of any such advances being equal to the
aggregate of payments
of principal and interest on the Mortgage Loans (net of the
Servicing Fees)
that were due on the related Due Date and not received by the
Master Servicer
as of the close of business on the related Determination Date
including an
amount equivalent to interest on each Mortgage Loan as to which
the related
Mortgaged Property is an REO Property; provided, however, that
the net monthly
rental income (if any) from such REO Property deposited in the
Certificate
Account for such Distribution Date pursuant to Section 3.12 may
be used to
offset such Advance for the Mortgage Loan related to such REO
Property;
provided, further, that for the avoidance of doubt, no Advances
shall be
required to be made in respect of any Liquidated Mortgage
Loan.
Agreement: This Pooling and Servicing Agreement and any and
all
amendments or supplements hereto made in accordance with the
terms herein.
Amount Held for Future Distribution: As to any Distribution
Date,
the aggregate amount held in the Certificate Account at the
close of business
on the immediately preceding Determination Date on account of
(i) all
Scheduled Payments or portions thereof received in respect of
the Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments
received in
respect of such Mortgage Loans after the last day of the related
Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries
received in
respect of such Mortgage Loans after the last day of the related
Due Period.
9
<PAGE>
Applied Realized Loss Amount: With respect to any
Distribution
Date, the sum of the Realized Losses with respect to the
Mortgage Loans which
are to be applied in reduction of the Certificate Principal
Balances of the
Subordinate Certificates or the Class 1-A-2 Certificates
pursuant to this
Agreement, which shall equal (i) in the case of the Subordinate
Certificates,
the amount, if any, by which the aggregate Certificate Principal
Balance of
all Certificates (after all distributions of principal on such
Distribution
Date) exceeds the sum of (x) the Stated Principal Balance of the
Mortgage
Loans for such Distribution Date and (y) the amount on deposit
in the
Pre-Funding Account, if any, and (ii) in the case of the Class
1-A-2
Certificates, after the Certificate Principal Balances of the
Subordinate
Certificates have been reduced to zero, the amount, if any, by
which the
aggregate Certificate Principal Balance of the Class 1-A
Certificates (after
all distributions of principal on such Distribution Date)
exceeds the sum of
(x) the Stated Principal Balance of the Group 1 Mortgage Loans
for such
Distribution Date and (y) the amount on deposit in the
Pre-Funding Account in
respect of Loan Group 1, if any.
Appraised Value: The appraised value of the Mortgaged
Property
based upon the appraisal made for the originator of the related
Mortgage Loan
by an independent fee appraiser at the time of the origination
of the related
Mortgage Loan, or the sales price of the Mortgaged Property at
the time of
such origination, whichever is less, or with respect to any
Mortgage Loan
originated in connection with a refinancing, the appraised value
of the
Mortgaged Property based upon the appraisal made at the time of
such
refinancing.
Bankruptcy Code: Title 11 of the United States Code.
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 5.06). As of
the Closing
Date, each Class of Adjustable Rate Certificates constitutes a
Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday,
or
(ii) a day on which banking institutions in the State of New
York or
California are authorized or obligated by law or executive order
to be closed.
Calculation Rate: For each Distribution Date, (a) in the case
of
the Class A and Class B REMIC 2 Interests, the product of (i) 10
and (ii) the
weighted average rate of the outstanding Class A and Class B
Interests,
treating each Class A Interest as capped at zero or reduced by a
fixed
percentage of 100% of the interest accruing on such Class A
Interest, and (b)
in the case of the Class C and Class D REMIC 2 Interests, the
product of (i)
10 and (ii) the weighted average rate of the outstanding Class C
and Class D
Interests, treating each Class C Interest as capped at zero or
reduced by a
fixed percentage of 100% of the interest accruing on such Class
C Interest.
Calculation Rate: With respect to any Distribution Date, in
the
case of the Class A and Class B Interests, the product of (i) 10
and (ii) the
weighted average rate of the outstanding
10
<PAGE>
Class A and Class B Interests, treating each Class A Interest as
capped at
zero or reduced by a fixed percentage of 100% of the interest
accruing on such
Class.
Carryover Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee pursuant to Section 4.08 in
the name of
the Trustee for the benefit of the Certificateholders and
designated "The Bank
of New York in trust for registered Holders of CWABS, Inc.,
Asset-Backed
Certificates, Series 2005-2". Funds in the Carryover Reserve
Fund shall be
held in trust for the Certificateholders for the uses and
purposes set forth
in this Agreement.
Certificate: Any one of the certificates of any Class executed
and
authenticated by the Trustee in substantially the forms attached
hereto as
Exhibits A-1 through A-13, Exhibit B, Exhibit C, Exhibit D and
Exhibit E.
Certificate Account: The separate Eligible Account created
and
initially maintained by the Master Servicer pursuant to Section
3.05(b) with a
depository institution in the name of the Master Servicer for
the benefit of
the Trustee on behalf of the Certificateholders and designated
"Countrywide
Home Loans Servicing LP in trust for registered Holders of
CWABS, Inc.,
Asset-Backed Certificates, Series 2005-2". Funds in the
Certificate Account
shall be held in trust for the Certificateholders for the uses
and purposes
set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
person that is the beneficial owner of such Book-Entry
Certificate.
Certificate Principal Balance: As to any Certificate (other
than
the Class C Certificates) and as of any Distribution Date, the
Initial
Certificate Principal Balance of such Certificate (A) less the
sum of (i) all
amounts distributed with respect to such Certificate in
reduction of the
Certificate Principal Balance thereof on previous Distribution
Dates pursuant
to Section 4.04, and (ii) with respect to the Class 1-A-2
Certificates or any
Subordinate Certificates, any Applied Realized Loss Amounts
allocated to such
Certificate on previous Distribution Dates pursuant to Section
4.04(h), and
(B) increased by, with respect to the Class 1-A-2 Certificates
or any
Subordinate Certificates, any Subsequent Recoveries allocated to
such Class of
Certificate pursuant to Section 4.04(i) on such Distribution
Date. References
herein to the Certificate Principal Balance of a Class of
Certificates shall
mean the Certificate Principal Balances of all Certificates in
such Class. The
Class C Certificates do not have a Certificate Principal
Balance. With respect
to any Certificate (other than the Class C Certificates) of a
Class and any
Distribution Date, the portion of the Certificate Principal
Balance of such
Class represented by such Certificate equal to the product of
the Percentage
Interest evidenced by such Certificate and the Certificate
Principal Balance
of such Class.
Certificate Register: The register maintained pursuant to
Section 5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register
(initially, Cede & Co.,
as nominee for the Depository, in the case of any Class of
Book-Entry
Certificates), except that solely for the purpose of giving any
consent
pursuant to this Agreement, any Certificate registered in the
name of the
Depositor or any affiliate of the Depositor shall be deemed not
to be
Outstanding and the Voting Interest
11
<PAGE>
evidenced thereby shall not be taken into account in determining
whether the
requisite amount of Voting Interests necessary to effect such
consent has been
obtained; provided that if any such Person (including the
Depositor) owns 100%
of the Voting Interests evidenced by a Class of Certificates,
such
Certificates shall be deemed to be Outstanding for purposes of
any provision
hereof (other than the second sentence of Section 10.01 hereof)
that requires
the consent of the Holders of Certificates of a particular Class
as a
condition to the taking of any action hereunder. The Trustee is
entitled to
rely conclusively on a certification of the Depositor or any
affiliate of the
Depositor in determining which Certificates are registered in
the name of an
affiliate of the Depositor.
CHL: Countrywide Home Loans, Inc., a New York corporation,
and
its successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule for which CHL is the applicable
Seller.
Class: All Certificates bearing the same Class designation as
set
forth in Section 5.01 hereof.
Class 1-A Certificate: Any Class 1-A-1 Certificate or Class
1-A-2 Certificate.
Class 1-A-1 Certificate: Any Certificate designated as a
"Class
1-A-1 Certificate" on the face thereof, in the form of Exhibit
A-1 hereto,
representing the right to distributions as set forth herein.
Class 1-A-2 Certificate: Any Certificate designated as a
"Class
1-A-2 Certificate" on the face thereof, in the form of Exhibit
A-2 hereto,
representing the right to distributions as set forth herein.
Class 1-A Corridor Contract: The transaction evidenced by
the
related Confirmation (as assigned to the Corridor Contract
Administrator
pursuant to the Corridor Contract Assignment Agreement), a form
of which is
attached hereto as Exhibit Q-1.
Class 1-A Net Rate Cap: With respect to any Distribution Date,
the
weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans in Loan
Group 1 for such Distribution Date, adjusted to an effective
rate reflecting
the calculation of interest on the basis of the actual number of
days elapsed
during the related Accrual Period and a 360-day year.
Class 1-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Senior Principal
Distribution Target
Amount and (y) a fraction, the numerator of which is the Class
1-A Principal
Distribution Target Amount and the denominator of which is the
sum of the
Class 1-A and Class 2-A Principal Distribution Target
Amounts.
Class 1-A Principal Distribution Target Amount: With respect
to
any Distribution Date, the excess of (1) the aggregate
Certificate Principal
Balance of the Class 1-A Certificates immediately prior to such
Distribution
Date, over (2) the lesser of (x) 62.40% of the aggregate Stated
Principal
Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and
12
<PAGE>
(y) the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group
1 for such Distribution Date minus the OC Floor.
Class 2-A Certificate: Any Class 2-A-1 Certificate, Class
2-A-2
Certificate, Class 2-A-3 Certificate or Class 2-A-4
Certificate.
Class 2-A-1 Certificate: Any Certificate designated as a
"Class
2-A-1 Certificate" on the face thereof, in the form of Exhibit
A-3 hereto,
representing the right to distributions as set forth herein.
Class 2-A-2 Certificate: Any Certificate designated as a
"Class
2-A-2 Certificate" on the face thereof, in the form of Exhibit
A-4 hereto,
representing the right to distributions as set forth herein.
Class 2-A-3 Certificate: Any Certificate designated as a
"Class
2-A-3 Certificate" on the face thereof, in the form of Exhibit
A-5 hereto,
representing the right to distributions as set forth herein.
Class 2-A-4 Certificate: Any Certificate designated as a
"Class
2-A-4 Certificate" on the face thereof, in the form of Exhibit
A-6 hereto,
representing the right to distributions as set forth herein.
Class 2-A Corridor Contract: The transaction evidenced by
the
related Confirmation (as assigned to the Corridor Contract
Administrator
pursuant to the Corridor Contract Assignment Agreement), a form
of which is
attached hereto as Exhibit Q-2.
Class 2-A Net Rate Cap: With respect to any Distribution Date,
the
weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans in Loan
Group 2 for such Distribution Date, adjusted to an effective
rate reflecting
the calculation of interest on the basis of the actual number of
days elapsed
during the related Accrual Period and a 360-day year.
Class 2-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Senior Principal
Distribution Target
Amount and (y) a fraction, the numerator of which is the Class
2-A Principal
Distribution Target Amount and the denominator of which is the
sum of the
Class 1-A and Class 2-A Principal Distribution Target
Amounts.
Class 2-A Principal Distribution Target Amount: With respect
to
any Distribution Date, the excess of (1) the aggregate
Certificate Principal
Balance of the Class 2-A Certificates immediately prior to such
Distribution
Date, over (2) the lesser of (x) 62.40% of the aggregate Stated
Principal
Balance of the Mortgage Loans in Loan Group 2 for such
Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group
2 for such Distribution Date minus the OC Floor.
Class A-R Certificate: Any Certificate designated as a "Class
A-R
Certificate" on the face thereof, in the form of Exhibit D
hereto,
representing the right to distributions as set forth herein.
13
<PAGE>
Class C Certificate: Any Certificate designated as a "Class
C
Certificate" on the face thereof, in the form of Exhibit C
hereto,
representing the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A-7
hereto,
representing the right to distributions as set forth herein.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A-8
hereto,
representing the right to distributions as set forth herein.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A-9
hereto,
representing the right to distributions as set forth herein.
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the form of Exhibit A-10
hereto,
representing the right to distributions as set forth herein.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the form of Exhibit A-11
hereto,
representing the right to distributions as set forth herein.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the form of Exhibit A-12
hereto,
representing the right to distributions as set forth herein.
Class M-7 Certificate: Any Certificate designated as a "Class
M-7
Certificate" on the face thereof, in the form of Exhibit A-13
hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Certificate designated as a "Class
P
Certificate" on the face thereof, in the form of Exhibit B
hereto,
representing the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution
Date
that occurs after the end of the latest Prepayment Charge Period
for all
Mortgage Loans that have a Prepayment Charge Period.
Closing Date: March 30, 2005.
Code: The Internal Revenue Code of 1986, including any
successor
or amendatory provisions.
Collateral Schedule: Schedule II hereto.
14
<PAGE>
Compensating Interest: With respect to the Mortgage Loans in
each
Loan Group and any Distribution Date, an amount equal to the
lesser of (x)
one-half of the Servicing Fee for such Mortgage Loans for the
related Due
Period and (y) the aggregate Prepayment Interest Shortfalls for
such Mortgage
Loans for such Distribution Date.
Confirmation: Any of the Confirmations dated March 21, 2005
evidencing a transaction between the Corridor Contract
Counterparty and CHL
relating to the Corridor Contracts.
Corporate Trust Office: The designated office of the Trustee
in
the State of New York where at any particular time its corporate
trust
business with respect to this Agreement shall be administered,
which office at
the date of the execution of this Agreement is located at 101
Barclay Street,
New York, New York 10286 (Attention: Corporate Trust MBS
Administration),
telephone: (212) 815-3236, facsimile: (212) 815-3986.
Corridor Contract: The Class 1-A Corridor Contract, the
Class
2-A Corridor Contract or the Subordinate Corridor Contract, as
applicable.
Corridor Contract Administration Agreement: The corridor
contract
administration agreement dated as of the Closing Date among CHL,
the Trustee
and the Corridor Contract Administrator, a form of which is
attached hereto as
Exhibit R.
Corridor Contract Administrator: The Bank of New York, in
its
capacity as corridor contract administrator under the Corridor
Contract
Administration Agreement.
Corridor Contract Assignment Agreement: The assignment
agreement
dated as of the Closing Date among CHL, the Corridor Contract
Administrator
and the Corridor Contract Counterparty, a form of which is
attached hereto as
Exhibit S.
Corridor Contract Counterparty: Bear Stearns Financial
Products
Inc., and its successors.
Corridor Contract Termination Date: With respect to each
Corridor Contract, the Distribution Date in February 2011.
Credit Bureau Risk Score: A statistical credit score obtained
by
CHL in connection with the origination of a Mortgage Loan.
Co-Trustee: The Bank of New York Trust Company, N.A., a
national
banking association, not in its individual capacity, but solely
in its
capacity as co-trustee for the benefit of the Certificateholders
under this
Agreement, and any successor thereto, and any corporation or
national banking
association resulting from or surviving any consolidation or
merger to which
it or its successors may be a party.
Credit Comeback Excess Account: The separate Eligible
Account
created and initially maintained by the Trustee pursuant to
Section 4.08 in
the name of the Trustee for the benefit of the
Certificateholders and
designated "The Bank of New York in trust for registered Holders
of CWABS,
Inc., Asset-Backed Certificates, Series 2005-2". Funds in the
Credit
15
<PAGE>
Comeback Excess Account shall be held in trust for the
Certificateholders for
the uses and purposes set forth in this Agreement.
Credit Comeback Excess Cashflow: With respect to any
Distribution
Date, any amounts in the Credit Comeback Excess Account
available for such
Distribution Date.
Credit Comeback Excess Amount: With respect to the Credit
Comeback
Loans and any Master Servicer Advance Date, the portion of the
sum of the
following (without duplication) attributable to the excess, if
any, of the
actual mortgage rate on each Credit Comeback Loan and the
Mortgage Rate on
such Credit Comeback Loan: (i) all scheduled interest collected
during the
related Due Period with respect to the Credit Comeback Loans,
(ii) all
Advances relating to interest with respect to the Credit
Comeback Loans, (iii)
all Compensating Interest with respect to the Credit Comeback
Loans and (iv)
Liquidation Proceeds with respect to the Credit Comeback Loans
collected
during the related Due Period (to the extent such Liquidation
Proceeds relate
to interest), less all Nonrecoverable Advances relating to
interest reimbursed
during the related Due Period.
Credit Comeback Loan: Any Mortgage Loan for which the
related
Mortgage Rate is subject to reduction (not exceeding 0.375% per
annum) for
good payment history of Scheduled Payments by the related
Mortgagor.
Cross-Over Situation: For any Distribution Date and for each
Loan
Group (after taking into account principal distributions on such
Distribution
Date) with respect to (1) the Class A and Class B REMIC 2
Interests, a
situation in which the Class A and Class B Interests
corresponding to any Loan
Group are in the aggregate less than 1% of the Subordinate
Component Balance
of the Loan Group to which they correspond and (2) the Class C
and Class D
REMIC 2 Interests, a situation in which the Class C and Class D
Interests
corresponding to any Loan Group are in the aggregate less than
1% of the
Adjusted Subordinate Component Balance of the Loan Group to
which they
correspond.
Cumulative Loss Trigger Event: With respect to a Distribution
Date
on or after the Stepdown Date the aggregate amount of Realized
Losses on the
Mortgage Loans from (and including) the Cut-off Date for each
Mortgage Loan to
(and including) the last day of the related Due Period reduced
by the
aggregate amount of any Subsequent Recoveries received through
the last day of
that Due Period exceeds the applicable percentage, as set forth
below, for
such Distribution Date, of the sum of (x) the aggregate Cut-off
Date Principal
Balance of the Initial Mortgage Loans and (y) the Pre-Funded
Amount:
<TABLE>
<CAPTION>
Distribution Date Percentage
----------------- ----------
<S> <C>
April 2008--March 2009............ 2.50% with respect to April
2008,
plus an additional 1/12th of 1.25%
for each month thereafter through
March 2009
April 2009-- March 2010........... 3.75% with respect to April
2009,
plus an additional 1/12th of 0.75%
for each month thereafter through
16
<PAGE>
Distribution Date Percentage
----------------- ----------
March 2010
April 2010-- March 2011........... 4.50% with respect to April
2010,
plus an additional 1/12th of 0.25%
for each month thereafter through
March 2011
April 2011 and thereafter........ 4.75%
</TABLE>
Current Interest: With respect to each Class of Adjustable
Rate
Certificates and each Distribution Date, the interest accrued at
the
applicable Pass-Through Rate for the applicable Accrual Period
on the
Certificate Principal Balance of such Class immediately prior to
such
Distribution Date, plus any amount previously distributed with
respect to
interest for such Class that is recovered as a voidable
preference by a
trustee in bankruptcy.
Cut-off Date: In the case of any Initial Mortgage Loan, the
later
of (x) March 1, 2005 and (y) the date of origination of such
Mortgage Loan
(the "Initial Cut-off Date"), and in the case of any Subsequent
Mortgage Loan,
the later of (x) the first day of the month of the related
Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage
Loan (the
related "Subsequent Cut-off Date"). When used with respect to
any Mortgage
Loan "the Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on
the Cut-off
Date after application of all payments of principal due on or
prior to the
Cut-off Date, whether or not received, and all Principal
Prepayments received
on or prior to the Cut-off Date, but without giving effect to
any installments
of principal received in respect of Due Dates after the Cut-off
Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan
that became
final and non-appealable, except such a reduction resulting from
a Deficient
Valuation or any other reduction that results in a permanent
forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged
Property in an
amount less than the then outstanding indebtedness under such
Mortgage Loan,
or any reduction in the amount of principal to be paid in
connection with any
Scheduled Payment that results in a permanent forgiveness of
principal, which
valuation or reduction results from an order of such court that
is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06 hereof.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage
Loans
identified on the schedule of Mortgage Loans hereto set forth on
Exhibit F-2
hereof for which all or a portion of a related Mortgage File is
not delivered
to the Co-Trustee on or prior to the Closing Date, and (ii) the
Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage
Loans set
17
<PAGE>
forth in Annex A to each related Subsequent Transfer Agreement
for which all
or a portion of the related Mortgage File is not delivered to
the Co-Trustee
on or prior to the related Subsequent Transfer Date. The
Depositor shall
deliver (or cause delivery of) the Mortgage Files to the
Co-Trustee: (A) with
respect to at least 50% of the Initial Mortgage Loans, not later
than the
Closing Date and with respect to at least 10% of the Subsequent
Mortgage Loans
conveyed on a Subsequent Transfer Date, not later than such
Subsequent
Transfer Date, (B) with respect to at least an additional 40% of
the Initial
Mortgage Loans, not later than 20 days after the Closing Date,
and not later
than 20 days after the relevant Subsequent Transfer Date with
respect to the
remaining Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date,
and (C) with respect to the remaining Initial Mortgage Loans,
not later than
thirty days after the Closing Date. To the extent that
Countrywide Home Loans,
Inc. shall be in possession of any Mortgage Files with respect
to any Delay
Delivery Mortgage Loan, until delivery to of such Mortgage File
to the
Co-Trustee as provided in Section 2.01, Countrywide Home Loans,
Inc. shall
hold such files as agent and in trust for the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced
by a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to a Distribution Date
on
or after the Stepdown Date exists the Rolling Sixty-Day
Delinquency Rate
equals or exceeds the product of 38.00% and the Senior
Enhancement Percentage
for such Distribution Date.
Delinquent: A Mortgage Loan is "delinquent" if any payment
due
thereon is not made pursuant to the terms of such Mortgage Loan
by the close
of business on the day such payment is scheduled to be due. A
Mortgage Loan is
"30 days delinquent" if such payment has not been received by
the close of
business on the corresponding day of the month immediately
succeeding the
month in which such payment was due, or, if there is no such
corresponding day
(e.g., as when a 30-day month follows a 31-day month in which a
payment was
due on the 31st day of such month), then on the last day of such
immediately
succeeding month. Similarly for "60 days delinquent," "90 days
delinquent" and
so on.
Denomination: With respect to each Certificate, the amount
set
forth on the face thereof as the "Initial Certificate Balance of
this
Certificate" or, if not the foregoing, the Percentage Interest
appearing on
the face thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its
successor
in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which 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(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry
Certificates,
the agreement among the Depositor, the Trustee and the initial
Depository,
dated as of the Closing Date, substantially in the form of
Exhibit O.
18
<PAGE>
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
15th day of the month of such Distribution Date or, if such 15th
day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 3.05(c) in the
name of the
Trustee for the benefit of the Certificateholders and designated
"The Bank of
New York, in trust for registered Holders of CWABS, Inc.,
Asset-Backed
Certificates, Series 2005-2". Funds in the Distribution Account
shall be held
in trust for the Certificateholders for the uses and purposes
set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution
Date,
1:00 p.m. Pacific time on the Business Day immediately preceding
such
Distribution Date.
Distribution Date: The 25th day of each month, or if such day
is
not a Business Day, on the first Business Day thereafter,
commencing in April
2005.
Due Date: With respect to any Mortgage Loan and Due Period,
the
due date for Scheduled Payments of interest and/or principal on
that Mortgage
Loan occurring in such Due Period as provided in the related
Mortgage Note.
Due Period: With respect to any Distribution Date, the
period
beginning on the second day of the calendar month preceding the
calendar month
in which such Distribution Date occurs and ending on the first
day of the
month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts
maintained
with a federal or state chartered depository institution or
trust company, the
long-term unsecured debt obligations and short-term unsecured
debt obligations
of which (or, in the case of a depository institution or trust
company that is
the principal subsidiary of a holding company, the debt
obligations of such
holding company, if Moody's is not a Rating Agency) are rated by
each Rating
Agency in one of its two highest long-term and its highest
short-term rating
categories respectively, at the time any amounts are held on
deposit therein,
or (ii) an account or accounts in a depository institution or
trust company in
which such accounts are insured by the FDIC (to the limits
established by the
FDIC) and the uninsured deposits in which accounts are otherwise
secured such
that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to
each Rating Agency, the Certificateholders have a claim with
respect to the
funds in such account or a perfected first priority 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 or trust company in which such account is
maintained,
or (iii) a trust account or accounts maintained with the
corporate trust
department of a federal or state chartered depository
institution or trust
company having capital and surplus of not less than $50,000,000,
acting in its
fiduciary capacity or (iv) any other account acceptable to the
Rating Agencies
without reduction or withdrawal of their then current ratings of
the
Certificates as evidenced by a
19
<PAGE>
letter from each Rating Agency to the Trustee. Eligible Accounts
may bear
interest, and may include, if otherwise qualified under this
definition,
accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d)
hereof.
ERISA: The Employee Retirement Income Security Act of 1974,
as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the applicable
requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class
P
Certificates, Class C Certificates and Certificates of any Class
that ceases
to satisfy the applicable rating requirement under the
Underwriter's
Exemption.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum
of
(x) the amount remaining as set forth in Section 4.04(a)(iii)(h)
and (y) the
amount remaining as set forth in Section 4.04(b)(1)(B)(viii) or
4.04(b)(2)(I),
as applicable.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any Liquidation Proceeds and
Subsequent
Recoveries are in excess of the sum of (i) the unpaid principal
balance of
such Liquidated Mortgage Loan as of the date of liquidation of
such Liquidated
Mortgage Loan plus (ii) interest at the Mortgage Rate from the
Due Date as to
which interest was last paid or advanced to Certificateholders
(and not
reimbursed to the Master Servicer) up to the Due Date in the
month in which
Liquidation Proceeds are required to be distributed on the
Stated Principal
Balance of such Liquidated Mortgage Loan outstanding during each
Due Period as
to which such interest was not paid or advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum
of
(i) the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date and any Loan Group, is the product of (a) the
lesser of (1)
the Overcollateralization Deficiency Amount and (2) the Excess
Cashflow
available for payment thereof and (b) a fraction, the numerator
of which is
the Principal Remittance Amount for such Loan Group and the
denominator of
which is the sum of the Principal Remittance Amounts for both
Loan Groups.
Fannie Mae: The Federal National Mortgage Association, a
federally
chartered and privately owned corporation organized and existing
under the
Federal National Mortgage Association Charter Act, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
20
<PAGE>
Fixed Rate Mortgage Loans: The Mortgage Loans identified in
the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed
for the life
of the related Mortgage and any Credit Comeback Loans, including
in each case
any Mortgage Loans delivered in replacement thereof.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and
existing under
Title III of the Emergency Home Finance Act of 1970, as amended,
or any
successor thereto.
Funding Period: The period from the Closing Date to and
including
the earlier to occur of (x) the date the amount in the
Pre-Funding Account is
less than $25,000 and (y) May 16, 2005.
Gross Margin: The percentage set forth in the related
Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the
Index for use
in determining the Mortgage Rate on each Adjustment Date, and
which is set
forth in the Mortgage Loan Schedule for the Adjustable Rate
Mortgage Loans.
Group 1 Mortgage Loans: The group of Mortgage Loans identified
in
the related Mortgage Loan Schedule as "Group 1 Mortgage Loans",
including in
each case any Mortgage Loans delivered in replacement
thereof.
Group 1 Sequential Trigger Event: With respect to any
Distribution
Date (i) prior to the Distribution Date in April 2008, if (x)
the aggregate
amount of Realized Losses on the Mortgage Loans in Loan Group 1
from the
Cut-off Date for each such Mortgage Loan to (and including) the
last day of
the related Due Period (reduced by the aggregate amount of any
Subsequent
Recoveries related to the Mortgage Loans in Loan Group 1
received through the
last day of that Due Period) exceeds (y) 2.50% of the sum of the
aggregate
Initial Cut-off Date Principal Balance of the Initial Mortgage
Loans in Loan
Group 1 and the original Pre-Funded Amount in respect of Loan
Group 1 or (ii)
on or after the Distribution Date in April 2008, if an
Adjustable Rate Trigger
Event is in effect.
Group 2 Mortgage Loans: The group of Mortgage Loans identified
in
the related Mortgage Loan Schedule as "Group 2 Mortgage Loans",
including in
each case any Mortgage Loans delivered in replacement
thereof.
Group 1 Pre-Funded Amount: The portion of the Pre-Funded
Amount
allocable for purchase of Subsequent Mortgage Loans as Group 1
Mortgage Loans
on the Closing Date, which shall equal $44,292,497.65.
Group 2 Pre-Funded Amount: The portion of the Pre-Funded
Amount
allocable for purchase of Subsequent Mortgage Loans as Group 2
Mortgage Loans
on the Closing Date, which shall equal $66,049,706.46.
Group Net Rate Cap: With respect to Loan Group 1, the Loan Group
1
Net Rate Cap and with respect to Loan Group 2, the Loan Group 2
Net Rate Cap.
21
<PAGE>
Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment
Date related thereto, the index for the adjustment of the
Mortgage Rate set
forth as such in the related Mortgage Note, such index in
general being the
average of the London interbank offered rates for six-month U.S.
dollar
deposits in the London market, as set forth in The Wall Street
Journal, as
most recently announced as of a date 45 days prior to such
Adjustment Date or,
if the Index ceases to be published in The Wall Street Journal
or becomes
unavailable for any reason, then the Index shall be a new index
selected by
the Master Servicer, based on comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of
such Mortgage
Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the
Initial Mortgage
Loans due after the Initial Cut-off Date and received by the
Master Servicer
before the Closing Date and not applied in computing the Cut-off
Date
Principal Balance thereof and (ii) interest on the Initial
Mortgage Loans due
after the Initial Cut-off Date and received by the Master
Servicer before the
Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C Certificates) the
Certificate Principal
Balance of such Certificate or any predecessor Certificate on
the Closing
Date.
Initial Cut-off Date: As defined in the definition of
Cut-off
Date.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee
on
the Closing Date pursuant to this Agreement as identified on the
Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Rate: As to each Adjustable Mortgage Loan,
the
Mortgage Rate in effect prior to the Initial Adjustment
Date.
Initial Periodic Rate Cap: With respect to each Adjustable
Rate
Mortgage Loan, the percentage specified in the related Mortgage
Note that
limits the permissible increase or decrease in the Mortgage Rate
on its
initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included
in
the Trust Fund, any insurance policy, including all riders and
endorsements
thereto in effect with respect to such Mortgage Loan, including
any
replacement policy or policies for any Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any other insurance policy
covering a
Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed
of trust and
are not 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, in
each case other than any amount included in such Insurance
Proceeds in respect
of Insured Expenses and received prior to such Mortgage Loan
becoming a
Liquidated Mortgage Loan.
22
<PAGE>
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: With respect to each Class of
Adjustable Rate Certificates and each Distribution Date, the
excess of (i) the
Current Interest for such Class with respect to prior
Distribution Dates over
(ii) the amount actually distributed to such Class with respect
to interest on
such prior Distribution Dates.
Interest Determination Date: With respect to the first
Accrual
Period for the Adjustable Rate Certificates, March 28, 2005.
With respect to
any Accrual Period for the Adjustable Rate Certificates
thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual
Period.
Interest Funds: With respect to any Distribution Date and
Loan
Group, the Interest Remittance Amount for such Loan Group and
Distribution
Date, less the portion of the Trustee Fee for such Distribution
Date allocable
to such Loan Group.
Interest Remittance Amount: With respect to the Mortgage Loans
in
each Loan Group and any Master Servicer Advance Date, (x) the
sum, without
duplication, of (i) all scheduled interest collected during the
related Due
Period (for the avoidance of doubt, other than Credit Comeback
Excess Amounts)
with respect to the related Mortgage Loans less the related
Servicing Fee,
(ii) all interest on prepayments, other than Prepayment Interest
Excess, (iii)
all related Advances relating to interest with respect to such
Mortgage Loans,
(iv) all related Compensating Interest with respect to such
Mortgage Loans,
(v) Liquidation Proceeds with respect to such Mortgage Loans
collected during
the related Due Period (to the extent such Liquidation Proceeds
relate to
interest) and (vi) the related Seller Shortfall Interest
Requirement, less (y)
all reimbursements to the Master Servicer during the related Due
Period for
Advances of interest previously made allocable to such Loan
Group.
Investment Letter: As defined in Section 5.02(b) hereof.
Latest Possible Maturity Date: The Distribution Date following
the
third anniversary of the scheduled maturity date of the Mortgage
Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London,
England and New York City, U.S.A. are open and conducting
transactions in
foreign currency and exchange.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan that has been liquidated through
deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other
realization as provided
by applicable law governing the real property subject to the
related Mortgage
and any security agreements and as to which the Master Servicer
has certified
(in accordance with Section 3.12 hereof) in the related
Prepayment Period that
it has received all amounts it expects to receive in connection
with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation
of Mortgage
Loans, whether through trustee's
23
<PAGE>
sale, foreclosure sale or otherwise or amounts received in
connection with any
condemnation or partial release of a Mortgaged Property and any
other proceeds
received in connection with an REO Property received in
connection with or
prior to such Mortgage Loan becoming a Liquidated Mortgage Loan,
less the sum
of related unreimbursed Advances, Servicing Fees and Servicing
Advances.
Loan Group: Either of Loan Group 1 or Loan Group 2.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Number and Borrower Identification Mortgage Loan
Schedule:
With respect to any Subsequent Transfer Date, the Loan Number
and Borrower
Identification Mortgage Loan Schedule delivered in connection
with such
Subsequent Transfer Date pursuant to Section 2.01(f) hereof.
Each Loan Number
and Borrower Identification Mortgage Loan Schedule shall contain
the
information specified in the definition of "Mortgage Loan
Schedule" with
respect to the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer
Date, and each Loan Number and Borrower Identification Mortgage
Loan Schedule
shall be deemed to be included in the Mortgage Loan
Schedule.
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the
numerator of which is the original principal balance of the
related Mortgage
Loan and the denominator of which is the Appraised Value of the
related
Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at
least
51% of the Voting Rights allocated to such Class of
Certificates.
<TABLE>
<CAPTION>
Margin: With respect to any Accrual Period and Class of
Adjustable
Rate Certificates, the per annum rate indicated in the following
table:
------------------------------------------------------------------------------------------------------
Class Margin (1) Margin (2)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class 1-A-1........................ 0.190% 0.380%
------------------------------------------------------------------------------------------------------
Class 1-A-2........................ 0.240% 0.480%
------------------------------------------------------------------------------------------------------
Class 2-A-1........................ 0.090% 0.180%
------------------------------------------------------------------------------------------------------
Class 2-A-2........................ 0.130% 0.260%
------------------------------------------------------------------------------------------------------
Class 2-A-3........................ 0.200% 0.400%
------------------------------------------------------------------------------------------------------
Class 2-A-4........................ 0.300% 0.600%
------------------------------------------------------------------------------------------------------
Class M-1.......................... 0.420% 0.630%
------------------------------------------------------------------------------------------------------
Class M-2.......................... 0.440% 0.660%
------------------------------------------------------------------------------------------------------
Class M-3.......................... 0.480% 0.720%
------------------------------------------------------------------------------------------------------
Class M-4.......................... 0.710% 1.065%
------------------------------------------------------------------------------------------------------
Class M-5.......................... 0.760% 1.140%
------------------------------------------------------------------------------------------------------
Class M-6.......................... 1.350% 2.025%
------------------------------------------------------------------------------------------------------
Class M-7.......................... 1.800% 2.700%
------------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
(1) For any Accrual Period relating to any Distribution Date
occurring on or
prior to the Optional Termination Date.
(2) For any Accrual Period relating to any Distribution Date
occurring after
the Optional Termination Date.
Master Servicer: Countrywide Home Loans Servicing LP, a
Texas
limited partnership, and its successors and assigns, in its
capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date,
the
Business Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts
(i)
payable by the Master Servicer in respect of any Prepayment
Charges waived
other than in accordance with the standard set forth in the
first sentence of
Section 3.20(a) hereof, or (ii) collected from the Master
Servicer in respect
of a remedy for the breach of the representation made by CHL set
forth in
Section 3.20(c) hereof.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in
the related
Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State
of Delaware,
or any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS
on
the MERS(R) System.
MERS(R) System: The system of recording transfers of
mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS
Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in
the related
Mortgage Note.
Modified Mortgage Loan: As defined in Section 3.12(a)
hereof.
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage
Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05 hereof.
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 ownership interest in an
estate in fee
simple in real property securing a Mortgage Note.
25
<PAGE>
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any
additional documents
delivered to the Co-Trustee to be added to the Mortgage File
pursuant to this
Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time
to time amended by the Master Servicer to reflect the deletion
of Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of
(x) Replacement
Mortgage Loans pursuant to the provisions of this Agreement and
(y) Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and
any Subsequent
Transfer Agreement) transferred to the Trustee as part of the
Trust Fund and
from time to time subject to this Agreement, attached hereto as
Exhibit F-1,
setting forth in the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at
the time of origination was represented to be
owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling, (b) a two
family
residential property, (c) a three family residential property,
(d)
a four family residential property, (e) planned unit
development,
(f) a low rise condominium unit, (g) a high rise condominium
unit
or (h) manufactured housing;
(xiii) a code indicating whether such Mortgage Loan is a
Credit Comeback Loan;
(xiv) [Reserved];
(xv) [Reserved];
(xvi) the purpose of the Mortgage Loan;
26
<PAGE>
(xvii) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap; and
(g) the Gross Margin;
(xviii) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Monaco Mortgage Loan or a Park
Sienna Mortgage Loan;
(xix) the premium rate for any lender-paid mortgage
insurance, if applicable; and
(xx) a code indicating whether the Mortgage Loan is a Fixed
Rate Mortgage Loan or an Adjustable Rate Mortgage
Loan.
Such schedule shall also set forth the total of the amounts
described under
(vii) above for all of the Mortgage Loans and for each Loan
Group. The
Mortgage Loan Schedule shall be deemed to include each Loan
Number and
Borrower Identification Mortgage Loan Schedule delivered
pursuant to Section
2.01(f) hereof and all the related Subsequent Mortgage Loans and
Subsequent
Mortgage Loan information included therein.
Mortgage Loans: Such of the Group 1 Mortgage Loans and Group
2
Mortgage Loans transferred and assigned to the Trustee pursuant
to the
provisions hereof and any Subsequent Transfer Agreement as from
time to time
are held as part of the Trust Fund (including any REO Property),
the mortgage
loans so held being identified in the Mortgage Loan Schedule,
notwithstanding
foreclosure or other acquisition of title of the related
Mortgaged Property.
Any mortgage loan that was intended by the parties hereto to be
transferred to
the Trust Fund as indicated by such Mortgage Loan Schedule which
is in fact
not so transferred for any reason, including a breach of the
representation
contained in Section 2.02 hereof, shall continue to be a
Mortgage Loan
hereunder until the Purchase Price with respect thereto has been
paid to the
Trust Fund.
Mortgage Note: The original executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
27
<PAGE>
Mortgage Pool: The aggregate of the Mortgage Loans identified
in
the Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a
Mortgage
Note from time to time; provided, however, the Mortgage Rate for
each Credit
Comeback Loan shall be treated for all purposes of payments on
the
Certificates, including the calculation of the Pass-Through
Rates and the
applicable Net Rate Cap, as reduced by 0.375% on the Due Date
following the
end of each of the first four annual periods after the
origination date,
irrespective of whether the Mortgagor qualifies for the
reduction by having a
good payment history.
Mortgaged Property: The underlying property securing a
Mortgage
Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any
time,
the per annum rate equal to the Mortgage Rate less the Servicing
Fee Rate.
Net Rate Cap: (i) With respect to the Class 1-A Certificates,
the
Class 1-A Net Rate Cap, (ii) with respect to the Class 2-A
Certificates, the
Class 2-A Net Rate Cap and (iii) with respect to the Subordinate
Certificates,
the Subordinate Net Rate Cap.
Net Rate Carryover: With respect to any Class of Adjustable
Rate
Certificates and any Distribution Date, the sum of (A) the
excess of (i) the
amount of interest that such Class would otherwise have accrued
for such
Distribution Date had the Pass-Through Rate for such Class and
the related
Accrual Period not been determined based on the applicable Net
Rate Cap, over
(ii) the amount of interest accrued on such Class at the
applicable Net Rate
Cap for such Distribution Date and (B) the Net Rate Carryover
for such Class
for all previous Distribution Dates not previously paid pursuant
to Section
4.04 hereof, together with interest thereon at the then
applicable
Pass-Through Rate for such Class, without giving effect to the
applicable Net
Rate Cap.
NIM Insurer: Any insurer guarantying at the request of CHL
certain
payments under notes backed or secured by the Class C or Class P
Certificates.
Nonrecoverable Advance: Any portion of an Advance previously
made
or proposed to be made by the Master Servicer that, in the good
faith judgment
of the Master Servicer, will not or, in the case of a current
delinquency,
would not, be ultimately recoverable by the Master Servicer from
the related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or
other entity
(treated as a corporation or a partnership for federal income
tax purposes)
created or organized in or under the laws of the United States,
any state
thereof or the District of Columbia, an estate whose income from
sources
without the United States is includible in gross income for
United States
federal income tax purposes regardless of its connection with
the conduct of a
trade or business within the United States, or a trust if a
court within the
United States is able to exercise primary supervision over the
administration
of the trust and one or more United States persons have
authority to control
all substantial decisions of the trustor.
28
<PAGE>
OC Floor: With respect to any Distribution Date, an amount
equal
to 0.50% of the sum of the aggregate Cut-off Date Principal
Balance of the
Initial Mortgage Loans and the original Pre-Funded Amount.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice
Chairman of the
Board, the President, a Managing Director, a Vice President
(however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the
Depositor,
(ii) in the case of the Master Servicer, signed by the
President, an Executive
Vice President, a Vice President, an Assistant Vice President,
the Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of
Countrywide GP,
Inc., its general partner or (iii) if provided for in this
Agreement, signed
by a Servicing Officer, as the case may be, and delivered to the
Depositor and
the Trustee, as the case may be, as required by this
Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee
on the
related Interest Determination Date on the basis of the rate for
U.S. dollar
deposits for one month that appears on Telerate Screen Page 3750
as of 11:00
a.m. (London time) on such Interest Determination Date; provided
that the
parties hereto acknowledge that One-Month LIBOR calculated for
the first
Accrual Period for the Adjustable Rate Certificates shall equal
2.850% per
annum. If such rate does not appear on such page (or such other
page as may
replace that page on that service, or if such service is no
longer offered,
such other service for displaying One-Month LIBOR or comparable
rates as may
be reasonably selected by the Trustee), One-Month LIBOR for the
applicable
Accrual Period for the Adjustable Rate Certificates will be the
Reference Bank
Rate. If no such quotations can be obtained by the Trustee and
no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to
the preceding Accrual Period for the Adjustable Rate
Certificates.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably
acceptable to
each addressee of such opinion; provided that with respect to
Section 6.04 or
10.01 hereof, or the interpretation or application of the REMIC
Provisions,
such counsel must (i) in fact be independent of the Depositor
and the Master
Servicer, (ii) not have any direct financial interest in the
Depositor or the
Master Servicer or in any affiliate of either and (iii) not be
connected with
the Depositor or the Master Servicer as an officer, employee,
promoter,
underwriter, trustee, partner, director or person performing
similar
functions.
Optional Termination: The termination of the Trust Fund
provided
hereunder pursuant to the purchase of the Mortgage Loans
pursuant to the last
sentence of Section 9.01 hereof.
Optional Termination Date: The first Distribution Date on
which
the aggregate Stated Principal Balance of the Mortgage Loans is
less than or
equal to 10% of the sum of the aggregate Cut-off Date Principal
Balance of the
Initial Mortgage Loans and the Pre-Funded Amount.
29
<PAGE>
Original Value: The value of the property underlying a
Mortgage
Loan based, in the case of the purchase of the underlying
Mortgaged Property,
on the lower of an appraisal satisfactory to the Master Servicer
or the sales
price of such property or, in the case of a refinancing, on an
appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage
Loan with a Stated Principal Balance greater than zero that was
not the
subject of a Principal Prepayment in full, and that did not
become a
Liquidated Mortgage Loan, prior to the end of the related
Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the
Overcollateralization
Target Amount exceeds the Overcollateralized Amount for such
Distribution Date
(after giving effect to distributions in respect of the
Principal Remittance
Amount for each Loan Group on such Distribution Date).
Overcollateralization Target Amount: With respect to (a)
each
Distribution Date prior to the Stepdown Date, an amount equal to
2.30% of the
sum of the aggregate Cut-off Date Principal Balance of the
Initial Mortgage
Loans and the Pre-Funded Amount and (b) for any Distribution
Date on or after
the Stepdown Date, 4.60% of the aggregate Stated Principal
Balance of the
Mortgage Loans for the current Distribution Date, subject to a
minimum amount
equal to the OC Floor; provided that if a Trigger Event is in
effect on any
Distribution Date, the Overcollateralization Target Amount will
be the
Overcollateralization Target Amount as in effect for the prior
Distribution
Date.
Overcollateralized Amount: With respect to any Distribution
Date
the amount, if any, by which (x) the sum of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date and any
remaining
amounts on deposit in the Pre-Funding Account exceeds (y) the
aggregate
Certificate Principal Balance of the Senior Certificates and the
Subordinate
Certificates as of such Distribution Date (after giving effect
to
distributions in respect of the Principal Remittance Amounts on
such
Distribution Date).
Ownership Interest: As to any Certificate, any ownership
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.
30
<PAGE>
Park Monaco: Park Monaco Inc., a Delaware corporation, and
its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as
such on the Mortgage Loan Schedule for which Park Monaco is the
applicable
Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company, and its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as
such on the Mortgage Loan Schedule for which Park Sienna is the
applicable
Seller.
Pass-Through Rate: With respect to any Accrual Period and
each
Class of Adjustable Rate Certificates, the lesser of (x)
One-Month LIBOR for
such Accrual Period plus the Margin for such Class and Accrual
Period and (y)
the applicable Net Rate Cap for such Class and the related
Distribution Date.
Percentage Interest: With respect to any Adjustable Rate
Certificate, a fraction, expressed as a percentage, the
numerator of which is
the Certificate Principal Balance represented by such
Certificate and the
denominator of which is the aggregate Certificate Principal
Balance of the
related Class. With respect to the Class C, Class P and Class
A-R
Certificates, the portion of the Class evidenced thereby,
expressed as a
percentage, as stated on the face of such Certificate.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and
credit
of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia
receiving
the highest long-term debt rating of each Rating Agency, or
such
lower rating as each Rating Agency has confirmed in writing
is
sufficient for the ratings originally assigned to the
Certificates
by such Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper
rating
of each Rating Agency, or such lower rating as each Rating
Agency
has confirmed in writing is sufficient for the ratings
originally
assigned to the Certificates by such Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations
of
such depository institution or trust company (or in the case
of
the principal depository institution in a holding company
system,
the commercial paper or long-term
31
<PAGE>
unsecured debt obligations of such holding company, but only
if
Moody's is not a Rating Agency) are then rated one of the
two
highest long-term and the highest short-term ratings of each
such
Rating Agency for such securities, or such lower ratings as
each
Rating Agency has confirmed in writing is sufficient for the
ratings originally assigned to the Certificates by such
Rating
Agency;
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case
entered
into with a depository institution or trust company (acting
as
principal) described in clause (iv) above;
(vi) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of
the
face amount thereof) bearing interest or sold at a discount
issued
by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such
investment,
have one of the two highest long term ratings of each Rating
Agency (except (x) if the Rating Agency is Moody's, such
rating
shall be the highest commercial paper rating of S&P for any
such
securities) and (y), or such lower rating as each Rating
Agency
has confirmed in writing is sufficient for the ratings
originally
assigned to the Certificates by such Rating Agency;
(vii) interests in any money market fund which at the date
of acquisition of the interests in such fund and throughout
the
time such interests are held in such fund has the highest
applicable long term rating by each Rating Agency or such
lower
rating as each Rating Agency has confirmed in writing is
sufficient for the ratings originally assigned to the
Certificates
by such Rating Agency;
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under
the
laws of the United States or any state thereof which on the
date
of acquisition has been rated by each Rating Agency in their
respective highest applicable rating category or such lower
rating
as each Rating Agency has confirmed in writing is sufficient
for
the ratings originally assigned to the Certificates by such
Rating
Agency; and
(ix) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a
discount acceptable to each Rating Agency as will not result
in
the downgrading or withdrawal of the rating then assigned to
the
Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency, and reasonably
acceptable
to the NIM Insurer, as evidenced by a signed writing delivered
by
the NIM Insurer;
provided, that no such instrument shall be a Permitted
Investment if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or (iii) is purchased at a deep discount; provided
further that no
such instrument shall be a Permitted Investment (A) if such
instrument
evidences principal and interest payments derived from
obligations underlying
such instrument and the interest payments with respect to such
instrument
provide a yield to maturity of greater than 120% of the yield to
maturity at
par of such underlying obligations, or (B) if it may be
redeemed
32
<PAGE>
at a price below the purchase price (the foregoing clause (B)
not to apply to
investments in units of money market funds pursuant to clause
(vii) above);
provided further that no amount beneficially owned by any REMIC
(including,
without limitation, any amounts collected by the Master Servicer
but not yet
deposited in the Certificate Account) may be invested in
investments (other
than money market funds) treated as equity interests for Federal
income tax
purposes, unless the Master Servicer shall receive an Opinion of
Counsel, at
the expense of Master Servicer, to the effect that such
investment will not
adversely affect the status of any such REMIC as a REMIC under
the Code or
result in imposition of a tax on any such REMIC. Permitted
Investments that
are subject to prepayment or call may not be purchased at a
price in excess of
par.
Permitted Transferee: Any Person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality
of any of the foregoing, (ii) a foreign government,
International Organization
or any agency or instrumentality of either of the foregoing,
(iii) an
organization (except certain farmers' cooperatives described in
Section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including
the tax imposed by Section 511 of the Code on unrelated business
taxable
income) on any excess inclusions (as defined in Section
860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural
electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, (v) an
"electing large partnership" as defined in Section 775 of the
Code, (vi) a
Person that is not a citizen or resident of the United States, a
corporation,
partnership, or other entity (treated as a corporation or a
partnership for
federal income tax purposes) created or organized in or under
the laws of the
United States, any state thereof or the District of Columbia, or
an estate
whose income from sources without the United States is
includible in gross
income for United States federal income tax purposes regardless
of its
connection with the conduct of a trade or business within the
United States,
or a trust if a court within the United States is able to
exercise primary
supervision over the administration of the trust and one or more
United States
Persons have authority to control all substantial decisions of
the trustor
unless such Person has furnished the transferor and the Trustee
with a duly
completed Internal Revenue Service Form W-8ECI, and (vii) any
other Person so
designated by the Trustee based upon an Opinion of Counsel that
the Transfer
of an Ownership Interest in a Class A-R Certificate to such
Person may cause
any REMIC formed hereunder to fail to qualify as a REMIC at any
time that any
Certificates are Outstanding. The terms "United States," "State"
and
"International Organization" shall have the meanings set forth
in Section 7701
of the Code or successor provisions. A corporation will not be
treated as an
instrumentality of the United States or of any State or
political subdivision
thereof for these purposes if all of its activities are subject
to tax and,
with the exception of the Federal Home Loan Mortgage
Corporation, a majority
of its board of directors is not selected by such government
unit.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock
company, trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Pool Stated Principal Balance: The aggregate of the Stated
Principal Balances of the Mortgage Loans which were Outstanding
Mortgage
Loans.
33
<PAGE>
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account
on the Closing Date, which shall equal $110,342,304.11.
Pre-Funding Account: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 3.05 hereof in the
name of the
Trustee for the benefit of the Certificateholders and designated
"The Bank of
New York, in trust for registered Holders of CWABS, Inc.,
Asset-Backed
Certificates, Series 2005-2." Funds in the Pre-Funding Account
shall be held
in trust for the Certificateholders for the uses and purposes
set forth in
this Agreement and shall not be a part of any REMIC created
hereunder,
provided, however that any investment income earned from
Permitted Investments
made with funds in the Pre-Funding Account will be for the
account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the
Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the
charges
or premiums, if any, due in connection with a full or partial
prepayment of
such Mortgage Loan within the related Prepayment Charge Period
in accordance
with the terms thereof (other than any Master Servicer
Prepayment Charge
Payment Amount).
Prepayment Charge Period: With respect to any Mortgage Loan,
the
period of time during which a Prepayment Charge may be
imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date
with
respect to each Initial Mortgage Loan and as of the Subsequent
Cut-off Date
with respect to each Subsequent Mortgage Loan, a list attached
hereto as
Schedule I (including the Prepayment Charge Summary attached
thereto), setting
forth the following information with respect to each Prepayment
Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on
the related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as
of the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall
contain the necessary information for each Initial Mortgage
Loan. The
Prepayment Charge Schedule shall be amended by the Master
Servicer upon the
sale of any Subsequent Mortgage Loans to the Trust Fund. In
addition, the
Prepayment Charge Schedule shall be amended from time to time by
the Master
Servicer in accordance with the provisions of this Agreement and
a copy of
each related
34
<PAGE>
amendment shall be furnished by the Master Servicer to the Class
P and Class C
Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a Principal
Prepayment during
the period from the related Due Date to the end of the related
Prepayment
Period, any payment of interest received in connection therewith
(net of any
applicable Servicing Fee) representing interest accrued for any
portion of
such month of receipt.
Prepayment Interest Shortfall: With respect to any
Distribution
Date, for each Mortgage Loan that was the subject of a partial
Principal
Prepayment or a Principal Prepayment in full during the period
from the
beginning of the related Prepayment Period to the Due Date in
such Prepayment
Period (other than a Principal Prepayment in full resulting from
the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or
9.01 hereof)
and for each Mortgage Loan that became a Liquidated Mortgage
Loan during the
related Due Period, the amount, if any, by which (i) one month's
interest at
the applicable Net Mortgage Rate on the Stated Principal Balance
of such
Mortgage Loan immediately prior to such prepayment (or
liquidation) or in the
case of a partial Principal Prepayment on the amount of such
prepayment (or
Liquidation Proceeds) exceeds (ii) the amount of interest paid
or collected in
connection with such Principal Prepayment or such Liquidation
Proceeds.
Prepayment Period: As to any Distribution Date and related
Due
Date, the period beginning with the opening of business on the
sixteenth day
of the calendar month preceding the month in which such
Distribution Date
occurs (or, with respect to the first Distribution Date, the
period beginning
on March 1, 2005) and ending on the close of business on the
fifteenth day of
the month in which such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of
New
York, as publicly announced to be in effect from time to time.
The Prime Rate
shall be adjusted automatically, without notice, on the
effective date of any
change in such prime commercial lending rate. The Prime Rate is
not
necessarily The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each
Distribution
Date and a Loan Group, the sum of (i) the Principal Remittance
Amount for such
Loan Group for such Distribution Date, (ii) the Extra Principal
Distribution
Amount for such Loan Group for such Distribution Date, and (iii)
with respect
to the Distribution Date immediately following the end of the
Funding Period,
the amount, if any, remaining in the Pre-Funding Account at the
end of the
Funding Period (net of any investment income therefrom)
allocable to such Loan
Group.
Principal Prepayment: Any Mortgagor payment or other recovery
of
(or proceeds with respect to) principal on a Mortgage Loan
(including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12
and 9.01
hereof) that is received in advance of its scheduled Due Date to
the extent it
is not accompanied by an amount as to interest representing
scheduled interest
due on any date or dates in any month or months subsequent to
the month of
prepayment. Partial Principal Prepayments shall be applied by
the Master
Servicer in accordance with the terms of the related Mortgage
Note.
35
<PAGE>
Principal Relocation Payment: A payment from any Loan Group to
a
REMIC 1 Regular Interest other than a Regular Interest
corresponding to that
Loan Group as provided in the Preliminary Statement. Principal
Relocation
Payments shall be made of principal allocations comprising the
Principal
Remittance Amount from a Loan Group and shall include a
proportionate
allocation of Realized Losses from the Mortgage Loans of such
Loan Group.
Principal Remittance Amount: With respect to the Mortgage Loans
in
each Loan Group and any Distribution Date, (a) the sum, without
duplication,
of: (i) the scheduled principal collected with respect to the
Mortgage Loans
during the related Due Period or advanced on or before 1:00 p.m.
Pacific time
on the related Master Servicer Advance Date, (ii) Principal
Prepayments
collected in the related Prepayment Period, with respect to the
Mortgage
Loans, (iii) the Stated Principal Balance of each Mortgage Loan
that was
repurchased by a Seller or purchased by the Master Servicer with
respect to
such Distribution Date, (iv) the amount, if any, by which the
aggregate unpaid
principal balance of any Replacement Mortgage Loans is less than
the aggregate
unpaid principal balance of any Deleted Mortgage Loans delivered
by the
Sellers in connection with a substitution of a Mortgage Loan,
and (v) all
Liquidation Proceeds (to the extent such Liquidation Proceeds
related to
principal) and Subsequent Recoveries collected during the
related Due Period;
less (b) all Nonrecoverable Advances relating to principal and
certain
expenses reimbursable pursuant to Section 6.03 hereof and
reimbursed during
the related Due Period.
Principal Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee pursuant to Section 3.08
hereof in the
name of the Trustee for the benefit of the Certificateholders
and designated
"The Bank of New York in trust for registered Holders of CWABS,
Inc.,
Asset-Backed Certificates, Series 2005-2". Funds in the
Principal Reserve Fund
shall be held in trust for the Certificateholders for the uses
and purposes
set forth in this Agreement.
Private Certificates: The Class C and Class P Certificates.
Prospectus: The prospectus dated October 25, 2004, relating
to
asset-backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated March
18,
2005, relating to the public offering of the certain Classes of
Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b) hereof.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required
to
be (1) repurchased by a Seller or purchased by the Master
Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2)
repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that
the Master
Servicer has a right to purchase pursuant to Section 3.12
hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance
(or, if such
purchase or repurchase, as the case may be, is effected by the
Master
Servicer, the Stated Principal Balance) of the Mortgage Loan as
of the date of
such purchase, (ii) accrued interest thereon at the applicable
Mortgage Rate
(or, if such purchase or repurchase, as the case may be, is
effected by the
Master
36
<PAGE>
Servicer, at the Net Mortgage Rate) from (a) the date through
which interest
was last paid by the Mortgagor (or, if such purchase or
repurchase, as the
case may be, is effected by the Master Servicer, the date
through which
interest was last advanced and not reimbursed by the Master
Servicer) to (b)
the Due Date in the month in which the Purchase Price is to be
distributed to
Certificateholders and (iii) any costs, expenses and damages
incurred by the
Trust Fund resulting from any violation of any predatory or
abusive lending
law in connection with such Mortgage Loan.
Rating Agency: Each of Moody's and S&P. If any such
organization
or its successor is no longer in existence, "Rating Agency"
shall be a
nationally recognized statistical rating organization, or other
comparable
Person, designated by the Depositor, notice of which designation
shall be
given to the Trustee. References herein to a given rating
category of a Rating
Agency shall mean such rating category without giving effect to
any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount (not less than zero or more than the Stated Principal
Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i)
the Stated
Principal Balance of such Liquidated Mortgage Loan as of the
date of such
liquidation, minus (ii) the Liquidation Proceeds, if any,
received in
connection with such liquidation during the month in which such
liquidation
occurs, to the extent applied as recoveries of principal of the
Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has
become the subject
of a Deficient Valuation, (i) if the value of the related
Mortgaged Property
was reduced below the principal balance of the related Mortgage
Note, the
amount by which the value of the Mortgaged Property was reduced
below the
principal balance of the related Mortgage Note, and (ii) if the
principal
amount due under the related Mortgage Note has been reduced, the
difference
between the principal balance of the Mortgage Loan outstanding
immediately
prior to such Deficient Valuation and the principal balance of
the Mortgage
Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan
that has become the subject of a Debt Service Reduction and any
Distribution
Date, the amount, if any, by which the related Scheduled Payment
was reduced.
Record Date: With respect to any Distribution Date and the
Adjustable Rate Certificates, the Business Day immediately
preceding such
Distribution Date, or if such Certificates are no longer
Book-Entry
Certificates, the last Business Day of the month preceding the
month of such
Distribution Date. With respect to the Class A-R, Class C and
Class P
Certificates, the last Business Day of the month preceding the
month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest
whole multiple
of 0.03125%) of the offered rates for United States dollar
deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m.,
New York City
time, on the related Interest Determination Date to prime banks
in the London
interbank market for a period of one month in amounts
approximately equal to
the outstanding aggregate Certificate Principal Balance of the
Adjustable Rate
Certificates on such Interest Determination Date, provided that
at least two
such Reference Banks provide such rate. If fewer than two
offered rates
appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%) of the
rates quoted
by one or more major banks in New York City, selected by the
Trustee, as of
11:00 a.m., New York City time, on such date for loans in U.S.
dollars to
leading European banks for a period of
37
<PAGE>
one month in amounts approximately equal to the aggregate
Certificate
Principal Balance of the Adjustable Rate Certificates on such
Interest
Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and
NatWest,
N.A., provided that if any of the foregoing banks are not
suitable to serve as
a Reference Bank, then any leading banks selected by the Trustee
which are
engaged in transactions in Eurodollar deposits in the
international
Eurocurrency market (i) with an established place of business in
London,
England, (ii) not controlling, under the control of or under
common control
with the Depositor, CHL or the Master Servicer and (iii) which
have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage
loan.
Regular Certificate: Any Certificate other than the Class
A-R
Certificates.
Relief Act: The Servicemembers Civil Relief Act.
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 and the NIM Insurer in accordance with
Section 4.04
hereof.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller
for a Deleted Mortgage Loan which must, on the date of such
substitution, as
confirmed in a Request for File Release, (i) have a Stated
Principal Balance,
after deduction of the principal portion of the Scheduled
Payment due in the
month of substitution, not in excess of, and not less than 90%
of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) with
respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no
more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan
and, with
respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum
Mortgage Rate
no more than 1% per annum higher or lower than the Maximum
Mortgage Rate of
the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no
more than 1%
per annum higher or lower than the Minimum Mortgage Rate of the
Deleted
Mortgage Loan; (c) have the same Index and intervals between
Adjustment Dates
as that of the Deleted Mortgage Loan; (d) have a Gross Margin
not more than 1%
per annum higher or lower than that of the Deleted Mortgage
Loan; and (e) have
an Initial Periodic Rate Cap and a Subsequent Periodic Rate Cap
each not more
than 1% lower than that of the deleted Mortgage Loan; (iii) have
the same or
higher credit quality characteristics than that of the Deleted
Mortgage Loan;
(iv) be accruing interest at a rate not more than 1% per annum
higher or lower
than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value
Ratio no
higher than that of the Deleted Mortgage Loan; (vi) have a
remaining term to
maturity not greater than (and not more than one year less than)
that of the
Deleted Mortgage Loan; (vii) not permit conversion of
38
<PAGE>
the Mortgage Rate from a fixed rate to a variable rate or vice
versa; (viii)
provide for a Prepayment Charge on terms substantially similar
to those of the
Prepayment Charge, if any, of the Deleted Mortgage Loan; (ix)
have the same
occupancy type and lien priority as the Deleted Mortgage Loan;
and (x) comply
with each representation and warranty set forth in Section 2.03
hereof as of
the date of substitution; provided, however, that
notwithstanding the
foregoing, to the extent that compliance with clause (x) of this
definition
would cause a proposed Replacement Mortgage Loan to fail to
comply with one or
more of clauses (i), (ii), (iv), (viii) and/or (ix) of this
definition, then
such proposed Replacement Mortgage Loan must comply with clause
(x) and need
not comply with one or more of clauses (i), (ii), (iv), (viii)
and/or (ix), to
the extent, and only to the extent, necessary to assure that the
Replacement
Mortgage Loan otherwise complies with clause (x).
Representing Party: As defined in Section 2.03(e) hereof.
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee,
substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release
submitted
by the Master Servicer to the Co-Trustee, substantially in the
form of
Exhibit N.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under
this Agreement.
Required Secondary Carryover Reserve Fund Deposit: With respect
to
any Distribution Date, an amount equal to the excess of (i)
$10,000 over (ii)
the amount of funds on deposit in the Carryover Reserve
Fund.
Responsible Officer: When used with respect to the Trustee,
any
Vice President, any Assistant Vice President, the Secretary, 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 also to whom, with respect to a particular matter,
such matter is
referred because of such officer's knowledge of and familiarity
with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution Date on or after the Stepdown Date, the average of
the Sixty-Day
Delinquency Rates for such Distribution Date and the two
immediately preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b) hereof.
S&P: Standard & Poor's Ratings Services, a division of
The
McGraw-Hill Companies, Inc. and its successors.
Scheduled Payment: With respect to any Mortgage Loan, the
scheduled monthly payment of principal and/or interest due on
any Due Date on
such Mortgage Loan which is payable by the related Mortgagor
from time to time
under the related Mortgage Note,
39
<PAGE>
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 3.05(a) hereof; and (c)
on the
assumption that all other amounts, if any, due under such
Mortgage Loan are
paid when due.
Securities Act: The Securities Act of 1933, as amended.
Sellers: CHL, in its capacity as seller of the CHL Mortgage
Loans
to the Depositor, Park Monaco, in its capacity as seller of the
Park Monaco
Mortgage Loans to the Depositor and Park Sienna, in its capacity
as seller of
the Park Sienna Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the
Master Servicer Advance Date in each of April 2005, May 2005 and
June 2005,
is the sum of
(a) the product of (1) the excess of the aggregate Stated
Principal Balances for such Distribution Date of the Mortgage
Loans (including
the Subsequent Mortgage Loans, if any) owned by the Trust Fund
at the
beginning of the related Due Period over the aggregate Stated
Principal
Balance for such Distribution Date of such Mortgage Loans
(including such
Subsequent Mortgage Loans, if any) that have a scheduled payment
of interest
due in the related Due Period, and (2) a fraction, the numerator
of which is
the weighted average Net Mortgage Rate of such Mortgage Loans
(including such
Subsequent Mortgage Loans, if any) (weighted on the basis of the
Stated
Principal Balances thereof for such Distribution Date) and the
denominator of
which is 12; and
(b) the lesser of:
(i) the product of: (1) the amount on deposit in the
Pre-Funding
Account at the beginning of the related Due Period, and (2) a
fraction, the
numerator of which is the weighted average Net Mortgage Rate of
the Mortgage
Loans (including Subsequent Mortgage Loans, if any) owned by the
Trust Fund at
the beginning of the related Due Period (weighted on the basis
of the Stated
Principal Balances thereof for such Distribution Date) and the
denominator of
which is 12; and
(ii) the excess of (x) the sum of the amount of Current
Interest
and Interest Carry Forward Amount due and payable on the
Adjustable Rate
Certificates for such Distribution Date, over (y) Interest Funds
otherwise
available to pay Current Interest and the Interest Carry Forward
Amount on the
Interest Bearing Certificates for such Distribution Date (after
giving effect
to the addition of any amounts in clause (a) of this definition
of Seller
Shortfall Interest Requirement to Interest Funds for such
Distribution Date).
Senior Certificates: The Class 1-A, Class 2-A and Class A-R
Certificates.
Senior Principal Distribution Target Amount: With respect to
any
Distribution Date, the excess of (1) the aggregate Certificate
Principal
Balance of the Class 1-A and Class 2-A Certificates immediately
prior to such
Distribution Date, over (2) the lesser of (i) 62.40% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution
Date and (ii)
40
<PAGE>
the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date minus the OC Floor.
Senior Principal Distribution Allocation Amount: With respect
to
any Distribution Date, (a) in the case of the Class 1-A
Certificates, the
Class 1-A Principal Distribution Amount and (b) in the case of
the Class 2-A
Certificates, the Class 2-A Principal Distribution Amount.
Servicing Advances: All customary, reasonable and necessary
"out
of pocket" costs and expenses incurred in the performance by the
Master
Servicer of its servicing obligations hereunder, including, but
not limited
to, the cost of (i) the preservation, restoration and protection
of a
Mortgaged Property, (ii) any enforcement or judicial
proceedings, including
foreclosures, (iii) the management and liquidation of any REO
Property and
(iv) compliance with the obligations under Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date,
an amount equal to one month's interest at the Servicing Fee
Rate on the
Stated Principal Balance of such Mortgage Loan for the preceding
Distribution
Date or, in the event of any payment of interest that
accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the
Servicing Fee Rate
on the Stated Principal Balance of such Mortgage Loan for the
period covered
by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing Officer: Any officer of the Master Servicer involved
in,
or responsible for, the administration and servicing of the
Mortgage Loans
whose name and facsimile signature appear on a list of servicing
officers
furnished to the Trustee by the Master Servicer on the Closing
Date pursuant
to this Agreement, as such list may from time to time be
amended.
Sixty-Day Delinquency Rate: With respect to any Distribution
Date
on or after the Stepdown Date, a fraction, expressed as a
percentage, the
numerator of which is the aggregate Stated Principal Balance for
such
Distribution Date of all Mortgage Loans 60 or more days
delinquent as of the
close of business on the last day of the calendar month
preceding such
Distribution Date (including Mortgage Loans in foreclosure,
bankruptcy and REO
Properties) and the denominator of which is the aggregate Stated
Principal
Balance for such Distribution Date of all Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan
or
related REO Property (i) as of the Cut-off Date, the unpaid
principal balance
of the Mortgage Loan as of such date (before any adjustment to
the
amortization schedule for any moratorium or similar waiver or
grace period),
after giving effect to any partial prepayments or Liquidation
Proceeds
received prior to such date and to the payment of principal due
on or prior to
such date and irrespective any delinquency in payment by the
related
Mortgagor, and (ii) as of any other Distribution Date, the
Stated Principal
Balance of the Mortgage Loan as of its Cut-off Date, minus the
sum of (a) the
principal portion of the Scheduled Payments (x) due with respect
to such
Mortgage Loan during each Due Period ending prior to such
Distribution Date
and (y) that were received by the Master Servicer as of the
close of business
on the Determination Date related to such
41
<PAGE>
Distribution Date or with respect to which Advances were made as
of the
Master Servicer Advance Date related to such Distribution Date,
(b) all
Principal Prepayments with respect to such Mortgage Loan
received by the
Master Servicer during each Prepayment Period ending prior to
such
Distribution Date and (c) all Liquidation Proceeds collected
with respect to
such Mortgage Loan during each Due Period ending prior to such
Distribution
Date, to the extent applied by the Master Servicer as recoveries
of principal
in accordance with Section 3.12 hereof. The Stated Principal
Balance of any
Mortgage Loan that becomes a Liquidated Mortgage Loan will be
zero on each
date following the Due Period in which such Mortgage Loan
becomes a Liquidated
Mortgage Loan. References herein to the Stated Principal Balance
of the
Mortgage Loans at any time shall mean the aggregate Stated
Principal Balance
of all Mortgage Loans in the Trust Fund as of such time, and
references herein
to the Stated Principal Balance of a Loan Group at any time
shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in such
Loan Group at
such time.
Stepdown Date: The later to occur of (x) the Distribution Date
in
April 2008 and (y) the first Distribution Date on which the
aggregate
Certificate Principal Balance of the Senior Certificates (after
calculating
anticipated distributions on such Distribution Date) is less
than or equal to
62.40% of the aggregate Stated Principal Balance of the Mortgage
Loans for
such Distribution Date.
Stepdown Target Subordination Percentage: For any Class of
Certificates the respective percentages indicated in the
following table:
Stepdown Target
Subordination
Percentage
-----------------------------
Class M-1.................... 31.00%
Class M-2.................... 24.90%
Class M-3.................... 21.10%
Class M-4.................... 11.30%
Class M-5.................... 9.40%
Class M-6.................... 6.60%
Class M-7.................... 4.60%
Subordinate Certificates: The Class M-1, Class M-2, Class
M-3,
Class M-4, Class M-5, Class M-6 and Class M-7 Certificates.
Subordinate Class Principal Distribution Amount: With respect
to
any Class of Subordinate Certificates and Distribution Date will
equal the
excess of: (1) the sum of: (a)the aggregate Certificate
Principal Balance of
the Senior Certificates (after taking into account distribution
of the Senior
Principal Distribution Target Amount for such Distribution
Date), (b) the
aggregate Certificate Principal Balance of any Class(es) of
Subordinate
Certificates that are senior to the subject class (in each case,
after taking
into account distribution of the Subordinate Class Principal
Distribution
Amount(s) for such senior class(es) of Certificates for such
Distribution
Date), and (c) the Certificate Principal Balance of the subject
class of
Subordinate Certificates immediately prior to such Distribution
Date over (2)
the lesser of (a) the product of
42
<PAGE>
(x) 100% minus the Stepdown Target Subordination Percentage for
the subject
class of Certificates and (y) the aggregate Stated Principal
Balance of the
Mortgage Loans in the Mortgage Pool for such Distribution Date
and (b) the
aggregate Stated Principal Balance of the Mortgage Loans in the
Mortgage Pool
for such Distribution Date minus the OC Floor; provided,
however, that if such
class of Subordinate Certificates is the only class of
Subordinate
Certificates outstanding on such Distribution Date, that class
will be
entitled to receive the entire remaining Principal Distribution
Amount until
the Certificate Principal Balance thereof is reduced to
zero.
Subordinate Component Balance: With respect to any
Distribution
Date and for each Loan Group, the excess of the principal
balance of such Loan
Group as of the first day of the related Due Period (after
giving effect to
Principal Prepayments received in the Prepayment Period ending
during such Due
Period) over the Certificate Principal Balance of the related
Classes of
Senior Certificates in either case immediately prior to such
Distribution
Date.
Subordinate Corridor Contract: The transaction evidenced by
the
related Confirmation (as assigned to the Corridor Contract
Administrator
pursuant to the Corridor Contract Assignment Agreement), a form
of which is
attached hereto as Exhibit Q-3.
Subordinate Net Rate Cap: With respect to any Distribution
Date
and each Class of Subordinate Certificates, the weighted average
of (a) the
weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans in Loan
Group 1 (weighted by an amount equal to the positive difference
(if any) of
the sum of the aggregate Stated Principal Balance of the
Mortgage Loans in
Loan Group 1 and the amount on deposit in the Pre-Funding
Account in respect
of Loan Group 1, over the outstanding aggregate Certificate
Principal Balance
of the Class 1-A Certificates) and (b) the weighted average
Adjusted Net
Mortgage Rate of the Mortgage Loans in Loan Group 2 (weighted by
an amount
equal to the positive difference (if any) of the sum of the
aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and the
amount on
deposit in the Pre-Funding Account in respect of Loan Group 2,
over the
outstanding aggregate Certificate Principal Balance of the Class
2-A
Certificates), and in the case of all Adjustable Rate
Certificates, adjusted
to an effective rate reflecting the calculation of interest on
the basis of
the actual number of days elapsed during the related Accrual
Period and a
360-day year.
Subsequent Periodic Rate Cap: With respect to each Adjustable
Rate
Mortgage Loan, the percentage specified in the related Mortgage
Note that
limits permissible increases and decreases in the Mortgage Rate
on any
Adjustment Date (other than the initial Adjustment Date).
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of
all amounts in
respect of (i) principal of the related Subsequent Mortgage
Loans due after
the related Subsequent Cut-off Date and received by the Master
Servicer on or
before such Subsequent Transfer Date and not applied in
computing the Cut-off
Date Principal Balance thereof and (ii) interest on the such
Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and
received by the
Master Servicer on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of
Cut-off
Date.
43
<PAGE>
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the
Trustee on a Subsequent Transfer Date, and listed on the related
Loan Number
and Borrower Identification Mortgage Loan Schedule delivered
pursuant to
Section 2.01(f) hereof. When used with respect to a single
Subsequent Transfer
Date, "Subsequent Mortgage Loan" shall mean a Subsequent
Mortgage Loan
conveyed to the Trustee on such Subsequent Transfer Date.
Subsequent Periodic Rate Cap: With respect to each Adjustable
Rate
Mortgage Loan, the percentage specified in the related Mortgage
Note that
limits permissible increases and decreases in the Mortgage Rate
on any
Adjustment Date (other than the initial Adjustment Date).
Subsequent Recoveries: As to any Distribution Date, with
respect
to a Liquidated Mortgage Loan that resulted in a Realized Loss
in a prior
calendar month, unexpected amounts received by the Master
Servicer (net of any
related expenses permitted to be reimbursed pursuant to Section
3.08 and 3.12
hereof) specifically related to such Liquidated Mortgage Loan
after the
classification of such Mortgage Loan as a Liquidated Mortgage
Loan.
Subsequent Transfer Agreement: A Subsequent Transfer
Agreement
substantially in the form of Exhibit P hereto, executed and
delivered by the
Sellers, the Depositor and the Trustee as provided in Section
2.01(d) hereof.
Subsequent Transfer Date: For any Subsequent Transfer
Agreement,
the "Subsequent Transfer Date" identified in such Subsequent
Transfer
Agreement; provided, however, the Subsequent Transfer Date for
any Subsequent
Transfer Agreement must be a Business Day and may not be a date
earlier than
the date on which the Subsequent Transfer Agreement is executed
and delivered
by the parties thereto pursuant to Section 2.01(d) hereof.
Subsequent Transfer Date Purchase Amount: With respect to
any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase
Amount"
identified in the related Subsequent Transfer Agreement which
shall be an
estimate of the aggregate Stated Principal Balances of the
Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to
any
Subsequent Transfer Date, an amount equal to the lesser of (i)
the aggregate
Stated Principal Balances as of the related Subsequent Cut-off
Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer
Date, as listed
on the related Loan Number and Borrower Identification Mortgage
Loan Schedule
delivered pursuant to Section 2.01(f) hereof and (ii) the amount
on deposit in
the Pre-Funding Account.
Subservicer: As defined in Section 3.02(a) hereof.
Subservicing Agreement: As defined in Section 3.02(a)
hereof.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(d) hereof.
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(d) hereof, the excess of
(x) the
principal balance of the Mortgage Loan that is
44
<PAGE>
substituted for, over (y) the principal balance of the related
substitute
Mortgage Loan, each balance being determined as of the date of
substitution.
Tax Matters Person: The person designated as "tax matters
person"
in the manner provided under Treasury regulation ss. 1.860F-4(d)
and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this
person shall be the
Trustee.
Tax Matters Person Certificate: With respect to the Master
REMIC,
REMIC 1 and REMIC 2, the Class A-R Certificate with a
Denomination of $0.05
and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01 hereof.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 36 months after origination thereof
before such
Mortgage Rate becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c) hereof.
Transferor Certificate: As defined in Section 5.02(b)
hereof.
Trigger Event: With respect to a Distribution Date on or after
the
Stepdown Date, consists of either a Delinquency Trigger Event
with respect to
that Distribution Date or a Cumulative Loss Trigger Event with
respect to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder
consisting
of (i) the Mortgage Loans and all interest and principal
received on or with
respect thereto after the Cut-off Date to the extent not applied
in computing
the Cut-off Date Principal Balance thereof, exclusive of
interest not required
to be deposited in the Certificate Account pursuant to Section
3.05(b)(2)
hereof; (ii) the Certificate Account, the Distribution Account,
the Principal
Reserve Fund, the Carryover Reserve Fund, the Credit Comeback
Excess Account,
the Pre-Funding Account and all amounts deposited therein
pursuant to the
applicable provisions of this Agreement; (iii) the rights to
receive certain
proceeds of the Corridor Contracts as provided in the Corridor
Contract
Administration Agreement; (iv) property that secured a Mortgage
Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v)
the mortgagee's rights under the Insurance Policies with respect
to the
Mortgage Loan; and (vi) all proceeds of the conversion,
voluntary or
involuntary, of any of the foregoing into cash or other liquid
property.
Trustee: The Bank of New York, a New York banking corporation,
not
in its individual capacity, but solely in its capacity as
trustee for the
benefit of the Certificateholders under this Agreement, and any
successor
thereto, and any corporation or national banking association
resulting from or
surviving any consolidation or merger to which it or its
successors may be a
party and any successor trustee as may from time to time be
serving as
successor trustee hereunder.
45
<PAGE>
Trustee Advance Notice: As defined in Section 4.01(d)
hereof.
Trustee Advance Rate: With respect to any Advance made by
the
Trustee pursuant to Section 4.01(d) hereof, a per annum rate of
interest
determined as of the date of such Advance equal to the Prime
Rate in effect on
such date plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i)
the Pool
Stated Principal Balance and (ii) any amounts remaining in the
Pre-Funding
Account (excluding any investment earnings thereon) with respect
to such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the
per
annum rate agreed upon in writing on or prior to the Closing
Date by the
Trustee and the Depositor, which is 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 24 months after origination thereof
before such
Mortgage Rate becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor
thereto), or
any substantially similar administrative exemption granted by
the U.S.
Department of Labor.
Underwriters: Countrywide Securities Corporation, Greenwich
Capital Markets, Inc. and Bear, Stearns and Co. Inc.
Unpaid Realized Loss Amount: For the Class 1-A-2 Certificates
or
any Class of Subordinate Certificates and any Distribution Date,
(x) the
portion of the aggregate Applied Realized Loss Amount previously
allocated to
that Class remaining unpaid from prior Distribution Dates minus
(y) any
increase in the Certificate Principal Balance of that Class due
to the
allocation of Subsequent Recoveries to the Certificate Principal
Balance of
that Class pursuant to Section 4.04(i) hereof.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes
of the voting
provisions hereunder. Voting Rights allocated to each Class of
Certificates
shall be allocated 97% to the Certificates other than the Class
A-R, Class C
and Class P Certificates (with the allocation among the
Certificates to be in
proportion to the Certificate Principal Balance of each Class
relative to the
Certificate Principal Balance of all other such Classes), and 1%
to each of
the Class A-R, Class C and Class P Certificates. Voting Rights
will be
allocated among the Certificates of each such Class in
accordance with their
respective Percentage Interests.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined
meanings when used in any certificate, agreement or other
document delivered
pursuant hereto unless otherwise defined therein. For purposes
of this
Agreement and all such certificates and other documents, unless
the context
otherwise requires: (a) accounting terms not otherwise defined
in this
46
<PAGE>
Agreement, and accounting terms partly defined in this Agreement
to the extent
not defined, shall have the respective meanings given to them
under generally
accepted accounting principles; (b) the words "hereof," "herein"
and
"hereunder" and words of similar import refer to this Agreement
(or the
certificate, agreement or other document in which they are used)
as a whole
and not to any particular provision of this Agreement (or such
certificate,
agreement or document); (c) references to any Section, Schedule
or Exhibit are
references to Sections, Schedules and Exhibits in or to this
Agreement, and
references to any paragraph, subsection, clause or other
subdivision within
any Section or definition refer to such paragraph, subsection,
clause or other
subdivision of such Section or definition; (d) the term
"including" means
"including without limitation"; (e) references to any law or
regulation refer
to that law or regulation as amended from time to time and
include any
successor law or regulation; (f) references to any agreement
refer to that
agreement as amended from time to time; and (g) references to
any Person
include that Person's permitted successors and assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over
and
otherwise conveys to the Depositor, without recourse, all the
right, title and
interest of such Seller in and to the applicable Initial
Mortgage Loans,
including all interest and principal received and receivable by
such Seller on
or with respect to applicable Initial Mortgage Loans after the
Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date
Principal
Balance thereof) or deposited into the Certificate Account by
the Master
Servicer on behalf of such Seller as part of the Initial
Certificate Account
Deposit as provided in this Agreement, other than principal due
on the
applicable Initial Mortgage Loans on or prior to the Initial
Cut-off Date and
interest accruing prior to the Initial Cut-off Date. The Master
Servicer
confirms that, on behalf of the Sellers, concurrently with the
transfer and
assignment, it has deposited into the Certificate Account the
Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage
Loans
referred to in the preceding paragraph, the Depositor sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for
benefit of the
Certificateholders, without recourse, all right title and
interest in the
Mortgage Loans.
CHL further agrees (x) to cause The Bank of New York to enter
into
the Corridor Contract Administration Agreement as Corridor
Contract
Administrator and (y) to assign all of its right, title and
interest in and to
the interest rate corridor transaction evidenced by each
Confirmation, and to
cause all of its obligations in respect of such transaction to
be assumed by,
the Corridor Contract Administrator, on the terms and conditions
set forth in
the Corridor Contract Assignment Agreement.
(b) Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided by Section 2.01(d)
hereof and the
terms and conditions of this Agreement, each Seller sells,
transfers, assigns,
sets over and otherwise conveys to the
47
<PAGE>
Depositor, without recourse, on each Subsequent Transfer Date,
all the right,
title and interest of such Seller in and to the related
Subsequent Mortgage
Loans, including all interest and principal received and
receivable by such
Seller on or with respect to such Subsequent Mortgage Loans
after the related
Subsequent Cut-off Date (to the extent not applied in computing
the Cut-off
Date Principal Balance thereof) or deposited into the
Certificate Account by
the Master Servicer on behalf of such Seller as part of any
related Subsequent
Certificate Account Deposit as provided in this Agreement, other
than
principal due on such Subsequent Mortgage Loans on or prior to
the related
Subsequent Cut-off Date and interest accruing prior to the
related Subsequent
Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage
Loans
referred to in the preceding paragraph, the Depositor sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for
benefit of the
Certificateholders, without recourse, all right title and
interest in the
Subsequent Mortgage Loans.
(c) Each Seller has entered into this Agreement in
consideration
for the purchase of the Mortgage Loans by the Depositor and has
agreed to take
the actions specified herein. The Depositor, concurrently with
the execution
and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise
conveys to the Trustee for the use and benefit of the
Certificateholders,
without recourse, all right title and interest in the portion of
the Trust
Fund not otherwise conveyed to the Trustee pursuant to Section
2.01(a) or (b)
hereof.
(d) On any Business Day during the Funding Period designated
by
CHL to the Trustee, the Sellers, the Depositor and the Trustee
shall complete,
execute and deliver a Subsequent Transfer Agreement. After the
execution and
delivery of such Subsequent Transfer Agreement, on the
Subsequent Transfer
Date, the Trustee shall set aside in the Pre-Funding Account an
amount equal
to the related Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the
Subsequent
Transfer Date is subject to the satisfaction of each of the
following
conditions:
(i) the Trustee and the Underwriters will be provided
Opinions of Counsel addressed to the Rating Agencies as with
respect to
the sale of the Subsequent Mortgage Loans conveyed on such
Subsequent
Transfer Date (such opinions being substantially similar to the
opinions
delivered on the Closing Date to the Rating Agencies with
respect to the
sale of the Initial Mortgage Loans on the Closing Date), to be
delivered
as provided in Section 2.01(f) hereof;
(ii) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans
does
not result in a reduction or withdrawal of the ratings assigned
to the
Certificates by the Ratings Agencies;
(iii) the Depositor shall deliver to the Trustee an
Officer's Certificate confirming the satisfaction of each of
the
conditions set forth in this Section 2.01(e) required to be
satisfied by
such Subsequent Transfer Date;
(iv) each Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and
warranties
applicable to it under this
48
<PAGE>
Agreement, provided, however, that with respect to a breach of
a
representation and warranty with respect to a Subsequent
Mortgage Loan
set forth in this clause (iv), the obligation under Section
2.03(e)
hereof of the applicable Seller, to cure, repurchase or replace
such
Subsequent Mortgage Loan shall constitute the sole remedy
against such
Seller respecting such breach available to Certificateholders,
the
Depositor or the Trustee;
(v) the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date were selected in a manner reasonably
believed
not to be adverse to the interests of the
Certificateholders;
(vi) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent;
(vii) following the conveyance of the Subsequent Mortgage
Loans on such Subsequent Transfer Date, the characteristics of
each Loan
Group will not vary by more than the amount specified below
(other than
the percentage of Mortgage Loans secured by Mortgaged Properties
located
in the State of California, which will not exceed 50% of the
Mortgage
Pool and the percentage of mortgage loans in the Credit Grade
Categories
of "C" or below, which will not exceed 10% of the Mortgage Loans
in each
Loan Group) from the characteristics listed below; provided that
for the
purpose of making such calculations, the characteristics for any
Initial
Mortgage Loan made will be taken as of the Initial Cut-off Date
and the
characteristics for any Subsequent Mortgage Loans will be taken
as of
the Subsequent Cut-off Date;
<TABLE>
<CAPTION>
Loan Group 1
Permitted Variance
Characteristic or Range
------------------------- -------------------------------
<S> <C> <C>
Average Stated Principal Balance........ $166,825 10.00%
Weighted Average Mortgage Rate.......... 7.424% 0.10%
Weighted Average Original Loan-to- 70.47% 3.00%
Value Ratio.............................
Weighted Average Remaining Term to 357 3 months
Maturity................................
Weighted Average Credit Bureau Risk 596 5 points
Score...................................
Loan Group 2
Permitted Variance
Characteristic or Range
------------------------- -------------------------------
Average Stated Principal Balance........ $181,567 10.00%
Weighted Average Mortgage Rate.......... 7.814% 0.10%
Weighted Average Original Loan-to- 72.91% 3.00%
Value Ratio.............................
Weighted Average Remaining Term to 356 3 months
Maturity................................
Weighted Average Credit Bureau Risk 591 5 points
Score...................................
</TABLE>
49
<PAGE>
(viii) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered
insolvent by
the conveyance of Subsequent Mortgage Loans on such Subsequent
Transfer
Date; and
(ix) the Trustee and the Underwriters will be provided with
an Opinion of Counsel, which Opinion of Counsel shall not be at
the
expense of either the Trustee or the Trust Fund, addressed to
the
Trustee, to the effect that such purchase of Subsequent Mortgage
Loans
will not (i) result in the imposition of the tax on
"prohibited
transactions" on the Trust Fund or contributions after the
Startup Date,
as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively
or (ii) cause any REMIC formed hereunder to fail to qualify as a
REMIC,
such opinion to be delivered as provided in Section 2.01(f)
hereof.
The Trustee shall not be required to investigate or
otherwise
verify compliance with these conditions, except for its own
receipt of
documents specified above, and shall be entitled to rely on the
required
Officer's Certificate.
(f) Within six Business Days after each Subsequent Transfer
Date,
upon (1) delivery to the Trustee by the Depositor of the
Opinions of Counsel
referred to in Section 2.01(e)(1) and (e)(9) hereof, (2)
delivery to the
Trustee by CHL (on behalf of each Seller) of a Loan Number and
Borrower
Identification Mortgage Loan Schedule reflecting the Subsequent
Mortgage Loans
conveyed on such Subsequent Transfer Date and the Loan Group
into which each
Subsequent Mortgage Loan was conveyed, (3) deposit in the
Certificate Account
by the Master Servicer on behalf of the Sellers of the
applicable Subsequent
Certificate Account Deposit, and (4) delivery to the Trustee by
the Depositor
of an Officer's Certificate confirming the satisfaction of each
of the
conditions precedent set forth in this Section 2.01(f), the
Trustee shall pay
the applicable Seller the Subsequent Transfer Date Transfer
Amount from such
funds that were set aside in the Pre-Funding Account pursuant to
Section
2.01(d) hereof. The positive difference, if any, between the
Subsequent
Transfer Date Transfer Amount and the Subsequent Transfer Date
Purchase Amount
shall be re-invested by the Trustee in the Pre-Funding
Account.
The Trustee shall not be required to investigate or
otherwise
verify compliance with the conditions set forth in the preceding
paragraph,
except for its own receipt of documents specified above, and
shall be entitled
to rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally
recognized
firm of independent public accountants stating whether or not
the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date conform
to the
characteristics described in Section 2.01(e)(vi) and (vii)
hereof.
(g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited
with, the
Co-Trustee (or, in the case of the Delay Delivery Mortgage
Loans, will deliver
to, and deposit with, the Co-Trustee within the time periods
specified in the
definition of Delay Delivery Mortgage Loans) (except as provided
in clause
(vi) below) for the benefit of the Certificateholders, the
following documents
or
50
<PAGE>
instruments with respect to each such Mortgage Loan so assigned
(with respect
to each Mortgage Loan, clause (i) through (vi) below, together,
the "Mortgage
File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to
the
order of ________________ without recourse", with all
intervening
endorsements that show a complete chain of endorsement from
the
originator to the Person endorsing the Mortgage Note (each
such
endorsement being sufficient to transfer all right, title
and
interest of the party so endorsing, as noteholder or
assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage Note has been lost or destroyed and not replaced,
an
original lost note affidavit, stating that the original
Mortgage
Note was lost or destroyed, together with a copy of the
related
Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case
of
each MERS Mortgage Loan, 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 indicated thereon, or a copy
of
the Mortgage certified by the public recording office in
which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2005-2, CWABS, Inc., by
The
Bank of New York, a New York banking corporation, as trustee
under
the Pooling and Servicing Agreement dated as of March 1,
2005,
without recourse" (each such assignment, when duly and
validly
completed, to be in recordable form and sufficient to effect
the
assignment of and transfer to the assignee thereof, under
the
Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such
Mortgage (noting the presence of a MIN in the case of each
MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all
riders
thereto or, in the event such original title policy has not
been
received from the insurer, such original or duplicate
original
lender's title policy and all riders thereto shall be
delivered
within one year of the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage Loan, each Seller agrees that it will cause, at such
Seller's own
expense, the MERS(R) System to indicate (and provide evidence to
the Trustee
that it has done so) that such Mortgage Loans have been assigned
by such
Seller to the Trustee in accordance with this Agreement for the
benefit of
51
<PAGE>
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 "[IDENTIFY TRUSTEE SPECIFIC CODE]"
in the field
"[IDENTIFY THE FIELD NAME FOR TRUSTEE]" which identifies the
Trustee and (b)
the code "[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field
"Pool Field"
which identifies the series of the Certificates issued in
connection with such
Mortgage Loans. The Sellers further agree that they 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.
In the event that in connection with any Mortgage Loan that is
not
a MERS Mortgage Loan a Seller cannot deliver the original
recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the
requirements
of clause (ii), (iii) or (iv) concurrently with the execution
and delivery
hereof, such Seller shall deliver or cause to be delivered to
the Co-Trustee a
true copy of such Mortgage and of each such undelivered interim
assignment of
the Mortgage each certified by such Seller, the applicable title
company,
escrow agent or attorney, or the originator of such Mortgage, as
the case may
be, to be a true and complete copy of the original Mortgage or
assignment of
Mortgage submitted for recording. For any such Mortgage Loan
that is not a
MERS Mortgage Loan each Seller shall promptly deliver or cause
to be delivered
to the Co-Trustee such original Mortgage and such assignment or
assignments
with evidence of recording indicated thereon upon receipt
thereof from the
public recording official, or a copy thereof, certified, if
appropriate, by
the relevant recording office, but in no event shall any such
delivery be made
later than 270 days following the Closing Date; provided that in
the event
that by such date such Seller is unable to deliver or cause to
be delivered
each such Mortgage and each interim assignment by reason of the
fact that any
such documents have not been returned by the appropriate
recording office, or,
in the case of each interim assignment, because the related
Mortgage has not
been returned by the appropriate recording office, such Seller
shall deliver
or cause to be delivered such documents to the Co-Trustee as
promptly as
possible upon receipt thereof. If the public recording office in
which a
Mortgage or interim assignment thereof is recorded retains the
original of
such Mortgage or assignment, a copy of the original Mortgage or
assignment so
retained, with evidence of recording thereon, certified to be
true and
complete by such recording office, shall satisfy a Seller's
obligations in
Section 2.01 hereof. If any document submitted for recording
pursuant to this
Agreement is (x) lost prior to recording or rejected by the
applicable
recording office, the applicable Seller shall immediately
prepare or cause to
be prepared a substitute and submit it for recording, and shall
deliver copies
and originals thereof in accordance with the foregoing or (y)
lost after
recording, the applicable Seller shall deliver to the Co-Trustee
a copy of
such document certified by the applicable public recording
office to be a true
and complete copy of the original recorded document. Each Seller
shall
promptly forward or cause to be forwarded to the Co-Trustee (x)
from time to
time additional original documents evidencing an assumption or
modification of
a Mortgage Loan and (y) any other documents required to be
delivered by the
Depositor or the Master Servicer to the Co-Trustee within the
time periods
specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage
Loan
as to which the related Mortgaged Property and Mortgage File are
located in
(a) the State of California or (b) any other jurisdiction under
the laws of
which the recordation of the assignment specified
52
<PAGE>
in clause (iii) above is not necessary to protect the Trustee's
and the
Certificateholders' interest in the related Mortgage Loan, as
evidenced by an
Opinion of Counsel delivered by CHL to the Trustee, and a copy
to the Rating
Agencies, in lieu of recording the assignment specified in
clause (iii) above,
the applicable Seller may deliver an unrecorded assignment in
blank, in form
otherwise suitable for recording to the Co-Trustee; provided
that if the
related Mortgage has not been returned from the applicable
public recording
office, such assignment, or any copy thereof, of the Mortgage
may exclude the
information to be provided by the recording office. As to any
Mortgage Loan
other than a MERS Mortgage Loan, the procedures of the preceding
sentence
shall be applicable only so long as the related Mortgage File is
maintained in
the possession of the Co-Trustee in the State or jurisdiction
described in
such sentence. In the event that with respect to Mortgage Loans
other than
MERS Mortgage Loans (i) any Seller, the Depositor, the Master
Servicer or the
NIM Insurer gives written notice to the Trustee that recording
is required to
protect the right, title and interest of the Trustee on behalf
of the
Certificateholders in and to any Mortgage Loan, (ii) a court
recharacterizes
any sale of the Mortgage Loans as a financing, or (iii) as a
result of any
change in or amendment to the laws of the State or jurisdiction
described in
the first sentence of this paragraph or any applicable political
subdivision
thereof, or any change in official position regarding
application or
interpretation of such laws, including a holding by a court of
competent
jurisdiction, such recording is so required, the Co-Trustee
shall complete the
assignment in the manner specified in clause (iii) of the second
paragraph of
this Section 2.01(g) and CHL shall submit or cause to be
submitted for
recording as specified above or, should CHL fail to perform such
obligations,
the Trustee shall cause the Master Servicer, at the Master
Servicer's expense,
to cause each such previously unrecorded assignment to be
submitted for
recording as specified above. In the event a Mortgage File is
released to the
Master Servicer as a result of the Master Servicer's having
completed a
Request for Document Release, the Trustee shall complete the
assignment of the
related Mortgage in the manner specified in clause (iii) of the
second
paragraph of this Section 2.01(g).
So long as the Co-Trustee or its agent maintains an office in
the
State of California, the Co-Trustee or its agent shall maintain
possession of
and not remove or attempt to remove from the State of California
any of the
Mortgage Files as to which the related Mortgaged Property is
located in such
State. In the event that a Seller fails to record an assignment
of a Mortgage
Loan as herein provided within 90 days of notice of an event set
forth in
clause (i), (ii) or (iii) of the above paragraph, the Master
Servicer shall
prepare and, if required hereunder, file such assignments for
recordation in
the appropriate real property or other records office. Each
Seller hereby
appoints the Master Servicer (and any successor servicer
hereunder) as its
attorney-in-fact with full power and authority acting in its
stead for the
purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date (in the case of
Initial Mortgage
Loans) or related Subsequent Transfer Date (in the case of
Subsequent Mortgage
Loans) and the Cut-off Date, CHL shall deposit or cause to be
deposited in the
Certificate Account the amount required to be deposited therein
with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement,
within
thirty days after the Closing Date (in the case of Initial
Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date
(in the case of
Subsequent Mortgage Loans), CHL (on behalf
53
<PAGE>
of each Seller) shall either (i) deliver to the Co-Trustee the
Mortgage File
as required pursuant to this Section 2.01 for each Delay
Delivery Mortgage
Loan or (ii) (A) repurchase the Delay Delivery Mortgage Loan or
(B) substitute
the Delay Delivery Mortgage Loan for a Replacement Mortgage
Loan, which
repurchase or substitution shall be accomplished in the manner
and subject to
the conditions set forth in Section 2.03 hereof, provided that
if CHL fails to
deliver a Mortgage File for any Delay Delivery Mortgage Loan
within the period
provided in the prior sentence, the cure period provided for in
Section 2.02
hereof or in Section 2.03 hereof shall not apply to the initial
delivery of
the Mortgage File for such Delay Delivery Mortgage Loan, but
rather CHL shall
have five (5) Business Days to cure such failure to deliver. CHL
shall
promptly provide each Rating Agency with written notice of any
cure,
repurchase or substitution made pursuant to the proviso of the
preceding
sentence. On or before the thirtieth (30th) day (or if such
thirtieth day is
not a Business Day, the succeeding Business Day) after the
Closing Date (in
the case of Initial Mortgage Loans) or within twenty days after
the related
Subsequent Transfer Date (in the case of Subsequent Mortgage
Loans), the
Trustee shall, in accordance with the provisions of Section 2.02
hereof, send
a Delay Delivery Certification substantially in the form annexed
hereto as
Exhibit G-3 (with any applicable exceptions noted thereon) for
all Delay
Delivery Mortgage Loans delivered within thirty (30) days after
such date. The
Trustee will promptly send a copy of such Delay Delivery
Certification to each
Rating Agency.
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial
Certification
in the form annexed hereto as Exhibit G-1 and in the list of
exceptions
attached thereto, of the documents referred to in clauses (i)
and (iii) of
Section 2.01(g) above with respect to the Initial Mortgage Loans
and all other
assets included in the Trust Fund and declares that it holds and
will hold
such documents and the other documents delivered to it
constituting the
Mortgage Files, and that it holds or will hold such other assets
included in
the Trust Fund, in trust for the exclusive use and benefit of
all present and
future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date
to
the Depositor, the Master Servicer and CHL (on behalf of each
Seller) an
Initial Certification substantially in the form annexed hereto
as Exhibit G-1
to the effect that, as to each Initial Mortgage Loan listed in
the Mortgage
Loan Schedule (other than any Initial Mortgage Loan paid in full
or any
Initial Mortgage Loan specifically identified in such
certification as not
covered by such certification), the documents described in
Section 2.01(g)(i)
hereof and, in the case of each Initial Mortgage Loan that is
not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii)
hereof with
respect to such Initial Mortgage Loans as are in the
Co-Trustee's possession
and based on its review and examination and only as to the
foregoing
documents, such documents appear regular on their face and
relate to such
Initial Mortgage Loan. The Trustee agrees to execute and deliver
within 30
days after the Closing Date to the Depositor, the Master
Servicer and CHL (on
behalf of each Seller) an Interim Certification substantially in
the form
annexed hereto as Exhibit G-2 to the effect that, as to each
Initial Mortgage
Loan listed in the Mortgage Loan Schedule (other than any
Initial Mortgage
Loan paid in full or any Initial Mortgage Loan specifically
identified in such
certification as not covered by such certification) all
documents required to
be delivered to the Co-Trustee pursuant to the Agreement with
respect to such
Initial Mortgage Loans are in its possession (except those
documents described
in Section 2.01(g)(vi) hereof) and
54
<PAGE>
based on its review and examination and only as to the foregoing
documents,
(i) such documents appear regular on their face and relate to
such Initial
Mortgage Loan, and (ii) the information set forth in items (i),
(iv), (v),
(vi), (viii), (ix) and (xvii) of the definition of the "Mortgage
Loan
Schedule" accurately reflects information set forth in the
Mortgage File. On
or before the thirtieth (30th) day after the Closing Date (or if
such
thirtieth day is not a Business Day, the succeeding Business
Day), the Trustee
shall deliver to the Depositor, the Master Servicer and CHL (on
behalf of each
Seller) a Delay Delivery Certification with respect to the
Initial Mortgage
Loans substantially in the form annexed hereto as Exhibit G-3,
with any
applicable exceptions noted thereon. The Co-Trustee or the
Trustee, as
applicable, shall be under no duty or obligation to inspect,
review or examine
such documents, instruments, certificates or other papers to
determine that
the same are genuine, enforceable or appropriate for the
represented purpose
or that they have actually been recorded in the real estate
records or that
they are other than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee
shall
deliver to the Depositor, the Master Servicer and CHL (on behalf
of each
Seller), and to any Certificateholder that so requests, a Final
Certification
with respect to the Initial Mortgage Loans substantially in the
form annexed
hereto as Exhibit H, with any applicable exceptions noted
thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Co-Trustee, at the Trustee's direction,
shall review
each Mortgage File with respect to the Initial Mortgage Loans to
determine
that such Mortgage File contains the following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to
the
order of ________________ without recourse", with all
intervening
endorsements that show a complete chain of endorsement from
the
originator to the Person endorsing the Mortgage Note (each
such
endorsement being sufficient to transfer all right, title
and
interest of the party so endorsing, as noteholder or
assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage Note has been lost or destroyed and not replaced,
an
original lost note affidavit, stating that the original
Mortgage
Note was lost or destroyed, together with a copy of the
related
Mortgage Note;
(ii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, and in
the
case of each Initial Mortgage Loan that is a MERS Mortgage
Loan,
the original Mortgage, noting the presence of the MIN of the
Initial Mortgage Loan and language indicating that the
Mortgage
Loan is a MOM Loan if the Initial Mortgage Loan is a MOM
Loan,
with evidence of recording indicated thereon, or a copy of
the
Mortgage certified by the public recording office in which
Mortgage has been recorded;
(iii) in the case of each Initial Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the
Mortgage
in the form permitted by Section 2.01 hereof;
55
<PAGE>
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of
such
Mortgage (noting the presence of a MIN in the case of each
MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all
riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File
that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the
Trustee shall
include such exceptions in such Final Certification (and the
Trustee shall
state in such Final Certification whether any Mortgage File does
not then
include the original or duplicate original lender's title policy
or a printout
of the electronic equivalent and all riders thereto). If the
public recording
office in which a Mortgage or assignment thereof is recorded
retains the
original of such Mortgage or assignment, a copy of the original
Mortgage or
assignment so retained, with evidence of recording thereon,
certified to be
true and complete by such recording office, shall be deemed to
satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable.
CHL shall
promptly correct or cure such defect referred to above within 90
days from the
date it was so notified of such defect and, if CHL does not
correct or cure
such defect within such period, CHL shall either (A) if the time
to cure such
defect expires prior to the end of the second anniversary of the
Closing Date,
substitute for the related Initial Mortgage Loan a Replacement
Mortgage Loan,
which substitution shall be accomplished in the manner and
subject to the
conditions set forth in Section 2.03 hereof, or (B) purchase
such Initial
Mortgage Loan from the Trust Fund within 90 days from the date
CHL was
notified of such defect in writing at the Purchase Price of such
Initial
Mortgage Loan; provided that any such substitution pursuant to
(A) above or
repurchase pursuant to (B) above shall not be effected prior to
the delivery
to the Trustee of the Opinion of Counsel required by Section
2.05 hereof and
any substitution pursuant to (A) above shall not be effected
prior to the
additional delivery to the Co-Trustee of a Request for File
Release. No
substitution will be made in any calendar month after the
Determination Date
for such month. The Purchase Price for any such Initial Mortgage
Loan shall be
deposited by CHL in the Certificate Account and, upon receipt of
such deposit
and Request for File Release with respect thereto, the
Co-Trustee shall
release the related Mortgage File to CHL and shall execute and
deliver at
CHL's request such instruments of transfer or assignment as CHL
has prepared,
in each case without recourse, as shall be necessary to vest in
CHL, or a
designee, the Trustee's interest in any Initial Mortgage Loan
released
pursuant hereto. If pursuant to the foregoing provisions CHL
repurchases an
Initial Mortgage Loan that is a MERS Mortgage Loan, the Master
Servicer shall
cause MERS to execute and deliver an assignment of the Mortgage
in recordable
form to transfer the Mortgage from MERS to CHL and shall cause
such Mortgage
to be removed from registration on the MERS(R) System in
accordance with MERS'
rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and
conditions set
forth herein. Each Seller shall promptly deliver to the
Co-Trustee, upon the
execution or receipt thereof, the originals of such
56
<PAGE>
other documents or instruments constituting the Mortgage File
that come into
the possession of such Seller from time to time.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase any Mortgage Loan that does not
meet the
requirements of Section 2.02(a) above shall constitute the sole
remedy
respecting such defect available to the Trustee, the Co-Trustee,
the Depositor
and any Certificateholder against any Seller.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase, pursuant to Section 2.02(a)
hereof, any Initial
Mortgage Loan whose Mortgage File contains any document or
documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and
which defect
is not corrected or cured by CHL within 90 days from the date it
was notified
of such defect, shall constitute the sole remedy respecting such
defect
available to the Trustee, the Co-Trustee, the Depositor and
any
Certificateholder against any Seller.
(b) The Trustee agrees to execute and deliver on the
Subsequent
Transfer Date to the Depositor, the Master Servicer and CHL (on
behalf of each
Seller) an Initial Certification substantially in the form
annexed hereto as
Exhibit G-4 to the effect that, as to each Subsequent Mortgage
Loan listed in
the Mortgage Loan Schedule (other than any Subsequent Mortgage
Loan paid in
full or any Subsequent Mortgage Loan specifically identified in
such
certification as not covered by such certification), the
documents described
in Section 2.01(g)(i) hereof and, in the case of each Subsequent
Mortgage Loan
that is not a MERS Mortgage Loan, the documents described in
Section
2.01(g)(iii) hereof, with respect to such Subsequent Mortgage
Loan are in its
possession, and based on its review and examination and only as
to the
foregoing documents, such documents appear regular on their face
and relate to
such Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after
the
Subsequent Transfer Date to the Depositor, the Master Servicer
and CHL (on
behalf of each Seller) an Interim Certification substantially in
the form
annexed hereto as Exhibit G-2 to the effect that, as to each
Subsequent
Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Subsequent
Mortgage Loan paid in full or any Subsequent Mortgage Loan
specifically
identified in such certification as not covered by such
certification), all
documents required to be delivered to it pursuant to this
Agreement with
respect to such Subsequent Mortgage Loan are in its possession
(except those
described in Section 2.01(g)(vi) hereof) and based on its review
and
examination and only as to the foregoing documents, (i) such
documents appear
regular on their face and relate to such Subsequent Mortgage
Loan, and (ii)
the information set forth in items (i), (iv), (v), (vi), (viii),
(ix) and
(xvii) of the definition of the "Mortgage Loan Schedule"
accurately reflects
information set forth in the Mortgage File. On or before the
thirtieth (30th)
day after the Subsequent Transfer Date (or if such thirtieth day
is not a
Business Day, the succeeding Business Day), the Trustee shall
deliver to the
Depositor, the Master Servicer and CHL (on behalf of each
Seller) a Delay
Delivery Certification with respect to the Subsequent Mortgage
Loans
substantially in the form annexed hereto as Exhibit G-3, with
any applicable
exceptions noted thereon, together with a Subsequent
Certification
substantially in the form annexed hereto as Exhibit G-4. The
Trustee shall be
under no duty or obligation to inspect, review or examine such
documents,
instruments, certificates or other papers to determine that the
same are
genuine,
57
<PAGE>
enforceable or appropriate for the represented purpose or that
they have
actually been recorded in the real estate records or that they
are other than
what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date,
the
Trustee shall deliver to the Depositor, the Master Servicer, CHL
(on behalf of
each Seller) and to any Certificateholder that so requests a
Final
Certification with respect to the Subsequent Mortgage Loans
substantially in
the form annexed hereto as Exhibit H, with any applicable
exceptions noted
thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Co-Trustee shall review each Mortgage
File with
respect to the Subsequent Mortgage Loans to determine that such
Mortgage File
contains the following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order of
________________ without recourse", with all intervening
endorsements
that show a complete chain of endorsement from the originator to
the
Person endorsing the Mortgage Note (each such endorsement
being
sufficient to transfer all right, title and interest of the
party so
endorsing, as noteholder or assignee thereof, in and to that
Mortgage
Note), or, if the original Mortgage Note has been lost or
destroyed and
not replaced, an original lost note affidavit, stating that the
original
Mortgage Note was lost or destroyed, together with a copy of the
related
Mortgage Note;
(ii) in the case of each Subsequent Mortgage Loan that is
not a MERS Mortgage Loan, the original recorded Mortgage, and in
the
case of each Subsequent Mortgage Loan that is a MERS Mortgage
Loan, the
original Mortgage, noting the presence of the MIN of the
Subsequent
Mortgage Loan and language indicating that the Subsequent
Mortgage Loan
is a MOM Loan if the Subsequent Mortgage Loan is a MOM Loan,
with
evidence of recording indicated thereon, or a copy of the
Mortgage
certified by the public recording office in which Mortgage has
been
recorded;
(iii) in the case of each Subsequent Mortgage Loan that is
not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in
the form permitted by Section 2.01 hereof;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage
(noting the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all
riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File
that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the
Trustee shall
include such exceptions in such Final Certification (and the
Trustee
58
<PAGE>
shall state in such Final Certification whether any Mortgage
File does not
then include the original or duplicate original lender's title
policy or a
printout of the electronic equivalent and all riders thereto).
If the public
recording office in which a Mortgage or assignment thereof is
recorded retains
the original of such Mortgage or assignment, a copy of the
original Mortgage
or assignment so retained, with evidence of recording thereon,
certified to be
true and complete by such recording office, shall be deemed to
satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable.
CHL shall
promptly correct or cure such defect referred to above within 90
days from the
date it was so notified of such defect and, if CHL does not
correct or cure
such defect within such period, CHL shall either (A) if the time
to cure such
defect expires prior to the end of the second anniversary of the
Closing Date,
substitute for the related Subsequent Mortgage Loan a
Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and
subject to
the conditions set forth in Section 2.03 hereof, or (B) purchase
such
Subsequent Mortgage Loan from the Trust Fund within 90 days from
the date CHL
was notified of such defect in writing at the Purchase Price of
such
Subsequent Mortgage Loan; provided that any such substitution
pursuant to (A)
above or repurchase pursuant to (B) above shall not be effected
prior to the
delivery to the Trustee of the Opinion of Counsel required by
Section 2.05
hereof and any substitution pursuant to (A) above shall not be
effected prior
to the additional delivery to the Trustee of a Request for File
Release. No
substitution will be made in any calendar month after the
Determination Date
for such month. The Purchase Price for any such Subsequent
Mortgage Loan shall
be deposited by CHL in the Certificate Account and, upon receipt
of such
deposit and Request for File Release with respect thereto, the
Trustee shall
release the related Mortgage File to CHL and shall execute and
deliver at
CHL's request such instruments of transfer or assignment as CHL
has prepared,
in each case without recourse, as shall be necessary to vest in
CHL, or a
designee, the Trustee's interest in any Subsequent Mortgage Loan
released
pursuant hereto. If pursuant to the foregoing provisions CHL
repurchases a
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the
Master Servicer
shall cause MERS to execute and deliver an assignment of the
Mortgage in
recordable form to transfer the Mortgage from MERS to CHL and
shall cause such
Mortgage to be removed from registration on the MERS(R) System
in accordance
with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and
conditions set
forth herein. Each Seller shall promptly deliver to the
Co-Trustee, upon the
execution or receipt thereof, the originals of such other
documents or
instruments constituting the Mortgage File that come into the
possession of
such Seller from time to time.
It is understood and agreed that the obligation of the Sellers
to
substitute for or to purchase, pursuant to Section 2.02(b)
hereof, any
Subsequent Mortgage Loan whose Mortgage File contains any
document or
documents that does not meet the requirements of clauses
(i)-(iv) and (vi)
above and which defect is not corrected or cured by such Seller
within 90 days
from the date it was notified of such defect, shall constitute
the sole remedy
respecting such defect available to the Trustee, the Co-Trustee,
the Depositor
and any Certificateholder against the Sellers.
59
<PAGE>
Section 2.03 Representations, Warranties and Covenants of
the
Master Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to
the
Depositor and the Trustee as follows, as of the date hereof with
respect to
the Initial Mortgage Loans, and the related Subsequent Transfer
Date with
respect to the Subsequent Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under
the laws
of the State of Texas 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, to service the Mortgage
Loans in
accordance with the terms of this Agreement and to perform any
of its
other obligations under this Agreement in accordance with the
terms
hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and 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
partnership 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 hereof by the
other
parties hereto, constitutes a legal, valid and binding
obligation of the
Master Servicer, enforceable against the Master Servicer in
accordance
with its terms, except that (a) the enforceability hereof 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 equitable defenses and to the discretion of
the court
before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the
Master
Servicer under this Agreement, the consummation of any other of
the
transactions contemplated by this Agreement, 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 material
breach of
any term or provision of the certificate of limited
partnership,
partnership agreement or other organizational document of the
Master
Servicer or (B) materially conflict with, result in a material
breach,
violation or acceleration of, or result in a material 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 (C)
constitute a
material violation of 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 in breach or violation of any material
indenture
or other material agreement or instrument, or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body
60
<PAGE>
having jurisdiction over it which breach or violation may
materially
impair the Master Servicer's ability to perform or meet any of
its
obligations under this Agreement.
(4) The Master Servicer is an approved servicer of
conventional mortgage loans for Fannie Mae and Freddie Mac and
is a
mortgagee approved by the Secretary of Housing and Urban
Development
pursuant to Sections 203 and 211 of the National Housing
Act.
(5) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer
that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer
Agreement or
the ability of the Master Servicer to service the Mortgage Loans
or to
perform any of its other obligations under this Agreement or
any
Subsequent Transfer Agreement in accordance with the terms
hereof or
thereof.
(6) 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 hereby, or if any such consent,
approval,
authorization or order is required, the Master Servicer has
obtained the
same.
(7) 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 for as long as such Mortgage Loans are registered with
MERS.
(8) The Master Servicer has fully furnished and will fully
furnish, in accordance with the Fair Credit Reporting Act and
its
implementing regulations, accurate and complete information
(i.e.,
favorable and unfavorable) on its borrower credit files to
Equifax,
Experian, and Trans Union Credit Information Company (three of
the
credit repositories), on a monthly basis for the Mortgage Loans
in Loan
Group 1.
(b) CHL hereby represents and warrants to the Depositor and
the
Trustee as follows, as of the Initial Cut-off Date in the case
of the Initial
Mortgage Loans and as of the related Subsequent Cut-off Date in
the case of
the Subsequent Mortgage Loans (unless otherwise indicated or the
context
otherwise requires, percentages with respect to the Initial
Mortgage Loans in
the Trust Fund or in a Loan Group or Loan Groups are measured by
the Cut-off
Date Principal Balance of the Initial Mortgage Loans in the
Trust Fund or of
the Initial Mortgage Loans in the related Loan Group or Loan
Groups, as
applicable):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the
State of New
York and is duly authorized and qualified to transact any and
all
business contemplated by this Agreement and each Subsequent
Transfer
Agreement to be conducted by CHL 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
61
<PAGE>
Loan, to sell the CHL Mortgage Loans in accordance with the
terms of
this Agreement and each Subsequent Transfer Agreement and to
perform any
of its other obligations under this Agreement and each
Subsequent
Transfer Agreement in accordance with the terms hereof and
thereof.
(2) CHL has the full corporate power and authority to sell
each CHL Mortgage Loan, and to execute, deliver and perform, and
to
enter into and consummate the transactions contemplated by
this
Agreement and each Subsequent Transfer Agreement and has duly
authorized
by all necessary corporate action on the part of CHL the
execution,
delivery and performance of this Agreement and each Subsequent
Transfer
Agreement; and this Agreement and each Subsequent Transfer
Agreement,
assuming the due authorization, execution and delivery hereof by
the
other parties hereto, constitutes a legal, valid and binding
obligation
of CHL, enforceable against CHL in accordance with its terms,
except
that (a) the enforceability hereof 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
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by CHL, the sale of the CHL
Mortgage Loans
by CHL under this Agreement and each Subsequent Transfer
Agreement, the
consummation of any other of the transactions contemplated by
this
Agreement and each Subsequent Transfer Agreement, and the
fulfillment of
or compliance with the terms hereof and thereof are in the
ordinary
course of business of CHL and will not (A) result in a material
breach
of any term or provision of the charter or by-laws of CHL or
(B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the
terms of any
other material agreement or instrument to which CHL is a party
or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to CHL of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction
over CHL; and CHL is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of
any statute, order or regulation of any court, regulatory
body,
administrative agency or governmental body having jurisdiction
over it
which breach or violation may materially impair CHL's ability to
perform
or meet any of its obligations under this Agreement and each
Subsequent
Transfer Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for Fannie Mae and Freddie Mac and is a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to Sections
203 and
211 of the National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge, threatened, against CHL that would materially and
adversely
affect the execution, delivery or enforceability of this
Agreement or
any Subsequent Transfer Agreement or the ability of CHL to sell
the CHL
Mortgage Loans or to perform any of its other obligations under
this
Agreement or any Subsequent Transfer Agreement in accordance
with the
terms hereof or thereof.
62
<PAGE>
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by CHL of, or compliance by CHL with,
this
Agreement or any Subsequent Transfer Agreement or the
consummation of
the transactions contemplated hereby, or if any such consent,
approval,
authorization or order is required, CHL has obtained the
same.
(7) The information set forth on Exhibit F-1 hereto with
respect to each Initial Mortgage Loan is true and correct in
all
material respects as of the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the Depositor as a sale of the CHL Mortgage Loans for all
tax,
accounting and regulatory purposes.
(9) None of the Mortgage Loans is delinquent in payment of
principal and interest.
(10) No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and
enforceable first lien on the related Mortgaged Property subject
only to
(1) the lien of non-delinquent current real property taxes
and
assessments, (2) covenants, conditions and restrictions, rights
of way,
easements and other matters of public record as of the date of
recording
of such Mortgage, such exceptions appearing of record being
acceptable
to mortgage lending institutions generally or specifically
reflected in
the appraisal made in connection with the origination of the
related
Mortgage Loan and (3) other matters to which like properties
are
commonly subject that do not materially interfere with the
benefits of
the security intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL
Mortgage Loan to the Depositor, CHL had good title to, and was
the sole
owner of, such CHL Mortgage Loan free and clear of any pledge,
lien,
encumbrance or security interest and had full right and
authority,
subject to no interest or participation of, or agreement with,
any other
party, to sell and assign the same pursuant to this
Agreement.
(13) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(14) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation
of the Mortgagor to pay the unpaid principal of or interest on
such
Mortgage Note.
(15) There are no mechanics' liens or claims for work, labor
or material affecting any Mortgaged Property that are or may be
a lien
prior to, or equal with, the lien of such Mortgage, except those
that
are insured against by the title insurance policy referred to in
item
(18) below.
63
<PAGE>
(16) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in
the
case of the Subsequent Mortgage Loans, to the best of CHL's
knowledge,
each Mortgaged Property is free of material damage and is in
good
repair.
(17) As of the Closing Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Transfer Date in
the
case of the Subsequent Mortgage Loans, neither CHL nor any prior
holder
of any Mortgage has modified the Mortgage in any material
respect
(except that a Mortgage Loan may have been modified by a
written
instrument that has been recorded or submitted for recordation,
if
necessary, to protect the interests of the Certificateholders
and the
original or a copy of which has been delivered to the
Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or
in part;
released the related Mortgaged Property in whole or in part from
the
lien of such Mortgage; or executed any instrument of
release,
cancellation, modification (except as expressly permitted above)
or
satisfaction with respect thereto.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement,
if
applicable, in an amount at least equal to the Cut-off Date
Principal
Balance of each such Mortgage Loan or a commitment (binder) to
issue the
same was effective on the date of the origination of each
Mortgage Loan,
each such policy is valid and remains in full force and effect,
and each
such policy was issued by a title insurer qualified to do
business in
the jurisdiction where the Mortgaged Property is located and
acceptable
to Fannie Mae and Freddie Mac and is in a form acceptable to
Fannie Mae
and Freddie Mac, which policy insures the Sellers and successor
owners
of indebtedness secured by the insured Mortgage, as to the
first
priority lien, of the Mortgage subject to the exceptions set
forth in
paragraph (11) above; to the best of CHL's knowledge, no claims
have
been made under such mortgage title insurance policy and no
prior holder
of the related Mortgage, including any Seller, has done, by act
or
omission, anything that would impair the coverage of such
mortgage title
insurance policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the
Closing
Date. No Subsequent Mortgage Loan was the subject of a
Principal
Prepayment in full between the Subsequent Cut-off Date and
the
Subsequent Transfer Date.
(20) To the best of CHL's knowledge, all of the improvements
that were included for the purpose of determining the Appraised
Value of
the Mortgaged Property lie wholly within the boundaries and
building
restriction lines of such property, and no improvements on
adjoining
properties encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located
on or being part of the Mortgaged Property is in violation of
any
applicable zoning law or regulation. To the best of CHL's
knowledge, all
inspections, licenses and certificates required to be made or
issued
with respect to all occupied portions of the Mortgaged Property
and,
with respect to the use and occupancy of the same, including but
not
limited to certificates of occupancy and fire underwriting
certificates,
have been made or
64
<PAGE>
obtained from the appropriate authorities, unless the lack
thereof would
not have a material adverse effect on the value of such
Mortgaged
Property, and the Mortgaged Property is lawfully occupied
under
applicable law.
(22) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the
maker
thereof, enforceable in accordance with its terms and under
applicable
law, except 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 equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought. To the best of
CHL's
knowledge, all parties to the Mortgage Note and the Mortgage had
legal
capacity to execute the Mortgage Note and the Mortgage and each
Mortgage
Note and Mortgage have been duly and properly executed by such
parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances
thereunder, and
any and all requirements as to completion of any on-site or
off-site
improvements and as to disbursements of any escrow funds
therefor have
been complied with. All costs, fees and expenses incurred in
making, or
closing or recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder
thereof
adequate for the realization against the Mortgaged Property of
the
benefits of the security, including, (i) in the case of a
Mortgage
designated as a deed of trust, by trustee's sale, and (ii)
otherwise by
judicial foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve
as such,
has been properly designated and currently so serves and is
named in
such Mortgage, and no fees or expenses are or will become
payable by the
Certificateholders to the trustee under the deed of trust,
except in
connection with a trustee's sale after default by the
Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable in
form to Fannie Mae and Freddie Mac.
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which
customary
arrangements for repayment thereof have not been made, and no
escrow
deposits or payments of other charges or payments due the
Sellers have
been capitalized under the Mortgage or the related Mortgage
Note.
(28) The origination, underwriting, servicing and collection
practices with respect to each Mortgage Loan have been in all
respects
legal, proper, prudent and customary in the mortgage lending
and
servicing business, as conducted by prudent lending institutions
which
service mortgage loans of the same type in the jurisdiction in
which the
Mortgaged Property is located.
65
<PAGE>
(29) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in
the Collateral Schedule of the Initial Mortgage Loans in Loan
Group 1
and Loan Group 2 are secured by single family detached
dwellings. No
more than approximately the percentage specified in the
Collateral
Schedule of the Initial Mortgage Loans in Loan Group 1 and Loan
Group 2
are secured by two- to four-family dwellings. No more than
approximately
the percentage specified in the Collateral Schedule of the
Initial
Mortgage Loans in Loan Group 1 and Loan Group 2 are secured by
low-rise
condominium units. No more than approximately the percentage
specified
in the Collateral Schedule of the Initial Mortgage Loans in Loan
Group 1
and Loan Group 2 are secured by high-rise condominium units. No
more
than approximately the percentage specified in the Collateral
Schedule
of the Initial Mortgage Loans in Loan Group 1 and Loan Group 2
are
secured by manufactured housing. No more than approximately
the
percentage specified in the Collateral Schedule of the Initial
Mortgage
Loans in Loan Group 1 and Loan Group 2 are secured by PUDs.
(33) Each Initial Mortgage Loan in Loan Group 1 and Loan
Group 2 was originated on or after the date specified in the
Collateral
Schedule.
(34) Each Initial Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan or
a
Three-Year Hybrid Mortgage Loan, had an initial Adjustment Date
no later
than the applicable date specified on the Collateral Schedule;
each
Initial Mortgage Loan that is a Two-Year Hybrid Mortgage Loan
had an
initial Adjustment Date no later than the applicable date
specified on
the Collateral Schedule; and each Initial Mortgage Loan that is
a
Three-Year Hybrid Mortgage Loan had an initial Adjustment Date
no later
than the applicable date specified on the Collateral
Schedule.
(35) Approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group
1 and
Loan Group 2 provide for a prepayment penalty.
(36) On the basis of representations made by the Mortgagors
in their loan applications, no more than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage
Loans in
Loan Group 1 and Loan Group 2, respectively, are secured by
investor
properties, and no less than approximately the percentage
specified in
the Collateral Schedule of the Initial Mortgage Loans in Loan
Group 1
and Loan Group 2, respectively, are secured by owner-occupied
Mortgaged
Properties that are primary residences.
66
<PAGE>
(37) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard
insurance
policy with a generally acceptable carrier that provides for
fire and
extended coverage and coverage for such other hazards as are
customary
in the area where the Mortgaged Property is located in an amount
that is
at least equal to the lesser of (i) the maximum insurable value
of the
improvements securing such Mortgage Loan or (ii) the greater of
(a) the
outstanding principal balance of the Mortgage Loan and (b) an
amount
such that the proceeds of such policy shall be sufficient to
prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If
the
Mortgaged Property is a condominium unit, it is included under
the
coverage afforded by a blanket policy for the condominium unit.
All such
individual insurance policies and all flood policies referred to
in item
(38) below contain a standard mortgagee clause naming the
applicable
Seller or the original mortgagee, and its successors in
interest, as
mortgagee, and the applicable Seller has received no notice that
any
premiums due and payable thereon have not been paid; the
Mortgage
obligates the Mortgagor thereunder to maintain all such
insurance,
including flood insurance, at the Mortgagor's cost and expense,
and upon
the Mortgagor's failure to do so, authorizes the holder of the
Mortgage
to obtain and maintain such insurance at the Mortgagor's cost
and
expense and to seek reimbursement therefor from the
Mortgagor.
(38) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency
as
having special flood hazards, a flood insurance policy in a form
meeting
the requirements of the current guidelines of the Flood
Insurance
Administration is in effect with respect to such Mortgaged
Property with
a generally acceptable carrier in an amount representing
coverage not
less than the least of (A) the original outstanding principal
balance of
the Mortgage Loan, (B) the minimum amount required to compensate
for
damage or loss on a replacement cost basis, or (C) the maximum
amount of
insurance that is available under the Flood Disaster Protection
Act of
1973, as amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial
condemnation
of the Mortgaged Property.
(40) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of
CHL's
knowledge, there is no material event that, with the passage of
time or
with notice and the expiration of any grace or cure period,
would
constitute a default, breach, violation or event of acceleration
under
the Mortgage or the related Mortgage Note; and no Seller has
waived any
default, breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units
and
dwelling units in PUDs. To the best of CHL's knowledge, no
improvement
to a Mortgaged Property includes a cooperative or a mobile home
or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
67
<PAGE>
(43) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured
by the
Mortgage, and the secured principal amount, as consolidated,
bears a
single interest rate and single repayment term reflected on the
Mortgage
Loan Schedule. The consolidated principal amount does not exceed
the
original principal amount of the Mortgage Loan. The Mortgage
Note does
not permit or obligate the Master Servicer to make future
advances to
the Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments
or
ground rents that previously became due and owing have been
paid, or an
escrow of funds has been established in an amount sufficient to
pay for
every such item that remains unpaid and that has been assessed,
but is
not yet due and payable. Except for (A) payments in the nature
of escrow
payments, and (B) interest accruing from the date of the
Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is
later, to
the day that precedes by one month the Due Date of the first
installment
of principal and interest, including without limitation, taxes
and
insurance payments, the Master Servicer has not advanced funds,
or
induced, solicited or knowingly received any advance of funds by
a party
other than the Mortgagor, directly or indirectly, for the
payment of any
amount required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten
in all material respects in accordance with CHL's
underwriting
guidelines for credit blemished quality mortgage loans or, with
respect
to Mortgage Loans purchased by CHL were underwritten in all
material
respects in accordance with customary and prudent
underwriting
guidelines generally used by originators of credit blemished
quality
mortgage loans.
(46) Prior to the approval of the Mortgage Loan application,
an appraisal of the related Mortgaged Property was obtained from
a
qualified appraiser, duly appointed by the originator, who had
no
interest, direct or indirect, in the Mortgaged Property or in
any loan
made on the security thereof, and whose compensation is not
affected by
the approval or disapproval of the Mortgage Loan; such appraisal
is in a
form acceptable to Fannie Mae and Freddie Mac.
(47) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage
Loan is
subject to a buydown or similar arrangement.
(48) The Mortgage Rates borne by the Initial Mortgage Loans
in Loan Group 1 and Loan Group 2 as of the Cut-off Date ranged
between
the approximate per annum percentages specified on the
Collateral
Schedule and the weighted average Mortgage Rate as of the
Cut-off Date
was approximately the per annum rate specified on the
Collateral
Schedule.
(49) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the
applicable
Seller's portfolio at the Closing Date
68
<PAGE>
as to which the representations and warranties made as to the
Mortgage
Loans set forth in this Section 2.03(b) and Section 2.03(c)
hereof can
be made. No selection was made in a manner that would adversely
affect
the interests of Certificateholders.
(50) The Gross Margins on the Initial Mortgage Loans in Loan
Group 1 and Loan Group 2 range between the approximate
percentages
specified on the Collateral Schedule, and the weighted average
Gross
Margin was approximately the percentage specified in the
Collateral
Schedule.
(51) Each of the Initial Mortgage Loans in the Mortgage Pool
has a Due Date on or before the date specified in the
Collateral
Schedule.
(52) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in
the
Prospectus Supplement.
(53) There is no obligation on the part of any Seller under
the terms of the Mortgage or related Mortgage Note to make
payments in
addition to those made by the Mortgagor.
(54) Any leasehold estate securing a Mortgage Loan has a
term of not less than five years in excess of the term of the
related
Mortgage Loan.
(55) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without
regard
to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that
treats a
defective obligation as a qualified mortgage, or any
substantially
similar successor provision) and applicable Treasury
regulations
promulgated thereunder.
(56) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined
in 16
C.F.R. ss. 433 nor is any Mortgage Loan a "mortgage" as defined
in 15
U.S.C. ss. 1602(aa).
(57) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage
Loan
complied with all licensing requirements and was authorized to
transact
and do business in the jurisdiction in which the related
Mortgaged
Property is located at all times when it held or serviced the
Mortgage
Loan. Any and all requirements of any federal, state or local
laws or
regulations, including, without limitation, usury,
truth-in-lending,
real estate settlement procedures, consumer credit
protection,
anti-predatory lending, fair credit reporting, unfair
collection
practice, equal credit opportunity, fair housing and disclosure
laws and
regulations, applicable to the solicitation, origination,
collection and
servicing of such Mortgage Loan have been complied with in all
material
respects; and any obligations of the holder of the Mortgage
Note,
Mortgage and other loan documents have been complied with in
all
material respects; servicing of each Mortgage Loan has been
in
accordance with prudent mortgage servicing standards, any
applicable
laws, rules and regulations and in accordance with the terms of
the
Mortgage Notes, Mortgage and other loan documents, whether
such
origination and servicing was done by the applicable Seller,
its
affiliates, or any third party which originated the Mortgage
Loan on
behalf of,
69
<PAGE>
or sold the Mortgage Loan to, any of them, or any servicing
agent of
any of the foregoing;
(58) The methodology used in underwriting the extension of
credit for the Mortgage Loan employs objective mathematical
principles
which relate the borrower's income, assets and liabilities to
the
proposed payment and such underwriting methodology does not rely
on the
extent of the borrower's equity in the collateral as the
principal
determining factor in approving such credit extension. Such
underwriting
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to
make
timely payments on the Mortgage Loan;
(59) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition
of
obtaining the extension of credit. No borrower obtained a
prepaid
single-premium credit life, disability, accident or health
insurance
policy in connection with the origination of the Mortgage
Loan;
(60) If the Mortgage Loan provides that the interest rate on
the principal balance of the related Mortgage Loan may be
adjusted, all
of the terms of the related Mortgage pertaining to interest
rate
adjustments, payment adjustments and adjustments of the
outstanding
principal balance have been made in accordance with the terms of
the
related Mortgage Note and applicable law and are enforceable and
such
adjustments will not affect the priority of the Mortgage
lien;
(61) The Mortgaged Property complies with all applicable
laws, rules and regulations relating to environmental matters,
including
but not limited to those relating to radon, asbestos and lead
paint and
no Seller nor, to the best of CHL's knowledge, the Mortgagor,
has
received any notice of any violation or potential violation of
such law;
(62) There is no action, suit or proceeding pending, or to
the best of CHL's knowledge, threatened or likely to be asserted
with
respect to the Mortgage Loan against or affecting any Seller
before or
by any court, administrative agency, arbitrator or governmental
body;
(63) No action, inaction, or event has occurred and no state
of fact exists or has existed that has resulted or will result
in the
exclusion from, denial of, or defense to coverage under any
applicable
hazard insurance policy, irrespective of the cause of such
failure of
coverage. In connection with the placement of any such
insurance, no
commission, fee, or other compensation has been or will be
received by
CHL or any designee of CHL or any corporation in which CHL or
any
officer, director, or employee had a financial interest at the
time of
placement of such insurance;
(64) Each Mortgage Loan has a fully assignable life of loan
tax service contract which may be assigned without the payment
of any
fee;
(65) No Mortgagor has notified CHL or the Master Servicer on
CHL's behalf, and CHL has no knowledge, of any relief requested
or
allowed to a Mortgagor under the Relief Act;
70
<PAGE>
(66) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union,
insurance
company, or mortgage banking company which is supervised and
examined by
a federal or state authority, or by a mortgagee approved by
the
Secretary of Housing and Urban Development pursuant to Sections
2.03 and
2.11 of the National Housing Act;
(67) Each Mortgage Loan was (A) originated no earlier than
six months prior to the time the applicable Seller purchased
such
Mortgage Loan pursuant to a mortgage loan purchase agreement or
other
similar agreement and (B) underwritten or reunderwritten by
the
applicable Seller in accordance with the applicable Seller's
underwriting guidelines in effect at the time the loan was
underwritten
or reunderwritten, as applicable;
(68) Each Mortgage Loan, at the time it was originated and
as of the Closing Date or the related Subsequent Transfer Date,
as
applicable, complied in all material respects with applicable
local,
state and federal laws, including, but not limited to, all
predatory and
abusive lending laws;
(69) None of the Mortgage Loans is a "high cost" mortgage
loan as defined by applicable federal, state and local predatory
and
abusive lending laws;
(70) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and
local
laws;
(71) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the
provisions of
the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01
(2004);
(72) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home
loan"
as defined under the Georgia Fair Lending Act;
(73) No Mortgage Loan in the Trust Fund is a High Cost Loan
or Covered Loan, as applicable (as such terms are defined in the
then
current Standard & Poor's LEVELS(R) Glossary which is now
Version 5.6
Revised, Appendix E) and no Mortgage Loan originated on or after
October
1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending
Act;
(74) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the
Internal
Revenue Code of 1986 (as amended) (the "Code"). The fair market
value of
the manufactured home securing each Mortgage Loan was at least
equal to
80% of the adjusted issue price of the contract at either (i)
the time
the contract was originated (determined pursuant to the
REMIC
Provisions) or (ii) the time the contract is transferred to
the
purchaser. Each Mortgage Loan is a "qualified mortgage" under
Section
860G(a)(3) of the Code;
(75) No Mortgage Loan in the Trust Fund is a "high cost
home," "covered" (excluding home loans defined as "covered home
loans"
in the New Jersey
71
<PAGE>
Home Ownership Security Act of 2002 that were originated
between
November 26, 2003 and July 7, 2004), "high risk home" or
"predatory"
loan under any applicable state, federal or local law (or a
similarly
classified loan using different terminology under a law
imposing
heightened regulatory scrutiny or additional legal liability
for
residential mortgage loans having high interest rates, points
and/or
fees).
(76) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003,
which
is secured by property located in the State of Georgia.
(77) Representations and Warranties relating to the Mortgage
Loans in Loan Group 1:
(i) No Mortgage Loan in Loan Group 1 is covered by HOEPA;
(ii) No borrower was required to purchase any single premium
credit insurance policy (e.g., life, disability, accident,
unemployment, or health insurance product) or debt
cancellation
agreement as a condition of obtaining the extension of credit.
No
borrower obtained a prepaid single-premium credit insurance
policy
(e.g., life, disability, accident, unemployment, mortgage,
or
health insurance) in connection with the origination of the
Mortgage Loan; No proceeds from any Mortgage Loan in Loan Group
1
were used to purchase single premium credit insurance policies
or
debt cancellation agreements as part of the origination of, or
as
a condition to closing, such Mortgage Loan;
(iii) No Mortgage Loan in Loan Group 1 originated on or
after October 1, 2002 will impose a prepayment premium for a
term
in excess of three years. Any Mortgage Loan in Loan Group 3
originated prior to such date will not impose prepayment
penalties
in excess of five years; and
(iv) With respect to (a) any Mortgage Loan in Loan Group 1
originated by CHL from August 1, 2004 through April 30, 2005
and
(b) any Mortgage Loan in Loan Group 1 originated by any
other
entity through April 30, 2005, if the related Mortgage or
the
related Mortgage Note, or any document relating to the loan
transaction, contains a mandatory arbitration clause (that is,
a
clause that requires the borrower to submit to arbitration
to
resolve any dispute arising out of or relating in any way to
the
mortgage loan transaction), CHL will (i) notify the related
borrower in writing within 60 days after the issuance of the
Certificates that none of the related seller, the related
servicer
or any subsequent party that acquires an interest in the loan
or
services such Mortgage Loan will enforce such arbitration
clause
against the borrower, but that the borrower will continue to
have
the right to submit a dispute to arbitration and (ii) place a
copy
of such notice in the Mortgage File.
(v) Each Mortgage Loan in Loan Group 1 had an original
principal balance that conforms to Freddie Mac guidelines
concerning original principal balance limits at the time of
the
origination of such mortgage loan.
72
<PAGE>
(c) Park Monaco hereby represents and warrants to the
Depositor
and the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a
| 
