EXECUTION COPY
==============================================================================
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 June 1, 2005
--------------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2005-AB2
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
-----------------
Page
----
ARTICLE I.
DEFINITIONS
<S>
<C>
<C>
Section 1.01 Defined
Terms..................................................................................10
Section 1.02 Certain
Interpretive
Provisions................................................................47
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance
of Mortgage
Loans...................................................................48
Section 2.02 Acceptance
by Trustee of the Mortgage
Loans....................................................55
Section 2.03
Representations, Warranties and Covenants of the Master Servicer
and the Sellers...............60
Section 2.04
Representations and Warranties of the
Depositor................................................79
Section 2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases................80
Section 2.06
Authentication and Delivery of
Certificates....................................................81
Section 2.07 Covenants
of the Master
Servicer...............................................................81
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master
Servicer to Service Mortgage
Loans......................................................82
Section 3.02
Subservicing; Enforcement of the Obligations of Master
Servicer................................84
Section 3.03 Rights of
the Depositor, the Sellers, the Certificateholders, the NIM Insurer
and the
Trustee in Respect of the Master
Servicer......................................................85
Section 3.04 Trustee to
Act as Master
Servicer..............................................................85
Section 3.05 Collection
of Mortgage Loan Payments; Certificate Account; Distribution
Account;
Pre-Funding Account; Seller Shortfall Interest
Requirement.....................................86
Section 3.06 Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts............................89
Section 3.07 Access to
Certain Documentation and Information Regarding the Mortgage
Loans...................90
Section 3.08 Permitted
Withdrawals from the Certificate Account, Distribution Account,
Carryover
Reserve Fund and the Principal Reserve
Fund....................................................90
Section 3.09
[Reserved].....................................................................................93
Section 3.10
Maintenance of Hazard
Insurance................................................................93
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements......................................94
Section 3.12
Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and
Realized Losses; Repurchase of Certain Mortgage
Loans..........................................95
Section 3.13 Co-Trustee
to Cooperate; Release of Mortgage
Files.............................................99
Section 3.14 Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Trustee.......................................................................................100
i
<PAGE>
Section 3.15 Servicing
Compensation........................................................................100
Section 3.16 Access to
Certain
Documentation...............................................................101
Section 3.17 Annual
Statement as to
Compliance.............................................................101
Section 3.18 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements..............101
Section 3.19 The
Corridor
Contracts........................................................................102
Section 3.20 Prepayment
Charges............................................................................102
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances;
Remittance
Reports..................................................................103
Section 4.02 Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls.........105
Section 4.03
[Reserved]....................................................................................105
Section 4.04
Distributions.................................................................................105
Section 4.05 Monthly
Statements to
Certificateholders......................................................111
Section 4.06
[Reserved]....................................................................................113
Section 4.07 Carryover
Reserve
Fund........................................................................114
Section 4.08
[Reserved]....................................................................................115
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates..............................................................................115
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...................116
Section 5.03 Mutilated,
Destroyed, Lost or Stolen
Certificates.............................................120
Section 5.04 Persons
Deemed
Owners.........................................................................120
Section 5.05 Access to
List of Certificateholders' Names and
Addresses.....................................120
Section 5.06 Book-Entry
Certificates.......................................................................121
Section 5.07 Notices to
Depository.........................................................................122
Section 5.08 Definitive
Certificates.......................................................................122
Section 5.09
Maintenance of Office or
Agency...............................................................122
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective
Liabilities of the Depositor, the Master Servicer and the
Sellers..................123
Section 6.02 Merger or
Consolidation of the Depositor, the Master Servicer or the
Sellers..................123
Section 6.03 Limitation
on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM
Insurer and
Others............................................................................123
Section 6.04 Limitation
on Resignation of Master
Servicer..................................................124
Section 6.05 Errors and
Omissions Insurance; Fidelity
Bonds................................................124
ii
<PAGE>
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default.............................................................................125
Section 7.02 Trustee to
Act; Appointment of
Successor......................................................127
Section 7.03
Notification to
Certificateholders............................................................128
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of
Trustee.............................................................................128
Section 8.02 Certain
Matters Affecting the
Trustee.........................................................130
Section 8.03 Trustee
Not Liable for Mortgage
Loans.........................................................131
Section 8.04 Trustee
May Own
Certificates..................................................................131
Section 8.05 Master Servicer to Pay
Trustee's Fees and
Expenses............................................131
Section 8.06
Eligibility Requirements for
Trustee..........................................................132
Section 8.07
Resignation and Removal of
Trustee............................................................132
Section 8.08 Successor
Trustee.............................................................................133
Section 8.09 Merger or
Consolidation of
Trustee............................................................134
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.................................................134
Section 8.11 Tax
Matters...................................................................................135
Section 8.12
Co-Trustee....................................................................................137
Section 8.13 Access to
Records of the
Trustee..............................................................140
Section 8.14 Suits for
Enforcement.........................................................................141
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation
or Repurchase of all Mortgage
Loans..............................141
Section 9.02 Final
Distribution on the
Certificates........................................................142
Section 9.03 Additional
Termination
Requirements...........................................................143
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.....................................................................................144
Section 10.02 Recordation of
Agreement;
Counterparts........................................................146
Section 10.03 Governing
Law.................................................................................146
Section 10.04 Intention of
Parties..........................................................................146
Section 10.05
Notices.......................................................................................147
Section 10.06 Severability of
Provisions....................................................................148
Section 10.07
Assignment....................................................................................148
Section 10.08 Limitation on
Rights of
Certificateholders....................................................148
Section 10.09 Inspection and
Audit
Rights...................................................................149
Section 10.10 Certificates
Nonassessable and Fully
Paid.....................................................149
Section 10.11 Rights of NIM
Insurer.........................................................................149
iii
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibits
<S>
<C>
EXHIBIT A
Forms of Certificates
EXHIBIT A-1
Form of Class 1-A-1 Certificate
EXHIBIT A-2
Form of Class 2-A-1 Certificate
EXHIBIT A-3
Form of Class 2-A-2 Certificate
EXHIBIT A-4
Form of Class 2-A-3 Certificate
EXHIBIT A-5
Form of Class M-1 Certificate
EXHIBIT A-6
Form of
Class M-2 Certificate
EXHIBIT A-7
Form of Class M-3 Certificate
EXHIBIT A-8
Form of Class M-4 Certificate
EXHIBIT A-9
Form of Class M-5 Certificate
EXHIBIT A-10
Form of Class M-6 Certificate
EXHIBIT A-11
Form of Class M-7 Certificate
EXHIBIT A-12
Form of Class B Certificate
EXHIBIT B
Form of Class P Certificate
EXHIBIT C
Form of Class C Certificate
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 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
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-1 Corridor Contract
EXHIBIT Q-2
Form of Class 2-A Corridor Contract
EXHIBIT Q-3
Form of Subordinate Corridor Contract
EXHIBIT R
[Reserved]
EXHIBIT S-1
Form of Corridor Contract Assignment Agreement
iv
<PAGE>
EXHIBIT S-2
Form of Corridor Contract Administration Agreement
EXHIBIT T
Officer's Certificate with respect to Prepayments
SCHEDULE I
Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II
Collateral Schedule
</TABLE>
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of June 1, 2005,
by and among CWABS, INC., a Delaware
corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC.,
a New York corporation, as 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 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 (other than the R-3-R Interest).
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
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.
REMIC 1:
The REMIC 1 Interests will have the principal balances,
pass-through rates and Corresponding Loan
Groups as set forth below.
<TABLE>
<CAPTION>
Initial
Corresponding
REMIC 1 Interests
Balance
Pass-Through 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-P
$100.00
(8)
N/A
R-1-R.......................................
(4)
(4)
N/A
</TABLE>
<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 1.
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 September 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 September 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 September 2005 is a per annum rate equal
to
0.00%. For any Distribution Date (and the related Accrual
Period)
following the Distribution Date in September 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 September 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 September 2005, the interest rate for this
REMIC
1 Interest is a per annum rate equal to 0.00%.
(8) The R-1-P
Interest is entitled to all Prepayment Charges collected
with respect to the Mortgage Loans. It pays no interest.
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
<PAGE>
(2) Principal. For any Distribution Date (and the related
Accrual
Period) through the Distribution Date in
September 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 September 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.
REMIC 2:
The REMIC 2 Interests will have the principal balances,
pass-through rates and Corresponding Loan
Groups as set forth below. For the
purpose of the descriptions that follow,
Loan Group 1 and Loan Group 2 and the
REMIC 2 Interests corresponding to Loan
Group 1 and Loan Group 2 are referrred
to, from time to time, as the "Variable
Loan Groups" and the "Variable
Interests," respectively.
<TABLE>
<CAPTION>
Corresponding Loan
REMIC 2 Interests
Initial Balance
Pass-Through Rate
Group
-------------------------------------------------- -----------------
---------------------
---------------------
<S>
<C>
<C>
<C>
R-2-A-2 (0.9% of SCB Group
1)...............
(1)
(2)
1
R-2-B-2 (0.1% of SCB Group
1)...............
(1)
(2)
1
R-2-C-2 (0.9% of ASCB Group
1)..............
(1)
(2)
1
R-2-D-2 (0.1% of ASCB Group
1)..............
(1)
(2)
1
R-2-E-2 (Excess of Group
1).................
(1)
(2)
1
R-2-A-3 (0.9% of SCB Group
2)...............
(1)
(3)
2
R-2-B-3 (0.1% of SCB Group
2)...............
(1)
(3)
2
R-2-C-3 (0.9% of ASCB Group
2)..............
(1)
(3)
2
R-2-D-3 (0.1% of ASCB Group
2)..............
(1)
(3)
2
R-2-E-3 (Excess of Group
2).................
(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) 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
3
<PAGE>
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 amounts payable with respect to
the R-1-P Interest. 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.
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 with respect to any REMIC
2 Interest, then the Principal
Distribution Amounts payable with respect
to each Loan Group will be payable:
first to cause the Loan Group's
corresponding R-2-A, R-2-B, R-2-C and R-2-D
Interests to 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
Corresponding Loan Group, and then to
the 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 Loan Group
1/2 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 such 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 Loan
Group 1/2 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 such Loan
Group.
4
<PAGE>
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 Loan Group 1/2 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 both
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 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
5
<PAGE>
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.
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:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Pass-Through
Corresponding Class of
REMIC 3
Interests
Initial Principal Balance
Rate
Certificates
----------------------------------------------------------------------------------------------------------------------
<S>
<C>
<C>
<C>
R-3-1-A-1.....................
(1)
(2)
1-A-1
R-3-2-A-1.....................
(1)
(3)
2-A-1
R-3-2-A-2.....................
(1)
(3)
2-A-2
R-3-2-A-3.....................
(1)
(3)
2-A-3
R-3-M-1.......................
(1)
(4)
M-1
vR-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-B.........................
(1)
(4)
B
R-3-$100......................
$100
(5)
A-R
R-3-Accrual...................
(1)
(6)
N/A
R-3-P.........................
$100
(7)
P
R-3-R.........................
(8)
(8)
N/A
R-3-X.........................
(9)
(10)
C
----------------------------------------------------------------------------------------------------------------------
</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
6
<PAGE>
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 (a) 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) This REMIC 3 Interest 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 (i) the Loan Group
1 Net Rate Cap and (ii) the Loan
Group 2 Net Rate Cap (the "Loan Group 1/2
Net Rate Cap").
(7) The R-3-P Interest is entitled to all
amounts payable with respect to the
R-2-P Interest. It pays no interest.
(8) 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...
(9) This REMIC 3 Interest pays no
principal.
(10) 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.
7
<PAGE>
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.....................................
$439,530,000
(1)
Class
2-A-1.....................................
$160,031,000
(1)
Class
2-A-2.....................................
$240,093,000
(1)
Class
2-A-3.....................................
$57,346,000
(1)
Class
M-1.......................................
$23,500,000
(1)
Class
M-2.......................................
$20,000,000
(1)
Class
M-3.......................................
$13,500,000
(1)
Class
M-4.......................................
$12,000,000
(1)
Class
M-5.......................................
$8,000,000
(1)
Class
M-6.......................................
$8,000,000
(1)
Class
M-7.......................................
$8,000,000
(1)
Class
B.........................................
$10,000,000
(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) the Class 1-A-1 Certificates
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 Subordinate Certificates will
be
subject to a cap equal to the Loan Group 1/2 Net Rate Cap. Any
entitlement of any class of Class A Certificates to Net Rate
Carryover and any entitlement of the Class M and Class B
Certificates
to interest at a rate in excess of Adjusted Subordinate Net Rate
Cap,
will be treated as paid by the Master REMIC to the Class C
Certificates and then paid to by the Class C Certificates pursuant
to
a limited recourse cap contract as described in Section 8.11
herein.
(2) The Class
C Certificates will have a Certificate Principal Balance
equal to the Overcollateralized Amount.
(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 Interest and (b)
a
specified portion of the interest on the REMIC 1 Group 1 and Group
2
"I" and "S" 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 (other than the R-3-$100,
R-3-P, R-3-X and R-3-R Interests) with each such Class other than
the
R-3-Accrual Interest, subject to a cap equal to the Pass-Through
Rate
of the Corresponding Master REMIC Class and the R-3-Accrual
Interest
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 "I" and "S" Interests
less
the interest accrued on the other interests issued by the
Master
REMIC. The Class C Distributable Amount for any Distribution Date
is
payable from current interest on the 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
Interest.
(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 REMIC regular interests, 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
8
<PAGE>
agreement except as provided in Sections
4.02(a)(1)(ii) and (iv)(y) hereunder,
(that is, its entitlement to $100 in the
waterfall).
9
<PAGE>
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 Interest-Bearing
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 Interest-Bearing
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.
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 the
Mortgage Loans in 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 immediately
prior to that Distribution Date and
(b)(I) the principal balance of such Loan
Group, divided by (II) the sum of
the principal balance of the Mortgage
Loans, in each case as of the first day
of the related Due Period, less (iii) the
aggregate Certificate Principal
Balance of the related Classes of Senior
Certificates 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
Balances 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 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 of, and interest on
the Stated Principal Balance of, 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
the Stated Principal Balance of each
Mortgage Loan as to which the related
Mortgaged Property is an REO Property or as
to which the related Mortgaged
Property has been liquidated but such
Mortgage Loan has not yet
10
<PAGE>
become a Liquidated Mortgage Loan;
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 related 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.
Applied Realized Loss Amount: With respect to any
Distribution Date and the Subordinate
Certificates, the amount, if any, by
which, the aggregate Certificate Principal
Balance of the Interest-Bearing
Certificates (after all distributions of
principal on such Distribution Date)
exceeds the sum of the aggregate Stated
Principal Balance of the Mortgage
Loans for such Distribution Date and the
amount on deposit in the Pre-Funding
Account.
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 Interest-Bearing
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 or the cities in which the
Corporate Trust Office of the Trustee is
located are authorized or obligated by law
or executive order to be closed.
Calculation Rate: For each Distribution Date, in the case of
the R-2-A and R-2-B Interests, the product
of (i) 10 and (ii) the weighted
average rate of the outstanding R-2-A and
R-2-B Interests, treating each R-2-A
Interest as capped at zero or reduced by a
fixed percentage of 100% of the
interest accruing on such Class. For each
Distribution Date, in the case of
the R-2-C
11
<PAGE>
and R-2-D Interests, the product of (i) 10
and (ii) the weighted average rate
of the outstanding R-2-C and R-2-D
Interests, treating each R-2-C 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 4.07 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-AB2". 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-12,
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-AB2". 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(b) and (ii) with respect to
any Subordinate Certificate, any
Applied Realized Loss Amounts allocated to
such Certificate on previous
Distribution Dates pursuant to Section
4.04(g), and (B) increased by, with
respect to any Subordinate Certificate, any
Subsequent Recoveries allocated to
such Certificate pursuant to Section
4.04(h) 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
12
<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-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-1 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-1 Corridor Contract Termination Date: With respect
to the Class 1-A-1 Corridor Contract, the
Distribution Date in November 2009.
Class 1-A-1 Net Rate Cap: For 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-1 Principal Distribution Amount: With respect to
any Distribution Date, the product of (x)
the Class A Principal Distribution
Target Amount and (y) a fraction, the
numerator of which is the Class 1-A-1
Principal Distribution Target Amount and
the denominator of which is the sum
of the Class 1-A-1 Principal Distribution
Target Amount and Class 2-A
Principal Distribution Target Amount.
Class 1-A-1 Principal Distribution Target Amount: With
respect to any Distribution Date, the
excess of (1) the Certificate Principal
Balance of the Class 1-A-1 Certificates
immediately prior to such Distribution
Date, over (2) the lesser of (x) 77.40% of
the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group
1 for such Distribution Date and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group
1 for such Distribution Date minus 0.50% of
the sum of the aggregate Stated
Principal Balance of the
13
<PAGE>
Mortgage Loans in Loan Group 1 as of the
Cut-off Date and the original Group 1
Pre-Funded Amount.
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-2
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-3
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-4
hereto, representing the right to
distributions as set forth herein.
Class 2-A Certificate: Any Class 2-A-1, Class 2-A-2 or Class
2-A-3 Certificate.
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 Corridor Contract Termination Date: With respect
to the Class 2-A Corridor Contract, the
Distribution Date in November 2009.
Class 2-A Net Rate Cap: For 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
Class A 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-1 Principal Distribution
Target Amount and the Class 2-A
Principal Distribution Target Amount.
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) 77.40% 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 0.50% of the sum of the
aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 as of
the Cut-off Date and the original Group 2
Pre-Funded Amount.
Class A-R Certificate: Any Certificate designated as a
"Class A-R Certificate" on the face
thereof, in the form of Exhibit D hereto
or, in the case of the Tax Matters Person
Certificate, Exhibit E hereto, in
either case representing the right to
distributions as set forth herein.
14
<PAGE>
Class A Certificate: Any Class 1-A-1 or Class 2-A
Certificate.
Class A Principal Distribution Allocation Amount: With
respect to any Distribution Date, (a) in
the case of the Class 1-A-1
Certificates, the Class 1-A-1 Principal
Distribution Amount and (b) in the
case of the Class 2-A Certificates, the
Class 2-A Principal Distribution
Amount.
Class B Certificate: Any Certificate designated as a "Class
B Certificate" on the face thereof, in the
form of Exhibit A-12 hereto,
representing the right to distributions as
set forth herein.
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-5
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-6
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-7
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-8
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-9
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-10
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-11
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.
15
<PAGE>
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: June 24,
2005.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Collateral Schedule:
Schedule II hereto.
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 June 6, 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-1 Corridor Contract, Class
2-A Corridor Contract or 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 S-2.
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-1.
Corridor Contract Counterparty: Barclays Bank PLC and its
successors.
Corridor Contract Termination Date: The Class 1-A-1 Corridor
Contract Termination Date and Class 2-A
Corridor Contract Termination Date and
Subordinate Corridor Contract Termination
Date, as applicable.
Covered Mortgage Loan: A Mortgage Loan listed on the
Mortgage Loan Schedule as being covered by
the Mortgage Insurance Policy.
16
<PAGE>
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.
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, a Cumulative Loss Trigger
Event will be in effect if (x) the
aggregate amount of Realized Losses on the
Mortgage Loans 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
received through the last day of that Due
Period) exceeds (y) the applicable
percentage, for such Distribution Date, of
the sum of the aggregate Cut-off Date
Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount,
as set forth below:
<TABLE>
<CAPTION>
Distribution Date
Percentage
-----------------
----------
<S>
<C>
July 2007 --
June 2008............ 0.75% with respect to July 2007, plus an
additional 1/12th of 0.75% for each
month thereafter through June 2008
July 2008 -- June 2009............ 1.50% with respect to July 2008,
plus an
additional 1/12th of 0.50% for each
month thereafter through June 2009
July 2009 -- June 2010............ 2.00% with respect to July 2009,
plus an
additional 1/12th of 0.50% for each
month thereafter through June 2010
July 2010 -- June 2011............ 2.50% with respect to July 2010,
plus an
additional 1/12th of 0.25% for each
month thereafter through June 2011
July 2011 and thereafter.......... 2.75%
17
<PAGE>
</TABLE>
Current Interest: With respect to each Class of
Interest-Bearing 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) June 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.
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 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)
18
<PAGE>
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 any Distribution
Date on or after the Stepdown Date, a
Delinquency Trigger Event will be in
effect if the Rolling Sixty-Day Delinquency
Rate for Outstanding Mortgage
Loans equals or exceeds the product of
40.00% 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.
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.
19
<PAGE>
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-AB2". 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
July 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
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.
20
<PAGE>
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 (i) the amount remaining after the
distribution of interest to
Certificateholders for such Distribution
Date pursuant to Section
4.04(a)(iii)(b), and (ii) the amount
remaining after the distribution of
principal to Certificateholders for such
Distribution Date, pursuant to
Section 4.04(b)(1)(B)(ii) or
4.04(b)(2)(C).
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, (ii) the
Trustee Fee Rate and (iii) with
respect to a Covered Mortgage Loan, the
applicable Mortgage Insurance Premium
Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date and each of Loan Group 1
and Loan Group 2, the lesser of (1)
the Overcollateralization Deficiency Amount
and (2) the Excess Cashflow
available for payment thereof, to be
allocated between Loan Group 1 and Loan
Group 2, pro rata, based on the Principal
Remittance Amount for each such Loan
Group for such Distribution Date.
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.
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.
21
<PAGE>
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 $175,000 and (y)
August 8, 2005.
Gross Margin: The percentage set forth in the related
Mortgage Note to be added to the Index for
use in determining the Mortgage
Rate on any Mortgage Loan on each of its
Adjustment Dates, which is set forth
in the Mortgage Loan Schedule.
Group 1/2 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 Subordinate
Component Balances of their
corresponding Loan Groups. For federal
income tax purposes, the Subordinate
Net Rate Cap will be the Calculation Rate
in respect of the Class A and Class
B Interests in REMIC 2.
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 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 $0.
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 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 $39,997,081.50.
Group Net Rate Cap. With respect to Loan Group 1, the Class
1-A-1 Net Rate Cap, and with respect to
Loan Group 2, the Class 2-A Net Rate
Cap.
Index: As to any 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 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
22
<PAGE>
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 Mortgage Loan, the
Mortgage Rate in effect prior to the
Initial Adjustment Date.
Initial Periodic Rate Cap: With respect to each 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 the Mortgage 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.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to
the Mortgage Loans.
Interest-Bearing Certificates: The Class A Certificates and
the Subordinate Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing 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 Interest-Bearing
Certificates, June 22, 2005. With
respect to any Accrual Period for the
Interest-
23
<PAGE>
Bearing 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 and the
Mortgage Insurance Premium 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 with respect to the
related Mortgage Loans less the related
Servicing Fee, (ii) all interest on
prepayments received during the related
Prepayment Period with respect to such
Mortgage Loans, 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).
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)
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 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.
24
<PAGE>
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). 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.
Margin: With respect to any Accrual Period and Class of
Interest-Bearing Certificates, the per
annum rate indicated in the following
table:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
Class
Margin (1)
Margin (2)
------------------------------------------------------------------------------
<S>
<C>
<C>
Class 1-A-1.............................
0.230%
0.460%
Class 2-A-1.............................
0.090%
0.180%
Class 2-A-2.............................
0.230%
0.460%
Class
2-A-3.............................
0.385%
0.770%
Class M-1...............................
0.470%
0.705%
Class M-2...............................
0.480%
0.720%
Class M-3...............................
0.500%
0.750%
Class M-4...............................
0.650%
0.975%
Class M-5...............................
0.680%
1.020%
Class M-6...............................
0.700%
1.050%
Class M-7...............................
1.200%
1.800%
Class B.................................
1.350%
2.025%
------------------------------------------------------------------------------
</TABLE>
(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
25
<PAGE>
with the standard set forth in the first
sentence of Section 3.20(a), 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).
Maximum Mortgage Rate: With respect to each 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 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).
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.
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.
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 Insurance Policy: The Mortgage Insurance Policy
issued by United Guaranty Mortgage
Indemnity Company with respect to certain
Mortgage Loans identified in the Mortgage
Loan Schedule.
Mortgage Insurance Premium: The premium payable on the
Mortgage Insurance Policy on each
Distribution Date.
Mortgage Insurance Premium Rate: With respect to a Covered
Mortgage Loan and any Distribution Date,
the per annum rate equal to a
fraction (expressed as a percentage),
the
26
<PAGE>
numerator of which is equal to the portion
of the Mortgage Insurance Premium
payable with respect to such Distribution
Date attributable to such Covered
Mortgage Loan multiplied by twelve and the
denominator of which is equal to
the Stated Principal Balance of such
Covered Mortgage Loan.
Mortgage Insurer: United Guaranty Mortgage Indemnity Company
or any replacement Mortgage Insurer, as
applicable.
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) the purpose of the Mortgage Loan;
(xiv) the frequency of
each Adjustment Date;
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(xv) the next
Adjustment Date;
(xvi) the Maximum
Mortgage Rate;
(xvii) the Minimum Mortgage Rate;
(xviii) the Mortgage Rate as of the Cut-off Date;
(xix) the related
Initial Periodic Rate Cap and
Subsequent Periodic Rate Cap;
(xx) the Gross
Margin;
(xxi) a code
indicating if such Mortgage Loan is a
Covered Mortgage Loan and the rate for the Mortgage
Insurance Premium, if applicable;
(xxii) a code indicating whether the Mortgage Loan
is a CHL Mortgage Loan, a Park Monaco Mortgage Loan or a
Park Sienna Mortgage Loan; and
(xxiii) the premium rate for any lender-paid
mortgage insurance, if applicable.
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) and all the related Subsequent
Mortgage Loans and Subsequent Mortgage
Loan information included therein.
Mortgage Loans: Such of the 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.
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.
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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: With respect to any Distribution Date, (i)
with respect to the Class 1-A-1
Certificates, the Class 1-A-1 Net Rate Cap,
(ii) with respect to each Class of Class
2-A Certificates, the Class 2-A Net
Rate Cap and (v) with respect to each Class
of Subordinate Certificates, the
Subordinate Net Rate Cap.
Net Rate Carryover: With respect to any Class of
Interest-Bearing 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, 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.
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
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
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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
Interest-Bearing 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 Interest-Bearing
Certificates shall equal 3.30% 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 Interest-Bearing
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 Interest-Bearing
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, 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
clause (a) of the first 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.
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.
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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 on such Distribution Date
(after giving effect to distributions in
respect of the Principal Remittance
Amount for Loan Group 1 and Loan Group 2 on
such Distribution Date).
Overcollateralization Target Amount: With respect to any
Distribution Date (a) on or prior to the
Distribution Date in August 2005,
0.00%, (b) after the Distribution Date in
August 2005 and prior to the
Stepdown Date, an amount equal to 1.00% of
the sum of the aggregate Cut-off
Date Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount
and (c) on or after the Stepdown Date, the
greater of (i) an amount equal to
2.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for the
current Distribution Date and (ii) the OC
Floor; provided, however, 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
amount on deposit in the Pre-Funding
Account exceeds (y) the aggregate
Certificate Principal Balance of the
Interest-Bearing Certificates as of such
Distribution Date (after giving effect to
distributions of the Principal
Remittance Amount for Loan Group 1 and Loan
Group 2 to be made 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.
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.
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<PAGE>
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 Interest-Bearing 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 Interest-Bearing
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 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;
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<PAGE>
(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 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
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<PAGE>
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.
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account on the Closing Date, which shall
equal $39,997,081.50.
Pre-Funding Account: The separate Eligible Account created
and maintained by the Trustee pursuant to
Section 3.05 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-AB2." Funds in
the Pre-Funding Account
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<PAGE>
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 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
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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
with the opening of business on the day
immediately following the Initial
Cut-off Date) 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.
Principal Relocation Payment: In the case of the Variable
Loan Groups and Variable Interests only, a
payment from any Loan Group to a
REMIC 2 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
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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 Advances relating to principal
and certain expenses reimbursable
pursuant to Section 6.03 and reimbursed
during the related Due Period, in each
case with respect to such Loan Group.
Principal Reserve Fund: The separate Eligible Account
created and initially maintained by the
Trustee pursuant to Section 3.08 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-AB2". 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 June 10, 2005, relating to
asset-backed securities to be sold by the
Depositor.
Prospectus Supplement: The prospectus supplement dated June
16, 2005, relating to the public offering
of the certain Classes of
Certificates offered thereby.
PTCE 95-60: As defined
in Section 5.02(b).
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 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
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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
Interest-Bearing 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
Interest-Bearing 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 one month in amounts
approximately equal to the aggregate
Certificate Principal Balance of the
Interest-Bearing Certificates on such
Interest Determination Date.
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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.
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) (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 the Mortgage
Rate from a variable rate to a
fixed rate; (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; (x) be covered by the
Mortgage Insurance Policy if the Deleted
Mortgage Loan was covered by the Mortgage
Insurance Policy; and (xi)
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comply with each representation and
warranty set forth in Section 2.03 as of
the date of substitution; provided,
however, that notwithstanding the
foregoing, to the extent that compliance
with clause (xi) 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 (xi) 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 (xi).
Representing Party: As
defined in Section 2.03(e).
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 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.
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, including with
respect to the Covered Mortgage Loans,
the Mortgage Insurance Policy.
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 and any Loan Group or Loan
Groups, the average of the Sixty-Day
Delinquency Rates for such Loan Group or
Loan Groups and 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).
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,
determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt Service
Reduction
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<PAGE>
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 or
any similar state or local law; (b) without
giving effect to any extension
granted or agreed to by the Master Servicer
pursuant to Section 3.05(a); 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
July 2005, August 2005 and September
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
Interest-Bearing Certificates, in each case
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 A and Class A-R Certificates.
Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Stepdown
Date, the fraction (expressed as a
percentage) (1) the numerator of which is
the excess of (a) the aggregate
Stated Principal Balance of the Mortgage
Loans for the preceding Distribution
Date over (b) (i) before the Certificate
Principal Balances of the Senior
Certificates
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have been reduced to zero, the sum of the
Certificate Principal Balances of
the Senior Certificates, or (ii) after the
Certificate Principal Balances of
the Senior Certificates have been reduced
to zero, the Certificate Principal
Balance of the most senior Class of
Subordinate Certificates outstanding, as
of the related Master Servicer Advance
Date, and (2) the denominator of which
is the aggregate Stated Principal Balance
of the Mortgage Loans for the
preceding Distribution Date.
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 related Stepdown Date
and any Loan Group or Loan Groups,
a fraction, expressed as a percentage, the
numerator of which is the aggregate
Stated Principal Balance for such
Distribution Date of all Mortgage Loans in
such Loan Group or Loan Groups 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 in such Loan Group or Loan
Groups.
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
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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. 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 earlier to occur of (a) the Distribution
Date on which the aggregate Certificate
Principal Balance of the Senior
Certificates is reduced to zero, and (b)
the later to occur of (x) the
Distribution Date in July 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 77.40% of the aggregate Stated
Principal Balance of the Mortgage
Loans for such Distribution Date.
Stepdown Target Subordination Percentage: For any Class of
Subordinate Certificates, the respective
percentage indicated in the following
table:
Stepdown
Target
Subordination
Percentage
-------------
Class M-1.................
17.90%
Class M-2.................
13.90%
Class M-3.................
11.20%
Class M-4.................
8.80%
Class M-5.................
7.20%
Class M-6.................
5.60%
Class M-7.................
4.00%
Class B...................
2.00%
Subordinate Certificates: Any Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class
M-7 or Class B Certificates.
Subordinate Class Principal Distribution Amount: With
respect to any Distribution Date and any
Class of Subordinate Certificates,
the excess of (1) the sum of (a) the
aggregate Certificate Principal Balance
of the Class A Certificates (after taking
into account distribution of the
Class A Principal Distribution 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
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Certificates immediately prior to such
Distribution Date over (2) the lesser
of (a) the product of (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 for
such Distribution Date and (b) the
aggregate Stated Principal Balance of the
Mortgage Loans 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 for Loan
Group 1 and Loan Group 2 until the
Certificate Principal Balance thereof is
reduced to zero.
Subordinate Component Balance: With respect to any
Distribution Date and for each of Loan
Group 1 and Loan Group 2, the excess of
the principal balance of the Mortgage Loans
in 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 Class
1-A-1 Certificates in the case of
Loan Group 1 and the Class 2-A Certificates
in the case of Loan Group 2, in
each case immediately prior to that
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 Corridor Contract Termination Date: With respect
to the Subordinate Corridor Contract, the
Distribution Date in November 2009.
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 on such Distribution Date (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
Certificate Principal Balance of the Class
1-A-1 Certificates) and (b) the
weighted average Adjusted Net Mortgage Rate
of the Mortgage Loans in Loan
Group 2 on such Distribution Date (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), 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 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.
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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). 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 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) 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).
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).
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) and (ii) the amount on deposit
in the Pre-Funding Account.
Subservicer: As
defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(e).
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(e),
the excess of (x) the principal
balance of the Mortgage Loan that is
substituted
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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.
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).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or
after the Stepdown Date, 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); (ii) the Certificate Account,
the Distribution Account, the
Principal Reserve Fund, the Carryover
Reserve Fund, 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.
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<PAGE>
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by
the Trustee pursuant to Section 4.01(d), 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, Bear,
Stearns & Co. Inc. and Credit Suisse
First Boston LLC.
Unpaid Realized Loss Amount: For 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(h).
Voting Rights: The voting rights of all the Certificates
that are 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
Agreement, and accounting terms partly
defined in this Agreement to the extent
not defined,
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<PAGE>
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
Initial 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) and the terms and
conditions of this Agreement, each Seller
sells, transfers, assigns, sets over
and otherwise conveys to the Depositor,
without recourse, on each Subsequent
Transfer Date, all the right, title and
interest of such Seller in and
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<PAGE>
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).
(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:
(1) 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);
(2) 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 any
ratings
assigned to the Certificates by the Rating Agencies;
(3) 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;
(4) each Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and
warranties
applicable to it under this Agreement, provided, however, that
with
respect to a breach of a representation and
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<PAGE>
warranty with respect to a Subsequent Mortgage Loan set forth
in
this clause (4), the obligation under Section 2.03(e) of this
Agreement 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;
(5) 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;
(6) no Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date was 30 or more days delinquent;
(7) 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;
Loan Group 1
<TABLE>
<CAPTION>
Permitted
Variance
Characteristic
Value
or Range
--------------
-----
--------
<S>
<C>
<C>
Average Stated Principal
Balance................................
$175,482
10%
Weighted Average Mortgage
Rate..................................
7.041%
0.10%
Weighted Average Original Loan-to-Value
Ratio...................
76.69%
3%
Weighted Average Remaining Term to
Maturity.....................
351 months
3 months
Weighted Average Credit Bureau Risk
Score.......................
614 points
5 points
Loan Group 2
Permitted
Variance
Characteristic
Value
or Range
--------------
-----
--------
Average Stated Principal
Balance................................
$170,953
10%
Weighted Average Mortgage
Rate..................................
7.101%
0.10%
Weighted Average Original Loan-to-Value
Ratio...................
80.14%
3%
Weighted Average Remaining Term to
Maturity.....................
359 months
3 months
Weighted Average Credit Bureau Risk
Score.......................
605 points
5 points
</TABLE>
50
<PAGE>
(8) 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
(9) 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).
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), (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). 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)(6) and (7).
(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 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):
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<PAGE>
(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-AB2,
CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling and Servicing
Agreement dated as of June 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 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
52
<PAGE>
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. 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 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
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<PAGE>
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 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
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<PAGE>
Mortgage Loan, which repurchase or
substitution shall be accomplished in the
manner and subject to the conditions set
forth in Section 2.03, 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 or in Section 2.03 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, 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)
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) 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)) 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 Initial Mortgage Loan, and
(ii) the information set forth in
items (i), (iv), (v), (vi), (viii), (ix)
and (xiv) through (xx) of the
definition of the "Mortgage Loan
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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;
(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);
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(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, 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 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
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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), 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)
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), 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)) 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 (xiv) through (xx) 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,
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
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Certificateholder that so requests a Final
Certification with r
