Exhibit 4.1
==============================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
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 December 1, 2004
-----------------------------
ASSET-BACKED CERTIFICATES, SERIES 2004-14
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Table of Contents
Page
ARTICLE I.
DEFINITIONS
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Section 1.01 Defined
Terms..........................................................3
Section 1.02 Certain Interpretive
Provisions.......................................37
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans..........................................37
Section 2.02 Acceptance by Trustee
of the Mortgage Loans...........................42
Section 2.03 Representations,
Warranties and Covenants of the Master Servicer
and the
Sellers.......................................................45
Section 2.04 Representations and
Warranties of the Depositor.......................60
Section 2.05 Delivery of Opinion of
Counsel in Connection with Substitutions
and
Repurchases.......................................................61
Section 2.06 Authentication and
Delivery of Certificates...........................62
Section 2.07 Covenants of the
Master Servicer......................................62
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to
Service Mortgage Loans.............................62
Section 3.02 Subservicing;
Enforcement of the Obligations of Master Servicer.......64
Section 3.03 Rights of the
Depositor, the Sellers, the Certificateholders,
the NIM Insurer and the Trustee in Respect of the Master
Servicer..............................................................65
Section 3.04 Trustee to Act as
Master Servicer.....................................65
Section 3.05 Collection of Mortgage
Loan Payments; Certificate Account;
Distribution Account; Seller Shortfall Interest
Requirement...........66
Section 3.06 Collection of Taxes,
Assessments and Similar Items; Escrow
Accounts..............................................................69
Section 3.07 Access to Certain
Documentation and Information Regarding
the Mortgage
Loans....................................................69
Section 3.08 Permitted Withdrawals
from the Certificate Account,
Distribution Account, Carryover Reserve Fund and the Principal
Reserve
Fund..........................................................70
Section 3.09
[Reserved]............................................................73
Section 3.10 Maintenance of Hazard
Insurance.......................................73
Section 3.11 Enforcement of
Due-On-Sale Clauses; Assumption Agreements.............73
Section 3.12 Realization Upon
Defaulted Mortgage Loans; Determination of
Excess Proceeds and Realized Losses; Repurchase of Certain
Mortgage
Loans........................................................75
Section 3.13 Co-Trustee to
Cooperate; Release of Mortgage Files....................78
Section 3.14 Documents, Records and
Funds in Possession of Master Servicer
to be Held for the
Trustee............................................79
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Section 3.15 Servicing
Compensation................................................80
Section 3.16 Access to Certain
Documentation.......................................80
Section 3.17 Annual Statement as to
Compliance.....................................80
Section 3.18 Annual Independent
Public Accountants' Servicing Statement;
Financial
Statements..................................................81
Section 3.19 The Corridor
Contract.................................................81
Section 3.20 Prepayment
Charges....................................................82
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance
Reports..........................................83
Section 4.02 Reduction of Servicing
Compensation in Connection with
Prepayment Interest
Shortfalls........................................84
Section 4.03
[Reserved]............................................................85
Section 4.04
Distributions.........................................................85
Section 4.05 Monthly Statements to
Certificateholders..............................91
Section 4.06
[Reserved]............................................................93
Section 4.07
[Reserved]............................................................93
Section 4.08 Carryover Reserve
Fund................................................93
Section 4.09 Credit Comeback Excess
Account........................................94
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates......................................................95
Section 5.02 Certificate Register;
Registration of Transfer and Exchange of
Certificates..........................................................96
Section 5.03 Mutilated, Destroyed,
Lost or Stolen Certificates....................100
Section 5.04 Persons Deemed
Owners................................................101
Section 5.05 Access to List of
Certificateholders' Names and Addresses............101
Section 5.06 Book-Entry
Certificates..............................................101
Section 5.07 Notices to
Depository................................................102
Section 5.08 Definitive
Certificates..............................................102
Section 5.09 Maintenance of Office
or Agency......................................103
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities
of the Depositor, the Master Servicer and
the
Sellers..........................................................103
Section 6.02 Merger or
Consolidation of the Depositor, the Master Servicer or
the
Sellers..........................................................103
Section 6.03 Limitation on
Liability of the Depositor, the Sellers, the Master
Servicer, the NIM Insurer and
Others.................................104
Section 6.04 Limitation on
Resignation of Master Servicer.........................104
Section 6.05 Errors and Omissions
Insurance; Fidelity Bonds.......................105
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default....................................................105
Section 7.02 Trustee to Act;
Appointment of Successor.............................107
Section 7.03 Notification to
Certificateholders...................................108
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of
Trustee....................................................109
Section 8.02 Certain Matters
Affecting the Trustee................................110
Section 8.03 Trustee Not Liable for
Mortgage Loans................................111
Section 8.04 Trustee May Own
Certificates.........................................111
Section 8.05 Master Servicer to Pay
Trustee's Fees and Expenses...................112
Section 8.06 Eligibility
Requirements for Trustee.................................112
Section 8.07 Resignation and
Removal of Trustee...................................113
Section 8.08 Successor
Trustee....................................................113
Section 8.09 Merger or
Consolidation of Trustee...................................114
Section 8.10 Appointment of
Co-Trustee or Separate Trustee........................114
Section 8.11 Tax
Matters..........................................................115
Section 8.12
Co-Trustee...........................................................118
Section 8.13 Access to Records of
the Trustee.....................................121
Section 8.14 Suits for
Enforcement................................................121
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon
Liquidation or Repurchase of all Mortgage Loans.....121
Section 9.02 Final Distribution on
the Certificates...............................122
Section 9.03 Additional Termination
Requirements..................................123
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment............................................................124
Section 10.02 Recordation of Agreement;
Counterparts...............................126
Section 10.03 Governing
Law........................................................126
Section 10.04 Intention of
Parties.................................................126
Section 10.05
Notices..............................................................127
Section 10.06 Severability of
Provisions...........................................128
Section 10.07
Assignment...........................................................128
Section 10.08 Limitation on Rights of
Certificateholders...........................128
Section 10.09 Inspection and Audit
Rights..........................................129
Section 10.10 Certificates Nonassessable
and Fully Paid............................129
Section 10.11 Rights of NIM
Insurer................................................130
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Exhibits
EXHIBIT A-1 Form
of Class A-1 Certificate
EXHIBIT A-2 Form
of Class A-2 Certificate
EXHIBIT A-3 Form
of Class A-3 Certificate
EXHIBIT A-4 Form
of Class A-4 Certificate
EXHIBIT A-5 Form
of Class A-5 Certificate
EXHIBIT A-6 Form
of Class M-1 Certificate
EXHIBIT A-7 Form
of Class M-2 Certificate
EXHIBIT A-8 Form
of Class M-3 Certificate
EXHIBIT A-9 Form
of Class M-4 Certificate
EXHIBIT A-10 Form of
Class M-5 Certificate
EXHIBIT A-11 Form of
Class B Certificate
EXHIBIT B
Form of Class P Certificates
EXHIBIT C
Form of Class C Certificates
EXHIBIT D
Form of Class A-R Certificate
EXHIBIT E
Form of Tax Matters Person Certificate (Class
A-R)
EXHIBIT F
Mortgage Loan Schedule
EXHIBIT F-1 List
of 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
EXHIBIT G-2 Form
of Interim Certification of Trustee
EXHIBIT G-3 Form
of Delay Delivery Certification
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
[Reserved]
EXHIBIT Q
Form of Corridor Contract
EXHIBIT R
Form of Corridor Contract Assignment Agreement
EXHIBIT S
Form of Corridor Contract Guaranty
EXHIBIT T
Form of Officer's Certificate with respect to
Prepayments
SCHEDULE I
Prepayment Charge Schedule and Prepayment
Charge
Summary
SCHEDULE II
Collateral Schedule
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POOLING AND SERVICING AGREEMENT, dated as of December 1, 2004,
by
and among CWABS, INC., a Delaware
corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York
corporation, as a seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware
corporation, as a seller ("Park
Monaco" or a "Seller", and together with
CHL, 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.
For federal income tax purposes,
the Trust Fund (excluding the Corridor
Contract, the Corridor Contract
Guaranty, the Carryover Reserve Fund and
the Credit Comeback Excess Account),
will consist of two real estate mortgage
investment conduits (each a "REMIC"
or, in the alternative, the "Underlying
REMIC" and the "Master REMIC,"
respectively). 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 each of the Underlying
REMIC and the Master REMIC. The Master
REMIC will hold as assets the several
classes of uncertificated Underlying REMIC
Interests (other than the UR-A-R
Interest). The Underlying REMIC will hold
as assets all the property of the
Trust Fund (excluding the Corridor
Contract, the Corridor Contract Guaranty,
the Carryover Reserve Fund and the Credit
Comeback Excess Account). For
federal income tax purposes, each
Underlying REMIC Interest (other than the
UR-A-R Interest) is hereby designated as a
regular interest in the Underlying
REMIC (each, an "Underlying REMIC Regular
Interest"). The latest possible
maturity date of all REMIC regular
interests created in this Agreement shall
be the Latest Possible Maturity Date.
Underlying REMIC:
The Underlying
REMIC Interests will have the initial balances,
pass-through rates and corresponding class
certificates as set forth in the
following table:
Corresponding
The Underlying REMIC
Initial
Pass-Through Class of
Interests
Balance
Rate
Certificates
---------------------------- ----------- ------------ --------------
UR-A-1.................... (1)
(2)
Class A-1
UR-A-2....................
(1)
(2)
Class A-2
UR-A-3....................
(1)
(2)
Class A-3
UR-A-4....................
(1)
(2)
Class A-4
UR-A-5....................
(1)
(2)
Class A-5
UR-M-1....................
(1)
(2)
Class M-1
UR-M-2....................
(1)
(2)
Class M-2
UR-M-3....................
(1)
(2)
Class M-3
UR-M-4....................
(1)
(2)
Class M-4
UR-M-5....................
(1)
(2)
Class M-5
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UR-$100...................
$100
(3)
Class A-R
UR-B......................
(1)
(2)
Class B
UR-P......................
$100
(3)
Class P
UR-C......................
(1)
(2)
Class C
UR-A-R....................
(8)
(4)
N/A
---------------
(1) On each Distribution Date,
following the allocation of scheduled
principal,
principal prepayments and Realized Losses, the Class UR-A-1
Interest, Class
UR-A-2 Interest, Class UR-A-3 Interest, Class UR-A-4
Interest, Class
UR-A-5 Interest, Class UR-M-1 Interest, Class UR-M-2
Interest, Class
UR-M-3 Interest, Class UR-M-4 Interest, Class UR-M-5
Interest and
Class UR-B Interest will each have a principal balance that
is equal to 100%
of its corresponding Certificate Class issued by the
Master REMIC,
and the Class UR-C Interest will have a principal balance
that is equal to
the Overcollateralized Amount.
(2) On each Distribution Date, the Net
Rate Cap.
(3) The UR-$100 Interest and the Class
UR-P Interest do not pay any interest.
All Prepayment
Charges will be allocated to the Class UR-P Interest.
(4) The Class UR-A-R Interest is the
sole class of residual interest in
Underlying
REMIC. It has no principal balance and pays no principal or
interest.
On each
Distribution Date, the Interest Remittance Amount and the
Principal Remittance Amount shall be
distributed with respect to the
Underlying REMIC Interests in the following
manner:
(1) Interest.
Interest is to be distributed with respect to each
Underlying REMIC
Interest at the rate, or according to the formulas,
described
above.
(2) Principal.
Principal shall be allocated among the Underlying REMIC
Interests in the
same manner that such items are allocated among their
corresponding
Certificate Classes.
Master REMIC:
The Master REMIC
Certificates will have the original certificate
principal balances and pass-through rates
as set forth in the following table:
Original
Certificate
Pass-Through
Class
Principal Balance
Rate
-------------------------------
-----------------
---------------
Class A-1.................... $ 151,523,000
(1)
Class A-2.................... $ 243,975,000
(1)
Class A-3.................... $ 53,252,000
(1)
Class A-4.................... $ 150,000,000
(1)
Class A-5.................... $ 17,000,000
(1)
Class M-1.................... $ 23,625,000
(1)
Class M-2.................... $ 21,750,000
(1)
Class M-3.................... $ 13,125,000
(1)
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Class M-4.................... $ 40,125,000
(1)
Class M-5.................... $ 15,000,000
(1)
Class B...................... $
7,500,000
(1)
Class C......................
(2) (3)
Class P......................
$100
(4)
Class A-R....................
$100
(5)
---------------
(1) The Certificates will accrue
interest at the related Pass-Through Rates
identified in
this Agreement. Any entitlement of any Class of
Certificates to
Net Rate Carryover will be treated as paid by the Master
REMIC to the
Class C Certificates and then paid to such Class of
Certificates
pursuant to a limited recourse cap contract as described in
Section 8.11
herein.
(2) The Class C Certificates have no
Certificate Principal Balance.
(3) For each Accrual Period the Class
C Certificates are entitled to the
"Class C
Distributable Amount," which shall consist of (i) a specified
portion of the
interest on each of the Underlying REMIC Regular Interests
(excluding the
UR-P and UR-$100 Interests) in an amount equal to the
excess of the
pass-through rate in respect of the Underlying REMIC
Regular Interest
over the pass-through rate in respect of the
Corresponding
Class Certificate of each such Underlying REMIC Regular
Interest, and
(ii) all accruals of interest and collections of scheduled
principal and
principal prepayments allocated to the Class UR-C Interest.
(4) For each Distribution Date the
Class P Certificates are entitled to all
Prepayment
Charges distributed with respect to the Class UR-P Interests.
(5) The Class A-R Certificates
represent the sole class of residual interest
in each REMIC
created hereunder. The Class A-R Certificates are not
entitled to
distributions of interest.
The foregoing REMIC structure is intended
to cause all of the cash from the
Mortgage Loans to flow through to the
Master REMIC as cash flow on a REMIC
regular interest, without creating any
shortfall--actual or potential (other
than for credit losses)--to any REMIC
regular interest. It is not intended
that the Class A-R Certificates be entitled
to any cash flow except as
provided in Section 4.04(b)(1)(A) hereunder
(that is, $100.00).
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
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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.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in
the
Mortgage Loan Schedule as having a Mortgage
Rate which is adjustable in
accordance with the terms of the related
Mortgage Note (for the avoidance of
doubt, excluding any Credit Comeback
Loans).
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage
Rate less the related Expense Fee Rate.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date
on which the related Mortgage Rate is
subject to adjustment, as provided in
the related Mortgage Note.
Advance: The aggregate of the advances required to be made by
the
Master Servicer with respect to any
Distribution Date pursuant to Section
4.01, the amount of any such advances being
equal to the aggregate of payments
of principal and interest on the Mortgage
Loans (net of the Servicing Fees)
that were due on the related Due Date and
not received by the Master Servicer
as of the close of business on the related
Determination Date including an
amount equivalent to interest on each
Mortgage Loan as to which the related
Mortgaged Property is an REO Property;
provided, however, that the net monthly
rental income (if any) from such REO
Property deposited in the Certificate
Account for such Distribution Date pursuant
to Section 3.12 may be used to
offset such Advance for the Mortgage Loan
related to such REO Property;
provided, further, that for the avoidance
of doubt no Advances shall be
required to be made in respect of any
Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in
accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date,
the aggregate amount held in the
Certificate Account at the close of business
on the immediately preceding Determination
Date on account of (i) all
Scheduled Payments or portions thereof
received in respect of the Mortgage
Loans due after the related Due Date, (ii)
Principal Prepayments received in
respect of such Mortgage Loans after the
last day of the related Prepayment
Period and (iii) Liquidation Proceeds and
Subsequent Recoveries received in
respect of such Mortgage Loans after the
last day of the related Due Period.
Applied Realized Loss Amount: A Class A-5 Applied Realized Loss
Amount or a Subordinate Applied Realized
Loss Amount.
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
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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
States of New York or California
are authorized or obligated by law or
executive order to be closed.
Carryover Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 4.08 in the name of
the Trustee for the benefit of the
Certificateholders and designated "The Bank
of New York in trust for registered holders
of CWABS, Inc., Asset-Backed
Certificates, Series 2004-14". 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-11, 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 2004-14".
Funds in the Certificate Account
shall be held in trust for the
Certificateholders for the uses and purposes
set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
person that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than
the
Class C Certificates) and as of any
Distribution Date, the Initial Certificate
Principal Balance of such Certificate (A)
less the sum of (i) all amounts
distributed with respect to such
Certificate in reduction of the Certificate
Principal Balance thereof on previous
Distribution Dates pursuant to Section
4.04, and (ii) with respect to the Class
A-5 Certificates and any Subordinate
Certificates, any Applied Realized Loss
Amounts allocated to such Certificate
on previous Distribution Dates pursuant to
Section 4.04(h), and (B) increased
by, with respect to the Class A-5
Certificates and any Subordinate
Certificates, any Subsequent Recoveries
allocated to such Certificate pursuant
to Section 4.04(i) on such Distribution
Date. References herein to the
Certificate Principal Balance of a Class of
Certificates shall mean the
Certificate Principal Balances of all
Certificates in such Class. The Class C
Certificates do not have a Certificate
Principal Balance. With
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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 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 A Certificate: Any Class A-1 Certificate, Class A-2
Certificate, Class A-3 Certificate, Class
A-4 Certificate or Class A-5
Certificate.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the
Certificate Principal Balance of the
Class A Certificates immediately prior to
such Distribution Date, over (2) the
lesser of (x) 64.20% of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (y)
the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor.
Class A Principal Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the
aggregate Certificate Principal Balance
of the Class A Certificates (after all
distributions of principal on such
Distribution Date) exceeds the aggregate
Stated Principal Balance of the
Mortgage Loans for such Distribution
Date.
Class A-1 Certificate: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to distributions as
set forth herein.
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Class A-2 Certificate: Any Certificate designated as a "Class
A-2
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to distributions as
set forth herein.
Class A-3 Certificate: Any Certificate designated as a "Class
A-3
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to distributions as
set forth herein.
Class A-4 Certificate: Any Certificate designated as a "Class
A-4
Certificate" on the face thereof, in the
form of Exhibit A-4 hereto,
representing the right to distributions as
set forth herein.
Class A-5 Certificate: Any Certificate designated as a "Class
A-5
Certificate" on the face thereof, in the
form of Exhibit A-5 hereto,
representing the right to distributions as
set forth herein.
Class A-5 Applied Realized Loss Amount: With respect to any
Distribution Date and the Class A-5
Certificates, an amount equal to the
product of (x) 27.1213966707% and (y) the
excess of (i) any Class A Principal
Loss Amount for such Distribution Date over
(ii) the Class A Principal Loss
Amount (if any) for the preceding
Distribution Date not applied as a Class A-5
Applied Realized Loss Amount.
Class A-R Certificate: Any Certificate designated as a "Class
A-R
Certificate" on the face thereof, in the
form of Exhibit D or Exhibit E
hereto, representing the right to
distributions as set forth herein.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the
form of Exhibit A-11 hereto,
representing the right to distributions as
set forth herein.
Class B Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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 Certificate
Principal Balance of the Class M-1
Certificates (after taking into account
distribution of the Class M-1
Principal Distribution Amount for such
Distribution Date), (c) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account
distribution of the Class M-2 Principal
Distribution Amount for such
Distribution Date), (d) the Certificate
Principal Balance of the Class M-3
Certificates (after taking into account
distribution of the Class M-3
Principal Distribution Amount for such
Distribution Date), (e) the Certificate
Principal Balance of the Class M-4
Certificates (after taking into account
distribution of the Class M-4 Principal
Distribution Amount for such
Distribution Date), (f) the Certificate
Principal Balance of the Class M-5
Certificates (after taking into account
distribution of the Class M-5
Principal Distribution Amount for such
Distribution Date) and (g) the
Certificate Principal Balance of the Class
B Certificates immediately prior to
such Distribution Date over (ii) the lesser
of (x) 96.50% of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date minus the OC Floor;
7
<PAGE>
provided, however, that if the Class B
Certificates are the only Class of
Subordinate Certificates outstanding on
such Distribution Date, the Class B
Certificates will be entitled to receive
the entire remaining Principal
Distribution Amount until the Certificate
Principal Balance thereof is reduced
to zero.
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-6 hereto,
representing the right to distributions as
set forth herein.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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) and (b) the Certificate
Principal Balance of the Class M-1
Certificates immediately prior to such
Distribution Date, over (ii) the lesser
of (x) 70.50% of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the
aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution
Date minus the OC Floor; provided,
however, that if the Class M-1 Certificates
are the only Class of Subordinate
Certificates outstanding on such
Distribution Date, the Class M-1 Certificates
will be entitled to receive the entire
remaining Principal Distribution Amount
until the Certificate Principal Balance
thereof is reduced to zero.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the
form of Exhibit A-7 hereto,
representing the right to distributions as
set forth herein.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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 Certificate
Principal Balance of the Class M-1
Certificates (after taking into account
distribution of the Class M-1
Principal Distribution Amount for such
Distribution Date) and (c) the
Certificate Principal Balance of the Class
M-2 Certificates immediately prior
to such Distribution Date over (ii) the
lesser of (x) 76.30% of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date minus the OC Floor;
provided, however, that if the Class M-2
Certificates are the only class of
Subordinate Certificates outstanding on
such Distribution Date, the Class M-2
Certificates will be entitled to receive
the entire remaining Principal Distribution
Amount until the Certificate
Principal Balance thereof is reduced to
zero.
8
<PAGE>
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the
form of Exhibit A-8 hereto,
representing the right to distributions as
set forth herein.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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 Certificate
Principal Balance of the Class M-1
Certificates (after taking into account
distribution of the Class M-1
Principal Distribution Amount for such
Distribution Date), (c) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account
distribution of the Class M-2 Principal
Distribution Amount for such
Distribution Date) and (d) the Certificate
Principal Balance of the Class M-3
Certificates immediately prior to such
Distribution Date over (ii) the lesser
of (x) 79.80% of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the
aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution
Date minus the OC Floor; provided,
however, that if the Class M-3 Certificates
are the only Class of Subordinate
Certificates outstanding on such
Distribution Date, the Class M-3 Certificates
will be entitled to receive the entire
remaining Principal Distribution Amount
until the Certificate Principal Balance
thereof is reduced to zero.
Class M-4 Certificate: Any Certificate designated as a "Class
M-4
Certificate" on the face thereof, in the
form of Exhibit A-9 hereto,
representing the right to distributions as
set forth herein.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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 Certificate
Principal Balance of the Class M-1
Certificates (after taking into account
distribution of the Class M-1
Principal Distribution Amount for such
Distribution Date), (c) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account
distribution of the Class M-2 Principal
Distribution Amount for such
Distribution Date), (d) the Certificate
Principal Balance of the Class M-3
Certificates (after taking into account
distribution of the Class M-3
Principal Distribution Amount for such
Distribution Date) and (e) the
Certificate Principal Balance of the Class
M-4 Certificates immediately prior
to such Distribution Date over (ii) the
lesser of (x) 90.50% of the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans for such
Distribution Date minus the OC Floor;
provided, however, that if the Class M-4
Certificates are the only Class of
Subordinate Certificates outstanding on
such Distribution Date, the Class M-4
Certificates will be entitled to receive
the entire remaining Principal Distribution
Amount until the Certificate
Principal Balance thereof is reduced to
zero.
Class M-5 Certificate: Any Certificate designated as a "Class
M-5
Certificate" on the face thereof, in the
form of Exhibit A-10 hereto,
representing the right to distributions as
set forth herein.
9
<PAGE>
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) 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 Certificate
Principal Balance of the Class M-1
Certificates (after taking into account
distribution of the Class M-1
Principal Distribution Amount for such
Distribution Date), (c) the Certificate
Principal Balance of the Class M-2
Certificates (after taking into account
distribution of the Class M-2 Principal
Distribution Amount for such
Distribution Date), (d) the Certificate
Principal Balance of the Class M-3
Certificates (after taking into account
distribution of the Class M-3
Principal Distribution Amount for such
Distribution Date), (e) the Certificate
Principal Balance of the Class M-4
Certificates (after taking into account
distribution of the Class M-4 Principal
Distribution Amount for such
Distribution Date) and (f) the Certificate
Principal Balance of the Class M-5
Certificates immediately prior to such
Distribution Date over (ii) the lesser
of (x) 94.50% of the aggregate Stated
Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the
aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution
Date minus the OC Floor; provided,
however, that if the Class M-5 Certificates
are the only Class of Subordinate
Certificates outstanding on such
Distribution Date, the Class M-5 Certificates
will be entitled to receive the entire
remaining Principal Distribution Amount
until the Certificate Principal Balance
thereof is reduced to zero.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the
form of Exhibit B hereto,
representing the right to distributions as
set forth herein.
Class P Principal Distribution Date: The first Distribution
Date
that occurs after the end of the latest
Prepayment Charge Period for all
Mortgage Loans that have a Prepayment
Charge Period.
Closing Date: December 30, 2004.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Compensating Interest: With respect to the Mortgage Loans and
any
Distribution Date, an amount equal to the
lesser of (x) one-half of the
Servicing Fee for the Mortgage Loans for
the related Due Period and (y) the
aggregate Prepayment Interest Shortfalls
for such Mortgage Loans for such
Distribution Date.
Confirmation: The Confirmation with a trade date of December
27,
2004 evidencing a transaction between the
Corridor Contract Counterparty and
CHL relating to the Corridor Contract.
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.
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<PAGE>
Corridor Contract: The transaction evidenced by the related
Confirmation (as assigned to the Trustee
pursuant to the Corridor Contract
Assignment Agreement), a form of which is
attached hereto as Exhibit Q.
Corridor Contract Assignment Agreement: The assignment
agreement
dated as of the Closing Date among CHL, the
Trustee and the Corridor Contract
Counterparty, the form of which is attached
hereto as Exhibit R.
Corridor Contract Counterparty: Lehman Brothers Special
Financing
Inc., and its successors.
Corridor Contract Guarantor: Lehman Brothers Holdings Inc., and
its
successors.
Corridor Contract Guaranty: The guaranty, dated as of December
30,
2004, by the Corridor Contract Guarantor in
favor of the Trustee, a form of
which is attached hereto as Exhibit S.
Corridor Contract Termination Date: With respect to the
Corridor
Contract, the Distribution Date in
September 2011.
Co-Trustee: The Bank of New York Trust Company, N.A., a
national
banking association, not in its individual
capacity, but solely in its
capacity as co-trustee for the benefit of
the Certificateholders under this
Agreement, and any successor thereto, and
any corporation or national banking
association resulting from or surviving any
consolidation or merger to which
it or its successors may be a party.
Credit Comeback Excess Account: The separate Eligible Account
created and initially maintained by the
Trustee pursuant to Section 4.09 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
2004-14". Funds in the Credit Comeback
Excess Account shall be held in trust for
the Certificateholders for the uses
and purposes set forth in this
Agreement.
Credit Comeback Excess Cashflow: As defined in Section 4.04(d).
Credit Comeback Excess Amount: With respect to the Credit
Comeback
Loans and any Master Servicer Advance Date,
the portion of the sum of the
following (without duplication)
attributable to the excess, if any, of the
actual mortgage rate on each Credit
Comeback Loan and the Mortgage Rate on
such Credit Comeback Loan: (i) all
scheduled interest collected during the
related Due Period with respect to the
Credit Comeback Loans, (ii) all
Advances relating to interest with respect
to the Credit Comeback Loans, (iii)
all Compensating Interest with respect to
the Credit Comeback Loans and (iv)
Liquidation Proceeds with respect to the
Credit Comeback Loans collected
during the related Due Period (to the
extent such Liquidation Proceeds relate
to interest), less all Nonrecoverable
Advances relating to interest reimbursed
during the related Due Period.
11
<PAGE>
Credit Comeback Loan: Any Mortgage Loan for which the related
Mortgage Rate is subject to reduction (not
exceeding 0.375% per annum) for
good payment history of Scheduled Payments
by the related Mortgagor.
Cumulative Loss Trigger Event: With respect to a Distribution
Date
on or after the Stepdown Date the aggregate
amount of Realized Losses on the
Mortgage Loans from (and including) the
Cut-off Date for each Mortgage Loan to
(and including) the last day of the related
Due Period reduced by the
aggregate amount of any Subsequent
Recoveries received through the last day of
that Due Period exceeds the applicable
percentage, as set forth below, for
such Distribution Date, of the aggregate
Cut-off Date Principal Balance of the
Mortgage Loans:
Distribution Date
Percentage
January 2008 -- December
2008 ........ 2.50% with respect to January 2008,
plus an additional 1/12th of 1.50%
for each month thereafter
January 2009 -- December
2009 ........ 4.00% with respect to January 2009,
plus an additional 1/12th of 1.00%
for each month thereafter
January 2010 -- December
2010 ........ 5.00% with respect to January 2010,
plus an additional 1/12th of 0.25%
for each month thereafter
January 2011 and
thereafter........... 5.25%
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 Mortgage Loan, the later of
(x)
December 1, 2004 and (y) the date of
origination of such Mortgage Loan.
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
12
<PAGE>
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: The 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. The
Depositor shall deliver (or cause
delivery of) the Mortgage Files to the
Co-Trustee: (A) with respect to at
least 50% of the Mortgage Loans, not later
than the Closing Date, (B) with
respect to at least an additional 40% of
the Mortgage Loans, not later than 20
days after the Closing Date and (C) with
respect to the remaining Mortgage
Loans, not later than thirty days after the
Closing Date. To the extent that
Countrywide Home Loans, Inc. shall be in
possession of any Mortgage Files with
respect to any Delay Delivery Mortgage
Loan, until delivery to of such
Mortgage File to the Co-Trustee as provided
in Section 2.01, Countrywide Home
Loans, Inc. shall hold such files as agent
and in trust for the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by
a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to a Distribution Date on
or
after the Stepdown Date exists the Rolling
Sixty-Day Delinquency Rate equals
or exceeds the product of 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.
13
<PAGE>
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.
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 2004-14". 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 January
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
14
<PAGE>
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.
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.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum
of
(x) the amount remaining as set forth in
Section 4.04(a)(8) and (y) the amount
remaining as set forth in Section
4.04(b)(1)(D) or 4.04(b)(2)(H), as
applicable.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any
Liquidation Proceeds and Subsequent
Recoveries are in excess of the sum of (i)
the unpaid principal balance of
such Liquidated Mortgage Loan as of the
date of liquidation of such Liquidated
Mortgage Loan plus (ii) interest at the
Mortgage Rate from the Due Date as to
which interest was last paid or advanced to
Certificateholders (and not
reimbursed to the Master Servicer) up to
the Due Date in the month in which
Liquidation Proceeds are required to be
distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan
outstanding during each Due Period as
to which such interest was not paid or
advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i)
the Servicing Fee Rate and (ii) the Trustee
Fee Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the
lesser of (1) the
Overcollateralization Deficiency Amount and
(2) the Excess Cashflow and Credit
Comeback Excess Cashflow available for
payment thereof.
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.
15
<PAGE>
Fitch: Fitch, Inc.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage
Rate which is fixed for the life
of the related Mortgage and any Credit
Comeback Loans, including in each case
any Mortgage Loans delivered in replacement
thereof.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States
created and existing under Title III of
the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Gross Margin: The percentage set forth in the related Mortgage
Note
for the Adjustable Rate Mortgage Loans to
be added to the Index for use in
determining the Mortgage Rate on each
Adjustment Date, and which is set forth
in the Mortgage Loan Schedule for the
Adjustable Rate Mortgage Loans.
Index: As to any Adjustable Rate Mortgage Loan on any
Adjustment
Date related thereto, the index for the
adjustment of the Mortgage Rate set
forth as such in the related Mortgage Note,
such index in general being the
average of the London interbank offered
rates for six-month U.S. dollar
deposits in the London market, as set forth
in The Wall Street Journal, as
most recently announced as of a date 45
days prior to such Adjustment Date or,
if the Index ceases to be published in The
Wall Street Journal or becomes
unavailable for any reason, then the Index
shall be a new index selected by
the Master Servicer, based on comparable
information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan,
the first Adjustment Date following the
origination of such Mortgage Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i)
principal of the Mortgage Loans due
after the Cut-off Date and received by the
Master Servicer before the Closing
Date and not applied in computing the
Cut-off Date Principal Balance thereof
and (ii) interest on the Mortgage Loans due
after the 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 Mortgage Rate: As to each Adjustable Rate Mortgage Loan,
the
Mortgage Rate in effect prior to the
Initial Adjustment Date.
Initial Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in
the related Mortgage Note that
limits the permissible increase or decrease
in the Mortgage Rate on its
initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including
all riders and endorsements
thereto in effect with respect to such
Mortgage Loan, including any
replacement policy or policies for any
Insurance Policy.
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<PAGE>
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 and 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, December 28, 2004. With respect
to any Accrual Period for the
Interest-Bearing Certificates thereafter, the
second LIBOR Business Day preceding the
commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date, the
Interest
Remittance Amount for such Distribution
Date, less the Trustee Fee for such
Distribution Date.
Interest Remittance Amount: With respect to any Master Servicer
Advance Date, (x) the sum, without
duplication, of (i) all scheduled interest
collected during the related Due Period
(for the avoidance of doubt, other
than Credit Comeback Excess Amounts) with
respect to the Mortgage Loans less
the Servicing Fee, (ii) all interest on
prepayments received during the
related Prepayment Period, other than
Prepayment Interest Excess, (iii) all
Advances made by the Master Servicer
relating to interest for the related
Distribution Date, (iv) the Compensating
Interest for such Distribution Date,
(v) Liquidation Proceeds collected during
the related Due Period (to the
extent such Liquidation Proceeds relate to
interest) and (vi) the Seller
Shortfall Interest Requirement, less (y)
all reimbursements to the Master
Servicer during the related Due Period for
Advances of interest previously
made.
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.
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<PAGE>
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-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:
--------------------------------------------
Class
Margin (1) Margin (2)
--------------------------------------------
Class A-1..... 0.140%
0.280%
--------------------------------------------
Class A-2..... 0.270%
0.540%
--------------------------------------------
Class A-3..... 0.370%
0.740%
--------------------------------------------
Class A-4..... 0.280%
0.560%
--------------------------------------------
Class A-5..... 0.340%
0.680%
--------------------------------------------
Class M-1..... 0.510%
0.765%
--------------------------------------------
Class M-2..... 0.540%
0.810%
--------------------------------------------
Class M-3..... 0.580%
0.870%
--------------------------------------------
Class M-4..... 0.950%
1.425%
--------------------------------------------
Class M-5..... 1.100%
1.650%
--------------------------------------------
Class B....... 1.550%
2.325%
--------------------------------------------
(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.
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<PAGE>
Master Servicer Prepayment Charge Payment Amount: The amounts
(i)
payable by the Master Servicer in respect
of any Prepayment Charges waived
other than in accordance with the standard
set forth in the first sentence of
Section 3.20(a), 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 Adjustable Rate
Mortgage
Loan, the maximum rate of interest set
forth as such in the related Mortgage
Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, the minimum rate of interest set
forth as such in the related Mortgage
Note.
Modified Mortgage Loan: As defined in Section 3.12(a).
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.
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<PAGE>
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 Replacement
Mortgage Loans pursuant to the provisions
of this 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) [Reserved];
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling, (b) a two family
residential property, (c) a three family residential property, (d)
a
four family residential property, (e) planned unit development,
(f)
a low rise condominium unit, (g) a high rise condominium unit or
(h)
manufactured housing;
(xiii) a code indicating whether such Mortgage Loan is a Credit
Comeback Loan;
(xiv) [Reserved];
(xv) [Reserved];
(xvi) the purpose of the Mortgage Loan;
(xvii) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of
each Adjustment Date;
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<PAGE>
(b) the next
Adjustment Date;
(c) the Maximum
Mortgage Rate;
(d) the Minimum
Mortgage Rate;
(e) the Mortgage Rate
as of the Cut-off Date;
(f) the related
Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap; and
(g) the Gross Margin;
and
(xviii) the premium rate for any lender-paid mortgage
insurance, if applicable;
(xix) a code indicating whether the Mortgage Loan is a Fixed
Rate Mortgage Loan or an Adjustable Rate Mortgage Loan;
and
(xx) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan or a Park Monaco Mortgage Loan.
Such schedule shall also set forth the
total of the amounts described under
(vii) above for all of the Mortgage
Loans.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to the provisions
hereof 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; provided, however, the
Mortgage Rate for each Credit
Comeback Loan shall be treated for all
purposes of payments on the
Certificates, including the calculation of
the Pass-Through Rates and the Net
Rate Cap, as reduced by 0.375% on the Due
Date following the end of each of
the first four annual periods after the
origination date, irrespective of
whether the Mortgagor qualifies for the
reduction by having a good payment
history.
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<PAGE>
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, the
weighted
average Adjusted Net Mortgage Rate of the
Mortgage Loans 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.
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 Net Rate Cap, over (ii) the
amount of interest accrued on such Class at
the 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
Net Rate Cap.
NIM Insurer: Any insurer guarantying at the request of the 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 aggregate Cut-off Date
Principal Balance of the Mortgage Loans.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the
Board, the Vice Chairman of the
Board, the President, a Managing Director,
a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or
one of the Assistant Treasurers or
Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer,
signed by the President, an Executive
Vice President, a Vice President, an
Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or
Assistant
22
<PAGE>
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 2.42% 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 the
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 aggregate Cut-off Date
Principal Balance of the Mortgage Loans.
Original Value: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the
underlying Mortgaged Property, on
the lower of an appraisal satisfactory to
the Master Servicer or the sales
price of such property or, in the case of a
refinancing, on an appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered
to the Trustee for cancellation; and
23
<PAGE>
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage
Loan with a Stated Principal Balance
greater than zero that was not the
subject of a Principal Prepayment in full,
and that did not become a
Liquidated Mortgage Loan, prior to the end
of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by
which the Overcollateralization
Target Amount exceeds the
Overcollateralized Amount for such Distribution Date
(after giving effect to distributions in
respect of the Principal Remittance
Amount on such Distribution Date).
Overcollateralization Target Amount: With respect to each
Distribution Date (a) prior to the Stepdown
Date, an amount equal to 1.75% of
the Cut-off Date Principal Balance of the
Mortgage Loans and (b) on or after
the Stepdown Date, 3.50% of the aggregate
Stated Principal Balance of the
Mortgage Loans for the current Distribution
Date, subject to a minimum amount
equal to the OC Floor; provided that if a
Trigger Event is in effect on any
Distribution Date, the
Overcollateralization Target Amount will be the
Overcollateralization Target Amount as in
effect for the prior Distribution
Date.
Overcollateralized Amount: With respect to any Distribution Date
the
amount, if any, by which (x) the aggregate
Stated Principal Balance of the
Mortgage Loans for such Distribution Date
exceeds (y) the aggregate
Certificate Principal Balance of the Senior
Certificates and the Subordinate
Certificates as of such Distribution Date
(after giving effect to
distributions in respect of the Principal
Remittance Amounts on such
Distribution Date).
Ownership Interest: As to any Certificate, any ownership interest
in
such Certificate including any interest in
such Certificate as the Holder
thereof and any other interest therein,
whether direct or indirect, legal or
beneficial.
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.
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
Net Rate Cap and the related Distribution
Date.
Percentage Interest: With respect to any Adjustable Rate
Certificate, a fraction, expressed as a
percentage, the numerator of which is
the Certificate Principal Balance
represented by such Certificate and the
denominator of which is the aggregate
Certificate Principal Balance of the
related Class. With respect to the Class C,
Class P and Class A-R
24
<PAGE>
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;
(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;
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<PAGE>
(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 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
26
<PAGE>
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.
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 to any Mortgage
Loan,
the period of time during which a
Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of the Cut-off Date with respect
to
each 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;
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(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 Mortgage
Loan. 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
connection therewith (net of any
applicable Servicing Fee) representing
interest accrued for any portion of
such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the
subject of a partial Principal
Prepayment or a Principal Prepayment in
full during the period from the
beginning of the related Prepayment Period
to the Due Date in such Prepayment
Period (other than a Principal Prepayment
in full resulting from the purchase
of a Mortgage Loan pursuant to Section
2.02, 2.03, 2.04, 3.12 or 9.01 hereof)
and for each Mortgage Loan that became a
Liquidated Mortgage Loan during the
related Due Period, the amount, if any, by
which (i) one month's interest at
the applicable Net Mortgage Rate on the
Stated Principal Balance of such
Mortgage Loan immediately prior to such
prepayment (or liquidation) or in the
case of a partial Principal Prepayment on
the amount of such prepayment (or
Liquidation Proceeds) exceeds (ii) the
amount of interest paid or collected in
connection with such Principal Prepayment
or such Liquidation Proceeds.
Prepayment Period: As to any Distribution Date and related Due
Date,
the period beginning with the opening of
business on the sixteenth day of the
calendar month preceding the month in which
such Distribution Date occurs (or,
with respect to the first Distribution
Date, the period beginning on December
1, 2004) 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, the sum of (i) the Principal
Remittance Amount for such Distribution
Date and (ii) the Extra Principal
Distribution Amount for such Distribution
Date.
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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 Remittance Amount: With respect to any Distribution
Date,
(a) the sum, without duplication, of: (i)
the scheduled principal collected
with respect to the Mortgage Loans during
the related Due Period or advanced
on or before 1:00 p.m. Pacific time on the
related Master Servicer Advance
Date, (ii) Principal Prepayments collected
in the related Prepayment Period
with respect to the Mortgage Loans, (iii)
the Stated Principal Balance of each
Mortgage Loan that was repurchased by a
Seller or purchased by the Master
Servicer with respect to such Distribution
Date, (iv) the amount, if any, by
which the aggregate unpaid principal
balance of any Replacement Mortgage Loans
is less than the aggregate unpaid principal
balance of any Deleted Mortgage
Loans delivered by the Sellers in
connection with a substitution of a Mortgage
Loan, and (v) all Liquidation Proceeds (to
the extent such Liquidation
Proceeds related to principal) and
Subsequent Recoveries collected during the
related Due Period; less (b) all
Nonrecoverable Advances relating to principal
and certain expenses reimbursable pursuant
to Section 6.03 and reimbursed
during the related Due Period.
Principal Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 3.08 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 2004-14". 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 Supplement: The Prospectus Supplement dated December
15,
2004, 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,
2.04 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
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paid by the Mortgagor (or, if such purchase
or repurchase, as the case may be,
is effected by the Master Servicer, the
date through which interest was last
advanced and not reimbursed by the Master
Servicer) to (b) the Due Date in the
month in which the Purchase Price is to be
distributed to Certificateholders
and (iii) any costs, expenses and damages
incurred by the Trust Fund resulting
from any violation of any predatory or
abusive lending law in connection with
such Mortgage Loan.
Rating Agency: Each of S&P and Moody's. 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
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one month in amounts approximately equal to
the aggregate Certificate
Principal Balance of the Interest-Bearing
Certificates on such Interest
Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A.,
provided that if any of the foregoing banks
are not suitable to serve as a
Reference Bank, then any leading banks
selected by the Trustee which are
engaged in transactions in Eurodollar
deposits in the international
Eurocurrency market (i) with an established
place of business in London,
England, (ii) not controlling, under the
control of or under common control
with the Depositor, CHL or the Master
Servicer and (iii) which have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an
existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Relief Act: The Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits
which appear at section 860A
through 860G of Subchapter M of Chapter 1
of the Code, and related provisions,
and regulations and rulings promulgated
thereunder, as the foregoing may be in
effect from time to time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM
Insurer in accordance with Section 4.04.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of
foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller
for a Deleted Mortgage Loan which must, on
the date of such substitution, as
confirmed in a Request for File Release,
(i) have a Stated Principal Balance,
after deduction of the principal portion of
the Scheduled Payment due in the
month of substitution, not in excess of,
and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) with respect to any
Adjustable Rate Mortgage Loan: (a) have a
Maximum Mortgage Rate no more than
1% per annum higher or lower than the
Maximum Mortgage Rate of the Deleted
Mortgage Loan; (b) have a Minimum Mortgage
Rate no more than 1% per annum
higher or lower than the Minimum Mortgage
Rate of the Deleted Mortgage Loan;
(c) have the same Index and intervals
between Adjustment Dates as that of the
Deleted Mortgage Loan; (d) have a Gross
Margin not more than 1% per annum
higher or lower than that of the Deleted
Mortgage Loan; and (e) have an
Initial Periodic Rate Cap and a Subsequent
Periodic Rate Cap each not more
than 1% lower than that of the Deleted
Mortgage Loan; (iii) have the same or
higher credit quality characteristics than
that of the Deleted Mortgage Loan;
(iv) be accruing interest at a rate not
more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; (v)
have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage
Loan; (vi) have a remaining term to
maturity not greater than (and not more
than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit
conversion of the Mortgage Rate from a
fixed rate to a variable rate or vice
versa; (viii) provide for a Prepayment
Charge on terms substantially similar to
those of the Prepayment Charge, if
any, of
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the Deleted Mortgage Loan; (ix) constitute
the same occupancy type and lien
priority as the Deleted Mortgage Loan; and
(x) comply with each representation
and warranty set forth in Section 2.03 as
of the date of substitution;
provided, however, that notwithstanding the
foregoing, to the extent that
compliance with clause (x) of this
definition would cause a proposed
Replacement Mortgage Loan to fail to comply
with one or more of clauses (i),
(ii), (iv), (viii) and/or (ix) of this
definition, then such proposed
Replacement Mortgage Loan need not comply
with one or more of clauses (i),
(ii), (iv), (viii) and/or (ix) to the
extent, and only to the extent,
necessary to assure that the Replacement
Mortgage Loan otherwise complies with
clause (x).
Representing Party: As defined in Section 2.03(d).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the
Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted
by
the Master Servicer to the Co-Trustee,
substantially in the form of Exhibit N.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be
maintained from time to time under
this Agreement.
Required Secondary Carryover Reserve Fund Deposit: With respect
to
any Distribution Date, an amount equal to
the excess of (i) $10,000 over (ii)
the amount of funds on deposit in the
Carryover Reserve Fund.
Responsible Officer: When used with respect to the Trustee, any
Vice
President, any Assistant Vice President,
the Secretary, any Assistant
Secretary, any Trust Officer or any other
officer of the Trustee customarily
performing functions similar to those
performed by any of the above designated
officers and also to whom, with respect to
a particular matter, such matter is
referred because of such officer's
knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution
Date on or after the Stepdown Date, the
average of the Sixty-Day Delinquency
Rates for such Distribution Date and the
two immediately preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
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 with respect to such
Mortgage Loan and (ii) any reduction in the
amount of interest collectible
from the related Mortgagor pursuant to the
Relief Act; (b) without giving
effect to any extension
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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, and Park Monaco, in its
capacity as seller of the Park Monaco
Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the
Master
Servicer Advance Date in January 2005, the
product of (1) the excess of the
aggregate Stated Principal Balance of the
Mortgage Loans owned by the Trust
Fund at the Cut-off Date, over the
aggregate Stated Principal Balance of the
Mortgage Loans 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 the Mortgage Loans
(weighted on the basis of the Stated
Principal Balances thereof for such
Distribution Date) and the denominator of
which is 12.
Senior Certificates: The Class A and Class A-R Certificates.
Senior Enhancement Percentage: With respect to a Distribution
Date
on and 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 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
preceding 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
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<PAGE>
appear on a list of servicing officers
furnished to the Trustee by the Master
Servicer on the Closing Date pursuant to
this Agreement, as such list may from
time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date
on
or after the Stepdown Date, a fraction,
expressed as a percentage, the
numerator of which is the aggregate Stated
Principal Balance for such
Distribution Date of all Mortgage Loans 60
or more days delinquent as of the
close of business on the last day of the
calendar month preceding such
Distribution Date (including Mortgage Loans
in foreclosure, bankruptcy and REO
Properties) and the denominator of which is
the aggregate Stated Principal
Balance for such Distribution Date of all
Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off
Date, the unpaid principal balance
of the Mortgage Loan as of such date
(before any adjustment to the
amortization schedule for any moratorium or
similar waiver or grace period),
after giving effect to any partial
prepayments or Liquidation Proceeds
received prior to such date and to the
payment of principal due on or prior to
such date and irrespective any delinquency
in payment by the related
Mortgagor, and (ii) as of any other
Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments
(x) due with respect to such
Mortgage Loan during each Due Period ending
prior to such Distribution Date
and (y) that were received by the Master
Servicer as of the close of business
on the Determination Date related to such
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.
Stepdown Date: The earlier to occur of (i) the Distribution Date
on
which the aggregate Certificate Principal
Balance of the Senior Certificates
is reduced to zero, and (ii) the later to
occur of (x) the Distribution Date
in January 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
64.20% of the aggregate Stated Principal
Balance of the Mortgage Loans for
such Distribution Date.
Subordinate 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 Senior Certificates
and the Subordinate Certificates (after all
distributions of principal on such
Distribution Date) exceeds the Stated
Principal Balance of the Mortgage Loans
for such Distribution Date.
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Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class B
Certificates.
Subordinate Component Balance: With respect to any Distribution
Date, the excess of the principal balance
of the Mortgage Loans 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 A Certificates immediately
prior to such Distribution Date.
Subsequent Periodic Rate Cap: With respect to each Adjustable
Rate
Mortgage Loan, the percentage specified in
the related Mortgage Note that
limits permissible increases and decreases
in the Mortgage Rate on any
Adjustment Date (other than the initial
Adjustment Date).
Subsequent Recoveries: As to any Distribution Date, with respect
to
a Liquidated Mortgage Loan that resulted in
a Realized Loss in a prior
calendar month, unexpected amounts received
by the Master Servicer (net of any
related expenses permitted to be reimbursed
pursuant to Section 3.08 and 3.12)
specifically related to such Liquidated
Mortgage Loan after the classification
of such Mortgage Loan as a Liquidated
Mortgage Loan.
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(d).
Substitution Amount: With respect to any Mortgage Loan
substituted
pursuant to Section 2.03(d), the excess of
(x) the principal balance of the
Mortgage Loan that is substituted for, over
(y) the principal balance of the
related substitute Mortgage Loan, each
balance being determined as of the date
of substitution.
Tax Matters Person: The person designated as "tax matters person"
in
the manner provided under Treasury
regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T.
Initially, this person shall be the
Trustee.
Tax Matters Person Certificate: With respect to the Master
REMIC,
REMIC 1 and REMIC 2, the Class A-R
Certificate with a Denomination of $0.05
and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
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.
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Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to a Distribution Date on or after
the
Stepdown Date, consists of either a
Delinquency Trigger Event with respect to
that Distribution Date or a Cumulative Loss
Trigger Event with respect to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and
principal received on or with
respect thereto after the Cut-off Date to
the extent not applied in computing
the Cut-off Date Principal Balance thereof,
exclusive of interest not required
to be deposited in the Certificate Account
pursuant to Section 3.05(b)(2);
(ii) the Certificate Account, the
Distribution Account, the Principal Reserve
Fund, the Carryover Reserve Fund, the
Credit Comeback Excess Account and all
amounts deposited therein pursuant to the
applicable provisions of this
Agreement; (iii) the Corridor Contract and
the Corridor Contract Guaranty;
(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.
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 Pool Stated Principal
Balance.
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.
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Underwriters: Countrywide Securities Corporation, Barclays
Capital
Inc. and Goldman, Sachs & Co.
Unpaid Realized Loss Amount: For any Class of Class A-5
Certificates
or Subordinate Certificates and any
Distribution Date, (x) the portion of the
aggregate Applied Realized Loss Amount
previously allocated to that Class
remaining unpaid from prior Distribution
Dates minus (y) any increase in the
Certificate Principal Balance of that Class
due to the allocation of
Subsequent Recoveries to the Certificate
Principal Balance of that Class
pursuant to Section 4.04(i).
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,
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
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the applicable Mortgage Loans, including
all interest and principal received
and receivable by such Seller on or with
respect to applicable Mortgage Loans
after the 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 Mortgage
Loans on or prior to the Cut-off Date
and interest accruing prior to the Cut-off
Date. The Master Servicer confirms
that, on behalf of the Sellers,
concurrently with the transfer and assignment,
it or the other Seller has deposited into
the Certificate Account the Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to
in
the preceding paragraph, the Depositor
sells, transfers, assigns, sets over
and otherwise conveys to the Trustee for
benefit of the Certificateholders,
without recourse, all right title and
interest in the Mortgage Loans.
CHL further agrees 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 Trustee on behalf of the
Trust Fund, on the terms and
conditions set forth in the Corridor
Contract Assignment Agreement.
(b) [Reserved].
(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).
(d) [Reserved].
(e) [Reserved].
(f) [Reserved].
(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):
(i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse,
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 applicable
Seller,
or, if the
original Mortgage Note has been lost or destroyed
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and not replaced, an original lost note affidavit from the
applicable Seller, 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 2004-14, CWABS, Inc., by The
Bank
of New York, a New York banking corporation, as trustee under
the
Pooling and Servicing Agreement dated as of December 1, 2004,
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 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
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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 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
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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) either Seller, the
Depositor or 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
the 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 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, 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 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,
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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, 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.
The Trust Fund will not acquire or hold any Mortgage Loan that
would
violate the representations made by CHL in
Section 2.03(b)(70) or (76).
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 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 Mortgage Loan
listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full
or any 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 Mortgage
Loan that is not a MERS Mortgage Loan, the
documents described in Section
2.01(g)(iii) with respect to such 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 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 Mortgage Loan
listed in the Mortgage Loan Schedule (other
than any Mortgage Loan paid in
full or any 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 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
Mortgage Loan, and (ii) the information set
forth in items (i), (iv), (v),
(vi), (viii), (ix) and (xvii) of the
definition of the "Mortgage Loan
Schedule" accurately reflects information
set forth in the Mortgage File. On
or before the thirtieth (30th) day after
the Closing Date (or if such
thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee
shall deliver to the Depositor, the Master
Servicer and CHL (on behalf of each
Seller) a Delay Delivery Certification with
respect to the 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
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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 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
Mortgage Loans to determine that such
Mortgage File contains the following
documents:
(i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse,
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 such Seller, or, if
the
original Mortgage Note has been lost or destroyed and not
replaced,
an original lost note affidavit from such Seller, 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 Mortgage Loan that is a 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 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 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);
(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
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(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 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 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 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 Mortgage Loan shall be
deposited by CHL in the Certificate Account
and, upon receipt of such deposit
and Request for File Release, 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 Mortgage Loan
released pursuant hereto. If pursuant
to the foregoing provisions CHL repurchases
a 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 constitute the
sole remedy respecting such defect
available to the Trustee, the Co-Trustee,
the Depositor and any
Certificateholder against either
Seller.
It is understood and agreed that the obligation of CHL to
substitute
for or to purchase, pursuant to Section
2.02(a), any 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
either Seller.
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Section 2.03 Representations, Warranties and Covenants of the
Master
Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of
the date hereof with respect to
the Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and
is validly existing and in good standing under the laws
of the State of
Texas and is duly authorized and qualified to transact
any and all
business contemplated by this Agreement to be conducted by
the Master
Servicer in any state in which a Mortgaged Property is located
or is otherwise
not required under applicable law to effect such
qualification
and, in any event, is in compliance with the doing business
laws of any such
state, to the extent necessary to ensure its ability to
enforce each
Mortgage Loan, to service the Mortgage Loans in accordance
with the terms
of this Agreement and to perform any of its other
obligations
under this Agreement in accordance with the terms hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and
service each Mortgage Loan, and to execute, deliver
and perform, and
to enter into and consummate the transactions
contemplated by
this Agreement and has duly authorized by all necessary
partnership
action on the part of the Master Servicer the execution,
delivery and
performance of this Agreement; and this Agreement, assuming
the due
authorization, execution and delivery hereof by the other
parties
hereto,
constitutes a legal, valid and binding obligation of the Master
Servicer,
enforceable against the Master Servicer in accordance with its
terms, except
that (a) the enforceability hereof may be limited by
bankruptcy,
insolvency, moratorium, receivership and other similar laws
relating to
creditors' rights generally and (b) the remedy of specific
performance and
injunctive and other forms of equitable relief may be
subject to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by the Master
Servicer, the
servicing of the Mortgage Loans by the Master Servicer
under this
Agreement, the consummation of any other of the transactions
contemplated by
this Agreement, and the fulfillment of or compliance with
the terms hereof
are in the ordinary course of business of the Master
Servicer and
will not (A) result in a material breach of any term or
provision of the
certificate of limited partnership, partnership
agreement or
other organizational document of the Master Servicer or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or result in a material default under, the terms of any
other material
agreement or instrument to which the Master Servicer is a
party or by
which it may be bound, or (C) constitute a material violation
of any statute,
order or regulation applicable to the Master Servicer of
any court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Master Servicer; and the Master Servicer
is
not in breach or
violation of any material indenture or other material
agreement or
instrument, or in violation of any statute, order or
regulation of
any court, regulatory body, administrative agency or
governmental
body
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having
jurisdiction over it which breach or violation may materially
impair the
Master Servicer's ability to perform or meet any of its
obligations
under this Agreement.
(4) The Master Servicer is an approved servicer of conventional
mortgage loans
for Fannie Mae and Freddie Mac and is a mortgagee approved
by the Secretary
of Housing and Urban Development pursuant to sections
203 and 211 of
the National Housing Act.
(5) No litigation is pending or, to the best of the Master
Servicer's
knowledge, threatened, against the Master Servicer that would
materially and
adversely affect the execution, delivery or enforceability
of this
Agreement or the ability of the Master Servicer to service the
Mortgage Loans
or to perform any of its other obligations under this
Agreement in accordance with
the terms hereof.
(6) No consent, approval, authorization or order of any court
or governmental
agency or body is required for the execution, delivery
and performance
by the Master Servicer of, or compliance by the Master
Servicer with,
this Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or
order is
required, the Master Servicer has obtained the same.
(7) The Master
Servicer is a member of MERS in good standing,
and will comply
in all material respects with the rules and procedures of
MERS in
connection with the servicing of the Mortgage Loans for as long
as such Mortgage
Loans are registered with MERS.
(b) CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Cut-off Date
(unless otherwise indicated or the
context otherwise requires, percentages
with respect to the Mortgage Loans in
the Trust Fund are measured by the Cut-off
Date Principal Balance of the
Mortgage Loans in the Trust Fund):
(1) CHL is duly organized as a New York corporation and is
validly existing
and in good standing under the laws of the State of New
York and is duly
authorized and qualified to transact any and all
business
contemplated by this Agreement to be conducted by CHL in any
state in which a
Mortgaged Property is located or is otherwise not
required under
applicable law to effect such qualification and, in any
event, is in
compliance with the doing business laws of any such state,
to the extent
necessary to ensure its ability to enforce each Mortgage
Loan, to sell
the CHL Mortgage Loans in accordance with the terms of this
Agreement and to
perform any of its other obligations under this
Agreement in
accordance with the terms hereof.
(2) CHL has the full corporate power and authority to sell each
CHL Mortgage
Loan, and to execute, deliver and perform, and to enter into
and consummate
the transactions contemplated by this Agreement and has
duly authorized
by all necessary corporate action on the part of CHL the
execution,
delivery and performance of this Agreement; and this
Agreement,
assuming the due authorization, execution and delivery hereof
by the other
parties hereto, constitutes a legal, valid and binding
obligation of
CHL, enforceable against CHL in accordance with its terms,
except that (a)
the
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enforceability
hereof may be limited by bankruptcy, insolvency,
moratorium,
receivership and other similar laws relating to creditors'
rights generally
and (b) the remedy of specific performance and
injunctive and
other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought.
(3) The execution and delivery of this Agreement by CHL, the
sale of the CHL
Mortgage Loans by CHL under this Agreement, the
consummation of
any other of the transactions contemplated by this
Agreement, and
the fulfillment of or compliance with the terms hereof and
thereof are in
the ordinary course of business of CHL and will not (A)
result in a
material breach of any term or provision of the charter or
by-laws of CHL
or (B) materially conflict with, result in a material
breach,
violation or acceleration of, or result in a material default
under, the terms
of any other material agreement or instrument to which
CHL is a party
or by which it may be bound, or (C) constitute a material
violation of any
statute, order or regulation applicable to CHL of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction
over CHL; and CHL is not in breach or violation of any
material
indenture or other material agreement or instrument, or in
violation of any
statute, order or regulation of any court, regulatory
body,
administrative agency or governmental body having jurisdiction
over
it which breach
or violation may materially impair CHL's ability to
perform or meet
any of its obligations under this Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for Fannie Mae
and Freddie Mac and is a mortgagee approved by the
Secretary of
Housing and Urban Development pursuant to sections 203 and
211 of the
National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge,
threatened, against CHL that would materially and adversely
affect the
execution, delivery or enforceability of this Agreement or the
ability of CHL
to sell the CHL Mortgage Loans or to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof.
(6) No consent, approval, authorization or order of any court
or governmental
agency or body is required for the execution, delivery
and performance
by CHL of, or compliance by CHL with, this Agreement or
the consummation
of the transactions contemplated hereby, or if any such
consent,
approval, authorization or order is required, CHL has obtained
the same.
(7) The information set forth on Exhibit F-1 hereto with
respect to each
Mortgage Loan is true and correct in all material
respects as of
the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the Depositor as
a sale of the CHL Mortgage Loans for all tax, accounting
and regulatory
purposes.
(9) None of the Mortgage Loans is delinquent in payment of
principal and
interest.
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(10) No Mortgage Loan that is secured by a first lien on the
related
Mortgaged Property had a Loan-to-Value Ratio at origination in
excess of
100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
first lien on
the related Mortgaged Property subject only to (1) the lien
of
non-delinquent current real property taxes and assessments, (2)
covenants,
conditions and restrictions, rights of way, easements and
other matters of
public record as of the date of recording of such
Mortgage, such
exceptions appearing of record being acceptable to
mortgage lending
institutions generally or specifically reflected in the
appraisal made
in connection with the origination of the related Mortgage
Loan and (3)
other matters to which like properties are commonly subject
that do not
materially interfere with the benefits of the security
intended to be
provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL Mortgage
Loan to the
Depositor, CHL had good title to, and was the sole owner of,
such CHL
Mortgage Loan free and clear of any pledge, lien, encumbrance
or
security
interest and had full right and authority, subject to no
interest or
participation of, or agreement with, any other party, to sell
and assign the
same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged
Property.
(14) There is no valid offset, claim, defense or counterclaim
to any Mortgage
Note or Mortgage, including the obligation of the
Mortgagor to pay
the unpaid principal of or interest on such Mortgage
Note.
(15) There are no mechanics' liens or claims for work, labor or
material
affecting any Mortgaged Property that are or may be a lien
prior
to, or equal
with, the lien of such Mortgage, except those that are
insured against
by the title insurance policy referred to in item (18)
below.
(16) As of the Closing Date, to the best of CHL's knowledge,
each Mortgaged
Property is free of material damage and is in good repair.
(17) As of the Closing Date, neither CHL nor any prior holder
of any Mortgage
has modified the Mortgage in any material respect (except
that a Mortgage
Loan may have been modified by a written instrument that
has been
recorded or submitted for recordation, if necessary, to protect
the interests of
the Certificateholders and the original or a copy of
which has been
delivered to the Trustee); satisfied, cancelled or
subordinated
such Mortgage in whole or in part; released the related
Mortgaged
Property in whole or in part from the lien of such Mortgage; or
executed any
instrument of release, cancellation, modification (except as
expressly
permitted above) or satisfaction with respect thereto.
(18) A lender's policy of title insurance together with a
condominium
endorsement and extended coverage endorsement, if applicable,
in an amount at
least equal to the Cut-off Date Principal Balance of each
such Mortgage
Loan or a commitment (binder) to issue the same was
effective on the
date of the origination of
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<PAGE>
each Mortgage
Loan, each such policy is valid and remains in full force
and effect, and
each such policy was issued by a title insurer qualified
to do business
in the jurisdiction where the Mortgaged Property is
located and
acceptable to Fannie Mae and Freddie Mac and is in a form
acceptable to
Fannie Mae and Freddie Mac, which policy insures the
Sellers and
successor owners of indebtedness secured by the insured
Mortgage, as to
the first priority lien, of the Mortgage subject to the
exceptions set
forth in paragraph (11) above; to the best of CHL's
knowledge, no
claims have been made under such mortgage title insurance
policy and no
prior holder of the related Mortgage, including either
Seller, has
done, by act or omission, anything that would impair the
coverage of such
mortgage title insurance policy.
(19) No Mortgage Loan was the subject of a Principal Prepayment
in full between
the Closing Date and the Cut-off Date.
(20) To the best of CHL's knowledge, all of the improvements
that were
included for the purpose of determining the Appraised Value of
the Mortgaged
Property lie wholly within the boundaries and building
restriction
lines of such property, and no improvements on adjoining
properties
encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on
or being part of
the Mortgaged Property is in violation of any applicable
zoning law or
regulation. To the best of CHL's knowledge, all
inspections,
licenses and certificates required to be made or issued with
respect to all
occupied portions of the Mortgaged Property and, with
respect to the
use and occupancy of the same, including but not limited
to certificates
of occupancy and fire underwriting certificates, have
been made or
obtained from the appropriate authorities, unless the lack
thereof would
not have a material adverse effect on the value of such
Mortgaged
Property, and the Mortgaged Property is lawfully occupied under
applicable
law.
(22) The Mortgage Note and the related Mortgage are genuine,
and each is the
legal, valid and binding obligation of the maker thereof,
enforceable in
accordance with its terms and under applicable law, except
that (a) the
enforceability thereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance
and injunctive
and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought. To the best of CHL's knowledge, all
parties to the
Mortgage Note and the Mortgage had legal capacity to
execute the
Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have
been duly and properly executed by such parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there
is no requirement for future advances thereunder, and
any and all requirements as
to completion of any on-site or off-site
improvements and
as to disbursements of any escrow funds therefor have
been complied
with. All costs, fees and expenses incurred in making, or
closing or
recording the Mortgage Loan were paid.
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<PAGE>
(24) The related Mortgage contains customary and enforceable
provisions that
render the rights and remedies of the holder thereof
adequate for the
realization against the Mortgaged Property of the
benefits of the
security, including, (i) in the case of a Mortgage
designated as a
deed of trust, by trustee's sale, and (ii) otherwise by
judicial
foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a
trustee, duly qualified under applicable law to serve as such,
has been
properly designated and currently so serves and is named in
such
Mortgage, and no
fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except
in
connection with
a trustee's sale after default by the Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable in form
to Fannie Mae
and Freddie Mac.
(27) There exist no deficiencies with respect to escrow
deposits and
payments, if such are required, for which customary
arrangements for
repayment thereof have not been made, and no escrow
deposits or
payments of other charges or payments due the Sellers have
been capitalized
under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and collection
practices with
respect to each Mortgage Loan have been in all respects
legal, proper,
prudent and customary in the mortgage lending and
servicing
business, as conducted by prudent lending institutions which
service mortgage
loans of the same type in the jurisdiction in which the
Mortgaged
Property is located.
(29) There is no pledged account or other security other than
real estate
securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent
interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in the
Collateral
Schedule of the Mortgage Loans are secured by single family
detached
dwellings. No more than approximately the percentage specified
in the
Collateral Schedule of the Mortgage Loans are secured by two-
to
four-family
dwellings. No more than approximately the percentage
specified in the
Collateral Schedule of the Mortgage Loans are secured by
low-rise
condominium units. No more than approximately the percentage
specified in the
Collateral Schedule of the Mortgage Loans are secured by
high-rise
condominium units. No more than approximately the percentage
specified in the
Collateral Schedule of the Mortgage Loans are secured by
manufactured
housing. No more than approximately the percentage specified
in the
Collateral Schedule of the Mortgage Loans are secured by PUDs.
(33) Each Mortgage Loan was originated on or after the date
specified in the
Collateral Schedule.
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<PAGE>
(34) Each Mortgage Loan that is an Adjustable Rate Mortgage
Loan, other than
a Two-Year Hybrid Mortgage Loan or a Three-Year Hybrid
Mortgage Loan,
had an initial Adjustment Date no later than the
applicable date
specified on the Collateral Schedule; each Mortgage Loan
that is a
Two-Year Hybrid Mortgage Loan had an initial Adjustment Date no
later than the
applicable date specified on the Collateral Schedule; and
each Mortgage
Loan that is a Three-Year Hybrid Mortgage Loan had an
initial
Adjustment Date no later than the applicable date specified on
the Collateral
Schedule.
(35) Approximately the percentage specified in the Collateral
Schedule of the
Mortgage Loans provide for a prepayment penalty.
(36) On the basis of representations made by the Mortgagors in
their loan
applications, no more than approximately the percentage
specified in the
Collateral Schedule of the Mortgage Loans are secured by
investor
properties, and no less than approximately the percentage
specified in the
Collateral Schedule of the Mortgage Loans are secured by
owner-occupied
Mortgaged Properties that are primary residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are
covered by a valid and existing hazard insurance policy with
a generally
acceptable carrier that provides for fire and extended
coverage and
coverage for such other hazards as are customary in the area
where the
Mortgaged Property is located in an amount that is at least
equal to the lesser of (i) the
maximum insurable value of the
improvements
securing such Mortgage Loan or (ii) the greater of (a) the
outstanding
principal balance of the Mortgage Loan and (b) an amount such
that the
proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or
the mortgagee from becoming a co-insurer. If the
Mortgaged
Property is a condominium unit, it is included under the
coverage
afforded by a blanket policy for the condominium unit. All such
individual
insurance policies and all flood policies referred to in item
(38) below
contain a standard mortgagee clause naming the applicable
Seller or the
original mortgagee, and its successors in interest, as
mortgagee, and
the applicable Seller has received no notice that any
premiums due and
payable thereon have not been paid; the Mortgage
obligates the
Mortgagor thereunder to maintain all such insurance,
including flood
insurance, at the Mortgagor's cost and expense, and upon
the Mortgagor's
failure to do so, authorizes the holder of the Mortgage
to obtain and
maintain such insurance at the Mortgagor's cost and expense
and to seek
reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in the
Federal Register
by the Federal Emergency Management Agency as having
special flood
hazards, a flood insurance policy in a form meeting the
requirements of
the current guidelines of the Flood Insurance
Administration
is in effect with respect to such Mortgaged Property with
a generally
acceptable carrier in an amount representing coverage not
less than the
least of (A) the original outstanding principal balance of
the Mortgage
Loan, (B) the minimum amount required to compensate for
damage or loss
on a replacement cost basis, or (C) the maximum amount of
insurance that
is available under the Flood Disaster Protection Act of
1973, as
amended.
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<PAGE>
(39) To the best of CHL's knowledge, there is no proceeding
occurring,
pending or threatened for the total or partial condemnation of
the Mortgaged
Property.
(40) There is no material monetary default existing under any
Mortgage or the
related Mortgage Note and, to the best of CHL's
knowledge, there
is no material event that, with the passage of time or
with notice and
the expiration of any grace or cure period, would
constitute a default,
breach, violation or event of acceleration under
the Mortgage or
the related Mortgage Note; and neither Seller has waived
any default,
breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family
residential dwelling, including condominium units and
dwelling units
in PUDs. To the best of CHL's knowledge, no improvement to
a Mortgaged
Property includes a cooperative or a mobile home or
constitutes
other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been
consolidated with the outstanding principal amount secured by
the
Mortgage, and
the secured principal amount, as consolidated, bears a
single interest
rate and single repayment term reflected on the Mortgage
Loan Schedule.
The consolidated principal amount does not exceed the
original
principal amount of the Mortgage Loan. The Mortgage Note does
not permit or
obligate the Master Servicer to make future advances to the
Mortgagor at the
option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and
municipal charges, leasehold payments or ground rents
that previously
became due and owing have been paid, or an escrow of
funds has been
established in an amount sufficient to pay for every such
item that
remains unpaid and that has been assessed, but is not yet due
and payable.
Except for (A) payments in the nature of escrow payments,
and (B) interest
accruing from the date of the Mortgage Note or date of
disbursement of
the Mortgage proceeds, whichever is later, to the day
that precedes by
one month the Due Date of the first installment of
principal and
interest, including without limitation, taxes and insurance
payments, the
Master Servicer has not advanced funds, or induced,
solicited or
knowingly received any advance of funds by a party other
than the
Mortgagor, directly or indirectly, for the payment of any
amount
required by the
Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all material
respects in accordance with CHL's underwriting guidelines
for credit
blemished quality mortgage loans or, with respect to Mortgage
Loans purchased
by CHL were underwritten in all material respects in
accordance with customary and
prudent underwriting guidelines generally
used by
originators of credit blemished quality mortgage loans.
(46) Prior to the approval of the Mortgage Loan application, an
appraisal of the
related Mortgaged Property was obtained from a qualified
appraiser,
duly
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<PAGE>
appointed by the
originator, who had no interest, direct or indirect, in
the Mortgaged
Property or in any loan made on the security thereof, and
whose
compensation is not affected by the approval or disapproval of
the
Mortgage Loan;
such appraisal is in a form acceptable to Fannie Mae and
Freddie Mac.
(47) None of the Mortgage Loans is a graduated payment mortgage
loan or a
growing equity mortgage loan, and no Mortgage Loan is subject
to a buydown or
similar arrangement.
(48) The Mortgage Rates borne by the Mortgage Loans as of the
Cut-off Date
ranged between the approximate per annum percentages
specified on the
Collateral Schedule and the weighted average Mortgage
Rate as of the
Cut-off Date was approximately the per annum rate
specified on the
Collateral Schedule.
(49) [Reserved].
(50) The Mortgage Loans were selected from among the
outstanding one-
to four-family mortgage loans in the applicable Seller's
portfolio at the
Closing Date as to which the representations and
warranties made
as to the Mortgage Loans set forth in this Sections
2.03(b) and
2.03(c) can be made. No selection was made in a manner that
would adversely
affect the interests of Certificateholders.
(51) The Gross Margins on the Mortgage Loans that are
Adjustable Rate
Mortgage Loans range between the approximate percentages
specified on the
Collateral Schedule, and the weighted average Gross
Margin was
approximately the percentage specified in the Collateral
Schedule.
(52) Each of the Mortgage Loans in the Mortgage Pool has a Due
Date on or
before the date specified in the Collateral Schedule.
(53) The Mortgage Loans, individually and in the aggregate,
conform in all
material respects to the descriptions thereof in the
Prospectus
Supplement.
(54) There is no obligation on the part of either Seller under
the terms of the
Mortgage or related Mortgage Note to make payments in
addition to
those made by the Mortgagor.
(55) Any leasehold estate securing a Mortgage Loan has a term
of not less than
five years in excess of the term of the related Mortgage
Loan.
(56) Each Mortgage Loan represents a "qualified mortgage"
within the
meaning of Section 860(a)(3) of the Code (but without regard
to the rule in
Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective
obligation as a qualified mortgage, or any substantially
similar
successor provision) and applicable Treasury regulations
promulgated
thereunder.
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(57) No Mortgage Loan was either a "consumer credit contract"
or a "purchase
money loan" as such terms are defined in 16 C.F.R. ss. 433
nor is any
Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(58) To the extent required under applicable law, each
originator and
subsequent mortgagee or servicer of the Mortgage Loan
complied with
all licensing requirements and was authorized to transact
and do business
in the jurisdiction in which the related Mortgaged
Property is
located at all times when it held or serviced the Mortgage
Loan. Any and
all requirements of any federal, state or local laws or
regulations,
including, without limitation, usury, truth-in-lending, real
estate
settlement procedures, consumer credit protection,
anti-predatory
lending, fair
credit reporting, unfair collection practice, equal credit
opportunity,
fair housing and disclosure laws and regulations, applicable
to the
solicitation, origination, collection and servicing of such
Mortgage Loan
have been complied with in all material respects; and any
obligations of
the holder of the Mortgage Note, Mortgage and other loan
documents have
been complied with in all material respects; servicing of
each Mortgage
Loan has been in accordance with prudent mortgage servicing
standards, any
applicable laws, rules and regulations and in accordance
with the terms
of the Mortgage Notes, Mortgage and other loan documents,
whether such
origination and servicing was done by the applicable Seller,
its affiliates,
or any third party which originated the Mortgage Loan on
behalf of, or
sold the Mortgage Loan to, any of them, or any servicing
agent of any of
the foregoing;
(59) The methodology used in underwriting the extension of
credit for the
Mortgage Loan employs objective mathematical principles
which relate the
borrower's income, assets and liabilities to the
proposed payment
and such underwriting methodology does not rely on the
extent of the
borrower's equity in the collateral as the principal
determining
factor in approving such credit extension. Such underwriting
methodology
confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to
make
timely payments
on the Mortgage Loan;
(60) No borrower was required to purchase any credit life,
disability,
accident or health insurance product as a condition of
obtaining the
extension of credit. No borrower obtained a prepaid
single-premium
credit life, disability, accident or health insurance
policy in connection with the
origination of the Mortgage Loan;
(61) If the Mortgage Loan provides that the interest rate on
the principal
balance of the related Mortgage Loan may be adjusted, all
of the terms of
the related Mortgage pertaining to interest rate
adjustments,
payment adjustments and adjustments of the outstanding
principal
balance have been made in accordance with the terms of the
related Mortgage
Note and applicable law and are enforceable and such
adjustments will not
affect the priority of the Mortgage lien;
(62) The Mortgaged Property complies with all applicable laws,
rules and
regulations relating to environmental matters, including but
not limited to
those relating to radon, asbestos and lead paint and
neither Seller
nor, to the best of CHL's
54
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knowledge, the
Mortgagor, has received any notice of any violation or
potential
violation of such law;
(63) There is no action, suit or proceeding pending, or to the
best of CHL's
knowledge, threatened or likely to be asserted with respect
to the Mortgage
Loan against or affecting either Seller before or by any
court,
administrative agency, arbitrator or governmental body;
(64) No action, inaction, or event has occurred and no state of
fact exists or
has existed that has resulted or will result in the
exclusion from,
denial of, or defense to coverage under any applicable
hazard insurance
policy, irrespective of the cause of such failure of
coverage. In
connection with the placement of any such insurance, no
commission, fee,
or other compensation has been or will be received by
CHL or any
designee of CHL or any corporation in which CHL or any
officer,
director, or employee had a financial interest at the time of
placement of
such insurance;
(65) Each Mortgage Loan has a fully assignable life of loan tax
service contract
which may be assigned without the payment of any fee;
(66) No Mortgagor has notified CHL or the Master Servicer on
CHL's behalf,
and CHL has no knowledge, of any relief requested or
allowed to a
Mortgagor under the Relief Act;
(67) Each Mortgage Loan was originated by a savings and loan
association,
savings bank, commercial bank, credit union, insurance
company, or
mortgage banking company which is supervised and examined by
a federal or
state authority, or by a mortgagee approved by the Secretary
of Housing and
Urban Development pursuant to Sections 2.03 and 2.11 of
the National
Housing Act;
(68) Each Mortgage Loan was (A) originated no earlier than six
months prior to
the time the applicable Seller purchased such Mortgage
Loan pursuant to
a mortgage loan purchase agreement or other similar
agreement and
(B) underwritten or reunderwritten by the applicable Seller
in accordance
with the applicable Seller's underwriting guidelines in
effect at the
time the loan was underwritten or reunderwritten, as
applicable;
(69) Each Mortgage Loan, at the time it was originated and as
of the Closing
Date, complied in all material respects with applicable
local, state and
federal laws, including, but not limited to, all
predatory and
abusive lending laws;
(70) None of the Mortgage Loans is a "high cost" mortgage loan
as defined by
applicable federal, state and local predatory and abusive
lending
laws;
(71) Each Prepayment Charge is enforceable and was originated
in compliance
with all applicable federal, state and local laws;
(72) [Reserved];
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<PAGE>
(73) There is no Mortgage Loan in the Trust Fund that was
originated on or
after March 7, 2003, which is a "high cost home loan" as
defined under
the Georgia Fair Lending Act;
(74) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as
applicable (as such terms are defined in the then
current Standard
& Poor's LEVELS(R) Glossary which is now Version 5.6
Revised,
Appendix E) and no Mortgage Loan originated on or after October
1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending
Act.
(75) Each Mortgage Loan is secured by a "single family
residence"
within the meaning of Section 25(e)(10) of the Internal
Revenue Code of 1986 (as
amended) (the "Code"). The fair market value of
the manufactured
home securing each Mortgage Loan was at least equal to
80% of the
adjusted issue price of the contract at either (i) the time
the contract was
originated (determined pursuant to the REMIC Provisions)
or (ii) the time
the contract is transferred to the purchaser. Each
Mortgage Loan is
a "qualified mortgage" under Section 860G(a)(3) of the
Code.
(76) None of the Mortgage Loans that are secured by property
located in the
State of Illinois are in violation of the provisions of
the Illinois
Interest Act.
(c) Park Monaco hereby represents and warrants to the Depositor
and
the Trustee as follows, as of the Cut-off
Date:
(1) Park Monaco is duly organized as a Delaware corporation and
is validly
existing and in good standing under the laws of the State of
Delaware and is
duly authorized and qualified to transact any and all
business
contemplated by this Agreement to be conducted by Park Monaco
in
any state in
which a Mortgaged Property securing a Park Monaco Mortgage
Loan is located
or is otherwise not required under applicable law to
effect such
qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure
its ability to
enforce each Park Monaco Mortgage Loan, to sell the Park
Monaco Mortgage
Loans in accordance with the terms of this Agreement and
to perform any
of its other obligations under this Agreement in
accordance with
the terms hereof.
(2) Park Monaco has the full company power and authority to
sell each Park
Monaco Mortgage Loan, and to execute, deliver and perform,
and to enter
into and consummate the transactions contemplated by this
Agreement and
has duly authorized by all necessary company action on the
part of Park
Monaco the execution, delivery and performance of this
Agreement; and
this Agreement, assuming the due authorization, execution
and delivery
hereof by the other parties hereto, constitutes a legal,
valid and
binding obligation of Park Monaco, enforceable against Park
Monaco in
accordance with its terms, except that (a) the enforceability
hereof may be
limited by bankruptcy, insolvency, moratorium, receivership
and other
similar laws relating to creditors' rights generally and (b)
the remedy of
specific performance and injunctive and other forms of
equitable relief
may be subject to equitable defenses and to the
discretion of
the court before which any proceeding therefor may be
brought.
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(3) The execution and delivery of this Agreement by Park
Monaco, the sale
of the Park Monaco Mortgage Loans by Park Monaco under
this Agreement,
the consummation of any other of the transactions
contemplated by
this Agreement, and the fulfillment of or compliance with
the terms hereof
are in the ordinary course of business of Park Monaco
and will not (A)
result in a material breach of any term or provision of
the certificate
of incorporation or bylaws of Park Monaco or (B)
materially
conflict with, result in a material breach, violation or
acceleration of,
or result in a material default under, the terms of any
other material
agreement or instrument to which Park Monaco is a party or
by which it may
be bound, or (C) constitute a material violation of any
statute, order
or regulation applicable to Park Monaco of any court,
regulatory body,
administrative agency or governmental body having
jurisdiction
over Park Monaco; and Park Monaco is not in breach or
violation of any
material indenture or other material agreement or
instrument, or
in violation of any statute, order or regulation of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction
over it which breach or violation may materially impair Park
Monaco's ability
to perform or meet any of its obligations under this
Agreement.
(4) No litigation is pending or, to the best of Park Monaco's
knowledge,
threatened, against Park Monaco that would materially and
adversely affect
the execution, delivery or enforceability of this
Agreement or the
ability of Park Monaco to sell the Park Monaco Mortgage
Loans or to
perform any of its other obligations under this Agreement in
accordance with
the terms hereof.
(5) No consent, approval, authorization or order of any court
or governmental
agency or body is required for the execution, delivery
and performance
by Park Monaco of, or compliance by Park Monaco with,
this Agreement
or the consummation of the transactions contemplated
hereby, or if
any such consent, approval, authorization or order is
required, Park
Monaco has obtained the same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans
to the Depositor as a sale of the Park Monaco Mortgage
Loans for all
tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Monaco
Mortgage Loan to
the Depositor, Park Monaco had good title to, and was
the sole owner
of, such Park Monaco Mortgage Loan free and clear of any
pledge, lien,
encumbrance or security interest and had full right and
authority,
subject to no interest or participation of, or agreement with,
any other party,
to sell and assign the same pursuant to this Agreement.
(d) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty set forth in
Section 2.03(a) through (c) that
materially and adversely affects the
interests of the Certificateholders in
any Mortgage Loan, the party discovering
such breach shall give prompt notice
thereof to the other parties and the NIM
Insurer. Each of the Master Servicer
and the Sellers (each, a "Representing
Party") hereby covenants with respect
to the representations and warranties set
forth in Sections 2.03(a) through
(c) that within 90 days of the earlier of
the discovery by such Representing
Party or receipt of written notice by such
Representing Party from any party
of a breach of any representation or
warranty set forth herein
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made that materially and adversely affects
the interests of the
Certificateholders in any Mortgage Loan, it
shall cure such breach in all
material respects and, if such breach is
not so cured, shall, (i) if such
90-day period expires prior to the second
anniversary of the Closing Date,
remove such Mortgage Loan (a "Deleted
Mortgage Loan") from the Trust Fund and
substitute in its place a Replacement
Mortgage Loan, in the manner and subject
to the conditions set forth in this
Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the
Trustee at the Purchase Price in the
manner set forth below; provided that (a)
any such substitution pursuant to
(i) above or repurchase pursuant to (ii)
above shall not be effected prior to
the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05
hereof, (b) any such substitution pursuant
to (i) above shall not be effected
prior to the additional delivery to the
Trustee of a Request for File Release
and (c) any such substitution pursuant to
(i) above shall include a payment by
the applicable Representing Party of any
amount as calculated under item (iii)
of the definition of "Purchase Price". Any
Representing Party liable for a
breach under this Section 2.03 shall
promptly reimburse the Master Servicer or
the Trustee for any expenses reasonably
incurred by the Master Servicer or the
Trustee in respect of enforcing the
remedies for such breach. To enable the
Master Servicer to amend the Mortgage Loan
Schedule, any Representing Party
liable for a breach under this Section 2.03
shall, unless it cures such breach
in a timely fashion pursuant to this
Section 2.03, promptly notify the Master
Servicer whether such Representing Party
intends either to repurchase, or to
substitute for, the Mortgage Loan affected
by such breach. With respect to the
representations and warranties described in
this Section that are made to the
best of the Representing Party's knowledge,
if it is discovered by any of the
Depositor, the Master Servicer, the Sellers
or the Trustee that the substance
of such representation and warranty is
inaccurate and such inaccuracy
materially and adversely affects the value
of the related Mortgage Loan,
notwithstanding the Representing Party's
lack of knowledge with respect to the
substance of such representation or
warranty, such inaccuracy shall be deemed
a breach of the applicable representation
or warranty.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such
Replacement Mortgage Loan shall deliver to
the Trustee for the benefit of the
Certificateholders the related Mortgage
Note, Mortgage and assignment of the
Mortgage, and such other documents and
agreements as are required by Section 2.01,
with the Mortgage Note endorsed
and the Mortgage assigned as required by
Section 2.01. No substitution will be
made in any calendar month after the
Determination Date for such month.
Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due
Period related to the Distribution Date on
which such proceeds are to be
distributed shall not be part of the Trust
Fund and will be retained by the
applicable Seller delivering such
Replacement Mortgage Loan on such
Distribution Date. For the month of
substitution, distributions to
Certificateholders will include the
Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period
and thereafter the applicable Seller
shall be entitled to retain all amounts
received in respect of such Deleted
Mortgage Loan. The Master Servicer shall
amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to
reflect the removal of such Deleted
Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans
and the Master Servicer shall deliver the
amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the
Replacement Mortgage Loan or Loans
shall be subject to the terms of this
Agreement in all respects, and the
applicable Seller delivering such
Replacement Mortgage Loan shall be deemed to
have made with respect to such Replacement
Mortgage Loan or Loans, as of the
date of substitution, the representations
and warranties set forth in Section
2.03(b) or (c) with respect to such
Mortgage
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Loan. Upon any such substitution and the
deposit to the Certificate Account of
the amount required to be deposited therein
in connection with such
substitution as described in the following
paragraph, the Co-Trustee shall
release to the Representing Party the
Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of
the Certificateholders and shall
execute and deliver at the Master
Servicer's direction such instruments of
transfer or assignment as have been
prepared by the Master Servicer, in each
case without recourse, as shall be
necessary to vest in the applicable Seller,
or its respective designee, title to the
Trustee's interest in any Deleted
Mortgage Loan substituted for pursuant to
this Section 2.03.
For any month in which either Seller substitutes one or more
Replacement Mortgage Loans for one or more
Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any)
by which the aggregate principal
balance of all such Replacement Mortgage
Loans as of the date of substitution
is less than the Stated Principal Balance
(after application of the principal
portion of the Scheduled Payment due in the
month of substitution) of all such
Deleted Mortgage Loans. An amount equal to
the aggregate of the deficiencies
described in the preceding sentence (such
amount, the "Substitution Adjustment
Amount") shall be forwarded by the
applicable Seller to the Master Servicer
and deposited by the Master Servicer into
the Certificate Account not later
than the Determination Date for the
Distribution Date relating to the
Prepayment Period during which the related
Mortgage Loan became required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be
deposited in the Certificate Account
pursuant to Section 3.05 on the
Determination Date for the Distribution Date
in the month following the month during
which such Seller became obligated to
repurchase or replace such Mortgage Loan
and upon such deposit of the Purchase
Price, the delivery of the Opinion of
Counsel required by Section 2.05, if
any, and the receipt of a Request for File
Release, the Co-Trustee shall
release the related Mortgage File held for
the benefit of the
Certificateholders to such Seller, and the
Trustee shall execute and deliver
at such Person's direction the related
instruments of transfer or assignment
prepared by such Seller, in each case
without recourse, as shall be necessary
to transfer title from the Trustee for the
benefit of the Certificateholders
and transfer the Trustee's interest to such
Seller to any Mortgage Loan
purchased pursuant to this Section 2.03. It
is understood and agreed that the
obligation under this Agreement of the
Sellers to cure, repurchase or replace
any Mortgage Loan as to which a breach has
occurred and is continuing shall
constitute the sole remedy against the
Sellers respecting such breach
available to Certificateholders, the
Depositor or the Trustee.
(e) The representations and warranties set forth in this
Section
2.03 shall survive delivery of the
respective Mortgage Files to the Co-Trustee
for the benefit of the Certificateholders
with respect to each Mortgage Loan.
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<PAGE>
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master
Servicer
and the Trustee as follows, as of the date
hereof:
(1) The Depositor is duly organized and is validly existing as
a corporation in
good standing under the laws of the State of Delaware
and has full
power and authority (corporate and other) necessary to own
or hold its
properties and to conduct its business as now conducted by it
and to enter
into and perform its obligations under this Agreement.
(2) The Depositor has the full corporate power and authority to
execute, deliver
and perform, and to enter into and consummate the
transactions
contemplated by, this Agreement and has duly authorized, by
all necessary
corporate action on its part, the execution, delivery and
performance of
this Agreement; and this Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes a
legal, valid and binding obligation of the Depositor,
enforceable
against the Depositor in accordance with its terms, subject,
as to
enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and
other similar laws affecting creditors' rights generally
and (ii) general
principles of equity, regardless of whether enforcement
is sought in a
proceeding in equity or at law.
(3) The execution and delivery of this Agreement by the
Depositor, the
consummation of the transactions contemplated by this
Agreement, and
the fulfillment of or compliance with the terms hereof are
in the ordinary
course of business of the Depositor and will not (A)
result in a
material breach of any term or provision of the charter or
by-laws of the
Depositor or (B) materially conflict with, result in a
material breach,
violation or acceleration of, or result in a material
default under,
the terms of any other material agreement or instrument to
which the
Depositor is a party or by which it may be bound or (C)
constitute a
material violation of any statute, order or regulation
applicable to
the Depositor of any court, regulatory body, administrative
agency or
governmental body having jurisdiction over the Depositor; and
the Depositor is
not in breach or violation of any material indenture or
other material
agreement or instrument, or in violation of any statute,
order or
regulation of any court, regulatory body, administrative agency
or governmental
body having jurisdiction over it which breach or
violation may
materially impair the Depositor's ability to perform or
meet any of its
obligations under this Agreement.
(4) No litigation is pending, or, to the best of the
Depositor's
knowledge, threatened, against the Depositor that would
materially and
adversely affect the execution, delivery or enforceability
of this
Agreement or the ability of the Depositor to perform its
obligations
under this Agreement in accordance with the terms hereof.
(5) No consent, approval, authorization or order of any court
or governmental
agency or body is required for the execution, delivery
and performance
by the Depositor of, or compliance by the Depositor with,
this Agreement
or the
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<PAGE>
consummation of
the transactions contemplated hereby, or if any such
consent,
approval, authorization or order is required, the Depositor has
obtained the
same.
The Depositor hereby represents and warrants to the Trustee
with
respect to each Mortgage Loan as of the
Closing Date, and following the
transfer of the Mortgage Loans to it by the
Sellers, the Depositor had good
title to the Mortgage Loans, and the
related Mortgage Notes were subject to no
offsets, claims, defenses or
counterclaims.
It is understood and agreed that the representations and
warranties
set forth in the two immediately preceding
paragraphs shall survive delivery
of the Mortgage Files to the Co-Trustee.
Upon discovery by the Depositor or
the Trustee, of a breach of any of the
foregoing representations and
warranties set forth in the immediately
preceding paragraph (referred to
herein as a "breach"), which breach
materially and adversely affects the
interest of the Certificateholders, the
party discovering such breach shall
give prompt written notice to the others
and to each Rating Agency and the NIM
Insurer. The Depositor hereby covenants
with respect to the representations
and warranties made by it in this Section
2.04 that within 90 days of the
earlier of the discovery it or receipt of
written notice by it from any party
of a breach of any representation or
warranty set forth herein made that
materially and adversely affects the
interests of the Certificateholders in
any Mortgage Loan, it shall cure such
breach in all material respects and, if
such breach is not so cured, shall
repurchase or replace the affected Mortgage
Loan or Loans in accordance with the
procedure set forth in Section 2.03(d).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
with
respect to any Mortgage Loan that is not in
default or as to which default is
not imminent, no repurchase or substitution
pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing
Party making such repurchase or
substitution delivers to the Trustee an
Opinion of Counsel (which such
Representing Party will use reasonable
efforts to obtain), addressed to the
Trustee to the effect that such repurchase
or substitution would not (i)
result in the imposition of the tax on
"prohibited transactions" of the Trust
Fund or contributions after the Closing
Date, as defined in sections
860F(a)(2) and 860G(d) of the Code,
respectively or (ii) cause the any REMIC
formed hereunder to fail to qualify as a
REMIC at any time that any
Certificates are outstanding. Any Mortgage
Loan as to which repurchase or
substitution was delayed pursuant to this
paragraph shall be repurchased or
the substitution therefor shall occur
(subject to compliance with Sections
2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or
imminent default with respect to such loan
and (b) receipt by the Trustee of
an Opinion of Counsel to the effect that
such repurchase or substitution, as
applicable, will not result in the events
described in clause (i) or clause
(ii) of the preceding sentence.
(b) Upon discovery by the Depositor, either Seller, the Master
Servicer or the Trustee that any Mortgage
Loan does not constitute a
"qualified mortgage" within the meaning of
section 860G(a)(3) of the Code, the
party discovering such fact shall promptly
(and in any event within 5 Business
Days of discovery) give written notice
thereof to the other parties and the
NIM Insurer. In connection therewith, the
Trustee shall require CHL, at CHL's
option, to either (i) substitute, if the
conditions in Section 2.03(d) with
respect to substitutions are satisfied,
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a Replacement Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase
the affected Mortgage Loan within 90 days
of such discovery in the same manner
as it would a Mortgage Loan for a breach of
representation or warranty
contained in Section 2.03. The Trustee
shall reconvey to CHL the Mortgage Loan
to be released pursuant hereto in the same
manner, and on the same terms and
conditions, as it would a Mortgage Loan
repurchased for breach of a
representation or warranty contained in
Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the
Trust Fund and, concurrently with such
transfer and assignment, has executed,
authenticated and delivered, to or upon the
order of the Depositor, the
Certificates in authorized denominations
evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the
rights referred to above for the benefit of
all present and future Holders of
the Certificates and to perform the duties
set forth in this Agreement to the
best of its ability, to the end that the
interests of the Holders of the
Certificates may be adequately and
effectively
