EXHIBIT 4.1
EXECUTION COPY
================================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2005
---------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2005-AB3
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
-----------------
Page
ARTICLE I.
DEFINITIONS
<S>
<C>
<C>
Section 1.01 Defined
Terms..................................................................................10
Section 1.02 Certain
Interpretive
Provisions................................................................49
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance
of Mortgage
Loans...................................................................50
Section 2.02 Acceptance
by Trustee of the Mortgage
Loans....................................................57
Section 2.03
Representations, Warranties and Covenants of the Master Servicer
and the Sellers...............62
Section 2.04
Representations and Warranties of the
Depositor................................................81
Section 2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases................82
Section 2.06
Authentication and Delivery of
Certificates....................................................83
Section 2.07 Covenants
of the Master
Servicer...............................................................83
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master
Servicer to Service Mortgage
Loans......................................................83
Section 3.02
Subservicing; Enforcement of the Obligations of Master
Servicer................................85
Section 3.03 Rights of
the Depositor, the Sellers, the Certificateholders, the NIM Insurer
and the
Trustee in Respect of the Master
Servicer......................................................86
Section 3.04 Trustee to
Act as Master
Servicer..............................................................87
Section 3.05 Collection
of Mortgage Loan Payments; Certificate Account; Distribution
Account;
Pre-Funding Account; Seller Shortfall Interest
Requirement.....................................88
Section 3.06 Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts............................91
Section 3.07 Access to
Certain Documentation and Information Regarding the Mortgage
Loans...................91
Section 3.08 Permitted
Withdrawals from the Certificate Account, Distribution Account,
Carryover
Reserve Fund and the Principal Reserve
Fund....................................................92
Section 3.09
[Reserved].....................................................................................95
Section 3.10
Maintenance of Hazard
Insurance................................................................95
Section 3.11
Enforcement of Due-On-Sale Clauses; Assumption
Agreements......................................96
Section 3.12
Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and
Realized Losses; Repurchase of Certain Mortgage
Loans..........................................97
Section 3.13 Co-Trustee
to Cooperate; Release of Mortgage
Files............................................100
Section 3.14 Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Trustee.......................................................................................102
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<PAGE>
Section 3.15 Servicing
Compensation........................................................................102
Section 3.16 Access to
Certain
Documentation...............................................................102
Section 3.17 Annual
Statement as to
Compliance.............................................................103
Section 3.18 Annual
Independent Public Accountants' Servicing Statement; Financial
Statements..............103
Section 3.19 The
Corridor
Contracts........................................................................104
Section 3.20 Prepayment
Charges............................................................................104
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances;
Remittance
Reports..................................................................105
Section 4.02 Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls.........107
Section 4.03
[Reserved]....................................................................................107
Section 4.04
Distributions.................................................................................107
Section 4.05 Monthly
Statements to
Certificateholders......................................................113
Section 4.06
[Reserved]....................................................................................116
Section 4.07 Carryover
Reserve
Fund........................................................................116
Section 4.08
Termination of the Mortgage Insurance
Policy..................................................117
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates..............................................................................117
Section 5.02
Certificate Register; Registration of Transfer and Exchange of
Certificates...................118
Section 5.03 Mutilated,
Destroyed, Lost or Stolen
Certificates.............................................122
Section 5.04 Persons
Deemed
Owners.........................................................................123
Section 5.05 Access to
List of Certificateholders' Names and
Addresses.....................................123
Section 5.06 Book-Entry
Certificates.......................................................................123
Section 5.07 Notices to
Depository.........................................................................124
Section 5.08 Definitive
Certificates.......................................................................124
Section 5.09 Maintenance of Office or
Agency...............................................................125
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective
Liabilities of the Depositor, the Master Servicer and the
Sellers..................125
Section 6.02 Merger or
Consolidation of the Depositor, the Master Servicer or the
Sellers..................125
Section 6.03 Limitation
on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM
Insurer and
Others............................................................................126
Section 6.04 Limitation
on Resignation of Master
Servicer..................................................127
Section 6.05 Errors and
Omissions Insurance; Fidelity
Bonds................................................127
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<PAGE>
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default.............................................................................127
Section 7.02 Trustee to Act; Appointment of
Successor......................................................129
Section 7.03
Notification to
Certificateholders............................................................131
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of
Trustee.............................................................................131
Section 8.02 Certain
Matters Affecting the
Trustee.........................................................132
Section 8.03 Trustee
Not Liable for Mortgage
Loans.........................................................133
Section 8.04 Trustee
May Own
Certificates..................................................................134
Section 8.05 Master
Servicer to Pay Trustee's Fees and
Expenses............................................134
Section 8.06
Eligibility Requirements for
Trustee..........................................................134
Section 8.07
Resignation and Removal of
Trustee............................................................135
Section 8.08 Successor
Trustee.............................................................................136
Section 8.09 Merger or
Consolidation of
Trustee............................................................136
Section 8.10
Appointment of Co-Trustee or Separate
Trustee.................................................136
Section 8.11 Tax
Matters...................................................................................138
Section 8.12
Co-Trustee....................................................................................140
Section 8.13 Access to
Records of the
Trustee..............................................................143
Section 8.14 Suits for
Enforcement.........................................................................143
ARTICLE IX.
TERMINATION
Section 9.01
Termination upon Liquidation or Repurchase of all Mortgage
Loans..............................144
Section 9.02 Final
Distribution on the
Certificates........................................................144
Section 9.03 Additional
Termination
Requirements...........................................................146
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.....................................................................................147
Section 10.02 Recordation of
Agreement;
Counterparts........................................................148
Section 10.03 Governing
Law.................................................................................149
Section 10.04 Intention of
Parties..........................................................................149
Section 10.05
Notices.......................................................................................149
Section 10.06 Severability of
Provisions....................................................................151
Section 10.07
Assignment....................................................................................151
Section 10.08 Limitation on
Rights of
Certificateholders....................................................151
Section 10.09 Inspection and
Audit
Rights...................................................................152
Section 10.10 Certificates
Nonassessable and Fully
Paid.....................................................152
Section 10.11 Rights of NIM
Insurer.........................................................................152
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<PAGE>
Exhibits
--------
EXHIBIT A
Forms of Certificates
EXHIBIT A-1
Form of Class 1-A-1 Certificate
EXHIBIT A-2
Form of Class 2-A-1 Certificate
EXHIBIT A-3
Form of Class 2-A-2A Certificate
EXHIBIT A-4
Form of Class 2-A-2B Certificate
EXHIBIT A-5
Form of Class 2-A-3 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 M-6 Certificate
EXHIBIT A-12
Form of Class M-7 Certificate
EXHIBIT A-13
Form of Class M-8 Certificate
EXHIBIT A-14
Form of Class B Certificate
EXHIBIT B
Form of Class P Certificate
EXHIBIT C
Form of Class C Certificate
EXHIBIT D
Form of Class A-R Certificate
EXHIBIT E
Form of Tax Matters Person Certificate
EXHIBIT F
Mortgage Loan Schedule
EXHIBIT F-1
List of Mortgage Loans
EXHIBIT F-2
Mortgage Loans for which All or a Portion of a Related Mortgage
File is
not Delivered to the Trustee on or prior to the Closing Date
EXHIBIT G
Forms of Certification of Trustee
EXHIBIT G-1
Form of Initial Certification of Trustee (Initial Mortgage
Loans)
EXHIBIT G-2
Form of Interim Certification of Trustee
EXHIBIT G-3
Form of Delay Delivery Certification
EXHIBIT G-4
Form of Initial Certification of Trustee (Subsequent Mortgage
Loans)
EXHIBIT H
Form of Final Certification of Trustee
EXHIBIT I
Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1
Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2
Form of Transferor Certificate for Private Certificates
EXHIBIT K
Form of Investment Letter (Non-Rule 144A)
EXHIBIT L
Form of Rule 144A Letter
EXHIBIT M
Form of Request for Document Release
EXHIBIT N
Form of Request for File Release
EXHIBIT O
Copy of Depository Agreement
EXHIBIT P
Form of Subsequent Transfer Agreement
EXHIBIT Q
Form of Corridor Contracts
EXHIBIT Q-1
Form of Class 1-A-1
Corridor Contract
EXHIBIT Q-2
Form of Class 2-A Corridor Contract
EXHIBIT Q-3
Form of Subordinate Corridor Contract
iv
<PAGE>
EXHIBIT R
[Reserved]
EXHIBIT S-1
Form of Corridor Contract Assignment Agreement
EXHIBIT S-2
Form of Corridor Contract Administration Agreement
EXHIBIT T
Officer's Certificate with respect to Prepayments
SCHEDULE I
Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II
Collateral Schedule
</TABLE>
v
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of September 1, 2005,
by
and among CWABS, INC., a Delaware
corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York
corporation, as seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware
corporation, as a seller ("Park
Monaco" or a "Seller"), PARK SIENNA LLC, a
Delaware limited liability company,
as a seller ("Park Sienna" or a "Seller",
and together with CHL and Park
Monaco, the "Sellers"), COUNTRYWIDE HOME
LOANS SERVICING LP, a Texas limited
partnership, as master servicer (the
"Master Servicer"), THE BANK OF NEW YORK,
a New York banking corporation, as trustee
(the "Trustee"), and THE BANK OF
NEW YORK TRUST COMPANY, N.A., a national
banking association, as co-trustee
(the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed
to the Trustee in return for the
Certificates. The Trust Fund (excluding the
Carryover Reserve Fund, the assets held in
the Pre-Funding Account and the
Trust Fund's rights with respect to
payments received under the Corridor
Contracts) for federal income tax purposes
will consist of four REMICs ("REMIC
1," "REMIC 2," "REMIC 3" and the "Master
REMIC"). Each Certificate, other than
the Class A-R Certificate, will represent
ownership of one or more regular
interests in the Master REMIC for purposes
of the REMIC Provisions. The Class
A-R Certificate represents ownership of the
sole class of residual interest in
REMIC 1, REMIC 2, REMIC 3 and the Master
REMIC. The Master REMIC will hold as
assets the several classes of
uncertificated REMIC 3 Interests (other than the
R-3-R Interest). Each REMIC 3 Interest
(other than the R-3-R Interest) is
hereby designated as a regular interest in
REMIC 3. REMIC 3 will hold as
assets the several classes of REMIC 2
Interests (other than the R-2-R
Interest). Each REMIC 2 Interest (other
than the R-2-R Interest) is hereby
designated as a regular interest in REMIC
2. REMIC 2 will hold as assets the
several classes of REMIC 1 Interests (other
than the R-1-R Interest). Each
REMIC 1 Interest (other than the R-1-R
Interest) is hereby designated as a
regular interest in REMIC 1. REMIC 1 will
hold as assets all property of the
Trust Fund (excluding the Carryover Reserve
Fund, the assets held in the
Pre-Funding Account and the Trust Fund's
rights with respect to payments
received under the Corridor Contracts). The
latest possible maturity date of
all REMIC regular interests created in this
Agreement shall be the Latest
Possible Maturity Date.
REMIC
1:
The REMIC
1 Interests will have the principal balances, pass-through
rates and Corresponding Loan Groups as set
forth below.
<TABLE>
<CAPTION>
Initial
Corresponding Loan
REMIC 1 Interests
Balance
Pass-Through Rate
Group(s)
<S>
<C>
<C>
<C>
R-1-1-I.....................................
(1)
(5)
1
R-1-1-S.....................................
(2)
(6)
1
R-1-2-I.....................................
(1)
(5)
2
R-1-2-S.....................................
(2)
(6)
2
R-1-X.......................................
(3)
(7)
1 and 2
R-1-P
$100.00
(8)
N/A
R-1-R.......................................
(4)
(4)
N/A
</TABLE>
<PAGE>
---------
(1) The principal balance of
each REMIC 1 Interest having an "I" designation
is the
principal balance of all the Initial Mortgage Loans in the
Corresponding Loan Group.
(2) The principal balance of
each REMIC 1 Interest having an "S" designation
is the
principal balance of all the Subsequent Mortgage Loans in the
Corresponding Loan Group.
(3) This REMIC 1 Interest pays
no principal.
(4) The R-1-R Interest is the
sole class of residual interest in REMIC 1. It
has no
principal balance and pays no principal or interest.
(5) The interest rate for this
REMIC 1 Interest with respect to any
Distribution Date (and the related Accrual Period) through the
Distribution Date in December 2005 is a per annum rate equal to
the
weighted
average of the Adjusted Net Mortgage Rates of the Initial
Mortgage
Loans in the Corresponding Loan Group. For any Distribution
Date (and
the related Accrual Period) following the Distribution Date in
December
2005, the interest rate for this REMIC 1 Interest is a per
annum rate
equal to the weighted average of the Adjusted Net Mortgage
Rates of
all the Mortgage Loans in the Corresponding Loan Group.
(6) The interest rate for this
REMIC 1 Interest with respect to any
Distribution Date (and the related Accrual Period) through the
Distribution Date in December 2005 is a per annum rate equal to
0.00%.
For any
Distribution Date (and the related Accrual Period) following
the
Distribution Date in December 2005, the interest rate for this
REMIC 1
Interest
is a per annum rate equal to the weighted average of the
Adjusted
Net Mortgage Rates of all the Mortgage Loans in the
Corresponding Loan Group.
(7) For any Distribution Date
(and the related Accrual Period) through the
Distribution Date in December 2005, this REMIC 1 Interest is
entitled to
all the
interest payable with respect to the Subsequent Mortgage Loans
in the
Corresponding Loan Group (or Groups). For any Distribution Date
(and the
related Accrual Period) following the Distribution Date in
December
2005, the interest rate for this REMIC 1 Interest is a per
annum rate
equal to 0.00%.
(8) The R-1-P Interest is
entitled to all Prepayment Charges collected with
respect to
the Mortgage Loans. It pays no interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount of the Corresponding
Loan Groups shall be distributed with
respect to the REMIC 1 Interests in the
following manner:
(1) Interest. Interest is to be distributed with respect to
each
REMIC 1 Interest at the rate, or according
to the formulas, described above.
2
<PAGE>
(2) Principal. For any Distribution Date (and the related
Accrual
Period) through the Distribution Date in
December 2005, the Principal
Distribution Amount with respect to the
Initial Mortgage Loans in a Loan Group
shall be allocated to its corresponding "I"
REMIC 1 Interests, and the
Principal Distribution Amount with respect
to the Subsequent Mortgage Loans in
a Loan Group shall be allocated to its
corresponding "S" REMIC 1 Interests.
For any Distribution Date (and the related
Accrual Period) after the
Distribution Date in December 2005, the
Principal Distribution Amount with
respect to all Mortgage Loans in a Loan
Group shall be allocated in proportion
to its corresponding REMIC 1 Interests.
REMIC
2:
The REMIC 2 Interests will have the principal balances,
pass-through
rates and Corresponding Loan Groups as set
forth below. For the purpose of the
descriptions that follow, Loan Group 1 and
Loan Group 2 and the REMIC 2
Interests corresponding to Loan Group 1 and
Loan Group 2 are referrred to,
from time to time, as the "Variable Loan
Groups" and the "Variable Interests,"
respectively.
<TABLE>
<CAPTION>
Corresponding Loan
REMIC 2 Interests
Initial Balance
Pass-Through Rate
Group
<S>
<C>
<C>
<C>
R-2-A-1 (0.9% of SCB Group
1)...............
(1)
(2)
1
R-2-B-1 (0.1% of SCB Group
1)...............
(1)
(2)
1
R-2-C-1 (0.9% of ASCB Group
1)..............
(1)
(2)
1
R-2-D-1 (0.1% of ASCB Group
1)..............
(1)
(2)
1
R-2-E-1 (Excess of Group
1).................
(1)
(2)
1
R-2-A-2 (0.9% of SCB Group
2)...............
(1)
(3)
2
R-2-B-2 (0.1% of SCB Group
2)...............
(1)
(3)
2
R-2-C-2 (0.9% of ASCB Group
2)..............
(1)
(3)
2
R-2-D-2 (0.1% of ASCB Group
2)..............
(1)
(3)
2
R-2-E-2 (Excess of Group
2).................
(1)
(3)
2
R-2-P.......................................
$100
(4)
N/A
R-2-R.......................................
(5)
(5)
N/A
R-2-X.......................................
(6)
(7)
N/A
</TABLE>
---------
(1) Each REMIC 2 Interest having
an "R-2-A-" designation (each, an "R-2-A
Interest")
will have a principal balance initially equal to 0.9% of the
Subordinate Component Balance ("SCB") of its Corresponding Loan
Group.
Each REMIC
2 Interest having an "R-2-B-" designation (each, an "R-2-B
Interest")
will have a principal balance initially equal to 0.1% of the
SCB of its
Corresponding Loan Group. Each REMIC 2 Interest having an
"R-2-C-"
designation (each, an "R-2-C Interest") will have a principal
balance
initially equal to 0.9% of the Adjusted Subordinate Component
Balance
("ASCB") of its Corresponding Loan Group. Each REMIC 2 Interest
having an
"R-2-D-" designation (each, an "R-2-D Interest") will have a
principal
balance initially equal to 0.1% of the ASCB of its
Corresponding Loan Group. The initial principal balance of each
REMIC 2
Interest
having an "R-2-E-" designation (each, an "R-2-E Interest") will
equal the
excess
3
<PAGE>
of its
Corresponding Loan Group over the initial aggregate principal
balances
of the R-2-A, R-2-B, R-2-C and R-2-D Interests corresponding to
such Loan
Group.
(2) A rate equal to the weighted
average of the pass-through rates of the
R-1-1-I
and R-1-1-S Interests (the "Loan Group 1 Net Rate Cap").
(3) A rate equal to the weighted
average of the pass-through rates of the
R-1-2-I
and R-1-2-S Interests (the "Loan Group 2 Net Rate Cap").
(4) The R-2-P Interest is
entitled to all amounts payable with respect to
the R-1-P
Interest. It pays no interest.
(5) The R-2-R Interest is the
sole class of residual interest in REMIC 2. It
has no
principal balance and pays no principal or interest.
(6) This REMIC 2 Interest pays
no principal.
(7) This REMIC 2 Interest is
entitled to all amounts payable with respect to
the R-1-X
Interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amounts payable with respect
to the REMIC 1 Interests shall be
payable with respect to the REMIC 2
Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to
each
REMIC 2 Interest at the rate, or according
to the formulas, described above.
(2) Principal if no Cross-Over Situation Exists. If no
Cross-Over
Situation exists with respect to any REMIC
2 Interest, then the Principal
Distribution Amounts payable with respect
to each Loan Group will be payable:
first to cause the Loan Group's
corresponding R-2-A, R-2-B, R-2-C and R-2-D
Interests to equal, respectively, 0.9% of
the SCB, 0.1% of the SCB, 0.9% of
the ASCB and 0.1% of the ASCB, of the
Corresponding Loan Group, and then to
the corresponding R-2-E Interest.
(3) Principal if a Cross-Over Situation Exists. If a Cross-Over
Situation exists with respect to the R-2-A
and R-2-B Interests then:
(a) if the Calculation Rate in respect of the outstanding R-2-A
and
R-2-B Interests is less than the
Subordinate Net Rate Cap, Principal
Relocation Payments will be made
proportionately to the outstanding R-2-A
Interests prior to any other principal
distributions from each such Loan
Group; and
(b) if the Calculation Rate in respect of the outstanding R-2-A
and
R-2-B Interests is greater than the
Subordinate Net Rate Cap, Principal
Relocation Payments will be made
proportionately to the outstanding R-2-B
Interests prior to any other principal
distributions from each such Loan
Group.
4
<PAGE>
In each case, Principal Relocation Payments will be made so as
to
cause the Calculation Rate in respect of
the outstanding R-2-A and R-2-B
Interests to equal the Subordinate Net Rate
Cap. With respect to each Loan
Group, if (and to the extent that) the sum
of (a) the principal payments
comprising the Principal Distribution
Amount payable for the related
Distribution Date and (b) the Realized
Losses, are insufficient to make the
necessary reductions of principal on the
R-2-A and R-2-B Interests, then
interest will be added to the Loan Group's
R-2-E Interest.
(c) The outstanding aggregate R-2-A and R-2-B Interests for
both
Loan Groups will not be reduced below 1
percent of the excess of (i) the
aggregate outstanding Stated Principal
Balances of all Loan Groups as of the
end of any Due Period over (ii) the Senior
Certificates related to the Loan
Groups as of the related Distribution Date
(after taking into account
distributions of principal on such
Distribution Date).
If (and to the extent that) the limitation in paragraph (c)
prevents
the distribution of principal to the R-2-A
and R-2-B Interests of a Loan
Group, and if the Loan Group's
corresponding R-2-E Interest has already been
reduced to zero, then the excess principal
from that Loan Group will be paid
to the R-2-E Interest of the other Loan
Group, the aggregate R-2-A and R-2-B
Interests of which are less than one
percent of the Subordinate Component
Balance. If the Loan Group of the
corresponding R-2-E Interest that receives
such payment has a Group Net Rate Cap below
the Group Net Rate Cap of the Loan
Group making the payment, then the payment
will be treated by REMIC 2 as a
Realized Loss. Conversely, if the Loan
Group of the R-2-E Interest that
receives such payment has a Group Net Rate
Cap above the Group Net Rate Cap of
the Loan Group making the payment, then the
payment will be treated by REMIC 2
as a reimbursement for prior Realized
Losses.
If a Cross-Over Situation exists with respect to the R-2-C and
R-2-D
Interests then:
(d) if the Calculation Rate in respect of the outstanding R-2-C
and
R-2-D Interests is less than the Adjusted
Subordinate Net Rate Cap, Principal
Relocation Payments will be made
proportionately to the R-2-C Interests prior
to any other principal distributions from
each such Loan Group; and
(e) if the Calculation Rate in respect of the outstanding R-2-C
and
R-2-D Interests is greater than the
Adjusted Subordinate Net Rate Cap,
Principal Relocation Payments will be made
proportionately to the outstanding
R-2-D Interests prior to any other
principal distributions from each such Loan
Group.
In each case, Principal Relocation Payments
will be made so as to cause the
Calculation Rate in respect of the
outstanding R-2-C and R-2-D Interests to
equal the Adjusted Subordinate Net Rate
Cap. With respect to each Loan Group,
if (and to the extent that) the sum of (a)
the principal payments comprising
the Principal Distribution Amount payable
for the related Distribution Date
and (b) the Realized Losses, are
insufficient to make the necessary reductions
of principal on the R-2-C and R-2-D
Interests, then interest will be added to
the Loan Group's R-2-E Interest.
(f) The outstanding aggregate R-2-C and R-2-D Interests for all
Loan
Groups will not be reduced below 1 percent
of the excess of (i) the aggregate
outstanding Stated Principal Balances of
all Loan Groups as of the end of any
Due Period over (ii) the Senior
Certificates related to the
5
<PAGE>
Loan Groups as of the related Distribution
Date (after taking into account
distributions of principal on such
Distribution Date).
If (and to the extent that) the limitation
in paragraph (f) prevents the
distribution of principal to the R-2-C and
R-2-D Interests of a Loan Group,
and if the Loan Group's R-2-E Interest has
already been reduced to zero, then
the excess principal from that Loan Group
will be paid to the R-2-E Interests
of the other Loan Group, the aggregate
R-2-C and R-2-D Interests of which are
less than one percent of the Adjusted
Subordinate Component Balance. If the
Loan Group of the R-2-E Interest that
receives such payment has a Group Net
Rate Cap below the Group Net Rate Cap of
the Loan Group making the payment,
then the payment will be treated by REMIC 2
as a Realized Loss. Conversely, if
the Loan Group of the R-2-E Interest that
receives such payment has a Group
Net Rate Cap above the Group Net Rate Cap
of the Loan Group making the
payment, then the payment will be treated
by REMIC 2 as a reimbursement for
prior Realized Losses.
REMIC 3:
The REMIC 3 Regular Interests will have the
principal balances, pass-through
rates and Corresponding Classes of
Certificates as set forth in the following
table:
<TABLE>
<CAPTION>
-------------------------------
---------------------------- ----------------------------
----------------------------
Pass-Through
Corresponding Class of
REMIC 3
Interests
Initial Principal Balance
Rate
Certificates
-------------------------------
---------------------------- ----------------------------
----------------------------
<S>
<C>
<C>
<C>
R-3-1-A-1.....................
(1)
(2)
1-A-1
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-2-A-1.....................
(1)
(2)
2-A-1
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-2-A-2A....................
(1)
(2)
2-A-2A
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-2-A-2B....................
(1)
(2)
2-A-2B
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-2-A-3.....................
(1)
(2)
2-A-3
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-1.......................
(1)
(2)
M-1
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-2.......................
(1)
(2)
M-2
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-3.......................
(1)
(2)
M-3
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-4.......................
(1)
(2)
M-4
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-5.......................
(1)
(2)
M-5
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-6.......................
(1)
(2)
M-6
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-7.......................
(1)
(2)
M-7
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-M-8.......................
(1)
(2)
M-8
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-B.........................
(1)
(2)
B
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-$100......................
$100
(3)
A-R
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-Accrual...................
(1)
(2)
N/A
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-P.........................
$100
(4)
P
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-R.........................
(5)
(5)
N/A
-------------------------------
---------------------------- ----------------------------
----------------------------
R-3-X.........................
(6)
(7)
N/A
-------------------------------
---------------------------- ----------------------------
----------------------------
</TABLE>
(1) This REMIC 3 Interest has a principal
balance that is initially equal to
50% of its Corresponding Certificate Class
issued by the Master REMIC.
Principal payments, both scheduled and
prepaid, Realized Losses, Subsequent
Recoveries and interest accruing on the
R-3-Accrual Interest will be allocated
to this class to maintain its size relative
to its Corresponding
6
<PAGE>
Certificate Class (that is, 50%) with any
excess payments of principal,
Realized Losses and Subsequent Recoveries
being allocated to the R-3-Accrual
Interest in such manner as to cause the
principal balance of the R-3-Accrual
Interest to have a principal balance equal
to (a) 50% of the Loan Group 1 and
Loan Group 2 principal balances plus (b)
50% of the Overcollateralized Amount
for such Distribution Date.
(2) The pass-through rate with respect to
any Distribution Date (and the
related Accrual Period) for this REMIC 3
Interest is a per annum rate equal to
the weighted average of the Loan Group 1
Net Rate Cap and the Loan Group 2
Net Rate Cap (the "Pool Net Rate Cap").
(3) This REMIC 3 Interest pays no
interest.
(4) The R-3-P Interest is entitled to all
amounts payable with respect to the
R-2-P Interest. It pays no interest.
(5) The R-3-R Interest is the sole class of
residual interest in REMIC 3. It
has no principal balance and pays no
principal or interest.
(6) This REMIC 3 Interest pays no
principal.
(7) This REMIC 3 Interest is entitled to
all amounts payable with respect to
the R-2-X Interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to
the REMIC 2 Interests shall be
payable with respect to the REMIC 3
Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to
each
REMIC 3 Interest at the rate, or according
to the formulas, described above.
(2) Principal. Principal Distribution Amounts shall be
allocated
among the REMIC 3 Interests in the manner
described above.
7
<PAGE>
The following table specifies the class designation, interest
rate,
and principal amount for each class of
Master REMIC Interest:
<TABLE>
<CAPTION>
Class
Original Certificate Principal
Pass-Through Rate
Balance
<S>
<C>
<C>
Class
1-A-1.....................................
$324,864,000
(1)
Class
2-A-1.....................................
$102,674,000
(1)
Class
2-A-2A....................................
$93,527,000
(1)
Class
2-A-2B....................................
$10,392,000
(1)
Class
2-A-3.....................................
$30,143,000
(1)
Class
M-1.......................................
$16,250,000
(1)
Class
M-2.......................................
$14,625,000
(1)
Class
M-3.......................................
$9,425,000
(1)
Class
M-4.......................................
$7,800,000
(1)
Class
M-5.......................................
$7,150,000
(1)
Class
M-6.......................................
$5,850,000
(1)
Class
M-7.......................................
$4,550,000
(1)
Class
M-8.......................................
$4,225,000
(1)
Class
B.........................................
$6,500,000
(1)
Class
C.........................................
(2)
(3)
Class
P.........................................
$100
(4)
Class
A-R.......................................
$100
(5)
</TABLE>
(1) The Certificates will accrue
interest at the related Pass-Through Rates
identified
in this Agreement. For federal income tax purposes, the
pass-through rate in respect of (i) the Class 1-A-1 Certificates
will be
subject to
a cap equal to the Loan Group 1 Net Rate Cap, (ii) the Class
2-A
Certificates will be subject to a cap equal to the Loan Group 2
Net
Rate Cap,
and (iii) the Subordinate Certificates will be subject to a
cap equal
to the lesser of the Subordinate Net Rate Cap and the Adjusted
Subordinate Net Rate Cap.
(2) For federal income tax
purposes, the Class C Certificates will be
treated as
having a Certificate Principal Balance equal to the
Overcollateralized Amount.
(3) For each I nterest Accrual
Period the Class C Certificates are entitled
to an
amount (the "Class C Distributable Amount") equal to the sum of
(a) the
interest payable on the R-3-X Interest and (b) a specified
portion of
the interest on the REMIC 3 Regular Interests (other than the
R-3-$100,
R-3-P and R-3-X Interests) equal to the excess of the Pool Net
Rate Cap
over the product of two and the weighted average interest rate
of the
REMIC 3 Regular Interests (other than the R-3-$100, R-3-P and
R-3-X
Interests) with each such Class other than the R-3-Accrual
Interest
subject to
a cap and a floor equal to the Pass-Through Rate of the
Corresponding Master REMIC Class and the R-3-Accrual Interest
subject to
a cap of
0.00%. The Pass-Through Rate of the Class C Certificates shall
be a rate
sufficient to entitle it to all interest accrued on the REMIC 1
Group 1 and Group 2
"I" and "S" Interests less the interest accrued on
the other
interests issued by the Master REMIC. The Class C Distributable
Amount for
any Distribution Date is payable from current interest on the
Mortgage
Loans and any related OC Release Amount for that Distribution
Date.
(4) For each Distribution Date
the Class P Certificates are entitled to all
Prepayment
Charges distributed with respect to the R-3-P Interest.
(5) The Class A-R Certificates
represent the sole class of residual interest
in each
REMIC created hereunder. The Class A-R Certificates are not
entitled
to distributions of interest.
The foregoing REMIC structure is intended to cause all of the
cash
from the Mortgage Loans to flow through to
the Master REMIC as cash flow on
REMIC regular interests, without creating
any shortfall--actual or potential
(other than for credit losses)-- to any
REMIC
8
<PAGE>
regular interest. It is not intended that
the Class A-R be entitled to any
cash flows pursuant to this agreement
except as provided in Section 3.08(a)
hereunder.
9
<PAGE>
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires,
shall have the following meanings:
Accrual Period: With respect to any Distribution Date and each
Class
of Interest-Bearing Certificates, the
period commencing on the immediately
preceding Distribution Date (or, in the
case of the first Distribution Date,
the Closing Date) and ending on the day
immediately preceding such
Distribution Date. With respect to any
Distribution Date and the Class C
Certificates, the calendar month preceding
the month in which such
Distribution Date occurs. All calculations
of interest on the Interest-Bearing
Certificates will be made on the basis of
the actual number of days elapsed in
the related Accrual Period and on a 360-day
year. All calculations of interest
on the Class C Certificates will be made on
the basis of a 360-day year
consisting of twelve 30-day months.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage
Rate less the related Expense Fee Rate.
Adjusted Subordinate Component Balance: With respect to any
Distribution Date and for each Loan Group,
(i) the principal balance of the
Mortgage Loans in such Loan Group as of the
first day of the related Due
Period (after giving effect to Principal
Prepayments received in the
Prepayment Period ending during such Due
Period) less (ii) the product of (a)
the Overcollateralized Amount immediately
prior to that Distribution Date and
(b)(I) the principal balance of such Loan
Group, divided by (II) the sum of
the principal balance of the Mortgage
Loans, in each case as of the first day
of the related Due Period, less (iii) the
aggregate Certificate Principal
Balance of the related Classes of Senior
Certificates immediately prior to
such Distribution Date.
Adjusted Subordinate Net Rate Cap: For each Distribution Date,
the
weighted average of the Group 1 Net Rate
Cap and Group 2 Net Rate Cap weighted
on the basis of the respective Adjusted
Subordinate Component Balances of
their corresponding Loan Groups. For
federal income tax purposes, the Adjusted
Subordinate Net Rate Cap will be the
Calculation Rate in respect of the Class
C and Class D Interests in REMIC 2.
Adjustment Date: As to each Mortgage Loan, each date on which
the
related Mortgage Rate is subject to
adjustment, as provided in the related
Mortgage Note.
Advance: The aggregate of the advances required to be made by
the
Master Servicer with respect to any
Distribution Date pursuant to Section
4.01, the amount of any such advances being
equal to the aggregate of payments
of principal of, and interest on the Stated
Principal Balance of, the Mortgage
Loans (net of the Servicing Fees) that were
due on the related Due Date and
not received by the Master Servicer as of
the close of business on the related
Determination Date including an amount
equivalent to interest on the Stated
Principal Balance of each Mortgage Loan as
to which the related Mortgaged
Property is an REO Property or as to which
the related Mortgaged Property has
been liquidated but such Mortgage Loan has
not yet
10
<PAGE>
become a Liquidated Mortgage Loan;
provided, however, that the net monthly
rental income (if any) from such REO
Property deposited in the Certificate
Account for such Distribution Date pursuant
to Section 3.12 may be used to
offset such Advance for the related REO
Property; provided, further, that for
the avoidance of doubt, no Advances shall
be required to be made in respect of
any Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in
accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date,
the aggregate amount held in the
Certificate Account at the close of business
on the immediately preceding Determination
Date on account of (i) all
Scheduled Payments or portions thereof
received in respect of the Mortgage
Loans due after the related Due Date, (ii)
Principal Prepayments received in
respect of such Mortgage Loans after the
last day of the related Prepayment
Period and (iii) Liquidation Proceeds and
Subsequent Recoveries received in
respect of such Mortgage Loans after the
last day of the related Due Period.
Applied Realized Loss Amount: A Subordinate Applied Realized
Loss
Amount or a Class 2-A-2B Applied Realized
Loss Amount, as the case may be.
Appraised Value: The
appraised value of the Mortgaged Property based
upon the appraisal made for the originator
of the related Mortgage Loan by an
independent fee appraiser at the time of
the origination of the related
Mortgage Loan, or the sales price of the
Mortgaged Property at the time of
such origination, whichever is less, or
with respect to any Mortgage Loan
originated in connection with a
refinancing, the appraised value of the
Mortgaged Property based upon the appraisal
made at the time of such
refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or
its nominee, the ownership of
which is reflected on the books of the
Depository or on the books of a person
maintaining an account with the Depository
(directly, as a "Depository
Participant", or indirectly, as an indirect
participant in accordance with the
rules of the Depository and as described in
Section 5.06). As of the Closing
Date, each Class of Interest-Bearing
Certificates constitutes a Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii)
a day on which banking institutions in the
State of New York or California or
the cities in which the Corporate Trust
Office of the Trustee is located are
authorized or obligated by law or executive
order to be closed.
Calculation Rate: For each Distribution Date, in the case of
the
R-2-A and R-2-B Interests, the product of
(i) 10 and (ii) the weighted average
rate of the outstanding R-2-A and R-2-B
Interests, treating each R-2-A
Interest as capped at zero or reduced by a
fixed percentage of 100% of the
interest accruing on such Class. For each
Distribution Date, in the case of
the R-2-C and R-2-D Interests, the product
of (i) 10 and (ii) the weighted
average rate of the outstanding R-2-C and
R-2-D Interests, treating each R-2-C
Interest as capped at zero or reduced by a
fixed percentage of 100% of the
interest accruing on such Class.
11
<PAGE>
Carryover Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 4.07 in the name of
the Trustee for the benefit of the
Certificateholders and designated "The Bank
of New York in trust for registered Holders
of CWABS, Inc., Asset-Backed
Certificates, Series 2005-AB3". 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-14, Exhibit B,
Exhibit C, Exhibit D and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer
pursuant to Section 3.05(b) with a
depository institution in the name of the
Master Servicer for the benefit of
the Trustee on behalf of the
Certificateholders and designated "Countrywide
Home Loans Servicing LP in trust for
registered Holders of CWABS, Inc.,
Asset-Backed Certificates, Series
2005-AB3". Funds in the Certificate Account
shall be held in trust for the
Certificateholders for the uses and purposes
set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
person that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than
the
Class C Certificates) and as of any
Distribution Date, the Initial Certificate
Principal Balance of such Certificate (A)
less the sum of (i) all amounts
distributed with respect to such
Certificate in reduction of the Certificate
Principal Balance thereof on previous
Distribution Dates pursuant to Section
4.04(b) and (ii) with respect to any Class
2-A-2B or Subordinate Certificate,
any Applied Realized Loss Amounts allocated
to such Certificate on previous
Distribution Dates pursuant to Section
4.04(g), and (B) increased by, with
respect to any Class 2-A-2B or Subordinate
Certificate, any Subsequent
Recoveries allocated to such Certificate
pursuant to Section 4.04(h) on such
Distribution Date. References herein to the
Certificate Principal Balance of a
Class of Certificates shall mean the
Certificate Principal Balances of all
Certificates in such Class. The Class C
Certificates do not have a Certificate
Principal Balance. With respect to any
Certificate (other than the Class C
Certificates) of a Class and any
Distribution Date, the portion of the
Certificate Principal Balance of such Class
represented by such Certificate
equal to the product of the Percentage
Interest evidenced by such Certificate
and the Certificate Principal Balance of
such Class.
Certificate Register: The register maintained pursuant to
Section
5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register
(initially, Cede & Co., as nominee
for the Depository, in the case of any
Class of Book-Entry Certificates),
except that solely for the purpose of
giving any consent pursuant to this
Agreement, any Certificate registered in
the name of the Depositor or any
affiliate of the Depositor shall be deemed
not to be Outstanding and the
Voting Interest 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
12
<PAGE>
Certificates, such Certificates shall be
deemed to be Outstanding for purposes
of any provision hereof (other than the
second sentence of Section 10.01
hereof) that requires the consent of the
Holders of Certificates of a
particular Class as a condition to the
taking of any action hereunder. The
Trustee is entitled to rely conclusively on
a certification of the Depositor
or any affiliate of the Depositor in
determining which Certificates are
registered in the name of an affiliate of
the Depositor.
CHL: Countrywide Home Loans, Inc., a New York corporation, and
its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule for which CHL is the
applicable Seller.
Class: All Certificates bearing the same Class designation as
set
forth in Section 5.01 hereof.
Class 1-A-1 Certificate: Any Certificate designated as a "Class
1-A-1 Certificate" on the face thereof, in
the form of Exhibit A-1 hereto,
representing the right to distributions as
set forth herein.
Class 1-A-1 Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the
Corridor Contract Administrator
pursuant to the Corridor Contract
Assignment Agreement), a form of which is
attached hereto as Exhibit Q-1.
Class 1-A-1 Corridor Contract Termination Date: With respect to
the
Class 1-A-1 Corridor Contract, the
Distribution Date in February 2010.
Class 1-A-1 Net Rate Cap: For any Distribution Date, the
weighted
average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 1 for
such Distribution Date, adjusted to an
effective rate reflecting the
calculation of interest on the basis of the
actual number of days elapsed
during the related Accrual Period and a
360-day year.
Class 1-A-1 Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the
Class A Principal Distribution
Target Amount and (y) a fraction, the
numerator of which is the Class 1-A-1
Principal Distribution Target Amount and
the denominator of which is the sum
of the Class 1-A-1 Principal Distribution
Target Amount and Class 2-A
Principal Distribution Target Amount.
Class 1-A-1 Principal Distribution Target Amount: With respect
to
any Distribution Date, the excess of (1)
the Certificate Principal Balance of
the Class 1-A-1 Certificates immediately
prior to such Distribution Date, over
(2) the lesser of (x) 72.80% of the
aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such
Distribution Date and (y) the
aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for
such Distribution Date minus 0.50% of the
sum of the aggregate Stated
Principal Balance of the Mortgage Loans in
Loan Group 1 as of the Cut-off Date
and the original Group 1 Pre-Funded
Amount.
13
<PAGE>
Class 2-A-1 Certificate: Any Certificate designated as a "Class
2-A-1 Certificate" on the face thereof, in
the form of Exhibit A-2 hereto,
representing the right to distributions as
set forth herein.
Class 2-A-2A Certificate: Any Certificate designated as a
"Class
2-A-2A Certificate" on the face thereof, in
the form of Exhibit A-3 hereto,
representing the right to distributions as
set forth herein.
Class 2-A-2B Applied Realized Loss Amount: With respect to the
Class
2-A-2B Certificates and any Distribution
Date, the product of (x) a fraction,
the numerator of which is the aggregate
Certificate Principal Balance of the
Class 2-A-2A Certificates and Class 2-A-2B
Certificates immediately prior to
such Distribution Date (calculated without
giving any effect to any Class
2-A-2B Applied Realized Loss Amounts
previously allocated to reduce the
Certificate Principal Balance of the Class
2-A-2B Certificates on any prior
Distribution Date), and the denominator of
which is the aggregate Certificate
Principal Balance of the Class 2-A
Certificates immediately prior to such
Distribution Date (calculated without
giving effect to any Class 2-A-2B
Applied Realized Loss Amounts previously
allocated to reduce the Certificate
Principal Balance of the Class 2-A-2B
Certificates on any prior Distribution
Date) and (y) the excess of (i) any Class
2-A Principal Loss Amount for such
Distribution Date over (ii) the Class 2-A
Principal Loss Amount for the
preceding Distribution Date not applied as
a Class 2-A-2B Applied Realized
Loss Amount.
Class 2-A-2B Certificate: Any Certificate designated as a
"Class
2-A-2B Certificate" on the face thereof, in
the form of Exhibit A-4 hereto,
representing the right to distributions as
set forth herein.
Class 2-A-3 Certificate: Any Certificate designated as a "Class
2-A-3 Certificate" on the face thereof, in
the form of Exhibit A-5 hereto,
representing the right to distributions as
set forth herein.
Class 2-A Certificate: Any Class 2-A-1, Class 2-A-2A, Class
2-A-2B
or Class 2-A-3 Certificate.
Class 2-A Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the
Corridor Contract Administrator
pursuant to the Corridor Contract
Assignment Agreement), a form of which is
attached hereto as Exhibit Q-2.
Class 2-A Corridor Contract Termination Date: With respect to
the
Class 2-A Corridor Contract, the
Distribution Date in February 2010.
Class 2-A Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 2 for
such Distribution Date, adjusted to an
effective rate reflecting the
calculation of interest on the basis of the
actual number of days elapsed
during the related Accrual Period and a
360-day year.
Class 2-A Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the
Class A Principal Distribution
Target Amount and (y) a fraction, the
numerator of which is the Class 2-A
Principal Distribution Target Amount and
the denominator
14
<PAGE>
of which is the sum of the Class 1-A-1
Principal Distribution Target Amount
and the Class 2-A Principal Distribution
Target Amount.
Class 2-A Principal Distribution Target Amount: With respect to
any
Distribution Date, the excess of (1) the
aggregate Certificate Principal
Balance of the Class 2-A Certificates
immediately prior to such Distribution
Date, over (2) the lesser of (x) 72.80% of
the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group
2 for such Distribution Date and
(y) the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group
2 for such Distribution Date minus 0.50% of
the sum of the aggregate Stated
Principal Balance of the Mortgage Loans in
Loan Group 2 as of the Cut-off Date
and the original Group 2 Pre-Funded
Amount.
Class 2-A Principal Loss Amount: With respect to any
Distribution
Date and the Class 2-A Certificates, the
amount, if any, by which, the
aggregate Certificate Principal Balance of
the Class 2-A Certificates (after
all distributions of principal on such
Distribution Date) exceeds the sum of
the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2
for such Distribution Date and the amount
on deposit in the Pre-Funding
Account in respect of Loan Group 2.
Class A-R Certificate: Any Certificate designated as a "Class
A-R
Certificate" on the face thereof, in the
form of Exhibit D hereto or, in the
case of the Tax Matters Person Certificate,
Exhibit E hereto, in either case
representing the right to distributions as
set forth herein.
Class A Certificate: Any Class 1-A-1 or Class 2-A Certificate.
Class A Principal Distribution Allocation Amount: With respect
to
any Distribution Date, (a) in the case of
the Class 1-A-1 Certificates, the
Class 1-A-1 Principal Distribution Amount
and (b) in the case of the Class 2-A
Certificates, the Class 2-A Principal
Distribution Amount.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the
form of Exhibit A-14 hereto,
representing the right to distributions as
set forth herein.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the
form of Exhibit C hereto,
representing the right to distributions as
set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the
form of Exhibit A-6 hereto,
representing the right to distributions as
set forth herein.
Class M-2 Certificate: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the
form of Exhibit A-7 hereto,
representing the right to distributions as
set forth herein.
15
<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-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-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.
Class M-6 Certificate: Any Certificate designated as a "Class
M-6
Certificate" on the face thereof, in the
form of Exhibit A-11 hereto,
representing the right to distributions as
set forth herein.
Class M-7 Certificate: Any Certificate designated as a "Class
M-7
Certificate" on the face thereof, in the
form of Exhibit A-12 hereto,
representing the right to distributions as
set forth herein.
Class M-8 Certificate: Any Certificate designated as a "Class
M-8
Certificate" on the face thereof, in the
form of Exhibit A-13 hereto,
representing the right to distributions as
set forth herein.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the
form of Exhibit B hereto,
representing the right to distributions as
set forth herein.
Class P Principal Distribution Date: The first Distribution
Date
that occurs after the end of the latest
Prepayment Charge Period for all
Mortgage Loans that have a Prepayment
Charge Period.
Closing Date: September 27, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collateral Schedule: Schedule II hereto.
Compensating Interest: With respect to the Mortgage Loans in
each
Loan Group and any Distribution Date, an
amount equal to the lesser of (x)
one-half of the Servicing Fee for such
Mortgage Loans for the related Due
Period and (y) the aggregate Prepayment
Interest Shortfalls for such Mortgage
Loans for such Distribution Date.
Confirmation: Any of the Confirmations dated September 12, 2005
evidencing a transaction between the
Corridor Contract Counterparty and CHL
relating to the Corridor Contracts.
16
<PAGE>
Corporate Trust Office: The designated office of the Trustee in
the
State of New York where at any particular
time its corporate trust business
with respect to this Agreement shall be
administered, which office at the date
of the execution of this Agreement is
located at 101 Barclay Street, New York,
New York 10286 (Attention: Corporate Trust
MBS Administration), telephone:
(212) 815-3236, facsimile: (212)
815-3986.
Corridor Contract: The Class 1-A-1 Corridor Contract, Class 2-A
Corridor Contract or Subordinate Corridor
Contract, as applicable.
Corridor Contract Administration Agreement: The corridor
contract
administration agreement dated as of the
Closing Date among CHL, the Trustee
and the Corridor Contract Administrator, a
form of which is attached hereto as
Exhibit S-2.
Corridor Contract Administrator: The Bank of New York, in its
capacity as corridor contract administrator
under the Corridor Contract
Administration Agreement.
Corridor Contract Assignment Agreement: The Assignment
Agreement
dated as of the Closing Date among CHL, the
Corridor Contract Administrator
and the Corridor Contract Counterparty, a
form of which is attached hereto as
Exhibit S-1.
Corridor Contract Counterparty: Barclays Bank PLC and its
successors.
Corridor Contract Termination Date: The Class 1-A-1 Corridor
Contract Termination Date and Class 2-A
Corridor Contract Termination Date and
Subordinate Corridor Contract Termination
Date, as applicable.
Covered Mortgage Loan: A Mortgage Loan listed on the Mortgage
Loan
Schedule as being covered by the Mortgage
Insurance Policy.
Credit Bureau Risk Score: A statistical credit score obtained by
CHL
in connection with the origination of a
Mortgage Loan.
Co-Trustee: The Bank of New York Trust Company, N.A., a
national
banking association, not in its individual
capacity, but solely in its
capacity as co-trustee for the benefit of
the Certificateholders under this
Agreement, and any successor thereto, and
any corporation or national banking
association resulting from or surviving any
consolidation or merger to which
it or its successors may be a party.
Cross-Over Situation: For any Distribution Date and for each
Loan
Group (after taking into account principal
distributions on such Distribution
Date) with respect to (1) the Class A and
Class B REMIC 2 Interests, a
situation in which the Class A and Class B
Interests corresponding to any Loan
Group are in the aggregate less than 1% of
the Subordinate Component Balance
of the Loan Group to which they correspond
and (2) the Class C and Class D
REMIC 2 Interests, a situation in which the
Class C and Class D Interests
corresponding to any Loan Group are in the
aggregate less than 1% of the
Adjusted Subordinate Component Balance of
the Loan Group to which they
correspond.
17
<PAGE>
Cumulative Loss Trigger Event: With respect to a Distribution
Date
on or after the Stepdown Date, a Cumulative
Loss Trigger Event will be in
effect if (x) the aggregate amount of
Realized Losses on the Mortgage Loans
from the Cut-off Date for each such
Mortgage Loan to (and including) the last
day of the related Due Period (reduced by
the aggregate amount of any
Subsequent Recoveries received through the
last day of that Due Period)
exceeds (y) the applicable percentage, for
such Distribution Date, of the sum
of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans
and the Pre-Funded Amount, as set forth
below:
Distribution Date
Percentage
-----------------
----------
October 2007 -- September 2008.........
0.75% with respect to October 2007, plus
an additional 1/12th of 0.75% for each
month thereafter through September 2008
October 2008 -- September 2009.........
1.50% with respect to October 2008, plus
an additional 1/12th of 0.75% for each
month thereafter through September 2009
October 2009 -- September 2010.........
2.25% with respect to October 2009, plus
an additional
1/12th of 0.50% for each
month thereafter through September 2010
October 2010 -- September 2011.........
2.75% with respect to October 2010, plus
an additional 1/12th of 0.25% for each
month thereafter through September 2011
October 2011 and thereafter............
3.00%
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: When used with respect to any Mortgage Loan the
"Cut-off Date" shall mean the Initial
Cut-off Date or the related Subsequent
Cut-off Date, as the case may be.
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
18
<PAGE>
resulting from a Deficient Valuation or any
other reduction that results in a
permanent forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
by a court of competent jurisdiction of the
Mortgaged Property in an amount
less than the then outstanding indebtedness
under such Mortgage Loan, or any
reduction in the amount of principal to be
paid in connection with any
Scheduled Payment that results in a
permanent forgiveness of principal, which
valuation or reduction results from an
order of such court that is final and
non-appealable in a proceeding under the
Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage
Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a
related Mortgage File is not delivered
to the Co-Trustee on or prior to the
Closing Date, and (ii) the Subsequent
Mortgage Loans identified on the schedule
of Subsequent Mortgage Loans set
forth in Annex A to each related Subsequent
Transfer Agreement for which all
or a portion of the related Mortgage File
is not delivered to the Co-Trustee
on or prior to the related Subsequent
Transfer Date. The Depositor shall
deliver (or cause delivery of) the Mortgage
Files to the Co-Trustee: (A) with
respect to at least 50% of the Initial
Mortgage Loans, not later than the
Closing Date and with respect to at least
10% of the Subsequent Mortgage Loans
conveyed on a Subsequent Transfer Date, not
later than such Subsequent
Transfer Date, (B) with respect to at least
an additional 40% of the Initial
Mortgage Loans, not later than 20 days
after the Closing Date, and not later
than 20 days after the relevant Subsequent
Transfer Date with respect to the
remaining Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date,
and (C) with respect to the remaining
Initial Mortgage Loans, not later than
thirty days after the Closing Date. To the
extent that Countrywide Home Loans,
Inc. shall be in possession of any Mortgage
Files with respect to any Delay
Delivery Mortgage Loan, until delivery to
of such Mortgage File to the
Co-Trustee as provided in Section 2.01,
Countrywide Home Loans, Inc. shall
hold such files as agent and in trust for
the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by
a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date
on
or after the Stepdown Date, a Delinquency
Trigger Event will be in effect if
the Rolling Sixty-Day Delinquency Rate for
Outstanding Mortgage Loans equals
or exceeds the product of (x) the Senior
Enhancement Percentage for such
Distribution Date and (y) the applicable
percentage listed below for the most
senior Class of Interest-Bearing
Certificates:
Class
Percentage
Class A.........................
40.00%
Class M-1.......................
49.00%
Class M-2.......................
61.50%
Class M-3.......................
73.50%
Class M-4.......................
87.75%
19
<PAGE>
Class M-5.......................
106.75%
Class M-6.......................
129.50%
Class M-7.......................
155.50%
Class M-8.......................
191.00%
Class B.........................
294.00%
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms
of such Mortgage Loan by the close
of business on the day such payment is
scheduled to be due. A Mortgage Loan is
"30 days delinquent" if such payment has
not been received by the close of
business on the corresponding day of the
month immediately succeeding the
month in which such payment was due, or, if
there is no such corresponding day
(e.g., as when a 30-day month follows a
31-day month in which a payment was
due on the 31st day of such month), then on
the last day of such immediately
succeeding month. Similarly for "60 days
delinquent," "90 days delinquent" and
so on.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial
Certificate Balance of this Certificate"
or, if not the foregoing, the Percentage
Interest appearing on the face
thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor
in
interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is Cede &
Co., or any other organization
registered as a "clearing agency" pursuant
to Section 17A of the Securities
Exchange Act of 1934, as amended. The
Depository shall initially be the
registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New
York.
Depository Agreement: With respect to the Book-Entry
Certificates,
the agreement among the Depositor 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 2005-AB3". Funds in
the Distribution Account
20
<PAGE>
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 October
2005.
Due Date: With respect to any Mortgage Loan and Due Period, the
due
date for Scheduled Payments of interest
and/or principal on that Mortgage Loan
occurring in such Due Period as provided in
the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar
month preceding the calendar month
in which such Distribution Date occurs and
ending on the first day of the
month in which such Distribution Date
occurs.
Eligible Account: Any of (i) an account or accounts maintained
with
a federal or state chartered depository
institution or trust company, the
long-term unsecured debt obligations and
short-term unsecured debt obligations
of which (or, in the case of a depository
institution or trust company that is
the principal subsidiary of a holding
company, the debt obligations of such
holding company, if Moody's is not a Rating
Agency) are rated by each Rating
Agency in one of its two highest long-term
and its highest short-term rating
categories respectively, at the time any
amounts are held on deposit therein,
or (ii) an account or accounts in a
depository institution or trust company in
which such accounts are insured by the FDIC
(to the limits established by the
FDIC) and the uninsured deposits in which
accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to
each Rating Agency, the Certificateholders
have a claim with respect to the
funds in such account or a perfected first
priority security interest against
any collateral (which shall be limited to
Permitted Investments) securing such
funds that is superior to claims of any
other depositors or creditors of the
depository institution or trust company in
which such account is maintained,
or (iii) a trust account or accounts
maintained with the corporate trust
department of a federal or state chartered
depository institution or trust
company having capital and surplus of not
less than $50,000,000, acting in its
fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies
without reduction or withdrawal of their
then-current ratings of the
Certificates as evidenced by a letter from
each Rating Agency to the Trustee.
Eligible Accounts may bear interest, and
may include, if otherwise qualified
under this definition, accounts maintained
with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d)
hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that
meets the applicable requirements of
the Underwriter's Exemption.
21
<PAGE>
ERISA-Restricted Certificates: The Class A-R Certificates, Class
P
Certificates, Class C Certificates and
Certificates of any Class that ceases
to satisfy the applicable rating
requirement under the Underwriter's
Exemption.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum
of
(i) the amount remaining after the
distribution of interest to
Certificateholders for such Distribution
Date pursuant to Section
4.04(a)(iii)(b), (ii) the amount remaining
after the distribution of principal
to Certificateholders for such Distribution
Date, pursuant to Section
4.04(b)(1)(B)(ii) or 4.04(b)(2)(C) and
(iii) the Overcollateralization
Reduction Amount for such Distribution
Date.
Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of
the Overcollateralized Amount for
such Distribution Date over the
Overcollateralization Target Amount for such
Distribution Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any
Liquidation Proceeds and Subsequent
Recoveries are in excess of the sum of (i)
the unpaid principal balance of
such Liquidated Mortgage Loan as of the
date of liquidation of such Liquidated
Mortgage Loan plus (ii) interest at the
Mortgage Rate from the Due Date as to
which interest was last paid or advanced to
Certificateholders (and not
reimbursed to the Master Servicer) up to
the Due Date in the month in which
Liquidation Proceeds are required to be
distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan
outstanding during each Due Period as
to which such interest was not paid or
advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i)
the Servicing Fee Rate, (ii) the Trustee
Fee Rate, (iii) with respect to a
Covered Mortgage Loan, the applicable
Mortgage Insurance Premium Rate and (iv)
with respect to any Mortgage Loan covered
by a lender paid mortgage insurance
policy (other than the Mortgage Insurance
Policy), the related mortgage
insurance premium rate.
Extra
Principal Distribution Amount: With respect to any
Distribution Date and each of Loan Group 1
and Loan Group 2, the lesser of (1)
the Overcollateralization Deficiency Amount
and (2) the Excess Cashflow
available for payment thereof, to be
allocated between Loan Group 1 and Loan
Group 2, pro rata, based on the Principal
Remittance Amount for each such Loan
Group for such Distribution Date.
Fannie Mae: The Federal National Mortgage Association, a
federally
chartered and privately owned corporation
organized and existing under the
Federal National Mortgage Association
Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
22
<PAGE>
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States
created and existing under Title III of
the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Funding Period: The period from the Closing Date to and
including
the earlier to occur of (x) the date the
amount in the Pre-Funding Account is
less than $175,000 and (y) November 11,
2005.
Gross Margin: The percentage set forth in the related Mortgage
Note
to be added to the Index for use in
determining the Mortgage Rate for each
Adjustable Rate Mortgage Loan on each of
its Adjustment Dates.
Group 1 Mortgage Loans: The group of Mortgage Loans identified
in
the related Mortgage Loan Schedule as
"Group 1 Mortgage Loans", including in
each case any Mortgage Loans delivered in
replacement thereof.
Group 1 Overcollateralization Reduction Amount: With respect to
any
Distribution Date, the
Overcollateralization Reduction Amount for such
Distribution Date multiplied by a fraction,
the numerator of which is (x) the
Principal Remittance Amount for Loan Group
1 for such Distribution Date, and
the denominator of which is (y) the
aggregate Principal Remittance Amount for
Loan Group 1 and Loan Group 2 for such
Distribution Date.
Group 1 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent
Mortgage Loans as Group 1 Mortgage Loans
on the Closing Date, which shall equal
$84,136,550.27.
Group 2 Mortgage Loans: The group of Mortgage Loans identified
in
the related Mortgage Loan Schedule as
"Group 2 Mortgage Loans", including in
each case any Mortgage Loans delivered in
replacement thereof.
Group 2 Overcollateralization Reduction Amount: With respect to
any
Distribution Date, the
Overcollateralization Reduction Amount for such
Distribution Date multiplied by a fraction,
the numerator of which is the
Principal Remittance Amount for Loan Group
2 for such Distribution Date, and
the denominator of which is the aggregate
Principal Remittance Amount for Loan
Group 1 and Loan Group 2 for such
Distribution Date.
Group 2 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent
Mortgage Loans as Group 2 Mortgage Loans
on the Closing Date, which shall equal
$63,877,986.27.
Group Net Rate Cap. With respect to Loan Group 1, the Class
1-A-1
Net Rate Cap, and with respect to Loan
Group 2, the Class 2-A Net Rate Cap.
Index: As to any Mortgage Loan on any Adjustment Date related
thereto, the index for the adjustment of
the Mortgage Rate set forth as such
in the related Mortgage Note, such index in
general being the average of the
London interbank offered rates for
six-month U.S. dollar deposits in the
London market, as set forth in The Wall
Street Journal, as most recently
announced as of a date 45 days prior to
such Adjustment Date or, if the Index
ceases to be
23
<PAGE>
published in The Wall Street Journal or
becomes unavailable for any reason,
then the Index shall be a new index
selected by the Master Servicer, based on
comparable information.
Initial Adjustment Date: As to any Mortgage Loan, the first
Adjustment Date following the origination
of such Mortgage Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i)
principal of the Initial Mortgage
Loans due after the Initial Cut-off Date
and received by the Master Servicer
before the Closing Date and not applied in
computing the Cut-off Date
Principal Balance thereof and (ii) interest
on the Initial Mortgage Loans due
after the Initial Cut-off Date and received
by the Master Servicer before the
Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C
Certificates) the Certificate Principal
Balance of such Certificate or any
predecessor Certificate on the Closing
Date.
Initial Cut-off Date: In the case of any Initial Mortgage Loan,
the
later of (x) September 1, 2005 and (y) the
date of origination of such
Mortgage Loan.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee
on
the Closing Date pursuant to this Agreement
as identified on the Mortgage Loan
Schedule delivered to the Trustee on the
Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate
in effect prior to the Initial Adjustment
Date.
Initial Periodic Rate Cap: With respect to each Mortgage Loan,
the
percentage specified in the related
Mortgage Note that limits the permissible
increase or decrease in the Mortgage Rate
on its initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including
the Mortgage Insurance Policy,
including all riders and endorsements
thereto in effect with respect to such
Mortgage Loan, including any replacement
policy or policies for any Insurance
Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any
other insurance policy covering a
Mortgage Loan, to the extent such proceeds
are payable to the mortgagee under
the Mortgage, the Master Servicer or the
trustee under the deed of trust and
are not applied to the restoration of the
related Mortgaged Property or
released to the Mortgagor in accordance
with the procedures that the Master
Servicer would follow in servicing mortgage
loans held for its own account, in
each case other than any amount included in
such Insurance Proceeds in respect
of Insured Expenses and received prior to
such Mortgage Loan becoming a
Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the
Mortgage Loans.
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<PAGE>
Interest-Bearing Certificates: The Class A Certificates and the
Subordinate Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each
Distribution Date, the excess of (i)
the Current Interest for such Class with
respect to prior Distribution Dates
over (ii) the amount actually distributed
to such Class with respect to
interest on such prior Distribution
Dates.
Interest Determination Date: With respect to the first Accrual
Period for the Interest-Bearing
Certificates, September 23, 2005. 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 and Loan
Group, the Interest Remittance Amount for
such Loan Group and Distribution
Date, less the portion of the Trustee Fee
for such Distribution Date allocable
to such Loan Group and the Mortgage
Insurance Premium for such Distribution
Date allocable to such Loan Group.
Interest Remittance Amount: With respect to the Mortgage Loans
in
each Loan Group and any Distribution Date,
(x) the sum, without duplication,
of (i) all scheduled interest collected
during the related Due Period with
respect to the related Mortgage Loans less
the related Servicing Fee, (ii) all
interest on prepayments received during the
related Prepayment Period with
respect to such Mortgage Loans, other than
Prepayment Interest Excess, (iii)
all related Advances relating to interest
with respect to such Mortgage Loans,
(iv) all related Compensating Interest with
respect to such Mortgage Loans,
(v) Liquidation Proceeds with respect to
such Mortgage Loans collected during
the related Due Period (to the extent such
Liquidation Proceeds relate to
interest) and (vi) the related Seller
Shortfall Interest Requirement, less (y)
all reimbursements to the Master Servicer
during the related Due Period for
Advances of interest previously made
allocable to such Loan Group.
Investment Letter: As defined in Section 5.02(b).
Latest Possible Maturity Date: The Distribution Date following
the
third anniversary of the scheduled maturity
date of the Mortgage Loan having
the latest scheduled maturity date as of
the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London,
England and New York City, U.S.A. are open
and conducting transactions in
foreign currency and exchange.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan that has been
liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's
sale or other realization as provided
by applicable law governing the real
property subject to the related Mortgage
and any security agreements and as to which
the Master Servicer has certified
in the related Prepayment Period that it
has received all amounts it expects
to receive in connection with such
liquidation.
25
<PAGE>
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 (other than the
amount of such net proceeds
representing any profit realized by the
Master Servicer in connection with the
disposition of any such properties), less
the sum of related unreimbursed
Advances, Servicing Fees and Servicing
Advances.
Loan Group: Either of Loan Group 1 or Loan Group 2.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 1 Net Rate Cap: As defined in the Preliminary
Statement.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 2 Net Rate Cap: As defined in the Preliminary
Statement.
Loan Number and Borrower Identification Mortgage Loan Schedule:
With
respect to any Subsequent Transfer Date,
the Loan Number and Borrower
Identification Mortgage Loan Schedule
delivered in connection with such
Subsequent Transfer Date pursuant to
Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan
Schedule shall contain the information
specified in the definition of "Mortgage
Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date, and each
Loan Number and Borrower Identification
Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan
Schedule.
Loan-to-Value Ratio: The fraction, expressed as a percentage,
the
numerator of which is the original
principal balance of the related Mortgage
Loan and the denominator of which is the
Appraised Value of the related
Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at least
51%
of the Voting Rights allocated to such
Class of Certificates.
Margin: With respect to any Accrual Period and Class of
Interest-Bearing Certificates, the per
annum rate indicated in the following
table:
------------------------------ ---------------
-----------------
Class
Margin (1)
Margin (2)
------------------------------ ---------------
-----------------
Class 1-A-1................... 0.250%
0.500%
------------------------------ ---------------
-----------------
Class 2-A-1................... 0.120%
0.240%
------------------------------ ---------------
-----------------
Class 2-A-2A.................. 0.260%
0.520%
------------------------------ ---------------
-----------------
Class 2-A-2B.................. 0.370%
0.740%
------------------------------ ---------------
-----------------
Class 2-A-3................... 0.360%
0.720%
------------------------------ ---------------
-----------------
Class M-1..................... 0.460%
0.690%
------------------------------ ---------------
-----------------
Class M-2..................... 0.470%
0.705%
------------------------------ ---------------
-----------------
Class M-3..................... 0.490%
0.735%
------------------------------ ---------------
-----------------
26
<PAGE>
------------------------------ ---------------
-----------------
Class
Margin (1)
Margin (2)
------------------------------ ---------------
-----------------
Class M-4..................... 0.590%
0.885%
------------------------------ ---------------
-----------------
Class M-5..................... 0.630%
0.945%
------------------------------ ---------------
-----------------
Class M-6..................... 0.690%
1.035%
------------------------------ ---------------
-----------------
Class M-7..................... 1.150%
1.725%
------------------------------ ---------------
-----------------
Class
M-8..................... 1.300%
1.950%
------------------------------ ---------------
-----------------
Class B....................... 1.750%
2.625%
------------------------------ ---------------
-----------------
(1) For any Accrual Period
relating to any Distribution Date occurring on or
prior to
the Optional Termination Date.
(2) For any Accrual Period
relating to any Distribution Date occurring after
the
Optional Termination Date.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and
assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such
Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts
(i)
payable by the Master Servicer in respect
of any Prepayment Charges waived
other than in accordance with the standard
set forth in the first sentence of
Section 3.20(a), or (ii) collected from the
Master Servicer in respect of a
remedy for the breach of the representation
made by CHL set forth in Section
3.20(c).
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
maximum rate of interest set forth as such
in the related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
minimum rate of interest set forth as such
in the related Mortgage Note.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the
originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
27
<PAGE>
Moody's: Moody's Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on or first priority ownership
interest in an estate in fee simple
in real property securing a Mortgage
Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan
and any additional documents
delivered to the Co-Trustee to be added to
the Mortgage File pursuant to this
Agreement.
Mortgage Insurance Policy: The Mortgage Insurance Policy issued
by
Mortgage Guaranty Insurance Corporation
with respect to certain Mortgage Loans
identified in the Mortgage Loan
Schedule.
Mortgage Insurance Premium: The premium payable on the Mortgage
Insurance Policy on each Distribution
Date.
Mortgage Insurance Premium Rate: With respect to a Covered
Mortgage
Loan and any Distribution Date, the per
annum rate equal to a fraction
(expressed as a percentage), the numerator
of which is equal to the portion of
the Mortgage Insurance Premium payable with
respect to such Distribution Date
attributable to such Covered Mortgage Loan
multiplied by twelve and the
denominator of which is equal to the Stated
Principal Balance of such Covered
Mortgage Loan.
Mortgage Insurer: Mortgage Guaranty Insurance Corporation or
any
replacement Mortgage Insurer, as
applicable.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Master Servicer to
reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans
and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions
of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions
of this Agreement and any Subsequent
Transfer Agreement) transferred to the
Trustee as part of the Trust Fund and
from time to time subject to this
Agreement, attached hereto as Exhibit F-1,
setting forth in the following information
with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
28
<PAGE>
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the
time
of origination
was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either
(a) a detached
single-family dwelling, (b) a two-family residential
property, (c) a
three-family residential property, (d) a four-family
residential
property, (e) planned unit development, (f) a low-rise
condominium
unit, (g) a high-rise condominium unit or (h) manufactured
housing;
(xiii) the purpose of the Mortgage Loan;
(xiv) the frequency of each Adjustment Date;
(xv) the next Adjustment Date;
(xvi) the Maximum Mortgage Rate;
(xvii) the Minimum Mortgage Rate;
(xviii) the Mortgage Rate as of the Cut-off Date;
(xix) the related Initial Periodic Rate Cap and Subsequent
Periodic
Rate Cap;
(xx) the Gross Margin;
(xxi) a code indicating if such Mortgage Loan is a Covered
Mortgage
Loan and the
rate for the Mortgage Insurance Premium, if applicable;
(xxii) a code indicating whether the Mortgage Loan is a CHL
Mortgage
Loan, a Park
Monaco Mortgage Loan or a Park Sienna Mortgage Loan; and
(xxiii) the premium rate for any lender-paid mortgage insurance,
if
applicable.
Such schedule shall also set forth the
total of the amounts described under
(vii) above for all of the Mortgage Loans
and for each Loan Group. The
Mortgage Loan Schedule shall be deemed to
include each Loan Number and
Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section
2.01(f) and all the related Subsequent
Mortgage Loans and Subsequent Mortgage
Loan information included therein.
29
<PAGE>
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to the provisions
hereof and any Subsequent Transfer
Agreement as from time to time are held as
part of the Trust Fund (including
any REO Property), the mortgage loans so
held being identified in the Mortgage
Loan Schedule, notwithstanding foreclosure
or other acquisition of title of
the related Mortgaged Property. Any
mortgage loan that was intended by the
parties hereto to be transferred to the
Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not
so transferred for any reason,
including a breach of the representation
contained in Section 2.02 hereof,
shall continue to be a Mortgage Loan
hereunder until the Purchase Price with
respect thereto has been paid to the Trust
Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note
from time to time.
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 and (i) the
Class 1-A-1 Certificates, the Class 1-A-1
Net Rate Cap, (ii) each Class of
Class 2-A Certificates, the Class 2-A Net
Rate Cap and (iii) each Class of
Subordinate Certificates, the Subordinate
Net Rate Cap.
Net Rate Carryover: With respect to any Class of
Interest-Bearing
Certificates and any Distribution Date, the
sum of (A) the excess of (i) the
amount of interest that such Class would
otherwise have accrued for such
Distribution Date had the Pass-Through Rate
for such Class and the related
Accrual Period not been determined based on
the applicable Net Rate Cap, over
(ii) the amount of interest accrued on such
Class at the applicable Net Rate
Cap for such Distribution Date and (B) the
Net Rate Carryover for such Class
for all previous Distribution Dates not
previously paid pursuant to Section
4.04, together with interest thereon at the
then-applicable Pass-Through Rate
for such Class, without giving effect to
the applicable Net Rate Cap.
NIM Insurer: Any insurer guarantying at the request of CHL
certain
payments under notes backed or secured by
the Class C or Class P Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Master Servicer
that, in the good faith judgment of
the Master Servicer, will not or, in the
case of a current delinquency, would
not, be ultimately recoverable by the
Master Servicer from the related
Mortgagor, related Liquidation Proceeds or
otherwise.
30
<PAGE>
Non-United States Person : A Person that is not a citizen or
resident of the United States, a
corporation, partnership, or other entity
(treated as a corporation or a partnership
for federal income tax purposes)
created or organized in or under the laws
of the United States, any state
thereof or the District of Columbia, an
estate whose income from sources
without the United States is includible in
gross income for United States
federal income tax purposes regardless of
its connection with the conduct of a
trade or business within the United States,
or a trust if a court within the
United States is able to exercise primary
supervision over the administration
of the trust and one or more United States
persons have authority to control
all substantial decisions of the
trustor.
OC Floor: With respect to any Distribution Date, an amount equal
to
0.50% of the sum of the aggregate Cut-off
Date Principal Balance of the
Initial Mortgage Loans and the Pre-Funded
Amount.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the
Board, the Vice Chairman of the
Board, the President, a Managing Director,
a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or
one of the Assistant Treasurers or
Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer,
signed by the President, an Executive
Vice President, a Vice President, an
Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or
Assistant Secretaries of Countrywide GP,
Inc., its general partner or (iii) if
provided for in this Agreement, signed
by a Servicing Officer, as the case may be,
and delivered to the Depositor and
the Trustee, as the case may be, as
required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Interest-Bearing Certificates, the rate
determined by the Trustee on the
related Interest Determination Date on the
basis of the rate for U.S. dollar
deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest
Determination Date; provided that the
parties hereto acknowledge that One-Month
LIBOR calculated for the first
Accrual Period for the Interest-Bearing
Certificates shall equal 3.83% 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.
31
<PAGE>
Optional Termination: The termination of the Trust Fund
provided
hereunder pursuant to the purchase of the
Mortgage Loans pursuant to clause
(a) of the first sentence of Section 9.01
hereof.
Optional Termination Date: The first Distribution Date on which
the
aggregate Stated Principal Balance of the
Mortgage Loans is less than or equal
to 10% of the sum of the aggregate Cut-off
Date Principal Balance of the
Initial Mortgage Loans and the Pre-Funded
Amount.
Original Value: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the
underlying Mortgaged Property, on
the lower of an appraisal satisfactory to
the Master Servicer or the sales
price of such property or, in the case of a
refinancing, on an appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore
executed and authenticated under
this Agreement except:
(i)
Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii)
Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage
Loan with a Stated Principal Balance
greater than zero that was not the
subject of a Principal Prepayment in full,
and that did not become a
Liquidated Mortgage Loan, prior to the end
of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by
which the Overcollateralization
Target Amount exceeds the
Overcollateralized Amount on such Distribution Date
(after giving effect to distribution of the
Principal Distribution Amount
(other than the portion thereof consisting
of the Extra Principal Distribution
Amount) on such Distribution Date).
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the
lesser of (i) the Excess
Overcollateralization Amount for such
Distribution Date and (ii) the aggregate
Principal Remittance Amount for Loan Group
1 and Loan Group 2 for such
Distribution Date.
Overcollateralization Target Amount: With respect to any
Distribution Date (a) prior to the Stepdown
Date, an amount equal to 1.85% of
the sum of the aggregate Cut-off Date
Principal Balance of the Initial
Mortgage Loans and the Pre-Funded Amount
and (b) on or after the Stepdown
Date, the greater of (i) an amount equal to
3.70% of the aggregate Stated
Principal Balance of the Mortgage Loans for
the current Distribution Date and
(ii) the OC Floor; provided, however, that
if a Trigger Event is in effect on
any Distribution Date, the
32
<PAGE>
Overcollateralization Target Amount will be
the Overcollateralization Target
Amount as in effect for the prior
Distribution Date.
Overcollateralized Amount: With respect to any Distribution
Date,
the amount, if any, by which (x) the sum of
the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date and any amount on
deposit in the Pre-Funding Account exceeds
(y) the aggregate Certificate
Principal Balance of the Interest-Bearing
Certificates as of such Distribution
Date (after giving effect to distribution
of the Principal Remittance Amounts
to be made on such Distribution Date and,
in the case of the Distribution Date
immediately following the end of the
Funding Period, any amounts to be
released from the Pre-Funding Account).
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.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company,
and its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such
on
the Mortgage Loan Schedule for which Park
Sienna is the applicable Seller.
Pass-Through Rate: With respect to any Accrual Period and each
Class
of Interest-Bearing Certificates the lesser
of (x) One-Month LIBOR for such
Accrual Period plus the Margin for such
Class and Accrual Period and (y) the
applicable Net Rate Cap for such Class and
the related Distribution Date.
Percentage Interest: With respect to any Interest-Bearing
Certificate, a fraction, expressed as a
percentage, the numerator of which is
the Certificate Principal Balance
represented by such Certificate and the
denominator of which is the aggregate
Certificate Principal Balance of the
related Class. With respect to the Class C,
Class P and Class A-R
Certificates, the portion of the Class
evidenced thereby, expressed as a
percentage, as stated on the face of such
Certificate.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i)
obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of
the United States;
(ii)
general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the
highest long-term debt rating of each Rating Agency, or such
lower
rating as each Rating Agency has
33
<PAGE>
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;
(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
34
<PAGE>
(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 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
35
<PAGE>
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 Net Rate Cap: As
defined in the Preliminary Statement.
Pool Stated Principal Balance: The aggregate of the Stated
Principal
Balances of the Mortgage Loans which were
Outstanding Mortgage Loans.
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account
on the Closing Date, which shall equal
$148,014,536.54.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to
Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders
and designated "The Bank of New
York, in trust for registered holders of
CWABS, Inc., Asset-Backed
Certificates, Series 2005-AB3." Funds in
the Pre-Funding Account shall be held
in trust for the Certificateholders for the
uses and purposes set forth in
this Agreement and shall not be a part of
any REMIC created hereunder,
provided, however that any investment
income earned from Permitted Investments
made with funds in the Pre-Funding Account
will be for the account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement
relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or
premiums, if any, due in connection with a
full or partial prepayment of such
Mortgage Loan within the related Prepayment
Charge Period in accordance with
the terms thereof (other than any Master
Servicer Prepayment Charge Payment
Amount).
Prepayment Charge Period: With respect to any Mortgage Loan,
the
period of time during which a Prepayment
Charge may be imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date with
respect to each Initial Mortgage Loan and
as of the Subsequent Cut-off Date
with respect to each Subsequent Mortgage
Loan, a list attached hereto as
Schedule I (including the Prepayment Charge
Summary attached thereto), setting
forth the following information with
respect to each Prepayment Charge:
(i)
the Mortgage Loan identifying number;
(ii) a
code indicating the type of Prepayment Charge;
(iii) the state
of origination of the related Mortgage Loan;
36
<PAGE>
(iv) the
date on which the first monthly payment was due on
the related Mortgage Loan;
(v)
the term of the related Prepayment Charge; and
(vi)
the
principal balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall
contain
the necessary information for each Initial
Mortgage Loan. The Prepayment
Charge Schedule shall be amended by the
Master Servicer upon the sale of any
Subsequent Mortgage Loans to the Trust
Fund. In addition, the Prepayment
Charge Schedule shall be amended from time
to time by the Master Servicer in
accordance with the provisions of this
Agreement and a copy of each related
amendment shall be furnished by the Master
Servicer to the Class P and Class C
Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject
of a Principal Prepayment during
the period from the related Due Date to the
end of the related Prepayment
Period, any payment of interest received in
connection therewith (net of any
applicable Servicing Fee) representing
interest accrued for any portion of
such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the
subject of a partial Principal
Prepayment or a Principal Prepayment in
full during the period from the
beginning of the related Prepayment Period
to the Due Date in such Prepayment
Period (other than a Principal Prepayment
in full resulting from the purchase
of a Mortgage Loan pursuant to Section
2.02, 2.03, 2.04, 3.12 or 9.01 hereof)
and for each Mortgage Loan that became a
Liquidated Mortgage Loan during the
related Due Period, the amount, if any, by
which (i) one month's interest at
the applicable Net Mortgage Rate on the
Stated Principal Balance of such
Mortgage Loan immediately prior to such
prepayment (or liquidation) or in the
case of a partial Principal Prepayment on
the amount of such prepayment (or
Liquidation Proceeds) exceeds (ii) the
amount of interest paid or collected in
connection with such Principal Prepayment
or such Liquidation Proceeds.
Prepayment Period: As to any Distribution Date and related Due
Date,
the period beginning with the opening of
business on the sixteenth day of the
calendar month preceding the month in which
such Distribution Date occurs (or,
with respect to the first Distribution
Date, the period beginning with the
opening of business on the day immediately
following the Initial Cut-off Date)
and ending on the close of business on the
fifteenth day of the month in which
such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of
New
York, as publicly announced to be in effect
from time to time. The Prime Rate
shall be adjusted automatically, without
notice, on the effective date of any
change in such prime commercial lending
rate. The Prime Rate is not
necessarily The Bank of New York's lowest
rate of interest.
Principal Distribution Amount: With respect to each
Distribution
Date and a Loan Group, the sum of (i) the
Principal Remittance Amount for such
Loan Group for such
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Distribution Date, (ii) the Extra Principal
Distribution Amount for such Loan
Group for such Distribution Date, and (iii)
with respect to the Distribution
Date immediately following the end of the
Funding Period, the amount, if any,
remaining in the Pre-Funding Account at the
end of the Funding Period (net of
any investment income therefrom) allocable
to such Loan Group, minus (iv) (a)
the amount of any Group 1
Overcollateralization Reduction Amount, in the case
of Loan Group 1 and (b) the amount of any
Group 2 Overcollateralization
Reduction Amount, in the case of Loan Group
2.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a
Mortgage Loan (including loans
purchased or repurchased under Sections
2.02, 2.03, 2.04, 3.12 and 9.01
hereof) that is received in advance of its
scheduled Due Date to the extent it
is not accompanied by an amount as to
interest representing scheduled interest
due on any date or dates in any month or
months subsequent to the month of
prepayment. Partial Principal Prepayments
shall be applied by the Master
Servicer in accordance with the terms of
the related Mortgage Note.
Principal Relocation Payment: In the case of the Variable Loan
Groups and Variable Interests only, a
payment from any Loan Group to a REMIC 2
Interest other than a Regular Interest
corresponding to that Loan Group as
provided in the Preliminary Statement.
Principal Relocation Payments shall be
made of principal allocations comprising
the Principal Remittance Amount from
a Loan Group and shall include a
proportionate allocation of Realized Losses
from the Mortgage Loans of such Loan
Group.
Principal Remittance Amount: With respect to the Mortgage Loans
in
each Loan Group and any Distribution Date,
(a) the sum, without duplication,
of: (i) the scheduled principal collected
with respect to the Mortgage Loans
during the related Due Period or advanced
with respect to such Distribution
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
delivered by the Sellers in connection with
a substitution of a Mortgage Loan
is less than the aggregate unpaid principal
balance of any Deleted Mortgage
Loans and (v) all Liquidation Proceeds (to
the extent such Liquidation
Proceeds related to principal) and
Subsequent Recoveries collected during the
related Due Period; less (b) all Advances
relating to principal and certain
expenses reimbursable pursuant to Section
6.03 and reimbursed during the
related Due Period, in each case with
respect to such Loan Group.
Principal Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 3.08 in the name of
the Trustee for the benefit of the
Certificateholders and designated "The Bank
of New York in trust for registered Holders
of CWABS, Inc., Asset-Backed
Certificates, Series 2005-AB3". 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 B, Class C and Class P
Certificates.
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Prospectus: The prospectus dated June 10, 2005, relating to
asset-backed securities to be sold by the
Depositor.
Prospectus Supplement: The prospectus supplement dated September
21,
2005, relating to the public offering of
the certain Classes of Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to
be
(1) repurchased by a Seller or purchased by
the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03
or 3.12 hereof or (2) repurchased
by the Depositor pursuant to Section 2.04
hereof, or (y) that the Master
Servicer has a right to purchase pursuant
to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid
principal balance (or, if such
purchase or repurchase, as the case may be,
is effected by the Master
Servicer, the Stated Principal Balance) of
the Mortgage Loan as of the date of
such purchase, (ii) accrued interest
thereon at the applicable Mortgage Rate
(or, if such purchase or repurchase, as the
case may be, is effected by the
Master Servicer, at the Net Mortgage Rate)
from (a) the date through which
interest was last paid by the Mortgagor
(or, if such purchase or repurchase,
as the case may be, is effected by the
Master Servicer, the date through which
interest was last advanced and not
reimbursed by the Master Servicer) to (b)
the Due Date in the month in which the
Purchase Price is to be distributed to
Certificateholders and (iii) any costs,
expenses and damages incurred by the
Trust Fund resulting from any violation of
any predatory or abusive lending
law in connection with such Mortgage
Loan.
Rating Agency: Each of Moody's and S&P. If any such
organization or
its successor is no longer in existence,
"Rating Agency" shall be a nationally
recognized statistical rating organization,
or other comparable Person,
designated by the Depositor, notice of
which designation shall be given to the
Trustee. References herein to a given
rating category of a Rating Agency shall
mean such rating category without giving
effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan,
an
amount (not less than zero or more than the
Stated Principal Balance of the
Mortgage Loan) as of the date of such
liquidation, equal to (i) the Stated
Principal Balance of such Liquidated
Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation
Proceeds, if any, received in
connection with such liquidation during the
month in which such liquidation
occurs, to the extent applied as recoveries
of principal of the Liquidated
Mortgage Loan. With respect to each
Mortgage Loan that has become the subject
of a Deficient Valuation, (i) if the value
of the related Mortgaged Property
was reduced below the principal balance of
the
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related Mortgage Note, the amount by which
the value of the Mortgaged Property
was reduced below the principal balance of
the related Mortgage Note, and (ii)
if the principal amount due under the
related Mortgage Note has been reduced,
the difference between the principal
balance of the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient
Valuation. With respect to each
Mortgage Loan that has become the subject
of a Debt Service Reduction and any
Distribution Date, the amount, if any, by
which the related Scheduled Payment
was reduced.
Record Date: With respect to any Distribution Date and the
Interest-Bearing Certificates, the Business
Day immediately preceding such
Distribution Date, or if such Certificates
are no longer Book-Entry
Certificates, the last Business Day of the
month preceding the month of such
Distribution Date. With respect to the
Class A-R, Class C and Class P
Certificates, the last Business Day of the
month preceding the month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for
United States dollar deposits for one
month that are quoted by the Reference
Banks as of 11:00 a.m., New York City
time, on the related Interest Determination
Date to prime banks in the London
interbank market for a period of one month
in amounts approximately equal to
the outstanding aggregate Certificate
Principal Balance of the
Interest-Bearing Certificates on such
Interest Determination Date, provided
that at least two such Reference Banks
provide such rate. If fewer than two
offered rates appear, the Reference Bank
Rate will be the arithmetic mean
(rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks
in New York City, selected by the
Trustee, as of 11:00 a.m., New York City
time, on such date for loans in U.S.
dollars to leading European banks for a
period of one month in amounts
approximately equal to the aggregate
Certificate Principal Balance of the
Interest-Bearing Certificates on such
Interest Determination Date.
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.
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<PAGE>
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM
Insurer in accordance with Section 4.04.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of
foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller
for a Deleted Mortgage Loan which must, on
the date of such substitution, as
confirmed in a Request for File Release,
(i) have a Stated Principal Balance,
after deduction of the principal portion of
the Scheduled Payment due in the
month of substitution, not in excess of,
and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) (a) have a Maximum
Mortgage Rate no more than 1% per annum
higher or lower than the Maximum
Mortgage Rate of the Deleted Mortgage Loan;
(b) have a Minimum Mortgage Rate
no more than 1% per annum higher or lower
than the Minimum Mortgage Rate of
the Deleted Mortgage Loan; (c) have the
same Index and intervals between
Adjustment Dates as that of the Deleted
Mortgage Loan; (d) have a Gross Margin
not more than 1% per annum higher or lower
than that of the Deleted Mortgage
Loan; and (e) have an Initial Periodic Rate
Cap and a Subsequent Periodic Rate
Cap each not more than 1% lower than that
of the Deleted Mortgage Loan; (iii)
have the same or higher credit quality
characteristics than that of the
Deleted Mortgage Loan; (iv) be accruing
interest at a rate not more than 1%
per annum higher or lower than that of the
Deleted Mortgage Loan; (v) have a
Loan-to-Value Ratio no higher than that of
the Deleted Mortgage Loan; (vi)
have a remaining term to maturity not
greater than (and not more than one year
less than) that of the Deleted Mortgage
Loan; (vii) not permit conversion of
the Mortgage Rate from a variable rate to a
fixed rate; (viii) provide for a
Prepayment Charge on terms substantially
similar to those of the Prepayment
Charge, if any, of the Deleted Mortgage
Loan; (ix) have the same occupancy
type and lien priority as the Deleted
Mortgage Loan; (x) be covered by the
Mortgage Insurance Policy if the Deleted
Mortgage Loan was covered by the
Mortgage Insurance Policy; and (xi) comply
with each representation and
warranty set forth in Section 2.03 as of
the date of substitution; provided,
however, that notwithstanding the
foregoing, to the extent that compliance
with clause (xi) of this definition would
cause a proposed Replacement
Mortgage Loan to fail to comply with one or
more of clauses (i), (ii), (iv),
(viii) and/or (ix) of this definition, then
such proposed Replacement Mortgage
Loan must comply with clause (xi) and need
not comply with one or more of
clauses (i), (ii), (iv), (viii) and/or
(ix), to the extent, and only to the
extent, necessary to assure that the
Replacement Mortgage Loan otherwise
complies with clause (xi).
Representing Party: As defined in Section 2.03(e).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the
Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted
by
the Master Servicer to the Co-Trustee,
substantially in the form of Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the
excess of (i) $10,000 over (ii) the
amount of funds on deposit in the Carryover
Reserve Fund.
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Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be
maintained from time to time under
this Agreement, including with respect to
the Covered Mortgage Loans, the
Mortgage Insurance Policy.
Responsible Officer: When used with respect to the Trustee, any
Vice
President, any Assistant Vice President,
the Secretary, any Assistant
Secretary, any Trust Officer or any other
officer of the Trustee customarily
performing functions similar to those
performed by any of the above designated
officers and also to whom, with respect to
a particular matter, such matter is
referred because of such officer's
knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution
Date on or after the Stepdown Date and any
Loan Group or Loan Groups, the
average of the Sixty-Day Delinquency Rates
for such Loan Group or Loan Groups
and such Distribution Date and the two
immediately preceding Distribution
Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of
The
McGraw-Hill Companies, Inc. and its
successors.
Scheduled Payment: With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and/or
interest due on any Due Date on such
Mortgage Loan which is payable by the
related Mortgagor from time to time
under the related Mortgage Note,
determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt Service
Reduction with respect to such
Mortgage Loan and (ii) any reduction in the
amount of interest collectible
from the related Mortgagor pursuant to the
Relief Act or any similar state or
local law; (b) without giving effect to any
extension granted or agreed to by
the Master Servicer pursuant to Section
3.05(a); and (c) on the assumption
that all other amounts, if any, due under
such Mortgage Loan are paid when
due.
Securities Act: The Securities Act of 1933, as amended.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans
to
the Depositor, Park Monaco, in its capacity
as seller of the Park Monaco
Mortgage Loans to the Depositor and Park
Sienna, in its capacity as seller of
the Park Sienna Mortgage Loans to the
Depositor.
Seller Shortfall Interest Requirement: With respect to the
Distribution Date in each of October 2005,
November 2005 and December 2005, is
the sum of:
(a)
the product of: (1) the excess of the aggregate Stated
Principal Balances for such Distribution
Date of all the Mortgage Loans in the
Mortgage Pool (including the Subsequent
Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related
Due Period, over the aggregate Stated
Principal Balance for such Distribution
Date of such Mortgage Loans (including
such Subsequent Mortgage Loans, if any)
that have a scheduled
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<PAGE>
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 all the
Mortgage Loans in the Mortgage Pool
(including such Subsequent Mortgage Loans,
if any) (weighted on the basis of the
Stated Principal Balances thereof for
such Distribution Date) and the denominator
of which is 12; and
(b)
the lesser of:
(i) the
product of: (1) the amount on deposit in the
Pre-Funding Account at the beginning of the
related Due Period, and (2) a
fraction, the numerator of which is the
weighted average Net Mortgage Rate of
the Mortgage Loans (including Subsequent
Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related
Due Period (weighted on the basis
of the Stated Principal Balances thereof
for such Distribution Date) and the
denominator of which is 12; and
(ii) the excess
of (x) the amount of Current Interest and
Interest Carry Forward Amount due and
payable on the Interest-Bearing
Certificates for such Distribution Date,
over (y) Interest Funds otherwise
available to pay Current Interest and the
Interest Carry Forward Amount on the
Interest-Bearing Certificates and for such
Distribution Date (after giving
effect to the addition of any amounts in
clause (a) of this definition of
Seller Shortfall Interest Requirement to
Interest Funds for such Distribution
Date).
Senior Certificates: The Class A and Class A-R Certificates.
Senior Enhancement Percentage: With respect to a Distribution
Date
on or after the Stepdown Date, the fraction
(expressed as a percentage) (1)
the numerator of which is the excess of (a)
the aggregate Stated Principal
Balance of the Mortgage Loans for the
preceding Distribution Date over (b) (i)
before the Certificate Principal Balances
of the Senior Certificates have been
reduced to zero, the sum of the Certificate
Principal Balances of the Senior
Certificates, or (ii) after the Certificate
Principal Balances of the Senior
Certificates have been reduced to zero, the
Certificate Principal Balance of
the most senior Class of Subordinate
Certificates outstanding, as of the
related Master Servicer Advance Date, and
(2) the denominator of which is the
aggregate Stated Principal Balance of the
Mortgage Loans for the preceding
Distribution Date.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the
performance by the Master Servicer
of its servicing obligations hereunder,
including, but not limited to, the
cost of (i) the preservation, restoration
and protection of a Mortgaged
Property, (ii) any enforcement or judicial
proceedings, including
foreclosures, (iii) the management and
liquidation of any REO Property and
(iv) compliance with the obligations under
Section 3.10.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date,
an amount equal to one month's interest at
the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage
Loan for the preceding Distribution
Date or, in the event of any payment of
interest that accompanies a Principal
Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate
on the Stated Principal Balance of such
Mortgage Loan for the period covered
by such payment of interest.
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Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing Officer: Any officer of the Master Servicer involved
in,
or responsible for, the administration and
servicing of the Mortgage Loans
whose name and facsimile signature appear
on a list of servicing officers
furnished to the Trustee by the Master
Servicer on the Closing Date pursuant
to this Agreement, as such list may from
time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date
on
or after the related Stepdown Date and any
Loan Group or Loan Groups, a
fraction, expressed as a percentage, the
numerator of which is the aggregate
Stated Principal Balance for such
Distribution Date of all Mortgage Loans in
such Loan Group or Loan Groups 60 or more
days delinquent as of the close of
business on the last day of the calendar
month preceding such Distribution
Date (including Mortgage Loans in
foreclosure, bankruptcy and REO Properties)
and the denominator of which is the
aggregate Stated Principal Balance for
such Distribution Date of all Mortgage
Loans in such Loan Group or Loan
Groups.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off
Date, the unpaid principal balance
of the Mortgage Loan as of such date
(before any adjustment to the
amortization schedule for any moratorium or
similar waiver or grace period),
after giving effect to any partial
prepayments or Liquidation Proceeds
received prior to such date and to the
payment of principal due on or prior to
such date and irrespective any delinquency
in payment by the related
Mortgagor, and (ii) as of any other
Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments
(x) due with respect to such
Mortgage Loan during each Due Period ending
prior to such Distribution Date
and (y) that were received by the Master
Servicer as of the close of business
on the Determination Date related to such
Distribution Date or with respect to
which Advances were made as of the Master
Servicer Advance Date related to
such Distribution Date, (b) all Principal
Prepayments with respect to such
Mortgage Loan received by the Master
Servicer during each Prepayment Period
ending prior to such Distribution Date and
(c) all Liquidation Proceeds
collected with respect to such Mortgage
Loan during each Due Period ending
prior to such Distribution Date, to the
extent applied by the Master Servicer
as recoveries of principal in accordance
with Section 3.12. The Stated
Principal Balance of any Mortgage Loan that
becomes a Liquidated Mortgage Loan
will be zero on each date following the Due
Period in which such Mortgage Loan
becomes a Liquidated Mortgage Loan.
References herein to the Stated Principal
Balance of the Mortgage Loans at any time
shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in
the Trust Fund as of such time, and
references herein to the Stated Principal
Balance of a Loan Group at any time
shall mean the aggregate Stated Principal
Balance of all Mortgage Loans in
such Loan Group at such time.
Stepdown Date: The earlier to occur of (a) the Distribution Date
on
which the aggregate Certificate Principal
Balance of the Senior Certificates
is reduced to zero, and (b) the later to
occur of (x) the Distribution Date in
October 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
72.80% of the aggregate Stated Principal
Balance of the Mortgage Loans for
such Distribution Date.
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Stepdown Target Subordination Percentage: For each Class of
Subordinate Certificates, the respective
percentage indicated in the following
table:
Stepdown Target Subordination
Percentage
Class M-1.................................
22.20%
Class M-2.................................
17.70%
Class M-3.................................
14.80%
Class M-4.................................
12.40%
Class M-5.................................
10.20%
Class M-6.................................
8.40%
Class M-7.................................
7.00%
Class M-8.................................
5.70%
Class B...................................
3.70%
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 Interest-Bearing
Certificates (after all distributions of
principal on such Distribution Date)
exceeds the sum of the aggregate Stated
Principal Balance of the Mortgage
Loans for such Distribution Date and the
amount on deposit in the Pre-Funding
Account.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5, Class M-6, Class M-7, Class
M-8 and Class B Certificates.
Subordinate Class Principal Distribution Amount: With respect to
any
Distribution Date and any Class of
Subordinate Certificates, the excess of (1)
the sum of (a) the aggregate Certificate
Principal Balance of the Class A
Certificates (after taking into account
distribution of the Class A Principal
Distribution Amount for such Distribution
Date), (b) the aggregate Certificate
Principal Balance of any Class(es) of
Subordinate Certificates that are senior
to the subject Class (in each case, after
taking into account distribution of
the Subordinate Class Principal
Distribution Amount(s) for such senior
Class(es) of Certificates for such
Distribution Date), and (c) the Certificate
Principal Balance of the subject Class of
Subordinate Certificates immediately
prior to such Distribution Date over (2)
the lesser of (a) the product of (x)
100% minus the Stepdown Target
Subordination Percentage for the subject Class
of Certificates and (y) the aggregate
Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (b)
the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor;
provided, however, that if such Class of
Subordinate Certificates is the only
Class of Subordinate Certificates
outstanding on such Distribution Date, that
Class will be entitled to receive the
entire remaining Principal Distribution
Amount for Loan Group 1 and Loan Group 2
until the Certificate Principal
Balance thereof is reduced to zero.
Subordinate Component Balance: With respect to any Distribution
Date
and for each of Loan Group 1 and Loan Group
2, the excess of the principal
balance of the Mortgage Loans in such Loan
Group as of the first day of the
related Due Period (after giving effect to
Principal Prepayments received in
the Prepayment Period ending during such
Due Period) over
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the Certificate Principal Balance of the
Class 1-A-1 Certificates in the case
of Loan Group 1 and the Class 2-A
Certificates in the case of Loan Group 2, in
each case immediately prior to that
Distribution Date.
Subordinate Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the
Corridor Contract Administrator
pursuant to the Corridor Contract
Assignment Agreement), a form of which is
attached hereto as Exhibit Q-3.
Subordinate Corridor Contract Termination Date: With respect to
the
Subordinate Corridor Contract, the
Distribution Date in February 2010.
Subordinate Net Rate Cap: With respect to any Distribution Date
and
each Class of Subordinate Certificates, the
weighted average of (a) the
weighted average Adjusted Net Mortgage Rate
of the Mortgage Loans in Loan
Group 1 on such Distribution Date (weighted
by an amount equal to the positive
difference (if any) of the sum of the
aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 1 and the
amount on deposit in the
Pre-Funding Account in respect of Loan
Group 1 over the outstanding
Certificate Principal Balance of the Class
1-A-1 Certificates) and (b) the
weighted average Adjusted Net Mortgage Rate
of the Mortgage Loans in Loan
Group 2 on such Distribution Date (weighted
by an amount equal to the positive
difference (if any) of the sum of the
aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and the
amount on deposit in the
Pre-Funding Account in respect of Loan
Group 2 over the outstanding aggregate
Certificate Principal Balance of the Class
2-A Certificates), adjusted to an
effective rate reflecting the calculation
of interest on the basis of the
actual number of days elapsed during the
related Accrual Period and a 360-day
year.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal
to the aggregate of all amounts in
respect of (i) principal of the related
Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and
received by the Master Servicer on or
before such Subsequent Transfer Date and
not applied in computing the Cut-off
Date Principal Balance thereof and (ii)
interest on the such Subsequent
Mortgage Loans due after such Subsequent
Cut-off Date and received by the
Master Servicer on or before the Subsequent
Transfer Date.
Subsequent Cut-off Date: In the case of any Subsequent Mortgage
Loan, the later of (x) the first day of the
month of the related Subsequent
Transfer Date and (y) the date of
origination of such Subsequent Mortgage
Loan.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the
Trustee
on a Subsequent Transfer Date, and listed
on the related Loan Number and
Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section
2.01(f). When used with respect to a single
Subsequent Transfer Date,
"Subsequent Mortgage Loan" shall mean a
Subsequent Mortgage Loan conveyed to
the Trustee on such Subsequent Transfer
Date.
Subsequent Periodic Rate Cap: With respect to each Mortgage
Loan,
the percentage specified in the related
Mortgage Note that limits permissible
increases and decreases in the Mortgage
Rate on any Adjustment Date (other
than the initial Adjustment Date).
46
<PAGE>
Subsequent Recoveries: As to any Distribution Date, with respect
to
a Liquidated Mortgage Loan that resulted in
a Realized Loss in a prior
calendar month, unexpected amounts received
by the Master Servicer (net of any
related expenses permitted to be reimbursed
pursuant to Section 3.08 and 3.12)
specifically related to such Liquidated
Mortgage Loan after the classification
of such Mortgage Loan as a Liquidated
Mortgage Loan.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P
hereto, executed and delivered by the
Sellers, the Depositor and the Trustee as
provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement,
the
"Subsequent Transfer Date" identified in
such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer
Date for any Subsequent Transfer
Agreement must be a Business Day and may
not be a date earlier than the date
on which the Subsequent Transfer Agreement
is executed and delivered by the
parties thereto pursuant to Section
2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent
Transfer Date Purchase Amount"
identified in the related Subsequent
Transfer Agreement which shall be an
estimate of the aggregate Stated Principal
Balances of the Subsequent Mortgage
Loans identified in such Subsequent
Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal
to the lesser of (i) the aggregate
Stated Principal Balances as of the related
Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date, as listed
on the related Loan Number and Borrower
Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and
(ii) the amount on deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03(e).
Substitution Amount: With respect to any Mortgage Loan
substituted
pursuant to Section 2.03(e), the excess of
(x) the principal balance of the
Mortgage Loan that is substituted 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 Treasury
regulation ss. 301.6231(a)(7)-1. 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.
47
<PAGE>
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 36 months after
origination thereof before such
Mortgage Rate becomes subject to
adjustment.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or after
the
Stepdown Date, either a Delinquency Trigger
Event with respect to that
Distribution Date or a Cumulative Loss
Trigger Event with respect to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and
principal received on or with
respect thereto after the Cut-off Date to
the extent not applied in computing
the Cut-off Date Principal Balance thereof,
exclusive of interest not required
to be deposited in the Certificate Account
pursuant to Section 3.05(b)(2);
(ii) the Certificate Account, the
Distribution Account, the Principal Reserve
Fund, the Carryover Reserve Fund, the
Pre-Funding Account and all amounts
deposited therein pursuant to the
applicable provisions of this Agreement;
(iii) the rights to receive certain
proceeds of the Corridor Contracts as
provided in the Corridor Contract
Administration Agreement, (iv) property that
secured a Mortgage Loan and has been
acquired by foreclosure, deed in lieu of
foreclosure or otherwise; (v) the
mortgagee's rights under the Insurance
Policies with respect to the Mortgage Loan;
and (vi) all proceeds of the
conversion, voluntary or involuntary, of
any of the foregoing into cash or
other liquid property.
Trustee: The Bank of New York, a New York banking corporation,
not
in its individual capacity, but solely in
its capacity as trustee for the
benefit of the Certificateholders under
this Agreement, and any successor
thereto, and any corporation or national
banking association resulting from or
surviving any consolidation or merger to
which it or its successors may be a
party and any successor trustee as may from
time to time be serving as
successor trustee hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per
annum rate of interest determined
as of the date of such Advance equal to the
Prime Rate in effect on such date
plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate
multiplied by the sum of (i) the Pool
Stated Principal Balance and (ii) any
amounts remaining in the Pre-Funding
Account (excluding any investment earnings
thereon) with respect to such
Distribution Date.
48
<PAGE>
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum
rate agreed upon in writing on or prior to
the Closing Date by the Trustee and
the Depositor, which is 0.009% per
annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 24 months after
origination thereof before such
Mortgage Rate becomes subject to
adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41,
67 Fed. Reg. 54487 (2002), as amended (or
any successor thereto), or any
substantially similar administrative
exemption granted by the U.S. Department
of Labor.
Underwriters: Countrywide Securities Corporation, Barclays
Capital
Inc. and Banc of America Securities
LLC.
Unpaid Realized Loss Amount: For the Class 2-A-2B Certificates
and
any Class of Subordinate Certificates and
any Distribution Date, (x) the
portion of the aggregate Applied Realized
Loss Amount previously allocated to
that Class remaining unpaid from prior
Distribution Dates minus (y) any
increase in the Certificate Principal
Balance of that Class due to the
allocation of Subsequent Recoveries to the
Certificate Principal Balance of
that Class pursuant to Section 4.04(h).
Voting Rights: The voting rights of all the Certificates that
are
allocated to any Certificates for purposes
of the voting provisions hereunder.
Voting Rights allocated to each Class of
Certificates shall be allocated 97%
to the Certificates other than the Class
A-R, Class C and Class P Certificates
(with the allocation among the Certificates
to be in proportion to the
Certificate Principal Balance of each Class
relative to the Certificate
Principal Balance of all other such
Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting
Rights will be allocated among the
Certificates of each such Class in
accordance with their respective Percentage
Interests.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined
meanings
when used in any certificate, agreement or
other document delivered pursuant
hereto unless otherwise defined therein.
For purposes of this Agreement and
all such certificates and other documents,
unless the context otherwise
requires: (a) accounting terms not
otherwise defined in this Agreement, and
accounting terms partly defined in this
Agreement to the extent not defined,
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
49
<PAGE>
regulation refer to that law or regulation
as amended from time to time and
include any successor law or regulation;
(f) references to any agreement refer
to that agreement as amended from time to
time; and (g) references to any
Person include that Person's permitted
successors and assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller
hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without
recourse, all the right, title and
interest of such Seller in and to the
applicable Initial Mortgage Loans,
including all interest and principal
received and receivable by such Seller on
or with respect to applicable Initial
Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in
computing the Cut-off Date Principal
Balance thereof) or deposited into the
Certificate Account by the Master
Servicer on behalf of such Seller as part
of the Initial Certificate Account
Deposit as provided in this Agreement,
other than principal due on the
applicable Initial Mortgage Loans on or
prior to the Initial Cut-off Date and
interest accruing prior to the Initial
Cut-off Date. The Master Servicer
confirms that, on behalf of the Sellers,
concurrently with the transfer and
assignment, it has deposited into the
Certificate Account the Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans
referred to in the preceding paragraph, the
Depositor sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for benefit of the
Certificateholders, without recourse, all
right title and interest in the
Initial Mortgage Loans.
CHL further agrees (x) to cause The Bank of New York to enter
into
the Corridor Contract Administration
Agreement as Corridor Contract
Administrator and (y) to assign all of its
right, title and interest in and to
the interest rate corridor transaction
evidenced by each Confirmation, and to
cause all of its obligations in respect of
such transaction to be assumed by,
the Corridor Contract Administrator, on the
terms and conditions set forth in
the Corridor Contract Assignment
Agreement.
(b)
Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided
by Section 2.01(d) and the terms and
conditions of this Agreement, each Seller
sells, transfers, assigns, sets over
and otherwise conveys to the Depositor,
without recourse, on each Subsequent
Transfer Date, all the right, title and
interest of such Seller in and to the
related Subsequent Mortgage Loans,
including all interest and principal
received and receivable by such Seller on
or with respect to such Subsequent
Mortgage Loans after the related Subsequent
Cut-off Date (to the extent not
applied in computing the Cut-off Date
Principal Balance thereof) or deposited
into the Certificate Account by the Master
Servicer on behalf of such Seller
as part of any related Subsequent
Certificate Account Deposit as provided in
this Agreement, other than principal due on
such Subsequent Mortgage Loans on
or prior to the related Subsequent Cut-off
Date and interest accruing prior to
the related Subsequent Cut-off Date.
50
<PAGE>
Immediately upon the conveyance of the Subsequent Mortgage
Loans
referred to in the preceding paragraph, the
Depositor sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for benefit of the
Certificateholders, without recourse, all
right title and interest in the
Subsequent Mortgage Loans.
(c)
Each Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by
the Depositor and has agreed to take
the actions specified herein. The
Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells,
transfers, assigns and otherwise
conveys to the Trustee for the use and
benefit of the Certificateholders,
without recourse, all right title and
interest in the portion of the Trust
Fund not otherwise conveyed to the Trustee
pursuant to Section 2.01(a) or (b).
(d)
On any Business Day during the Funding Period designated by
CHL to the Trustee, the Sellers, the
Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer
Agreement. After the execution and
delivery of such Subsequent Transfer
Agreement, on the Subsequent Transfer
Date, the Trustee shall set aside in the
Pre-Funding Account an amount equal
to the related Subsequent Transfer Date
Purchase Amount.
(e)
The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the
satisfaction of each of the following
conditions:
(1) the Trustee
and the Underwriters will be provided
Opinions of
Counsel addressed to the Rating Agencies as with respect to
the sale of the
Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date (such
opinions being substantially similar to the opinions
delivered on the
Closing Date to the Rating Agencies with respect to the
sale of the
Initial Mortgage Loans on the Closing Date), to be delivered
as provided in
Section 2.01(f);
(2) the
execution and delivery of such Subsequent Transfer
Agreement or
conveyance of the related Subsequent Mortgage Loans does not
result in a
reduction or withdrawal of any ratings assigned to the
Certificates by
the Rating Agencies;
(3) the
Depositor shall deliver to the Trustee an Officer's
Certificate
confirming the satisfaction of each of the conditions set
forth in this
Section 2.01(e) required to be satisfied by such Subsequent
Transfer
Date;
(4) each
Subsequent Mortgage Loan conveyed on such
Subsequent
Transfer Date satisfies the representations and warranties
applicable to it
under this Agreement, provided, however, that with
respect to a
breach of a representation and warranty with respect to a
Subsequent
Mortgage Loan set forth in this clause (4), the obligation
under Section
2.03(e) of this Agreement of the applicable Seller, to
cure, repurchase
or replace such Subsequent Mortgage Loan shall
constitute the
sole remedy against such Seller respecting such breach
available to
Certificateholders, the Depositor or the Trustee;
(5) the
Subsequent Mortgage Loans conveyed on such
Subsequent
Transfer Date were selected in a manner reasonably believed
not to be
adverse to the interests of the Certificateholders;
51
<PAGE>
(6) no
Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date
was 30 or more days delinquent;
(7) following
the conveyance of the Subsequent Mortgage
Loans on such
Subsequent Transfer Date, the characteristics of each Loan
Group will not
vary by more than the amount specified below (other than
the percentage
of Mortgage Loans secured by Mortgaged Properties located
in the State of
California, which will not exceed 50% of the Mortgage
Pool and the
percentage of mortgage loans in the Credit Grade Categories
of "C" or below,
which will not exceed 10% of the Mortgage Loans in each
Loan Group) from
the characteristics listed below; provided that for the
purpose of
making such calculations, the characteristics for any Initial
Mortgage Loan
made will be taken as of the Initial Cut-off Date and the
characteristics
for any Subsequent Mortgage Loans will be taken as of the
Subsequent
Cut-off Date;
<TABLE>
<CAPTION>
Loan Group 1
Permitted Variance
Characteristic
Value
or Range
----------------------------------------------------------------
----------
------------------
<S>
<C>
<C>
Average Stated Principal
Balance................................ $204,467
10%
Weighted Average Mortgage
Rate.................................. 6.830%
0.10%
Weighted Average Original Loan-to-Value
Ratio................... 87.49%
3%
Weighted Average Remaining Term to
Maturity..................... 359 months
3 months
Weighted Average Credit Bureau Risk
Score....................... 679 points
5 points
Loan Group 2
Permitted Variance
Characteristic
Value
or Range
----------------------------------------------------------------
----------
------------------
Average Stated Principal
Balance................................ $385,014
10%
Weighted Average Mortgage
Rate.................................. 6.560%
0.10%
Weighted Average Original Loan-to-Value
Ratio................... 86.73%
3%
Weighted Average Remaining Term to
Maturity..................... 358 months
3 months
Weighted Average Credit Bureau Risk
Score....................... 682 points
5 points
</TABLE>
(8) none of the
Sellers or the Depositor is insolvent and
neither of the
Sellers nor the Depositor will be rendered insolvent by
the conveyance
of Subsequent Mortgage Loans on such Subsequent Transfer
Date; and
(9) the Trustee
and the Underwriters will be provided with
an Opinion of
Counsel, which Opinion of Counsel shall not be at the
expense of
either the Trustee or the Trust Fund, addressed to the
Trustee, to the
effect that such purchase of Subsequent Mortgage Loans
will not (i)
result in the imposition of the tax on "prohibited
transactions" on
the Trust Fund or contributions after the Startup Date,
as defined in
Sections 860F(a)(2) and 860G(d) of the Code, respectively
or (ii) cause
any REMIC formed hereunder to fail to qualify as a REMIC,
such opinion to
be delivered as provided in Section 2.01(f).
52
<PAGE>
The Trustee shall not be required to investigate or otherwise
verify
compliance with these conditions, except
for its own receipt of documents
specified above, and shall be entitled to
rely on the required Officer's
Certificate.
(f)
Within six Business Days after each Subsequent Transfer Date,
upon (1) delivery to the Trustee by the
Depositor of the Opinions of Counsel
referred to in Section 2.01(e)(1) and
(e)(9), (2) delivery to the Trustee by
CHL (on behalf of each Seller) of a Loan
Number and Borrower Identification
Mortgage Loan Schedule reflecting the
Subsequent Mortgage Loans conveyed on
such Subsequent Transfer Date and the Loan
Group into which each Subsequent
Mortgage Loan was conveyed, (3) deposit in
the Certificate Account by the
Master Servicer on behalf of the Sellers of
the applicable Subsequent
Certificate Account Deposit, and (4)
delivery to the Trustee by the Depositor
of an Officer's Certificate confirming the
satisfaction of each of the
conditions precedent set forth in this
Section 2.01(f), the Trustee shall pay
the applicable Seller the Subsequent
Transfer Date Transfer Amount from such
funds that were set aside in the
Pre-Funding Account pursuant to Section
2.01(d). The positive difference, if any,
between the Subsequent Transfer Date
Transfer Amount and the Subsequent Transfer
Date Purchase Amount shall be
re-invested by the Trustee in the
Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise
verify
compliance with the conditions set forth in
the preceding paragraph, except
for its own receipt of documents specified
above, and shall be entitled to
rely on the required Officer's
Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a
letter of a nationally recognized
firm of independent public accountants
stating whether or not the Subsequent
Mortgage Loans conveyed on such Subsequent
Transfer Date conform to the
characteristics described in Section
2.01(e)(6) and (7).
(g)
In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered
to, and deposited with, the Co-
Trustee (or, in the case of the Delay
Delivery Mortgage Loans, will deliver to,
and deposit with, the Co-Trustee within the
time periods specified in the
definition of Delay Delivery Mortgage
Loans) (except as provided in clause (vi)
below) for the benefit of the
Certificateholders, the following documents or
instruments with respect to each such
Mortgage Loan so assigned (with respect to
each Mortgage Loan, clause (i) through (vi)
below, together, the "Mortgage File"
for each such Mortgage Loan):
(i)
the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order
of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage
Note has been lost or destroyed and not replaced, an original
lost
note affidavit, stating that the original Mortgage Note was lost
or
destroyed, together with a copy of the related Mortgage Note;
(ii) in
the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case
of
each MERS Mortgage
53
<PAGE>
Loan, the original Mortgage, noting the presence of the MIN of
the
Mortgage Loan and language indicating that the Mortgage Loan is
a
MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage
certified
by the public recording office in which such Mortgage has been
recorded;
(iii) in the
case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2005-AB3, CWABS, Inc., by
The
Bank of New York, a New York banking corporation, as trustee
under
the Pooling and Servicing Agreement dated as of September 1,
2005,
without recourse" (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect
the
assignment of and transfer to the assignee thereof, under the
Mortgage to which such assignment relates);
(iv) the
original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v)
the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the
original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders
thereto
or, in the event such original title policy has not been
received
from the insurer, such original or duplicate original lender's
title
policy and all riders thereto shall be delivered within one year
of
the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage
Loan, each Seller agrees that it will
cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide
evidence to the Trustee that it has
done so) that such Mortgage Loans have been
assigned by such Seller to the
Trustee in accordance with this Agreement
for the benefit of the
Certificateholders by including (or
deleting, in the case of Mortgage Loans
which are repurchased in accordance with
this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE
SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which
identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in
the field "Pool Field" which
identifies the series of the Certificates
issued in connection with such
Mortgage Loans. The Sellers further agree
that they will not, and will not
permit the Master Servicer to, and the
Master Servicer agrees that it will
not, alter the codes referenced in this
paragraph with respect to any Mortgage
Loan during the term of this Agreement
unless and until such Mortgage Loan is
repurchased in accordance with the terms of
this Agreement.
In the event that in connection with any Mortgage Loan that is not
a
MERS Mortgage Loan a Seller cannot deliver
the original recorded Mortgage or
all interim recorded assignments of the
Mortgage satisfying the requirements
of clause (ii), (iii) or (iv) concurrently
with the execution and delivery
hereof, such Seller shall deliver or cause
to be delivered to the
54
<PAGE>
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 shall
be applicable only so long as the
related Mortgage File is maintained in the
possession of the Co-Trustee in the
State or jurisdiction described in such
sentence. In the event that with
respect to Mortgage Loans other than MERS
Mortgage Loans (i) any Seller, the
Depositor, the Master Servicer or the NIM
Insurer gives written notice to the
Trustee that recording is required to
protect the right, title and interest of
the Trustee on behalf of the
Certificateholders in and to any Mortgage Loan,
(ii) a court recharacterizes any sale of
the Mortgage Loans as a financing, or
(iii) as a result of any change in or
amendment to the laws of the State or
jurisdiction described
55
<PAGE>
in the first sentence of this paragraph or
any applicable political
subdivision thereof, or any change in
official position regarding application
or interpretation of such laws, including a
holding by a court of competent
jurisdiction, such recording is so
required, the Co-Trustee shall complete the
assignment in the manner specified in
clause (iii) of the second paragraph of
this Section 2.01(g) and CHL shall submit
or cause to be submitted for
recording as specified above or, should CHL
fail to perform such obligations,
the Trustee shall cause the Master
Servicer, at the Master Servicer's expense,
to cause each such previously unrecorded
assignment to be submitted for
recording as specified above. In the event
a Mortgage File is released to the
Master Servicer as a result of the Master
Servicer's having completed a
Request for Document Release, the Trustee
shall complete the assignment of the
related Mortgage in the manner specified in
clause (iii) of the second
paragraph of this Section 2.01(g).
So long as the Co-Trustee or its agent maintains an office in
the
State of California, the Co-Trustee or its
agent shall maintain possession of
and not remove or attempt to remove from
the State of California any of the
Mortgage Files as to which the related
Mortgaged Property is located in such
State. In the event that a Seller fails to
record an assignment of a Mortgage
Loan as herein provided within 90 days of
notice of an event set forth in
clause (i), (ii) or (iii) of the above
paragraph, the Master Servicer shall
prepare and, if required hereunder, file
such assignments for recordation in
the appropriate real property or other
records office. Each Seller hereby
appoints the Master Servicer (and any
successor servicer hereunder) as its
attorney-in-fact with full power and
authority acting in its stead for the
purpose of such preparation, execution and
filing.
In
the case of Mortgage Loans that become the subject of a
Principal
Prepayment between the Closing Date (in the
case of Initial Mortgage Loans) or
related Subsequent Transfer Date (in the
case of Subsequent Mortgage Loans)
and the Cut-off Date, CHL shall deposit or
cause to be deposited in the
Certificate Account the amount required to
be deposited therein with respect
to such payment pursuant to Section 3.05
hereof.
Notwithstanding anything to the contrary in this Agreement,
within
thirty days after the Closing Date (in the
case of Initial Mortgage Loans) or
within twenty days after the related
Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), CHL (on behalf
of each Seller) shall either (i)
deliver to the Co-Trustee the Mortgage File
as required pursuant to this
Section 2.01 for each Delay Delivery
Mortgage Loan or (ii) (A) repurchase the
Delay Delivery Mortgage Loan or (B)
substitute the Delay Delivery Mortgage
Loan for a Replacement Mortgage Loan, which
repurchase or substitution shall
be accomplished in the manner and subject
to the conditions set forth in
Section 2.03, provided that if CHL fails to
deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the
period provided in the prior sentence,
the cure period provided for in Section
2.02 or in Section 2.03 shall not
apply to the initial delivery of the
Mortgage File for such Delay Delivery
Mortgage Loan, but rather CHL shall have
five (5) Business Days to cure such
failure to deliver. CHL shall promptly
provide each Rating Agency with written
notice of any cure, repurchase or
substitution made pursuant to the proviso of
the preceding sentence. On or before the
thirtieth (30th) day (or if such
thirtieth day is not a Business Day, the
succeeding Business Day) after the
Closing Date (in the case of Initial
Mortgage Loans) or within twenty days
after the related Subsequent Transfer Date
(in the case of Subsequent Mortgage
Loans), the Trustee shall, in accordance
with the provisions of Section 2.02,
send a Delay Delivery Certification
substantially in the form annexed hereto
as
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Exhibit G-3 (with any applicable exceptions
noted thereon) for all Delay
Delivery Mortgage Loans delivered within
thirty (30) days after such date. The
Trustee will promptly send a copy of such
Delay Delivery Certification to each
Rating Agency.
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a)
The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions
noted in the Initial Certification
in the form annexed hereto as Exhibit G-1
and in the list of exceptions
attached thereto, of the documents referred
to in clauses (i) and (iii) of
Section 2.01(g) above with respect to the
Initial Mortgage Loans and all other
assets included in the Trust Fund and
declares that it holds and will hold
such documents and the other documents
delivered to it constituting the
Mortgage Files, and that it holds or will
hold such other assets included in
the Trust Fund, in trust for the exclusive
use and benefit of all present and
future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date to
the
Depositor, the Master Servicer and CHL (on
behalf of each Seller) an Initial
Certification substantially in the form
annexed hereto as Exhibit G-1 to the
effect that, as to each Initial Mortgage
Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage
Loan paid in full or any Initial
Mortgage Loan specifically identified in
such certification as not covered by
such certification), the documents
described in Section 2.01(g)(i) and, in the
case of each Initial Mortgage Loan that is
not a MERS Mortgage Loan, the
documents described in Section 2.01(g)(iii)
with respect to such Initial
Mortgage Loans as are in the Co-Trustee's
possession and based on its review
and examination and only as to the
foregoing documents, such documents appear
regular on their face and relate to such
Initial Mortgage Loan. The Trustee
agrees to execute and deliver within 30
days after the Closing Date to the
Depositor, the Master Servicer and CHL (on
behalf of each Seller) an Interim
Certification substantially in the form
annexed hereto as Exhibit G-2 to the
effect that, as to each Initial Mortgage
Loan listed in the Mortgage Loan
Schedule (other than any Initial Mortgage
Loan paid in full or any Initial
Mortgage Loan specifically identified in
such certification as not covered by
such certification) all documents required
to be delivered to the Co-Trustee
pursuant to the Agreement with respect to
such Initial Mortgage Loans are in
its possession (except those documents
described in Section 2.01(g)(vi)) and
based on its review and examination and
only as to the foregoing documents,
(i) such documents appear regular on their
face and relate to such Initial
Mortgage Loan, and (ii) the information set
forth in items (i), (iv), (v),
(vi), (viii), (ix) and (xiv) through (xx)
of the definition of the "Mortgage
Loan Schedule" accurately reflects
information set forth in the Mortgage File.
On or before the thirtieth (30th) day after
the Closing Date (or if such
thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee
shall deliver to the Depositor, the Master
Servicer and CHL (on behalf of each
Seller) a Delay Delivery Certification with
respect to the Initial Mortgage
Loans substantially in the form annexed
hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The
Co-Trustee or the Trustee, as
applicable, shall be under no duty or
obligation to inspect, review or examine
such documents, instruments, certificates
or other papers to determine that
the same are genuine, enforceable or
appropriate for the represented purpose
or that they have actually been recorded in
the real estate records or that
they are other than what they purport to be
on their face.
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Not later than 180 days after the Closing Date, the Trustee
shall
deliver to the Depositor, the Master
Servicer and CHL (on behalf of each
Seller), and to any Certificateholder that
so requests, a Final Certification
with respect to the Initial Mortgage Loans
substantially in the form annexed
hereto as Exhibit H, with any applicable
exceptions noted thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Co-Trustee, at the
Trustee's direction, shall review
each Mortgage File with respect to the
Initial Mortgage Loans to determine
that such Mortgage File contains the
following documents:
(i)
the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the
order
of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage
Note has been lost or destroyed and not replaced, an original
lost
note affidavit, stating that the original Mortgage Note was lost
or
destroyed, together with a copy of the related Mortgage Note;
(ii) in
the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, and in the
case
of each Initial Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the
Initial
Mortgage Loan and language indicating that the Mortgage Loan is
a
MOM Loan if the Initial Mortgage Loan is a MOM Loan, with
evidence
of recording indicated thereon, or a copy of the Mortgage
certified
by the public recording office in which Mortgage has been
recorded;
(iii) in the
case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage
in
the form permitted by Section 2.01;
(iv) the
original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v)
the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the
original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document
or documents constituting a part of such
Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi)
above, the Trustee shall include
such exceptions in such Final Certification
(and the Trustee shall state in
such Final Certification whether any
Mortgage File does not then include the
original or duplicate original lender's
title policy or a printout of the
electronic equivalent and all riders
thereto). If the public recording office
in which a Mortgage or assignment thereof
is
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recorded retains the original of such
Mortgage or assignment, a copy of the
original Mortgage or assignment so
retained, with evidence of recording
thereon, certified to be true and complete
by such recording office, shall be
deemed to satisfy the requirements of
clause (ii), (iii) or (iv) above, as
applicable. CHL shall promptly correct or
cure such defect referred to above
within 90 days from the date it was so
notified of such defect and, if CHL
does not correct or cure such defect within
such period, CHL shall either (A)
if the time to cure such defect expires
prior to the end of the second
anniversary of the Closing Date, substitute
for the related Initial Mortgage
Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in
the manner and subject to the conditions
set forth in Section 2.03, or (B)
purchase such Initial Mortgage Loan from
the Trust Fund within 90 days from
the date CHL was notified of such defect in
writing at the Purchase Price of
such Initial Mortgage Loan; provided that
any such substitution pursuant to
(A) above or repurchase pursuant to (B)
above shall not be effected prior to
the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05
hereof and any substitution pursuant to (A)
above shall not be effected prior
to the additional delivery to the
Co-Trustee of a Request for File Release. No
substitution will be made in any calendar
month after the Determination Date
for such month. The Purchase Price for any
such Initial Mortgage Loan shall be
deposited by CHL in the Certificate Account
and, upon receipt of such deposit
and Request for File Release with respect
thereto, the Co-Trustee shall
release the related Mortgage File to CHL
and shall execute and deliver at
CHL's request such instruments of transfer
or assignment as CHL has prepared,
in each case without recourse, as shall be
necessary to vest in CHL, or a
designee, the Trustee's interest in any
Initial Mortgage Loan released
pursuant hereto. If pursuant to the
foregoing provisions CHL repurchases an
Initial Mortgage Loan that is a MERS
Mortgage Loan, the Master Servicer shall
cause MERS to execute and deliver an
assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to
CHL and shall cause such Mortgage
to be removed from registration on the
MERS(R) System in accordance with MERS'
rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage
File in accordance with and subject to the
terms and conditions set forth
herein. Each Seller shall promptly deliver
to the Co-Trustee, upon the
execution or receipt thereof, the originals
of such other documents or
instruments constituting the Mortgage File
that come into the possession of
such Seller from time to time.
It is understood and agreed that the obligation of CHL to
substitute
for or to purchase any Mortgage Loan that
does not meet the requirements of
Section 2.02(a) above shall constitute the
sole remedy respecting such defect
available to the Trustee, the Co-Trustee,
the Depositor and any
Certificateholder against any Seller.
It is understood and agreed that the obligation of CHL to
substitute
for or to purchase, pursuant to Section
2.02(a), any Initial Mortgage Loan
whose Mortgage File contains any document
or documents that does not meet the
requirements of clauses (i)-(iv) and (vi)
above and which defect is not
corrected or cured by CHL within 90 days
from the date it was notified of such
defect, shall constitute the sole remedy
respecting such defect available to
the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against
any Seller.
(b)
The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master
Servicer and CHL (on behalf of each
Seller) an Initial
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Certification substantially in the form
annexed hereto as Exhibit G-4 to the
effect that, as to each Subsequent Mortgage
Loan listed in the Mortgage Loan
Schedule (other than any Subsequent
Mortgage Loan paid in full or any
Subsequent Mortgage Loan specifically
identified in such certification as not
covered by such certification), the
documents described in Section 2.01(g)(i)
and, in the case of each Subsequent
Mortgage Loan that is not a MERS Mortgage
Loan, the documents described in Section
2.01(g)(iii), with respect to such
Subsequent Mortgage Loan are in its
possession, and based on its review and
examination and only as to the foregoing
documents, such documents appear
regular on their face and relate to such
Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after
the
Subsequent Transfer Date to the Depositor,
the Master Servicer and CHL (on
behalf of each Seller) an Interim
Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect
that, as to each Subsequent
Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Subsequent
Mortgage Loan paid in full or any
Subsequent Mortgage Loan specifically
identified in such certification as not
covered by such certification), all
documents required to be delivered to it
pursuant to this Agreement with
respect to such Subsequent Mortgage Loan
are in its possession (except those
described in Section 2.01(g)(vi)) and based
on its review and examination and
only as to the foregoing documents, (i)
such documents appear regular on their
face and relate to such Subsequent Mortgage
Loan, and (ii) the information set
forth in items (i), (iv), (v), (vi),
(viii), (ix) and (xiv) through (xx) of
the definition of the "Mortgage Loan
Schedule" accurately reflects information
set forth in the Mortgage File. On or
before the thirtieth (30th) day after
the Subsequent Transfer Date (or if such
thirtieth day is not a Business Day,
the succeeding Business Day), the Trustee
shall deliver to the Depositor, the
Master Servicer and CHL (on behalf of each
Seller) a Delay Delivery
Certification with respect to the
Subsequent Mortgage Loans substantially in
the form annexed hereto as Exhibit G-3,
with any applicable exceptions noted
thereon, together with a Subsequent
Certification substantially in the form
annexed hereto as Exhibit G-4. The Trustee
shall be under no duty or
obligation to inspect, review or examine
such documents, instruments,
certificates or other papers to determine
that the same are genuine,
enforceable or appropriate for the
represented purpose or that they have
actually been recorded in the real estate
records or that they are other than
what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the
Trustee shall deliver to the Depositor, the
Master Servicer, CHL (on behalf of
each Seller) and to any Certificateholder
that so requests a Final
Certification with respect to the
Subsequent Mortgage Loans substantially in
the form annexed hereto as Exhibit H, with
any applicable exceptions noted
thereon.
In connection with the Trustee's completion and delivery of
such
Final Certification, the Co-Trustee shall
review each Mortgage File with
respect to the Subsequent Mortgage Loans to
determine that such Mortgage File
contains the following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile
signature in blank in the following form: "Pay to the order of
________________
without recourse", with all intervening endorsements
that show a
complete chain of endorsement from the originator to the
Person endorsing
the Mortgage Note (each such
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endorsement
being sufficient to transfer all right, title and interest
of the party so
endorsing, as noteholder or assignee thereof, in and to
that Mortgage
Note), or, if the original Mortgage Note has been lost or
destroyed and
not replaced, an original lost note affidavit, stating
that the
original Mortgage Note was lost or destroyed, together with a
copy of the
related Mortgage Note;
(ii) in the case
of each Subsequent Mortgage Loan that is
not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case
of each
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the
original
Mortgage, noting the presence of the MIN of the Subsequent
Mortgage Loan
and language indicating that the Subsequent Mortgage Loan
is a MOM Loan if
the Subsequent Mortgage Loan is a MOM Loan, with
evidence of
recording indicated thereon, or a copy of the Mortgage
certified by the
public recording office in which Mortgage has been
recorded;
(iii) in the case of each Subsequent Mortgage Loan that is
not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in
the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage
together with all interim recorded assignments of such Mortgage
(noting the
presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a
printout of the electronic equivalent and all riders thereto.
If, in the course of such review, the Co-Trustee finds any
document
or documents constituting a part of such
Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi)
above, the Trustee shall include
such exceptions in such Final Certification
(and the Trustee shall state in
such Final Certification whether any
Mortgage File does not then include the
original or duplicate original lender's
title policy or a printout of the
electronic equivalent and all riders
thereto). If the public recording office
in which a Mortgage or assignment thereof
is recorded retains the original of
such Mortgage or assignment, a copy of the
original Mortgage or assignment so
retained, with evidence of recording
thereon, certified to be true and
complete by such recording office, shall be
deemed to satisfy the requirements
of clause (ii), (iii) or (iv) above, as
applicable. CHL shall promptly correct
or cure such defect referred to above
within 90 days from the date it was so
notified of such defect and, if CHL does
not correct or cure such defect
within such period, CHL shall either (A) if
the time to cure such defect
expires prior to the end of the second
anniversary of the Closing Date,
substitute for the related Subsequent
Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be
accomplished in the manner and subject to
the conditions set forth in Section 2.03,
or (B) purchase such Subsequent
Mortgage Loan from the Trust Fund within 90
days from the date CHL was
notified of such defect in writing at the
Purchase Price of such Subsequent
Mortgage Loan; provided that any such
substitution pursuant to (A) above or
repurchase pursuant to (B) above shall not
be effected prior to the delivery
to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and
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<PAGE>
any substitution pursuant to (A) above
shall not be effected prior to the
additional delivery to the Trustee of a
Request for File Release. No
substitution will be made in any calendar
month after the Determination Date
for such month. The Purchase Price for any
such Subsequent Mortgage Loan shall
be deposited by CHL in the Certificate
Account and, upon receipt of such
deposit and Request for File Release with
respect thereto, the Trustee shall
release the related Mortgage File to CHL
and shall execute and deliver at
CHL's request such instruments of transfer
or assignment as CHL has prepared,
in each case without recourse, as shall be
necessary to vest in CHL, or a
designee, the Trustee's interest in any
Subsequent Mortgage Loan released
pursuant hereto. If pursuant to the
foregoing provisions CHL repurchases a
Subsequent Mortgage Loan that is a MERS
Mortgage Loan, the Master Servicer
shall cause MERS to execute and deliver an
assignment of the Mortgage in
recordable form to transfer the Mortgage
from MERS to CHL and shall cause such
Mortgage to be removed from registration on
the MERS(R) System in accordance
with MERS' rules and regulations.
The
Co-Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the
terms and conditions set forth
herein. Each Seller shall promptly deliver
to the Co-Trustee, upon the
execution or receipt thereof, the originals
of such other documents or
instruments constituting the Mortgage File
that come into the possession of
such Seller from time to time.
It is understood and agreed that the obligation of the Sellers
to
substitute for or to purchase, pursuant to
Section 2.02(b), any Subsequent
Mortgage Loan whose Mortgage File contains
any document or documents that does
not meet the requirements of clauses
(i)-(iv) and (vi) above and which defect
is not corrected or cured by such Seller
within 90 days from the date it was
notified of such defect, shall constitute
the sole remedy respecting such
defect available to the Trustee, the
Co-Trustee, the Depositor and any
Certificateholder against the Sellers.
Section 2.03 Representations, Warranties and Covenants of the
Master
Servicer and the Sellers.
(a)
The Master Servicer hereby represents and warrants to the
Depositor and the Trustee as follows, as of
the date hereof with respect to
the Initial Mortgage Loans, and the related
Subsequent Transfer Date with
respect to the Subsequent Mortgage
Loans:
(1) The
Master Servicer is duly organized as a Texas
limited
partnership and is validly existing and in good standing under
the laws of the
State of Texas and is duly authorized and qualified to
transact any and
all business contemplated by this Agreement to be
conducted by the
Master Servicer in any state in which a Mortgaged
Property is
located or is otherwise not required under applicable law to
effect such
qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure
its ability to
enforce each Mortgage Loan, to service the Mortgage Loans
in accordance with the
terms of this Agreement and to perform any of its
other
obligations under this Agreement in accordance with the terms
hereof.
(2) The
Master Servicer has the full partnership power and
authority to
sell and service each Mortgage Loan, and to execute, deliver
and perform, and
to enter
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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 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 or any
Subsequent Transfer Agreement in accordance with the
terms hereof or
thereof.
(6) No
consent, approval, authorization or order of any
court or
governmental agency or body is required for the execution,
delivery and
performance by the Master Servicer of, or compliance by the
Master Servicer
with, this Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Master Servicer has obtained the
same.
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(7) The
Master Servicer is a member of MERS in good
standing, and
will comply in all material respects with the rules and
procedures of
MERS in connection with the servicing of the Mortgage Loans
for as long as
such Mortgage Loans are registered with MERS.
(8) The
Master Servicer has fully furnished and will fully
furnish, in
accordance with the Fair Credit Reporting Act and its
implementing
regulations, accurate and complete information (i.e.,
favorable and
unfavorable) on its borrower credit files to Equifax,
Experian, and
Trans Union Credit Information Company (three of the credit
repositories),
on a monthly basis for the Mortgage Loans in Loan Group 1.
(b)
CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Initial
Cut-off Date in the case of the Initial
Mortgage Loans and as of the related
Subsequent Cut-off Date in the case of
the Subsequent Mortgage Loans (unless
otherwise indicated or the context
otherwise requires, percentages with
respect to the Initial Mortgage Loans in
the Trust Fund or in a Loan Group or Loan
Groups are measured by the Cut-off
Date Principal Balance of the Initial
Mortgage Loans in the Trust Fund or of
the Initial Mortgage Loans in the related
Loan Group or Loan Groups, as
applicable):
(1) CHL is
duly organized as a New York corporation and is
validly existing
and in good standing under the laws of the State of New
York and is duly
authorized and qualified to transact any and all
business
contemplated by this Agreement and each Subsequent Transfer
Agreement to be
conducted by CHL in any state in which a Mortgaged
Property is
located or is otherwise not required under applicable law to
effect such
qualification and, in any event, is in compliance with the
doing business
laws of any such state, to the extent necessary to ensure
its ability to
enforce each Mortgage Loan, to sell the CHL Mortgage Loans
in accordance
with the terms of this Agreement and each Subsequent
Transfer
Agreement and to perform any of its other obligations under
this
Agreement and
each Subsequent Transfer Agreement in accordance with the
terms hereof and
thereof.
(2) CHL
has the full corporate power and authority to sell
each CHL
Mortgage Loan, and to execute, deliver and perform, and to
enter
into and
consummate the transactions contemplated by this Agreement and
each Subsequent
Transfer Agreement and has duly authorized by all
necessary
corporate action on the part of CHL the execution, delivery and
performance of this Agreement and
each Subsequ
