EXHIBIT 4.1
-----------
Pooling and Servicing Agreement
<PAGE>
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
-------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
-------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2005-AB1
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<TABLE>
<CAPTION>
Table of Contents
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Page
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ARTICLE I.
DEFINITIONS
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<C>
<C>
Section 1.01 Defined
Terms...................................................................................5
Section 1.02 Certain Interpretive
Provisions................................................................39
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01 Conveyance of Mortgage
Loans...................................................................40
Section 2.02 Acceptance by Trustee of the
Mortgage
Loans....................................................47
Section 2.03 Representations, Warranties
and Covenants of the Master Servicer and the
Sellers...............52
Section 2.04 Representations and
Warranties of the
Depositor................................................69
Section 2.05 Delivery of Opinion of
Counsel in Connection with Substitutions and
Repurchases................71
Section 2.06 Authentication and Delivery
of
Certificates....................................................71
Section 2.07 Covenants of the Master
Servicer...............................................................72
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service
Mortgage
Loans......................................................72
Section 3.02 Subservicing; Enforcement of
the Obligations of Master
Servicer................................74
Section 3.03 Rights of the Depositor,
the Sellers, the
Certificateholders,
the NIM Insurer and
the
Trustee in Respect of the Master
Servicer......................................................75
Section 3.04 Trustee to Act as Master
Servicer..............................................................76
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Pre-Funding Account; Seller Shortfall Interest
Requirement.....................................76
Section 3.06 Collection of Taxes,
Assessments and Similar Items; Escrow
Accounts............................80
Section 3.07 Access to Certain
Documentation and Information Regarding the Mortgage
Loans...................80
Section 3.08 Permitted Withdrawals from the Certificate
Account, Distribution Account, Carryover
Reserve Fund and the Principal Reserve
Fund....................................................81
Section 3.09
[Reserved].....................................................................................84
Section 3.10 Maintenance of Hazard
Insurance................................................................84
Section 3.11 Enforcement of Due-On-Sale
Clauses; Assumption
Agreements......................................84
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage
Loans..........................................86
Section 3.13 Co-Trustee to Cooperate;
Release of Mortgage
Files.............................................89
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the
Trustee........................................................................................90
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Section 3.15 Servicing
Compensation.........................................................................91
Section 3.16 Access to Certain
Documentation................................................................91
Section 3.17 Annual Statement as to
Compliance..............................................................91
Section 3.18 Annual Independent Public
Accountants' Servicing Statement; Financial
Statements...............92
Section 3.19 The Corridor
Contract..........................................................................92
Section 3.20 Prepayment
Charges.............................................................................93
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance
Reports...................................................................94
Section 4.02 Reduction of Servicing
Compensation in Connection with Prepayment Interest
Shortfalls..........96
Section 4.03
[Reserved].....................................................................................96
Section 4.04
Distributions..................................................................................96
Section 4.05 Monthly Statements to
Certificateholders......................................................101
Section 4.06
[Reserved]....................................................................................104
Section 4.07
[Reserved]....................................................................................104
Section 4.08 Carryover Reserve
Fund........................................................................104
Section 4.09
[Reserved]....................................................................................105
ARTICLE V.
THE CERTIFICATES
Section 5.01 The
Certificates..............................................................................105
Section 5.02 Certificate Register;
Registration of Transfer and Exchange of
Certificates...................106
Section 5.03 Mutilated, Destroyed, Lost
or Stolen
Certificates.............................................110
Section 5.04 Persons Deemed
Owners.........................................................................111
Section 5.05 Access to List of
Certificateholders' Names and
Addresses.....................................111
Section 5.06 Book-Entry
Certificates.......................................................................111
Section 5.07 Notices to
Depository.........................................................................112
Section 5.08 Definitive
Certificates.......................................................................112
Section 5.09 Maintenance of Office or
Agency...............................................................113
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of
the Depositor, the Master Servicer and the
Sellers..................113
Section 6.02 Merger or Consolidation of
the Depositor, the Master Servicer or the
Sellers..................113
Section 6.03 Limitation on Liability of
the Depositor,
the Sellers,
the Master
Servicer, the NIM
Insurer and
Others............................................................................114
Section 6.04 Limitation on Resignation of
Master
Servicer..................................................115
Section 6.05 Errors and Omissions
Insurance; Fidelity
Bonds................................................115
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ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of
Default.............................................................................115
Section 7.02 Trustee to Act; Appointment
of
Successor......................................................117
Section 7.03 Notification to
Certificateholders............................................................119
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of
Trustee.............................................................................119
Section 8.02 Certain Matters Affecting
the
Trustee.........................................................120
Section 8.03 Trustee Not Liable for
Mortgage
Loans.........................................................121
Section 8.04 Trustee May Own
Certificates..................................................................122
Section 8.05 Master Servicer to Pay
Trustee's Fees and
Expenses............................................122
Section 8.06 Eligibility Requirements for
Trustee..........................................................122
Section 8.07 Resignation and Removal of
Trustee............................................................123
Section 8.08 Successor
Trustee.............................................................................123
Section 8.09 Merger or Consolidation of
Trustee............................................................124
Section 8.10 Appointment of Co-Trustee or
Separate
Trustee.................................................124
Section 8.11 Tax
Matters...................................................................................125
Section 8.12
Co-Trustee....................................................................................128
Section 8.13 Access to Records of the
Trustee..............................................................131
Section 8.14 Suits for
Enforcement.........................................................................131
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation
or Repurchase of all Mortgage
Loans..............................131
Section 9.02 Final Distribution on the
Certificates........................................................132
Section 9.03 Additional Termination
Requirements...........................................................134
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment.....................................................................................135
Section 10.02 Recordation of Agreement;
Counterparts........................................................136
Section 10.03 Governing
Law.................................................................................137
Section 10.04 Intention of
Parties..........................................................................137
Section 10.05
Notices.......................................................................................137
Section 10.06 Severability of
Provisions....................................................................139
Section 10.07
Assignment....................................................................................139
Section 10.08 Limitation on Rights of
Certificateholders....................................................139
Section 10.09 Inspection and Audit
Rights...................................................................140
Section 10.10 Certificates Nonassessable and
Fully
Paid.....................................................140
Section 10.11 Rights of NIM
Insurer.........................................................................140
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Exhibits
EXHIBIT A-1
Form of Class A-1 Certificate
EXHIBIT A-2
Form of Class A-2 Certificate
EXHIBIT A-3
Form of Class A-3 Certificate
EXHIBIT A-4
Form of Class M-1 Certificate
EXHIBIT A-5
Form of Class M-2 Certificate
EXHIBIT A-6
Form of Class M-3 Certificate
EXHIBIT A-7
Form of Class M-4 Certificate
EXHIBIT A-8
Form of Class M-5 Certificate
EXHIBIT A-9
Form of Class M-6 Certificate
EXHIBIT A-10
Form of Class M-7 Certificate
EXHIBIT A-11
Form of Class B Certificate
EXHIBIT B
Form of Class P Certificates
EXHIBIT C
Form of
Class C Certificates
EXHIBIT D
Form of Class A-R Certificate
EXHIBIT E
Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F
Mortgage Loan Schedule
EXHIBIT F-1
List of Mortgage Loans
EXHIBIT F-2
Mortgage Loans for which All or a Portion of a Related Mortgage
File is not
Delivered to the Trustee on or prior to the Closing Date
EXHIBIT G
Forms of Certification of Trustee
EXHIBIT G-1
Form of Initial Certification of Trustee (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 Contract
EXHIBIT R-1
Form of Corridor Contract Assignment Agreement
EXHIBIT R-2
Form of Corridor Contract Administration Agreement
EXHIBIT S
[Reserved]
EXHIBIT T
Form of Officer's Certificate with respect to Prepayments
EXHIBIT U
[Reserved]
SCHEDULE I
Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II
Collateral Schedule
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<PAGE>
POOLING AND
SERVICING AGREEMENT, dated as of March 1, 2005, by and among
CWABS, INC., a Delaware corporation, as
depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York
corporation, as a seller ("CHL" or a
"9eller"), 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.
For federal income tax purposes,
the Trust Fund (exclusive of the Carryover
Reserve Fund and the Pre-Funding
Account and the Trust Fund's rights with
respect to payments received under the
Corridor Contract), will consist of three
real estate mortgage investment
conduits (each a "REMIC" or, in the
alternative, "REMIC 1," "REMIC 2" and the
"Master REMIC," respectively). Each
Certificate, other than the Class A-R
Certificate, will represent ownership of
one or more regular interests in the
Master REMIC for purposes of the REMIC
Provisions. The Class A-R Certificate
represents ownership of the sole class of
residual interest in each of REMIC 1,
REMIC 2 and the Master REMIC. The Master
REMIC will hold as assets the several
classes of uncertificated REMIC 2 Interests
(other than the R-2 Interest).
REMIC 2 will hold as assets the several
classes of uncertificated REMIC 1
Interests (other than the R-1 Interest).
REMIC 1 will hold as assets all the
property of the Trust Fund (excluding the
Carryover Reserve Fund and the
Pre-Funding Account and the Trust Fund's
rights with respect to payments
received under the Corridor Contract). For
federal income tax purposes, each
REMIC 2 and REMIC 1 Interest (other than
the R-1 Interest and the R-2 Interest)
is hereby designated as a regular interest
in its respective REMIC. 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 and
pass-through rates as set forth below.
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Initial
Pass-Through
REMIC 1 Interests
Balance
Rate
----------------------------------- ------------- -----------------
I................................
(1)
(5)
S................................
(2)
(6)
X................................
(3)
(7)
R-1..............................
(4)
(4)
---------------
(1) The principal balance of this
Interest is the principal balance of all
the Initial
Mortgage Loans.
(2) The principal balance of this
Interest is the principal balance of all
the Subsequent
Mortgage Loans.
(3) This REMIC 1 Interest pays no
principal.
(4) The R-1 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
Interest with respect to any Distribution Date
(and the related
Accrual Period) through the Distribution Date in June
2005 is a per
annum rate equal to the weighted average of the Adjusted
Net Mortgage
Rates of the Initial Mortgage Loans. For any Distribution
Date (and the
related Accrual Period) following the Distribution Date in
June 2005, the
interest rate for this Interest is a per annum rate equal
to the weighted
average of the Adjusted Net Mortgage Rates of all of the
Mortgage
Loans.
(6) The interest rate for this
Interest with respect to any Distribution Date
(and the related
Accrual Period) through the Distribution Date in June
2005 is a per
annum rate equal to 0.00%. For any Distribution Date (and
the related
Accrual Period) following the Distribution Date in June 2005,
the interest
rate for this Interest is a per annum rate equal to the
weighted average
of the Adjusted Net Mortgage Rates of all of the
Mortgage
Loans.
(7) For any Distribution Date (and the
related Accrual Period) through the
Distribution
Date in June 2005, this Interest is entitled to all the
interest payable
with respect to the Subsequent Mortgage Loans. For any
Distribution
Date (and the related Accrual Period) following the
Distribution
Date in June 2005, the interest rate for this Interest is a
per annum rate
equal to 0.00%.
On each
Distribution Date, the Interest Remittance Amount and Principal
Remittance Amount 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.
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(2) Principal.
For any Distribution Date (and the related Accrual Period)
through the Distribution Date in May 2005,
the Principal Distribution Amount
with respect to the Initial Mortgage Loans
shall be allocated to the "I" REMIC
1 Interest, and the Principal Distribution
Amount with respect to the
Subsequent Mortgage Loans shall be
allocated to the "S" REMIC 1 Interest. For
any Distribution Date (and the related
Accrual Period) after the Distribution
Date in May 2005, the Principal
Distribution Amount with respect to all of the
Mortgage Loans shall be allocated in
proportion to the balance of the I and S
REMIC 1 Interests.
REMIC 2:
The REMIC 2
Interests will have the initial balances, pass-through rates
and corresponding class certificates as set
forth in the following table:
<TABLE>
<CAPTION>
Corresponding
Pass-Through
Class of
The REMIC 2 Interests
Initial Balance
Rate
Certificates
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<C>
<C>
<C>
A-1.........................................
(1)
(2)
Class A-1
A-2.........................................
(1)
(2)
Class A-2
A-3.........................................
(1)
(2)
Class A-3
M-1.........................................
(1)
(2)
Class M-1
M-2.........................................
(1)
(2)
Class M-2
M-3.........................................
(1)
(2)
Class M-3
M-4.........................................
(1)
(2)
Class M-4
M-5.........................................
(1)
(2)
Class M-5
M-6.........................................
(1)
(2)
Class M-6
M-7.........................................
(1)
(2)
Class M-7
$100........................................
$100
(3)
Class A-R
B...........................................
(1)
(2)
Class B
P...........................................
$100
(3)
Class P
Accrual.....................................
(1)
(2)
N/A
X...........................................
(4)
(4)
Class
C
R-2.........................................
(5)
(5)
N/A
</TABLE>
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(1) Except for the Accrual Interest,
this REMIC 2 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 Accrual
Interest will be allocated to this class to maintain its size
relative to its
Corresponding Certificate Class (that is, 50%) with any
excess payments
of principal, Realized Losses and Subsequent Recoveries
being allocated
to the Accrual Interest in such manner as to cause the
principal
balance of the Accrual Interest to have a principal balance
equal to (a) 50%
of the principal balance of the Mortgage Loans plus (b)
50% of the
Overcollateralized Amount for such Distribution Date.
(2) On each Distribution Date, the Net
Rate Cap.
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(3) The Class $100 Interest and the
Class P Interest do not pay any interest.
All Prepayment
Charges will be allocated to the Class P Interest.
(4) On each Distribution Date, the
REMIC 2 Class X Interest is entitled to
all interest
payable on the REMIC 1 X Interest.
(5) The Class R-2 Interest is the sole
class of residual interest in REMIC 2.
It has no
principal balance and pays no principal or interest.
On each
Distribution Date, the Interest Remittance Amount and the
Principal Remittance Amount payable on the
REMIC 1 Regular Interests shall be
distributed 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.
Principal shall be allocated among the REMIC 2 Interests
in the same
manner that such items are allocated among their
corresponding
Certificate Classes.
Master REMIC:
The Master REMIC
Certificates will have the original certificate
principal balances and pass-through rates
as set forth in the following table:
Original Certificate
Class
Principal Balance
Pass-Through Rate
----------------------------- -------------------------
-------------------
Class A-1....................
$ 533,375,000
(1)
Class A-2....................
$ 457,919,000
(1)
Class A-3....................
$ 82,706,000
(1)
Class M-1....................
$ 24,600,000
(1)
Class M-2....................
$ 24,000,000
(1)
Class M-3....................
$ 13,200,000
(1)
Class M-4....................
$ 13,200,000
(1)
Class M-5....................
$ 13,200,000
(1)
Class M-6....................
$ 12,000,000
(1)
Class M-7....................
$ 12,000,000
(1)
Class B......................
$ 12,000,000
(1)
Class C......................
(2)
(3)
Class P......................
$100
(4)
Class A-R....................
$100
(5)
---------------
(1) The Certificates will accrue
interest at the related Pass-Through Rates
identified in
this Agreement. For federal income tax purposes, the
Pass-Through
Rate in respect of each Certificate shall be subject to a
cap equal to the
Net Rate Cap. Any entitlement of any Class of
Certificates to
Net Rate Carryover will be treated as paid by the Master
REMIC to the
Class C Certificates and then paid to such Class of
Certificates
pursuant to a limited recourse cap contract as described in
Section 8.11
herein.
4
<PAGE>
(2) The Class C Certificates have no
Certificate Principal Balance.
(3) For each Interest Accrual Period
the Class C Certificates are entitled to
an amount (the
"Class C Distributable Amount") equal to the sum of (a)
the interest
payable on the REMIC 2 X Interest and (b) a specified
portion of the
interest on the REMIC 1 "I" and "S" Interests equal to the
excess of the
Net Rate Cap over the product of two and the weighted
average interest
rate of the REMIC 2 Regular Interests (other than the P,
R-2 and X
Interests) with each such Class other than the Accrual
Interest,
subject to a cap equal to the Pass-Through Rate of the
Corresponding
Master REMIC Class and the Accrual Interest subject to a
cap of 0.00%.
The Pass-Through Rate of the Class C Certificates shall be
a rate
sufficient to entitle the class to all interest accrued on the
REMIC 1 "I" and
"S" Interests less the interest accrued on the other
Certificates
issued by the Master REMIC. The Class C Distributable Amount
for any Distribution
Date is payable from current interest on the
Mortgage
Loans.
(4) For each Distribution Date the
Class P Certificates are entitled to all
Prepayment
Charges distributed with respect to the REMIC 2 Class P
Interests.
(5) The Class A-R Certificates
represent the sole class of residual interest
in each REMIC
created hereunder. The Class A-R Certificates are not
entitled to
distributions of interest.
The foregoing REMIC structure is intended
to cause all of the cash from the
Mortgage Loans to flow through to the
Master REMIC as cash flow on a REMIC
regular interest, without creating any
shortfall--actual or potential (other
than for credit losses)--to any REMIC
regular interest. It is not intended
that the Class A-R be entitled to any cash
flows pursuant to this agreement
except as provided in Section 3.08
hereunder. To the extent that the structure
is believed to diverge from such intention
the Trustee will resolve
ambiguities to accomplish such result and
will to the extent necessary rectify
any drafting errors or seek clarification
to the structure without
Certificateholder approval (but with
guidance of counsel selected by it with
due care and which has substantial
experience with similar REMIC structures)
to accomplish such intention.
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
5
<PAGE>
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.
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 and interest on the Mortgage
Loans (net of the Servicing Fees)
that were due on the related Due Date and
not received by the Master Servicer
as of the close of business on the related
Determination Date including an
amount equivalent to interest on each
Mortgage Loan as to which the related
Mortgaged Property is an REO Property;
provided, however, that the net monthly
rental income (if any) from such REO
Property deposited in the Certificate
Account for such Distribution Date pursuant
to Section 3.12 may be used to
offset such Advance for the Mortgage Loan
related to such REO Property;
provided, further, that for the avoidance
of doubt no Advances shall be
required to be made in respect of any
Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in
accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution
Date,
the aggregate amount held in the
Certificate Account at the close of business
on the immediately preceding Determination
Date on account of (i) all
Scheduled Payments or portions thereof
received in respect of the Mortgage
Loans due after the related Due Date, (ii)
Principal Prepayments received in
respect of such Mortgage Loans after the
last day of the related Prepayment
Period and (iii) Liquidation Proceeds and
Subsequent Recoveries received in
respect of such Mortgage Loans after the
last day of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the sum of the Realized Losses with respect
to the Mortgage Loans which are to
be applied in reduction of the Certificate
Principal Balances of the
Subordinate Certificates pursuant to this
Agreement, which shall equal the
amount, if any, by which the aggregate
Certificate Principal Balance of the
Senior Certificates and the Subordinate
Certificates (after all distributions
of principal on such Distribution Date)
exceeds the sum of (x) the Stated
Principal Balance of the Mortgage Loans for
such Distribution Date and (y) the
amount on deposit in the Pre-Funding
Account, if any.
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.
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<PAGE>
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.
Carryover Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 4.08 in the name of
the Trustee for the benefit of the
Certificateholders and designated "The Bank
of New York in trust for registered Holders
of CWABS, Inc., Asset-Backed
Certificates, Series 2005-AB1". Funds in
the Carryover Reserve Fund shall be
held in trust for the Certificateholders
for the uses and purposes set forth
in this Agreement.
Certificate: Any one of the certificates of any Class executed
and
authenticated by the Trustee in
substantially the forms attached hereto as
Exhibits A-1 through A-11, Exhibit B,
Exhibit C, Exhibit D and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer
pursuant to Section 3.05(b) with a
depository institution in the name of the
Master Servicer for the benefit of
the Trustee on behalf of the
Certificateholders and designated "Countrywide
Home Loans Servicing LP in trust for
registered Holders of CWABS, Inc.,
Asset-Backed Certificates, Series
2005-AB1". Funds in the Certificate Account
shall be held in trust for the
Certificateholders for the uses and purposes
set forth in this Agreement.
Certificate Owner: With respect to a Book-Entry Certificate,
the
person that is the beneficial owner of such
Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than
the
Class C Certificates) and as of any
Distribution Date, the Initial Certificate
Principal Balance of such Certificate (A)
less the sum of (i) all amounts
distributed with respect to such
Certificate in reduction of the Certificate
Principal Balance thereof on previous
Distribution Dates pursuant to Section
4.04, and (ii) with respect to any
Subordinate Certificates, any Applied
Realized Loss Amounts allocated to such
Certificate on previous Distribution
Dates pursuant to Section 4.04(h), and (B)
increased by, with respect to any
Subordinate Certificates, any Subsequent
Recoveries allocated to such
Certificate pursuant to Section 4.04(i) on
such Distribution Date. References
herein to the Certificate Principal Balance
of a Class of Certificates shall
mean the Certificate Principal Balances of
all Certificates in such Class. The
Class C Certificates do not have a
Certificate Principal Balance. With 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.
7
<PAGE>
Certificate Register: The register maintained pursuant to
Section
5.02 hereof.
Certificateholder or Holder: The person in whose name a
Certificate
is registered in the Certificate Register
(initially, Cede & Co., as nominee
for the Depository, in the case of any
Class of Book-Entry Certificates),
except that solely for the purpose of
giving any consent pursuant to this
Agreement, any Certificate registered in
the name of the Depositor or any
affiliate of the Depositor shall be deemed
not to be Outstanding and the
Voting Interest evidenced thereby shall not
be taken into account in
determining whether the requisite amount of
Voting Interests necessary to
effect such consent has been obtained;
provided that if any such Person
(including the Depositor) owns 100% of the
Voting Interests evidenced by a
Class of Certificates, such Certificates
shall be deemed to be Outstanding for
purposes of any provision hereof (other
than the second sentence of Section
10.01 hereof) that requires the consent of
the Holders of Certificates of a
particular Class as a condition to the
taking of any action hereunder. The
Trustee is entitled to rely conclusively on
a certification of the Depositor
or any affiliate of the Depositor in
determining which Certificates are
registered in the name of an affiliate of
the Depositor.
CHL: Countrywide Home Loans, Inc., a New York corporation, and
its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on
the
Mortgage Loan Schedule for which CHL is the
applicable Seller.
Class: All Certificates bearing the same Class designation as
set
forth in Section 5.01 hereof.
Class A Certificate: Any Class A-1 Certificate, Class A-2
Certificate or Class A-3 Certificate.
Class A-1 Certificate: Any Certificate designated as a "Class
A-1
Certificate" on the face thereof, in the
form of Exhibit A-1 hereto,
representing the right to distributions as
set forth herein.
Class A-2 Certificate: Any Certificate designated as a "Class
A-2
Certificate" on the face thereof, in the
form of Exhibit A-2 hereto,
representing the right to distributions as
set forth herein.
Class A-3 Certificate: Any Certificate designated as a "Class
A-3
Certificate" on the face thereof, in the
form of Exhibit A-3 hereto,
representing the right to distributions as
set forth herein.
Class A-R Certificate: Any Certificate designated as a "Class
A-R
Certificate" on the face thereof, in the
form of Exhibit D or Exhibit E
hereto, representing the right to
distributions as set forth herein.
Class B Certificate: Any Certificate designated as a "Class B
Certificate" on the face thereof, in the
form of Exhibit A-11 hereto,
representing the right to distributions as
set forth herein.
8
<PAGE>
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the
form of Exhibit C hereto,
representing the right to distributions as
set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the
form of Exhibit A-4 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-5 hereto,
representing the right to distributions as
set forth herein.
Class M-3 Certificate: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the
form of Exhibit A-6 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-7 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-8 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-9 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-10 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.
Class Principal Distribution Amount: With respect to any Class
of
Interest-Bearing Certificates and any
Distribution Date, the excess of (i) the
sum of (a) the aggregate Certificate
Principal Balance of any outstanding
Class(es) of Interest-Bearing Certificates
senior to the subject Class (after
taking into account distribution of the
Class Principal Distribution Amount(s)
for those more senior Class(es) of
Interest-Bearing Certificates for such
Distribution Date) and (b) the Certificate
Principal Balance of the subject
Class of Interest-Bearing
9
<PAGE>
Certificates immediately prior to such
Distribution Date, over (ii) the lesser
of (x) the product of (A) 100% less the
Stepdown Target Subordination
Percentage for the subject Class of
Interest-Bearing Certificates and (B) the
aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution
Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for
such Distribution Date minus the OC Floor;
provided, however, that with
respect to any Class of Subordinate
Certificates, if that Class is the only
Class of Subordinate Certificates
outstanding on such Distribution Date, that
Class will be entitled to receive the
entire remaining Principal Distribution
Amount until the Certificate Principal
Balance thereof is reduced to zero.
For purposes of the Class Principal Distribution Amount, (i)
the
Class A Certificates shall be treated as if
they were a single Class of
Certificates, and (ii) the Class A
Certificates are senior to the Class M and
Class B Certificates and each Class of
Class M Certificates is senior to the
Class B Certificates and to each Class of
Class M Certificates, if any, that
has a higher numerical designation than
such Class.
Closing Date: March 29, 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 and
any
Distribution Date, an amount equal to the
lesser of (x) one-half of the
Servicing Fee for the Mortgage Loans for
the related Due Period and (y) the
aggregate Prepayment Interest Shortfalls
for such Mortgage Loans for such
Distribution Date.
Confirmation: The Confirmation with a trade date of March 14,
2005
evidencing a transaction between the
Corridor Contract Counterparty and CHL
relating to the Corridor Contract.
Covered Mortgage Loan: A Mortgage Loan listed on the Mortgage
Loan
Schedule as being covered by the Mortgage
Insurance Policy.
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 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.
Corridor Contract Administration Agreement: The corridor
contract
administration agreement dated as of the
Closing Date among CHL, the Trustee
and the Corridor Contract Administrator, a
form of which is attached hereto as
Exhibit R-2.
10
<PAGE>
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 R-1.
Corridor Contract Counterparty: JPMorgan Chase Bank, N.A. and
its
successors.
Corridor Contract Termination Date: With respect to the
Corridor
Contract, the Distribution Date in August
2009.
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.
Cumulative Loss Trigger Event: With respect to a Distribution
Date
on or after the Stepdown Date the aggregate
amount of Realized Losses on the
Mortgage Loans from (and including) the
Cut-off Date for each Mortgage Loan to
(and including) the last day of the related
Due Period reduced by the
aggregate amount of any Subsequent
Recoveries received through the last day of
that Due Period exceeds the applicable
percentage, as set forth below, for
such Distribution Date, of the sum of (x)
the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans and
(y) the Pre-Funded Amount:
Distribution Date
Percentage
-----------------
----------
April 2007 -- March 2008........ 0.75% with respect to April
2007,
plus an additional 1/12th of
0.50% for each month thereafter
April 2008 -- March 2009........ 1.25% with respect to April
2008,
plus an additional 1/12th of
0.75% for each month thereafter
April 2009 -- March 2009........ 2.00% with respect to April
2009,
plus an additional 1/12th of
0.50% for each month thereafter
April 2010 -- March 2010........ 2.50% with respect to April
2010,
plus an additional 1/12th of
0.25% for each month thereafter
April 2011 and thereafter....... 2.75%
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.
11
<PAGE>
Cut-off Date: In the case of any Initial Mortgage Loan, the later
of
(x) March 1, 2005 and (y) the date of
origination of such Mortgage Loan (the
"Initial Cut-off Date"), and in the case of
any Subsequent Mortgage Loan, the
later of (x) the first day of the month of
the related Subsequent Transfer
Date and (y) the date of origination of
such Subsequent Mortgage Loan (the
related "Subsequent Cut-off Date"). When
used with respect to any Mortgage
Loan "the Cut-off Date" shall mean the
related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close
of business on the Cut-off Date
after application of all payments of
principal due on or prior to the Cut-off
Date, whether or not received, and all
Principal Prepayments received on or
prior to the Cut-off Date, but without
giving effect to any installments of
principal received in respect of Due Dates
after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent
jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment
for such Mortgage Loan that became
final and non-appealable, except such a
reduction resulting from a Deficient
Valuation or any other reduction that
results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation
by a court of competent jurisdiction of the
Mortgaged Property in an amount
less than the then outstanding indebtedness
under such Mortgage Loan, or any
reduction in the amount of principal to be
paid in connection with any
Scheduled Payment that results in a
permanent forgiveness of principal, which
valuation or reduction results from an
order of such court that is final and
non-appealable in a proceeding under the
Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
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.
12
<PAGE>
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by
a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to a Distribution Date on
or
after the Stepdown Date exists the Rolling
Sixty-Day Delinquency Rate equals
or exceeds the product of 30.00% and the
Senior Enhancement Percentage for
such Distribution Date.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms
of such Mortgage Loan by the close
of business on the day such payment is
scheduled to be due. A Mortgage Loan is
"30 days delinquent" if such payment has
not been received by the close of
business on the corresponding day of the
month immediately succeeding the
month in which such payment was due, or, if
there is no such corresponding day
(e.g., as when a 30-day month follows a
31-day month in which a payment was
due on the 31st day of such month), then on
the last day of such immediately
succeeding month. Similarly for "60 days
delinquent," "90 days delinquent" and
so on.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial
Certificate Balance of this Certificate"
or, if not the foregoing, the Percentage
Interest appearing on the face
thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor
in
interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is Cede &
Co., or any other organization
registered as a "clearing agency" pursuant
to Section 17A of the Securities
Exchange Act of 1934, as amended. The
Depository shall initially be the
registered Holder of the Book-Entry
Certificates. The Depository shall at all
times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New
York.
Depository Agreement: With respect to the Book-Entry
Certificates,
the agreement among the Depositor, the
Trustee and the initial Depository,
dated as of the Closing Date, substantially
in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other
financial
institution or other person for whom from
time to time a Depository effects
book-entry transfers and pledges of
securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the
15th
day of the month of such Distribution Date
or, if such 15th day is not a
Business Day, the immediately preceding
Business Day.
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-AB1". Funds in
the Distribution Account shall be
held in trust for the Certificateholders
for the uses and purposes set forth
in this Agreement.
13
<PAGE>
Distribution Account Deposit Date: As to any Distribution Date,
1:00
p.m. Pacific time on the Business Day
immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each month, or if such day is
not
a Business Day, on the first Business Day
thereafter, commencing in April
2005.
Due Date: With respect to any Mortgage Loan and Due Period, the
due
date for Scheduled Payments of interest
and/or principal on that Mortgage Loan
occurring in such Due Period as provided in
the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar
month preceding the calendar month
in which such Distribution Date occurs and
ending on the first day of the
month in which such Distribution Date
occurs.
Eligible Account: Any of (i) an account or accounts maintained
with
a federal or state chartered depository
institution or trust company, the
long-term unsecured debt obligations and
short-term unsecured debt obligations
of which (or, in the case of a depository
institution or trust company that is
the principal subsidiary of a holding
company, the debt obligations of such
holding company, if Moody's is not a Rating
Agency) are rated by each Rating
Agency in one of its two highest long-term
and its highest short-term rating
categories respectively, at the time any
amounts are held on deposit therein,
or (ii) an account or accounts in a
depository institution or trust company in
which such accounts are insured by the FDIC
(to the limits established by the
FDIC) and the uninsured deposits in which
accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to
each Rating Agency, the Certificateholders
have a claim with respect to the
funds in such account or a perfected first
priority security interest against
any collateral (which shall be limited to
Permitted Investments) securing such
funds that is superior to claims of any
other depositors or creditors of the
depository institution or trust company in
which such account is maintained,
or (iii) a trust account or accounts
maintained with the corporate trust
department of a federal or state chartered
depository institution or trust
company having capital and surplus of not
less than $50,000,000, acting in its
fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies
without reduction or withdrawal of their
then current ratings of the
Certificates as evidenced by a letter from
each Rating Agency to the Trustee.
Eligible Accounts may bear interest, and
may include, if otherwise qualified
under this definition, accounts maintained
with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d)
hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that
meets the applicable requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class
P
Certificates, Class C Certificates and
Certificates of any Class that ceases
to satisfy the applicable rating
requirement under the Underwriter's
Exemption.
Escrow Account: As defined in Section 3.06 hereof.
14
<PAGE>
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum
of
(x) the amount remaining as set forth in
Section 4.04(a)(3) and (y) the amount
remaining as set forth in Section
4.04(b)(1)(C) or 4.04(b)(2)(C), as
applicable.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the
amount, if any, by which the sum of any
Liquidation Proceeds and Subsequent
Recoveries are in excess of the sum of (i)
the unpaid principal balance of
such Liquidated Mortgage Loan as of the
date of liquidation of such Liquidated
Mortgage Loan plus (ii) interest at the
Mortgage Rate from the Due Date as to
which interest was last paid or advanced to
Certificateholders (and not
reimbursed to the Master Servicer) up to
the Due Date in the month in which
Liquidation Proceeds are required to be
distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan
outstanding during each Due Period as
to which such interest was not paid or
advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i)
the Servicing Fee Rate, (ii) the Trustee
Fee Rate and (iii) with respect to a
Covered Mortgage Loan, the applicable
Mortgage Insurance Premium Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date on or after the
Distribution Date in July 2005, is the
lesser of (1) the Overcollateralization
Deficiency Amount and (2) the Excess
Cashflow available for payment thereof in
the priority set forth in this
Agreement.
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.
Fitch: Fitch, Inc. and its successors.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States
created and existing under Title III of
the Emergency Home Finance Act of 1970, as
amended, or any successor thereto.
Funding Period: The period from the Closing Date to and
including
the earlier to occur of (x) the date the
amount in the Pre-Funding Account is
less than $25,000 and (y) May 16, 2005.
Gross Margin: The percentage set forth in the related Mortgage
Note
for the Mortgage Loans to be added to the
Index for use in determining the
Mortgage Rate on each Adjustment Date, and
which is set forth in the Mortgage
Loan Schedule for the Mortgage Loans.
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.
15
<PAGE>
dollar deposits in the London market, as
set forth in The Wall Street Journal,
as most recently announced as of a date 45
days prior to such Adjustment Date
or, if the Index ceases to be published in
The Wall Street Journal or becomes
unavailable for any reason, then the Index
shall be a new index selected by
the Master Servicer, based on comparable
information.
Initial Adjustment Date: As to any Mortgage Loan, the first
Adjustment Date following the origination
of such Mortgage Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i)
principal of the Initial Mortgage
Loans due after the Initial Cut-off Date
and received by the Master Servicer
before the Closing Date and not applied in
computing the 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 Mortgage Loan: A Mortgage Loan conveyed to the Trustee
on
the Closing Date pursuant to this Agreement
as identified on the Mortgage Loan
Schedule delivered to the Trustee on the
Closing Date.
Initial Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate
in effect prior to the Initial Adjustment
Date.
Initial Periodic Rate Cap: With respect to each Mortgage Loan,
the
percentage specified in the related
Mortgage Note that limits the permissible
increase or decrease in the Mortgage Rate
on its initial Adjustment Date.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including
the Mortgage Insurance Policy,
including all riders and endorsements
thereto in effect with respect to such
Mortgage Loan, including any replacement
policy or policies for any Insurance
Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any
other insurance policy covering a
Mortgage Loan, to the extent such proceeds
are payable to the mortgagee under
the Mortgage, the Master Servicer or the
trustee under the deed of trust and
are not applied to the restoration of the
related Mortgaged Property or
released to the Mortgagor in accordance
with the procedures that the Master
Servicer would follow in servicing mortgage
loans held for its own account, in
each case other than any amount included in
such Insurance Proceeds in respect
of Insured Expenses and received prior to
such Mortgage Loan becoming a
Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or
any
other insurance policy with respect to the
Mortgage Loans.
Interest-Bearing Certificates: The Class A and Subordinate
Certificates.
16
<PAGE>
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, March 25, 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, the
Interest
Remittance Amount for such Distribution
Date, less the Trustee Fee for such
Distribution Date and the Mortgage
Insurance Premium for such Distribution
Date.
Interest Remittance Amount: With respect to any Master Servicer
Advance Date, (x) the sum, without
duplication, of (i) all scheduled interest
collected during the related Due Period
with respect to the Mortgage Loans
less the Servicing Fee, (ii) all interest
on prepayments received during the
related Prepayment Period, other than
Prepayment Interest Excess, (iii) all
Advances made by the Master Servicer
relating to interest for the related
Distribution Date, (iv) the Compensating
Interest for such Distribution Date,
(v) Liquidation Proceeds collected during
the related Due Period (to the
extent such Liquidation Proceeds relate to
interest) and (vi) the Seller
Shortfall Interest Requirement, less (y)
all reimbursements to the Master
Servicer during the related Due Period for
Advances of interest previously
made.
Investment Letter: As defined in Section 5.02(b).
Latest Possible Maturity Date: The Distribution Date following
the
third anniversary of the scheduled maturity
date of the Mortgage Loan having
the latest scheduled maturity date as of
the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of
London,
England and New York City, U.S.A. are open
and conducting transactions in
foreign currency and exchange.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan that has been
liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's
sale or other realization as provided
by applicable law governing the real
property subject to the related Mortgage
and any security agreements and as to which
the Master Servicer has certified
(in accordance with Section 3.12) in the
related Prepayment Period that it has
received all amounts it expects to receive
in connection with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or
complete liquidation of Mortgage
Loans, whether through trustee's sale,
foreclosure sale or otherwise or
amounts received in connection with any
condemnation or partial release of a
Mortgaged Property and any other proceeds
received in connection with an REO
Property received in connection with or
prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan, less the sum of
related unreimbursed Advances,
Servicing Fees and Servicing Advances.
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<PAGE>
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 A-1.............. 0.100%
0.200%
------------------------------------------------------------
Class A-2.............. 0.210%
0.420%
------------------------------------------------------------
Class A-3.............. 0.300%
0.600%
------------------------------------------------------------
Class M-1.............. 0.420%
0.630%
------------------------------------------------------------
Class M-2.............. 0.440%
0.660%
------------------------------------------------------------
Class M-3.............. 0.480%
0.720%
------------------------------------------------------------
Class M-4.............. 0.600%
0.900%
------------------------------------------------------------
Class M-5.............. 0.650%
0.975%
------------------------------------------------------------
Class M-6.............. 0.730%
1.095%
------------------------------------------------------------
Class M-7.............. 1.250%
1.875%
------------------------------------------------------------
Class B................ 1.500%
2.250%
------------------------------------------------------------
(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).
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<PAGE>
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
maximum rate of interest set forth as such
in the related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of
the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
minimum rate of interest set forth as such
in the related Mortgage Note.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the
originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.05.
Moody's: Moody's Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on or first priority ownership
interest in an estate in fee simple
in real property securing a Mortgage
Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan
and any additional documents
delivered to the Co-Trustee to be added to
the Mortgage File pursuant to this
Agreement.
Mortgage Insurance Policy: The Mortgage Insurance Policy issued
by
PMI Mortgage Insurance Company with respect
to certain Mortgage Loans
identified in the Mortgage Loan
Schedule.
Mortgage Insurance Premium: The premium payable on the Mortgage
Insurance Policy on each Distribution Date
and amounts due for premium taxes
with respect to West Virginia and
Kentucky.
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
19
<PAGE>
twelve and the denominator of which is
equal to the Stated Principal Balance
of such Covered Mortgage Loan.
Mortgage Insurer: PMI Mortgage Insurance Company or any
replacement
Mortgage Insurer, as applicable.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to
time amended by the Master Servicer to
reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans
and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions
of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions
of this Agreement and any Subsequent
Transfer Agreement) transferred to the
Trustee as part of the Trust Fund and
from time to time subject to this
Agreement, attached hereto as Exhibit F-1,
setting forth in the following information
with respect to each Mortgage Loan:
(i) the loan
number;
(ii) [Reserved];
(iii) the Appraised Value;
(iv) the Initial
Mortgage Rate;
(v) the maturity
date;
(vi) the original
principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled
Payment in effect as of the Cut-off
Date;
(x) the
Loan-to-Value Ratio at origination;
(xi) a code indicating
whether the residential dwelling
at the time of origination was represented to be
owner-occupied;
(xii) a code indicating whether the residential dwelling
is either (a) a detached single family dwelling, (b) a two
family
residential property, (c) a three family residential property, (d)
a
four family residential property, (e) planned unit development, (f)
a
low rise condominium unit, (g) a high rise condominium unit or
(h)
manufactured housing;
(xiii) the purpose of the Mortgage Loan;
(xiv) the frequency of each Adjustment Date;
(xv) the next
Adjustment Date;
20
<PAGE>
(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) the premium rate for any lender-paid mortgage
insurance, if applicable; and
(xxiii) a code indicating whether the Mortgage Loan is a
CHL Mortgage Loan, a Park Monaco Mortgage Loan or a Park Sienna
Mortgage Loan.
Such schedule shall also set forth the
total of the amounts described under
(vii) through (xx) above for all of the
Mortgage Loans. The Mortgage Loan
Schedule shall be deemed to include each
Loan Number and Borrower
Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f)
and all the related Subsequent Mortgage
Loans and Subsequent Mortgage Loan
information included therein.
Mortgage Loans: Such of the mortgage loans transferred and
assigned
to the Trustee pursuant to the provisions
hereof and any Subsequent Transfer
Agreement as from time to time are held as
part of the Trust Fund (including
any REO Property), the mortgage loans so
held being identified in the Mortgage
Loan Schedule, notwithstanding foreclosure
or other acquisition of title of
the related Mortgaged Property. Any
mortgage loan that was intended by the
parties hereto to be transferred to the
Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not
so transferred for any reason,
including a breach of the representation
contained in Section 2.02 hereof,
shall continue to be a Mortgage Loan
hereunder until the Purchase Price with
respect thereto has been paid to the Trust
Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of
a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
21
<PAGE>
Mortgagor: The obligors on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the
per annum rate equal to the Mortgage Rate
less the Servicing Fee Rate.
Net Rate Cap: With respect to any Distribution Date, the
weighted
average Adjusted Net Mortgage Rate of the
Mortgage Loans for such Distribution
Date, adjusted to an effective rate
reflecting the calculation of interest on
the basis of the actual number of days
elapsed during the related Accrual
Period and a 360-day year.
Net Rate Carryover: With respect to any Class of
Interest-Bearing
Certificates and any Distribution Date, the
sum of (A) the excess of (i) the
amount of interest that such Class would
otherwise have accrued for such
Distribution Date had the Pass-Through Rate
for such Class and the related
Accrual Period not been determined based on
the Net Rate Cap, over (ii) the
amount of interest accrued on such Class at
the Net Rate Cap for such
Distribution Date and (B) the Net Rate
Carryover for such Class for all
previous Distribution Dates not previously
paid pursuant to Section 4.04,
together with interest thereon at the then
applicable Pass-Through Rate for
such Class, without giving effect to the
Net Rate Cap.
NIM Insurer: Any insurer guarantying at the request of CHL
certain
payments under notes backed or secured by
the Class C or Class P Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made
or
proposed to be made by the Master Servicer
that, in the good faith judgment of
the Master Servicer, will not or, in the
case of a current delinquency, would
not, be ultimately recoverable by the
Master Servicer from the related
Mortgagor, related Liquidation Proceeds or
otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a
corporation, partnership, or other entity
(treated as a corporation or a partnership
for federal income tax purposes)
created or organized in or under the laws
of the United States, any state
thereof or the District of Columbia, an
estate whose income from sources
without the United States is includible in
gross income for United States
federal income tax purposes regardless of
its connection with the conduct of a
trade or business within the United States,
or a trust if a court within the
United States is able to exercise primary
supervision over the administration
of the trust and one or more United States
persons have authority to control
all substantial decisions of the
trustor.
OC Floor: With respect to any Distribution Date, an amount equal
to
0.50% of the sum of the aggregate Cut-off
Date Principal Balance of the
Initial Mortgage Loans and the Pre-Funded
Amount.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the
Board, the Vice Chairman of the
Board, the President, a Managing Director,
a Vice President (however
denominated), an Assistant Vice President,
the Treasurer, the Secretary, or
one of the Assistant Treasurers or
Assistant Secretaries of the Depositor,
(ii) in the case of the 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,
22
<PAGE>
signed by a Servicing Officer, as the case
may be, and delivered to the
Depositor and the Trustee, as the case may
be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Interest-Bearing Certificates, the rate
determined by the Trustee on the
related Interest Determination Date on the
basis of the rate for U.S. dollar
deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00
a.m. (London time) on such Interest
Determination Date; provided that the
parties hereto acknowledge that One-Month
LIBOR calculated for the first
Accrual Period for the Interest-Bearing
Certificates shall equal 2.42% per
annum. If such rate does not appear on such
page (or such other page as may
replace that page on that service, or if
such service is no longer offered,
such other service for displaying One-Month
LIBOR or comparable rates as may
be reasonably selected by the Trustee),
One-Month LIBOR for the applicable
Accrual Period for the Interest-Bearing
Certificates will be the Reference
Bank Rate. If no such quotations can be
obtained by the Trustee and no
Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period
for the Interest-Bearing
Certificates.
Opinion of Counsel: A written opinion of counsel, who may be
counsel
for the Depositor or the Master Servicer,
reasonably acceptable to each
addressee of such opinion; provided that
with respect to Section 6.04 or
10.01, or the interpretation or application
of the REMIC Provisions, such
counsel must (i) in fact be independent of
the Depositor and the Master
Servicer, (ii) not have any direct
financial interest in the Depositor or the
Master Servicer or in any affiliate of
either and (iii) not be connected with
the Depositor or the Master Servicer as an
officer, employee, promoter,
underwriter, trustee, partner, director or
person performing similar
functions.
Optional Termination: The termination of the Trust Fund
provided
hereunder pursuant to the purchase of the
Mortgage Loans pursuant to 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
23
<PAGE>
(ii) Certificates in
exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage
Loan with a Stated Principal Balance
greater than zero that was not the
subject of a Principal Prepayment in full,
and that did not become a
Liquidated Mortgage Loan, prior to the end
of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by
which the Overcollateralization
Target Amount exceeds the
Overcollateralized Amount for such Distribution Date
(after giving effect to distributions in
respect of the Principal Remittance
Amount on such Distribution Date).
Overcollateralization Target Amount: With respect to each
Distribution Date (a) prior to the
Distribution Date in July 2005, 0%, (b) on
and after the Distribution Date in July
2005 and prior to the Stepdown Date,
an amount equal to 1.10% of the sum of the
Cut-off Date Principal Balance of
the Initial Mortgage Loans and the
Pre-Funded Amount and (c) on or after the
Stepdown Date, an amount equal to the
greater of (i) 2.20% of the aggregate
Stated Principal Balance of the Mortgage
Loans for the current Distribution
Date, and (ii) the OC Floor; provided that
if a Trigger Event is in effect on
any Distribution Date, the
Overcollateralization Target Amount for that
Distribution Date will be the
Overcollateralization Target Amount as in effect
for the prior Distribution Date.
Overcollateralized Amount: With respect to any Distribution Date
the
amount, if any, by which (x) the aggregate
Stated Principal Balance of the
Mortgage Loans for such Distribution Date
and any remaining amounts on deposit
in the Pre-Funding Account exceeds (y) the
aggregate Certificate Principal
Balance of the Senior Certificates and the
Subordinate Certificates as of such
Distribution Date (after giving effect to
distributions in respect of the
Principal Remittance Amounts on such
Distribution Date).
Ownership Interest: As to any Certificate, any ownership interest
in
such Certificate including any interest in
such Certificate as the Holder
thereof and any other interest therein,
whether direct or indirect, legal or
beneficial.
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.
24
<PAGE>
Pass-Through Rate: With respect to any Accrual Period and each
Class
of Interest-Bearing Certificates, the
lesser of (x) One-Month LIBOR for such
Accrual Period plus the Margin for such
Class and Accrual Period and (y) the
Net Rate Cap and the related Distribution
Date.
Percentage Interest: With respect to any Adjustable Rate
Certificate, a fraction, expressed as a
percentage, the numerator of which is
the Certificate Principal Balance
represented by such Certificate and the
denominator of which is the aggregate
Certificate Principal Balance of the
related Class. With respect to the Class C,
Class P and Class A-R
Certificates, the portion of the Class
evidenced thereby, expressed as a
percentage, as stated on the face of such
Certificate.
Permitted Investments: At any time, any one or more of the
following
obligations and securities:
(i) obligations
of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of
the United States;
(ii) general
obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the
highest long-term debt rating of each Rating Agency, or such
lower
rating as each Rating Agency has confirmed in writing is
sufficient
for the ratings originally assigned to the Certificates by such
Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as each Rating Agency
has
confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency;
(iv) certificates of
deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities, provided that the commercial
paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the
commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Moody's is not a Rating Agency) are then
rated
one of the two highest long-term and the highest short-term
ratings
of each such Rating Agency for such securities, or such lower
ratings
as each Rating Agency has confirmed in writing is sufficient for
the
ratings originally assigned to the Certificates by such Rating
Agency;
(v) repurchase
obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (iv) above;
(vi) securities (other
than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the
face
amount thereof)
25
<PAGE>
bearing interest or sold at a discount issued by any
corporation
incorporated under the laws of the United States or any state
thereof which, at the time of such investment, have one of the
two
highest long term ratings of each Rating Agency (except (x) if
the
Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of S&P for any such securities) and
(y), or
such lower rating as each Rating Agency has confirmed in writing
is
sufficient for the ratings originally assigned to the
Certificates
by such Rating Agency;
(vii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the
time
such interests are held in such fund has the highest applicable
long
term rating by each Rating Agency or such lower rating as each
Rating
Agency has confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating Agency;
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the
laws
of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their
respective
highest applicable rating category or such lower rating as each
Rating Agency has confirmed in writing is sufficient for the
ratings
originally assigned to the Certificates by such Rating Agency;
and
(ix) such other
relatively risk free investments having a
specified stated maturity and bearing interest or sold at a
discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed
writing
delivered by each Rating Agency and reasonably acceptable to the
NIM
Insurer as evidenced by a signed writing delivered by the NIM
Insurer;
provided, that no such instrument shall be
a Permitted Investment if such
instrument (i) evidences the right to
receive interest only payments with
respect to the obligations underlying such
instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep
discount; provided further that no
such instrument shall be a Permitted
Investment (A) if such instrument
evidences principal and interest payments
derived from obligations underlying
such instrument and the interest payments
with respect to such instrument
provide a yield to maturity of greater than
120% of the yield to maturity at
par of such underlying obligations, or (B)
if it may be redeemed at a price
below the purchase price (the foregoing
clause (B) not to apply to investments
in units of money market funds pursuant to
clause (vii) above); provided
further that no amount beneficially owned
by any REMIC (including, without
limitation, any amounts collected by the
Master Servicer but not yet deposited
in the Certificate Account) may be invested
in investments (other than money
market funds) treated as equity interests
for Federal income tax purposes,
unless the Master Servicer shall receive an
Opinion of Counsel, at the expense
of Master 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.
26
<PAGE>
Permitted Transferee: Any Person other than (i) the United
States,
any State or political subdivision thereof,
or any agency or instrumentality
of any of the foregoing, (ii) a foreign
government, International Organization
or any agency or instrumentality of either
of the foregoing, (iii) an
organization (except certain farmers'
cooperatives described in section 521 of
the Code) that is exempt from tax imposed
by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code
on unrelated business taxable
income) on any excess inclusions (as
defined in section 860E(c)(1) of the
Code) with respect to any Class A-R
Certificate, (iv) rural electric and
telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in
section 775 of the Code, (vi) a
Person that is not a citizen or resident of
the United States, a corporation,
partnership, or other entity (treated as a
corporation or a partnership for
federal income tax purposes) created or
organized in or under the laws of the
United States, any state thereof or the
District of Columbia, or an estate
whose income from sources without the
United States is includible in gross
income for United States federal income tax
purposes regardless of its
connection with the conduct of a trade or
business within the United States,
or a trust if a court within the United
States is able to exercise primary
supervision over the administration of the
trust and one or more United States
Persons have authority to control all
substantial decisions of the trustor
unless such Person has furnished the
transferor and the Trustee with a duly
completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so
designated by the Trustee based upon an
Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R
Certificate to such Person may cause
any REMIC formed hereunder to fail to
qualify as a REMIC at any time that any
Certificates are Outstanding. The terms
"United States," "State" and
"International Organization" shall have the
meanings set forth in section 7701
of the Code or successor provisions. A
corporation will not be treated as an
instrumentality of the United States or of
any State or political subdivision
thereof for these purposes if all of its
activities are subject to tax and,
with the exception of the Federal Home Loan
Mortgage Corporation, a majority
of its board of directors is not selected
by such government unit.
Person: Any individual, corporation, partnership, limited
liability
company, joint venture, association,
joint-stock company, trust,
unincorporated organization or government,
or any agency or political
subdivision thereof.
Pool Stated Principal Balance: The aggregate of the Stated
Principal
Balances of the Mortgage Loans which were
Outstanding Mortgage Loans.
Pre-Funded Amount: The amount deposited in the Pre-Funding
Account
on the Closing Date, which shall equal
$106,180,719.18.
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-AB1." 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.
27
<PAGE>
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement
relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or
premiums, if any, due in connection with a
full or partial prepayment of such
Mortgage Loan within the related Prepayment
Charge Period in accordance with
the terms thereof (other than any Master
Servicer Prepayment Charge Payment
Amount).
Prepayment Charge Period: With respect to any Mortgage Loan,
the
period of time during which a Prepayment
Charge may be imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date with
respect to each Initial Mortgage Loan and
as of the Subsequent Cut-off Date
with respect to each Subsequent Mortgage
Loan, a list attached hereto as
Schedule I (including the Prepayment Charge
Summary attached thereto), setting
forth the following information with
respect to each Prepayment Charge:
(i) the Mortgage
Loan identifying number;
(ii) a code indicating
the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which
the first monthly payment was due on
the related Mortgage Loan;
(v) the term of
the related Prepayment Charge; and
(vi) the principal
balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall
contain
the necessary information for each Initial
Mortgage Loan. The Prepayment
Charge Schedule shall be amended by the
Master Servicer upon the sale of any
Subsequent Mortgage Loans to the Trust
Fund. In addition, the Prepayment
Charge Schedule shall be amended from time
to time by the Master Servicer in
accordance with the provisions of this
Agreement and a copy of each related
amendment shall be furnished by the Master
Servicer to the Class P and Class C
Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject
of a Principal Prepayment during
the period from the related Due Date to the
end of the related Prepayment
Period, any payment of interest received in
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
28
<PAGE>
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, the sum of (i) the Principal
Remittance Amount for such Distribution
Date and (ii) the Extra Principal
Distribution Amount 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) .
Principal Prepayment: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a
Mortgage Loan (including loans
purchased or repurchased under Sections
2.02, 2.03, 2.04, 3.12 and 9.01
hereof) that is received in advance of its
scheduled Due Date to the extent it
is not accompanied by an amount as to
interest representing scheduled interest
due on any date or dates in any month or
months subsequent to the month of
prepayment. Partial Principal Prepayments
shall be applied by the Master
Servicer in accordance with the terms of
the related Mortgage Note.
Principal
Remittance Amount: With respect to any Distribution Date,
(a) the sum, without duplication, of: (i)
the scheduled principal collected
with respect to the Mortgage Loans during
the related Due Period or advanced
on or before 1:00 p.m. Pacific time on the
related Master Servicer Advance
Date, (ii) Principal Prepayments collected
in the related Prepayment Period
with respect to the Mortgage Loans, (iii)
the Stated Principal Balance of each
Mortgage Loan that was repurchased by a
Seller or purchased by the Master
Servicer with respect to such Distribution
Date, (iv) the amount, if any, by
which the aggregate unpaid principal
balance of any Replacement Mortgage Loans
is less than the aggregate unpaid principal
balance of any Deleted Mortgage
Loans delivered by the Sellers in
connection with a substitution of a Mortgage
Loan, and (v) all Liquidation Proceeds (to
the extent such Liquidation
Proceeds related to principal) and
Subsequent Recoveries collected during the
related Due Period; less (b) all
29
<PAGE>
Nonrecoverable Advances relating to
principal and certain expenses
reimbursable pursuant to Section 6.03 and
reimbursed during the related Due
Period.
Principal Reserve Fund: The separate Eligible Account created
and
initially maintained by the Trustee
pursuant to Section 3.08 in the name of
the Trustee for the benefit of the
Certificateholders and designated "The Bank
of New York in trust for registered Holders
of CWABS, Inc., Asset-Backed
Certificates, Series 2005-AB1". Funds in
the Principal Reserve Fund shall be
held in trust for the Certificateholders
for the uses and purposes set forth
in this Agreement.
Private Certificates: The Class C and Class P Certificates.
Prospectus: The prospectus dated October 25, 2004, relating to
asset-backed securities to be sold by the
Depositor.
Prospectus Supplement: The prospectus supplement dated March
14,
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,
2.04 or 3.12 hereof or (2)
repurchased by the Depositor pursuant to
Section 2.04 hereof, or (y) that the
Master Servicer has a right to purchase
pursuant to Section 3.12 hereof, an
amount equal to the sum of (i) 100% of the
unpaid principal balance (or, if
such purchase or repurchase, as the case
may be, is effected by the Master
Servicer, the Stated Principal Balance) of
the Mortgage Loan as of the date of
such purchase, (ii) accrued interest
thereon at the applicable Mortgage Rate
(or, if such purchase or repurchase, as the
case may be, is effected by the
Master Servicer, at the Net Mortgage Rate)
from (a) the date through which
interest was last 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, Fitch 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
30
<PAGE>
with such liquidation during the month in
which such liquidation occurs, to
the extent applied as recoveries of
principal of the Liquidated Mortgage Loan.
With respect to each Mortgage Loan that has
become the subject of a Deficient
Valuation, (i) if the value of the related
Mortgaged Property was reduced
below the principal balance of the related
Mortgage Note, the amount by which
the value of the Mortgaged Property was
reduced below the principal balance of
the related Mortgage Note, and (ii) if the
principal amount due under the
related Mortgage Note has been reduced, the
difference between the principal
balance of the Mortgage Loan outstanding
immediately prior to such Deficient
Valuation and the principal balance of the
Mortgage Loan as reduced by the
Deficient Valuation. With respect to each
Mortgage Loan that has become the
subject of a Debt Service Reduction and any
Distribution Date, the amount, if
any, by which the related Scheduled Payment
was reduced.
Record Date: With respect to any Distribution Date and the
Interest-Bearing Certificates, the Business
Day immediately preceding such
Distribution Date, or if such Certificates
are no longer Book-Entry
Certificates, the last Business Day of the
month preceding the month of such
Distribution Date. With respect to the
Class A-R, Class C and Class P
Certificates, the last Business Day of the
month preceding the month of a
Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for
United States dollar deposits for one
month that are quoted by the Reference
Banks as of 11:00 a.m., New York City
time, on the related Interest Determination
Date to prime banks in the London
interbank market for a period of one month
in amounts approximately equal to
the outstanding aggregate Certificate
Principal Balance of the
Interest-Bearing Certificates on such
Interest Determination Date, provided
that at least two such Reference Banks
provide such rate. If fewer than two
offered rates appear, the Reference Bank
Rate will be the arithmetic mean
(rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks
in New York City, selected by the
Trustee, as of 11:00 a.m., New York City
time, on such date for loans in U.S.
dollars to leading European banks for a
period of one month in amounts
approximately equal to the aggregate
Certificate Principal Balance of the
Interest-Bearing Certificates on such
Interest Determination Date.
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.
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<PAGE>
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits
which appear at section 860A
through 860G of Subchapter M of Chapter 1
of the Code, and related provisions,
and regulations and rulings promulgated
thereunder, as the foregoing may be in
effect from time to time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM
Insurer in accordance with Section 4.04.
REO Property: A Mortgaged Property acquired by the Master
Servicer
through foreclosure or deed-in-lieu of
foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a
Seller
for a Deleted Mortgage Loan which must, on
the date of such substitution, as
confirmed in a Request for File Release,
(i) have a Stated Principal Balance,
after deduction of the principal portion of
the Scheduled Payment due in the
month of substitution, not in excess of,
and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage
Loan; (ii) have a Maximum Mortgage
Rate no more than 1% per annum higher or
lower than the Maximum Mortgage Rate
of the Deleted Mortgage Loan; (iii) have a
Minimum Mortgage Rate no more than
1% per annum higher or lower than the
Minimum Mortgage Rate of the Deleted
Mortgage Loan; (iv) have the same Index and
intervals between Adjustment Dates
as that of the Deleted Mortgage Loan; (v)
have a Gross Margin not more than 1%
per annum higher or lower than that of the
Deleted Mortgage Loan; (vi) 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; (vii) have the same or
higher credit quality characteristics than
that of the Deleted Mortgage Loan;
(viii) be accruing interest at a rate not
more than 1% per annum higher or
lower than that of the Deleted Mortgage
Loan; (ix) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage
Loan; (x) have a remaining term to
maturity not greater than (and not more
than one year less than) that of the
Deleted Mortgage Loan; (xi) not permit
conversion of the Mortgage Rate from a
variable rate to a fixed rate; (xii)
provide for a Prepayment Charge on terms
substantially similar to those of the
Prepayment Charge, if any, of the
Deleted Mortgage Loan; (xiii) have the same
occupancy type and lien priority
as the Deleted Mortgage Loan; (xiv) be
covered by the Mortgage Insurance
Policy if the Deleted Mortgage Loan was
covered by the Mortgage Insurance
Policy; and (xv) 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 (xv)
of this definition would cause a proposed
Replacement Mortgage Loan to fail to
comply with one or more of clauses (i),
(ii), (iii), (iv), (v), (vi), (viii),
(xii) and/or (xiii) of this definition,
then such proposed Replacement
Mortgage Loan must comply with clause (xv)
and need not comply with one or
more of clauses (i), (ii), (iii), (iv),
(v), (vi), (viii), (xii) and/or (xiii)
to the extent, and only to the extent,
necessary to assure that the
Replacement Mortgage Loan otherwise
complies with clause (xv).
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.
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<PAGE>
Request for File Release: A Request for File Release submitted
by
the Master Servicer to the Co-Trustee,
substantially in the form of Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the
excess of (i) $10,000 over (ii) the
amount of funds on deposit in the Carryover
Reserve Fund.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy that is required to be
maintained from time to time under
this Agreement, including with respect to
the Covered Mortgage Loans, the
Mortgage Insurance Policy.
Responsible Officer: When used with respect to the Trustee, any
Vice
President, any Assistant Vice President,
the Secretary, any Assistant
Secretary, any Trust Officer or any other
officer of the Trustee customarily
performing functions similar to those
performed by any of the above designated
officers and also to whom, with respect to
a particular matter, such matter is
referred because of such officer's
knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution
Date on or after the Stepdown Date, the
average of the Sixty-Day Delinquency
Rates for such Distribution Date and the
two immediately preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of
The
McGraw-Hill Companies, Inc. and its
successors.
Scheduled Payment: With respect to any Mortgage Loan, the
scheduled
monthly payment of principal and/or
interest due on any Due Date on such
Mortgage Loan which is payable by the
related Mortgagor from time to time
under the related Mortgage Note,
determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt Service
Reduction with respect to such
Mortgage Loan and (ii) any reduction in the
amount of interest collectible
from the related Mortgagor pursuant to the
Relief Act; (b) without giving
effect to any extension granted or agreed
to by the Master Servicer pursuant
to Section 3.05(a); and (c) on the
assumption that all other amounts, if any,
due under such Mortgage Loan are paid when
due.
Securities Act: The Securities Act of 1933, as amended.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans
to
the Depositor, Park Monaco, in its capacity
as seller of the Park Monaco
Mortgage Loans to the Depositor, and Park
Sienna, in its capacity as seller of
the Park Sienna Mortgage Loans to the
Depositor.
Seller Shortfall Interest Requirement: With respect to the
Master
Servicer Advance Date in each of April
2005, May 2005 and June 2005 is the sum
of:
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<PAGE>
(a)
the product of: (1) the excess of the aggregate Stated
Principal Balances for such Distribution
Date of the Mortgage Loans (including
the Subsequent Mortgage Loans, if any)
owned by the Trust Fund at the beginning
of the related Due Period, over the
aggregate Stated Principal Balance for such
Distribution Date of such Mortgage Loans
(including such Subsequent Mortgage
Loans, if any) that have a scheduled
payment of interest due in the related Due
Period, and (2) a fraction, the numerator
of which is the weighted average Net
Mortgage Rate of such Mortgage Loans
(including such Subsequent Mortgage Loans,
if any) (weighted on the basis of the
Stated Principal Balances thereof for
such Distribution Date) and the denominator
of which is 12; and
(b)
the lesser of:
(i) the product
of: (1) the amount on deposit in the
Pre-Funding Account at the beginning of the related Due Period,
and
(2) a fraction, the numerator of which is the weighted average
Net
Mortgage Rate of the Mortgage Loans (including Subsequent
Mortgage
Loans, if any) owned by the Trust Fund at the beginning of the
related Due Period (weighted on the basis of the Stated
Principal
Balances thereof for such Distribution Date) and the denominator
of
which is 12; and
(ii) the excess of (x)
the amount of Current Interest and
Interest Carry Forward Amount due and payable on the
Interest-Bearing
Certificates over (y) Interest Funds otherwise available to pay
Current Interest and the Interest Carry Forward Amount on the
Interest-Bearing Certificates for such Distribution Date (after
giving effect to the addition of any amounts in clause (a) of
this
definition of Seller Shortfall Interest Requirement to Interest
Funds
for such Distribution Date).
Senior Certificates: The Class A and Class A-R Certificates.
Senior
Enhancement Percentage: With respect to a Distribution Date
on and after the Stepdown Date, the
fraction (expressed as a percentage) (1)
the numerator of which is the excess of (a)
the aggregate Stated Principal
Balance of the Mortgage Loans for the
preceding Distribution Date over (b) (i)
before the Certificate Principal Balances
of the Senior Certificates have been
reduced to zero, the sum of the Certificate
Principal Balances of the Senior
Certificates, or (ii) after the Certificate
Principal Balances of the Senior
Certificates have been reduced to zero, the
Certificate Principal Balance of
the most senior Class of Subordinate
Certificates outstanding as of the
preceding Master Servicer Advance Date and
(2) the denominator of which is the
aggregate Stated Principal Balance of the
Mortgage Loans for the preceding
Distribution Date.
Servicing Advances: All customary, reasonable and necessary "out
of
pocket" costs and expenses incurred in the
performance by the Master Servicer
of its servicing obligations hereunder,
including, but not limited to, the
cost of (i) the preservation, restoration
and protection of a Mortgaged
Property, (ii) any enforcement or judicial
proceedings, including
foreclosures, (iii) the management and
liquidation of any REO Property and
(iv) compliance with the obligations under
Section 3.10.
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<PAGE>
Servicing Fee: As to each Mortgage Loan and any Distribution
Date,
an amount equal to one month's interest at
the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage
Loan for the preceding Distribution
Date or, in the event of any payment of
interest that accompanies a Principal
Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate
on the Stated Principal Balance of such
Mortgage Loan for the period covered
by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per
annum.
Servicing Officer: Any officer of the Master Servicer involved
in,
or responsible for, the administration and
servicing of the Mortgage Loans
whose name and facsimile signature appear
on a list of servicing officers
furnished to the Trustee by the Master
Servicer on the Closing Date pursuant
to this Agreement, as such list may from
time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date
on
or after the Stepdown Date, a fraction,
expressed as a percentage, the
numerator of which is the aggregate Stated
Principal Balance for such
Distribution Date of all Mortgage Loans 60
or more days delinquent as of the
close of business on the last day of the
calendar month preceding such
Distribution Date (including Mortgage Loans
in foreclosure, bankruptcy and REO
Properties) and the denominator of which is
the aggregate Stated Principal
Balance for such Distribution Date of all
Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off
Date, the unpaid principal balance
of the Mortgage Loan as of such date
(before any adjustment to the
amortization schedule for any moratorium or
similar waiver or grace period),
after giving effect to any partial
prepayments or Liquidation Proceeds
received prior to such date and to the
payment of principal due on or prior to
such date and irrespective any delinquency
in payment by the related
Mortgagor, and (ii) as of any other
Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments
(x) due with respect to such
Mortgage Loan during each Due Period ending
prior to such Distribution Date
and (y) that were received by the Master
Servicer as of the close of business
on the Determination Date related to such
Distribution Date or with respect to
which Advances were made as of the Master
Servicer Advance Date related to
such Distribution Date, (b) all Principal
Prepayments with respect to such
Mortgage Loan received by the Master
Servicer during each Prepayment Period
ending prior to such Distribution Date and
(c) all Liquidation Proceeds
collected with respect to such Mortgage
Loan during each Due Period ending
prior to such Distribution Date, to the
extent applied by the Master Servicer
as recoveries of principal in accordance
with Section 3.12. The Stated
Principal Balance of any Mortgage Loan that
becomes a Liquidated Mortgage Loan
will be zero on each date following the Due
Period in which such Mortgage Loan
becomes a Liquidated Mortgage Loan.
References herein to the Stated Principal
Balance of the Mortgage Loans at any time
shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in
the Trust Fund as of such time.
Stepdown Date: The later to occur of (1) the Distribution Date
in
April 2008 and (2) 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
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<PAGE>
equal to the product of (x) 100% less the
Stepdown Target Subordination
Percentage for the Class A Certificates and
(y) the aggregate Stated Principal
Balance of the Mortgage Loans for such
Distribution Date.
Stepdown
Target Subordination Percentage: With respect to any Class
of Interest-Bearing Certificates, the
percentage indicated in the following
table:
-----------------------------------------------------------
Stepdown Target
Class
Subordination Percentage
-----------------------------------------------------------
Class A.................
23.20%
-----------------------------------------------------------
Class M-1...............
18.80%
-----------------------------------------------------------
Class M-2...............
14.80%
-----------------------------------------------------------
Class M-3...............
12.60%
-----------------------------------------------------------
Class M-4...............
10.40%
-----------------------------------------------------------
Class M-5...............
8.20%
-----------------------------------------------------------
Class M-6...............
6.20%
-----------------------------------------------------------
Class M-7...............
4.20%
-----------------------------------------------------------
Class B.................
2.20%
-----------------------------------------------------------
For purposes of the Stepdown Target Subordination Percentage,
the
Class A Certificates shall be treated as if
they were a single Class of
Certificates.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5, Class M-6, Class M-7 and
Class B Certificates.
Subordinate Component Balance: With respect to any Distribution
Date, the excess of the principal balance
of the Mortgage Loans as of the
first day of the related Due Period (after
giving effect to Principal
Prepayments received in the Prepayment
Period ending during such Due Period)
over the Certificate Principal Balance of
the Class A Certificates immediately
prior to such Distribution Date.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal
to the aggregate of all amounts in
respect of (i) principal of the related
Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and
received by the Master Servicer on or
before such Subsequent Transfer Date and
not applied in computing the Cut-off
Date Principal Balance thereof and (ii)
interest on the such Subsequent
Mortgage Loans due after such Subsequent
Cut-off Date and received by the
Master Servicer on or before the Subsequent
Transfer Date.
Subsequent Cut-off Date: As defined in the definition of
Cut-off
Date.
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.
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<PAGE>
Subsequent Periodic Rate Cap: With respect to each Mortgage
Loan,
the percentage specified in the related
Mortgage Note that limits permissible
increases and decreases in the Mortgage
Rate on any Adjustment Date (other
than the initial Adjustment Date).
Subsequent Recoveries: As to any Distribution Date, with respect
to
a Liquidated Mortgage Loan that resulted in
a Realized Loss in a prior
calendar month, unexpected amounts received
by the Master Servicer (net of any
related expenses permitted to be reimbursed
pursuant to Section 3.08 and 3.12)
specifically related to such Liquidated
Mortgage Loan after the classification
of such Mortgage Loan as a Liquidated
Mortgage Loan.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P
hereto, executed and delivered by the
Sellers, the Depositor and the Trustee as
provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement,
the
"Subsequent Transfer Date" identified in
such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer
Date for any Subsequent Transfer
Agreement must be a Business Day and may
not be a date earlier than the date
on which the Subsequent Transfer Agreement
is executed and delivered by the
parties thereto pursuant to Section
2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent
Transfer Date Purchase Amount"
identified in the related Subsequent
Transfer Agreement which shall be an
estimate of the aggregate Stated Principal
Balances of the Subsequent Mortgage
Loans identified in such Subsequent
Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal
to the lesser of (i) the aggregate
Stated Principal Balances as of the related
Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date, as listed
on the related Loan Number and Borrower
Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and
(ii) the amount on deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such
term
pursuant to Section 2.03(e).
Substitution Amount: With respect to any Mortgage Loan
substituted
pursuant to Section 2.03(e), the excess of
(x) the principal balance of the
Mortgage Loan that is substituted for, over
(y) the principal balance of the
related substitute Mortgage Loan, each
balance being determined as of the date
of substitution.
Tax Matters Person: The person designated as "tax matters person"
in
the manner provided under Treasury
regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T.
Initially, this person shall be the
Trustee.
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Tax Matters Person Certificate: With respect to the Master
REMIC,
REMIC 1 and REMIC 2, the Class A-R
Certificate with a Denomination of $0.05
and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 36 months after
origination thereof before such
Mortgage Rate becomes subject to
adjustment.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to a Distribution Date on or after
the
Stepdown Date, consists of either a
Delinquency Trigger Event with respect to
that Distribution Date or a Cumulative Loss
Trigger Event with respect to that
Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all interest and
principal received on or with
respect thereto after the Cut-off Date to
the extent not applied in computing
the Cut-off Date Principal Balance thereof,
exclusive of interest not required
to be deposited in the Certificate Account
pursuant to Section 3.05(b)(2);
(ii) the Certificate Account, the
Distribution Account, the Principal Reserve
Fund, the Carryover Reserve Fund, the
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 Contract 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%.
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<PAGE>
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate
multiplied by the sum of (i) the Pool
Stated Principal Balance and (ii) any
amounts remaining in the Pre-Funding
Account (excluding any investment earnings
thereon) with respect to such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum
rate agreed upon in writing on or prior to
the Closing Date by the Trustee and
the Depositor, which is 0.009% per
annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage
Rate that is fixed for 24 months after
origination thereof before such
Mortgage Rate becomes subject to
adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41,
67 Fed. Reg. 54487 (2002), as amended (or
any successor thereto), or any
substantially similar administrative
exemption granted by the U.S. Department
of Labor.
Underwriters: Countrywide Securities Corporation, Bear, Stearns
&
Co. Inc. and Greenwich Capital Markets,
Inc.
Unpaid Realized Loss Amount: For any Class of Subordinate
Certificates and any Distribution Date, (x)
the portion of the aggregate
Applied Realized Loss Amount previously
allocated to that Class remaining
unpaid from prior Distribution Dates minus
(y) any increase in the Certificate
Principal Balance of that Class due to the
allocation of Subsequent Recoveries
to the Certificate Principal Balance of
that Class pursuant to Section
4.04(i).
Voting Rights: The voting rights of all the Certificates that
are
allocated to any Certificates for purposes
of the voting provisions hereunder.
Voting Rights allocated to each Class of
Certificates shall be allocated 97%
to the Certificates other than the Class
A-R, Class C and Class P Certificates
(with the allocation among the Certificates
to be in proportion to the
Certificate Principal Balance of each Class
relative to the Certificate
Principal Balance of all other such
Classes), and 1% to each of the Class A-R,
Class C and Class P Certificates. Voting
Rights will be allocated among the
Certificates of each such Class in
accordance with their respective Percentage
Interests.
Section 1.02
Certain Interpretive
Provisions.
--------------------------------
All terms defined in this Agreement shall have the defined
meanings
when used in any certificate, agreement or
other document delivered pursuant
hereto unless otherwise defined therein.
For purposes of this Agreement and
all such certificates and other documents,
unless the context otherwise
requires: (a) accounting terms not
otherwise defined in this Agreement, and
accounting terms partly defined in this
Agreement to the extent not defined,
shall have the respective meanings given to
them under generally accepted
accounting principles; (b) the words
"hereof," "herein" and "hereunder" and
words of similar import refer to this
Agreement (or the certificate, agreement
or other document in which they are used)
as a whole and not to any particular
provision of this Agreement (or such
certificate, agreement or document); (c)
references to any Section, Schedule or
Exhibit are references to Sections,
Schedules and Exhibits in or to this
Agreement, and references to any
paragraph, subsection,
39
<PAGE>
clause or other subdivision within any
Section or definition refer to such
paragraph, subsection, clause or other
subdivision of such Section or
definition; (d) the term "including" means
"including without limitation"; (e)
references to any law or regulation refer
to that law or regulation as amended
from time to time and include any successor
law or regulation; (f) references
to any agreement refer to that agreement as
amended from time to time; and (g)
references to any Person include that
Person's permitted successors and
assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage Loans.
-----------------------------
(a)
Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without
recourse, all the right, title and
interest of such Seller in and to the
applicable Initial Mortgage Loans,
including all interest and principal
received and receivable by such Seller on
or with respect to applicable Initial
Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in
computing the Cut-off Date Principal
Balance thereof) or deposited into the
Certificate Account by the Master
Servicer on behalf of such Seller as part
of the Initial Certificate Account
Deposit as provided in this Agreement,
other than principal due on the
applicable Initial Mortgage Loans on or
prior to the Initial Cut-off Date and
interest accruing prior to the Initial
Cut-off Date. The Master Servicer
confirms that, on behalf of the Sellers,
concurrently with the transfer and
assignment, it has deposited into the
Certificate Account the Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to
in
the preceding paragraph, the Depositor
sells, transfers, assigns, sets over
and otherwise conveys to the Trustee for
benefit of the Certificateholders,
without recourse, all right title and
interest in the Mortgage Loans.
CHL further agrees (x) to cause The Bank of New York to enter
into
the Corridor Contract Administration
Agreement as Corridor Contract
Administrator and (y) to assign all of its
right, title and interest in and to
the interest rate corridor transaction
evidenced by the 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
40
<PAGE>
related Subsequent Cut-off Date and
interest accruing prior to the related
Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage
Loans
referred to in the preceding paragraph, the
Depositor sells, transfers,
assigns, sets over and otherwise conveys to
the Trustee for benefit of the
Certificateholders, without recourse, all
right title and interest in the
Subsequent Mortgage Loans.
(c)
Each Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by
the Depositor and has agreed to take
the actions specified herein. The
Depositor, concurrently with the execution
and delivery of this Agreement, hereby
sells, transfers, assigns and otherwise
conveys to the Trustee for the use and
benefit of the Certificateholders,
without recourse, all right title and
interest in the portion of the Trust Fund
not otherwise conveyed to the Trustee
pursuant to Section 2.01(a) or (b).
(d)
On any Business Day during the Funding Period designated by
CHL to the Trustee, the Sellers, the
Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer
Agreement. After the execution and
delivery of such Subsequent Transfer
Agreement, on the Subsequent Transfer
Date, the Trustee shall set aside in the
Pre-Funding Account an amount equal to
the related Subsequent Transfer Date
Purchase Amount.
(e)
The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the
satisfaction of each of the following
conditions:
(i) the Trustee
and the Underwriters will be provided
Opinions of Counsel addressed to the Rating Agencies as with
respect
to the sale of the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date (such opinions being substantially
similar
to
the opinions delivered on the Closing Date to the Rating
Agencies
with respect to the sale of the Initial Mortgage Loans on the
Closing
Date), to be delivered as provided in Section 2.01(f);
(ii) the execution and
delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans
does
not result in a reduction or withdrawal of the ratings assigned
to
the Certificates by the Ratings Agencies;
(iii) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions
set
forth in this Section 2.01(e) required to be satisfied by such
Subsequent Transfer Date;
(iv) each Subsequent
Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and
warranties
applicable to it under this Agreement, provided, however, that
with
respect to a breach of a representation and warranty with respect
to
a Subsequent Mortgage Loan set forth in this clause (iv), the
obligation under Section 2.03(e) 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;
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<PAGE>
(v) the
Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date were selected in a manner reasonably
believed not to be adverse to the interests of the
Certificateholders;
(vi) no Subsequent
Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent;
(vii) following the conveyance of the Subsequent Mortgage
Loans on such Subsequent Transfer Date, the characteristics of
the
Mortgage Loans 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 the Mortgage Pool) 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>
Permitted
Characteristic
Variance or Range
------------------------
-------------------
<S>
<C>
<C>
Average
Stated Principal Balance............... $229,113
10%
Weighted
Average Mortgage Rate................. 6.746%
0.10%
Weighted
Average Original Loan-to-Value Ratio.. 84.45%
3%
Weighted
Average Remaining Term to Maturity.... 359 months 3
months
Weighted
Average Credit Bureau Risk Score...... 678 5
points
</TABLE>
(viii) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered
insolvent
by the conveyance of Subsequent Mortgage Loans on such
Subsequent
Transfer Date; and
(ix) the Trustee and
the Underwriters will be provided with
an Opinion of Counsel, which Opinion of Counsel shall not be at
the
expense of either the Trustee or the Trust Fund, addressed to
the
Trustee, to the effect that such purchase of Subsequent
Mortgage
Loans will not (i) result in the imposition of the tax on
"prohibited
transactions" on the Trust Fund or contributions after the
Startup
Date, as defined in Sections 860F(a)(2) and 860G(d) of the
Code,
respectively or (ii) cause any REMIC formed hereunder to fail
to
qualify as a REMIC, such opinion to be delivered as provided in
Section 2.01(f).
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)(i) and
(e)(ix), (2) delivery to the Trustee by
CHL (on behalf of each Seller) of a
Loan
42
<PAGE>
Number and Borrower Identification Mortgage
Loan Schedule reflecting the
Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date, (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)(vi) and (vii).
(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 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;
43
<PAGE>
(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-AB1, CWABS, Inc., by The
Bank
of New York, a New York banking corporation, as trustee under
the
Pooling and Servicing Agreement dated as of March 1, 2005,
without
recourse" (each such assignment, when duly and validly completed,
to
be in recordable form and sufficient to effect the assignment of
and
transfer to the assignee thereof, under the Mortgage to which
such
assignment relates);
(iv) the original
recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original
or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or
duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto
or,
in the event such original title policy has not been received
from
the insurer, such original or duplicate original lender's title
policy and all riders thereto shall be delivered within one year
of
the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage
Loan, each Seller agrees that it will
cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide
evidence to the Trustee that it has
done so) that such Mortgage Loans have been
assigned by such Seller to the
Trustee in accordance with this Agreement
for the benefit of the
Certificateholders by including (or
deleting, in the case of Mortgage Loans
which are repurchased in accordance with
this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE
SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which
identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in
the field "Pool Field" which
identifies the series of the Certificates
issued in connection with such
Mortgage Loans. The Sellers further agree
that they will not, and will not
permit the Master Servicer to, and the
Master Servicer agrees that it will
not, alter the codes referenced in this
paragraph with respect to any Mortgage
Loan during the term of this Agreement
unless and until such Mortgage Loan is
repurchased in accordance with the terms of
this Agreement.
In the event that in connection with any Mortgage Loan that is not
a
MERS Mortgage Loan a Seller cannot deliver
the original recorded Mortgage or
all interim recorded assignments of the
Mortgage satisfying the requirements
of clause (ii), (iii) or (iv) concurrently
with the execution and delivery
hereof, such Seller shall deliver or cause
to be delivered to the Co-Trustee a
true copy of such Mortgage and of each such
undelivered interim assignment of
the Mortgage each certified by such Seller,
the applicable title company,
escrow agent or attorney, or the originator
of such Mortgage, as the case may
be, to be a true and complete copy of the
original Mortgage or assignment of
Mortgage submitted for recording. For any
such Mortgage Loan that is not a
MERS Mortgage Loan each Seller shall
promptly deliver or cause to be delivered
to the Co-Trustee such original Mortgage
and such assignment or assignments
with
44
<PAGE>
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 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
45
<PAGE>
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 Exhibit G-3 (with any applicable
exceptions noted thereon) for all Delay
Delivery Mortgage Loans delivered within
thirty (30) days after such date. The
Trustee will promptly send a copy of such
Delay Delivery Certification to each
Rating Agency.
The Trust
Fund will not acquire or hold any Mortgage Loan that would
violate the representations made by CHL in
Section 2.03(b)(70) or (72).
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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.
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.
47
<PAGE>
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 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
48
<PAGE>
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 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)
49
<PAGE>
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
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
50
<PAGE>
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
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
51
<PAGE>
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 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
52
<PAGE>
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.
(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
53
<PAGE>
with the
servicing of the Mortgage Loans for as long as such Mortgage
Loans are
registered with MERS.
(b)
CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the 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 are measured by the Cut-off
Date Principal Balance of the
Initial Mortgage Loans in the Trust
Fund):
(1) CHL is duly organized as a New York corporation and is
validly existing
and in good standing under the laws of the State of New
York and is duly
authorized and qualified to transact any and all
business
contemplated by this Agreement 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 Subsequent Transfer Agreement; and
this Agreement
and each Subsequent Transfer Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes a
legal, valid and binding obligation of CHL, enforceable
against CHL in
accordance with its terms, except that (a) the
enforceability
hereof may be limited by bankruptcy, insolvency,
moratorium,
receivership and other similar laws relating to creditors'
rights generally
and (b) the remedy of specific performance and
injunctive and
other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent
Transfer Agreement by CHL, the sale of the CHL Mortgage Loans
by CHL under
this Agreement and each Subsequent Transfer Agreement, the
consummation of
any other of the transactions contemplated by this
Agreement and
each Subsequent Transfer Agreement, and the fulfillment of
or compliance
with the terms hereof and thereof are in the ordinary
course of business of CHL and will
not (A) result in a material breach of
any term or
provision of the charter or by-laws of CHL or (B) materially
conflict with,
result in a material breach, violation or acceleration of,
or result in a
material default under, the terms of any other material
agreement or
instrument to which CHL is a party or by which it may be
bound, or (C)
constitute a material violation of any statute, order or
regulation
applicable to CHL of any court, regulatory body,
54
<PAGE>
administrative
agency or governmental body having jurisdiction over CHL;
and CHL is not
in breach or violation of any material indenture or other
material
agreement or instrument, or in violation of any statute, order
or regulation of
any court, regulatory body, administrative agency or
governmental
body having jurisdiction over it which breach or violation
may materially
impair CHL's ability to perform or meet any of its
obligations
under this Agreement and each Subsequent Transfer Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for Fannie Mae
and Freddie Mac and is a mortgagee approved by the
Secretary of
Housing and Urban Development pursuant to sections 203 and
211 of the
National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge,
threatened, against CHL that would materially and adversely
affect the
execution, delivery or enforceability of this Agreement or any
Subsequent
Transfer Agreement or the ability of CHL to sell the CHL
Mortgage Loans
or to perform any of its other obligations under this
Agreement or any
Subsequent Transfer Agreement in accordance with the
terms hereof or
thereof.
(6) No consent, approval, authorization or order of any court
or governmental
agency or body is required for the execution, delivery
and performance
by CHL of, or compliance by CHL with, this Agreement or
any Subsequent
Transfer Agreement or the consummation of the transactions
contemplated
hereby, or if any such consent, approval, authorization or
order is
required, CHL has obtained the same.
(7) The information set forth on Exhibit F-1 hereto with
respect to each
Initial Mortgage Loan is true and correct in all material
respects as of
the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the Depositor as
a sale of the CHL Mortgage Loans for all tax, accounting
and regulatory
purposes.
(9) None of the Mortgage Loans is delinquent in payment of
principal and
interest.
(10) No Mortgage Loan that is secured by a first lien on the
related
Mortgaged Property had a Loan-to-Value Ratio at origination in
excess of
100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
first lien on
the related Mortgaged Property subject only to (1) the lien
of
non-delinquent current real property taxes and assessments, (2)
covenants,
conditions and restrictions, rights of way, easements and
other matters of
public record as of the date of recording of such
Mortgage, such
exceptions appearing of record being acceptable to
mortgage lending
institutions generally or specifically reflected in the
appraisal made
in connection with the origination of the related Mortgage
Loan and (3)
other matters to which like properties are commonly subject
that do not
materially interfere with the benefits of the security
intended to be
provided by such Mortgage.
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(12) Immediately prior to the assignment of each CHL Mortgage
Loan to the
Depositor, CHL had good title to, and was the sole owner of,
such CHL
Mortgage Loan free and clear of any pledge, lien, encumbrance
or
security
interest and had full right and authority, subject to no
interest or
participation of, or agreement with, any other party, to sell
and assign the
same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged
Property.
(14) There is no valid offset, claim, defense or counterclaim
to any Mortgage
Note or Mortgage, including the obligation of the
Mortgagor to pay
the unpaid principal of or interest on such Mortgage
Note.
(15) There are no mechanics' liens or claims for work, labor or
material
affecting any Mortgaged Property that are or may be a lien
prior
to, or equal
with, the lien of such Mortgage, except those that are
insured against
by the title insurance policy referred to in item (18)
below.
(16) As of the Closing Date in the case of the Initial Mortgage
Loans and as of
the related Subsequent Transfer Date in the case of the
Subsequent
Mortgage Loans, to the best of CHL's knowledge, each Mortgaged
Property is free
of material damage and is in good repair.
(17) As of the Closing Date in the case of the Initial Mortgage
Loans and as of
the related Subsequent Transfer Date in the case of the
Subsequent
Mortgage Loans, neither CHL nor any prior holder of any
Mortgage has
modified the Mortgage in any material respect (except that a
Mortgage Loan
may have been modified by a written instrument that has
been recorded or
submitted for recordation, if necessary, to protect the
interests of the
Certificateholders and the original or a copy of which
has been
delivered to the Trustee); satisfied, cancelled or subordinated
such Mortgage in
whole or in part; released the related Mortgaged
Property in
whole or in part from the lien of such Mortgage; or executed
any instrument
of release, cancellation, modification (except as
expressly
permitted above) or satisfaction with respect thereto.
(18) A lender's policy of title insurance together with a
condominium
endorsement and extended coverage endorsement, if applicable,
in an amount at
least equal to the Cut-off Date Principal Balance of each
such Mortgage
Loan or a commitment (binder) to issue the same was
effective on the date
of the origination of each Mortgage Loan, each such
policy is valid
and remains in full force and effect, and each such
policy was
issued by a title insurer qualified to do business in the
jurisdiction
where the Mortgaged Property is located and acceptable to
Fannie Mae and
Freddie Mac and is in a form acceptable to Fannie Mae and
Freddie Mac,
which policy insures the Sellers and successor owners of
indebtedness
secured by the insured Mortgage, as to the first priority
lien, of the
Mortgage subject to the exceptions set forth in paragraph
(11) above; to
the best of CHL's knowledge, no claims have been made
under such
mortgage title insurance policy and no prior holder of the
related
Mortgage, including any Seller,
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has done, by act
or omission, anything that would impair the coverage of
such mortgage
title insurance policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in
full between the Initial Cut-off Date and the Closing Date.
No Subsequent
Mortgage Loan was the subject of a Principal Prepayment in
full between the
Subsequent Cut-off Date and the Subsequent Transfer
Date.
(20) To the best of CHL's knowledge, all of the improvements
that were
included for the purpose of determining the Appraised Value of
the Mortgaged
Property lie wholly within the boundaries and building
restriction
lines of such property, and no improvements on adjoining
properties
encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on
or being part of
the Mortgaged Property is in violation of any applicable
zoning law or
regulation. To the best of CHL's knowledge, all
inspections,
licenses and certificates required to be made or issued with
respect to all
occupied portions of the Mortgaged Property and, with
respect to the
use and occupancy of the same, including but not limited
to certificates
of occupancy and fire underwriting certificates, have
been made or
obtained from the appropriate authorities, unless the lack
thereof would
not have a material adverse effect on the value of such
Mortgaged
Property, and the Mortgaged Property is lawfully occupied under
applicable
law.
(22) The Mortgage Note and the related Mortgage are genuine,
and each is the
legal, valid and binding obligation of the maker thereof,
enforceable in
accordance with its terms and under applicable law, except
that (a) the
enforceability thereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors' rights
generally and (b) the remedy of specific performance
and injunctive
and other forms of equitable relief may be subject to
equitable
defenses and to the discretion of the court before which any
proceeding
therefor may be brought. To the best of CHL's knowledge, all
parties to the
Mortgage Note and the Mortgage had legal capacity to
execute the
Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have
been duly and properly executed by such parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there
is no requirement for future advances thereunder, and
any and all
requirements as to completion of any on-site or off-site
improvements and
as to disbursements of any escrow funds therefor have
been complied
with. All costs, fees and expenses incurred in making, or
closing or
recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and enforceable
provisions that render
the rights and remedies of the holder thereof
adequate for the
realization against the Mortgaged Property of the
benefits of the
security, including, (i) in the case of a Mortgage
designated as a
deed of trust, by trustee's sale, and (ii) otherwise by
judicial
foreclosure.
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(25) With respect to each Mortgage constituting a deed of
trust, a
trustee, duly qualified under applicable law to serve as such,
has been
properly designated and currently so serves and is named in
such
Mortgage, and no
fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except
in
connection with
a trustee's sale after default by the Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable in form
to Fannie Mae
and Freddie Mac.
(27) There exist no deficiencies with respect to escrow
deposits and
payments, if such are required, for which customary
arrangements for
repayment thereof have not been made, and no escrow
deposits or
payments of other charges or payments due the Sellers have
been capitalized
under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and collection
practices with
respect to each Mortgage Loan have been in all respects
legal, proper,
prudent and customary in the mortgage lending and
servicing
business, as conducted by prudent lending institutions which
service mortgage
loans of the same type in the jurisdiction in which the
Mortgaged
Property is located.
(29) There is no pledged account or other security other than
real estate securing the
Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent
interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in the
Collateral
Schedule of the Initial Mortgage Loans are secured by single
family detached
dwellings. No more than approximately the percentage
specified in the
Collateral Schedule of the Initial Mortgage Loans are
secured by two-
to four-family dwellings. No more than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage
Loans are
secured by low-rise condominium units. No more than
approximately
the percentage specified in the Collateral Schedule of the
Initial Mortgage
Loans are secured by high-rise condominium units. No
more than
approximately the percentage specified in the Collateral
Schedule of the
Initial Mortgage Loans are secured by manufactured
housing. No more
than approximately the percentage specified in the
Collateral
Schedule of the Initial Mortgage Loans are secured by PUDs.
(33) Each Initial Mortgage Loan was originated on or after the
date specified
in the Collateral Schedule.
(34) Each Initial Mortgage Loan, other than a Two-Year Hybrid
Mortgage Loan or
a Three-Year Hybrid Mortgage Loan, had an initial
Adjustment Date
no later than the applicable date specified on the
Collateral
Schedule; each Initial Mortgage Loan that is a Two-Year Hybrid
Mortgage Loan
had an initial Adjustment Date no later than the applicable
date specified
on the Collateral Schedule; and each Initial
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Mortgage Loan
that is a Three-Year Hybrid Mortgage Loan had an initial
Adjustment Date
no later than the applicable date specified on the
Collateral
Schedule.
(35) Approximately the percentage specified in the Collateral
Schedule of the
Initial Mortgage Loans provide for a prepayment penalty.
(36) On the basis of representations made by the Mortgagors in
their loan
applications, no more than approximately the percentage
specified in the
Collateral Schedule of the Initial Mortgage Loans are
secured by
investor properties, and no less than approximately the
percentage
specified in the Collateral Schedule of the Initial Mortgage
Loans are
secured by owner-occupied Mortgaged Properties that are primary
residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are
covered by a valid and existing hazard insurance policy with
a generally acceptable
carrier that provides for fire and extended
coverage and
coverage for such other hazards as are customary in the area
where the
Mortgaged Property is located in an amount that is at least
equal to the
lesser of (i) the maximum insurable value of the
improvements
securing such Mortgage Loan or (ii) the greater of (a) the
outstanding
principal balance of the Mortgage Loan and (b) an amount such
that the
proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or
the mortgagee from becoming a co-insurer. If the
Mortgaged
Property is a condominium unit, it is included under the
coverage
afforded by a blanket policy for the condominium unit. All such
individual
insurance policies and all flood policies referred to in item
(38) below
contain a standard mortgagee clause naming the applicable
Seller or the
original mortgagee, and its successors in interest, as
mortgagee, and
the applicable Seller has received no notice that any
premiums due and
payable thereon have not been paid; the Mortgage
obligates the
Mortgagor thereunder to maintain all such insurance,
including flood
insurance, at the Mortgagor's cost and expense, and upon
the Mortgagor's
failure to do so, authorizes the holder of the Mortgage
to obtain and
maintain such insurance at the Mortgagor's cost and expense
and to seek
reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in the
Federal Register
by the Federal Emergency Management Agency as having
special flood
hazards, a flood insurance policy in a form meeting the
requirements of
the current guidelines of the Flood Insurance
Administration
is in effect with respect to such Mortgaged Property with
a generally
acceptable carrier in an amount representing coverage not
less than the
least of (A) the original outstanding principal balance of
the Mortgage
Loan, (B) the minimum amount required to compensate for
damage or loss
on a replacement cost basis, or (C) the maximum amount of
insurance that
is available under the Flood Disaster Protection Act of
1973, as
amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring,
pending or threatened for the total or partial condemnation of
the Mortgaged
Property.
(40) There is no material monetary default existing under any
Mortgage or the
related Mortgage Note and, to the best of CHL's
knowledge, there
is no material
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event that, with
the passage of time or with notice and the expiration of
any grace or
cure period, would constitute a default, breach, violation
or event of
acceleration under the Mortgage or the related Mortgage Note;
and no Seller
has waived any default, breach, violation or event of
acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family
residential dwelling, including condominium units and
dwelling units
in PUDs. To the best of CHL's knowledge, no improvement to
a Mortgaged
Property includes a cooperative or a mobile home or
constitutes
other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been
consolidated with the outstanding principal amount secured by
the
Mortgage, and
the secured principal amount, as consolidated, bears a
single interest
rate and single repayment term reflected on the Mortgage
Loan Schedule.
The consolidated principal amount does not exceed the
original
principal amount of the Mortgage Loan. The Mortgage Note does
not permit or
obligate the Master Servicer to make future advances to the
Mortgagor at the
option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and
municipal charges, leasehold payments or ground rents
that previously
became due and owing have been paid, or an escrow of
funds has been
established in an amount sufficient to pay for every such
item that
remains unpaid and that has been assessed, but is not yet due
and payable.
Except for (A) payments in the nature of escrow payments,
and (B) interest
accruing from the date of the Mortgage Note or date of
disbursement of
the Mortgage proceeds, whichever is later, to the day
that precedes by
one month the Due Date of the first installment of
principal and
interest, including without limitation, taxes and insurance
payments, the
Master Servicer has not advanced funds, or induced,
solicited or
knowingly received any advance of funds by a party other
than the
Mortgagor, directly or indirectly, for the payment of any
amount
required by the
Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all material respects in
accordance with CHL's underwriting guidelines
for credit
blemished quality mortgage loans or, with respect to Mortgage
Loans purchased
by CHL were underwritten in all material respects in
accordance with
customary and prudent underwriting guidelines generally
used by
originators of credit blemished quality mortgage loans.
(46) Prior to the approval of the Mortgage Loan application, an
appraisal of the
related Mortgaged Property was obtained from a qualified
appraiser, duly
appointed by the originator, who had no interest, direct
or indirect, in
the Mortgaged Property or in any loan made on the
security
thereof, and whose compensation is not affected by the approval
or disapproval
of the Mortgage Loan; such appraisal is in a form
acceptable to
Fannie Mae and Freddie Mac.
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(47) None of the Mortgage Loans is a graduated payment mortgage
loan or a
growing equity mortgage loan, and no Mortgage Loan is subject
to a buydown or
similar arrangement.
(48) The Mortgage Rates borne by the Initial Mortgage Loans as
of the Cut-off
Date ranged between the approximate per annum percentages
specified on the
Collateral Schedule and the weighted average Mortgage
Rate as of the
Cut-off Date was approximately the per annum rate
specified on the
Collateral Schedule.
(49) [Reserved.]
(50) The Mortgage Loans were selected from among the
outstanding one-
to four-family mortgage loans in the applicable Seller's
portfolio at the
Closing Date as to which the representations and
warranties made
as to the Mortgage Loans set forth in this Section
2.03(b) and
Sections 2.03(c) and 2.03(d) can be made. No selection was
made in a manner
that would adversely affect the interests of
Certificateholders.
(51) The Gross Margins on the Initial Mortgage Loans range
between the
approximate percentages specified on the Collateral Schedule,
and the weighted
average Gross Margin was approximately the percentage
specified in the
Collateral Schedule.
(52) Each of the Initial Mortgage Loans in the Mortgage Pool
has a Due Date
on or before the date specified in the Collateral
Schedule.
(53) The Mortgage Loans, individually and in the aggregate,
conform in all
material respects to the descriptions thereof in the
Prospectus
Supplement.
(54) There is no obligation on the part of any Seller under the
terms of the
Mortgage or related Mortgage Note to make payments in
addition to
those made by the Mortgagor.
(55) Any leasehold estate securing a Mortgage Loan has a term
of not less than
five years in excess of the term of the related Mortgage
Loan.
(56) Each Mortgage Loan represents a "qualified mortgage"
within the
meaning of Section 860(a)(3) of the Code (but without regard
to the rule in
Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective
obligation as a qualified mortgage, or any substantially
similar
successor provision) and applicable Treasury regulations
promulgated
thereunder.
(57) No Mortgage Loan was either a "consumer credit contract"
or a "purchase
money loan" as such terms are defined in 16 C.F.R. ss. 433
nor is any
Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(58) To the extent required under applicable law, each
originator and
subsequent mortgagee or servicer of the Mortgage Loan
complied with
all licensing requirements and was authorized to transact
and do business
in the jurisdiction in which
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the related
Mortgaged Property is located at all times when it held or
serviced the
Mortgage Loan. Any and all requirements of any federal,
state or local
laws or regulations, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer
credit
protection,
anti-predatory lending, fair credit reporting, unfair
collection
practice, equal credit opportunity, fair housing and
disclosure laws
and regulations, applicable to the solicitation,
origination,
collection and servicing of such Mortgage Loan have been
complied with in
all material respects; and any obligations of the holder
of the Mortgage
Note, Mortgage and other loan documents have been
complied with in
all material respects; servicing of each Mortgage Loan
has been in
accordance with prudent mortgage servicing standards, any
applicable laws,
rules and regulations and in accordance with the terms
of the Mortgage
Notes, Mortgage and other loan documents, whether such
origination and
servicing was done by the applicable Seller, its
affiliates, or
any third party which originated the Mortgage Loan on
behalf of, or
sold the Mortgage Loan to, any of them, or any servicing
agent of any of
the foregoing;
(59) The methodology used in underwriting the extension of
credit
for the Mortgage
Loan employs objective mathematical principles which
relate the
borrower's income, assets and liabilities to the proposed
payment and such
underwriting methodology does not rely on the extent of
the borrower's
equity in the collateral as the principal determining
factor in
approving such credit extension. Such underwriting methodology
confirmed that
at the time of origination (application/approval) the
borrower had a
reasonable ability to make timely payments on the Mortgage
Loan;
(60) No borrower was required to purchase any credit life,
disability,
accident or health insurance product as a condition of
obtaining the
extension of credit. No borrower obtained a prepaid
single-premium
credit life, disability, accident or health insurance
policy in
connection with the origination of the Mortgage Loan;
(61) If the Mortgage Loan provides that the interest rate on
the principal
balance of the related Mortgage Loan may be adjusted, all
of the terms of
the related Mortgage pertaining to interest rate
adjustments
