EXHIBIT 4.1
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EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
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ASSET-BACKED CERTIFICATES, SERIES 2004-AB2
Table of Contents
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Page
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ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.................................................................5
Section 1.02 Certain Interpretive Provisions..............................................41
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................................41
Section 2.02 Acceptance by Trustee of the Mortgage Loans..................................48
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
Sellers......................................................................53
Section 2.04 Representations and Warranties of the Depositor..............................69
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases..................................................................70
Section 2.06 Authentication and Delivery of Certificates..................................71
Section 2.07 Covenants of the Master Servicer.............................................71
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans....................................71
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....................74
Section 3.04 Trustee to Act as Master Servicer............................................75
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..........79
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...............80
Section 3.09 [Reserved]...................................................................83
Section 3.10 Maintenance of Hazard Insurance..............................................83
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...........85
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.......................................................90
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...................................................................91
Section 3.19 The Corridor Contract........................................................92
Section 3.20 Prepayment Charges...........................................................92
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.................................................93
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls..........................................................95
Section 4.03 [Reserved]...................................................................95
Section 4.04 Distributions................................................................95
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.......................................................110
Section 5.05 Access to List of Certificateholders' Names and Addresses...................110
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.............................................112
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........................................113
Section 6.04 Limitation on Resignation of Master Servicer................................114
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds..............................114
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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..........................................118
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee...........................................................118
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................................................121
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses..........................121
Section 8.06 Eligibility Requirements for Trustee........................................122
Section 8.07 Resignation and Removal of Trustee..........................................122
Section 8.08 Successor Trustee...........................................................123
Section 8.09 Merger or Consolidation of Trustee..........................................123
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............................124
Section 8.11 Tax Matters.................................................................125
Section 8.12 Co-Trustee..................................................................127
Section 8.13 Access to Records of the Trustee............................................130
Section 8.14 Suits for Enforcement.......................................................130
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans............131
Section 9.02 Final Distribution on the Certificates......................................131
Section 9.03 Additional Termination Requirements.........................................133
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment...................................................................134
Section 10.02 Recordation of Agreement; Counterparts......................................135
Section 10.03 Governing Law...............................................................136
Section 10.04 Intention of Parties........................................................136
Section 10.05 Notices.....................................................................136
Section 10.06 Severability of Provisions..................................................138
Section 10.07 Assignment..................................................................138
Section 10.08 Limitation on Rights of Certificateholders..................................138
Section 10.09 Inspection and Audit Rights.................................................139
Section 10.10 Certificates Nonassessable and Fully Paid...................................139
Section 10.11 Rights of NIM Insurer.......................................................139
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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-12 Form of Class B Certificate
EXHIBIT B Form of Class P Certificates
EXHIBIT C Form of Class C Certificates
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the
Trustee on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT 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 Form of Corridor Contract Assignment 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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POOLING AND SERVICING AGREEMENT, dated as of December 1, 2004, by
and among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware corporation, as a seller ("Park Monaco"
or a "Seller", and together with CHL, the "Sellers"), COUNTRYWIDE HOME LOANS
SERVICING LP, a Texas limited partnership, as master servicer (the "Master
Servicer"), THE BANK OF NEW YORK, a New York banking corporation, as trustee
(the "Trustee"), and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national
banking association, as co-trustee (the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. For federal income tax purposes, the
Trust Fund (excluding the Corridor Contract, the Carryover Reserve Fund and the
assets held in the Pre-Funding Account), 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 Corridor Contract, the Carryover
Reserve Fund and the assets held in the Pre-Funding Account). 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.
1
Initial
REMIC 1 Interests Balance Pass-Through Rate
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I............................. (1) (5)
S............................. (2) (6)
X............................. (3) (7)
R-1........................... (4) (4)
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(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
February 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 February 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
February 2005 is a per annum rate equal to 0.00%. For any Distribution
Date (and the related Accrual Period) following the Distribution Date in
February 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 February 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 February 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 February 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 February 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:
Corresponding
Class of
The REMIC 2 Interests Initial Balance Pass-Through Rate Certificates
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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
$100................................ $100 (3) Class A-R
B................................... (1) (2) Class B
P................................... $100 (3) Class P
C................................... (1) (2) Class C
X................................... (4) (4) N/A
R-2................................. (5) (5) N/A
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(1) Except for the Class C 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 Class C 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 Class C Interest in such manner as to
cause the principal balance of the Class C 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.
(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.
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(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
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Class A-1.................. $ 348,093,000 (1)
Class A-2.................. $ 616,339,000 (1)
Class A-3.................. $ 138,068,000 (1)
Class M-1.................. $ 30,625,000 (1)
Class M-2.................. $ 24,500,000 (1)
Class M-3.................. $ 14,088,000 (1)
Class M-4.................. $ 12,250,000 (1)
Class M-5.................. $ 12,250,000 (1)
Class M-6.................. $ 12,250,000 (1)
Class B.................... $ 16,537,000 (1)
Class C.................... (2) (3)
Class P.................... $100 (4)
Class A-R.................. $100 (5)
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(1) The Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. Any entitlement of any Class of
Certificates to Net Rate Carryover will be treated as paid by the Master
REMIC to the Class C Certificates and then paid to such Class of
Certificates pursuant to a limited recourse cap contract as described in
Section 8.11 herein.
(2) The Class C Certificates have no Certificate Principal Balance.
(3) For each 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
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"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 C Interest, subject to a cap equal to the Pass-Through
Rate of the Corresponding Master REMIC Class and the C Interest subject
to a cap of 0.00%. The Pass-Through Rate of the Class C Certificates
shall be a rate sufficient to entitle it to all interest accrued on the
REMIC 1 "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.
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accrual Period: With respect to any Distribution Date and each
Class of Interest-Bearing Certificates, the period commencing on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date, the
Closing Date) and ending on the day immediately preceding such Distribution
Date. With respect to any Distribution Date and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Interest-Bearing Certificates will be made on
the basis of the actual number of days elapsed in the related Accrual Period and
on a 360 day year. All calculations of interest on the Class C Certificates will
be made on the basis of a 360-day year consisting of twelve 30-day months.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the
Mortgage Rate less the related Expense Fee Rate.
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
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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.
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.
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Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a day on which banking institutions in the States of New York or California
are authorized or obligated by law or executive order to be closed.
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-AB2". Funds in the Carryover Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Certificate: Any one of the certificates of any Class executed
and authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through X-00, Xxxxxxx X, Xxxxxxx X, Xxxxxxx X and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans Servicing LP in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-AB2". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Certificate Owner: With respect to a Book-Entry Certificate, the
person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than
the Class C Certificates) and as of any Distribution Date, the Initial
Certificate Principal Balance of such Certificate (A) less the sum of (i) all
amounts distributed with respect to such Certificate in reduction of the
Certificate Principal Balance thereof on previous Distribution Dates pursuant to
Section 4.04, 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.
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
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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 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the Certificate Principal Balance of the
Class A Certificates immediately prior to such Distribution Date, over (2) the
lesser of (x) 78.20% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (y) the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date minus the OC Floor.
Class A-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-12 hereto,
representing the right to distributions as set forth herein.
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Class B Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (c) the Certificate Principal Balance of the
Class M-2 Certificates (after taking into account distribution of the Class M-2
Principal Distribution Amount for such Distribution Date), (d) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (e) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date), (f) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account distribution of
the Class M-5 Principal Distribution Amount for such Distribution Date), (g) the
Certificate Principal Balance of the Class M-6 Certificates (after taking into
account distribution of the Class M-6 Principal Distribution Amount for such
Distribution Date) and (h) the Certificate Principal Balance of the Class B
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(x) 98.20% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date minus the OC Floor; provided, however,
that if the Class B Certificates are the only Class of Subordinate Certificates
outstanding on such Distribution Date, the Class B Certificates will be entitled
to receive the entire remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to zero.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date) and (b) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date, over (ii) the lesser of (x) 83.20%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (y) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date minus the OC Floor; provided, however, that if
the Class M-1 Certificates are the only Class of Subordinate Certificates
outstanding on such Distribution Date, the Class M-1 Certificates will be
entitled to receive the entire remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to zero.
9
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-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (c) the Certificate Principal Balance of
the Class M-2 Certificates immediately prior to such Distribution Date over (ii)
the lesser of (x) 87.20% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date minus the OC Floor;
provided, however, that if the Class M-2 Certificates are the only class of
Subordinate Certificates outstanding on such Distribution Date, the Class M-2
Certificates will be entitled to receive the entire remaining Principal
Distribution Amount until the Certificate Principal Balance thereof is reduced
to zero.
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-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (c) the Certificate Principal Balance of the
Class M-2 Certificates (after taking into account distribution of the Class M-2
Principal Distribution Amount for such Distribution Date) and (d) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (x) 89.50% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor; provided, however, that if the Class M-3
Certificates are the only Class of Subordinate Certificates outstanding on such
Distribution Date, the Class M-3 Certificates will be entitled to receive the
entire remaining Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero.
Class M-4 Certificate: Any Certificate designated as a "Class M-4
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such
10
Distribution Date), (c) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2
Principal Distribution Amount for such Distribution Date), (d) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date) and (e) the Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 91.50% of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date minus the OC Floor; provided,
however, that if the Class M-4 Certificates are the only Class of Subordinate
Certificates outstanding on such Distribution Date, the Class M-4 Certificates
will be entitled to receive the entire remaining Principal Distribution Amount
until the Certificate Principal Balance thereof is reduced to zero.
Class M-5 Certificate: Any Certificate designated as a "Class M-5
Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (c) the Certificate Principal Balance of the
Class M-2 Certificates (after taking into account distribution of the Class M-2
Principal Distribution Amount for such Distribution Date), (d) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (e) the Certificate Principal Balance of the Class M-4
Certificates (after taking into account distribution of the Class M-4 Principal
Distribution Amount for such Distribution Date) and (f) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (x) 93.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date minus the OC Floor; provided, however, that if the Class M-5 Certificates
are the only Class of Subordinate Certificates outstanding on such Distribution
Date, the Class M-5 Certificates will be entitled to receive the entire
remaining Principal Distribution Amount until the Certificate Principal Balance
thereof is reduced to zero.
Class 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-6 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class M-1 Certificates
(after taking into account distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (c) the Certificate Principal Balance of the
Class M-2 Certificates (after
11
taking into account distribution of the Class M-2 Principal Distribution
Amount for such Distribution Date), (d) the Certificate Principal Balance of
the Class M-3 Certificates (after taking into account distribution of the
Class M-3 Principal Distribution Amount for such Distribution Date), (e) the
Certificate Principal Balance of the Class M-4 Certificates (after taking into
account distribution of the Class M-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class M-5
Certificates (after taking into account distribution of the Class M-5
Principal Distribution Amount for such Distribution Date) and (g) the
Certificate Principal Balance of the Class M-6 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 95.50% of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date minus the OC Floor; provided, however, that if the Class M-6
Certificates are the only Class of Subordinate Certificates outstanding on
such Distribution Date, the Class M-6 Certificates will be entitled to receive
the entire remaining Principal Distribution Amount until the Certificate
Principal Balance thereof is reduced to zero.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans that have a Prepayment Charge Period.
Closing Date: December 29, 2004.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
Compensating Interest: With respect to the Mortgage Loans and any
Distribution Date, an amount equal to the lesser of (x) one-half of the
Servicing Fee for the Mortgage Loans for the related Due Period and (y) the
aggregate Prepayment Interest Shortfalls for such Mortgage Loans for such
Distribution Date.
Confirmation: The Confirmation with a trade date of December 9,
2004 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 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration), telephone: (212)
000-0000, facsimile: (000) 000-0000.
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Corridor Contract: The transaction evidenced by the related
Confirmation (as assigned to the Trustee pursuant to the Corridor Contract
Assignment Agreement), a form of which is attached hereto as Exhibit Q.
Corridor Contract Assignment Agreement: The assignment agreement
dated as of the Closing Date among CHL, the Trustee and the Corridor Contract
Counterparty, the form of which is attached hereto as Exhibit R.
Corridor Contract Counterparty: Bank of America, N.A., and its
successors.
Corridor Contract Termination Date: With respect to the
Corridor Contract, the Distribution Date in May 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
----------------- ----------
January 2008 -- December 2008.....1.50% with respect to January
2008, plus an additional 1/12th of
0.75% for each month thereafter
January 2009 -- December 2009.....2.25% with respect to January
2009, plus an additional 1/12th
of 0.50% for each month thereafter
January 2010 -- December 2010.....2.75% with respect to January
2009, plus an additional 1/12th
of 0.25% for each month thereafter
January 2011 and thereafter.......3.00%
Current Interest: With respect to each Class of Interest-Bearing
Certificates and each Distribution Date, the interest accrued at the applicable
Pass-Through Rate for the applicable Accrual Period on the Certificate Principal
Balance of such Class immediately prior to such Distribution Date, plus any
amount previously distributed with respect to interest for such Class that is
recovered as a voidable preference by a trustee in bankruptcy.
13
Cut-off Date: In the case of any Initial Mortgage Loan, the later
of (x) December 1, 2004 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.
DBRS: Dominion Bond Rating Service, Inc. and its successors.
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 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 at least 90% of the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date, and (C) with respect to the remaining
10% of the 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
14
such Mortgage File to the Co-Trustee as provided in Section 2.01, Countrywide
Home Loans, Inc. shall hold such files as agent and in trust for the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to a Distribution Date on
or after the Stepdown Date exists the Rolling Sixty-Day Delinquency Rate equals
or exceeds the product of 32.10% 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 2004-AB2". Funds in the Distribution Account
15
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each month, or if such day is
not a Business Day, on the first Business Day thereafter, commencing in January
2005.
Due Date: With respect to any Mortgage Loan and Due Period, the
due date for Scheduled Payments of interest and/or principal on that Mortgage
Loan occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Xxxxx'x 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.
16
ERISA-Restricted Certificates: The Class A-R Certificates, Class
P Certificates, Class C Certificates and Certificates of any Class that ceases
to satisfy the applicable rating requirement under the Underwriter's Exemption.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of
(x) the amount remaining as set forth in Section 4.04(a)(9) and (y) the amount
remaining as set forth in Section 4.04(b)(1)(C) or 4.04(b)(2)(I), as applicable.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds and Subsequent
Recoveries are in excess of the sum of (i) the unpaid principal balance of such
Liquidated Mortgage Loan as of the date of liquidation of such Liquidated
Mortgage Loan plus (ii) interest at the Mortgage Rate from the Due Date as to
which interest was last paid or advanced to Certificateholders (and not
reimbursed to the Master Servicer) up to the Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan outstanding during each Due Period as
to which such interest was not paid or advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i) the Servicing Fee Rate, (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 June 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.
Xxxxxx 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.
Xxxxxxx 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) February 14, 2005.
17
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. 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 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.
18
Interest-Bearing Certificates: The Class A and Subordinate
Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each Distribution Date, the excess of (i) the
Current Interest for such Class with respect to prior Distribution Dates over
(ii) the amount actually distributed to such Class with respect to interest on
such prior Distribution Dates.
Interest Determination Date: With respect to the first Accrual
Period for the Interest-Bearing Certificates, December 27, 2004. With respect to
any Accrual Period for the Interest-Bearing Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date, the
Interest Remittance Amount for such Distribution Date, less the Trustee Fee for
such Distribution Date 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
19
Liquidated Mortgage Loan, less the sum of related unreimbursed Advances,
Servicing Fees and Servicing Advances.
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........... 0.150% 0.300%
-------------------------------------------------------------
Class A-2........... 0.270% 0.540%
-------------------------------------------------------------
Class A-3........... 0.410% 0.820%
-------------------------------------------------------------
Class M-1........... 0.520% 0.780%
-------------------------------------------------------------
Class M-2........... 0.570% 0.855%
-------------------------------------------------------------
Class M-3........... 0.600% 0.900%
-------------------------------------------------------------
Class M-4........... 0.850% 1.275%
-------------------------------------------------------------
Class M-5........... 0.950% 1.425%
-------------------------------------------------------------
Class M-6........... 1.500% 1.575%
-------------------------------------------------------------
Class B............. 1.700% 2.550%
-------------------------------------------------------------
(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
20
Master Servicer in respect of a remedy for the breach of the representation
made by CHL set forth in Section 3.20(c).
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
maximum rate of interest set forth as such in the related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
minimum rate of interest set forth as such in the related Mortgage Note.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.05.
Moody's: Xxxxx'x 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
21
numerator of which is equal to the portion of the Mortgage Insurance Premium
payable with respect to such Distribution Date attributable to such Covered
Mortgage Loan multiplied by twelve and the denominator of which is equal to
the Stated Principal Balance of such Covered Mortgage Loan.
Mortgage Insurer: 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;
22
(xv) the next Adjustment Date;
(xvi) the Maximum Mortgage Rate;
(xvii) the Minimum Mortgage Rate;
(xviii)the Mortgage Rate as of the Cut-off Date;
(xix) the related Initial Periodic Rate Cap and
Subsequent Periodic Rate Cap;
(xx) the Gross Margin;
(xxi) a code indicating if such Mortgage Loan is a
Covered Mortgage Loan and the rate for the Mortgage
Insurance Premium, if applicable;
(xxii) 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 or a Park Monaco 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.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof and any Subsequent
Transfer Agreement as from time to time are held as part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property. Any mortgage loan that was intended by
the parties hereto to be transferred to the Trust Fund as indicated by such
Mortgage Loan Schedule which is in fact not so transferred for any reason,
including a breach of the representation contained in Section 2.02 hereof, shall
continue to be a Mortgage Loan hereunder until the Purchase Price with respect
thereto has been paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in
the Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note from time to time.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligors on a Mortgage Note.
23
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Rate Cap: With respect to any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans for such Distribution
Date, adjusted to an effective rate reflecting the calculation of interest on
the basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year.
Net Rate Carryover: With respect to any Class of Interest-Bearing
Certificates and any Distribution Date, the sum of (A) the excess of (i) the
amount of interest that such Class would otherwise have accrued for such
Distribution Date had the Pass-Through Rate for such Class and the related
Accrual Period not been determined based on the Net Rate Cap, over (ii) the
amount of interest accrued on such Class at the Net Rate Cap for such
Distribution Date and (B) the Net Rate Carryover for such Class for all previous
Distribution Dates not previously paid pursuant to Section 4.04, together with
interest thereon at the then applicable Pass-Through Rate for such Class,
without giving effect to the Net Rate Cap.
NIM Insurer: Any insurer guarantying at the request of the CHL
certain payments under notes backed or secured by the Class C or Class P
Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made
or proposed to be made by the Master Servicer that, in the good faith judgment
of the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources without
the United States is includible in gross income for United States federal income
tax purposes regardless of its connection with the conduct of a trade or
business within the United States, or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have authority to control all
substantial decisions of the trustor.
OC Floor: With respect to any Distribution Date, an amount equal
to 0.50% of the 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,
24
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
25
(ii) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Mortgage Loan, prior to the end of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount on
such Distribution Date).
Overcollateralization Target Amount: With respect to each
Distribution Date (a) prior to the Stepdown Date, an amount equal to 0.90% of
the sum of the Cut-off Date Principal Balance of the Initial Mortgage Loans and
the Pre-Funded Amount and (b) on or after the Stepdown Date, an amount equal to
the greater of (i) 1.80% 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.
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
26
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 Xxxxx'x is not a Rating Agency)
are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such
securities, or such lower ratings as each Rating Agency has
confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency;
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into with a depository institution or trust company (acting as
principal) described in clause (iv) above;
(vi) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of 115%
of the face amount thereof) bearing interest or sold at a
discount issued by any corporation incorporated under the laws of
the United States or any state thereof which, at the time of such
investment, have one of the two highest long term ratings of each
Rating Agency (except (x) if the Rating Agency is Moody's, such
rating shall be the highest commercial paper rating of S&P for
any such securities) and (y), or such lower rating as each Rating
Agency has confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating Agency;
27
(vii) interests in any money market fund which at the
date of acquisition of the interests in such fund and throughout
the time such interests are held in such fund has the highest
applicable long term rating by each Rating Agency or such lower
rating as each Rating Agency has confirmed in writing is
sufficient for the ratings originally assigned to the
Certificates by such Rating Agency;
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the
laws of the United States or any state thereof which on the date
of acquisition has been rated by each Rating Agency in their
respective highest applicable rating category or such lower
rating as each Rating Agency has confirmed in writing is
sufficient for the ratings originally assigned to the
Certificates by such Rating Agency; and
(ix) such other relatively risk free investments having
a specified stated maturity and bearing interest or sold at a
discount acceptable to each Rating Agency as will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency and reasonably acceptable
to the NIM Insurer as evidenced by a signed writing delivered by
the NIM Insurer;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of a
tax on any such REMIC. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a
28
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 $91,294,867.00.
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 2004-AB2." Funds in the Pre-Funding Account shall be held in trust for
the Certificateholders for the uses and purposes set forth in this Agreement and
shall not be a part of any REMIC created hereunder, provided, however that any
investment income earned from Permitted Investments made with funds in the
Pre-Funding Account will be for the account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan within the related Prepayment Charge Period in accordance with the
terms thereof (other than any Master Servicer Prepayment Charge Payment Amount).
29
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 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.
30
Prepayment Period: As to any Distribution Date and related Due
Date, the period beginning with the opening of business on the sixteenth day of
the calendar month preceding the month in which such Distribution Date occurs
(or, with respect to the first Distribution Date, the period beginning on
December 1, 2004) and ending on the close of business on the fifteenth day of
the month in which such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not necessarily
The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution
Date, the sum of (i) the Principal Remittance Amount for such Distribution Date
and (ii) the Extra Principal Distribution Amount for such Distribution Date, 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 Nonrecoverable Advances relating to principal and certain
expenses reimbursable pursuant to Section 6.03 and reimbursed during the related
Due Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-AB2". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Private Certificates: The Class C and Class P Certificates.
31
Prospectus Supplement: The Prospectus Supplement dated December
8, 2004, relating to the public offering of the certain Classes of
Certificates offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to
be (1) repurchased by a Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03, 2.04 or 3.12 hereof or (2)
repurchased by the Depositor pursuant to Section 2.04 hereof, or (y) that the
Master Servicer has a right to purchase pursuant to Section 3.12 hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance (or, if such
purchase or repurchase, as the case may be, is effected by the Master Servicer,
the Stated Principal Balance) of the Mortgage Loan as of the date of such
purchase, (ii) accrued interest thereon at the applicable Mortgage Rate (or, if
such purchase or repurchase, as the case may be, is effected by the Master
Servicer, at the Net Mortgage Rate) from (a) the date through which interest was
last 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, DBRS and S&P. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received in connection
with such liquidation during the month in which such liquidation occurs, to the
extent applied as recoveries of principal of the Liquidated Mortgage Loan. With
respect to each Mortgage Loan that has become the subject of a Deficient
Valuation, (i) if the value of the related Mortgaged Property was reduced below
the principal balance of the related Mortgage Note, the amount by which the
value of the Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, and (ii) if the principal amount due under the related
Mortgage Note has been reduced, the difference between the principal balance of
the Mortgage Loan outstanding immediately prior to such Deficient Valuation and
the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. With respect to each Mortgage Loan that has become the subject of a
Debt Service Reduction and any Distribution Date, the amount, if any, by which
the related Scheduled Payment was reduced.
Record Date: With respect to any Distribution Date and the
Interest-Bearing Certificates, the Business Day immediately preceding such
Distribution Date, or if such
32
Certificates are no longer Book-Entry Certificates, the last Business Day of
the month preceding the month of such Distribution Date. With respect to the
Class A-R, Class C and Class P Certificates, the last Business Day of the month
preceding the month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding aggregate Certificate Principal Balance of the Interest-Bearing
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Interest-Bearing Certificates on such
Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A., provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor,
CHL or the Master Servicer and (iii) which have been designated as such by the
Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Relief Act: The Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
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%
33
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 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(d).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted
by the Master Servicer to the Co-Trustee, substantially in the form of Exhibit
N.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement, including with respect to the Covered Mortgage Loans, the Mortgage
Insurance Policy.
Required Secondary Carryover Reserve Fund Deposit: With respect
to any Distribution Date, an amount equal to the excess of (i) $10,000 over (ii)
the amount of funds on deposit in the Carryover Reserve Fund.
Responsible Officer: When used with respect to the Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such
34
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
XxXxxx-Xxxx 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, and Park Monaco, in its capacity as seller of the Park
Monaco Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the
Master Servicer Advance Date in each of January 2005, February 2005 and March
2005 is the sum of:
(a) the product of: (1) the excess of the aggregate Stated
Principal Balances for such Distribution Date of the Mortgage Loans (including
the Subsequent Mortgage Loans, if any) owned by the Trust Fund at the beginning
of the related Due Period, over the aggregate Stated Principal Balance for such
Distribution Date of such Mortgage Loans (including such Subsequent Mortgage
Loans, if any) that have a scheduled payment of interest due in the related Due
Period, and (2) a fraction, the numerator of which is the weighted average Net
Mortgage Rate of such Mortgage Loans (including such Subsequent Mortgage Loans,
if any) (weighted on the basis of the Stated Principal Balances thereof for such
Distribution Date) and the denominator of which is 12; and
(b) the lesser of:
(i) the product of: (1) the amount on deposit in the
Pre-Funding Account at the beginning of the related Due Period, and (2) a
fraction, the numerator of which is the weighted average Net Mortgage Rate of
the Mortgage Loans (including Subsequent Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related Due Period
35
(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.
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
36
Distribution Date (including Mortgage Loans in foreclosure, bankruptcy and REO
Properties) and the denominator of which is the aggregate Stated Principal
Balance for such Distribution Date of all Mortgage Loans.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance of
the Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due on or prior to such date and
irrespective any delinquency in payment by the related Mortgagor, and (ii) as of
any other Distribution Date, the Stated Principal Balance of the Mortgage Loan
as of its Cut-off Date, minus the sum of (a) the principal portion of the
Scheduled Payments (x) due with respect to such Mortgage Loan during each Due
Period ending prior to such Distribution Date and (y) that were received by the
Master Servicer as of the close of business on the Determination Date related to
such Distribution Date or with respect to which Advances were made as of the
Master Servicer Advance Date related to such Distribution Date, (b) all
Principal Prepayments with respect to such Mortgage Loan received by the Master
Servicer during each Prepayment Period ending prior to such Distribution Date
and (c) all Liquidation Proceeds collected with respect to such Mortgage Loan
during each Due Period ending prior to such Distribution Date, to the extent
applied by the Master Servicer as recoveries of principal in accordance with
Section 3.12. The Stated Principal Balance of any Mortgage Loan that becomes a
Liquidated Mortgage Loan will be zero on each date following the Due Period in
which such Mortgage Loan becomes a Liquidated Mortgage Loan. References herein
to the Stated Principal Balance of the Mortgage Loans at any time shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in the Trust Fund as of
such time.
Stepdown Date: The earlier to occur of (i) the Distribution Date
on which the aggregate Certificate Principal Balance of the Senior Certificates
is reduced to zero, and (ii) the later to occur of (x) the Distribution Date in
January 2008 and (y) the first Distribution Date on which the aggregate
Certificate Principal Balance of the Senior Certificates (after calculating
anticipated distributions on such Distribution Date) is less than or equal to
78.20% of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Subordinate Certificates: The Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6 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
37
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.
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).
38
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(d).
Substitution Amount: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(d), the excess of (x) the principal balance
of the Mortgage Loan that is substituted for, over (y) the principal balance of
the related substitute Mortgage Loan, each balance being determined as of the
date of substitution.
Tax Matters Person: The person designated as "tax matters person"
in the manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person shall be the
Trustee.
Tax Matters Person Certificate: With respect to the Master REMIC,
REMIC 1 and REMIC 2, the Class A-R Certificate with a Denomination of $0.05 and
in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a
Mortgage Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
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
Corridor Contract; (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
39
association resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee as may from time
to time be serving as successor trustee hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest determined as
of the date of such Advance equal to the Prime Rate in effect on such date plus
5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool Stated
Principal Balance and (ii) any amounts remaining in the Pre-Funding Account
(excluding any investment earnings thereon) with respect to such Distribution
Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum rate agreed upon in writing on or prior to the Closing Date by the Trustee
and the Depositor, which is 0.009% per annum.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 24 months after origination thereof before such Mortgage
Rate becomes subject to adjustment.
Underwriter's Exemption: Prohibited Transaction Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or
any substantially similar administrative exemption granted by the U.S.
Department of Labor.
Underwriters: Countrywide Securities Corporation, Barclays
Capital Inc. and Deutsche Bank Securities 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.
40
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined
meanings when used in any certificate, agreement or other document delivered
pursuant hereto unless otherwise defined therein. For purposes of this Agreement
and all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; (b) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement (or the certificate, agreement
or other document in which they are used) as a whole and not to any particular
provision of this Agreement (or such certificate, agreement or document); (c)
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement, and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term "including" means "including without limitation"; (e)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (f) references to
any agreement refer to that agreement as amended from time to time; and (g)
references to any Person include that Person's permitted successors and assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Mortgage Loans, including all
interest and principal received and receivable by such Seller on or with respect
to applicable Mortgage Loans after the Cut-off Date (to the extent not applied
in computing the Cut-off Date Principal Balance thereof) or deposited into the
Certificate Account by the Master Servicer on behalf of such Seller as part of
the Initial Certificate Account Deposit as provided in this Agreement, other
than principal due on the applicable Mortgage Loans on or prior to the Cut-off
Date and interest accruing prior to the Cut-off Date. The Master Servicer
confirms that, on behalf of the Sellers, concurrently with the transfer and
assignment, it or the other Seller has deposited into the Certificate Account
the Initial Certificate Account Deposit.
Immediately upon the conveyance of the Mortgage Loans referred to
in the preceding paragraph, the Depositor sells, transfers, assigns, sets over
and otherwise conveys to the Trustee for benefit of the Certificateholders,
without recourse, all right title and interest in the Mortgage Loans.
CHL further agrees to assign all of its right, title and interest
in and to the interest rate corridor transaction evidenced by each Confirmation,
and to cause all of its obligations in respect of such transaction to be assumed
by, the Trustee on behalf of the Trust Fund, on the terms and conditions set
forth in the Corridor Contract Assignment Agreement.
41
(b) Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided by Section 2.01(d) and the terms and
conditions of this Agreement, each Seller sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal received
and receivable by such Seller on or with respect to such Subsequent Mortgage
Loans after the related Subsequent Cut-off Date (to the extent not applied in
computing the Cut-off Date Principal Balance thereof) or deposited into the
Certificate Account by the Master Servicer on behalf of such Seller as part of
any related Subsequent Certificate Account Deposit as provided in this
Agreement, other than principal due on such Subsequent Mortgage Loans on or
prior to the related Subsequent Cut-off Date and interest accruing prior to the
related Subsequent Cut-off Date.
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;
42
(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(d) 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;
(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;
Permitted Variance
Characteristic or Range
-------------------- --------------------
Average Stated Principal Balance....... $ 229,128 10%
Weighted Average Mortgage Rate......... 6.629% 0.10%
Weighted Average Original Loan-to-
Value Ratio............................ 83.66% 3.0%
Weighted Average Remaining Term to
Maturity............................... 359 months 3 months
Weighted Average Credit Bureau
Risk Score............................. 680 5 points
(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
43
(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 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 the applicable
Seller or the originator of such Mortgage Loan, without recourse,
in the following form: "Pay to the order of ________________
without recourse", with all intervening
44
endorsements that show a complete chain of endorsement from the
originator to the applicable Seller, or, if the original
Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit from the applicable Seller, stating
that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loan and language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan, with evidence of recording indicated thereon, or a copy
of the Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-AB2, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee
under the Pooling and Servicing Agreement dated as of December 1,
2004, without recourse" (each such assignment, when duly and
validly completed, to be in recordable form and sufficient to
effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of
the Mortgage together with all interim recorded assignments of
such Mortgage (noting the presence of a MIN in the case of each
MERS Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not been
received from the insurer, such original or duplicate original
lender's title policy and all riders thereto shall be delivered
within one year of the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage Loan, each Seller agrees that it will cause, at such Seller's own
expense, the MERS(R) System to indicate (and provide evidence to the Trustee
that it has done so) that such Mortgage Loans have been assigned by such Seller
to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Sellers further agree that they will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will
45
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage
or all interim recorded assignments of the Mortgage satisfying the requirements
of clause (ii), (iii) or (iv) concurrently with the execution and delivery
hereof, such Seller shall deliver or cause to be delivered to the Co-Trustee a
true copy of such Mortgage and of each such undelivered interim assignment of
the Mortgage each certified by such Seller, the applicable title company, escrow
agent or attorney, or the originator of such Mortgage, as the case may be, to be
a true and complete copy of the original Mortgage or assignment of Mortgage
submitted for recording. For any such Mortgage Loan that is not a MERS Mortgage
Loan each Seller shall promptly deliver or cause to be delivered to the
Co-Trustee such original Mortgage and such assignment or assignments with
evidence of recording indicated thereon upon receipt thereof from the public
recording official, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery be made later
than 270 days following the Closing Date; provided that in the event that by
such date such Seller is unable to deliver or cause to be delivered each such
Mortgage and each interim assignment by reason of the fact that any such
documents have not been returned by the appropriate recording office, or, in the
case of each interim assignment, because the related Mortgage has not been
returned by the appropriate recording office, such Seller shall deliver or cause
to be delivered such documents to the Co-Trustee as promptly as possible upon
receipt thereof. If the public recording office in which a Mortgage or interim
assignment thereof is recorded retains the original of such Mortgage or
assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall satisfy a Seller's obligations in Section 2.01. If any
document submitted for recording pursuant to this Agreement is (x) lost prior to
recording or rejected by the applicable recording office, the applicable Seller
shall immediately prepare or cause to be prepared a substitute and submit it for
recording, and shall deliver copies and originals thereof in accordance with the
foregoing or (y) lost after recording, the applicable Seller shall deliver to
the Co-Trustee a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original recorded
document. Each Seller shall promptly forward or cause to be forwarded to the
Co-Trustee (x) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (y) any other documents
required to be delivered by the Depositor or the Master Servicer to the
Co-Trustee within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage
Loan as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel delivered by CHL to
the Trustee, and a copy to the Rating Agencies, in lieu of recording the
assignment specified in 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
46
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) either Seller, the Depositor or the Master
Servicer or the NIM Insurer gives written notice to the Trustee that recording
is required to protect the right, title and interest of the Trustee on behalf of
the Certificateholders in and to any Mortgage Loan, (ii) a court recharacterizes
the sale of the Mortgage Loans as a financing, or (iii) as a result of any
change in or amendment to the laws of the State or jurisdiction described in the
first sentence of this paragraph or any applicable political subdivision
thereof, or any change in official position regarding application or
interpretation of such laws, including a holding by a court of competent
jurisdiction, such recording is so required, the Co-Trustee shall complete the
assignment in the manner specified in clause (iii) of the second paragraph of
this Section 2.01(g) and CHL shall submit or cause to be submitted for recording
as specified above or, should CHL fail to perform such obligations, the Trustee
shall cause the Master Servicer, at the Master Servicer's expense, to cause each
such previously unrecorded assignment to be submitted for recording as specified
above. In the event a Mortgage File is released to the Master Servicer as a
result of the Master Servicer's having completed a Request for Document Release,
the Trustee shall complete the assignment of the related Mortgage in the manner
specified in clause (iii) of the second paragraph of this Section 2.01(g).
So long as the Co-Trustee or its agent maintains an office in the
State of California, the Co-Trustee or its agent shall maintain possession of
and not remove or attempt to remove from the State of California any of the
Mortgage Files as to which the related Mortgaged Property is located in such
State. In the event that a Seller fails to record an assignment of a Mortgage
Loan as herein provided within 90 days of notice of an event set forth in clause
(i), (ii) or (iii) of the above paragraph, the Master Servicer shall prepare
and, if required hereunder, file such assignments for recordation in the
appropriate real property or other records office. Each Seller hereby appoints
the Master Servicer (and any successor servicer hereunder) as its
attorney-in-fact with full power and authority acting in its stead for the
purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date (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
47
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).
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions attached
thereto, of the documents referred to in clauses (i) and (iii) of Section
2.01(g) above with respect to the Mortgage Loans and all other assets included
in the Trust Fund and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date to
the Depositor, the Master Servicer and CHL (on behalf of each Seller) an Initial
Certification substantially in the form annexed hereto as Exhibit G-1 to the
effect that, as to each 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
48
Schedule" accurately reflects information set forth in the Mortgage File. On
or before the thirtieth (30th) day after the Closing Date (or if such
thirtieth day is not a Business Day, the succeeding Business Day), the Trustee
shall deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller) a Delay Delivery Certification with respect to the Initial Mortgage
Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The Co-Trustee or the Trustee, as
applicable, shall be under no duty or obligation to inspect, review or examine
such documents, instruments, certificates or other papers to determine that
the same are genuine, enforceable or appropriate for the represented purpose
or that they have actually been recorded in the real estate records or that
they are other than what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller), and to any Certificateholder that so requests, a Final Certification
with respect to the Initial Mortgage Loans substantially in the form annexed
hereto as Exhibit H, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of such
Final Certification, the Co-Trustee, at the Trustee's direction, shall review
each Mortgage File with respect to the Initial Mortgage Loans to determine that
such Mortgage File contains the following documents:
(i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse,
in the following form: "Pay to the order of ________________
without recourse", with all intervening endorsements that show a
complete chain of endorsement from the originator to such Seller,
or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit from such Seller,
stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note;
(ii) in the case of each 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);
49
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not meet
the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include
such exceptions in such Final Certification (and the Trustee shall state in such
Final Certification whether any Mortgage File does not then include the original
or duplicate original lender's title policy or a printout of the electronic
equivalent and all riders thereto). If the public recording office in which a
Mortgage or assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall be deemed to satisfy the requirements of clause (ii),
(iii) or (iv) above, as applicable. CHL shall promptly correct or cure such
defect referred to above within 90 days from the date it was so notified of such
defect and, if CHL does not correct or cure such defect within such period, CHL
shall either (A) if the time to cure such defect expires prior to the end of the
second anniversary of the Closing Date, substitute for the related Initial
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (B) purchase such Initial Mortgage Loan from the Trust Fund within 90
days from the date CHL was notified of such defect in writing at the Purchase
Price of such Initial Mortgage Loan; provided that any such substitution
pursuant to (A) above or repurchase pursuant to (B) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof and any substitution pursuant to (A) above shall not be
effected prior to the additional delivery to the Co-Trustee of a Request for
File Release. No substitution will be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Initial
Mortgage Loan shall be deposited by CHL in the Certificate Account and, upon
receipt of such deposit and Request for File Release with respect thereto, the
Co-Trustee shall release the related Mortgage File to CHL and shall execute and
deliver at CHL's request such instruments of transfer or assignment as CHL has
prepared, in each case without recourse, as shall be necessary to vest in CHL,
or a designee, the Trustee's interest in any Initial Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions CHL repurchases an
Initial Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to CHL and shall cause such Mortgage to
be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations.
The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. Each Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of such
Seller from time to time.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a) above shall
50
constitute the sole remedy respecting such defect available to the Trustee,
the Co-Trustee, the Depositor and any Certificateholder against either Seller.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase, pursuant to Section 2.02(a), any Mortgage Loan
whose Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by CHL within 90 days from the date it was notified of such
defect, shall constitute the sole remedy respecting such defect available to the
Trustee, the Co-Trustee, the Depositor and any Certificateholder against either
Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer and CHL (on behalf of each
Seller) an Initial Certification substantially in the form annexed hereto as
Exhibit G-4 to the effect that, as to each Subsequent Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full
or any Subsequent Mortgage Loan specifically identified in such certification as
not covered by such certification), the documents described in Section
2.01(g)(i) and, in the case of each Subsequent Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Subsequent Mortgage Loan are in its possession, and based on its review and
examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after
the Subsequent Transfer Date to the Depositor, the Master Servicer and CHL (on
behalf of each Seller) an Interim Certification substantially in the form
annexed hereto as Exhibit G-2 to the effect that, as to each Subsequent Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Subsequent Mortgage
Loan paid in full or any Subsequent Mortgage Loan specifically identified in
such certification as not covered by such certification), all documents required
to be delivered to it pursuant to this Agreement with respect to such Subsequent
Mortgage Loan are in its possession (except those described in Section
2.01(g)(vi)) and based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and relate
to such Subsequent Mortgage Loan, and (ii) the information set forth in items
(i), (iv), (v), (vi), (viii), (ix) and (xiv) through (xx) of the definition of
the "Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. On or before the thirtieth (30th) day after the Subsequent
Transfer Date (or if such thirtieth day is not a Business Day, the succeeding
Business Day), the Trustee shall deliver to the Depositor, the Master Servicer
and CHL (on behalf of each Seller) a Delay Delivery Certification with respect
to the Subsequent Mortgage Loans substantially in the form annexed hereto as
Exhibit G-3, with any applicable exceptions noted thereon, together with a
Subsequent Certification substantially in the form annexed hereto as Exhibit
G-4. The Trustee shall be under no duty or obligation to inspect, review or
examine such documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the
Trustee shall deliver to the Depositor, the Master Servicer, CHL (on behalf of
each Seller) and to any
51
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 the applicable
Seller or the originator of such Mortgage Loan, without recourse, in the
following form: "Pay to the order of ________________ without recourse",
with all intervening endorsements that show a complete chain of
endorsement from the originator to such Seller, or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Seller, stating that the original Mortgage
Note was lost or destroyed, together with a copy of the related Mortgage
Note;
(ii) in the case of each 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
52
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 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
53
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of this
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
partnership action on the part of the Master Servicer the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the
Master Servicer, enforceable against the Master Servicer in accordance
with its terms, except that (a) the enforceability hereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer under this Agreement, the consummation of any other of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Master Servicer and will not (A) result in a material breach of
any term or provision of the certificate of limited partnership,
partnership agreement or other organizational document of the Master
Servicer or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Master
Servicer is a party or by which it may be bound, or (C) constitute a
material violation of any statute, order or regulation applicable to the
Master Servicer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Master Servicer; and the
Master Servicer is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body 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 Xxxxxx Xxx and Xxxxxxx 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
54
Master Servicer to service the Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of, or compliance by the
Master Servicer with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Master Servicer has obtained the
same.
(7) The Master Servicer is a member of MERS in good
standing, and will comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage
Loans for as long as such Mortgage Loans are registered with MERS.
(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 to perform any
of its other obligations under this Agreement in accordance with the
terms of this Agreement and each Subsequent Transfer Agreement
(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.
55
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by CHL, the sale of the CHL Mortgage Loans
by CHL under this Agreement and each Subsequent Transfer Agreement, the
consummation of any other of the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement, and the fulfillment of
or compliance with the terms hereof and thereof are in the ordinary
course of business of CHL and will not (A) result in a material breach
of any term or provision of the charter or by-laws of CHL or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which CHL is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to CHL of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over CHL; and CHL is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair CHL's ability to perform
or meet any of its obligations under this Agreement and each Subsequent
Transfer Agreement.
(4) CHL is an approved seller of conventional mortgage
loans for Xxxxxx Mae and Xxxxxxx 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 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%.
56
(11) Each Mortgage Loan is secured by a valid and
enforceable first lien on the related Mortgaged Property subject only to
(1) the lien of non-delinquent current real property taxes and
assessments, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording
of such Mortgage, such exceptions appearing of record being acceptable
to mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan and (3) other matters to which like properties are
commonly subject that do not materially interfere with the benefits of
the security intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL
Mortgage Loan to the Depositor, CHL had good title to, and was the sole
owner of, such CHL Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any other
party, to sell and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(14) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(15) There are no mechanics' liens or claims for work,
labor or material affecting any Mortgaged Property that are or may be a
lien prior to, or equal with, the lien of such Mortgage, except those
that are insured against by the title insurance policy referred to in
item (18) below.
(16) As of the Closing Date 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
57
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 Xxxxxx Mae and Xxxxxxx
Mac and is in a form acceptable to Xxxxxx Mae and Xxxxxxx Mac, which
policy insures the Sellers and successor owners of indebtedness
secured by the insured Mortgage, as to the first priority lien, of the
Mortgage subject to the exceptions set forth in paragraph (11) above;
to the best of CHL's knowledge, no claims have been made under such
mortgage title insurance policy and no prior holder of the related
Mortgage, including either Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage title
insurance policy.
(19) No 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
58
escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making, or closing or recording the Mortgage Loan
were paid.
(24) The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in
such Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable
in form to Xxxxxx Mae and Xxxxxxx Mac.
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Sellers have
been capitalized under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and
collection practices with respect to each Mortgage Loan have been in all
respects legal, proper, prudent and customary in the mortgage lending
and servicing business, as conducted by prudent lending institutions
which service mortgage loans of the same type in the jurisdiction in
which the Mortgaged Property is located.
(29) There is no pledged account or other security other
than real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature,
or other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified
in the Collateral Schedule of the Mortgage Loans are secured by single
family detached dwellings. No more than approximately the percentage
specified in the Collateral Schedule of the Mortgage Loans are secured
by two- to four-family dwellings. No more than approximately the
percentage specified in the Collateral Schedule of the Mortgage Loans
are secured by low-rise condominium units. No more than approximately
the percentage specified in the Collateral Schedule of the Mortgage
Loans are secured by high-rise condominium units. No more than
approximately the percentage specified in the Collateral Schedule of the
Mortgage Loans are secured by manufactured housing. No more than
approximately the percentage specified in the Collateral Schedule of the
Mortgage Loans are secured by PUDs.
59
(33) Each Mortgage Loan was originated on or after the
date specified in the Collateral Schedule.
(34) Each Mortgage Loan, other than a Two-Year Hybrid
Mortgage Loan or a Three-Year Hybrid Mortgage Loan, had an initial
Adjustment Date no later than the applicable date specified on the
Collateral Schedule; each Mortgage Loan that is a Two-Year Hybrid
Mortgage Loan had an initial Adjustment Date no later than the
applicable date specified on the Collateral Schedule; and each Mortgage
Loan that is a Three-Year Hybrid Mortgage Loan had an initial Adjustment
Date no later than the applicable date specified on the Collateral
Schedule.
(35) Approximately the percentage specified in the
Collateral Schedule of the Mortgage Loans provide for a prepayment
penalty.
(36) On the basis of representations made by the
Mortgagors in their loan applications, no more than approximately the
percentage specified in the Collateral Schedule of the Mortgage Loans
are secured by investor properties, and no less than approximately the
percentage specified in the Collateral Schedule of the Mortgage Loans
are secured by owner-occupied Mortgaged Properties that are primary
residences.
(37) At the Cut-off Date, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire and
extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount that is
at least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All such
individual insurance policies and all flood policies referred to in item
(38) below contain a standard mortgagee clause naming the applicable
Seller or the original mortgagee, and its successors in interest, as
mortgagee, and the applicable Seller has received no notice that any
premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form meeting
the requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property with
a generally acceptable carrier in an amount representing coverage not
less than the least of (A) the original outstanding principal balance of
the Mortgage Loan, (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis,
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or (C) the maximum amount of insurance that is available under the
Flood Disaster Protection Act of 1973, as amended.
(39) To the best of CHL's knowledge, there is no
proceeding occurring, pending or threatened for the total or partial
condemnation of the Mortgaged Property.
(40) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of CHL's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and neither Seller has waived
any default, breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of CHL's knowledge, no improvement
to a Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date
have been consolidated with the outstanding principal amount secured by
the Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note does
not permit or obligate the Master Servicer to make future advances to
the Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents that previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for
every such item that remains unpaid and that has been assessed, but is
not yet due and payable. Except for (A) payments in the nature of escrow
payments, and (B) interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is later, to
the day that precedes by one month the Due Date of the first installment
of principal and interest, including without limitation, taxes and
insurance payments, the Master Servicer has not advanced funds, or
induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any
amount required by the Mortgage.
(45) The Mortgage Loans originated by CHL were
underwritten in all material respects in accordance with CHL's
underwriting guidelines for credit blemished quality mortgage loans or,
with respect to Mortgage Loans purchased by CHL were underwritten in all
material respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
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(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 Xxxxxx Xxx and Xxxxxxx Mac.
(47) None of the Mortgage Loans is a graduated payment
mortgage loan or a growing equity mortgage loan, and no Mortgage Loan is
subject to a buydown or similar arrangement.
(48) The Mortgage Rates borne by the Mortgage Loans as of
the Cut-off Date ranged between the approximate per annum percentages
specified on the Collateral Schedule and the weighted average Mortgage
Rate as of the Cut-off Date was approximately the per annum rate
specified on the Collateral Schedule.
(49) [Reserved.]
(50) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable
Seller's portfolio at the Closing Date as to which the representations
and warranties made as to the Mortgage Loans set forth in this Sections
2.03(b) and 2.03(c) can be made. No selection was made in a manner that
would adversely affect the interests of Certificateholders.
(51) The Gross Margins on the Mortgage Loans range between
the approximate percentages specified on the Collateral Schedule, and
the weighted average Gross Margin was approximately the percentage
specified in the Collateral Schedule.
(52) Each of the Mortgage Loans in the Mortgage Pool has a
Due Date on or before the date specified in the Collateral Schedule.
(53) The Mortgage Loans, individually and in the
aggregate, conform in all material respects to the descriptions thereof
in the Prospectus Supplement.
(54) There is no obligation on the part of either Seller
under the terms of the Mortgage or related Mortgage Note to make
payments in addition to those made by the Mortgagor.
(55) Any leasehold estate securing a Mortgage Loan has a
term of not less than five years in excess of the term of the related
Mortgage Loan.
(56) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
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(57) No Mortgage Loan was either a "consumer credit
contract" or a "purchase money loan" as such terms are defined in 16
C.F.R. ss. 433 nor is any Mortgage Loan a "mortgage" as defined in 15
U.S.C. ss. 1602(aa).
(58) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage Loan
complied with all licensing requirements and was authorized to transact
and do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the Mortgage
Loan. Any and all requirements of any federal, state or local laws or
regulations, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection,
anti-predatory lending, fair credit reporting, unfair collection
practice, equal credit opportunity, fair housing and disclosure laws and
regulations, applicable to the solicitation, origination, collection and
servicing of such Mortgage Loan have been complied with in all material
respects; and any obligations of the holder of the Mortgage Note,
Mortgage and other loan documents have been complied with in all
material respects; servicing of each Mortgage Loan has been in
accordance with prudent mortgage servicing standards, any applicable
laws, rules and regulations and in accordance with the terms of the
Mortgage Notes, Mortgage and other loan documents, whether such
origination and servicing was done by the applicable Seller, its
affiliates, or any third party which originated the Mortgage Loan on
behalf of, or sold the Mortgage Loan to, any of them, or any servicing
agent of any of the foregoing;
(59) The methodology used in underwriting the extension of
credit for the Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the
extent of the borrower's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan;
(60) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan;
(61) If the Mortgage Loan provides that the interest rate
on the principal balance of the related Mortgage Loan may be adjusted,
all of the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien;
(62) The Mortgaged Property complies with all applicable
laws, rules and regulations relating to environmental matters, including
but not limited to those relating to radon, asbestos and lead paint and
neither Seller nor, to the best of CHL's
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knowledge, the Mortgagor, has received any notice of any violation or
potential violation of such law;
(63) There is no action, suit or proceeding pending, or to
the best of CHL's knowledge, threatened or likely to be asserted with
respect to the Mortgage Loan against or affecting either Seller before
or by any court, administrative agency, arbitrator or governmental body;
(64) No action, inaction, or event has occurred and no
state of fact exists or has existed that has resulted or will result in
the exclusion from, denial of, or defense to coverage under any
applicable hazard insurance policy, irrespective of the cause of such
failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by CHL or any designee of CHL or any corporation in which CHL
or any officer, director, or employee had a financial interest at the
time of placement of such insurance;
(65) Each Mortgage Loan has a fully assignable life of
loan tax service contract which may be assigned without the payment of
any fee;
(66) No Mortgagor has notified CHL or the Master Servicer
on CHL's behalf, and CHL has no knowledge, of any relief requested or
allowed to a Mortgagor under the Relief Act;
(67) Each Mortgage Loan was originated by a savings and
loan association, savings bank, commercial bank, credit union, insurance
company, or mortgage banking company which is supervised and examined by
a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 2.03 and
2.11 of the National Housing Act;
(68) Each Mortgage Loan was (A) originated no earlier than
six months prior to the time the applicable Seller purchased such
Mortgage Loan pursuant to a mortgage loan purchase agreement or other
similar agreement and (B) underwritten or reunderwritten by the
applicable Seller in accordance with the applicable Seller's
underwriting guidelines in effect at the time the loan was underwritten
or reunderwritten, as applicable;
(69) Each Mortgage Loan, at the time it was originated and
as of the Closing Date or the Subsequent Transfer Date, complied in all
material respects with applicable local, state and federal laws,
including, but not limited to, all predatory and abusive lending laws;
(70) None of the Mortgage Loans is a "high cost" mortgage
loan as defined by applicable federal, state and local predatory and
abusive lending laws;
(71) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and local
laws;
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(72) None of the Mortgage Loans that are secured by
property located in the State of Illinois are in violation of the
provisions of the Illinois Interest Act.;
(73) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home loan"
as defined under the Georgia Fair Lending Act;
(74) No Mortgage Loan in the Trust Fund is a High Cost
Loan or Covered Loan, as applicable (as such terms are defined in the
then current Standard & Poor's LEVELS(R) Glossary which is now Version
5.6 Revised, Appendix E) and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act; and
(75) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Internal
Revenue Code of 1986 (as amended) (the "Code"). The fair market value of
the manufactured home securing each Mortgage Loan was at least equal to
80% of the adjusted issue price of the contract at either (i) the time
the contract was originated (determined pursuant to the REMIC
Provisions) or (ii) the time the contract is transferred to the
purchaser. Each Mortgage Loan is a "qualified mortgage" under Section
860G(a)(3) of the Code.
(c) Park Monaco hereby represents and warrants to the
Depositor and the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware
corporation and is validly existing and in good standing under the laws
of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by this Agreement and each
Subsequent Transfer Agreement to be conducted by Park Monaco in any
state in which a Mortgaged Property securing a Park Monaco Mortgage Loan
is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Park Monaco Mortgage Loan, to sell the Park
Monaco Mortgage Loans in accordance with the terms of this Agreement and
each Subsequent Transfer Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(2) Park Monaco has the full company power and authority
to sell each Park Monaco Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary company action on the part of Park Monaco
the execution, delivery and performance of this Agreement and 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 Park Monaco, enforceable against Park Monaco
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
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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 Park Monaco, the sale of the Park
Monaco Mortgage Loans by Park Monaco 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 are
in the ordinary course of business of Park Monaco and will not (A)
result in a material breach of any term or provision of the certificate
of incorporation or by-laws of Park Monaco or (B) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which Park Monaco is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to Park Monaco of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over Park Monaco; and Park Monaco is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Park Monaco's
ability to perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park
Monaco's knowledge, threatened, against Park Monaco that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer Agreement or
the ability of Park Monaco to sell the Park Monaco Mortgage Loans or to
perform any of its other obligations under this Agreement or any
Subsequent Transfer Agreement in accordance with the terms hereof or
thereof.
(5) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by Park Monaco of, or compliance by Park Monaco
with, this Agreement or any Subsequent Transfer Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, Park Monaco has
obtained the same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans to the Depositor as a sale of the Park Monaco Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park
Monaco Mortgage Loan to the Depositor, Park Monaco had good title to,
and was the sole owner of, such the Park Monaco Mortgage Loan free and
clear of any pledge, lien, encumbrance or security interest and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same pursuant to
this Agreement.
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(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (c) that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties and the NIM Insurer. Each of the Master Servicer
and the Sellers (each, a "Representing Party") hereby covenants with respect to
the representations and warranties set forth in Sections 2.03(a) through (c)
that within 90 days of the earlier of the discovery by such Representing Party
or receipt of written notice by such Representing Party from any party of a
breach of any representation or warranty set forth herein made that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, it shall cure such breach in all material respects and, if such breach is
not so cured, shall, (i) if such 90-day period expires prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at
the Purchase Price in the manner set forth below; provided that (a) any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof, (b) any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for File Release and (c) any such substitution pursuant to (i) above
shall include a payment by the applicable Representing Party of any amount as
calculated under item (iii) of the definition of "Purchase Price". Any
Representing Party liable for a breach under this Section 2.03 shall promptly
reimburse the Master Servicer or the Trustee for any expenses reasonably
incurred by the Master Servicer or the Trustee in respect of enforcing the
remedies for such breach. To enable the Master Servicer to amend the Mortgage
Loan Schedule, any Representing Party liable for a breach under this Section
2.03 shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Master Servicer whether such Representing
Party intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties
described in this Section that are made to the best of the Representing Party's
knowledge, if it is discovered by any of the Depositor, the Master Servicer, the
Sellers or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, notwithstanding the Representing Party's lack of
knowledge with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall deliver to the
Trustee for the benefit of the Certificateholders the related Mortgage Note,
Mortgage and assignment of the Mortgage, and such other documents and agreements
as are required by Section 2.01, with the Mortgage Note endorsed and the
Mortgage assigned as required by Section 2.01. No substitution will be made in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Replacement Mortgage Loans in the Due Period
related to the Distribution Date on which such proceeds are to be distributed
shall not be part of the Trust Fund and will be retained by the applicable
Seller delivering such Replacement Mortgage Loan on such Distribution Date. For
the month of substitution, distributions to Certificateholders will include the
Scheduled Payment due on any Deleted Mortgage Loan for the related Due Period
and thereafter the applicable Seller shall be entitled to retain all amounts
received in respect of such
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Deleted Mortgage Loan. The Master Servicer shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Replacement Mortgage
Loan or Loans and the Master Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Replacement Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects, and
the applicable Seller delivering such Replacement Mortgage Loan shall be
deemed to have made with respect to such Replacement Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties set forth
in Section 2.03(b) or (c) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Certificate Account of the amount required
to be deposited therein in connection with such substitution as described in
the following paragraph, the Co-Trustee shall release to the Representing
Party the Mortgage File relating to such Deleted Mortgage Loan and held for
the benefit of the Certificateholders and shall execute and deliver at the
Master Servicer's direction such instruments of transfer or assignment as have
been prepared by the Master Servicer, in each case without recourse, as shall
be necessary to vest in the applicable Seller, or its respective designee,
title to the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
For any month in which either Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution is
less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) of all such
Deleted Mortgage Loans. An amount equal to the aggregate of the deficiencies
described in the preceding sentence (such amount, the "Substitution Adjustment
Amount") shall be forwarded by the applicable Seller to the Master Servicer and
deposited by the Master Servicer into the Certificate Account not later than the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on the Determination Date for the Distribution Date in
the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if any,
and the receipt of a Request for File Release, the Co-Trustee shall release the
related Mortgage File held for the benefit of the Certificateholders to such
Seller, and the Trustee shall execute and deliver at such Person's direction the
related instruments of transfer or assignment prepared by such Seller, in each
case without recourse, as shall be necessary to transfer title from the Trustee
for the benefit of the Certificateholders and transfer the Trustee's interest to
such Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Sellers to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedy against the Sellers
respecting such breach available to Certificateholders, the Depositor or the
Trustee.
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(e) The representations and warranties set forth in this Section
2.03 shall survive delivery of the respective Mortgage Files to the Co-Trustee
for the benefit of the Certificateholders with respect to each Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master
Servicer and the Trustee as follows, as of the date hereof and as of each
Subsequent Transfer Date:
(1) The Depositor is duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has full power and authority (corporate and other)
necessary to own or hold its properties and to conduct its business as
now conducted by it and to enter into and perform its obligations under
this Agreement.
(2) The Depositor has the full corporate power and
authority to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement and each
Subsequent Transfer Agreement and has duly authorized, by all necessary
corporate action on its part, 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 the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Depositor and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Depositor or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Depositor is a party
or by which it may be bound or (C) constitute a material violation of
any statute, order or regulation applicable to the Depositor of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Depositor; and the Depositor is not in
breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair the Depositor's ability to perform or meet any of
its obligations under this Agreement.
(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or any Subsequent Transfer
69
Agreement or the ability of the Depositor to perform its obligations
under this Agreement or any Subsequent Transfer Agreement in accordance
with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Depositor of, or compliance by the
Depositor with, this Agreement or any Subsequent Transfer Agreement or
the consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Depositor has
obtained the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the Closing Date or the related Subsequent
Transfer Date, as applicable, and following the transfer of the Mortgage Loans
to it by the Sellers, the Depositor had good title to the Initial Mortgage Loans
or related Subsequent Mortgage Loans, as applicable, and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Co-Trustee. Upon discovery by the
Depositor or the Trustee, of a breach of any of the foregoing representations
and warranties set forth in the immediately preceding paragraph (referred to
herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency and the NIM
Insurer. The Depositor hereby covenants with respect to the representations and
warranties made by it in this Section 2.04 that within 90 days of the earlier of
the discovery it or receipt of written notice by it from any party of a breach
of any representation or warranty set forth herein made that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects and, if such breach is not so
cured, shall repurchase or replace the affected Mortgage Loan or Loans in
accordance with the procedure set forth in Section 2.03(d).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which default
is not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03
or 2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee an Opinion of Counsel (which such
Representing Party will use reasonable efforts to obtain), addressed to the
Trustee to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the any REMIC formed hereunder
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that
70
such repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, either Seller, the Master
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within 5 Business Days of
discovery) give written notice thereof to the other parties and the NIM Insurer.
In connection therewith, the Trustee shall require CHL, at CHL's option, to
either (i) substitute, if the conditions in Section 2.03(d) with respect to
substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 2.03. The Trustee shall reconvey
to CHL the Mortgage Loan to be released pursuant hereto in the same manner, and
on the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the
Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor or the Trustee and prepared by the Master Servicer pursuant to
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate, statement
or report not misleading.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer
shall service and administer the Mortgage Loans in accordance with customary and
usual standards of practice of
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prudent mortgage loan lenders in the respective states in which the Mortgaged
Properties are located, including taking all required and appropriate actions
under each Required Insurance Policy and taking all required and appropriate
actions under the Mortgage Insurance Policy on behalf of the Co-Trustee, other
than the payment of the Mortgage Insurance Premium and obtaining the approval
of the Mortgage Insurer with respect to the appointment of a successor
servicer. In connection with such servicing and administration, the Master
Servicer shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.02 hereof, subject to the terms hereof
(i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents,
(ii) to consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes and related Mortgages (but only in the manner provided in this
Agreement), (iii) to collect any Insurance Proceeds, other Liquidation
Proceeds and Subsequent Recoveries and (iv) subject to Section 3.12(b), to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan; provided that the Master Servicer shall
take no action that is inconsistent with or prejudices the interests of the
Trustee or the Certificateholders in any Mortgage Loan or the rights and
interests of the Depositor and the Trustee under this Agreement. The Master
Servicer shall represent and protect the interest of the Trustee in the same
manner as it currently protects its own interest in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan and
shall not make or permit any modification, waiver or amendment of any term of
any Mortgage Loan which would (i) cause any REMIC formed hereunder to fail to
qualify as a REMIC, (ii) result in the imposition of any tax under section
860(a) or 860(d) of the Code or (iii) cause any Covered Mortgage Loan to not
be covered by the Mortgage Insurance Policy, but in any case the Master
Servicer shall not act in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the
name of the Depositor and the Trustee, is hereby authorized and empowered by
the Depositor and the Trustee, when the Master Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of
the Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Master
Servicer to service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Master Servicer. The Master Servicer further is authorized
and empowered by the Trustee, on behalf of the Certificateholders and the
Trustee, in its own name or in the name of the Subservicer, when the Master
Servicer or the Subservicer, as the case may be, believes it appropriate in
its best judgment to register any Mortgage Loan on the MERS(R) System, or
cause the removal from the registration of any Mortgage Loan on the MERS(R)
System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be
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reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.06, and further as provided in Section 3.08.
All costs incurred by the Master Servicer, if any, in effecting the timely
payments of taxes and assessments on the Mortgaged Properties and related
insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Mortgage Loans, notwithstanding that the terms of
such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers
to the Trustee by the Closing Date.
In addition, the Master Servicer shall administer the Mortgage
Insurance Policy on behalf of itself, the Sellers, the Depositor, and the
Trustee for the benefit of the Certificateholders, when it is necessary to make
claims and receive payments under the Mortgage Insurance Policy. In connection
with its activities as Master Servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any primary insurance policies
and, in this regard, to take any reasonable action necessary to permit recovery
under any primary insurance policies respecting defaulted Mortgage Loans. Any
amounts collected by the Master Servicer under any primary insurance policies
shall be deposited in the Certificate Account.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under the Mortgage Insurance Policy and to service
the Covered Mortgage Loans in the manner required by the Mortgage Insurance
Policy. The Master Servicer shall prepare and submit all claims eligible for
submission under the Mortgage Insurance Policies and shall perform all of the
obligations of the insured under the Mortgage Insurance Policy. If the Mortgage
Insurance Policy is terminated for any reason other than the exhaustion of its
coverage, or if the financial strength rating of its issuer is reduced to below
investment grade, the Master Servicer will use its best efforts to obtain a
comparable policy from an insurer that is acceptable to the Rating Agencies. The
replacement policy will provide coverage equal to the then remaining coverage of
the applicable Mortgage Insurance Policy, if available. However, if the premium
cost of a replacement policy exceeds the premium cost of the Mortgage Insurance
Policy, the coverage amount of the replacement policy will be reduced so that
its premium cost will not exceed the premium cost of the Mortgage Insurance
Policy.
In the event that a shortfall in any collection on or liability
with respect to any Mortgage Loan results from or is attributable to adjustments
to Mortgage Rates, Scheduled Payments or Stated Principal Balances that were
made by the Master Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Master Servicer, upon discovery or
receipt of notice thereof, immediately shall deliver to the Trustee for deposit
in the Distribution Account from its own funds the amount of any such shortfall
and shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor master servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.01 shall not limit the ability of
the Master Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by law and
shall not be an expense of the Trust.
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Section 3.02 Subservicing; Enforcement of the Obligations of
Master Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates, as evidenced
by a letter to that effect delivered by each Rating Agency to the Depositor and
the NIM Insurer and (iii) the NIM Insurer shall have consented to such
subservicing agreements (which consent shall not be unreasonably withheld) with
Subservicers, for the servicing and administration of the Mortgage Loans. The
Master Servicer shall deliver to the Trustee copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments. The Master
Servicer, with the written consent of the NIM Insurer (which consent shall not
be unreasonably withheld), shall be entitled to terminate any Subservicing
Agreement and the rights and obligations of any Subservicer pursuant to any
Subservicing Agreement in accordance with the terms and conditions of such
Subservicing Agreement. Notwithstanding the provisions of any subservicing
agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Master Servicer or a subservicer or reference to
actions taken through a Master Servicer or otherwise, the Master Servicer shall
remain obligated and liable to the Depositor, the Trustee and the
Certificateholders for the servicing and administration of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Master Servicer shall contain a provision giving
the successor Master Servicer the option to terminate such agreement without
cost in the event a successor Master Servicer is appointed. All actions of each
subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Master Servicer with the same force and effect as
if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect to
the Mortgage Loans that are received by a subservicer regardless of whether such
payments are remitted by the subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer and the Trustee
in Respect of the Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer or the Depositor shall have any responsibility or liability for any
action or failure to act by the Master Servicer, and none of them is obligated
to supervise the performance of the Master Servicer hereunder or otherwise. The
Master Servicer shall afford (and any Subservicing Agreement shall provide that
each Subservicer shall afford) the Depositor, the NIM Insurer and the Trustee,
upon reasonable notice, during normal business hours, access to all records
maintained by the
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Master Servicer (and any such Subservicer) in respect of the Master Servicer's
rights and obligations hereunder and access to officers of the Master Servicer
(and those of any such Subservicer) responsible for such obligations. Upon
request, the Master Servicer shall furnish to the Depositor, the NIM Insurer
and the Trustee its (and any such Subservicer's) most recent financial
statements and such other information relating to the Master Servicer's
capacity to perform its obligations under this Agreement that it possesses. To
the extent such information is not otherwise available to the public, the
Depositor, the NIM Insurer and the Trustee shall not disseminate any
information obtained pursuant to the preceding two sentences without the
Masters Servicer's (or any such Subservicer's) written consent, except as
required pursuant to this Agreement or to the extent that it is necessary to
do so (i) in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Trustee, the NIM Insurer or the Trust Fund, and in either case, the Depositor,
the NIM Insurer or the Trustee, as the case may be, shall use its reasonable
best efforts to assure the confidentiality of any such disseminated non-public
information. The Depositor may, but is not obligated to, enforce the
obligations of the Master Servicer under this Agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted
obligation of the Master Servicer under this Agreement or exercise the rights
of the Master Servicer under this Agreement; provided by virtue of such
performance by the Depositor of its designee. The Depositor shall not have any
responsibility or liability for any action or failure to act by the Master
Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the predecessor Master
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of Section
6.02 hereof). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in its
capacity as servicer under a subservicing agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Master Servicer thereunder; and the Master Servicer shall not
thereby be relieved of any liability or obligations under the subservicing
agreement arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each
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subservicing agreement and the Mortgage Loans then being serviced thereunder
and an accounting of amounts collected held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the subservicing
agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments;
Certificate Account; Distribution Account;
Pre-Funding Account; Seller Shortfall Interest
Requirement.
(a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or, subject to Section 3.20, any Prepayment Charge
or penalty interest in connection with the prepayment of a Mortgage Loan and
(ii) extend the due dates for payments due on a Mortgage Note for a period not
greater than 270 days. In the event of any such arrangement, the Master Servicer
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements. In addition, the NIM
Insurer's prior written consent shall be required for any waiver of Prepayment
Charges or for the extension of the due dates for payments due on a Mortgage
Note, if the aggregate number of outstanding Mortgage Loans that have been
granted such waivers or extensions exceeds 5% of the aggregate number of Initial
Mortgage Loans and Subsequent Mortgage Loans. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to be
deposited on a daily basis within two Business Days of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and interest
due on the Mortgage Loans before the Cut-off Date) and the following amounts
required to be deposited hereunder:
(1) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage
Loans (net of the related Servicing Fee and Prepayment Interest Excess
permitted under Section 3.15 hereof to the extent not previously paid to
or withheld by the Master Servicer);
(3) all Insurance Proceeds;
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(4) all Liquidation Proceeds and Subsequent Recoveries,
other than proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures;
(5) all Compensating Interest;
(6) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments;
(7) any amounts required to be deposited by the Master
Servicer pursuant to Section 3.10 hereof;
(8) the Purchase Price and any Substitution Adjustment
Amount;
(9) all Advances made by the Master Servicer or the
Trustee pursuant to Section 4.01 hereof;
(10) all Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts; and
(11) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer
into the Certificate Account shall be exclusive, it being understood and agreed
that, without limiting the generality of the foregoing, payments in the nature
of late payment charges or assumption fees, if collected, need not be remitted
by the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted and not otherwise subject to withdrawal
pursuant to Section 3.08 hereof, it may at any time withdraw or direct the
institution maintaining the Certificate Account, to withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
Such withdrawal or direction may be accomplished by delivering written notice
thereof to the institution maintaining the Certificate Account, that describes
the amounts deposited in error in the Certificate Account. The Master Servicer
shall maintain adequate records with respect to all withdrawals made pursuant to
this Section. All funds deposited in the Certificate Account shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
3.08.
No later than 1:00 p.m. Pacific time on the Business Day prior to
the Master Servicer Advance Date in each of January 2005, February 2005 and
March 0000, XXX shall remit to the Master Servicer, and the Master Servicer
shall deposit in the Certificate Account, the Seller Shortfall Interest
Requirement (if any) for such Master Servicer Advance Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a); and
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(2) any amount required to be deposited by the Master
Servicer pursuant to Section 3.05(e) in connection with any losses on
Permitted Investments.
The foregoing requirements for remittance by the Master Servicer
and deposit by the Trustee into the Distribution Account shall be exclusive. In
the event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering a written notice to the Trustee that
describes the amounts deposited in error in the Distribution Account. All funds
deposited in the Distribution Account shall be held by the Trustee in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Trustee incur
liability for withdrawals from the Distribution Account at the direction of the
Master Servicer.
(d) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Pre-Funding Account. On the Closing Date, CHL shall
remit the Pre-Funded Amount to the Trustee for deposit in the Pre-Funding
Account.
On the Business Day before the Distribution Date following the
end of the Funding Period, the Trustee shall (i) withdraw the amount on deposit
in the Pre-Funding Account (net of investment income), (ii) promptly deposit
such amount in the Distribution Account, and (iii) distribute each amount to the
Certificates on the Distribution Date pursuant to Section 4.04.
No later than 1:00 p.m. Pacific time on the Business Day prior to
the Master Servicer Advance Date in January 2005, February 2005 and March 0000,
XXX on behalf of the Sellers shall remit to the Master Servicer, and the Master
Servicer shall deposit in the Certificate Account, the Seller Shortfall Interest
Requirement (if any) for such Master Servicer Advance Date.
(e) Each institution that maintains the Certificate Account, the
Distribution Account or the Pre-Funding Account shall invest the funds in each
such account, as directed by the Master Servicer, in Permitted Investments,
which shall mature not later than (x) in the case of the Certificate Account,
the second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account, then such Permitted
Investment shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date) and (y) in the case of the Distribution
Account and the Pre-Funding Account, the Business Day immediately preceding the
first Distribution Date that follows the date of such investment (except that if
such Permitted Investment is an obligation of the institution that maintains
such Distribution Account or Pre-Funding Account, then such Permitted Investment
shall mature not later than such Distribution Date), in each case, shall not be
sold or disposed of prior to its maturity. All such Permitted Investments shall
be made in the name of the Trustee, for the benefit of the Certificateholders.
In the case of (i) the Certificate Account and the Distribution Account, all
income and gain net of any losses realized from any such investment shall be for
the benefit of the Master Servicer as servicing compensation and shall be
remitted to it monthly as provided
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herein and (ii) the Pre-Funding Account, all income and gain net of any losses
realized from any such investment shall be for the benefit of CHL and shall be
remitted to CHL as provided herein. The amount of any losses incurred in the
Certificate Account or the Distribution Account in respect of any such
investments shall be deposited by the Master Servicer in the Certificate
Account or paid to the Trustee for deposit into the Distribution Account out
of the Master Servicer's own funds immediately as realized. The amount of any
losses incurred in the Pre-Funding Account in respect of any such investments
shall be paid by CHL to the Trustee for deposit into the Pre-Funding Account
out of CHL's own funds immediately as realized. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or
lack of investment of funds held in the Certificate Account, the Distribution
Account or the Pre-Funding Account and made in accordance with this Section
3.05.
(f) The Master Servicer shall give at least 30 days advance
notice to the Trustee, each Seller, each Rating Agency and the Depositor of any
proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, each Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account, the Pre-Funding Account or
the Carryover Reserve Fund prior to any change thereof.
(g) Except as otherwise expressly provided in this Agreement, if
any default occurs under any Permitted Investment, the Trustee may and, subject
to Sections 8.01 and 8.02(a)(4), at the request of the Holders of Certificates
representing more than 50% of the Voting Rights or the NIM Insurer, shall take
any action appropriate to enforce payment or performance, including the
institution and prosecution of appropriate proceedings.
Section 3.06 Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors (or
advances by the Master Servicer) for the payment of taxes, assessments, hazard
insurance premiums or comparable items for the account of the Mortgagors.
Nothing herein shall require the Master Servicer to compel a Mortgagor to
establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to reimburse
the Master Servicer out of related collections for any payments made pursuant to
Sections 3.01 hereof (with respect to taxes and assessments and insurance
premiums) and 3.10 hereof (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.
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Section 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor, the NIM Insurer
and the Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it. Upon request, the Master Servicer shall furnish to
the Trustee and the NIM Insurer its most recent publicly available financial
statements and any other information relating to its capacity to perform its
obligations under this Agreement reasonably requested by the NIM Insurer.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder or Certificate Owner for actual expenses incurred by the
Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate
Account, Distribution Account, Carryover Reserve
Fund and the Principal Reserve Fund.
(a) The Master Servicer may from time to time make
withdrawals from the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not
previously paid to or withheld by the Master Servicer), as
servicing compensation in accordance with Section 3.15, that
portion of any payment of interest that equals the Servicing Fee
for the period with respect to which such interest payment was
made, and, as additional servicing compensation to the Master
Servicer, those other amounts set forth in Section 3.15;
(ii) to reimburse each of the Master Servicer and the
Trustee for Advances made by it with respect to the Mortgage
Loans, such right of reimbursement pursuant to this subclause
(ii) being limited to amounts received on particular Mortgage
Loan(s) (including, for this purpose, Liquidation Proceeds,
Insurance Proceeds and Subsequent Recoveries) that represent late
recoveries of payments of principal and/or interest on such
particular Mortgage Loan(s) in respect of which any such Advance
was made;
(iii) [Reserved];
(iv) to reimburse each of the Master Servicer and the
Trustee for any Nonrecoverable Advance previously made;
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(v) to reimburse the Master Servicer from Insurance
Proceeds for Insured Expenses covered by the related Insurance
Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees
and to reimburse it for any unreimbursed Servicing Advances, the
Master Servicer's right to reimbursement of Servicing Advances
pursuant to this subclause (vi) with respect to any Mortgage Loan
being limited to amounts received on particular Mortgage Loan(s)
(including, for this purpose, Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries and purchase and repurchase
proceeds) that represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section
3.06;
(vii) to pay to the applicable Seller, the Depositor or
the Master Servicer, as applicable, with respect to each Mortgage
Loan or property acquired in respect thereof that has been
purchased pursuant to Section 2.02, 2.03, 2.04 or 3.12, all
amounts received thereon and not taken into account in
determining the related Stated Principal Balance of such
repurchased Mortgage Loan;
(viii) to reimburse the applicable Seller, the Master
Servicer, the NIM Insurer or the Depositor for expenses incurred
by any of them in connection with the Mortgage Loans or
Certificates and reimbursable pursuant to Section 6.03 hereof;
provided that such amount shall only be withdrawn following the
withdrawal from the Certificate Account for deposit into the
Distribution Account pursuant to the following paragraph;
(ix) to pay any lender-paid primary mortgage insurance
premiums;
(x) to withdraw pursuant to Section 3.05 any amount
deposited in the Certificate Account and not required to be
deposited therein; and
(xi) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount and
Principal Remittance Amount, and the Trustee shall deposit such amount in the
Distribution Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, CHL shall deposit into the Principal Reserve Fund $200.00. Funds
on deposit in the Principal Reserve Fund shall not be invested. The Principal
Reserve Fund shall be treated as an "outside reserve fund" under applicable
Treasury regulations and shall not be part of any REMIC created under this
Agreement.
On the Business Day before the first Distribution Date, the
Trustee shall transfer $100.00 from the Principal Reserve Fund to the
Distribution Account, and on the first
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Distribution Date, the Trustee shall withdraw $100 and distribute such amount
to the Class A-R Certificates in reduction of the Certificate Principal Balance
thereof.
On the Business Day before the Class P Principal Distribution
Date, the Trustee shall transfer from the Principal Reserve Fund to the
Distribution Account $100 and shall distribute such amount to the Class P
Certificates on the Class P Principal Distribution Date. Following the
distributions to be made in accordance with the preceding sentence, the Trustee
shall then terminate the Principal Reserve Fund.
The Master Servicer shall keep and maintain separate accounting,
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii), (iv),
(v), (vi), (vii) and (viii) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iv), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the penultimate paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Distribution Account for the following purposes:
(i) to pay the Trustee the Trustee Fee on each
Distribution Date;
(ii) to pay to the Master Servicer, as additional
servicing compensation, earnings on or investment income with
respect to funds in or credited to the Distribution Account;
(iii) to withdraw pursuant to Section 3.05 any amount
deposited in the Distribution Account and not required to be
deposited therein;
(iv) to reimburse the Trustee for any unreimbursed
Advances made by it pursuant to Section 4.01(d) hereof, such
right of reimbursement pursuant to this subclause (iv) being
limited to (x) amounts received on the related Mortgage Loan(s)
in respect of which any such Advance was made and (y) amounts not
otherwise reimbursed to the Trustee pursuant to Section
3.08(a)(ii) hereof;
(v) to reimburse the Trustee for any Nonrecoverable
Advance previously made by the Trustee pursuant to Section
4.01(d) hereof, such right of reimbursement pursuant to this
subclause (v) being limited to amounts not otherwise reimbursed
to the Trustee pursuant to Section 3.08(a)(iv) hereof; and
(vi) to pay to the Co-Trustee, for payment to the Mortgage
Insurer as provided below, the Mortgage Insurance Premium;
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(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
The Co-Trustee shall pay the applicable Mortgage Insurance
Premium to the Mortgage Insurer in accordance with the following wiring
instructions:
PMI Mortgage Insurance Co., Account #12332-07419, ABA
#000-00000-0, Master Policy #21827-0004, Bulk #24-566, Txt: Attention: Policy,
Servicing, CWABS 2004-AB2. Bulk Primary.
(c) The Trustee shall withdraw funds from the Carryover Reserve
Fund for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the penultimate paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:
(1) to withdraw any amount deposited in the Carryover
Reserve Fund and not required to be deposited therein; and
(2) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved]
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (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 related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds or Subsequent Recoveries to the extent
permitted by Section 3.08 hereof. It is understood and agreed that no earthquake
or other additional insurance is to be required of any Mortgagor or maintained
on property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is
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located at the time of origination of the Mortgage Loan in a federally
designated special flood hazard area and such area is participating in the
national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the
maximum amount of such insurance available for the related Mortgaged Property
under the Flood Disaster Protection Act of 1973, as amended.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
The Master Servicer shall notify the Trustee that any such substitution,
modification or assumption agreement has been completed by forwarding to the
Co-Trustee the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof.
(b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the
Master Servicer shall prepare and deliver or cause to be prepared and delivered
to the Trustee for signature and shall direct, in writing, the Trustee to
execute the assumption agreement with the Person to whom the
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Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note (including, but not
limited to, the Mortgage Rate, the amount of the Scheduled Payment, the
Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin, the
Initial Periodic Rate Cap, the Subsequent Periodic Rate Cap, the Adjustment
Date and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Master Servicer in accordance
with its underwriting standards as then in effect. The Master Servicer shall
notify the Trustee that any such substitution or assumption agreement has been
completed by forwarding to the Trustee the original of such substitution or
assumption agreement, which in the case of the original shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer for
entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans.
(a) The Master Servicer may agree to a modification of any
Mortgage Loan (the "Modified Mortgage Loan") if (i) the modification is in lieu
of a refinancing and (ii) the Mortgage Rate on the Modified Mortgage Loan is
approximately a prevailing market rate for newly-originated mortgage loans
having similar terms and (iii) the Master Servicer purchases the Modified
Mortgage Loan from the Trust Fund as described below. Effective immediately
after the modification, and, in any event, on the same Business Day on which the
modification occurs, all interest of the Trustee in the Modified Mortgage Loan
shall automatically be deemed transferred and assigned to the Master Servicer
and all benefits and burdens of ownership thereof, including the right to
accrued interest thereon from the date of modification and the risk of default
thereon, shall pass to the Master Servicer. The Master Servicer shall promptly
deliver to the Trustee a certification of a Servicing Officer to the effect that
all requirements of this paragraph have been satisfied with respect to the
Modified Mortgage Loan. For federal income tax purposes, the Trustee shall
account for such purchase as a prepayment in full of the Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any Modified Mortgage
Loan in the Certificate Account pursuant to Section 3.05 within one Business Day
after the purchase of the Modified Mortgage Loan. Upon receipt by the Trustee of
written notification of any such deposit signed by a Servicing Officer, the
Trustee shall release to the Master Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in the Master Servicer any
Modified Mortgage Loan previously transferred and assigned pursuant hereto. The
Master Servicer covenants and agrees to indemnify the Trust Fund against any
liability for any "prohibited transaction" taxes and any related interest,
additions, and penalties imposed on the Trust Fund established hereunder as a
result of any modification of a Mortgage Loan effected pursuant to this
subsection (b), any holding of a Modified Mortgage Loan by the Trust Fund or
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any purchase of a Modified Mortgage Loan by the Master Servicer (but such
obligation shall not prevent the Master Servicer or any other appropriate
Person from in good faith contesting any such tax in appropriate proceedings
and shall not prevent the Master Servicer from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings). The Master
Servicer shall have no right of reimbursement for any amount paid pursuant to
the foregoing indemnification, except to the extent that the amount of any
tax, interest, and penalties, together with interest thereon, is refunded to
the Trust Fund or the Master Servicer. If the Master Servicer agrees to a
modification of any Mortgage Loan pursuant to this Section 3.12(a), and if
such Mortgage Loan carries a Prepayment Charge provision, the Master Servicer
will deliver to the Trustee the amount of the Prepayment Charge, if any, that
would have been due had such Mortgage Loan been prepaid at the time of such
modification, for deposit into the Certificate Account (not later than 1:00
p.m. Pacific time on the Master Servicer Advance Date immediately succeeding
the date of such modification) for distribution in accordance with the terms
of this Agreement.
(b) The Master Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
the requirements of the insurer under any Required Insurance Policy; provided
that the Master Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement to
itself of such expenses and (ii) that such expenses will be recoverable to it
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Certificate Account pursuant to Section 3.08
hereof). The Master Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided that it shall be
entitled to reimbursement thereof from the proceeds of liquidation of the
related Mortgaged Property and any related Subsequent Recoveries, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Master Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the
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best interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO
Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and
filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property
as aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but in
no event later than three years after its acquisition by the Trust Fund or, at
the expense of the Trust Fund, the Master Servicer shall request, more than 60
days prior to the day on which such three-year period would otherwise expire, an
extension of the three-year grace period. In the event the Trustee shall have
been supplied with an Opinion of Counsel (such opinion not to be an expense of
the Trustee) to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the Trust Fund as defined in section
860F of the Code or cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, and the Trust Fund may
continue to hold such Mortgaged Property (subject to any conditions contained in
such Opinion of Counsel) after the expiration of such three-year period.
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition
of any federal, state or local income taxes on the income earned from such
Mortgaged Property under section 860G(c) of the Code or otherwise, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding, net of
reimbursement to the Master Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Advances, Servicing Advances and any management fee
paid or to be paid with respect to the management of such Mortgaged Property,
shall be applied to the payment of principal of, and interest on, the related
defaulted Mortgage Loans (with interest accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Certificate Account. To
the extent the income received during a
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Prepayment Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Rate on the related
Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan
and any Subsequent Recoveries, net of any payment to the Master Servicer as
provided above, shall be deposited in the Certificate Account as provided in
Section 3.05 for distribution on the related Distribution Date, except that any
Excess Proceeds shall be retained by the Master Servicer as additional servicing
compensation.
The proceeds of any Liquidated Mortgage Loan, as well as any
recovery resulting from a partial collection of Liquidation Proceeds or any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Master Servicer for any related unreimbursed Servicing
Advances and Servicing Fees, pursuant to Section 3.08(a)(vi) or this Section
3.12; second, to reimburse the Master Servicer for any unreimbursed Advances,
pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to accrued and
unpaid interest (to the extent no Advance has been made for such amount) on the
Mortgage Loan or related REO Property, at the Net Mortgage Rate to the Due Date
occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan.
(c) [Reserved]
(d) The Master Servicer, in its sole discretion, shall have the
right to elect (by written notice sent to the Trustee) to purchase for its own
account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Certificate Account. Any purchase of a
Mortgage Loan pursuant to this Section 3.12(d) shall be accomplished by
remittance to the Master Servicer for deposit in the Certificate Account of the
Purchase Price. The Trustee, upon receipt of certification from the Master
Servicer of such deposit and a Request for File Release from the Master
Servicer, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Mortgage
Loan, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto.
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Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify the
Co-Trustee by delivering a Request for File Release. Upon receipt of such
request, the Co-Trustee shall promptly release the related Mortgage File to the
Master Servicer, and the Co-Trustee shall at the Master Servicer's direction
execute and deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument releasing
the lien of the Mortgage in each case provided by the Master Servicer, together
with the Mortgage Note with written evidence of cancellation thereon. The Master
Servicer is authorized to cause the removal from the registration on the MERS(R)
System of such Mortgage and to execute and deliver, on behalf of the Trust Fund
and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or the related subservicing account. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood insurance
any fidelity bond or errors or omissions policy, or for the purposes of
effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Co-Trustee
shall, upon delivery to the Co-Trustee of a Request for Document Release or a
Request for File Release, as applicable, release the documents specified in such
request or the Mortgage File, as the case may be, to the Master Servicer.
Subject to the further limitations set forth below, the Master Servicer shall
cause the Mortgage File or documents so released to be returned to the
Co-Trustee when the need therefor by the Master Servicer no longer exists,
unless the Mortgage Loan is liquidated and the proceeds thereof are deposited in
the Certificate Account, in which case the Master Servicer shall deliver to the
Co-Trustee a Request for File Release for any remaining documents in the
Mortgage File not in the possession of the Master Servicer.
If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the documents
therein that shall have been released by the Co-Trustee to be returned to the
Co-Trustee within 21 calendar days after possession thereof shall have been
released by the Co-Trustee unless (i) the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Certificate Account, and the Master Servicer shall have delivered to the
Co-Trustee a Request for File Release or (ii) the Mortgage File or document
shall have been delivered to an attorney or to a public trustee or other public
official as required by law for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property and the
Master Servicer shall have delivered to the Trustee an Officer's Certificate of
a Servicing Officer certifying as to the name and address of
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the Person to which the Mortgage File or the documents therein were delivered
and the purpose or purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of
Master Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Co-Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries in respect of any Mortgage Loan. All Mortgage Files and
funds collected or held by, or under the control of, the Master Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Subsequent Recoveries,
including but not limited to, any funds on deposit in the Certificate Account,
shall be held by the Master Servicer for and on behalf of the Trust Fund and
shall be and remain the sole and exclusive property of the Trust Fund, subject
to the applicable provisions of this Agreement. The Master Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Certificate Account, the Distribution Account, the
Carryover Reserve Fund or in any Escrow Account (as defined in Section 3.06), or
any funds that otherwise are or may become due or payable to the Trustee for the
benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of set off against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except, however,
that the Master Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account out of each
payment of interest on a Mortgage Loan included in the Trust Fund an amount
equal to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of any Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess, and
all income and gain net of any losses realized from Permitted Investments shall
be retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(b) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.
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Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
Certificate Owners and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices of the Master Servicer
designated by it. Nothing in this Section shall limit the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before the 80th day after the end of the Master Servicer's fiscal
year, commencing with its 2004 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master
Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Master Servicer's
expense, provided such statement is delivered by the Master Servicer to the
Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the
Master Servicer's fiscal year, commencing with its 2004 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2004, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, CHL or
any affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, the Depositor and CHL in
compliance with the Uniform Single Attestation Program for Mortgage Bankers.
Copies of such report shall be provided by the Trustee to any Certificateholder
or Certificate Owner upon request at the Master Servicer's expense, provided
such report is delivered by the Master Servicer to the Trustee. Upon written
request, the Master Servicer shall provide to the Certificateholders or
Certificate Owners its publicly available annual financial statements (or the
Master Servicer's parent company's publicly available annual financial
statements, as applicable), if any, promptly after they become available.
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Section 3.19 The Corridor Contract.
CHL shall assign all of its right, title and interest in and to
the interest rate corridor transactions evidenced by the Corridor Contract to,
and shall cause all of its obligations in respect of such transactions to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and conditions
set forth in the Corridor Contract Assignment Agreement. The Corridor Contract
will be an asset of the Trust Fund but will not be an asset of any REMIC. The
Master Servicer, on behalf of the Trustee, shall deposit any amounts received
from time to time with respect to the Corridor Contract into the Carryover
Reserve Fund.
The Master Servicer, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under the Corridor Contract.
The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Corridor Contract, in each case
upon the occurrence of certain events of default or termination events to the
extent specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for the
benefit of the Trust Fund an amount in respect of such termination. Any amounts
received by the Trustee or the Master Servicer for the benefit of the Trust
Fund, as the case may be, in respect of such termination shall be deposited and
held in the Carryover Reserve Fund to pay Net Rate Carryover for the applicable
Classes of Certificates as provided in Section 4.04(e) on the Distribution Dates
following such termination to and including the Corridor Contract Termination
Date, but shall not be available for distribution to the Class C Certificates
pursuant to Section 4.08(c) until the Corridor Contract Termination Date. On the
Corridor Contract Termination Date, after all other distributions on such date,
if any amounts in respect of early termination of the Corridor Contract remain
in the Carryover Reserve Fund, such amounts shall be distributed by the Trustee
to the Class C Certificates.
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary,
in the event of a Principal Prepayment in full or in part of a Mortgage Loan,
the Master Servicer may not waive any Prepayment Charge or portion thereof
required by the terms of the related Mortgage Note unless (i) such Mortgage Loan
is in default or the Master Servicer believes that such default is imminent and
the Master Servicer determines that such waiver would maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Charge, or (ii) (A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law relating
to creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law. In the event of a Principal Prepayment
in full or in part with respect to any Mortgage Loan, the Master Servicer shall
deliver to the Trustee an Officer's Certificate substantially in the form of
Exhibit T no later than the third Business Day following the immediately
succeeding Determination Date with a copy to the Class P Certificateholders. If
the Master Servicer has waived or does not collect all or a portion of a
Prepayment Charge relating to a Principal Prepayment in full or in part due to
any action or omission of the Master Servicer, other than as provided above, the
Master Servicer shall deliver to the Trustee, together with the Principal
Prepayment in full or in part, the amount
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of such Prepayment Charge (or such portion thereof as had been waived) for
deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on
the immediately succeeding Master Servicer Advance Date, in the case of such
Prepayment Charge) for distribution in accordance with the terms of this
Agreement.
(b) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing subsection (a), the party
discovering the breach shall give prompt written notice to the other parties.
(c) CHL represents and warrants to the Depositor and the Trustee,
as of the Closing Date and each Subsequent Transfer Date, that the information
in the Prepayment Charge Schedule (including the attached prepayment charge
summary) is complete and accurate in all material respects at the dates as of
which the information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable state law, except as
the enforceability thereof is limited due to acceleration in connection with a
foreclosure or other involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible
Officer of the Trustee of a breach of the foregoing clause (c) that materially
and adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties. Within 60 days of the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of breach, the
Master Servicer shall cure the breach in all material respects or shall pay into
the Certificate Account the amount of the Prepayment Charge that would otherwise
be due from the Mortgagor, less any amount representing such Prepayment Charge
previously collected and paid by the Master Servicer into the Certificate
Account.
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date, the
Master Servicer shall deliver to the Trustee by facsimile or electronic mail (or
by such other means as the Master Servicer and the Trustee, as the case may be,
may agree from time to time) a Remittance Report with respect to the related
Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Trustee will provide notice to the Master
Servicer by facsimile by the close of business on any Master Servicer Advance
Date in the event that the amount remitted by the Master Servicer to the Trustee
on the Distribution Account Deposit Date is less than the Advances required to
be made by the Master Servicer for such Distribution Date. The Master Servicer
shall be obligated to
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make any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser
portion of such Advance would constitute a Nonrecoverable Advance, the Master
Servicer shall deliver (i) to the Trustee for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance,
if applicable, and (ii) to the Depositor, each Rating Agency and the Trustee
an Officer's Certificate setting forth the basis for such determination.
(c) In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry in
its records relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision of
this Agreement, except as otherwise provided in this Section 4.01.
(d) If the Master Servicer determines that it will be unable to
comply with its obligation to make the Advances as and when described in
paragraphs (b) and (c) immediately above, it shall use its best efforts to give
written notice thereof to the Trustee (each such notice a "Trustee Advance
Notice"; and such notice may be given by facsimile), not later than 3:00 p.m.,
New York time, on the Business Day immediately preceding the related Master
Servicer Advance Date, specifying the amount that it will be unable to deposit
(each such amount an "Advance Deficiency") and certifying that such Advance
Deficiency constitutes an Advance hereunder and is not a Nonrecoverable Advance.
If the Trustee receives a Trustee Advance Notice on or before 3:30 p.m., (New
York time) on a Master Servicer Advance Date, the Trustee shall, not later than
3:00 p.m., (New York time), on the related Distribution Date, deposit in the
Distribution Account an amount equal to the Advance Deficiency identified in
such Trustee Advance Notice unless it is prohibited from so doing by applicable
law. Notwithstanding the foregoing, the Trustee shall not be required to make
such deposit if the Trustee shall have received written notification from the
Master Servicer that the Master Servicer has deposited or caused to be deposited
in the Certificate Account an amount equal to such Advance Deficiency. All
Advances made by the Trustee pursuant to this Section 4.01(d) shall accrue
interest on behalf of the Trustee at the Trustee Advance Rate from and including
the date such Advances are made to but excluding the date of repayment, with
such interest being an obligation of the Master Servicer and not the Trust Fund.
The Master Servicer shall reimburse the Trustee for the amount of any Advance
made by the Trustee pursuant to this Section 4.01(d) together with accrued
interest, not later than 6:00 p.m. (New York time) on the Business Day following
the related Distribution Date. In the event that the Master Servicer does not
reimburse the Trustee in accordance with the requirements of the preceding
sentence, the Trustee shall immediately (i) terminate all of the rights and
obligations of the Master Servicer under this Agreement in
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accordance with Section 7.01 and (ii) subject to the limitations set forth in
Section 3.04, assume all of the rights and obligations of the Master Servicer
hereunder.
(e) On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date) the Master
Servicer shall deliver to the Trustee a report (in form and substance reasonably
satisfactory to the Trustee) that indicates (i) the Mortgage Loans with respect
to which the Master Servicer has determined that the related Scheduled Payments
should be advanced and (ii) the amount of the related Scheduled Payments. The
Master Servicer shall deliver to the Trustee on the related Master Servicer
Advance Date an Officer's Certificate of a Servicing Officer indicating the
amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.
Section 4.02 Reduction of Servicing Compensation in Connection
with Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall remit any related
Compensating Interest as part of the related Interest Remittance Amount as
provided in this Agreement. The Master Servicer shall not be entitled to any
recovery or reimbursement for Compensating Interest from the Depositor, the
Trustee, either Seller, the Trust Fund or the Certificateholders.
Section 4.03 [Reserved]
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:
(1) concurrently to each class of Class A Certificates,
the Current Interest and Interest Carry Forward Amount for each such
class and such Distribution Date, pro rata, based on their respective
entitlements,
(2) to the Class M-1 Certificates, the Current Interest
for such Class,
(3) to the Class M-2 Certificates, the Current Interest
for such Class,
(4) to the Class M-3 Certificates, the Current Interest
for such Class,
(5) to the Class M-4 Certificates, the Current Interest
for such Class,
(6) to the Class M-5 Certificates, the Current Interest
for such Class,
(7) to the Class M-6 Certificates, the Current Interest
for such Class,
(8) to the Class B Certificates, the Current Interest for
such Class, and
(9) any remainder, as part of the Excess Cashflow.
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(b) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date shall be allocated by the Trustee from the
Distribution Account in the following order of priority:
(1) with respect to any Distribution Date prior to the
Stepdown Date or on which a Trigger Event is in effect:
(A) to the Class A Certificates, in the order and
priorities set forth in clause (3) below, until the Certificate
Principal Balances thereof are reduced to zero,
(B) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6 and Class B Certificates, in that order,
until the Certificate Principal Balance of each such Class is reduced to
zero, and
(C) any remainder as part of the Excess Cashflow.
(2) For each Distribution Date on or after the Stepdown
Date and so long as a Trigger Event is not in effect, from the Principal
Distribution Amount, sequentially:
(A) in an amount up to the Class A Principal Distribution
Amount, to the Class A Certificates in the order and priorities set
forth in clause (3) below, until the Certificate Principal Balances
thereof are reduced to zero,
(B) to the Class M-1 Certificates, the Class M-1 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(C) to the Class M-2 Certificates, the Class M-2 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(D) to the Class M-3 Certificates, the Class M-3 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(E) to the Class M-4 Certificates, the Class M-4 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(F) to the Class M-5 Certificates, the Class M-5 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(G) to the Class M-6 Certificates, the Class M-6 Principal
Distribution Amount until the Certificate Principal Balance thereof is
reduced to zero,
(H) to the Class B Certificates, the Class B Principal
Distribution Amount, until the Certificate Principal Balance thereof is
reduced to zero, and
(I) any remainder as part of the Excess Cashflow.
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(3) On each Distribution Date on which any principal
amounts are to be distributed to the Class A Certificates pursuant to
clause (1)(A) or (2)(A) above, such amounts shall be distributed
sequentially, to the Class A-1, Class A-2 and Class A-3 Certificates, in
that order, in each case until the Certificate Principal Balance thereof
is reduced to zero.
Notwithstanding the foregoing order of priority, on any
Distribution Date on which the aggregate Certificate Principal Balance
of the Class A Certificates is greater than the aggregate Stated
Principal Balance of the Mortgage Loans, any principal amounts to be
distributed to the Class A Certificates will be distributed pro rata,
based on the Certificate Principal Balances thereof, in each case until
the Certificate Principal Balance thereof is reduced to zero, and not as
described above.
(c) [Reserved].
(d) On each Distribution Date, any Excess Cashflow will be
paid to the Classes of Certificates in the following order of priority:
(1) with respect to any Distribution Date on or after the
Distribution Date in June 2005, to the Certificateholders of the Offered
Certificates then entitled to receive distributions in respect of
principal, in an aggregate amount equal to the Extra Principal
Distribution Amount, payable to such Certificateholders as part of the
Principal Distribution Amount pursuant to Section 4.04(b) above,
(2) to the Class M-1 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(3) to the Class M-1 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
(4) to the Class M-2 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(5) to the Class M-2 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
(6) to the Class M-3 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(7) to the Class M-3 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
(8) to the Class M-4 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(9) to the Class M-4 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
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(10) to the Class M-5 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(11) to the Class M-5 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
(12) to the Class M-6 Certificateholders, in an amount
equal to the Interest Carry Forward Amount for such Class and
Distribution Date;
(13) to the Class M-6 Certificateholders, in an amount
equal to the Unpaid Realized Loss Amount for such Class and Distribution
Date;
(14) to the Class B Certificateholders, in an amount equal
to the Interest Carry Forward Amount for such Class and Distribution
Date;
(15) to the Class B Certificateholders, in an amount equal
to the Unpaid Realized Loss Amount for such Class and Distribution Date;
(16) from any remaining Excess Cashflow, concurrently to
each Class of Interest-Bearing Certificates (in each case after
application of amounts received under the Corridor Contract to cover Net
Rate Carryover), pro rata based on the Certificate Principal Balances
thereof, to the extent needed to pay any unpaid Net Rate Carryover for
each such Class; and then any Excess Cashflow remaining after such
allocation to pay Net Rate Carryover based on the Certificate Principal
Balances of the Certificates will be distributed to each Class with
respect to which there remains any unpaid Net Rate Carryover, pro rata,
based on the amount of such unpaid Net Rate Carryover;
(17) to the to the Carryover Reserve Fund, in an amount
equal to the Required Secondary Carryover Reserve Fund Deposit (after
giving effect to other deposits and withdrawals therefrom on such
Distribution Date without regard to any excess Corridor Contract
proceeds);
(18) to the Class C Certificateholders, the Class C
Distributable Amount for such Distribution Date; and
(19) to the Class A-R Certificates.
(e) On each Distribution Date on or prior to the Corridor
Contract Termination Date, amounts received by the Trustee in respect of the
Corridor Contract for such Distribution Date will be withdrawn from the
Carryover Reserve Fund and distributed in the following order of priority:
(1) first, concurrently to each Class of Interest-Bearing
Certificates, pro rata, based on the Certificate Principal Balances
thereof, to the extent needed to pay any Net Rate Carryover for each
such Class; and then, to each such class of Interest-Bearing
Certificates to the extent needed to pay any remaining unpaid Net Rate
Carryover, pro rata, based on the amount of such remaining unpaid Net
Rate Carryover; and
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(2) any remaining amounts to the holders of the Class C
Certificates, unless the Corridor Contract is subject to early
termination, in which case any early termination payments received on
the Corridor Contract shall be deposited by the Trustee in the Carryover
Reserve Fund to cover any Net Rate Carryover on the Certificates
entitled thereto on future Distribution Dates until the Corridor
Contract Termination Date.
(f) To the extent that a Class of Interest-Bearing
Certificates receives interest in excess of the Net Rate Cap, such interest
shall be deemed to have been paid to the Carryover Reserve Fund and then paid
by the Carryover Reserve Fund to those Certificateholders. For purposes of the
Code, amounts deemed deposited in the Carryover Reserve Fund shall be deemed to
have first been distributed to the Class C Certificates.
(g) On each Distribution Date, all Prepayment Charges
(including amounts deposited in connection with the full or partial waiver of
such Prepayment Charges pursuant to Section 3.20) shall be allocated and paid
to the Class P Certificates. On the Class P Principal Distribution Date, the
Trustee shall make the $100.00 distribution to the Class P Certificates as
specified in Section 3.08.
(h) On each Distribution Date, the Trustee shall allocate the
Applied Realized Loss Amount with respect to the Subordinate Certificates to
reduce the Certificate Principal Balances of the Subordinate Certificates in the
following order of priority:
(1) to the Class B Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(2) to the Class M-6 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(3) to the Class M-5 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(4) to the Class M-4 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(5) to the Class M-3 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(6) to the Class M-2 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(7) to the Class M-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero.
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(i) On each Distribution Date, the Trustee shall allocate the
amount of the Subsequent Recoveries, if any, to increase the Certificate
Principal Balances of the Subordinate Certificates to which Applied Realized
Loss Amounts have been previously allocated in the following order of priority:
(1) to the Class M-1 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-1
Certificates;
(2) to the Class M-2 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-2
Certificates;
(3) to the Class M-3 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-3
Certificates;
(4) to the Class M-4 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-4
Certificates;
(5) to the Class M-5 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-5
Certificates;
(6) to the Class M-6 Certificates, but not by more than
the amount of the Unpaid Realized Loss Amount of the Class M-6
Certificates; and
(7) to the Class B Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class B Certificates.
Holders of Certificates to which any Subsequent Recoveries have
been allocated shall not be entitled to any payment in respect of Current
Interest on the amount of such increases for any Accrual Period preceding the
Distribution Date on which such increase occurs.
Subject to Section 9.02 hereof respecting the final distribution,
on each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such Holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with an aggregate initial
Certificate Principal Balance of not less than $1,000,000 or evidencing a
Percentage Interest aggregating 10% or more with respect to such Class or, if
not, by check mailed by first class mail to such Certificateholder at the
address of such Holder appearing in the Certificate Register. Notwithstanding
the foregoing, but subject to Section 9.02 hereof respecting the final
distribution, distributions with respect to Certificates registered in the name
of a Depository shall be made to such Depository in immediately available funds.
On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee (in the form of a computer
readable magnetic tape or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to
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by the Master Servicer and the Trustee such as to permit the Trustee to
prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall not be responsible to recompute, recalculate or verify
information provided to it by the Master Servicer and shall be permitted to
conclusively rely on any information provided to it by the Master Servicer.
Section 4.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a Class
of Certificates of the Trust Fund, the Master Servicer, each Seller and the
Depositor a statement setting forth for the Certificates:
(1) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein and (B)
the aggregate of all scheduled payments of principal included therein;
(2) the amount of such distribution to Holders of each
Class allocable to interest;
(3) any Interest Carry Forward Amount for each Class;
(4) the Certificate Principal Balance of each Class after
giving effect (i) to all distributions allocable to principal on such
Distribution Date, (ii) the allocation of any Applied Realized Loss
Amounts for such Distribution Date and (iii) the allocation of any
Subsequent Recoveries for such Distribution Date;
(5) the aggregate Stated Principal Balance of the Mortgage
Loans for the Mortgage Pool;
(6) the related amount of the Servicing Fees paid to or
retained by the Master Servicer for the related Due Period;
(7) the Pass-Through Rate for each Class of Certificates
with respect to the current Accrual Period;
(8) the Net Rate Carryover paid on any Class of
Certificates on such Distribution Date and any Net Rate Carryover
remaining on any Class of Certificates on such Distribution Date;
(9) the amount of Advances included in the distribution on
such Distribution Date;
(10) the number and aggregate principal amounts of
Mortgage Loans: (A) Delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more
days, and (B) in foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to
89 days and (3) 90 or more days, in each case as of the close of
business on the last day of the calendar month preceding such
Distribution Date;
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(11) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number and Stated
Principal Balance of such Mortgage Loan and the date of acquisition
thereof;
(12) the total number and Stated Principal Balance of any
Mortgage Loans converted to REO Properties, as of the close of business
on the Determination Date preceding such Distribution Date;
(13) the aggregate Stated Principal Balance of all
Liquidated Mortgage Loans;
(14) with respect to any Liquidated Mortgage Loan, the
loan number and Stated Principal Balance relating thereto;
(15) whether a Trigger Event is in effect;
(16) the amount of the distribution made to the Holders of
the Class P Certificates;
(17) the amount of Realized Losses and Subsequent
Recoveries applied to the Subordinate Certificates for such Distribution
Date;
(18) prior to the end of the Funding Period, (A) the
amount on deposit in the Pre-Funding Account (if any) on the related
Determination Date (net of investment income) and the amount (if any)
included in the Principal Distribution Amount and (B) the aggregate
Stated Principal Balances of the Subsequent Mortgage Loans for
Subsequent Transfer Dates occurring during the related Due Period;
(19) the amount, if any, due from the Corridor Contract
Counterparty, and the amounts received under the Corridor Contract for
such Distribution Date;
(20) all payments made by the Master Servicer in respect
of Compensating Interest for such Distribution Date;
(21) the information set forth in the Prepayment Charge
Schedule;
(22) with respect to any Mortgage Loan repurchased by a
Seller or purchased by the Master Servicer or the Depositor, the loan
number and Stated Principal Balance relating thereto; and
(23) the amount of any claims made, and any claims
rejected, under the Mortgage Insurance Policy during the related Due
Period.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
shall send a copy of each statement provided pursuant to this Section 4.05 to
each Rating Agency and the NIM Insurer. The Trustee may
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make the above information available to Certificateholders via the Trustee's
website at xxxx://xxx.xxxxxxxxxxxx.xxx.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(1), (a)(2) and (a)(6) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee
shall furnish to the Holders of the Class A-R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:
(1) The original projected principal and interest cash
flows on the Closing Date on each related Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(2) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each related
Class of regular and residual interests created hereunder and the
Mortgage Loans, based on the Prepayment Assumption;
(3) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(4) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through
the end of such calendar quarter with respect to each related Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(5) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the
timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(6) The amount and timing of any non-interest expenses of
the related REMIC; and
(7) Any taxes (including penalties and interest) imposed
on the related REMIC, including, without limitation, taxes on
"prohibited transactions," "contributions" or "net income from
foreclosure property" or state or local income or franchise taxes.
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The information pursuant to clauses (1), (2), (3) and (4) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 [Reserved]
Section 4.07 [Reserved]
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain
in its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $10,000 therein. The Carryover Reserve
Fund shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including without limitation, other moneys held by the Trustee pursuant to this
Agreement.
(b) On each Distribution Date, the Trustee shall deposit all
amounts received pursuant to the Corridor Contract in the Carryover Reserve
Fund. The Trustee shall make withdrawals from the Carryover Reserve Fund to make
distributions in respect of Net Rate Carryover as to the extent required by
Section 4.04.
(c) Any amounts received on the Corridor Contract with respect to
a Distribution Date and remaining after the distributions required pursuant to
Section 4.04(e) shall be distributed to the Class C Certificates; provided,
however, that if the Corridor Contract is subject to early termination, early
termination payments received on the Corridor Contract shall be deposited by the
Trustee in the Carryover Reserve Fund and withdrawn from the Carryover Reserve
Fund to pay any Net Rate Carryover on the related Classes of Certificates as
provided in Section 4.04(e) on the Distribution Dates following such termination
to and including the Corridor Contract Termination Date, but such early
termination payments shall not be available for distribution to the Class C
Certificates on future Distribution Dates until the Corridor Contract
Termination Date.
(d) Funds in the Carryover Reserve Fund in respect of amounts
received under the Corridor Contract may be invested in Permitted Investments at
the direction of the Majority Holder of the Class C Certificates (voting as a
single Class), which Permitted Investments shall mature not later than the
Business Day immediately preceding the first Distribution Date that follows the
date of such investment (except that if such Permitted Investment is an
obligation of the institution that maintains the Carryover Reserve Fund, then
such Permitted Investment shall mature not later than such Distribution Date)
and shall not be sold or disposed of prior to maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. In the absence of such written direction, all funds in the
Carryover Reserve Fund in respect of amounts received of under the Corridor
Contract shall be invested by the Trustee in The Bank of New York cash reserves.
Any net investment earnings on such amounts shall be payable pro rata to the
Holders of the Class C Certificates in accordance with their Percentage
Interests. Any losses incurred in the Carryover Reserve Fund in respect of any
such investments shall be charged against amounts on deposit in the Carryover
Reserve Fund (or such investments) immediately as realized.
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(e) The Trustee shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in the
Carryover Reserve Fund and made in accordance with this Section 4.08. The
Carryover Reserve Fund shall not constitute an asset of any REMIC created
hereunder. The Class C Certificates shall evidence ownership of the Carryover
Reserve Fund for federal tax purposes.
Section 4.09 [Reserved]
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through X-00, Xxxxxxx X, Xxxxxxx X, Xxxxxxx X and Exhibit
E. The Certificates shall be issuable in registered form, in the minimum dollar
denominations, integral dollar multiples in excess thereof and aggregate dollar
denominations as set forth in the following table:
Integral Multiples Original Certificate
Class Minimum Denomination in Excess of Minimum Principal Balance
------------------------------------------------------------------------------------------------
A-1 $20,000 $1,000 $ 348,093,000
A-2 $20,000 $1,000 $ 616,339,000
A-3 $20,000 $1,000 $ 138,068,000
M-1 $20,000 $1,000 $ 30,625,000
M-2 $20,000 $1,000 $ 24,500,000
M-3 $20,000 $1,000 $ 14,088,000
M-4 $20,000 $1,000 $ 12,250,000
M-5 $20,000 $1,000 $ 12,250,000
M-6 $20,000 $1,000 $ 12,250,000
B $20,000 $1,000 $ 16,537,000
A-R $99.95(1) N/A $100
C N/A N/A N/A
P N/A N/A $100
(1) The Tax Matters Person Certificate may be issued in a denomination of
$0.05.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
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authentication. On the Closing Date, the Trustee shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c) below
and to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of Transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of Transfer of
any Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall (except in connection with any transfer of a
Private Certificate to an affiliate of the Depositor (either directly or through
a nominee) on or about the Closing Date) each certify to the Trustee in writing
the facts surrounding the Transfer in substantially the forms set forth in
Exhibit J-2 and, in the case of a Class A-R Certificate, Exhibit J-1 (each, a
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A
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Letter") or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act;
provided, however, that in the case of the delivery of an Investment Letter in
connection with the transfer of any Class C or Class P Certificate to a
transferee that is formed with the purpose of issuing notes backed by such
Class C or Class P Certificate, as the case may be, clause (b) and (c) of the
form of Investment Letter shall not be applicable and shall be deleted by such
transferee. The Depositor shall provide to any Holder of a Private Certificate
and any prospective transferee designated by any such Holder, information
regarding the related Certificates and the Mortgage Loans and such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee, the Co-Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Trustee, the Co-Trustee, the Depositor, the Trust
Fund, each Seller, the Master Servicer and the NIM Insurer against any
liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
No Transfer of an ERISA-Restricted Certificate (other than a
transfer of an ERISA-Restricted Certificate to an affiliate of the Depositor
(either directly or through a nominee) on or about the Closing Date) shall be
made unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit K
or Exhibit L, or in the event such Certificate is a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that (x) such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA or a plan or arrangement subject to Section 4975
of the Code, or a Person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement, or (y) in the case of an
ERISA-Restricted Certificate that has been the subject of an ERISA-Qualifying
Underwriting, a representation that the transferee is an insurance company which
is purchasing such Certificate with funds contained in an "insurance company
general account" (as such term is defined in section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificate satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60 or (ii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
or arrangement subject to ERISA, or a plan or arrangement subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or arrangement or any other person acting on behalf of
any such plan or arrangement, an Opinion of Counsel satisfactory to the Trustee,
addressed to the Trustee and the Master Servicer, to the effect that the
purchase or holding of such ERISA-Restricted Certificate will not result in a
non-exempt prohibited transaction under ERISA or the Code and will not subject
the Trustee or the Master Servicer to any obligation in addition to those
expressly undertaken in this Agreement, which Opinion of
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Counsel shall not be an expense of the Trustee, the Master Servicer, or the
Trust Fund. For purposes of the preceding sentence, one of such
representations, as appropriate, shall be deemed to have been made to the
Trustee by the transferee's acceptance of an ERISA-Restricted Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates) unless the Trustee shall have received
from the transferee an Opinion of Counsel as described in clause (ii) or a
representation letter acceptable in form and substance to the Trustee.
Notwithstanding anything else to the contrary herein, any purported transfer
of an ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
without the delivery to the Trustee of an Opinion of Counsel satisfactory to
the Trustee meeting the requirements of clause (i) of the first sentence of
this paragraph as described above shall be void and of no effect. The Trustee
shall be under no liability to any Person for any registration of transfer of
any ERISA-Restricted Certificate that is in fact not permitted by this Section
5.02(b) or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee, with respect to the
transfer of such Classes of Certificates, required delivery of such
certificates and other documentation or evidence as are expressly required by
the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact
an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code or a Person acting on
behalf of any such plan or arrangement at the time it became a Holder or, at
such subsequent time as it became such a plan or arrangement or Person acting
on behalf of such a plan or arrangement, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Holder of such Certificate that is not such a plan or
arrangement or Person acting on behalf of a plan or arrangement.
(c) Each Person who has or who acquires any Ownership
Interest in a Class A-R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Class A-R Certificate are expressly subject to the following
provisions:
(1) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.
(2) Except in connection with any registration in the name
of, or transfer of a Class A-R Certificate to, an affiliate of the
Depositor (either directly or through a nominee) on or about the Closing
Date, no Ownership Interest in a Class A-R Certificate may be registered
or transferred, and the Trustee shall not register the Transfer of any
Class A-R Certificate, unless the Trustee shall have been furnished with
an affidavit (a "Transfer Affidavit") of the initial owner or the
proposed transferee in the form attached hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership
Interest in a Class A-R Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person
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to whom such Person attempts to Transfer its Ownership Interest in a
Class A-R Certificate, (B) to obtain a Transfer Affidavit from any
Person for whom such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Class A-R Certificate and (C) not to
Transfer its Ownership Interest in a Class A-R Certificate, or to
cause the Transfer of an Ownership Interest in a Class A-R Certificate
to any other Person, if it has actual knowledge that such Person is
not a Permitted Transferee or that such Transfer Affidavit is false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive
to the date of registration of Transfer of such Class A-R Certificate.
The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class A-R Certificate that is in fact not
permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement so long as the Transfer was registered after receipt of the
related Transfer Affidavit and Transferor Certificate. The Trustee shall
be entitled but not obligated to recover from any Holder of a Class A-R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class A-R Certificate at
and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set
forth in this section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, either Seller
or the Master Servicer to the effect that the elimination of such restrictions
will not cause any REMIC formed hereunder to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class A-R Certificate, by
acceptance of its Ownership Interest, shall be deemed to consent to any
amendment of this Agreement that, based on an Opinion of Counsel furnished to
the Trustee, is reasonably necessary (a) to ensure that the record ownership of,
or any beneficial interest in, a Class A-R Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
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(d) The preparation and delivery of all affidavits,
certifications and opinions referred to above in this section 5.02 shall not be
an expense of the Trust Fund, the Trustee, the Depositor, either Seller or the
Master Servicer.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee,
or the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is delivered
to the Master Servicer and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. All
Certificates surrendered to the Trustee under the terms of this Section 5.03
shall be canceled and destroyed by the Trustee in accordance with its standard
procedures without liability on its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Master Servicer, the Trustee or the NIM Insurer or
any agent of the Master Servicer, the Trustee or the NIM Insurer shall be
affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names
and Addresses.
If three or more Certificateholders or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate Owners desire to communicate with other
Certificateholders or Certificate Owners with respect to their rights under this
Agreement or under the Certificates and (c) provide a copy of the communication
that such Certificateholders or Certificate Owners propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders or Certificate Owners at such recipients' expense the most
recent list of the Certificateholders of the Trust Fund held by the Trustee, if
any. The Depositor and every Certificateholder or Certificate Owner, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
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Section 5.06 Book-Entry Certificates.
The Book-Entry Certificates, upon original issuance, shall be
issued in the form of one typewritten Certificate (or more than one, if required
by the Depository) for each Class of such Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 5.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Sellers, the Master Servicer and the
Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of distributions) as the authorized
representative of the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
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Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect
to any Certificates, (a) the Depositor advises the Trustee that the Depository
is no longer willing or able to discharge properly its responsibilities under
the Depository Agreement with respect to such Certificates and the Trustee or
the Depositor is unable to locate a qualified successor or (b) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights evidenced
by any Class of Book-Entry Certificates advise the Trustee and the Depository in
writing through the Depository Participants that the continuation of a
book-entry system with respect to Certificates of such Class through the
Depository (or its successor) is no longer in the best interests of the
Certificate Owners of such Class, then the Trustee shall notify all Certificate
Owners of such Certificates, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners of such Class requesting the same. The Depositor shall provide the
Trustee with an adequate inventory of Certificates to facilitate the issuance
and transfer of Definitive Certificates. Upon surrender to the Trustee of any
such Certificates by the Depository, accompanied by registration instructions
from the Depository for registration, the Trustee shall authenticate and deliver
such Definitive Certificates. Neither the Depositor nor the Trustee shall be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.
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ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the
Master Servicer and the Sellers.
The Depositor, the Master Servicer and each Seller shall each be
liable in accordance herewith only to the extent of the obligations specifically
and respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the
Master Servicer or the Sellers.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of the
United States or under the laws of one of the states thereof and will obtain and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Depositor, the Master Servicer or
either Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or either
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or either Seller, shall be the successor of the
Depositor, the Master Servicer or such Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Xxxxxx Mae and Xxxxxxx Mac.
Section 6.03 Limitation on Liability of the Depositor, the
Sellers, the Master Servicer, the NIM Insurer
and Others.
None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section 8.05), the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided that this provision shall not protect the Depositor, the
Sellers, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Sellers, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the
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performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor, the Sellers, the NIM Insurer, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Sellers, the NIM Insurer or the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Sellers, the NIM
Insurer, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be
indemnified by the Trust Fund and held harmless against any loss, liability or
expense incurred in connection with any audit, controversy or judicial
proceeding relating to a governmental taxing authority or any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense related to any specific Mortgage Loan or Mortgage Loans (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant
to this Agreement) and any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and
that in its opinion may involve it in any expense or liability; provided that
any of the Depositor, the Sellers, the NIM Insurer or the Master Servicer may,
in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be, expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Sellers, the NIM Insurer and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (i) upon determination that its duties
hereunder are no longer permissible under applicable law or (ii) upon
appointment of a successor servicer that is reasonably acceptable to the Trustee
and the NIM Insurer and the written confirmation from each Rating Agency (which
confirmation shall be furnished to the Depositor, the Trustee and the NIM
Insurer) that such resignation will not cause such Rating Agency to reduce the
then current rating of the Certificates. Any such determination pursuant to
clause (i) of the preceding sentence permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No resignation of the Master Servicer shall become effective until
the Trustee shall have assumed the Master Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx and Xxxxxxx Mac for
persons performing
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servicing for mortgage loans purchased by Xxxxxx Mae and Xxxxxxx Mac. In the
event that any such policy or bond ceases to be in effect, the Master Servicer
shall use its reasonable best efforts to obtain a comparable replacement
policy or bond from an insurer or issuer, meeting the requirements set forth
above as of the date of such replacement.
The Master Servicer shall provide the Trustee and the NIM Insurer
(upon such party's reasonable request) with copies of any such insurance
policies and fidelity bond. The Master Servicer shall be deemed to have complied
with this provision if an Affiliate of the Master Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance policy
or fidelity bond, the coverage afforded thereunder extends to the Master
Servicer.
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(1) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the Trustee
any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for five calendar days and, with
respect to a payment required to be made under Section 4.01(b) or (c)
hereof, for one Business Day, after the date on which written notice of
such failure shall have been given to the Master Servicer by the
Trustee, the NIM Insurer or the Depositor, or to the Trustee, the NIM
Insurer and the Master Servicer by the Holders of Certificates
evidencing not less than 25% of the Voting Rights; or
(2) any failure by the Master Servicer to observe or
perform in any material respect any other of the covenants or agreements
on the part of the Master Servicer contained in this Agreement or any
representation or warranty shall prove to be untrue, which failure or
breach shall continue unremedied for a period of 60 days after the date
on which written notice of such failure shall have been given to the
Master Servicer by the Trustee, the NIM Insurer or the Depositor, or to
the Trustee by the Holders of Certificates evidencing not less than 25%
of the Voting Rights; provided that the sixty-day cure period shall not
apply to the initial delivery of the Mortgage File for Delay Delivery
Mortgage Loans nor the failure to repurchase or substitute in lieu
thereof; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 consecutive days;
or
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(4) the Master Servicer shall consent to the appointment
of a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(5) the Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition
to take advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its obligations; or
(6) the Master Servicer shall fail to reimburse in full
the Trustee not later than 6:00 p.m. (New York time) on the Business Day
following the related Distribution Date for any Advance made by the
Trustee pursuant to Section 4.01(d) together with accrued and unpaid
interest.
If an Event of Default shall occur, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Trustee shall, but only at the direction of either the NIM Insurer or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates , by notice in writing to the Master Servicer
(with a copy to each Rating Agency), terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder. On
or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. The
Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII.
The Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee of all cash amounts
which shall at the time be credited to the Certificate Account, or thereafter be
received with respect to the Mortgage Loans. The Trustee shall promptly notify
the Rating Agencies of the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due prior
to the notice terminating such Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which such Master Servicer would have been entitled pursuant to Sections
3.08(a)(i) through (viii), and any other amounts payable to such Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.
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Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, (i) appoint any established mortgage loan
servicing institution reasonably acceptable to the NIM Insurer (as evidenced by
the prior written consent of the NIM Insurer), or (ii) if it is unable for 60
days to appoint a successor servicer reasonably acceptable to the NIM Insurer,
petition a court of competent jurisdiction to appoint any established mortgage
loan servicing institution, the appointment of which does not adversely affect
the then current rating of the Certificates and the NIM Insurer guaranteed notes
(without giving effect to any policy or guaranty provided by the NIM Insurer) by
each Rating Agency as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer hereunder. Any successor Master Servicer shall be an
institution that is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing, that has been approved by the Mortgage Insurer if required, that
has a net worth of at least $15,000,000 and that is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, that contains an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Master Servicer (other than liabilities and indemnities of
the Master Servicer under Section 6.03 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder. The Trustee shall not resign
as servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 hereof, act in such capacity as herein above
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
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caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give
notice to the NIM Insurer and the Mortgagors of such change of servicer and
shall, during the term of its service as servicer maintain in force the policy
or policies that the Master Servicer is required to maintain pursuant to Section
6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS(R) System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Co-Trustee promptly
upon receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
ARTICLE VIII.
CONCERNING THE TRUSTEE AND THE CO-TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
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The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee (or the Co-Trustee, to the extent provided in this Agreement)
that are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:
(1) prior to the occurrence of an Event of Default, and
after the curing of all such Events of Default that may have occurred,
the duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable, individually or as Trustee, except for the performance of such
duties and obligations as are specifically set forth in this Agreement,
no implied covenants or obligations shall be read into this Agreement
against the Trustee and the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(2) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
grossly negligent or acted in bad faith or with willful misfeasance;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Holders of each Class of Certificates evidencing not less than 25% of
the Voting Rights of such Class relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement; and
(4) without in any way limiting the provisions of this
Section 8.01 or Section 8.02 hereof, the Trustee shall be entitled to
rely conclusively on the information delivered to it by the Master
Servicer in a Trustee Advance Notice in determining whether or not it is
required to make an Advance under Section 4.01(d), shall have no
responsibility to ascertain or confirm any information contained in any
Trustee Advance Notice, and shall have no obligation to make any Advance
under Section 4.01(d) in the absence of a Trustee Advance Notice or
actual knowledge by a Responsible Officer that (A) a required Advance
was not made and (B) such required Advance was not a Nonrecoverable
Advance.
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Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(1) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) the Trustee may consult with counsel and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(3) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Agreement;
(4) prior to the occurrence of an Event of Default
hereunder and after the curing of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
the NIM Insurer or the Holders of each Class of Certificates evidencing
not less than 25% of the Voting Rights of such Class; provided, however,
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee not reasonably
assured to the Trustee by such Certificateholders, the Trustee may
require reasonable indemnity against such expense, or liability from
such Certificateholders as a condition to taking any such action;
(5) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(6) the Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such liability is not assured to it;
(7) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(8) the Trustee shall not be deemed to have knowledge of
an Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
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(9) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to make
any investigation of matters arising hereunder or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request,
order or direction of the NIM Insurer or any of the Certificateholders,
pursuant to the provisions of this Agreement, unless the NIM Insurer or
such Certificateholders, as applicable, shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee without
the possession of any of the Certificates, or the production thereof at the
trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the Certificates.
The Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Certificate Account by the Depositor or the Master Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or expense
(i) incurred in connection with any legal action relating to
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this Agreement or the Certificates, or in connection with the performance of
any of the Trustee's duties hereunder, other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or negligence in
the performance of any of the Trustee's duties hereunder or by reason of
reckless disregard of the Trustee's obligations and duties hereunder or (ii)
resulting from any error in any tax or information return prepared by the
Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register and each Rating Agency, not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the NIM Insurer or the Depositor, (ii) the
Trustee shall become incapable of acting, or shall be adjudged as bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the
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purpose of rehabilitation, conservation or liquidation, or (iii)(A) a tax is
imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located, (B) the imposition of such tax would be avoided by
the appointment of a different trustee and (C) the Trustee fails to indemnify
the Trust Fund against such tax, then the Depositor, the NIM Insurer or the
Master Servicer may remove the Trustee and appoint a successor trustee,
reasonably acceptable to the NIM Insurer, by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee,
one copy of which shall be delivered to the Master Servicer and one copy of
which shall be delivered to the successor trustee.
The Holders evidencing at least 51% of the Voting Rights of each
Class of Certificates may at any time remove the Trustee and appoint a successor
trustee by written instrument or instruments, in triplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered by the successor Trustee to the Master Servicer
one complete set to the Trustee so removed and one complete set to the successor
so appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the NIM Insurer and its appointment shall not adversely affect the
then current ratings of the Certificates.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to the NIM Insurer and all Holders of Certificates. If the
Depositor fails to mail such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to substantially all of the corporate trust business
of the Trustee, shall be the successor of the
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Trustee hereunder, provided that such corporation shall be eligible under the
provisions of Section 8.06 hereof without the execution or filing of any paper
or further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee and reasonably acceptable to the NIM
Insurer to act as co-trustee or co-trustees jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust Fund or any part thereof, whichever
is applicable, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. If the Master Servicer shall not
have joined in such appointment within 15 days after receipt by it of a request
to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(1) All rights, powers, duties and obligations conferred
or imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular
act or acts are to be performed (whether as Trustee hereunder or as
successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(2) No trustee hereunder shall be held personally liable
by reason of any act or omission of any other trustee hereunder; and
(3) The Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each
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of them. Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article VIII. Each separate
trustee and co-trustee upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically
including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to
the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC created pursuant
to the Preliminary Statement qualifies as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Trustee covenants and agrees that it shall
act as agent (and the Trustee is hereby appointed to act as agent) on behalf of
the Trust Fund and that in such capacity it shall: (a) prepare and file, or
cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Returns (Form 1066 or any successor form adopted
by the Internal Revenue Service) and prepare and file or cause to be prepared
and filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each REMIC created hereunder containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on Forms
8811 or as otherwise may be required by the Code, the name, title, address, and
telephone number of the person that the Holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) make or cause
to be made elections, on behalf of each REMIC created hereunder to be treated as
a REMIC on the federal tax return of each such REMIC for its first taxable year
(and, if necessary, under applicable state law); (d) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption; (e)
provide information necessary for the computation of tax imposed on the transfer
of a Class A-R Certificate to a Person that is not a Permitted Transferee, or an
agent (including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is the
record holder of an interest (the
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reasonable cost of computing and furnishing such information may be charged to
the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC
created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the penultimate paragraph of this Section 8.11, the
amount of any federal, state and local taxes, including prohibited transaction
taxes as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) sign or cause to be signed
federal, state or local income tax or information returns; (j) maintain
records relating to each REMIC created hereunder, including but not limited to
the income, expenses, assets and liabilities of each such REMIC, and the fair
market value and adjusted basis of the Trust Fund property determined at such
intervals as may be required by the Code, as may be necessary to prepare the
foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent the Trust Fund in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year
of any REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of the Trust Fund, and otherwise act on behalf of any REMIC created
hereunder in relation to any tax matter involving any such REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within 10 days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3) and (4)
of Section 4.05(d)). Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, request in order to enable the Trustee
to perform its duties as set forth herein. The Depositor hereby indemnifies the
Trustee for any losses, liabilities, damages, claims or expenses of the Trustee
arising from any errors or miscalculations of the Trustee that result from any
failure of the Depositor to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions"
of the Trust Fund as defined in section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of the Trust Fund as defined in section
860G(c) of the Code, on any contribution to the Trust Fund after the startup day
pursuant to section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any federal, state or local tax or minimum tax imposed upon
the Trust Fund pursuant to sections 23153 and 24872 of the California Revenue
and Taxation Code if not paid as otherwise provided for herein, such tax shall
be paid by (i) the Trustee, if any such other tax arises out of or results from
a breach by the Trustee of any of its obligations under this Agreement, (ii) (x)
the Master Servicer, in the case of any such minimum tax, and (y) any party
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hereto (other than the Trustee) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party here fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class A-R Certificateholders, and second with amounts otherwise to be
distributed to all other Certificateholders in the same manner as if such tax
were a Realized Loss. Notwithstanding anything to the contrary contained herein,
to the extent that such tax is payable by the Class A-R Certificates, the
Trustee is hereby authorized to retain on any Distribution Date, from the
Holders of the Class A-R Certificates (and, if necessary, second, from the
Holders of the all other Certificates in the priority specified in the preceding
sentence), funds otherwise distributable to such Holders in an amount sufficient
to pay such tax. The Trustee agrees to promptly notify in writing the party
liable for any such tax of the amount thereof and the due date for the payment
thereof.
The Trustee shall treat the Carryover Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned
by the Holders of the Class C Certificates, and that is not an asset of any
REMIC created hereunder. The Trustee shall treat the rights of the Holders of
each Class of Certificates (other than the Class P and Class A-R Certificates)
to receive payments from the Carryover Reserve Fund as rights in an interest
rate corridor contract written by: (i) the Corridor Contract Counterparty in
respect of any Net Rate Carryover funded by the Corridor Contract and in respect
of any residual payments from the Corridor Contract received by the Class C
Certificates, and (ii) the holders of the Class C Certificates in respect of any
monies distributed pursuant to Section 4.04(d)(16) and (17) and Section 4.08(c)
herein, in favor of the other Certificateholders. Thus, each Certificate (other
than the Class P and Class A-R Certificates) shall be treated as representing
ownership of not only an Master REMIC regular interest, but also ownership of an
interest in an interest rate corridor contract. For purposes of determining the
issue price of the Master REMIC regular interests, the Trustee shall assume that
the Corridor Contract has a value of $1,814,500.
Section 8.12 Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Co-Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement shall examine them to
determine whether they conform to the requirements of this Agreement, to the
extent required by this Agreement. If any such instrument is found not to
conform to the requirements of this Agreement in a material manner, the
Co-Trustee shall take action as it deems appropriate to have the instrument
corrected. In addition, the Co-Trustee shall act as the insured under the
Mortgage Insurance Policy and hereby directs the Master Servicer, on behalf of
the Co-Trustee, to take all actions appropriate or required of the Co-Trustee
under the Mortgage Insurance Policy, other than the payment of the Mortgage
Insurance Premium and obtaining the approval of the Mortgage Insurer with
respect to the appointment of a successor servicer.
(b) No provision of this Agreement shall be construed to relieve
the Co-Trustee from liability for its own grossly negligent action, its own
gross negligent failure to act or its own misconduct, its grossly negligent
failure to perform its obligations in compliance with
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this Agreement, or any liability that would be imposed by reason of its
willful misfeasance or bad faith; provided that:
(1) the duties and obligations of the Co-Trustee shall be
determined solely by the express provisions of this Agreement with the
exception of Section 8.10, the Co-Trustee shall not be liable,
individually or as Co-Trustee, except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Co-Trustee and the Co-Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Co-Trustee and conforming to the requirements of this Agreement that it
reasonably believed in good faith to be genuine and to have been duly
executed by the proper authorities respecting any matters arising
hereunder; and
(2) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Co-Trustee
was grossly negligent or acted in bad faith or with willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(1) the Co-Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) the Co-Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(3) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(4) the Co-Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document;
(5) the Co-Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys; and
(6) the Co-Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder if
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it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such liability is not assured to it.
(d) The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and the
Co-Trustee assumes no responsibility for their correctness. The Co-Trustee makes
no representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System. The
Co-Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Certificate Account by the Depositor or the Master Servicer.
(e) The Co-Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Co-Trustee's
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of the
Co-Trustee's duties hereunder or by reason of reckless disregard of the
Co-Trustee's obligations and duties hereunder and (ii) resulting from any error
in any tax or information return prepared by the Master Servicer. Such indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Co-Trustee hereunder.
(g) The Co-Trustee hereunder shall, at all times, be a
corporation or association organized and doing business under the laws of a
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or state authority
and with a credit rating that would not cause any of the Rating Agencies to
reduce
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their respective ratings of any Class of Certificates below the ratings
issued on the Closing Date (or having provided such security from time to time
as is sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.12 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Co-Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Co-Trustee shall resign immediately in
the manner and with the effect specified in paragraph (h) below. The corporation
or national banking association serving as Co-Trustee may have normal banking
and trust relationships with the Depositor, the Sellers and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged from
the trusts hereby created by giving 30 days prior written notice of resignation
to the Trustee, the Depositor and the Master Servicer. Upon such resignation the
Trustee (x) may appoint a successor Co-Trustee meeting the requirements in
paragraph (g) above and acceptable to the Master Servicer and the NIM Insurer
(in their sole discretion), so long as such Co-Trustee executes and delivers to
the other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.
Section 8.13 Access to Records of the Trustee.
The Trustee and any Co-Trustee shall afford the Sellers, the
Depositor, the Master Servicer, the NIM Insurer and each Certificate Owner upon
reasonable notice during normal business hours access to all records maintained
by the Trustee or Co-Trustee in respect of its duties under this Agreement and
access to officers of the Trustee responsible for performing its duties. Upon
request, the Trustee or Co-Trustee shall furnish the Depositor, the Master
Servicer, the NIM Insurer and any requesting Certificate Owner with its most
recent financial statements. The Trustee shall cooperate fully with the Sellers,
the Master Servicer, the Depositor, the NIM Insurer and the Certificate Owner
for review and copying any books, documents, or records requested with respect
to the Trustee's and Co-Trustee's respective duties under this Agreement. The
Sellers, the Depositor, the Master Servicer, and the Certificate Owner shall not
have any responsibility or liability for any action for failure to act by the
Trustee or Co-Trustee and are not obligated to supervise the performance of the
Trustee under this Agreement or otherwise.
Section 8.14 Suits for Enforcement.
If an Event of Default or other material default by the Master
Servicer or the Depositor under this Agreement occurs and is continuing, at the
direction of the Certificateholders holding not less than 51% of the Voting
Rights or the NIM Insurer, the Trustee shall proceed to protect and enforce its
rights and the rights of the Certificateholders or the NIM Insurer under this
Agreement by a suit, action, or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this
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Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable, or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIM
Insurer and the Certificateholders.
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Sellers, the Trustee and the Co-Trustee created hereby shall terminate upon the
earlier of (a) the purchase by the Master Servicer or NIM Insurer (the party
exercising such purchase option, the "Terminator") of all of the Mortgage Loans
(and REO Properties) remaining in the Trust Fund at the price equal to the sum
of (i) 100% of the Stated Principal Balance of each Mortgage Loan in the Trust
Fund (other than in respect of an REO Property), (ii) accrued interest thereon
at the applicable Mortgage Rate (or, if such repurchase is effected by the
Master Servicer, at the applicable Net Mortgage Rate), (iii) the appraised value
of any REO Property in the Trust Fund (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Terminator and the Trustee, and (iv) if the Terminator is the
NIM Insurer, any unreimbursed Servicing Advances, and the principal portion of
any unreimbursed Advances, made on the Mortgage Loans prior to the exercise of
such repurchase and (b) the later of (i) the maturity or other liquidation (or
any Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (ii) the distribution to
related Certificateholders of all amounts required to be distributed to them
pursuant to this Agreement, as applicable. In no event shall the trusts created
hereby continue beyond the earlier of (i) the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
hereof and (ii) the Latest Possible Maturity Date.
The right to purchase all Mortgage Loans and REO Properties by
the Terminator pursuant to clause (a) of the immediately preceding paragraph
shall be conditioned upon (1) the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating ten percent (10%) or less
of the sum of (x) the aggregate Cut-Off Date Principal Balance of the Initial
Mortgage Loans and (y) the Pre-Funded Amount, and (2) unless the NIM Insurer
otherwise consents, the purchase price for such Mortgage Loans and REO
Properties shall result in a final distribution on any NIM Insurer guaranteed
notes that is sufficient (x) to pay such notes in full and (y) to pay any
amounts due and payable to the NIM Insurer pursuant to the indenture related to
such notes. The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds
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in the Certificate Account, the Master Servicer shall direct the Trustee to
send a final distribution notice promptly to each related Certificateholder or
(ii) the Trustee determines that a Class of Certificates shall be retired
after a final distribution on such Class, the Trustee shall notify the related
Certificateholders within five (5) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the related Certificates at the
Corporate Trust Office of the Trustee. If the Terminator elects to terminate
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders, such electing party
shall notify the Depositor and the Trustee of the date such electing party
intends to terminate and of the applicable repurchase price of the related
Mortgage Loans and REO Properties.
Notice of any termination, specifying the Distribution Date on
which related Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to related Certificateholders mailed not earlier than the 10th day and
no later than the 15th day of the month immediately preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date upon
which final distribution on related Certificates will be made upon presentation
and surrender of such Certificates at the office therein designated, (b) the
amount of such final distribution, (c) the location of the office or agency at
which such presentation and surrender must be made and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of such Certificates at the
office therein specified. The Terminator will give such notice to each Rating
Agency at the time such notice is given to the affected Certificateholders.
In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for File Release therefor, the Co-Trustee shall promptly release to the
Master Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class the
amounts allocable to such Certificates held in the Distribution Account (and, if
applicable, the Carryover Reserve Fund) in the order and priority set forth in
Section 4.04 hereof on the final Distribution Date and in proportion to their
respective Percentage Interests. Notwithstanding the reduction of the
Certificate Principal Balance of any Class of Certificates to zero, such Class
will be outstanding hereunder (solely for the purpose of receiving distributions
(if any) to which it may be entitled pursuant to the terms of this Agreement and
not for any other purpose) until the termination of the respective obligations
and responsibilities of the Depositor, each Seller, the Master Servicer and the
Trustee hereunder in accordance with Article IX.
In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders
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to surrender their related Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second
notice all the applicable Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within one year after the second notice all related Certificates shall not
have been surrendered for cancellation, then the Class A-R Certificates shall
be entitled to all unclaimed funds and other assets that remain subject
hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the Terminator exercises its purchase option,
the Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the Terminator, to the effect that the failure of the Trust
Fund to comply with the requirements of this Section 9.03 will not (i) result in
the imposition of taxes on "prohibited transactions" of a REMIC, or (ii) cause
any REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master
Servicer shall prepare a plan of complete liquidation and shall otherwise
satisfy all the requirements of a qualified liquidation under Section 860F of
the Code and any regulations thereunder, as evidenced by an Opinion of Counsel
delivered to the Trustee and the Depositor obtained at the expense of the
Terminator;
(2) During such 90-day liquidation period, and at or prior
to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust
Fund to the Terminator for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders. The Trustee shall attach a statement to the final federal
income tax return for each of any REMIC created hereunder stating that pursuant
to Treasury Regulation Section 1.860F-1, the first day of the 90-day liquidation
period for each the REMIC was the date on which the Trustee sold the assets of
the Trust Fund to the Terminator.
(c) The Trustee as agent for each REMIC created hereunder hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1), and together
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with the Holders of the Class A-R Certificates agree to take such other action
in connection therewith as may be reasonably requested by the Terminator.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Sellers the Co-Trustee and the Trustee with the consent
of the NIM Insurer, without the consent of any of the Certificateholders to cure
any ambiguity, to correct or supplement any provisions herein, to conform this
Agreement to the Prospectus Supplement, or to make such other provisions with
respect to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder; provided that any such amendment shall be
deemed not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Certificates, it being understood
and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. Any
amendment described above, made solely to conform this Agreement to the
Prospectus Supplement shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders. Notwithstanding the foregoing,
no amendment that significantly changes the permitted activities of the trust
created by this Agreement may be made without the consent of Certificateholders
representing not less than 51% of the Voting Rights of each Class of
Certificates affected by such amendment.
The Trustee, the Co-Trustee, the Depositor, the Master Servicer
and the Sellers with the consent of the NIM Insurer may also at any time and
from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or appropriate to maintain the qualification of the
Trust Fund as a REMIC under the Code or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would be a
claim against the Trust Fund at any time prior to the final redemption of the
Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee, to the effect that such
action is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Sellers, the Co-Trustee and the Trustee with
the consent of the NIM Insurer and the Holders of each Class of Certificates
affected thereby evidencing not less than 51% of the Voting Rights of such Class
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner
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the rights of the Holders of Certificates; provided that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of
such Class evidencing 66% or more of the Voting Rights of such Class, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders
of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, Trustee
and the NIM Insurer shall not consent to any amendment to this Agreement unless
each shall have first received an Opinion of Counsel satisfactory to the Trustee
and the NIM Insurer, which opinion shall be an expense of the party requesting
such amendment but in any case shall not be an expense of the Trustee or the NIM
Insurer, to the effect that such amendment will not cause the imposition of any
tax on the Trust Fund or the Certificateholders or cause any REMIC formed
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement,
the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder (if the consent of Certificateholdes is
required) and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into
an amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee and the NIM Insurer that (i) such amendment is permitted and is not
prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any Certificateholder
or (B) the conclusion set forth in the immediately preceding clause (A) is not
required to be reached pursuant to this Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
135
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other reason
this Agreement or any Subsequent Transfer Agreement is held or deemed to create
a security interest in such assets, then (i) this Agreement shall be deemed to
be a security agreement (within the meaning of the Uniform Commercial Code of
the State of New York) with respect to all such assets and security interests
and (ii) the conveyance provided for in this Agreement and any Subsequent
Transfer Agreement shall be deemed to be an assignment and a grant pursuant to
the terms of this Agreement by the Depositor to the Trustee, for the benefit of
the Certificateholders, of a security interest in all of the assets that
constitute the Trust Fund, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders and the
NIM Insurer shall, to the extent consistent with this Agreement, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement. The Depositor shall arrange for filing any Uniform Commercial Code
continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The occurrence of any Event of Default that has not
been cured;
(3) The resignation or termination of the Master Servicer
or the Trustee and the appointment of any successor;
136
(4) The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02, 2.03, 2.04 and 3.12; and
(5) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(6) Each report to Certificateholders described in Section
4.05;
(7) Each annual statement as to compliance described in
Section 3.17; and
(8) Each annual independent public accountants' servicing
report described in Section 3.18.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the Depositor,
CWABS, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number:
(000) 000-0000, Attention: Xxxxx X. Xxxxxxx, or such other address as may be
hereafter furnished to the Sellers, the Master Servicer and the Trustee by the
Depositor in writing; (ii) in the case of CHL, Countrywide Home Loans, Inc.,
0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000,
Attention: Xxxxx X. Xxxxxxx, or such other address as may be hereafter furnished
to the Depositor, the Master Servicer and the Trustee by the Sellers in writing;
(iii) in the case of Park Monaco, Park Monaco Inc., 0000 Xxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxx
Xxx, or such other address as may be hereafter furnished to the Depositor, the
Master Servicer and the Trustee by the Sellers in writing; (iv) in the case of
the Master Servicer, Countrywide Home Loans Servicing LP, 0000 Xxxxxxxxx Xxxxx,
Xxxxx, Xxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxx Xxxx or
such other address as may be hereafter furnished to the Depositor, the Sellers
and the Trustee by the Master Servicer in writing; (v) in the case of the
Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, CWABS, Series 2004-AB2, or such
other address as the Trustee may hereafter furnish to the parties hereto; (vi)
in the case of the Co-Trustee, The Bank of New York Trust Company, N.A., 000 X.
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, Attention: MBS Support
Services, or such other address as the Co-Trustee may be hereafter furnished to
the Depositor, the Master Servicer and the Trustee; and (vii) in the case of the
Rating Agencies, as applicable, (x) Xxxxx'x Investors Service, Inc., Attention:
ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, (y) Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Attention: Mortgage Surveillance Group, 00 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx, 00000 and (z) Dominion Bond Rating Service, Inc., Attention:
Residential Mortgage-Backed Securities, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000. Notices to Certificateholders shall be deemed given when mailed,
first postage prepaid, to their respective addresses appearing in the
Certificate Register.
137
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except
as provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than 25%
of the Voting Rights shall also have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses, and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions
138
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it
will permit any representative of the Depositor, either Seller, the NIM Insurer
or the Trustee during the Master Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Master
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Depositor, a Seller, the NIM Insurer or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision the Master Servicer hereby authorizes such accountants to discuss with
such representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor, either Seller, the NIM Insurer or the
Trustee of any right under this Section 10.09 shall be borne by the party
requesting such inspection; all other such expenses shall be borne by the Master
Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
Section 10.11 Rights of NIM Insurer.
(a) The rights of the NIM Insurer under this Agreement shall
exist only so long as either:
(1) the notes certain payments on which are guaranteed by
the NIM Insurer remain outstanding or
(2) the NIM Insurer is owed amounts paid by it with
respect to that guaranty.
(b) The rights of the NIM Insurer under this Agreement are
exercisable by the NIM Insurer only so long as no default by the NIM Insurer
under its guaranty of certain payments under notes backed or secured by the
Class C or Class P Certificates has occurred and is continuing. If the NIM
Insurer is the subject of any insolvency proceeding, the rights of the NIM
Insurer under this Agreement will be exercisable by the NIM Insurer only so long
as:
(1) the obligations of the NIM Insurer under its guaranty
of notes backed or secured by the Class C or Class P Certificates have
not been disavowed and
139
(2) CHL and the Trustee have received reasonable
assurances that the NIM Insurer will be able to satisfy its obligations
under its guaranty of notes backed or secured by the Class C or Class P
Certificates.
(c) The NIM Insurer is a third party beneficiary of this
Agreement to the same extent as if it were a party to this Agreement and may
enforce any of those rights under this Agreement.
(d) A copy of any documents of any nature required by this
Agreement to be delivered by the Trustee, or to the Trustee or the Rating
Agencies, shall in each case at the same time also be delivered to the NIM
Insurer. Any notices required to be given by the Trustee, or to the Trustee or
the Rating Agencies, shall in each case at the same time also be given to the
NIM Insurer. If the Trustee receives a notice or document that is required
hereunder to be delivered to the NIM Insurer, and if such notice or document
does not indicate that a copy thereof has been previously sent to the NIM
Insurer, the Trustee shall send the NIM Insurer a copy of such notice or
document. If such document is an Opinion of Counsel, the NIM Insurer shall be an
addressee thereof or such Opinion of Counsel shall contain language permitting
the NIM Insurer to rely thereon as if the NIM Insurer were an addressee thereof.
(e) Anything in this Agreement that is conditioned on not
resulting in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies shall also be conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned by the Rating
Agencies to the notes backed or secured by the Class C or Class P Certificate
(without giving effect to any policy or guaranty provided by the NIM Insurer).
140
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CWABS, INC.,
as Depositor
By:_______________________________
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By:_______________________________
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
PARK MONACO INC.,
as a Seller
By:______________________________
Name: Xxxxxx Xxxxx XxXxxxxxxx
Title: Chief Financial Officer and
Executive Vice President
COUNTRYWIDE HOME LOANS SERVICING
LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:______________________________
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
PSA
THE BANK OF NEW YORK,
as Trustee
By:________________________________
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
as Co-Trustee
By:________________________________
Name: Xxxxxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
(solely with respect to its
obligations under Section 4.01(d))
By:_________________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
PSA
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of December, 2004, before me, a notary public in
and for said State, appeared Xxxx Xxxxxxx, Xx., personally known to me on the
basis of satisfactory evidence to be a Senior Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
Xxxxxx Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
Comm. Expires Oct. 15, 0000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of December, 2004, before me, a notary public in
and for said State, appeared Xxxx Xxxxxxx, Xx., personally known to me on the
basis of satisfactory evidence to be a Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_____________________________________
Notary Public
[Notarial Seal]
Xxxxxx Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
Comm. Expires Oct. 15, 0000
XXXXX XX XXXXXXXXXX )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of December, 2004, before me, a notary public in
and for said State, appeared Xxxx Xxxxxxx, Xx., personally known to me on the
basis of satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
____________________________________
Notary Public
[Notarial Seal]
Xxxxxx Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
Comm. Expires Oct. 15, 2005
Notary page to PSA
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of December, 2004, before me, a notary public in
and for said State, appeared Xxxxxx Xxxxx XxXxxxxxxx, personally known to me on
the basis of satisfactory evidence to be a Chief Financial Officer and Executive
Vice President of Park Monaco Inc., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such corporation and acknowledged to me that such corporation executed
the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
Xxxxxx Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
Comm. Expires Oct. 15, 2005
Notary page to PSA
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of December, 2004 before me, a notary public in
and for said State, appeared Xxxxx Xxxxxx personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York, a New York
banking corporation that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
Notary page to PSA
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 29th day of December, 2004 before me, a notary public in
and for said State, appeared Xxxxxxxxx Xxxxxx, personally known to me on the
basis of satisfactory evidence to be a Vice President of The Bank of New York
Trust Company, N.A., a national banking association that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
______________________________________
Notary Public
[Notarial Seal]
[Xxxxxxxx X. Xxxxxx]
Commission # 1389902
Notary Public - California
Los Angeles County
Comm. Expires December 13, 2006
Notary page to PSA
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of December, 2004 before me, a notary public in
and for said State, appeared Xxxx Xxxxxxxx, personally known to me on the basis
of satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_______________________________
Notary Public
[Notarial Seal]
[Xxxxxxxxx Xxxxxxx]
Notary Public, State of New York
No. 01MO6069202
Qualified in New York County
Comm. Expires January 22, 2006
Notary page to PSA
Exhibit A-1
through A-12
[Exhibits A-1 through A-12 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
Exhibit B is a photocopy
of the Class P Certificates
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C is a photocopy
of the Class C Certificates
as delivered.
[See appropriate documents delivered at closing.]
C-1
Exhibit D
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate (Class A-R)
as delivered.
[See appropriate documents delivered at closing.]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2004-AB2
------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company,
N.A., as Co-Trustee, the undersigned, as Trustee, hereby certifies that, as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed in the attached list of exceptions) the
Co-Trustee has received:
(i) the original Mortgage Note, endorsed by the applicable Seller
or the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _____________________, without recourse", or, if the
original Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the applicable Seller, stating that the original
Mortgage Note was lost or destroyed, together with a copy of the related
Mortgage Note; and
(ii) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
G-1-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:______________________________
Name:
Title:
G-1-2
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2004-AB2
------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company, N.A.,
as Co-Trustee, the undersigned, as Trustee, hereby certifies that, with respect
to the Subsequent Mortgage Loans delivered in connection with the Subsequent
Transfer Agreement, dated as of __________, 2004 (the "Subsequent Transfer
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a
Seller, Park Monaco Inc., as a Seller,] and The Bank of New York, as Trustee],
except as listed in the following paragraph, as to each [Initial Mortgage
Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan Schedule][Loan
Number and Borrower Identification Mortgage Loan Schedule] (other than any
[Mortgage Loan][Loan Number and Borrower Identification Mortgage Loan Schedule]
paid in full or listed on the attached list of exceptions) the Co-Trustee has
received:
(i) original Mortgage Note, endorsed by the applicable Seller or
the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the applicable
Seller, stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;
(ii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage, and in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that is a
MERS Mortgage Loan, the original Mortgage, noting thereon the presence of the
MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan] and language
indicating that the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM
Loan if the [Initial Mortgage Loan][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 such Mortgage has been
recorded;
G-2-1
(iii) the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage to "Asset-Backed Certificates, Series 2004-AB2, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of September 1, 2004, without recourse", or, in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect
to property located in the State of California that is not a MERS Mortgage Loan,
a duly executed assignment of the Mortgage in blank (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) 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, with evidence of recording
thereon if recordation thereof is permissible under applicable law; 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, any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company, with the original
policy of title insurance to be delivered within one year of the Closing Date.
In the event that in connection with any [Initial Mortgage
Loan][Subsequent Mortgage Loan] that is not a MERS Mortgage Loan the applicable
Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii) or
(iv), as applicable, the Co-Trustee has received, in lieu thereof, a true and
complete copy of such Mortgage and/or such assignment or assignments of the
Mortgage, as applicable, each certified by the applicable Seller, the applicable
title company, escrow agent or attorney, or the originator of such [Initial
Mortgage Loan][Subsequent Mortgage Loan], as the case may be, to be a true and
complete copy of the original Mortgage or assignment of Mortgage submitted for
recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][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" in Section 1.01 of the Pooling and
Servicing Agreement accurately reflects information set forth in the Mortgage
File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
G-2-2
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:_____________________________
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Seller]
[Seller]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2004-AB2
------------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee
relating to the above-referenced series, with the schedule of exceptions
attached thereto, delivered by the undersigned, as Trustee, on the Closing Date
in accordance with Section 2.02 of the Pooling and Servicing Agreement dated as
of December 1, 2004 (the "Pooling and Servicing Agreement") among CWABS, Inc.,
as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the
undersigned, as Trustee, The Bank of New York Trust Company, N.A., as
Co-Trustee. The undersigned hereby certifies that [, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement, dated as of __________, 2004 (the "Subsequent Transfer Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, and The Bank of New York, as Trustee,] as to each
Delay Delivery Mortgage Loan listed on the Schedule A attached hereto (other
than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full or
listed on Schedule B attached hereto) it has received:
(1) the original Mortgage Note, endorsed by the applicable Seller
or the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the applicable
Seller, stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;
(2) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage to "Asset-Backed Certificates, Series 2004-AB2, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of December 1, 2004, without recourse", or, in
the case of each [Initial Mortgage Loan][Subsequent
G-3-1
Mortgage Loan] with respect to property located in the State of California
that is not a MERS Mortgage Loan, a duly executed assignment of the Mortgage
in blank (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).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:________________________________
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Seller]
[Seller]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2004-AB2
------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company, N.A.,
as Co-Trustee, the undersigned hereby certifies that, as to each Subsequent
Mortgage Loan listed in the Loan Number and Borrower Identification Mortgage
Loan Schedule (other than any Subsequent Mortgage Loan paid in full or listed in
the attached list of exceptions) the Co-Trustee has received:
(1) the original Mortgage Note, endorsed by the applicable Seller
or the originator of such Subsequent Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without recourse", with all
intervening endorsements that show a complete chain of endorsement from the
originator to the applicable Seller, or, if the original Mortgage Note has been
lost or destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(2) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency,
G-3-1
enforceability or genuineness of any of the documents contained in each
Mortgage File of any of the Subsequent Mortgage Loans identified on the Loan
Number and Borrower Identification Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Subsequent Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:_____________________________________
Name:
Title:
G-3-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Seller]
Re: CWABS Asset-Backed Certificates, Series 2004-AB2
------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Countrywide Home Loans Servicing LP, Park Monaco Inc., as a Seller, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company, N.A.,
as Co-Trustee, the undersigned, as Trustee, hereby certifies that [, with
respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________, 2004 (the "Subsequent
Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, and The Bank of New York, as
Trustee,] as to each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in
the [Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage
Loan Schedule] (other than any [Initial Mortgage Loan][Subsequent Mortgage Loan]
paid in full or listed on the attached Document Exception Report) it has
received:
(i) the original Mortgage Note, endorsed by the applicable Seller
or the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the applicable
Seller, stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage,
and in the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that
is a MERS Mortgage Loan, the original Mortgage, noting thereon the presence of
the MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan] and language
indicating that the [Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM
Loan if the [Initial Mortgage Loan][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 such Mortgage has been
recorded];
H-1
(iii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage to "Asset-Backed Certificates, Series 2004-AB2, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of December 1, 2004, without recourse", or, in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with respect
to property located in the State of California that is not a MERS Mortgage Loan,
a duly executed assignment of the Mortgage in blank (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, with evidence of recording
thereon if recordation thereof is permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or
a printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, 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.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
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" in Section 1.01 of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the [Initial Mortgage
Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].
H-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:_____________________________
Name:
Title:
H-3
EXHIBIT I
TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated as
of December 1, 2004 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc.,
as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The Bank
of New York Trust Company, N.A., as Co-Trustee, and The Bank of New York, as
Trustee. Capitalized terms used, but not defined herein or in Exhibit 1 hereto,
shall have the meanings ascribed to such terms in the Agreement. The Transferee
has authorized the undersigned to make this affidavit on behalf of the
Transferee.
2. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or to section 4975 of the Internal Revenue Code of 1986, nor
is it acting on behalf of or with plan assets of any such plan. The Transferee
is, as of the date hereof, and will be, as of the date of the Transfer, a
Permitted Transferee. The Transferee will endeavor to remain a Permitted
Transferee for so long as it retains its Ownership Interest in the Certificate.
The Transferee is acquiring its Ownership Interest in the Certificate for its
own account.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
I-1-1
5. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Class A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may
be "noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the Transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
Transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.
11. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.
* * *
I-1-2
IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,
by its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:_________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ____________ of the Transferee, and acknowledged that
he executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
-------------------------------------
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-1-3
Certain Definitions
"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.
"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, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate, including the acquisition of a Certificate
by the Depositor.
"Transferee": Any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
I-1-4
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Class A-R Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(2) Except in connection with any registration in the name of, or
transfer of a Class A-R Certificate to, an affiliate of the Depositor
(either directly or through a nominee) on or about the Closing Date, no
Ownership Interest in a Class A-R Certificate may be registered on the
Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class A-R Certificate unless, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto
as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class
A-R Certificate, or to cause the Transfer of an Ownership Interest in a
Class A-R Certificate to any other Person, if it has actual knowledge
that such Person is not a Permitted Transferee.
(4) Any attempted or purported Transfer of any Ownership Interest
in a Class A-R Certificate in violation of the provisions of this
Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Class A-R Certificate in violation of the
provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof retroactive
to the date of registration of Transfer of such Class A-R Certificate.
The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class A-R Certificate that is in fact not
permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any
other action with respect to such Holder under the provisions of this
Agreement so long as the Transfer was registered after receipt of the
related Transfer Affidavit and Transferor Certificate. The Trustee shall
be entitled but not obligated to recover from any Holder of a Class A-R
Certificate that was in fact not a Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Class A-R Certificate at
and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
I-1-5
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Class A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set
forth in this section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Sellers or
the Master Servicer to the effect that the elimination of such restrictions will
not cause any constituent REMIC of any REMIC formed hereunder to fail to qualify
as a REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class A-R
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Class A-R Certificate that is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
I-1-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc., Asset Backed Certificates, Series 2004-AB2
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R
Certificates, we certify that we have no knowledge that the Transferee is not
a Permitted Transferee. All capitalized terms used herein but not defined
herein shall have the meanings assigned to them in the Pooling and Servicing
Agreement dated as of December 1, 2004, among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York
Trust Company, N.A., as Co-Trustee, and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By: _______________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-AB2, Class [ ]
-----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-captioned
Certificates we certify that (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to, or
solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner that
would be deemed, or taken any other action which would result in, a violation of
Section 5 of the Act. All capitalized terms used herein but not defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By: _______________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-AB2, Class [ ]
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement to
effect such acquisition or (ii) if the Certificates have been the subject of an
ERISA-Qualifying Underwriting, we are an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we are
acquiring the Certificates for investment for our own account and not with a
view to any distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action which would result in a violation of Section 5 of the
Act, and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if
K-1
requested, we will at our expense provide an opinion of counsel satisfactory
to the addressees of this Certificate that such sale, transfer or other
disposition may be made pursuant to an exemption from the Act, (2) the
purchaser or transferee of such Certificate has executed and delivered to you
a certificate to substantially the same effect as this certificate, and (3)
the purchaser or transferee has otherwise complied with any conditions for
transfer set forth in the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferee
By: _______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates, Series 2004-AB2, Class [ ]
------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction that
is exempt from the registration requirements of the Act and any such laws, (b)
we have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement or using the assets of any such plan or arrangement
to effect such acquisition or (ii) if the Certificates have been the subject of
an ERISA-Qualifying Underwriting, we are an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and the purchase and holding
of such Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto,
L-1
nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.
All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferee
By: _______________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the
Buyer.
In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the
Buyer owned and/or invested on a discretionary basis either at least
$100,000,000 in securities or, if Buyer is a dealer, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in
securities (except for the excluded securities referred to below) as
of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies
the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of
L-3
risks underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are
part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S.
or any instrumentality thereof, (iv) bank deposit notes and
certificates of deposit, (v) loan participations, (vi) repurchase
agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i)
where the Buyer reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been
published. If clause (ii) in the preceding sentence applies, the
securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's
direction. However, such securities were not included if the Buyer is
a majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities
Exchange Act of 1934, as amended.
The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer may be in reliance
on Rule 144A.
L-4
Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice
is given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase.
In addition, if the Buyer is a bank or savings and loan is provided
above, the Buyer agrees that it will furnish to such parties updated
annual financial statements promptly after they become available.
-----------------------------------
Print Name of Buyer
By:________________________________
Name:
Title:
Date:______________________________
L-5
ANNEX 2 TO EXHIBIT L
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment
Company Act of 1940, as amended and (ii) as marked below, the Buyer
alone, or the Buyer's Family of Investment Companies, owned at least
$100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal
year. For purposes of determining the amount of securities owned by
the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's
Family of Investment Companies reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no
current information with respect to the cost of those securities has
been published. If clause (ii) in the preceding sentence applies, the
securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase
L-6
agreements, (vi) securities owned but subject to a repurchase agreement
and (vii) currency, interest rate and commodity swaps.
The Buyer is familiar with Rule 144A and under-stands that the parties
listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
Until the date of purchase of the Certificates, the undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the
Certificates will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.
-----------------------------------
Print Name of Buyer or Adviser
By:_______________________________
Name:
Title:
IF AN ADVISER:
-----------------------------------
Print Name of Buyer
Date:_____________________________
L-7
EXHIBIT M
FORM OF REQUEST FOR DOCUMENT RELEASE
Loan Information
----------------
Name of Mortgagor: ____________________________________
Master Servicer
Loan No.: _____________________________________
Trustee
-------
Name: ____________________________________
Address: ____________________________________
____________________________________
Trustee
Mortgage File No.: ____________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Trustee for the
Holders of Asset-Backed Certificates, Series 2004-AB2, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Document Release shall have the meanings given them in the Pooling
and Servicing Agreement dated as of December 1, 2004, among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New
York Trust Company, N.A., as Co-Trustee, and The Bank of New York, as Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal
sum of $________, made by __________________, payable to, or
endorsed to the order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no. __________
in the County Recorder's Office of the County of ________________,
State of _______________ in book/reel/docket _______________ of
official records at page/image _____________.
( ) Deed of Trust recorded on _____________ as instrument no. _________
in the County Recorder's Office of the County of ________________,
State of _______________ in book/reel/docket _______________ of
official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded
on _________________as instrument no. __________ in the County
Recorder's Office of the County of__________, State of ____________
in book/reel/docket
M-1
_______________ of official records at page/image _____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ----------------------------------------------
( ) ----------------------------------------------
( ) ----------------------------------------------
( ) ----------------------------------------------
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trust Fund, solely for the
purposes provided in the Pooling and Servicing Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions nor
shall the Master Servicer assert or seek to assert any claims or rights
of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Co-Trustee when the
need therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been
remitted to the Certificate Account and except as expressly provided in
the Pooling and Servicing Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the
Master Servicer shall at all times be earmarked for the account of the
Trust Fund, and the Master Servicer shall keep the Documents and any
proceeds separate and distinct from all other property in the Master
Servicer's possession, custody or control.
[Master Servicer]
By_____________________________________
Its____________________________________
Date: _________________, ____
M-2
EXHIBIT N
FORM OF REQUEST FOR FILE RELEASE
[Mortgage Loans Paid in Full, Repurchased or Replaced]
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2004-AB2
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ _____________________
DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[See appropriate documents delivered at closing.]
O-1
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_]
(this "Subsequent Transfer Agreement"), among CWABS, INC., a Delaware
corporation, as depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New
York corporation, in its capacity as a seller under the Pooling and Servicing
Agreement referred to below ("CHL"), PARK MONACO INC., a Delaware corporation,
in its capacity as a seller under the Pooling and Servicing Agreement ("Park
Monaco" and, together with CHL, the "Sellers"), and The Bank of New York, a New
York banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Monaco, the Trustee and
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York Trust Company, N.A., as Co-Trustee, have entered in the Pooling and
Servicing Agreement, dated as of December 1, 2004 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2004-AB2 (capitalized terms not otherwise defined herein are used as defined in
the Pooling and Servicing Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer Agreement
in accordance with the terms and conditions of the Pooling and Servicing
Agreement;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this
Subsequent Transfer Agreement shall be ________ __, 200[_].
(b) The "Subsequent Transfer Date Purchase Amount" with respect
to this Subsequent Transfer Agreement shall be $_______________.
(c) The Subsequent Mortgage Loans conveyed on the Subsequent
Transfer Date shall be subject to the terms and conditions of the Pooling and
Servicing Agreement. by the Sellers as follows.
(d) Annex A hereto set forth a list of the Mortgage Loans which
are Delay Delivery Mortgage Loans.
(e) In case any provision of this Subsequent Transfer Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
(f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
P-1
(g) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of New
York.
(h) The Subsequent Transfer Agreement may be executed in one or
more counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By: __________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By: __________________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:___________________________________
Name:
Title:
P-3
Annex I
Mortgage Loans for which All or a Portion of a Related Mortgage File is not
Delivered to the Trustee on or prior to the Subsequent Transfer Date
P-4
EXHIBIT Q
FORM OF CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-3-1
EXHIBIT R
FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT
[see document delivered at closing]
R-1
EXHIBIT S
[Reserved]
S-1
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2004-AB2
[Date]
Via Facsimile
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated
as of December 1, 2004, (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
The Bank of New York Trust Company, N.A., as Co-Trustee, and The Bank of New
York, as Trustee. Capitalized terms used herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during
the related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note
with respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and deposited
in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule
for which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver
would maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law; and
4. We certify that all amounts due in connection with the waiver
of a Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
-------------------------------------------------------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
-------------------------------------------------------------------------------
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T-3
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
S-I-1
SCHEDULE II
COLLATERAL SCHEDULE
-------------------------------------------------------------------------------------------------
Characteristic Applicable Section
-------------------------------------------------------------------------------------------------
Single-Family Detached Dwellings 2.03(b)(32) 68.37%
-------------------------------------------------------------------------------------------------
Two- to Four-Family Dwellings 2.03(b)(32) 4.00%
-------------------------------------------------------------------------------------------------
Low-Rise Condominium Units 2.03(b)(32) 9.15%
-------------------------------------------------------------------------------------------------
High-Rise Condominium Units 2.03(b)(32) 0.34%
-------------------------------------------------------------------------------------------------
Manufactured Housing 2.03(b)(32) 0.05%
-------------------------------------------------------------------------------------------------
PUDs 2.03(b)(32) 18.08%
-------------------------------------------------------------------------------------------------
Earliest Origination Date 2.03(b)(33) May 4, 2004
-------------------------------------------------------------------------------------------------
Prepayment Penalty 2.03(b)(35) 78.81%
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Investor Properties 2.03(b)(36) 1.88%
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Primary Residences 2.03(b)(36) 97.23%
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Lowest Current Mortgage Rate 2.03(b)(48) 3.875%
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Highest Current Mortgage Rate 2.03(b)(48) 11.500%
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Weighted Average Current Mortgage Rate 2.03(b)(48) 6.620%
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Lowest Gross Margin 2.03(b)(51) 2.000%
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Highest Gross Margin 2.03(b)(51) 11.130%
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Weighted Average Gross Margin 2.03(b)(51) 6.287%
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Date on or before which each Initial Mortgage Loan has 2.03(b)(52) December 1, 2004
a Due Date
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Adjustment Date Applicable Mortgage Loans (other Two-Year Three-Year
Section than Two-Year and Hybrid Hybrid
Three-Year Hybrid Mortgage Mortgage
Mortgage Loans) Loans Loans
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Latest Next 2.03(b)(34) May 1, 2005 January 1, January 1,
Adjustment Date 2007 2008
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S-I-1
