Exhibit 4.1
EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2005
---------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2005-1
Table of Contents
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Page
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ARTICLE I. DEFINITIONS 13
Section 1.01 Defined Terms.............................................13
Section 1.02 Certain Interpretive Provisions...........................63
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES 64
Section 2.01 Conveyance of Mortgage Loans..............................64
Section 2.02 Acceptance by Trustee of the Mortgage Loans...............72
Section 2.03 Representations, Warranties and Covenants of the
Master Servicer and the Sellers...........................77
Section 2.04 Representations and Warranties of the Depositor...........98
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases............................100
Section 2.06 Authentication and Delivery of Certificates..............100
Section 2.07 Covenants of the Master Servicer.........................101
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 101
Section 3.01 Master Servicer to Service Mortgage Loans................101
Section 3.02 Subservicing; Enforcement of the Obligations of
Master Servicer..........................................103
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer, the Class AF-5B
Insurer and the Trustee in Respect of the Master
Servicer.................................................103
Section 3.04 Trustee to Act as Master Servicer........................104
Section 3.05 Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account; Pre-Funding Account;
Seller Shortfall Interest Requirement....................105
Section 3.06 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..........................................108
Section 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans.............................109
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account, Carryover Reserve Fund and the
Principal Reserve Fund...................................109
Section 3.09 [Reserved]...............................................112
Section 3.10 Maintenance of Hazard Insurance..........................112
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements...............................................113
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized Losses;
Repurchase of Certain Mortgage Loans.....................114
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files.......117
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee......................118
Section 3.15 Servicing Compensation...................................119
Section 3.16 Access to Certain Documentation..........................119
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Section 3.17 Annual Statement as to Compliance........................120
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements..........................120
Section 3.19 The Corridor Contracts...................................120
Section 3.20 Prepayment Charges.......................................121
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER 122
Section 4.01 Advances; Remittance Reports.............................122
Section 4.02 Reduction of Servicing Compensation in Connection
with Prepayment Interest Shortfalls......................124
Section 4.03 [Reserved]...............................................124
Section 4.04 Distributions............................................124
Section 4.05 Monthly Statements to Certificateholders.................146
Section 4.06 Class AF-5B Policy; Rights of the Class AF-5B Insurer....149
Section 4.07 Carryover Reserve Fund...................................152
Section 4.08 Credit Comeback Excess Account...........................154
ARTICLE V. THE CERTIFICATES 154
Section 5.01 The Certificates.........................................154
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.................................156
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates........160
Section 5.04 Persons Deemed Owners....................................160
Section 5.05 Access to List of Certificateholders' Names and
Addresses................................................161
Section 5.06 Book-Entry Certificates..................................161
Section 5.07 Notices to Depository....................................162
Section 5.08 Definitive Certificates..................................162
Section 5.09 Maintenance of Office or Agency..........................163
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS 163
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Sellers.................................163
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Sellers..................................163
Section 6.03 Limitation on Liability of the Depositor, the
Sellers, the Master Servicer, the NIM Insurer and
Others...................................................164
Section 6.04 Limitation on Resignation of Master Servicer.............164
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds...........165
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 165
Section 7.01 Events of Default........................................165
Section 7.02 Trustee to Act; Appointment of Successor.................167
Section 7.03 Notification to Certificateholders.......................168
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ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE 169
Section 8.01 Duties of Trustee........................................169
Section 8.02 Certain Matters Affecting the Trustee....................170
Section 8.03 Trustee Not Liable for Mortgage Loans....................171
Section 8.04 Trustee May Own Certificates.............................172
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.......172
Section 8.06 Eligibility Requirements for Trustee.....................172
Section 8.07 Resignation and Removal of Trustee.......................173
Section 8.08 Successor Trustee........................................173
Section 8.09 Merger or Consolidation of Trustee.......................174
Section 8.10 Appointment of Co-Trustee or Separate Trustee............174
Section 8.11 Tax Matters..............................................175
Section 8.12 Co-Trustee...............................................178
Section 8.13 Access to Records of the Trustee.........................181
Section 8.14 Suits for Enforcement....................................181
ARTICLE IX. TERMINATION 182
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans...........................................182
Section 9.02 Final Distribution on the Certificates...................183
Section 9.03 Additional Termination Requirements......................184
ARTICLE X. MISCELLANEOUS PROVISIONS 185
Section 10.01 Amendment................................................185
Section 10.02 Recordation of Agreement; Counterparts...................187
Section 10.03 Governing Law............................................187
Section 10.04 Intention of Parties.....................................187
Section 10.05 Notices..................................................188
Section 10.06 Severability of Provisions...............................189
Section 10.07 Assignment...............................................189
Section 10.08 Limitation on Rights of Certificateholders...............189
Section 10.09 Inspection and Audit Rights..............................190
Section 10.10 Certificates Nonassessable and Fully Paid................190
Section 10.11 Rights of NIM Insurer....................................191
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Exhibits
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EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class AF-1 Certificate
EXHIBIT A-2 Form of Class AF-2 Certificate
EXHIBIT A-3 Form of Class AF-3 Certificate
EXHIBIT A-4 Form of Class AF-4 Certificate
EXHIBIT A-5 Form of Class AF-5A Certificate
EXHIBIT A-6 Form of Class AF-5B Certificate
EXHIBIT A-7 Form of Class AF-6 Certificate
EXHIBIT A-8 Form of Class MF-1 Certificate
EXHIBIT A-9 Form of Class MF-2 Certificate
EXHIBIT A-10 Form of Class MF-3 Certificate
EXHIBIT A-11 Form of Class MF-4 Certificate
EXHIBIT A-12 Form of Class MF-5 Certificate
EXHIBIT A-13 Form of Class MF-6 Certificate
EXHIBIT A-14 Form of Class MF-7 Certificate
EXHIBIT A-15 Form of Class MF-8 Certificate
EXHIBIT A-16 Form of Class BF Certificate
EXHIBIT A-17 Form of Class 1-AV-1 Certificate
EXHIBIT A-18 Form of Class 1-AV-2 Certificate
EXHIBIT A-19 Form of Class 1-AV-3 Certificate
EXHIBIT A-20 Form of Class 2-AV-1 Certificate
EXHIBIT A-21 Form of Class 2-AV-2 Certificate
EXHIBIT A-22 Form of Class 3-AV-1 Certificate
EXHIBIT A-23 Form of Class 3-AV-2 Certificate
EXHIBIT A-24 Form of Class 3-AV-3 Certificate
EXHIBIT A-25 Form of Class MV-1 Certificate
EXHIBIT A-26 Form of Class MV-2 Certificate
EXHIBIT A-27 Form of Class MV-3 Certificate
EXHIBIT A-28 Form of Class MV-4 Certificate
EXHIBIT A-29 Form of Class MV-5 Certificate
EXHIBIT A-30 Form of Class MV-6 Certificate
EXHIBIT A-31 Form of Class MV-7 Certificate
EXHIBIT A-32 Form of Class MV-8 Certificate
EXHIBIT A-33 Form of Class BV Certificate
EXHIBIT B Forms of Class P Certificates
EXHIBIT B-1 Form of Class PF Certificate
EXHIBIT B-2 Form of Class PV Certificate
EXHIBIT C Forms of Class C Certificates
EXHIBIT C-1 Form of Class CF Certificate
EXHIBIT C-2 Form of Class CV Certificate
EXHIBIT D Form of Class A-R Certificate
EXHIBIT E Form of Tax Matters Person Certificate (Class A-R)
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Initial Mortgage Loans
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EXHIBIT F-2 Mortgage Loans for which All or a Portion of a
Related Mortgage File is not Delivered to the
Trustee on or prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee (Initial
Mortgage Loans)
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee (Subsequent
Mortgage Loans)
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I-1 Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1 Form of Transferor Certificate for Class A-R
Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private
Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Form of Request for Document Release
EXHIBIT N Form of Request for File Release
EXHIBIT O Copy of Depository Agreement
EXHIBIT P Form of Subsequent Transfer Agreement
EXHIBIT Q Form of Corridor Contracts
EXHIBIT Q-1 Form of Class AF-1 Corridor Contract
EXHIBIT Q-2 Form of Class 1-AV Corridor Contract
EXHIBIT Q-3 Form of Class 2-AV Corridor Contract
EXHIBIT Q-4 Form of Class 3-AV Corridor Contract
EXHIBIT Q-5 Form of Adjustable Rate Subordinate Corridor Contract
EXHIBIT R Form of Class AF-5B Policy
EXHIBIT S-1 Form of Corridor Contract Assignment Agreement
EXHIBIT S-2 Form of Corridor Contract Administration Agreement
EXHIBIT T Officer's Certificate with respect to Prepayments
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge
Summary
SCHEDULE II Collateral Schedule
v
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2005, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller ("CHL" or a
"Seller"), PARK MONACO INC. , a Delaware corporation, as a seller ("Park
Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited liability company
("Park Sienna" or a "Seller", and together with CHL and Park Monaco, the
"Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership,
as master servicer (the "Master Servicer"), THE BANK OF NEW YORK, a New York
banking corporation, as trustee (the "Trustee"), and THE BANK OF NEW YORK
TRUST COMPANY, N.A., a national banking association, as co-trustee (the
"Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund
(excluding the Corridor Contracts, the Credit Comeback Excess Account, the
Carryover Reserve Fund and the assets held in the Pre-Funding Account) for
federal income tax purposes will consist of four REMICs ("REMIC 1", "REMIC 2",
"REMIC 3" and the "Master REMIC"). Each Certificate, other than the Class A-R
Certificate, will represent ownership of one or more regular interests in the
Master REMIC for purposes of the REMIC Provisions. The Class A-R Certificate
represents ownership of the sole class of residual interest in REMIC 1, REMIC
2, REMIC 3 and the Master REMIC. The Master REMIC will hold as assets the
several classes of uncertificated REMIC 3 Interests. Each REMIC 3 Interest
(other than the R-3-R Interest) is hereby designated as a regular interest in
REMIC 3. REMIC 3 will hold as assets the several classes of REMIC 2 Interests
(other than the R-2-R Interest). Each REMIC 2 Interest (other than the R-2-R
Interest) is hereby designated as a regular interest in REMIC 2. REMIC 2 will
hold as assets the several classes of REMIC 1 Interests (other than the R-1-R
Interest). Each REMIC 1 Interest (other than the R-1-R Interest) is hereby
designated as a regular interest in REMIC 1. REMIC 1 will hold as assets all
property of the Trust Fund (excluding the Corridor Contracts, the Credit
Comeback Excess Account, the Carryover Reserve Fund and the assets held in the
Pre-Funding Account). The latest possible maturity date of all REMIC regular
interests created in this Agreement shall be the Latest Possible Maturity
Date.
REMIC 1:
The REMIC 1 Interests will have the principal balances,
pass-through rates and Corresponding Loan Groups as set forth below.
Initial Pass-Through Corresponding
REMIC 1 Interests Balance Rate Loan Group(s)
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R-1-1-I....................... (1) (5) 1
R-1-1-S....................... (2) (6) 1
R-1-2-I....................... (1) (5) 2
R-1-2-S....................... (2) (6) 2
R-1-3-I....................... (1) (5) 3
R-1-3-S....................... (2) (6) 3
R-1-4-I....................... (1) (5) 4
R-1-4-S....................... (2) (6) 4
R-1-XF........................ (3) (7) 1
R-1-XV........................ (3) (7) 1, 2 and 3
R-1-R......................... (4) (4) N/A
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(1) The principal balance of each REMIC 1 Interest having an "I" designation
is the principal balance of all the Initial Mortgage Loans in the
Corresponding Loan Group.
(2) The principal balance of each REMIC 1 Interest having an "S" designation
is the principal balance of all the Subsequent Mortgage Loans in the
Corresponding Loan Group.
(3) This REMIC 1 Interest pays no principal.
(4) The R-1-R Interest is the sole class of residual interest in REMIC 2. It
has no principal balance and pays no principal or interest.
(5) The interest rate for this REMIC 1 Interest with respect to any
Distribution Date (and the related Accrual Period) through the
Distribution Date in June 2005 is a per annum rate equal to the weighted
average of the Adjusted Net Mortgage Rates of the Initial Mortgage Loans
in the Corresponding Loan Group. For any Distribution Date (and the
related Accrual Period) following the Distribution Date in June 2005,
the interest rate for this REMIC 1 Interest is a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates of all the
Mortgage Loans in the Corresponding Loan Group.
(6) The interest rate for this REMIC 1 Interest with respect to any
Distribution Date (and the related Accrual Period) through the
Distribution Date in June 2005 is a per annum rate equal to 0.00%. For
any Distribution Date (and the related Accrual Period) following the
Distribution Date in June 2005, the interest rate for this REMIC 1
Interest is a per annum rate equal to the weighted average of the
Adjusted Net Mortgage Rates of all the Mortgage Loans in the
Corresponding Loan Group.
(7) For any Distribution Date (and the related Accrual Period) through the
Distribution Date in June 2005, this REMIC 1 Interest is entitled to all
the interest payable with respect to the Subsequent Mortgage Loans in
the Corresponding Loan Group (or Groups). For any
2
Distribution Date (and the related Accrual Period) following the
Distribution Date in June 2005, the interest rate for this REMIC 1
Interest is a per annum rate equal to 0.00%.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount of the Corresponding Loan Groups shall be distributed with
respect to the REMIC 1 Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each REMIC 1
Interest at the rate, or according to the formulas, described above.
(2) Principal For any Distribution Date (and the related Accrual Period)
through the Distribution Date in June 2005, the Principal Distribution Amount
with respect to the Initial Mortgage Loans in a Loan Group shall be allocated
to its corresponding "I" REMIC 1 Interests, and the Principal Distribution
Amount with respect to the Subsequent Mortgage Loans in a Loan Group shall be
allocated to its corresponding "S" REMIC 1 Interests. For any Distribution
Date (and the related Accrual Period) after the Distribution Date in June
2005, the Principal Distribution Amount with respect to all Mortgage Loans in
a Loan Group shall be allocated in proportion to its corresponding REMIC 1
Interests.
REMIC 2:
The REMIC 2 Interests will have the principal balances,
pass-through rates and Corresponding Loan Groups as set forth below. For the
purpose of the descriptions that follow, (1) Loan Group 1 and the REMIC 2
Interests that correspond to Loan Group 1 are referred to, from time to time,
as the "Fixed Loan Group" and the "Fixed Interests," respectively, and (2)
Loan Group 2, Loan Group 3 and Loan Group 4 and the REMIC 2 Interests
corresponding to Loan Group 2, Loan Group 3 and Loan Group 4, are referrred
to, from time to time, as the "Variable Loan Groups" and the "Variable
Interests," respectively.
Pass-Through Corresponding
REMIC 2 Interests Initial Balance Rate Loan Group
---------------------------------------- -------------------- -------------------- --------------------
R-2-F ........................ (1) (2) 1
R-2-A-2 (0.9% of SCB Group 2). (3) (4) 2
R-2-B-2 (0.1% of SCB Group 2). (3) (4) 2
R-2-C-2 (0.9% of ASCB Group 2) (3) (4) 2
R-2-D-2 (0.1% of ASCB Group 2) (3) (4) 2
R-2-E-2 (Excess of Group 2)... (3) (4) 2
R-2-A-3 (0.9% of SCB Group 3). (3) (5) 3
R-2-B-3 (0.1% of SCB Group 3). (3) (5) 3
R-2-C-3 (0.9% of ASCB Group 3) (3) (5) 3
R-2-D-3 (0.1% of ASCB Group 3) (3) (5) 3
R-2-E-3 (Excess of Group 3)... (3) (5) 3
R-2-A-4 (0.9% of SCB Group 4). (3) (6) 4
R-2-B-4 (0.1% of SCB Group 4). (3) (6) 4
R-2-C-4 (0.9% of ASCB Group 4) (3) (6) 4
R-2-D-4 (0.1% of ASCB Group 4) (3) (6) 4
R-2-E-4 (Excess of Group 4).. (3) (6) 4
3
Pass-Through Corresponding
REMIC 2 Interests Initial Balance Rate Loan Group
---------------------------------------- -------------------- -------------------- --------------------
R-2-PF........................ $100 (7) N/A
R-2-PV........................ $100 (8) N/A
R-2-R......................... (9) (9) N/A
R-2-XF........................ (10) (11) N/A
R-2-XV........................ (10) (12) N/A
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(1) The Class F Interest will have a principal balance equal to the
principal balance of the R-1-1-I and R-1-1-S Interests.
(2) A rate equal to the weighted average of the pass-through rates of the
R-1-1-I and R-1-1-S Interests (the "Loan Group 1 Net Rate Cap").
(3) With respect to the Variable Interests, each REMIC 2 Interest having an
"R-2-A-" designation (each, an "R-2-A Interest") will have a principal
balance initially equal to 0.9% of the Subordinate Component Balance
("SCB") of its Corresponding Loan Group. Each REMIC 1 Interest having an
"R-2-B-" designation (each, an "R-2-B Interest") will have a principal
balance initially equal to 0.1% of the SCB of its Corresponding Loan
Group. Each REMIC 2 Interest having an "R-2-C-" designation (each, an
"R-2-C Interest") will have a principal balance initially equal to 0.9%
of the Adjusted Subordinated Component Balance ("ASCB") of its
Corresponding Loan Group. Each REMIC 2 Interest having an "R-2-D-"
designation (each, an "R-2-D Interest") will have a principal balance
initially equal to 0.1% of the ASCB of its Corresponding Loan Group. The
initial principal balance of each REMIC 2 Interest having an "R-2-E-"
designation (each, an "R-2-E Interest") will equal the excess of its
Corresponding Loan Group over the initial aggregate principal balances
of the X-0-X, X-0-X, X-0-X and R-2-D Interests corresponding to such
Loan Group.
(4) A rate equal to the weighted average of the pass-through rates of the
R-1-2-I and R-1-2-S Interests (the "Loan Group 2 Net Rate Cap").
(5) A rate equal to the weighted average of the pass-through rates of the
R-1-3-I and R-1-3-S Interests (the "Loan Group 3 Net Rate Cap").
(6) A rate equal to the weighted average of the pass-through rates of the
R-1-4-I and R-1-4-S Interests (the "Loan Group 4 Net Rate Cap").
(7) The R-2-PF Interest is entitled to all Prepayment Charges collected with
respect to the Mortgage Loans in Group 1. It pays no interest.
(8) The R-2-PV Interest is entitled to all Prepayment Charges collected with
respect to the Mortgage Loans in Loan Group 2, Loan Group 3 and Loan
Group 4. It pays no interest.
(9) The R-2-R Interest is the sole class of residual interest in REMIC 2. It
has no principal balance and pays no principal or interest.
(10) This REMIC 2 Interest pays no principal.
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(11) This REMIC 2 Interest is entitled to all amounts payable with respect to
the R-1-XF Interest.
(12) This REMIC 2 Interest is entitiled to all amounts payable with respect
to the R-1-XV Interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amounts payable with respect to the REMIC 1 Interests shall be
payable with respect to the REMIC 2 Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each REMIC 2
Interest at the rate, or according to the formulas, described above.
(2) Principal. All Principal Distribution Amounts arising with respect
to Loan Group 1 shall be allocated to the Fixed Interests.
(3) Principal if no Cross-Over Situation Exists. If no Cross-Over
Situation exists with respect to any Variable Interest, then the Principal
Distribution Amounts payable with respect to each Variable Loan Group will be
payable: first to cause the Variable Loan Group's corresponding X-0-X, X-0-X,
X-0-X and R-2-D Interests to equal, respectively, 0.9% of the SCB, 0.1% of the
SCB, 0.9% of the ASCB and 0.1% of the ASCB, of the Corresponding Loan Group,
and then to the corresponding R-2-E Interest.
(4) Principal if a Cross-Over Situation Exists. If a Cross-Over
Situation exists with respect to the R-2-A and R-2-B Interests then:
(a) if the Calculation Rate in respect of the outstanding R-2-A and
R-2-B Interests is less than the Adjustable Rate Subordinate Net Rate Cap,
Principal Relocation Payments will be made proportionately to the outstanding
R-2-A Interests prior to any other principal distributions from each such
Variable Loan Group; and
(b) if the Calculation Rate in respect of the outstanding R-2-A and
R-2-B Interests is greater than the Adjustable Rate Subordinate Net Rate Cap,
Principal Relocation Payments will be made proportionately to the outstanding
R-2-B Interests prior to any other principal distributions from each such
Variable Loan Group.
In each case, Principal Relocation Payments will be made so as to cause the
Calculation Rate in respect of the outstanding R-2-A and R-2-B Interests to
equal the Adjustable Rate Subordinate Net Rate Cap. With respect to each
Variable Loan Group, if (and to the extent that) the sum of (a) the principal
payments comprising the Principal Distribution Amount payable for the related
Distribution Date and (b) the Realized Losses, are insufficient to make the
necessary reductions of principal on the R-2-A and R-2-B Interests, then
interest will be added to the Variable Loan Group's R-2-E Interest.
(c) The outstanding aggregate R-2-A and R-2-B Interests for the Variable Loan
Groups will not be reduced below 1 percent of the excess of (i) the aggregate
outstanding Stated Principal Balances of all Variable Loan Groups as of the
end of any Due Period over (ii) the Senior
5
Certificates related to the Variable Loan Groups as of the related
Distribution Date (after taking into account distributions of principal on
such Distribution Date).
If (and to the extent that) the limitation in paragraph (c) prevents the
distribution of principal to the R-2-A and R-2-B Interests of a Variable Loan
Group, and if the Variable Loan Group's corresponding R-2-E Interest has
already been reduced to zero, then the excess principal from that Variable
Loan Group will be paid to the R-2-E Interest of the other Variable Loan
Groups, the aggregate R-2-A and R-2-B Interests of which are less than one
percent of the Subordinate Component Balance. If the Variable Loan Group of
the corresponding R-2-E Interest that receives such payment has a Group Net
Rate Cap below the Group Net Rate Cap of the Variable Loan Group making the
payment, then the payment will be treated by REMIC 2 as a Realized Loss.
Conversely, if the Variable Loan Group of the R-2-E Interest that receives
such payment has a Group Net Rate Cap above the Group Net Rate Cap of the
Variable Loan Group making the payment, then the payment will be treated by
REMIC 2 as a reimbursement for prior Realized Losses.
If a Cross-Over Situation exists with respect to the R-2-C and R-2-D Interests
then:
(d) if the Calculation Rate in respect of the outstanding R-2-C and
R-2-D Interests is less than the Modified Adjustable Subordinate Net Rate Cap,
Principal Relocation Payments will be made proportionately to the R-2-C
Interests prior to any other principal distributions from each such Variable
Loan Group; and
(e) if the Calculation Rate in respect of the outstanding R-2-C and
R-2-D Interests is greater than the Modified Adjustable Subordinate Net Rate
Cap, Principal Relocation Payments will be made proportionately to the
outstanding R-2-D Interests prior to any other principal distributions from
each such Variable Loan Group.
In each case, Principal Relocation Payments will be made so as to cause the
Calculation Rate in respect of the outstanding R-2-C and R-2-D Interests to
equal the Modified Adjustable Subordinate Net Rate Cap. With respect to each
Variable Loan Group, if (and to the extent that) the sum of (a) the principal
payments comprising the Principal Distribution Amount payable for the related
Distribution Date and (b) the Realized Losses, are insufficient to make the
necessary reductions of principal on the R-2-C and R-2-D Interests, then
interest will be added to the Variable Loan Group's R-2-E Interest.
(f) The outstanding aggregate R-2-C and R-2-D Interests for all Variable
Loan Groups will not be reduced below 1 percent of the excess of (i) the
aggregate outstanding Stated Principal Balances of all Variable Loan Groups as
of the end of any Due Period over (ii) the Senior Certificates related to the
Variable Loan Groups as of the related Distribution Date (after taking into
account distributions of principal on such Distribution Date).
If (and to the extent that) the limitation in paragraph (f) prevents the
distribution of principal to the R-2-C and R-2-D Interests of a Variable Loan
Group, and if the Variable Loan Group's R-2-E Interest has already been
reduced to zero, then the excess principal from that Variable Loan Group will
be paid to the R-2-E Interests of the other Variable Loan Groups, the
aggregate R-2-C and R-2-D Interests of which are less than one percent of the
Adjusted Subordinate
6
Component Balance. If the Variable Loan Group of the R-2-E Interest that
receives such payment has a Group Net Rate Cap below the Group Net Rate Cap of
the Variable Loan Group making the payment, then the payment will be treated
by REMIC 2 as a Realized Loss. Conversely, if the Variable Loan Group of the
R-2- E Interest that receives such payment has a Group Net Rate Cap above the
Group Net Rate Cap of the Variable Loan Group making the payment, then the
payment will be treated by REMIC 2 as a reimbursement for prior Realized
Losses.
7
REMIC 3:
The REMIC 3 Regular Interests will have the principal balances, pass-through
rates and Corresponding Classes of Certificates as set forth in the following
table:
--------------------------------------------------------------------------------------------------------------------------
Initial Principal Pass-Through Corresponding Class
REMIC 3 Interests Balance Rate of Certificates
-------------------------- ------------------------- -------------------- ---------------------------
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-1...................... (1) (2) AF-1
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-2...................... (1) (2) AF-2
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-3...................... (1) (2) AF-3
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-4...................... (1) (2) AF-4
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-5A..................... (1) (2) AF-5
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-5B..................... (1) (2) AF-5
--------------------------------------------------------------------------------------------------------------------------
R-3-AF-6...................... (1) (2) AF-6
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-1...................... (1) (2) MF-1
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-2...................... (1) (2) MF-2
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-3...................... (1) (2) MF-3
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-4...................... (1) (2) MF-4
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-5...................... (1) (2) MF-5
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-6...................... (1) (2) MF-6
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-7...................... (1) (2) MF-7
--------------------------------------------------------------------------------------------------------------------------
R-3-MF-8...................... (1) (2) MF-8
--------------------------------------------------------------------------------------------------------------------------
R-3-BF........................ (1) (2) BF
--------------------------------------------------------------------------------------------------------------------------
R-3-PF........................ $100 (3) PF
--------------------------------------------------------------------------------------------------------------------------
R-3-F-Accrual................. $0 (2) N/A
--------------------------------------------------------------------------------------------------------------------------
R-3-1-AV-1.................... (4) (5) 1-AV-1
--------------------------------------------------------------------------------------------------------------------------
R-3-1-AV-2.................... (4) (5) 1-AV-2
--------------------------------------------------------------------------------------------------------------------------
R-3-1-AV-3.................... (4) (5) 1-AV-3
--------------------------------------------------------------------------------------------------------------------------
R-3-2-AV-1.................... (4) (6) 2-AV-1
--------------------------------------------------------------------------------------------------------------------------
R-3-2-AV-2.................... (4) (6) 2-AV-2
--------------------------------------------------------------------------------------------------------------------------
R-3-3-AV-1.................... (4) (7) 3-AV-1
--------------------------------------------------------------------------------------------------------------------------
R-3-3-AV-2.................... (4) (7) 3-AV-2
--------------------------------------------------------------------------------------------------------------------------
R-3-3-AV-3.................... (4) (7) 3-AV-3
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-1...................... (4) (8) MV-1
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-2...................... (4) (8) MV-2
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-3...................... (4) (8) MV-3
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-4...................... (4) (8) MV-4
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-5...................... (4) (8) MV-5
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-6...................... (4) (8) MV-6
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-7...................... (4) (8) MV-7
--------------------------------------------------------------------------------------------------------------------------
R-3-MV-8...................... (4) (8) MV-8
--------------------------------------------------------------------------------------------------------------------------
R-3-BV........................ (4) (8) BV
--------------------------------------------------------------------------------------------------------------------------
R-3-$100...................... $100 (9) A-R
--------------------------------------------------------------------------------------------------------------------------
R-3-V-Accrual................. $0 (10) N/A
--------------------------------------------------------------------------------------------------------------------------
R-3-PV........................ $100 (11) PV
--------------------------------------------------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------------------------------------------------
Initial Principal Pass-Through Corresponding Class
REMIC 3 Interests Balance Rate of Certificates
-------------------------- ------------------------- -------------------- ---------------------------
--------------------------------------------------------------------------------------------------------------------------
R-3-R......................... (12) (12) N/A
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
R-3-XF........................ (13) (14) CF
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
R-3-XV........................ (13) (15) CV
--------------------------------------------------------------------------------------------------------------------------
(1) This REMIC 3 Interest has a principal balance that is initially equal to
50% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses, Subsequent
Recoveries and interest accruing on the R-3-F-Accrual Interest will be
allocated to this class to maintain its size relative to its Corresponding
Certificate Class (that is, 50%) with any excess payments of principal,
Realized Losses and Subsequent Recoveries being allocated to the R-3-F-Accrual
Interest in such manner as to cause the principal balance of the R-3-F-Accrual
Interest to have a principal balance equal to (a) 50% of the Loan Group 1
principal balance plus (b) 50% of the Fixed Rate Overcollateralized Amount for
such Distribution Date.
(2) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the Loan Group 1 Net Rate Cap.
(3) The R-3-PF Interest is entitled to all amounts collected with respect to
the R-2-PF Interest. It pays no interest.
(4 This REMIC 3 Interest has a principal balance that is initially equal to
50% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses, Subsequent
Recoveries and interest accruing on the R-3-V-Accrual Interest will be
allocated to this class to maintain its size relative to its Corresponding
Certificate Class (that is, 50%) with any excess payments of principal,
Realized Losses and Subsequent Recoveries being allocated to the R-3-V-Accrual
Interest in such manner as to cause the principal balance of the R-3-V-Accrual
Interest to have a principal balance equal to (a) 50% of the Loan Group 2,
Loan Group 3 and Loan Group 4 principal balances plus (b) 50% of the
Adjustable Rate Overcollateralized Amount for such Distribution Date.
(5) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the Loan Group 2 Net Rate Cap.
(6) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the Loan Group 3 Net Rate Cap.
(7) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the Loan Group 4 Net Rate Cap.
(8) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the Modified Adjustable Subordinate Net Rate Cap. For federal income tax
purposes the Modified Adjustable Subordinate Net Rate Cap will equal the
Calculation Rate with respect to the R-2-C and R-2-D Interests.
9
(9) This REMIC 3 Interest pays no interest.
(10) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this REMIC 3 Interest is a per annum rate equal to
the weighted average of (i) the Loan Group 2 Net Rate Cap, (ii) the Loan Group
3 Net Rate Cap and (iii) the Loan Group 4 Net Rate Cap (the "Loan Group 2/3/4
Net Rate Cap").
(11) The R-3-PV Interest is entitled to all amounts collected with respect to
the R-2-PV Interest. It pays no interest.
(12) The R-3-R Interest is the sole class of residual interest in REMIC 3. It
has no principal balance and pays no principal or interest.
(13) This REMIC 3 Interest pays no principal.
(14) This REMIC 3 Interest is entitled to all amounts payable with respect to
the R-2-XF Interest.
(15) This REMIC 3 Interest is entitled to all amounts payable with respect to
the R-2-XV Interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the REMIC 2 Interests shall be
payable with respect to the REMIC 3 Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each REMIC 3
Interest at the rate, or according to the formulas, described above.
(2) Principal. Principal Distribution Amounts shall be allocated among
the REMIC 3 Interests in the same manner that such items are allocated among
their corresponding Certificate Classes.
10
The following table specifies the class designation, interest
rate, and principal amount for each class of Master REMIC Interest:
Original Certificate
Class Principal Balance Pass-Through Rate
----------------------------------- ---------------------------- -------------------------
Class AF-1....................... $198,467,000 (1)
Class AF-2....................... $22,435,000 (1)
Class AF-3....................... $130,575,000 (1)
Class AF-4....................... $35,623,000 (1)
Class AF-5A...................... $39,500,000 (1)
Class AF-5B...................... $30,005,000 (1)
Class AF-6....................... $60,000,000 (1)
Class MF-1....................... $16,800,000 (1)
Class MF-2....................... $14,700,000 (1)
Class MF-3....................... $9,000,000 (1)
Class MF-4....................... $9,000,000 (1)
Class MF-5....................... $7,500,000 (1)
Class MF-6....................... $7,200,000 (1)
Class MF-7....................... $6,000,000 (1)
Class MF-8....................... $6,000,000 (1)
Class BF......................... $6,000,000 (1)
Class 1-AV-1..................... $451,953,000 (1)
Class 1-AV-2..................... $229,761,000 (1)
Class 1-AV-3..................... $24,946,000 (1)
Class 2-AV-1..................... $560,882,000 (1)
Class 2-AV-2..................... $140,220,000 (1)
Class 3-AV-1..................... $287,922,000 (1)
Class 3-AV-2..................... $160,132,000 (1)
Class 3-AV-3..................... $49,784,000 (1)
Class MV-1....................... $124,800,000 (1)
Class MV-2....................... $82,800,000 (1)
Class MV-3....................... $50,400,000 (1)
Class MV-4....................... $46,800,000 (1)
Class MV-5....................... $43,200,000 (1)
Class MV-6....................... $40,800,000 (1)
Class MV-7....................... $37,200,000 (1)
Class MV-8....................... $30,000,000 (1)
Class BV......................... $30,000,000 (1)
Class CF......................... (2) (3)
Class CV......................... (2) (4)
Class PF......................... $100 (5)
Class PV......................... $100 (5)
Class A-R........................ $100 (6)
(1) The Certificates will accrue interest at the related Pass-Through Rates
identified in this Agreement. For federal income tax purposes, the pass
through rate in respect of (i) each of the Class AF (other than the
Class AF-5B Certificates), Class MF and Class BF Certificates will be
subject to a cap equal to the Loan
11
Group 1 Net Rate Cap, (ii) the Class AF-5B Certificates will be subject
to a cap equal to the Loan Group 1 Net Rate Cap minus the Class AF-5B
Policy Premium Rate), (iii) the Class 1-AV-1 Certificates will be
subject to a cap equal to the Loan Group 2 Net Rate Cap, (iv) the Class
2-AV Certificates will be subject to a cap equal to the Loan Group 3 Net
Rate Cap, (v) the Class 3-AV Certificates will be subject to a cap equal
to the Loan Group 4 Net Rate Cap and (vi) the Class MV Certificates and
the Class BV Certificates will be subject to a cap equal to the Modified
Adjustable Subordinate Net Rate Cap. Any entitlement of any class of
Certificates to Net Rate Carryover will be treated as paid by the Master
REMIC to the Class CF Certificates, in the case of the Class AF
Certificates, the Class MF Certificates and the Class BF Certificates,
and to the Class CV Certificates, in the case of the Class AV
Certificates, the Class MV Certificates and the Class BV 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 CF and Class CV Certificates will have Certificate Principal
Balances equal to the Fixed Rate Overcollateralized Amount and
Adjustable Rate Overcollateralized Amount, respectively.
(3) For each Interest Accrual Period the Class CF Certificates are entitled
to an amount (the "Class CF Distributable Amount") equal to the sum of
(a) the interest payable on the R-3-XF Interests and (b) a specified
portion of the interest on the REMIC 1 Group 1 "I" and "S" Interests
equal to the excess of the Loan Group 1 Net Rate Cap over the product of
two and the weighted average interest rate of the REMIC 3 Regular
Interests having an "F" designated in the column entitled "REMIC 3
Interests" (other than the R-3-PF and R-3-XF Interests) with each such
Class other than the R-3-F-Accrual Interest, subject to a cap equal to
the Pass-Through Rate of the Corresponding Master REMIC Class and the
R-3-F-Accrual Interest subject to a cap of 0.00%. The Pass-Through Rate
of the Class CF Certificates shall be a rate sufficient to entitle it to
all interest accrued on the REMIC 1 Group 1 "I" and "S" Interests less
the interest accrued on the other F Class interests issued by the Master
REMIC. The Class CF Distributable Amount for any Distribution Date is
payable from current interest on the Group 1 Mortgage Loans.
(4) For each Interest Accrual Period the Class CV Certificates are entitled
to an amount (the "Class CV Distributable Amount") equal to the sum of
(a) the interest payable on the R-3-XV Interests and (b) a specified
portion of the interest on the REMIC 1 Group 2, Group 3 and Group 4 "I"
and "S" Interests equal to the excess of the Loan Group 2/3/4 Net Rate
Cap over the product of two and the weighted average interest rate of
the REMIC 3 Regular Interests having an "V" designated in the column
entitled "REMIC 3 Interests" (other than the R-3-PV and R-3-XV
Interests) with each such Class other than the R-3-V-Accrual Interest,
subject to a cap equal to the Pass-Through Rate of the Corresponding
Master REMIC Class and the R-3-V-Accrual Interest subject to a cap of
0.00%. The Pass-Through Rate of the Class CV Certificates shall be a
rate sufficient to entitle it to all interest accrued on the REMIC 1
Group 2, Group 3 and Group 4 "I" and "S" Interests less the interest
accrued on the other V Class interests issued by the Master REMIC. The
Class CV Distributable Amount for any Distribution Date is payable from
current interest on the Group 2, Group 3 and Group 4 Mortgage Loans.
(5) For each Distribution Date the Class PF and Class PV Certificates are
entitled to all Prepayment Charges distributed with respect to the
R-3-PF and R-3-PV Interests, respectively.
(6) 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 Sections 3.08(a) hereunder, (that is, its entitlement to $100).
12
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 Adjustable Rate 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
each Class of Fixed Rate Certificates and the Class C Certificates, the
calendar month preceding the month in which such Distribution Date occurs. All
calculations of interest on the Adjustable Rate 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 Fixed Rate
Certificates and Class C Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months.
Adjustable Rate Certificates: The Class AF-1 Certificates, the
Class AV Certificates and the Adjustable Rate Subordinate Certificates.
Adjustable Rate Cumulative Loss Trigger Event: With respect to a
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Cumulative Loss Trigger Event occurs if (x) the aggregate amount of
Realized Losses on the Mortgage Loans in Loan Group 2, Loan Group 3 and Loan
Group 4 from the Cut-off Date for each such Mortgage Loan to (and including)
the last day of the related Due Period (reduced by the aggregate amount of any
Subsequent Recoveries related to the Mortgage Loans in Loan Group 2, Loan
Group 3 and Loan Group 4 received through the last day of that Due Period)
exceeds (y) the applicable percentage, for such Distribution Date, of the sum
of the aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans
in Loan Group 2, Loan Group 3 and Loan Group 4, the Group 2 Pre-Funded Amount,
the Group 3 Pre-Funded Amount and the Group 4 Pre-Funded Amount, as set forth
below:
13
Distribution Date Percentage
----------------- ----------
April 2008 -- March 2009......... 3.25% with respect to April
2008, plus an additional
1/12th of 1.50% for each
month thereafter through
March 2009
April 2009 -- March 2010......... 4.75% with respect to April
2009, plus an additional
1/12th of 1.50% for each
month thereafter through
March 2010
April 2010 -- March 2011......... 6.25% with respect to April
2010, plus an additional
1/12th of 0.50% or each month
thereafter through March 2011
April 2011 and thereafter........ 6.75%
Adjustable Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency
Rate for Outstanding Mortgage Loans in Loan Group 2, Loan Group 3 and Loan
Group 4 equals or exceeds the product of 30.75% and the Adjustable Rate Senior
Enhancement Percentage for such Distribution Date.
Adjustable Rate Loan Group Excess Cashflow: With respect to any
Distribution Date the sum of (i) the amount remaining after the distribution
of interest to Certificateholders for such Distribution Date pursuant to
Section 4.04(b)(iii)(j), and (ii) the amount remaining after the distribution
of principal to Certificateholders for such Distribution Date, pursuant to
Section 4.04(d)(1)(B)(x) or 4.04(d)(2)(K).
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note (for the avoidance of
doubt, excluding any Credit Comeback Loans).
Adjustable Rate OC Floor: For 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 in Loan Group 2, Loan Group 3 and Loan Group 4, the
Group 2 Pre-Funded Amount, the Group 3 Pre-Funded Amount and the Group 4
Pre-Funded Amount.
Adjustable Rate Overcollateralization Deficiency Amount: With
respect to any Distribution Date, the amount, if any, by which the Adjustable
Rate Overcollateralization Target Amount exceeds the Adjustable Rate
Overcollateralized Amount on such Distribution Date (after giving effect to
distributions in respect of the Principal Remittance Amount for Loan Group 2,
Loan Group 3 and Loan Group 4 on such Distribution Date).
Adjustable Rate Overcollateralization Target Amount: With respect
to any Distribution Date (a) prior to the Adjustable Rate Stepdown Date, an
amount equal to 3.25% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans in Loan
14
Group 2, Loan Group 3 and Loan Group 4, the Group 2 Pre-Funded Amount, the
Group 3 Pre-Funded Amount and the Group 4 Pre-Funded Amount and (b) on or
after the Adjustable Rate Stepdown Date, the greater of (i) an amount equal to
6.50% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2, Loan Group 3 and Loan Group 4 for the current Distribution Date and
(ii) the Adjustable Rate OC Floor; provided, however, that if an Adjustable
Rate Trigger Event is in effect on any Distribution Date, the Adjustable Rate
Overcollateralization Target Amount will be the Adjustable Rate
Overcollateralization Target Amount as in effect for the prior Distribution
Date.
Adjustable Rate Overcollateralized Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2, Loan Group 3
and Loan Group 4 for such Distribution Date and any amount on deposit in the
Pre-Funding Account in respect of Loan Group 2, Loan Group 3 and Loan Group 4
exceeds (y) the sum of the aggregate Certificate Principal Balance of the
Class AV Certificates and the Adjustable Rate Subordinate Certificates as of
such Distribution Date (after giving effect to distributions of the Principal
Remittance Amount for Loan Group 2, Loan Group 3 and Loan Group 4 to be made
on such Distribution Date).
Adjustable Rate Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Adjustable Rate 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 in Loan Group 2,
Loan Group 3 and Loan Group 4 for the preceding Distribution Date over (b) (i)
before the Certificate Principal Balances of the Class AV Certificates have
been reduced to zero, the sum of the Certificate Principal Balances of the
Class AV Certificates, or (ii) after such time, the Certificate Principal
Balance of the most senior Class of Adjustable Rate Subordinate Certificates
outstanding, as of the related Master Servicer Advance Date, and (2) the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2, Loan Group 3 and Loan Group 4 for the preceding
Distribution Date.
Adjustable Rate Subordinate Class Principal Distribution Amount:
With respect to any Distribution Date and any Class of Adjustable Rate
Subordinate Certificates the excess of (1) the sum of (a) the aggregate
Certificate Principal Balance of the Class AV Certificates (after taking into
account distribution of the Class AV Principal Distribution Amount for such
Distribution Date), (b) the aggregate Certificate Principal Balance of any
Class(es) of Adjustable Rate Subordinate Certificates that are senior to the
subject Class (in each case, after taking into account distribution of the
Adjustable Rate Subordinate Class Principal Distribution Amount(s) for such
senior Class(es) of Certificates for such Distribution Date), and (c) the
Certificate Principal Balance of the subject Class of Adjustable Rate
Subordinate Certificates immediately prior to such Distribution Date over (2)
the lesser of (a) the product of (x) 100% minus the Stepdown Target
Subordination Percentage for the subject Class of Certificates and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2, Loan
Group 3 and Loan Group 4 for such Distribution Date and (b) the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2, Loan Group 3
and Loan Group 4 for such Distribution Date minus the Adjustable Rate OC
Floor; provided, however, that if such Class of Adjustable Rate Subordinate
Certificates is the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, that Class will be entitled to receive
the entire remaining
15
Principal Distribution Amount for Loan Group 2, Loan Group 3 and Loan Group 4
until the Certificate Principal Balance thereof is reduced to zero.
Adjustable Rate Stepdown Date: The later to occur of (x) the
Distribution Date in April 2008 and (y) the first Distribution Date on which
the aggregate Certificate Principal Balance of the Class AV Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 52.60% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4 for such
Distribution Date.
Adjustable Rate Subordinate Certificates: Any Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8
or Class BV Certificates.
Adjustable Rate Subordinate Corridor Contract: The transaction
evidenced by the related Confirmation (as assigned to the Corridor Contract
Administrator pursuant to the Corridor Contract Assignment Agreement), a form
of which is attached hereto as Exhibit Q-5.
Adjustable Rate Subordinate Corridor Contract Termination Date:
With respect to the Adjustable Rate Subordinate Corridor Contract, the
Distribution Date in June 2009.
Adjustable Rate Subordinate Net Rate Cap: With respect to any
Distribution Date and each Class of Adjustable Rate Subordinate Certificates,
the weighted average of (a) the weighted average Adjusted Net Mortgage Rate of
the Mortgage Loans in Loan Group 2 on such Distribution Date (weighted by an
amount equal to the positive difference (if any) of the sum of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and the amount
on deposit in the Pre-Funding Account in respect of Loan Group 2 over the
outstanding aggregate Certificate Principal Balance of the Class 1-AV
Certificates), (b) the weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 3 on such Distribution Date (weighted by an
amount equal to the positive difference (if any) of the sum of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 3 and the amount
on deposit in the Pre-Funding Account in respect of Loan Group 3 over the
outstanding aggregate Certificate Principal Balance of the Class 2-AV
Certificates) and (c) the weighted average Adjusted Net Mortgage Rate of the
Mortgage Loans in Loan Group 4 on such Distribution Date (weighted by an
amount equal to the positive difference (if any) of the sum of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 4 and the amount
on deposit in the Pre-Funding Account in respect of Loan Group 4 over the
outstanding aggregate Certificate Principal Balance of the Class 3-AV
Certificates), adjusted to an effective rate reflecting the calculation of
interest on the basis of the actual number of days elapsed during the related
Accrual Period and a 360-day year.
Adjustable Rate Trigger Event: With respect to any Distribution
Date on or after the Adjustable Rate Stepdown Date, either an Adjustable Rate
Delinquency Trigger Event with respect to that Distribution Date or an
Adjustable Rate Cumulative Loss Trigger Event with respect to that
Distribution Date.
16
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the related Expense Fee Rate.
Adjusted Subordinate Component Balance: With respect to any
Distribution Date and for any Variable Loan Group, (i) the principal balance
of such Variable Loan Group as of the first day of the related Due Period
(after giving effect to Principal Prepayments received in the Prepayment
Period ending during such Due Period) less (ii) the product of (a) the
Adjustable Rate Overcollateralized Amount and (b)(I) the principal balance of
such Variable Loan Group, divided by (II) the sum of the principal balance of
the Mortgage Loans, as of the first day of the related Due Period, less (iii)
the aggregate Certificate Principal Balance of the related Classes of Senior
Certificates in either case immediately prior to such Distribution Date.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on which the related Mortgage Rate is subject to adjustment, as provided
in the related Mortgage Note.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the aggregate of payments
of principal and interest on the Mortgage Loans (net of the Servicing Fees)
that were due on the related Due Date and not received by the Master Servicer
as of the close of business on the related Determination Date including an
amount equivalent to interest on each Mortgage Loan as to which the related
Mortgaged Property is an REO Property; provided, however, that the net monthly
rental income (if any) from such REO Property deposited in the Certificate
Account for such Distribution Date pursuant to Section 3.12 may be used to
offset such Advance for the related REO Property; provided, further, that for
the avoidance of doubt, no Advances shall be required to be made in respect of
any Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Ambac: Ambac Assurance Corporation, organized and created under
the laws of the State of Wisconsin, or any successor thereto.
Amount Held for Future Distribution: As to any Distribution Date,
the aggregate amount held in the Certificate Account at the close of business
on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments received in
respect of such Mortgage Loans after the last day of the related Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries received in
respect of such Mortgage Loans after the last day of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution
Date and (i) Loan Group 1 and the Fixed Rate Subordinate Certificates, the
amount, if any, by which, the aggregate Certificate Principal Balance of the
Fixed Rate Certificates and the Class AF-1 Certificates (after all
distributions of principal on such Distribution Date) exceeds the sum of (x)
the Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date
17
and (y) the amount on deposit in the Pre-Funding Account in respect of Loan
Group 1, (ii) Loan Group 2, Loan Group 3 and Loan Group 4 and the Adjustable
Rate Subordinate Certificates, the amount, if any, by which, the aggregate
Certificate Principal Balance of the Adjustable Rate Certificates, other than
the Class AF-1 Certificates (after all distributions of principal on such
Distribution Date) exceeds the sum of (x) the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4
and (y) the amount on deposit in the Pre-Funding Account in respect of Loan
Group 2, Loan Group 3 and Loan Group 4 and (iii) Loan Group 3 and the Class
2-A-2 Certificates, after the Certificate Principal Balances of the Adjustable
Rate Subordinate Certificates have been reduced to zero, the amount, if any,
by which, the aggregate Certificate Principal Balance of the Class 2-AV
Certificates (after all distributions of principal on such Distribution Date)
exceeds the sum of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 3 and (y) the amount on deposit in the Pre-Funding Account
in respect of Loan Group 3 and (iv) Loan Group 4 and the Class 3-A-3
Certificates, after the Certificate Principal Balances of the Adjustable Rate
Subordinate Certificates have been reduced to zero, the amount, if any, by
which, the aggregate Certificate Principal Balance of the Class 3-AV
Certificates (after all distributions of principal on such Distribution Date)
exceeds the sum of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 4 and (y) the amount on deposit in the Pre-Funding Account
in respect of Loan Group 4.
Appraised Value: The appraised value of the Mortgaged Property
based upon the appraisal made for the originator of the related Mortgage Loan
by an independent fee appraiser at the time of the origination of the related
Mortgage Loan, or the sales price of the Mortgaged Property at the time of
such origination, whichever is less, or with respect to any Mortgage Loan
originated in connection with a refinancing, the appraised value of the
Mortgaged Property based upon the appraisal made at the time of such
refinancing.
Bankruptcy Code: Title 11 of the United States Code.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Interest Bearing Certificates constitutes a Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which the Class AF-5B Insurer or banking institutions in the
State of New York or California are authorized or obligated by law or
executive order to be closed.
Calculation Rate: For each Distribution Date, in the case of the
R-2-A and R-2-B Interests, the product of (i) 10 and (ii) the weighted average
rate of the outstanding R-2-A and R-2-B Interests, treating each R-2-A
Interest as capped at zero or reduced by a fixed percentage of 100% of the
interest accruing on such Class. For each Distribution Date, in the case of
the R-2-C and R-2-D Interests, the product of (i) 10 and (ii) the weighted
average rate of the outstanding R-2-C and R-2-D Interests, treating each R-2-C
Interest as capped at zero or reduced by a fixed percentage of 100% of the
interest accruing on such Class.
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Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.07 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2005-1". 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, Xxxxxxxx X-0 and B-2, Exhibits C-1 and C-2, Exhibit
D and Exhibit E.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of the Certificateholders and designated "Countrywide
Home Loans Servicing LP in trust for registered Holders of CWABS, Inc.,
Asset-Backed Certificates, Series 2005-1". 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(c) or 4.04(d), (ii) with respect to the Class AF-5B
Certificates only, payments under the Class AF-5B Policy relating to principal
and (iii) with respect to the Class 2-AV-2 and Class 3-AV-3 Certificates and
any Class of Subordinate Certificates, any Applied Realized Loss Amounts
allocated to such Certificate on previous Distribution Dates pursuant to
Section 4.04(j) or 4.04(k), and (B) increased by, with respect to the Class
2-AV-2, Class 3-AV-3 and Subordinate Certificates, any Subsequent Recoveries
allocated to such Class of Certificate pursuant to Section 4.04(l) or 4.04(m)
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. Exclusively
for the purpose of determining any subrogation rights of the Class AF-5B
Insurer arising under Section 4.06 hereof, the "Certificate Principal Balance"
of the Class AF-5B Certificates shall not be reduced by the amount of any
payments made by the Class AF-5B Insurer in respect of principal on such
Certificates under the Class AF-5B Policy, except to the extent such payment
shall have been reimbursed to the Class AF-5B Insurer pursuant to the
provisions of this Agreement.
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
19
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co.,
as nominee for the Depository, in the case of any Class of Book-Entry
Certificates), except that solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any affiliate of the Depositor shall be deemed not to be
Outstanding and the Voting Interest evidenced thereby shall not be taken into
account in determining whether the requisite amount of Voting Interests
necessary to effect such consent has been obtained; provided that if any such
Person (including the Depositor) owns 100% of the Voting Interests evidenced
by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof (other than the second
sentence of Section 10.01 hereof) that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
CHL: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule for which CHL is the applicable Seller.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
Class 1-AV-1 Certificate: Any Certificate designated as a "Class
1-AV-1 Certificate" on the face thereof, in the form of Exhibit A-17 hereto,
representing the right to distributions as set forth herein.
Class 1-AV-2 Certificate: Any Certificate designated as a "Class
1-AV-2 Certificate" on the face thereof, in the form of Exhibit A-18 hereto,
representing the right to distributions as set forth herein.
Class 1-AV-3 Certificate: Any Certificate designated as a "Class
1-AV-3 Certificate" on the face thereof, in the form of Exhibit A-19 hereto,
representing the right to distributions as set forth herein.
Class 1-AV Certificate: Any Class 1-AV-1, Class 1-AV-2 or Class
1-AV-3 Certificate.
Class 1-AV Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Corridor Contract Administrator
pursuant to the Corridor Contract Assignment Agreement), a form of which is
attached hereto as Exhibit Q-2.
Class 1-AV Corridor Contract Termination Date: With respect to the
Class 1-AV Corridor Contract, the Distribution Date in June 2009.
Class 1-AV Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 2 for
such Distribution Date,
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adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year.
Class 1-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Class 1-AV
Principal Distribution Target Amount and the denominator of which is the sum
of the Class 1-AV Principal Distribution Target Amount, Class 2-AV Principal
Distribution Target Amount and Class 3-AV Principal Distribution Target
Amount.
Class 1-AV Principal Distribution Target Amount: With respect to
any Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class 1-AV Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 52.60% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
2 for such Distribution Date minus 0.50% of the sum of the aggregate Stated
Principal Balance of the Initial Mortgage Loans in Loan Group 2 as of the
Cut-off Date and the original Group 2 Pre-Funded Amount .
Class 2-AV-1 Certificate: Any Certificate designated as a "Class
2-AV-1 Certificate" on the face thereof, in the form of Exhibit A-20 hereto,
representing the right to distributions as set forth herein.
Class 2-AV-2 Certificate: Any Certificate designated as a "Class
2-AV-2 Certificate" on the face thereof, in the form of Exhibit A-21 hereto,
representing the right to distributions as set forth herein.
Class 2-AV Certificate: Any Class 2-AV-1 or Class 2-AV-2
Certificate.
Class 2-AV Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Corridor Contract Administrator
pursuant to the Corridor Contract Assignment Agreement), a form of which is
attached hereto as Exhibit Q-3.
Class 2-AV Corridor Contract Termination Date: With respect to the
Class 2-AV Corridor Contract, the Distribution Date in August 2009.
Class 2-AV Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 3 for
such Distribution Date, adjusted to an effective rate reflecting the
calculation of interest on the basis of the actual number of days elapsed
during the related Accrual Period and a 360-day year.
Class 2-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Class 2-AV
Principal Distribution Target Amount and the denominator of which is the sum
of the Class 1-AV Principal Distribution Target Amount, Class 2-AV Principal
Distribution Target Amount and Class 3-AV Principal Distribution Target
Amount.
21
Class 2-AV Principal Distribution Target Amount: With respect to
any Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class 2-AV Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 52.60% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 3 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
3 for such Distribution Date minus 0.50% of the sum of the aggregate Stated
Principal Balance of the Initial Mortgage Loans in Loan Group 3 as of the
Cut-off Date and the original Group 3 Pre-Funded Amount.
Class 3-AV-1 Certificate: Any Certificate designated as a "Class
3-AV-1 Certificate" on the face thereof, in the form of Exhibit A-22 hereto,
representing the right to distributions as set forth herein.
Class 3-AV-2 Certificate: Any Certificate designated as a "Class
3-AV-2 Certificate" on the face thereof, in the form of Exhibit A-23 hereto,
representing the right to distributions as set forth herein.
Class 3-AV-3 Certificate: Any Certificate designated as a "Class
3-AV-3 Certificate" on the face thereof, in the form of Exhibit A-24 hereto,
representing the right to distributions as set forth herein.
Class 3-AV Certificate: Any Class 3-AV-1, Class 3-AV-2 or Class
3-AV-3 Certificate.
Class 3-AV Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Corridor Contract Administrator
pursuant to the Corridor Contract Assignment Agreement), a form of which is
attached hereto as Exhibit Q-4.
Class 3-AV Corridor Contract Termination Date: With respect to the
Class 3-AV Corridor Contract, the Distribution Date in January 2009.
Class 3-AV Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 4 for
such Distribution Date, adjusted to an effective rate reflecting the
calculation of interest on the basis of the actual number of days elapsed
during the related Accrual Period and a 360-day year.
Class 3-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Class 3-AV
Principal Distribution Target Amount and the denominator of which is the sum
of the Class 1-AV Principal Distribution Target Amount, Class 2-AV Principal
Distribution Target Amount and the Class 3-AV Principal Distribution Target
Amount.
Class 3-AV Principal Distribution Target Amount: With respect to
any Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class 3-AV Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 52.60% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 4 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
4 for
22
such Distribution Date minus 0.50% of the sum of the aggregate Stated
Principal Balance of the Initial Mortgage Loans in Loan Group 4 as of the
Cut-off Date and the original Group 4 Pre-Funded Amount.
Class AF Certificate: Any Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5 or Class AF-6 Certificate.
Class AF Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate on the Mortgage Loans in Loan Group 1 for
such Distribution Date, adjusted in the case of the Class AF-1 Certificates
only, to an effective rate reflecting the calculation of interest on the basis
of the actual number of days elapsed during the related Accrual Period and a
360-day year.
Class AF Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class AF Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 67.70% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
1 for such Distribution Date minus the Fixed Rate OC Floor.
Class AF-1 Certificate: Any Certificate designated as a "Class
AF-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class AF-1 Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Corridor Contract Administrator
pursuant to the Corridor Contract Assignment Agreement), a form of which is
attached hereto as Exhibit Q-1.
Class AF-1 Corridor Contract Termination Date: With respect to the
Class AF-1 Corridor Contract, the Distribution Date in January 2007.
Class AF-2 Certificate: Any Certificate designated as a "Class
AF-2 Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class AF-3 Certificate: Any Certificate designated as a "Class
AF-3 Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class AF-4 Certificate: Any Certificate designated as a "Class
AF-4 Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class AF-5 Certificate: Any Class AF-5A or Class AF-5B
Certificate.
Class AF-5A Certificate: Any Certificate designated as a "Class
AF-5A Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
23
Class AF-5B Available Funds: With respect to any Distribution
Date, funds allocated from amounts available pursuant to this Agreement to
make distributions on the Class AF-5B Certificates on such Distribution Date,
other than any Insured Amounts.
Class AF-5B Certificate: Any Certificate designated as a "Class
AF-5B Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class AF-5B Insurer: Ambac in its capacity as insurer under the
Class AF-5B Policy, and any permitted successor or assign.
Class AF-5B Insurer Contact Person: The officer designated by the
Master Servicer to provide information to the Class AF-5B Insurer pursuant to
Section 4.06(i).
Class AF-5B Insurer Default: As defined in Section 4.06(l).
Class AF-5B Net Rate Cap: With respect to any Distribution Date,
the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 1 for such Distribution Date, less the Class AF-5B Policy Premium Rate
adjusted to an effective rate reflecting the calculation of interest on the
basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year.
Class AF-5B Policy: The irrevocable Certificate Guaranty Insurance
Policy, No. AB0867BE, including any endorsements thereto, issued by Ambac with
respect to the Class AF-5B Certificates, in the form attached hereto as
Exhibit R.
Class AF-5B Policy Payments Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.06(c) in the name
of the Trustee for the benefit of the Class AF-5B Certificateholders and
designated "The Bank of New York in trust for registered holders of CWABS,
Inc., Asset-Backed Certificates, Series 2005-1, Class AF-5B". Funds in the
Class AF-5B Policy Payments Account shall be held in trust for the Class AF-5B
Certificateholders for the uses and purposes set forth in this Agreement.
Class AF-5B Premium: For any Distribution Date is the fee payable
to the Class AF-5B Insurer in respect of its services as Class AF-5B Insurer
that accrues at the Class AF-5B Policy Premium Rate for the Class AF-5B
Certificates on a balance equal to the Certificate Principal Balance of the
Class AF-5B Certificates immediately prior to such Distribution Date. The
Class AF-5B Premium shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
Class AF-5B Policy Premium Rate: Means the rate per annum
specified in the Commitment Letter dated as of March 30, 2005 between the
Class AF-5B Insurer and CHL.
Class AF-5B Reimbursement Amount: As to any Distribution Date, (i)
all Insured Payments paid by the Class AF-5B Insurer, but for which the Class
AF-5B Insurer has not been reimbursed prior to such Distribution Date pursuant
to Section 4.04 hereof, plus (ii) interest accrued on such Insured Payments
not previously repaid, calculated at the Late Payment Rate from the date such
Insured Payments were made.
24
Class AF-6 Certificate: Any Certificate designated as a "Class
AF-6 Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class AF-6 Portion: For any Distribution Date, a percentage,
expressed as a fraction, the numerator of which is the Certificate Principal
Balance of the Class AF-6 Certificates immediately prior to such Distribution
Date and the denominator of which is the aggregate Certificate Principal
Balance of all Classes of the Class AF Certificates immediately prior to such
Distribution Date.
Class A-R Certificate: Any Certificate designated as a "Class A-R
Certificate" on the face thereof, in the form of Exhibit D hereto or, in the
case of the Tax Matters Person Certificate, Exhibit E hereto, in either case
representing the right to distributions as set forth herein.
Class AV Certificate: Any Class 1-AV, Class 2-AV or Class 3-AV
Certificate.
Class BF Certificate: Any Certificate designated as a "Class BF
Certificate" on the face thereof, in the form of Exhibit A-16 hereto,
representing the right to distributions as set forth herein.
Class BV Certificate: Any Certificate designated as a "Class BV
Certificate" on the face thereof, in the form of Exhibit A-33 hereto,
representing the right to distributions as set forth herein.
Class C Certificate: Any Class CF or Class CV Certificate.
Class CF Certificate: Any Certificate designated as a "Class CF
Certificate" on the face thereof, in the form of Exhibit C-1 hereto,
representing the right to distributions as set forth herein.
Class CF Distributable Amount: As defined in the Preliminary
Statement.
Class CV Certificate: Any Certificate designated as a "Class CV
Certificate" on the face thereof, in the form of Exhibit C-2 hereto,
representing the right to distributions as set forth herein.
Class CV Distributable Amount: As defined in the Preliminary
Statement.
Class MF-1 Certificate: Any Certificate designated as a "Class
MF-1 Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class MF-2 Certificate: Any Certificate designated as a "Class
MF-2 Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
25
Class MF-3 Certificate: Any Certificate designated as a "Class
MF-3 Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.
Class MF-4 Certificate: Any Certificate designated as a "Class
MF-4 Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to distributions as set forth herein.
Class MF-5 Certificate: Any Certificate designated as a "Class
MF-5 Certificate" on the face thereof, in the form of Exhibit A-12 hereto,
representing the right to distributions as set forth herein.
Class MF-6 Certificate: Any Certificate designated as a "Class
MF-6 Certificate" on the face thereof, in the form of Exhibit A-13 hereto,
representing the right to distributions as set forth herein.
Class MF-7 Certificate: Any Certificate designated as a "Class
MF-7 Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to distributions as set forth herein.
Class MF-8 Certificate: Any Certificate designated as a "Class
MF-8 Certificate" on the face thereof, in the form of Exhibit A-15 hereto,
representing the right to distributions as set forth herein.
Class MV-1 Certificate: Any Certificate designated as a "Class
MV-1 Certificate" on the face thereof, in the form of Exhibit A-25 hereto,
representing the right to distributions as set forth herein.
Class MV-2 Certificate: Any Certificate designated as a "Class
MV-2 Certificate" on the face thereof, in the form of Exhibit A-26 hereto,
representing the right to distributions as set forth herein.
Class MV-3 Certificate: Any Certificate designated as a "Class
MV-3 Certificate" on the face thereof, in the form of Exhibit A-27 hereto,
representing the right to distributions as set forth herein.
Class MV-4 Certificate: Any Certificate designated as a "Class
MV-4 Certificate" on the face thereof, in the form of Exhibit A-28 hereto,
representing the right to distributions as set forth herein.
Class MV-5 Certificate: Any Certificate designated as a "Class
MV-5 Certificate" on the face thereof, in the form of Exhibit A-29 hereto,
representing the right to distributions as set forth herein.
Class MV-6 Certificate: Any Certificate designated as a "Class
MV-6 Certificate" on the face thereof, in the form of Exhibit A-30 hereto,
representing the right to distributions as set forth herein.
26
Class MV-7 Certificate: Any Certificate designated as a "Class
MV-7 Certificate" on the face thereof, in the form of Exhibit A-31 hereto,
representing the right to distributions as set forth herein.
Class MV-8 Certificate: Any Certificate designated as a "Class
MV-8 Certificate" on the face thereof, in the form of Exhibit A-32 hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Class PF Certificate or Class PV
Certificate.
Class PF Certificate: Any Certificate designated as a "Class PF
Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
representing the right to distributions as set forth herein.
Class PF Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 1 that have a Prepayment Charge Period.
Class PV Certificate: Any Certificate designated as a "Class PV
Certificate" on the face thereof, in the form of Exhibit B-2 hereto,
representing the right to distributions as set forth herein.
Class PV Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4 that have a
Prepayment Charge Period.
Closing Date: March 30, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collateral Schedule: Schedule II hereto.
Compensating Interest: With respect to the Mortgage Loans in each
Loan Group and any Distribution Date, an amount equal to the lesser of (x)
one-half of the Servicing Fee for such Mortgage Loans for the related Due
Period and (y) the aggregate Prepayment Interest Shortfalls for such Mortgage
Loans for such Distribution Date.
Confirmation: Any of the Confirmations dated March 22, 2005
evidencing a transaction between the Corridor Contract Counterparty and CHL
relating to the Corridor Contracts.
Corporate Trust Office: The designated office of the Trustee in
the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration),
telephone: (000) 000-0000, facsimile: (000) 000-0000.
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Corridor Contract: The Class AF-1 Corridor Contract, Class 1-AV
Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV Corridor Contract
or Adjustable Rate Subordinate Corridor Contract, as applicable.
Corridor Contract Administration Agreement: The corridor contract
administration agreement dated as of the Closing Date among CHL, the Trustee
and the Corridor Contract Administrator, a form of which is attached hereto as
Exhibit S-2.
Corridor Contract Administrator: The Bank of New York, in its
capacity as corridor contract administrator under the Corridor Contract
Administration Agreement.
Corridor Contract Assignment Agreement: The assignment agreement
dated as of the Closing Date among CHL, the Corridor Contract Administrator
and the Corridor Contract Counterparty, a form of which is attached hereto as
Exhibit S-1.
Corridor Contract Counterparty: Bear Xxxxxxx Financial Products
Inc. and its successors.
Corridor Contract Termination Date: The Adjustable Rate
Subordinate Corridor Contract Termination Date, Class 1-AV Corridor Contract
Termination Date, Class 2-AV Corridor Contract Termination Date, Class 3-AV
Corridor Contract Termination Date and Class AF-1 Corridor Contract
Termination Date, as applicable.
Credit Bureau Risk Score: A statistical credit score obtained by
CHL in connection with the origination of a Mortgage Loan.
Co-Trustee: The Bank of New York Trust Company, N.A., a national
banking association, not in its individual capacity, but solely in its
capacity as co-trustee for the benefit of the Certificateholders under this
Agreement, and any successor thereto, and any corporation or national banking
association resulting from or surviving any consolidation or merger to which
it or its successors may be a party.
Credit Comeback Excess Account: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.08 in
the name of the Trustee for the benefit of the Certificateholders and
designated "The Bank of New York in trust for registered Holders of CWABS,
Inc., Asset-Backed Certificates, Series 2005-1". Funds in the Credit Comeback
Excess Account shall be held in trust for the Certificateholders for the uses
and purposes set forth in this Agreement.
Credit Comeback Excess Cashflow: With respect to any Distribution
Date, any amounts in the Credit Comeback Excess Account available for such
Distribution Date.
Credit Comeback Excess Amount: With respect to the Credit Comeback
Loans in Loan Group 1 and any Master Servicer Advance Date, the portion of the
sum of the following (without duplication) attributable to the excess, if any,
of the actual mortgage rate on each Credit Comeback Loan and the Mortgage Rate
on such Credit Comeback Loan: (i) all scheduled interest collected during the
related Due Period with respect to the Credit Comeback Loans, (ii) all
Advances relating to interest with respect to the Credit Comeback Loans, (iii)
all
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Compensating Interest with respect to the Credit Comeback Loans and (iv)
Liquidation Proceeds with respect to the Credit Comeback Loans collected
during the related Due Period (to the extent such Liquidation Proceeds relate
to interest), less all Nonrecoverable Advances relating to interest reimbursed
during the related Due Period.
Credit Comeback Loan: Any Mortgage Loan for which the related
Mortgage Rate is subject to reduction (not exceeding 0.375% per annum) for
good payment history of Scheduled Payments by the related Mortgagor.
Cross-Over Situation: With respect to any Distribution Date and
Loan Group 2, Loan Group 3 and Loan Group 4 (after taking into account
principal distributions on such Distribution Date), a Cross-Over Situation
shall exist (i) with respect to the X-0-X, X-0-X and R-2-C Interests, if the
R-2-A, R-2-B and R-2-C Interests are in the aggregate less than 1% of the
Subordinate Component Balance of Loan Group 2, Loan Group 3 and Loan Group 4.
Current Interest: With respect to each Class of Interest Bearing
Certificates and each Distribution Date, the interest accrued at the
applicable Pass-Through Rate for the applicable Accrual Period on the
Certificate Principal Balance of such Class immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a
trustee in bankruptcy.
Cut-off Date: In the case of any Initial Mortgage Loan, the later
of (x) March 1, 2005 and (y) the date of origination of such Mortgage Loan
(the "Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan,
the later of (x) the first day of the month of the related Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage Loan (the
related "Subsequent Cut-off Date"). When used with respect to any Mortgage
Loan the "Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-off
Date after application of all payments of principal due on or prior to the
Cut-off Date, whether or not received, and all Principal Prepayments received
on or prior to the Cut-off Date, but without giving effect to any installments
of principal received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
Deficiency Amount: With respect to:
(a) any Distribution Date prior to the Last Scheduled Distribution
Date, the excess, if any, of the Current Interest on the Class AF-5B
Certificates net of any interest shortfalls resulting from Prepayment Interest
Shortfalls or any shortfalls resulting from the application of the Relief Act,
or similar state or local laws, over Class AF-5B Available Funds for such
Distribution Date,
29
(b) the Last Scheduled Distribution Date, an amount equal to the
sum of (1) the excess, if any, of the Current Interest on the Class AF-5B
Certificates net of any interest shortfalls resulting from Prepayment Interest
Shortfalls and any interest shortfalls resulting from the application of the
Relief Act, or similar state or local laws over the Class AF-5B Available
Funds for such Distribution Date and (2) the Certificate Principal Balance of
the Class AF-5B Certificates on such Last Scheduled Distribution Date (after
taking into account all distributions to be made to the Class AF-5B
Certificates on such Distribution Date); and
(c) any date on which the acceleration of the Certificates has
been directed or consented to by the Class AF-5B Insurer, the excess of (i)
the amount required to pay the outstanding Certificate Principal Balance of
the Class AF-5B Certificates in full, together with accrued and unpaid
interest thereon through the date of payment of the Class AF-5B Certificates
and (ii) the Class AF-5B Available Funds for that Distribution Date.
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 hereof.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not delivered
to the Co-Trustee on or prior to the Closing Date, and (ii) the Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage Loans set
forth in Annex A to each related Subsequent Transfer Agreement for which all
or a portion of the related Mortgage File is not delivered to the Co-Trustee
on or prior to the related Subsequent Transfer Date. The Depositor shall
deliver (or cause delivery of) the Mortgage Files to the Co-Trustee: (A) with
respect to at least 50% of the Initial Mortgage Loans, not later than the
Closing Date and with respect to at least 10% of the Subsequent Mortgage Loans
conveyed on a Subsequent Transfer Date, not later than such Subsequent
Transfer Date, (B) with respect to at least an additional 40% of the Initial
Mortgage Loans, not later than 20 days after the Closing Date, and not later
than 20 days after the relevant Subsequent Transfer Date with respect to the
remaining Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date,
and (C) with respect to the remaining Initial Mortgage Loans, not later than
thirty days after the Closing Date. To the extent that Countrywide Home Loans,
Inc. shall be in possession of any Mortgage Files with respect to any Delay
Delivery Mortgage Loan, until delivery to of such Mortgage File to the
Co-Trustee as provided in Section 2.01, Countrywide Home Loans, Inc. shall
hold such files as agent and in trust for the Co-Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a Replacement Mortgage Loan.
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
30
payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if
such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or, if not the foregoing, the Percentage Interest appearing on
the face thereof, as applicable.
Depositor: CWABS, Inc., a Delaware corporation, or its successor
in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository,
dated as of the Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2005-1". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 25th day of each month, or if such day is
not a Business Day, on the first Business Day thereafter, commencing in April
2005.
Due Date: With respect to any Mortgage Loan and Due Period, the
due date for Scheduled Payments of interest and/or principal on that Mortgage
Loan occurring in such Due Period as provided in the related Mortgage Note.
31
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 (without regard to the Class AF-5B Policy, in the case of the
Class AF-5B Certificates) as evidenced by a letter from each Rating Agency to
the Trustee. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d) hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class P
Certificates, Class C Certificates and Certificates of any Class that ceases
to satisfy the applicable rating requirement under the Underwriter's
Exemption.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
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
32
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan outstanding during each Due Period as to which
such interest was not paid or advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of
(i) the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date and (A) Loan Group 1, the lesser of (1) the Fixed Rate
Overcollateralization Deficiency Amount and (2) the sum of the Fixed Rate Loan
Group Excess Cashflow and the Credit Comeback Excess Amount available for
payment thereof and (B) each of Loan Group 2, Loan Group 3 and Loan Group 4,
the lesser of (1) the Adjustable Rate Overcollateralization Deficiency Amount
and (2) the Adjustable Rate Loan Group Excess Cashflow available for payment
thereof, to be allocated between Loan Group 2, Loan Group 3 and Loan Group 4,
pro rata, based on the Principal Remittance Amount for each such Loan Group
for such Distribution Date.
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.
Fixed Rate Certificates: The Class AF-2, Class AF-3, Class AF-4,
Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class MF-3, Class MF-4, Class
MF-5, Class MF-6, Class MF-7, MF-8 and Class BF Certificates.
Fixed Rate Cumulative Loss Trigger Event: With respect to a
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Cumulative Loss Trigger Event is in effect if (x) the aggregate amount of
Realized Losses on the Mortgage Loans in Loan Group 1 from the Cut-off Date
for each such Mortgage Loan to (and including) the last day of the related Due
Period (reduced by the aggregate amount of any Subsequent Recoveries related
to Loan Group 1 received through the last day of that Due Period) exceeds (y)
the applicable percentage, for such Distribution Date, of the sum of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan
Group 1 and the Group 1 Pre-Funded Amount, as set forth below:
Distribution Date Percentage
----------------- ----------
April 2008 -- March 2009........... 1.50% with respect to April 2008,
plus an additional 1/12th of
1.00% for each month thereafter
through March 2009
April 2009 -- March 2010........... 2.50% with respect to April 2009,
plus an additional 1/12th of
0.75% for each month thereafter
through March 2010
April 2010 -- March 2011........... 3.25% with respect to April 2010,
plus an additional 1/12th of
0.50%
33
Distribution Date Percentage
----------------- ----------
for each month thereafter through
March 2011
April 2011 and thereafter.......... 3.75%
Fixed Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency Rate for
Outstanding Mortgage Loans in Loan Group 1 equals or exceeds the product of
45.50% and the Fixed Rate Senior Enhancement Percentage for such Distribution
Date.
Fixed Rate Loan Group Excess Cashflow: With respect to any
Distribution Date the sum of (i) the amount remaining after the distribution
of interest to Certificateholders and the payment of the Class AF-5B Premium
and any Class AF-5B Reimbursement Amount to the Class AF-5B Insurer, in each
case for such Distribution Date pursuant to Section 4.04(a)(ii)(k), and (ii)
the amount remaining after the distribution of principal to Certificateholders
and the payment of any unpaid Class AF-5B Premium and any unpaid Class AF-5B
Reimbursement Amount to the Class AF-5B Insurer, in each case for such
Distribution Date pursuant to Section 4.04(c)(1)(K) or 4.04(c)(2)(L).
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life
of the related Mortgage and any Credit Comeback Loans, including in each case
any Mortgage Loans delivered in replacement thereof.
Fixed Rate OC Floor: An amount equal to 0.50% of the sum of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan
Group 1 and the Group 1 Pre-Funded Amount.
Fixed Rate Overcollateralization Deficiency Amount: With respect
to any Distribution Date, the amount, if any, by which the Fixed Rate
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized
Amount on such Distribution Date (after giving effect to distributions in
respect of the Principal Remittance Amount for Loan Group 1 on such
Distribution Date).
Fixed Rate Overcollateralization Target Amount: With respect to
any Distribution Date (a) prior to the Fixed Rate Stepdown Date, an amount
equal to 2.45% of the sum of the aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans in Loan Group 1 and the Group 1 Pre-Funded Amount
and (b) on or after the Fixed Rate Stepdown Date, the greater of (i) an amount
equal to 4.90% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 1 for the current Distribution Date and (ii) the Fixed Rate OC
Floor; provided, however, that if a Fixed Rate Trigger Event is in effect on
any Distribution Date, the Fixed Rate Overcollateralization Target Amount will
be the Fixed Rate Overcollateralization Target Amount as in effect for the
prior Distribution Date.
34
Fixed Rate Overcollateralized Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the sum of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for such
Distribution Date and the Group 1 Pre-Funded Amount exceeds (y) the aggregate
Certificate Principal Balance of the Class AF Certificates and the Fixed Rate
Subordinate Certificates as of such Distribution Date (after giving effect to
distributions of the Principal Remittance Amount for Loan Group 1 to be made
on such Distribution Date).
Fixed Rate Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Fixed Rate 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 in Loan Group 1
for the preceding Distribution Date over (b) (i) before the Certificate
Principal Balances of the Class AF Certificates have been reduced to zero, the
sum of the Certificate Principal Balances of the Class AF Certificates, or
(ii) after such time, the Certificate Principal Balance of the most senior
Class of Fixed Rate Subordinate Certificates outstanding, as of the related
Master Servicer Advance Date, and (2) the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for
the preceding Distribution Date.
Fixed Rate Subordinate Class Principal Distribution Amount: With
respect to any Distribution Date and any Class of Fixed Rate Subordinate
Certificates the excess of (1) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the aggregate Certificate Principal Balance of any
Class(es) of Fixed Rate Subordinate Certificates that are senior to the
subject Class (in each case, after taking into account distribution of the
Fixed Rate Subordinate Class Principal Distribution Amount(s) for such senior
Class(es) of Certificates for such Distribution Date), and (c) the Certificate
Principal Balance of such Class of Fixed Rate Subordinate Certificates
immediately prior to the subject Distribution Date over (2) the lesser of (a)
the product of (x) 100% minus the Stepdown Target Subordination Percentage for
the subject Class of Certificates and (y) the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for such Distribution Date and
(b) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
1 for such Distribution Date minus the Fixed Rate OC Floor; provided, however,
that if such Class of Fixed Rate Subordinate Certificates is the only Class of
Fixed Rate Subordinate Certificates outstanding on such Distribution Date,
that Class will be entitled to receive the entire remaining Principal
Distribution Amount for Loan Group 1 until the Certificate Principal Balance
thereof is reduced to zero.
Fixed Rate Stepdown Date: The later to occur of (x) the
Distribution Date in April 2008 and (y) the first Distribution Date on which
the aggregate Certificate Principal Balance of the Class AF Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 67.70% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date.
Fixed Rate Subordinate Certificates: The Class MF-1, Class MF-2,
Class MF-3, Class MF-4, Class MF-5, Class MF-6, Class MF-7, Class MF-8 and
Class BF Certificates.
35
Fixed Rate Subordinate Net Rate Cap: With respect to any
Distribution Date, the weighted average of the Adjusted Net Mortgage Rate of
the Mortgage Loans in Loan Group 1 for such Distribution Date.
Fixed Rate Trigger Event: With respect to any Distribution Date on
or after the Fixed Rate Stepdown Date, consists of either a Fixed Rate
Delinquency Trigger Event with respect to that Distribution Date or a Fixed
Rate Cumulative Loss Trigger Event with respect to that Distribution Date.
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) May 16, 2005.
Gross Margin: The percentage set forth in the related Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the Index for use
in determining the Mortgage Rate on each Adjustment Date, and which is set
forth in the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 1 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 1 Mortgage Loans
on the Closing Date, which shall equal $9,841,709.
Group 2 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 2 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 2 Mortgage Loans
on the Closing Date, which shall equal $82,634,256.69.
Group 3 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 3 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 3 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 3 Mortgage Loans
on the Closing Date, which shall equal $17,885,224.44.
Group 3 Sequential Trigger Event: With respect to any Distribution
Date (i) prior to the Distribution Date in April 2008, if (x) the aggregate
amount of Realized Losses on the
36
Mortgage Loans in Loan Group 3 from the Cut-off Date for each such Mortgage
Loan to (and including) the last day of the related Due Period (reduced by the
aggregate amount of any Subsequent Recoveries related to the Mortgage Loans in
Loan Group 3 received through the last day of that Due Period) exceeds (y)
3.25% of the sum of the aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans in Loan Group 3 and the Group 3 Pre-Funded Amount or
(ii) on or after the Distribution Date in April 2008, if an Adjustable Rate
Trigger Event is in effect.
Group 4 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 4 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 4 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 4 Mortgage Loans
on the Closing Date, which shall equal $12,756,589.14.
Group 4 Sequential Trigger Event: With respect to any Distribution
Date (i) prior to the Distribution Date in April 2008, if (x) the aggregate
amount of Realized Losses on the Mortgage Loans in Loan Group 4 from the
Cut-off Date for each such Mortgage Loan to (and including) the last day of
the related Due Period (reduced by the aggregate amount of any Subsequent
Recoveries related to the Mortgage Loans in Loan Group 4 received through the
last day of that Due Period) exceeds (y) 3.25% of the sum of the aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan Group 4
and the Group 4 Pre-Funded Amount or (ii) on or after the Distribution Date in
April 2008, if an Adjustable Rate Trigger Event is in effect.
Group Net Rate Cap. With respect to Loan Group 2, the Loan Group 2
Net Rate Cap, with respect to Loan Group 3, the Loan Group 3 Net Rate Cap and
with respect to Loan Group 4, the Loan Group 4 Net Rate Cap.
Index: As to any Adjustable Rate Mortgage Loan on any Adjustment
Date related thereto, the index for the adjustment of the Mortgage Rate set
forth as such in the related Mortgage Note, such index in general being the
average of the London interbank offered rates for six-month U.S. dollar
deposits in the London market, as set forth in The Wall Street Journal, as
most recently announced as of a date 45 days prior to such Adjustment Date or,
if the Index ceases to be published in The Wall Street Journal or becomes
unavailable for any reason, then the Index shall be a new index selected by
the Master Servicer, based on comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage
Loan.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the 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.
37
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C Certificates) the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing
Date.
Initial Cut-off Date: As defined in the definition of Cut-off
Date.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee on
the Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Initial Mortgage Rate: As to each Adjustable Mortgage Loan, the
Mortgage Rate in effect prior to the Initial Adjustment Date.
Initial Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that
limits the permissible increase or decrease in the Mortgage Rate on its
initial Adjustment Date.
Insolvency Proceeding: As defined in Section 4.06(h).
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any
replacement policy or policies for any Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
(other than by the Class AF-5B Insurer under the Class AF-5B Policy) 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 Amounts: With respect to any Distribution Date, the
Deficiency Amount for such Distribution Date.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Insured Payments: With respect to any Distribution Date, the
aggregate amount actually paid by the Class AF-5B Certificate Insurer to the
Trustee in respect of (i) Insured Amounts for a Distribution Date and (ii)
Preference Amounts for any given Business Day.
Interest Bearing Certificates: The Fixed Rate Certificates and
the Adjustable Rate 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
38
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 Adjustable Rate Certificates, March 28, 2005. With respect to
any Accrual Period for the Adjustable Rate Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
Interest Funds: With respect to any Distribution Date and Loan
Group, the Interest Remittance Amount for such Loan Group and Distribution
Date, less the portion of the Trustee Fee for such Distribution Date allocable
to such Loan Group and the Mortgage Insurance Premium for such Distribution
Date allocable to such Loan Group.
Interest Remittance Amount: With respect to the Mortgage Loans in
each Loan Group and any Master Servicer Advance Date, (x) the sum, without
duplication, of (i) all scheduled interest collected during the related Due
Period (for the avoidance of doubt, other than Credit Comeback Excess Amounts)
with respect to the related Mortgage Loans less the related Servicing Fee,
(ii) all interest on prepayments, other than Prepayment Interest Excess, (iii)
all related Advances relating to interest with respect to such Mortgage Loans,
(iv) all related Compensating Interest with respect to such Mortgage Loans,
(v) Liquidation Proceeds with respect to such Mortgage Loans collected during
the related Due Period (to the extent such Liquidation Proceeds relate to
interest) and (vi) the related Seller Shortfall Interest Requirement, less (y)
all reimbursements to the Master Servicer during the related Due Period for
Advances of interest previously made allocable to such Loan Group.
Investment Letter: As defined in Section 5.02(b).
Last Scheduled Distribution Date: With respect to the Class AF-5B
Certificates, the Distribution Date occurring in July 2035.
Late Payment Rate: With respect to any Distribution Date, the
lesser of (i) the greater of (a) the rate of interest, as it is publicly
announced by Citibank, N.A. at its principal office in New York, New York as
its prime rate (any change in such prime rate of interest to be effective on
the date such change is announced by Citibank, N.A.) plus 2% and (b) the then
applicable highest rate of interest on the Class AF-5B Certificates and (ii)
the maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the
actual number of days elapsed over a year of 360 days.
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.
39
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property received in connection with or prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan, less the sum of related unreimbursed Advances,
Servicing Fees and Servicing Advances.
Loan Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or
Loan Group 4.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
Loan Group 4: The Group 4 Mortgage Loans.
Loan Group Net Rate Cap of the Related Loan Group: With respect to
Loan Group 1, the Loan Group 1 Net Rate Cap, with respect to Loan Group 2, the
Loan Group 2 Net Rate Cap, with respect to Loan Group 3, the Loan Group 3 Net
Rate Cap and with respect to Loan Group 4, the Loan Group 4 Net Rate Cap.
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.
40
Margin: With respect to any Accrual Period and Class of
Adjustable Rate Certificates, the per annum rate indicated in the following
table:
-------------------------------------------------------------
Class Margin (1) Margin (2)
-------------------------------------------------------------
Class AF-1................. 0.100% 0.100%
-------------------------------------------------------------
Class 1-AV-1............... 0.090% 0.180%
-------------------------------------------------------------
Class 1-AV-2............... 0.200% 0.400%
-------------------------------------------------------------
Class 1-AV-3............... 0.290% 0.580%
-------------------------------------------------------------
Class 2-AV-1............... 0.190% 0.380%
-------------------------------------------------------------
Class 2-AV-2............... 0.240% 0.480%
-------------------------------------------------------------
Class 3-AV-1............... 0.090% 0.180%
-------------------------------------------------------------
Class 3-AV-2............... 0.250% 0.500%
-------------------------------------------------------------
Class 3-AV-3............... 0.250% 0.500%
-------------------------------------------------------------
Class MV-1................. 0.400% 0.600%
-------------------------------------------------------------
Class MV-2................. 0.440% 0.660%
-------------------------------------------------------------
Class MV-3................. 0.480% 0.720%
-------------------------------------------------------------
Class MV-4................. 0.600% 0.900%
-------------------------------------------------------------
Class MV-5................. 0.650% 0.975%
-------------------------------------------------------------
Class MV-6................. 0.730% 1.095%
-------------------------------------------------------------
Class MV-7................. 1.250% 1.875%
-------------------------------------------------------------
Class MV-8................. 1.400% 2.100%
-------------------------------------------------------------
Class BV................... 1.950% 2.925%
-------------------------------------------------------------
(1) For any Accrual Period relating to any Distribution Date occurring on or
prior to the Optional Termination Date.
(2) For any Accrual Period relating to any Distribution Date occurring after
the Optional Termination Date.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived
other than in accordance with the standard set forth in the first sentence of
Section 3.20(a), or (ii) collected from the Master Servicer in respect of a
remedy for the breach of the representation made by CHL set forth in Section
3.20(c).
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware,
or any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS(R) System.
41
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
Modified Adjustable Subordinate Net Rate Cap: For each
Distribution Date, the weighted average of the Group 2 Net Rate Cap, Group 3
Net Rate Cap and Group 4 Net Rate Cap weighted on the basis of the respective
Adjusted Subordinate Component Balance of their corresponding Loan Groups. For
federal income tax purposes, the Modified Adjustable Subordinate Net Rate Cap
will be the Calculation Rate in respect of the Class C and Class D Interests
in REMIC 2.
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 Loan Schedule: The list of Mortgage Loans (as from time
to time amended by the Master Servicer to reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and any Subsequent
Transfer Agreement) transferred to the Trustee as part of the Trust Fund and
from time to time subject to this Agreement, attached hereto as Exhibit F-1,
setting forth in the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
42
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at
the time of origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single-family dwelling, (b) a two-family
residential property, (c) a three-family residential property, (d)
a four-family residential property, (e) planned unit development,
(f) a low-rise condominium unit, (g) a high-rise condominium unit
or (h) manufactured housing;
(xiii) a code indicating whether such Mortgage Loan is a
Credit Comeback Loan;
(xiv) [Reserved];
(xv) [Reserved];
(xvi) the purpose of the Mortgage Loan;
(xvii) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap; and
(g) the Gross Margin;
43
(xviii) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Monaco Mortgage Loan or a Park
Sienna Mortgage Loan;
(xix) the premium rate for any lender-paid mortgage
insurance, if applicable; and
(xx) a code indicating whether the Mortgage Loan is a Fixed
Rate Mortgage Loan or an Adjustable Rate Mortgage
Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans and for each Loan Group. The
Mortgage Loan Schedule shall be deemed to include each Loan Number and
Borrower Identification Mortgage Loan Schedule delivered pursuant to Section
2.01(f) and all the related Subsequent Mortgage Loans and Subsequent Mortgage
Loan information included therein.
Mortgage Loans: Such of the Group 1 Mortgage Loans, Group 2
Mortgage Loans, Group 3 Mortgage Loans and Group 4 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; provided, however, the Mortgage Rate for each Credit
Comeback Loan shall be treated for all purposes of payments on the
Certificates, including the calculation of the Pass-Through Rates and the
applicable Net Rate Cap, as reduced by 0.375% on the Due Date following the
end of each of the first four annual periods after the origination date,
irrespective of whether the Mortgagor qualifies for the reduction by having a
good payment history.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligors on a Mortgage Note.
NAS Factor: For any Distribution Date set forth below, the
percentage set forth in the following table:
Distribution Date Percentage
---------------------------------------------------- ----------
44
April 2005 - March 2008......................... 0%
April 2008 - March 2010......................... 45%
April 2010 - March 2011......................... 80%
April 2011 - March 2012......................... 100%
April 2012 and thereafter....................... 300%
NAS Principal Distribution Amount: For any Distribution Date, an
amount equal to the product of (i) the Class AF-6 Portion for such
Distribution Date, (ii) any amounts distributed to the Class AF Certificates
pursuant to Section 4.04(c) and 4.04(e)(1) for such Distribution Date and
(iii) the NAS Factor for such Distribution Date.
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: (i) With respect to each Class of Class AF
Certificates (other than the Class AF-5B Certificates), the Class AF Net Rate
Cap, (ii) with respect to the Class AF-5B Certificates, the Class AF Net Rate
Cap less the Class AF-5B Policy Premium Rate, (iii) with respect to the Class
1-AV Certificates, the Class 1-AV Net Rate Cap, (iv) with respect to each
Class of Class 2-AV Certificates, the Class 2-AV Net Rate Cap, (v) with
respect to each Class of Class 3-AV Certificates, the Class 3-AV Net Rate Cap,
(vi) with respect to each Class of Fixed Rate Subordinate Certificates, the
Fixed Rate Subordinate Net Rate Cap and (vii) with respect to each Class of
Adjustable Rate Subordinate Certificates, the Adjustable Rate Subordinate Net
Rate Cap.
Net Rate Carryover: With respect to any Class of Interest Bearing
Certificates and any Distribution Date, the sum of (A) the excess of (i) the
amount of interest that such Class would otherwise have accrued for such
Distribution Date had the Pass-Through Rate for such Class and the related
Accrual Period not been determined based on the applicable Net Rate Cap, over
(ii) the amount of interest accrued on such Class at the applicable Net Rate
Cap for such Distribution Date and (B) the Net Rate Carryover for such Class
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the then-applicable Pass-Through Rate
for such Class, without giving effect to the applicable Net Rate Cap.
NIM Insurer: Any insurer guarantying at the request of CHL certain
payments under notes backed or secured by the Class C or Class P Certificates.
Nonrecoverable Advance: Any portion of an Advance previously made
or proposed to be made by the Master Servicer that, in the good faith judgment
of the Master Servicer, will not or, in the case of a current delinquency,
would not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes
45
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.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Managing Director, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer, signed by the President, an Executive
Vice President, a Vice President, an Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of Countrywide GP,
Inc., its general partner or (iii) if provided for in this Agreement, signed
by a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate 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 Adjustable Rate Certificates shall equal 2.850% 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 Adjustable Rate 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 Adjustable Rate Certificates.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to
each addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to the last
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.
46
Original Value: The value of the property underlying a Mortgage
Loan based, in the case of the purchase of the underlying Mortgaged Property,
on the lower of an appraisal satisfactory to the Master Servicer or the sales
price of such property or, in the case of a refinancing, on an appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a
Liquidated Mortgage Loan, prior to the end of the related Prepayment Period.
Ownership Interest: As to any Certificate, any ownership interest
in such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such
on the Mortgage Loan Schedule for which Park Monaco is the applicable Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability
company, and its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such
on the Mortgage Loan Schedule for which Park Sienna is the applicable Seller.
Pass-Through Rate: With respect to any Accrual Period and each
Class of Adjustable Rate Certificates the lesser of (x) One-Month LIBOR for
such Accrual Period plus the Margin for such Class and Accrual Period and (y)
the applicable Net Rate Cap for such Class and the related Distribution Date.
With respect to any Accrual Period and each Class of Fixed Rate Certificates,
the lesser of (x) the per annum rate set forth in the following table for such
Class and Accrual Period and (y) the applicable Net Rate Cap for such Class
and the related Distribution Date.
47
------------------------------------------------------------
Pass-Through Pass-Through
Class Rate (1) Rate (2)
------------------------------------------------------------
AF-2 4.355% 4.355%
------------------------------------------------------------
AF-3 4.575% 4.575%
------------------------------------------------------------
AF-4 5.147% 5.147%
------------------------------------------------------------
AF-5A 5.497% 5.997%
------------------------------------------------------------
AF-5B 5.417% 5.917%
------------------------------------------------------------
AF-6 5.030% 5.030%
------------------------------------------------------------
MF-1 5.456% 5.456%
------------------------------------------------------------
MF-2 5.505% 5.505%
------------------------------------------------------------
MF-3 5.555% 5.555%
------------------------------------------------------------
MF-4 5.654% 5.654%
------------------------------------------------------------
MF-5 5.754% 5.754%
------------------------------------------------------------
MF-6 5.853% 5.853%
------------------------------------------------------------
MF-7 6.101% 6.101%
------------------------------------------------------------
MF-8 6.200% 6.200%
------------------------------------------------------------
BF 6.200% 6.200%
------------------------------------------------------------
(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.
Percentage Interest: With respect to any Interest Bearing
Certificate, a fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of the
related Class. With respect to the Class C, Class P and Class A-R
Certificates, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving
the highest long-term debt rating of each Rating Agency, or such
lower rating as each Rating Agency has confirmed in writing is
sufficient for the ratings originally assigned to the Certificates
by such Rating Agency (without regard to the Class AF-5B Policy,
in the case of Class AF-5B Certificates);
(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 (without regard
to the Class AF-5B Policy, in the case of the Class AF-5B
Certificates);
48
(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 (without regard to the Class
AF-5B Policy, in the case of Class AF-5B Certificates);
(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 (without regard
to the Class AF-5B Policy, in the case of Class AF-5B
Certificates);
(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 (without regard to the Class AF-5B Policy,
in the case of Class AF-5B Certificates);
(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 (without regard to the Class AF-5B Policy, in the case of
Class AF-5B Certificates); 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
49
assigned to the Certificates by any Rating Agency (without regard
to the Class AF-5B Policy, in the case of Class AF-5B
Certificates), as evidenced by a signed writing delivered by each
Rating Agency, and reasonably acceptable to the NIM Insurer, as
evidenced by a signed writing delivered by the NIM Insurer;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no
such instrument shall be a Permitted Investment (A) if such instrument
evidences principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to investments
in units of money market funds pursuant to clause (vii) above); provided
further that no amount beneficially owned by any REMIC (including, without
limitation, any amounts collected by the Master Servicer but not yet deposited
in the Certificate Account) may be invested in investments (other than money
market funds) treated as equity interests for Federal income tax purposes,
unless the Master Servicer shall receive an Opinion of Counsel, at the expense
of Master Servicer, to the effect that such investment will not adversely
affect the status of any such REMIC as a REMIC under the Code or result in
imposition of a tax on any such REMIC. Permitted Investments that are subject
to prepayment or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
Persons have authority to control all substantial decisions of the trustor
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8ECI, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the 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
50
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.
Preference Claim: As defined in Section 4.06(h).
Preference Amount: Any payment of principal or interest on a Class
AF-5B Certificate which has become Due for Payment and which was made to a
Holder by or on behalf of the Trust, which has been deemed a preferential
transfer and was previously recovered from the Holder pursuant to the United
States Bankruptcy Code in accordance with a final, non-appealable order of a
court of competent jurisdiction.
Pre-Funded Amount: The amount deposited in the Pre-Funding Account
on the Closing Date, which shall equal $123,117,779.27.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New
York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2005-1." Funds in the Pre-Funding Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall not be a part of any REMIC created hereunder,
provided, however that any investment income earned from Permitted Investments
made with funds in the Pre-Funding Account will be for the account of CHL.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges
or premiums, if any, due in connection with a full or partial prepayment of
such Mortgage Loan within the related Prepayment Charge Period in accordance
with the terms thereof (other than any Master Servicer Prepayment Charge
Payment Amount).
Prepayment Charge Period: With respect to any Mortgage Loan, the
period of time during which a Prepayment Charge may be imposed.
51
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.
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
52
month in which such Distribution Date occurs (or, with respect to the first
Distribution Date, the period beginning on March 1, 2005) and ending on the
close of business on the fifteenth day of the month in which such Distribution
Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution
Date and a Loan Group, the sum of (i) the Principal Remittance Amount for such
Loan Group for such Distribution Date, (ii) the Extra Principal Distribution
Amount for such Loan Group for such Distribution Date, and (iii) with respect
to the Distribution Date immediately following the end of the Funding Period,
the amount, if any, remaining in the Pre-Funding Account at the end of the
Funding Period (net of any investment income therefrom) allocable to such Loan
Group.
Principal Prepayment: Any Mortgagor payment or other recovery of
(or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01
hereof) that is received in advance of its scheduled Due Date to the extent it
is not accompanied by an amount as to interest representing scheduled interest
due on any date or dates in any month or months subsequent to the month of
prepayment. Partial Principal Prepayments shall be applied by the Master
Servicer in accordance with the terms of the related Mortgage Note.
Principal Relocation Payment: In the case of the Variable Loan
Groups and Variable Interests only, a payment from any Loan Group to a REMIC 2
Interest other than a Regular Interest corresponding to that Loan Group as
provided in the Preliminary Statement. Principal Relocation Payments shall be
made of principal allocations comprising the Principal Remittance Amount from
a Loan Group and shall include a proportionate allocation of Realized Losses
from the Mortgage Loans of such Loan Group.
Principal Remittance Amount: With respect to the Mortgage Loans in
each Loan Group and any Distribution Date, (a) the sum, without duplication,
of: (i) the scheduled principal collected with respect to the Mortgage Loans
during the related Due Period or advanced on or before 1:00 p.m. Pacific time
on the related Master Servicer Advance Date, (ii) Principal Prepayments
collected in the related Prepayment Period, with respect to the Mortgage
Loans, (iii) the Stated Principal Balance of each Mortgage Loan that was
repurchased by a Seller or purchased by the Master Servicer with respect to
such Distribution Date, (iv) the amount, if any, by which the aggregate unpaid
principal balance of any Replacement Mortgage Loans is less than the aggregate
unpaid principal balance of any Deleted Mortgage Loans delivered by the
Sellers in connection with a substitution of a Mortgage Loan and (v) all
Liquidation Proceeds (to the extent such Liquidation Proceeds related to
principal) and Subsequent Recoveries collected during the related Due Period;
less (b) all Nonrecoverable Advances relating to principal and certain
expenses reimbursable pursuant to Section 6.03 and reimbursed during the
related Due Period.
53
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2005-1". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth
in this Agreement.
Private Certificates: The Class C and Class P Certificates.
Prospectus: The prospectus dated October 25, 2004, relating to
asset-backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated March 11,
2005, relating to the public offering of the certain Classes of Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to
be (1) repurchased by a Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that the Master
Servicer has a right to purchase pursuant to Section 3.12 hereof, an amount
equal to the sum of (i) 100% of the unpaid principal balance (or, if such
purchase or repurchase, as the case may be, is effected by the Master
Servicer, the Stated Principal Balance) of the Mortgage Loan as of the date of
such purchase, (ii) accrued interest thereon at the applicable Mortgage Rate
(or, if such purchase or repurchase, as the case may be, is effected by the
Master Servicer, at the Net Mortgage Rate) from (a) the date through which
interest was last paid by the Mortgagor (or, if such purchase or repurchase,
as the case may be, is effected by the Master Servicer, the date through which
interest was last advanced and not reimbursed by the Master Servicer) to (b)
the Due Date in the month in which the Purchase Price is to be distributed to
Certificateholders and (iii) any costs, expenses and damages incurred by the
Trust Fund resulting from any violation of any predatory or abusive lending
law in connection with such Mortgage Loan.
Rating Agency: Each of Moody's and S&P. If any such organization
or its successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be
given to the Trustee. References herein to a given rating category of a Rating
Agency shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received in
connection with such liquidation during the month in which such liquidation
occurs, to the extent applied as recoveries of principal of the Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has become the subject
of a Deficient Valuation, (i) if the value of the related Mortgaged
54
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
Adjustable Rate Certificates, the Business Day immediately preceding such
Distribution Date, or if such Certificates are no longer Book-Entry
Certificates, the last Business Day of the month preceding the month of such
Distribution Date. With respect to the Fixed Rate Certificates and 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 Adjustable Rate
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 Adjustable Rate
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
55
M of Chapter 1 of the Code, and related provisions, and regulations and
rulings promulgated thereunder, as the foregoing may be in effect from time to
time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with Section 4.04.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for File Release, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) with respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan and, with
respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage Rate of
the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1%
per annum higher or lower than the Minimum Mortgage Rate of the Deleted
Mortgage Loan; (c) have the same Index and intervals between Adjustment Dates
as that of the Deleted Mortgage Loan; (d) have a Gross Margin not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan; and (e) have
an Initial Periodic Rate Cap and a Subsequent Periodic Rate Cap each not more
than 1% lower than that of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) be accruing interest at a rate not more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or vice versa; (viii) provide for a Prepayment
Charge on terms substantially similar to those of the Prepayment Charge, if
any, of the Deleted Mortgage Loan; (ix) have the same occupancy type and lien
priority as the Deleted Mortgage Loan; and (x) comply with each representation
and warranty set forth in Section 2.03 as of the date of substitution;
provided, however, that notwithstanding the foregoing, to the extent that
compliance with clause (x) of this definition would cause a proposed
Replacement Mortgage Loan to fail to comply with one or more of clauses (i),
(ii), (iv), (viii) and/or (ix) of this definition, then such proposed
Replacement Mortgage Loan must comply with clause (x) and need not comply with
one or more of clauses (i), (ii), (iv), (viii) and/or (ix), to the extent, and
only to the extent, necessary to assure that the Replacement Mortgage Loan
otherwise complies with clause (x).
Representing Party: As defined in Section 2.03(d).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted
by the Master Servicer to the Co-Trustee, substantially in the form of
Exhibit N.
56
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Required Secondary Carryover Reserve Fund Deposit: With respect to
any Distribution Date, an amount equal to the excess of (i) $10,000 over (ii)
the amount of funds on deposit in the Carryover Reserve Fund.
Responsible Officer: When used with respect to the Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any
Distribution Date on or after the Stepdown Date and any Loan Group or Loan
Groups, the average of the Sixty-Day Delinquency Rates for such Loan Group or
Loan Groups and such Distribution Date and the two immediately preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The
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, Park Monaco, in its capacity as seller of the Park Monaco
Mortgage Loans to the Depositor and Park Sienna, in its capacity as seller of
the Park Sienna Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the Master
Servicer Advance Date in each of April 2005, May 2005 and June 2005, is the
sum of:
(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
57
Stated Principal Balance for such Distribution Date of such Mortgage Loans
(including such Subsequent Mortgage Loans, if any) that have a scheduled
payment of interest due in the related Due Period, and (2) a fraction, the
numerator of which is the weighted average Net Mortgage Rate of such Mortgage
Loans (including such Subsequent Mortgage Loans, if any) (weighted on the
basis of the Stated Principal Balances thereof for such Distribution Date) and
the denominator of which is 12; and
(b) the lesser of:
(i) the product of: (1) the amount on deposit in the
Pre-Funding Account at the beginning of the related Due Period, and (2) a
fraction, the numerator of which is the weighted average Net Mortgage Rate of
the Mortgage Loans (including Subsequent Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related Due Period (weighted on the basis
of the Stated Principal Balances thereof for such Distribution Date) and the
denominator of which is 12; and
(ii) the excess of (x) the sum of the amount of Current
Interest and Interest Carry Forward Amount due and payable on the Interest
Bearing Certificates and the Class AF-5B Premium, in each case for such
Distribution Date, over (y) Interest Funds otherwise available to pay Current
Interest and the Interest Carry Forward Amount on the Interest Bearing
Certificates for such Distribution Date (after giving effect to the addition
of any amounts in clause (a) of this definition of Seller Shortfall Interest
Requirement to Interest Funds for such Distribution Date).
Senior Certificates: The Class AF, Class AV and Class A-R
Certificates.
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.
58
Sixty-Day Delinquency Rate: With respect to any Distribution Date
on or after the related Stepdown Date and any Loan Group or Loan Groups, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Stated Principal Balance for such Distribution Date of all Mortgage Loans in
such Loan Group or Loan Groups 60 or more days delinquent as of the close of
business on the last day of the calendar month preceding such Distribution
Date (including Mortgage Loans in foreclosure, bankruptcy and REO Properties)
and the denominator of which is the aggregate Stated Principal Balance for
such Distribution Date of all Mortgage Loans in such Loan Group or Loan
Groups.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance
of the Mortgage Loan as of such date (before any adjustment to the
amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to any partial prepayments or Liquidation Proceeds
received prior to such date and to the payment of principal due on or prior to
such date and irrespective any delinquency in payment by the related
Mortgagor, and (ii) as of any other Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date
and (y) that were received by the Master Servicer as of the close of business
on the Determination Date related to such Distribution Date or with respect to
which Advances were made as of the Master Servicer Advance Date related to
such Distribution Date, (b) all Principal Prepayments with respect to such
Mortgage Loan received by the Master Servicer during each Prepayment Period
ending prior to such Distribution Date and (c) all Liquidation Proceeds
collected with respect to such Mortgage Loan during each Due Period ending
prior to such Distribution Date, to the extent applied by the Master Servicer
as recoveries of principal in accordance with Section 3.12. The Stated
Principal Balance of any Mortgage Loan that becomes a Liquidated Mortgage Loan
will be zero on each date following the Due Period in which such Mortgage Loan
becomes a Liquidated Mortgage Loan. References herein to the Stated Principal
Balance of the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balance of all Mortgage Loans in the Trust Fund as of such time, and
references herein to the Stated Principal Balance of a Loan Group at any time
shall mean the aggregate Stated Principal Balance of all Mortgage Loans in
such Loan Group at such time.
Stepdown Target Subordination Percentage: For any Class of
Subordinate Certificates, the respective percentage indicated in the following
table:
Stepdown Target
Subordination
Percentage
-------------------------------
Class MF-1................... 26.70%
Class MF-2................... 21.80%
Class MF-3................... 18.80%
Class MF-4................... 15.80%
Class MF-5................... 13.30%
Class MF-6................... 10.90%
Class MF-7................... 8.90%
Class MF-8................... 6.90%
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Stepdown Target
Subordination
Percentage
----------
Class BF..................... 4.90%
Class MV-1................... 37.00%
Class MV-2................... 29.70%
Class MV-3................... 25.50%
Class MV-4................... 21.60%
Class MV-5................... 18.00%
Class MV-6................... 14.60%
Class MV-7................... 11.50%
Class MV-8................... 9.00%
Class BV..................... 6.50%
Subordinate Certificates: The Fixed Rate Subordinate Certificates
and the Adjustable Rate Subordinate Certificates.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all amounts in
respect of (i) principal of the related Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and received by the Master Servicer on or
before such Subsequent Transfer Date and not applied in computing the Cut-off
Date Principal Balance thereof and (ii) interest on the such Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and received by the
Master Servicer on or before the Subsequent Transfer Date.
Subordinate Component Balance: With respect to any Distribution
Date and for each of Loan Group 2, Loan Group 3 and Loan Group 4, the excess
of the principal balance of such Loan Group as of the first day of the related
Due Period (after giving effect to Principal Prepayments received in the
Prepayment Period ending during such Due Period) over the aggregate
Certificate Principal Balance of the Class 1-AV Certificates in the case of
Loan Group 2, the Class 2-AV Certificates in the case of Loan Group 3 and the
Class 3-AV Certificates in the case of Loan Group 4.
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.
Subordinate Net Rate Cap: For the Subordinate Certificates and the
Interest Accrual Period related to each Distribution Date, a per annum rate
equal to (1) the sum of the following for each Loan Group: the product of (x)
the Loan Group Net Rate Cap of the Related Loan Group and (y) the Subordinate
Component Balance related to that Loan Group, divided by (2) the aggregate
Certificate Principal Balances of the Subordinate Certificates immediately
prior to that Distribution Date.
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Subsequent Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that
limits permissible increases and decreases in the Mortgage Rate on any
Adjustment Date (other than the initial Adjustment Date).
Subsequent Recoveries: As to any Distribution Date, with respect
to a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior
calendar month, unexpected amounts received by the Master Servicer (net of any
related expenses permitted to be reimbursed pursuant to Section 3.08 and 3.12)
specifically related to such Liquidated Mortgage Loan after the classification
of such Mortgage Loan as a Liquidated Mortgage Loan.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P hereto, executed and delivered by the
Sellers, the Depositor and the Trustee as provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement,
the "Subsequent Transfer Date" identified in such Subsequent Transfer
Agreement; provided, however, the Subsequent Transfer Date for any Subsequent
Transfer Agreement must be a Business Day and may not be a date earlier than
the date on which the Subsequent Transfer Agreement is executed and delivered
by the parties thereto pursuant to Section 2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase Amount"
identified in the related Subsequent Transfer Agreement which shall be an
estimate of the aggregate Stated Principal Balances of the Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal to the lesser of (i) the aggregate
Stated Principal Balances as of the related Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed
on the related Loan Number and Borrower Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and (ii) the amount on deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(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.
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Tax Matters Person Certificate: With respect to the Master REMIC,
REMIC 1 and REMIC 2, the Class A-R Certificate with a Denomination of $0.05
and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trust Fund: The corpus of the trust created hereunder consisting
of (i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the Cut-off Date to the extent not applied in
computing the Cut-off Date Principal Balance thereof, exclusive of interest
not required to be deposited in the Certificate Account pursuant to Section
3.05(b)(2); (ii) the Certificate Account, the Distribution Account, the
Principal Reserve Fund, the Carryover Reserve Fund, the Credit Comeback Excess
Account, the Pre-Funding Account and all amounts deposited therein pursuant to
the applicable provisions of this Agreement; (iii) the rights to receive
certain proceeds of the Corridor Contracts as provided in the Corridor
Contract Administration Agreement, (iv) property that secured a Mortgage Loan
and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v) the mortgagee's rights under the Insurance Policies with
respect to the Mortgage Loan; (vi) with respect to the Class AF-5B
Certificates only, the Class AF-5B Policy; and (vii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid property.
Trustee: The Bank of New York, a New York banking corporation, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest determined
as of the date of such Advance equal to the Prime Rate in effect on such date
plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool
Stated Principal Balance and (ii) any amounts remaining in the Pre-Funding
Account (excluding any investment earnings thereon) with respect to such
Distribution Date.
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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, Greenwich
Capital Markets, Inc. and Bear, Xxxxxxx and Co. Inc.
Unpaid Realized Loss Amount: For the Class 2-AV-2 and Class 3-AV-3
Certificates and any Class of Subordinate Certificates and any Distribution
Date, (x) the portion of the aggregate Applied Realized Loss Amount previously
allocated to that Class remaining unpaid from prior Distribution Dates minus
(y) any increase in the Certificate Principal Balance of that Class due to the
allocation of Subsequent Recoveries to the Certificate Principal Balance of
that Class pursuant to Section 4.04(l) or 4.04(m).
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 95%
to the Certificates other than the Class A-R, Class CF, Class CV, Class PF and
Class PV 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 CF, Class CV, Class PF and Class PV Certificates. Voting
Rights will be allocated among the Certificates of each such Class in
accordance with their respective Percentage Interests. Notwithstanding any of
the foregoing, on any date on which any Class AF-5B Certificates are
outstanding or any amounts are owed the Class AF-5B Insurer under this
Agreement, unless a Class AF-5B Insurer Default shall have occurred and be
continuing, the Class AF-5B Insurer will be entitled to exercise the Voting
Rights of the Class AF-5B Certificateholders, without the consent of the Class
AF-5B Certificateholders, and the Class AF-5B Certificateholders may exercise
such rights only with the prior written consent of the Class AF-5B Insurer.
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
63
and not to any particular provision of this Agreement (or such certificate,
agreement or document); (c) references to any Section, Schedule or Exhibit are
references to Sections, Schedules and Exhibits in or to this Agreement, and
references to any paragraph, subsection, clause or other subdivision within
any Section or definition refer to such paragraph, subsection, clause or other
subdivision of such Section or definition; (d) the term "including" means
"including without limitation"; (e) references to any law or regulation refer
to that law or regulation as amended from time to time and include any
successor law or regulation; (f) references to any agreement refer to that
agreement as amended from time to time; and (g) references to any Person
include that Person's permitted successors and assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Initial Mortgage Loans,
including all interest and principal received and receivable by such Seller on
or with respect to applicable Initial Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date Principal
Balance thereof) or deposited into the Certificate Account by the Master
Servicer on behalf of such Seller as part of the Initial Certificate Account
Deposit as provided in this Agreement, other than principal due on the
applicable Initial Mortgage Loans on or prior to the Initial Cut-off Date and
interest accruing prior to the Initial Cut-off Date. The Master Servicer
confirms that, on behalf of the Sellers, concurrently with the transfer and
assignment, it has deposited into the Certificate Account the Initial
Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans
referred to in the preceding paragraph, the Depositor (i) sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders and the Class AF-5B Insurer, without recourse, all right
title and interest in the Initial Mortgage Loans and (ii) causes the Class
AF-5B Insurer to deliver the Class AF-5B Policy to the Trustee.
CHL further agrees (x) to cause The Bank of New York to enter into
the Corridor Contract Administration Agreement as Corridor Contract
Administrator and (y) to assign all of its right, title and interest in and to
the interest rate corridor transaction evidenced by each Confirmation, and to
cause all of its obligations in respect of such transaction to be assumed by,
the Corridor Contract Administrator, on the terms and conditions set forth in
the Corridor Contract Assignment Agreement.
(b) Subject to the execution and delivery of the related
Subsequent Transfer Agreement as provided by Section 2.01(d) and the terms and
conditions of this Agreement, each Seller sells, transfers, assigns, sets over
and otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal
received and receivable by such Seller on or with respect to such Subsequent
Mortgage Loans after the related
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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 and the Class AF-5B Insurer, without recourse, all right
title and interest in the Subsequent Mortgage Loans.
(c) Each Seller has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by the Depositor and has agreed to take
the actions specified herein. The Depositor, concurrently with the execution
and delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust
Fund not otherwise conveyed to the Trustee pursuant to Section 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by
CHL to the Trustee, the Sellers, the Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer Agreement. After the execution and
delivery of such Subsequent Transfer Agreement, on the Subsequent Transfer
Date, the Trustee shall set aside in the Pre-Funding Account an amount equal
to the related Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
(1) the Trustee and the Underwriters will be provided
Opinions of Counsel addressed to the Rating Agencies as with respect to
the sale of the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date (such opinions being substantially similar to the opinions
delivered on the Closing Date to the Rating Agencies with respect to the
sale of the Initial Mortgage Loans on the Closing Date), to be delivered
as provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does
not result in a reduction or withdrawal of the ratings assigned to the
Certificates by the Ratings Agencies (without regard to the Class AF-5B
Policy, in the case of the Class AF-5B Certificates);
(3) the Depositor shall deliver to the Trustee an
Officer's Certificate confirming the satisfaction of each of the
conditions set forth in this Section 2.01(e) required to be satisfied by
such Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date satisfies the representations and warranties
applicable to it under this Agreement, provided, however, that with
respect to a breach of a representation and warranty with respect to a
Subsequent Mortgage Loan set forth in this clause (4), the
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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;
(5) the Subsequent Mortgage Loans conveyed on such
Subsequent Transfer Date were selected in a manner reasonably believed
not to be adverse to the interests of the Certificateholders;
(6) no Subsequent Mortgage Loan conveyed on such
Subsequent Transfer Date was 30 or more days delinquent;
(7) following the conveyance of the Subsequent Mortgage
Loans on such Subsequent Transfer Date, the characteristics of each Loan
Group will not vary by more than the amount specified below (other than
the percentage of Mortgage Loans secured by Mortgaged Properties located
in the State of California, which will not exceed 50% of the Mortgage
Pool and the percentage of mortgage loans in the Credit Grade Categories
of "C" or below, which will not exceed 10% of the Mortgage Loans in each
Loan Group) from the characteristics listed below; provided that for the
purpose of making such calculations, the characteristics for any Initial
Mortgage Loan made will be taken as of the Initial Cut-off Date and the
characteristics for any Subsequent Mortgage Loans will be taken as of
the Subsequent Cut-off Date;
Loan Group 1
Permitted
Variance or
Characteristic Value Range
------------------------ ---------------------- -----------------
Average Stated Principal Balance................. $174,989 10%
Weighted Average Mortgage Rate................... 7.023% 0.10%
Weighted Average Original Loan-to-Value Ratio.... 76.34% 3%
Weighted Average Remaining Term to Maturity...... 348 months 3 months
Weighted Average Credit Bureau Risk Score........ 614 points 5 points
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Loan Group 2
Permitted
Variance or
Characteristic Value Range
------------------------ ---------------------- -----------------
Average Stated Principal Balance............ $198,434 10%
Weighted Average Mortgage Rate.............. 7.476% 0.10%
Weighted Average Original Loan-to-Value Ratio 81.49% 3%
Weighted Average Remaining Term to Maturity. 358 months 3 months
Weighted Average Credit Bureau Risk Score... 593 points 5 points
Loan Group 3
Permitted
Variance or
Characteristic Value Range
------------------------ ---------------------- -----------------
Average Stated Principal Balance............ $177,890 10%
Weighted Average Mortgage Rate.............. 6.984% 0.10%
Weighted Average Original Loan-to-Value Ratio 79.15% 3%
Weighted Average Remaining Term to Maturity. 359 months 3 months
Weighted Average Credit Bureau Risk Score... 607 points 5 points
Loan Group 4
Permitted
Variance or
Characteristic Value Range
------------------------ ---------------------- -----------------
Average Stated Principal Balance............ $178,134 10%
Weighted Average Mortgage Rate.............. 7.045% 0.10%
Weighted Average Original Loan-to-Value Ratio 79.89% 3%
Weighted Average Remaining Term to Maturity. 358 months 3 months
Weighted Average Credit Bureau Risk Score... 602 points 5 points
(8) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered insolvent by
the conveyance of Subsequent Mortgage Loans on such Subsequent Transfer
Date; and
(9) the Trustee and the Underwriters will be provided with
an Opinion of Counsel, which Opinion of Counsel shall not be at the
expense of either the Trustee or the Trust Fund, addressed to the
Trustee, to the effect that such purchase of Subsequent Mortgage Loans
will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date,
as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively
or (ii) cause any REMIC formed hereunder to fail to qualify as a REMIC,
such opinion to be delivered as provided in Section 2.01(f).
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The Trustee shall not be required to investigate or otherwise
verify compliance with these conditions, except for its own receipt of
documents specified above, and shall be entitled to rely on the required
Officer's Certificate.
(f) Within six Business Days after each Subsequent Transfer
Date, upon (1) delivery to the Trustee by the Depositor of the Opinions of
Counsel referred to in Section 2.01(e)(1) and (e)(9), (2) delivery to the
Trustee by CHL (on behalf of each Seller) of a Loan Number and Borrower
Identification Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans
conveyed on such Subsequent Transfer Date and the Loan Group into which each
Subsequent Mortgage Loan was conveyed, (3) deposit in the Certificate Account
by the Master Servicer on behalf of the Sellers of the applicable Subsequent
Certificate Account Deposit, and (4) delivery to the Trustee by the Depositor
of an Officer's Certificate confirming the satisfaction of each of the
conditions precedent set forth in this Section 2.01(f), the Trustee shall pay
the applicable Seller the Subsequent Transfer Date Transfer Amount from such
funds that were set aside in the Pre-Funding Account pursuant to Section
2.01(d). The positive difference, if any, between the Subsequent Transfer Date
Transfer Amount and the Subsequent Transfer Date Purchase Amount shall be
re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise
verify compliance with the conditions set forth in the preceding paragraph,
except for its own receipt of documents specified above, and shall be entitled
to rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee a letter of a nationally recognized
firm of independent public accountants stating whether or not the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date conform to the
characteristics described in Section 2.01(e)(6) and (7).
(g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver
to, and deposit with, the Co-Trustee within the time periods specified in the
definition of Delay Delivery Mortgage Loans) (except as provided in clause
(vi) below) for the benefit of the Certificateholders, the following documents
or instruments with respect to each such Mortgage Loan so assigned (with
respect to each Mortgage Loan, clause (i) through (vi) below, together, the
"Mortgage File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank, in the following form: "Pay to the
order of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit, stating that the original Mortgage
Note was lost or destroyed, together with a copy of the related
Mortgage Note;
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(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN of the Mortgage Loan and language indicating
that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM
Loan, with evidence of recording indicated thereon, or a copy of
the Mortgage certified by the public recording office in which
such Mortgage has been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2005-1, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under
the Pooling and Servicing Agreement dated as of March 1, 2005,
without recourse" (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the
Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any;
and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto or, in the event such original title policy has not been
received from the insurer, such original or duplicate original
lender's title policy and all riders thereto shall be delivered
within one year of the Closing Date.
In addition, in connection with the assignment of any MERS
Mortgage Loan, each Seller agrees that it will cause, at such Seller's own
expense, the MERS(R) System to indicate (and provide evidence to the Trustee
that it has done so) that such Mortgage Loans have been assigned by such
Seller to the Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Sellers further agree that they will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
In the event that in connection with any Mortgage Loan that is not
a MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage or
all interim recorded
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assignments of the Mortgage satisfying the requirements of clause (ii), (iii)
or (iv) concurrently with the execution and delivery hereof, such Seller shall
deliver or cause to be delivered to the Co-Trustee a true copy of such
Mortgage and of each such undelivered interim assignment of the Mortgage each
certified by such Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan
each Seller shall promptly deliver or cause to be delivered to the Co-Trustee
such original Mortgage and such assignment or assignments with evidence of
recording indicated thereon upon receipt thereof from the public recording
official, or a copy thereof, certified, if appropriate, by the relevant
recording office, but in no event shall any such delivery be made later than
270 days following the Closing Date; provided that in the event that by such
date such Seller is unable to deliver or cause to be delivered each such
Mortgage and each interim assignment by reason of the fact that any such
documents have not been returned by the appropriate recording office, or, in
the case of each interim assignment, because the related Mortgage has not been
returned by the appropriate recording office, such Seller shall deliver or
cause to be delivered such documents to the Co-Trustee as promptly as possible
upon receipt thereof. If the public recording office in which a Mortgage or
interim assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall satisfy a Seller's obligations in Section 2.01. If any
document submitted for recording pursuant to this Agreement is (x) lost prior
to recording or rejected by the applicable recording office, the applicable
Seller shall immediately prepare or cause to be prepared a substitute and
submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the applicable
Seller shall deliver to the Co-Trustee a copy of such document certified by
the applicable public recording office to be a true and complete copy of the
original recorded document. Each Seller shall promptly forward or cause to be
forwarded to the Co-Trustee (x) from time to time additional original
documents evidencing an assumption or modification of a Mortgage Loan and (y)
any other documents required to be delivered by the Depositor or the Master
Servicer to the Co-Trustee within the time periods specified in this Section
2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan
as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel delivered by CHL
to the Trustee and a copy to the Rating Agencies, in lieu of recording the
assignment specified in clause (iii) above, the applicable Seller may deliver
an unrecorded assignment in blank, in form otherwise suitable for recording to
the Co-Trustee; provided that if the related Mortgage has not been returned
from the applicable public recording office, such assignment, or any copy
thereof, of the Mortgage may exclude the information to be provided by the
recording office. As to any Mortgage Loan other than a MERS Mortgage Loan, the
procedures of the preceding sentence shall be applicable only so long as the
related Mortgage File is maintained in the possession of the Co-Trustee in the
State or jurisdiction described in such sentence. In the event that with
respect to Mortgage Loans other than MERS Mortgage Loans (i) any Seller, the
Depositor, the Master Servicer or the NIM Insurer gives written notice to the
Trustee that recording is required to protect the right, title and interest of
the Trustee on behalf of the Certificateholders in and to
70
any Mortgage Loan, (ii) a court recharacterizes any sale of the Mortgage Loans
as a financing, or (iii) as a result of any change in or amendment to the laws
of the State or jurisdiction described in the first sentence of this paragraph
or any applicable political subdivision thereof, or any change in official
position regarding application or interpretation of such laws, including a
holding by a court of competent jurisdiction, such recording is so required,
the Co-Trustee shall complete the assignment in the manner specified in clause
(iii) of the second paragraph of this Section 2.01(g) and CHL shall submit or
cause to be submitted for recording as specified above or, should CHL fail to
perform such obligations, the Trustee shall cause the Master Servicer, at the
Master Servicer's expense, to cause each such previously unrecorded assignment
to be submitted for recording as specified above. In the event a Mortgage File
is released to the Master Servicer as a result of the Master Servicer's having
completed a Request for Document Release, the Trustee shall complete the
assignment of the related Mortgage in the manner specified in clause (iii) of
the second paragraph of this Section 2.01(g).
So long as the Co-Trustee or its agent maintains an office in the
State of California, the Co-Trustee or its agent shall maintain possession of
and not remove or attempt to remove from the State of California any of the
Mortgage Files as to which the related Mortgaged Property is located in such
State. In the event that a Seller fails to record an assignment of a Mortgage
Loan as herein provided within 90 days of notice of an event set forth in
clause (i), (ii) or (iii) of the above paragraph, the Master Servicer shall
prepare and, if required hereunder, file such assignments for recordation in
the appropriate real property or other records office. Each Seller hereby
appoints the Master Servicer (and any successor servicer hereunder) as its
attorney-in-fact with full power and authority acting in its stead for the
purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date (in the case of Initial Mortgage
Loans) or related Subsequent Transfer Date (in the case of Subsequent Mortgage
Loans) and the Cut-off Date, CHL shall deposit or cause to be deposited in the
Certificate Account the amount required to be deposited therein with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date (in the case of Initial Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall either (i)
deliver to the Co-Trustee the Mortgage File as required pursuant to this
Section 2.01 for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the
Delay Delivery Mortgage Loan or (B) substitute the Delay Delivery Mortgage
Loan for a Replacement Mortgage Loan, which repurchase or substitution shall
be accomplished in the manner and subject to the conditions set forth in
Section 2.03, provided that if CHL fails to deliver a Mortgage File for any
Delay Delivery Mortgage Loan within the period provided in the prior sentence,
the cure period provided for in Section 2.02 or in Section 2.03 shall not
apply to the initial delivery of the Mortgage File for such Delay Delivery
Mortgage Loan, but rather CHL shall have five (5) Business Days to cure such
failure to deliver. CHL shall promptly provide each Rating Agency with written
notice of any cure, repurchase or substitution made pursuant to the proviso of
the preceding sentence. On or before the thirtieth (30th) day (or if such
thirtieth day is not a Business Day, the succeeding Business Day) after the
Closing Date (in the case of Initial Mortgage Loans) or within twenty days
after the related Subsequent Transfer Date (in the
71
case of Subsequent Mortgage Loans), the Trustee shall, in accordance with the
provisions of Section 2.02, send a Delay Delivery Certification substantially
in the form annexed hereto as Exhibit G-3 (with any applicable exceptions
noted thereon) for all Delay Delivery Mortgage Loans delivered within thirty
(30) days after such date. The Trustee will promptly send a copy of such Delay
Delivery Certification to each Rating Agency.
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions
attached thereto, of the documents referred to in clauses (i) and (iii) of
Section 2.01(g) above with respect to the Initial Mortgage Loans and all other
assets included in the Trust Fund and declares that it holds and will hold
such documents and the other documents delivered to it constituting the
Mortgage Files, and that it holds or will hold such other assets included in
the Trust Fund, in trust for the exclusive use and benefit of all present and
future Certificateholders.
The Trustee agrees to execute and deliver on the Closing Date to
the Depositor, the Master Servicer and CHL (on behalf of each Seller) an
Initial Certification substantially in the form annexed hereto as Exhibit G-1
to the effect that, as to each Initial Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Initial Mortgage Loan paid in full or any
Initial Mortgage Loan specifically identified in such certification as not
covered by such certification), the documents described in Section 2.01(g)(i)
and, in the case of each Initial Mortgage Loan that is not a MERS Mortgage
Loan, the documents described in Section 2.01(g)(iii) with respect to such
Initial Mortgage Loans as are in the Co-Trustee's possession and based on its
review and examination and only as to the foregoing documents, such documents
appear regular on their face and relate to such Initial Mortgage Loan. The
Trustee agrees to execute and deliver within 30 days after the Closing Date to
the Depositor, the Master Servicer and CHL (on behalf of each Seller) an
Interim Certification substantially in the form annexed hereto as Exhibit G-2
to the effect that, as to each Initial Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Initial Mortgage Loan paid in full or any
Initial Mortgage Loan specifically identified in such certification as not
covered by such certification) all documents required to be delivered to the
Co-Trustee pursuant to the Agreement with respect to such Initial Mortgage
Loans are in its possession (except those documents described in Section
2.01(g)(vi)) and based on its review and examination and only as to the
foregoing documents, (i) such documents appear regular on their face and
relate to such Initial Mortgage Loan, and (ii) the information set forth in
items (i), (iv), (v), (vi), (viii), (ix) and (xvii) of the definition of the
"Mortgage Loan Schedule" accurately reflects information set forth in the
Mortgage File. On or before the thirtieth (30th) day after the Closing Date
(or if such thirtieth day is not a Business Day, the succeeding Business Day),
the Trustee shall deliver to the Depositor, the Master Servicer and CHL (on
behalf of each Seller) a Delay Delivery Certification with respect to the
Initial Mortgage Loans substantially in the form annexed hereto as Exhibit
G-3, with any applicable exceptions noted thereon. The Co-Trustee or the
Trustee, as applicable, shall be under no duty or obligation to inspect,
review or examine such documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
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Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller) and to any Certificateholder that so requests, a Final Certification
with respect to the Initial Mortgage Loans substantially in the form annexed
hereto as Exhibit H, with any applicable exceptions noted thereon.
In connection with the Trustee's completion and delivery of such
Final Certification, the Co-Trustee, at the Trustee's direction, shall review
each Mortgage File with respect to the Initial Mortgage Loans to determine
that such Mortgage File contains the following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank, in the following form: "Pay to the
order of ________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original
Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit, stating that the original Mortgage
Note was lost or destroyed, together with a copy of the related
Mortgage Note;
(ii) in the case of each Initial Mortgage Loan that is not
a MERS Mortgage Loan, the original recorded Mortgage, and in the
case of each Initial Mortgage Loan that is a MERS Mortgage Loan,
the original Mortgage, noting the presence of the MIN of the
Initial Mortgage Loan and language indicating that the Mortgage
Loan is a MOM Loan if the Initial Mortgage Loan is a MOM Loan,
with evidence of recording indicated thereon, or a copy of the
Mortgage certified by the public recording office in which
Mortgage has been recorded;
(iii) in the case of each Initial Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage
in the form permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any;
and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall
state in such Final Certification whether any Mortgage File does not then
include the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all
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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 constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against any Seller.
It is understood and agreed that the obligation of CHL to
substitute for or to purchase, pursuant to Section 2.02(a), any Initial
Mortgage Loan whose Mortgage File contains any document or documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and which defect
is not corrected or cured by CHL within 90 days from the date it was notified
of such defect, shall constitute the sole remedy respecting such defect
available to the Trustee, the Co-Trustee, the Depositor and any
Certificateholder against any Seller.
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(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 (xvii) of the definition
of the "Mortgage Loan Schedule" accurately reflects information set forth in
the Mortgage File. On or before the thirtieth (30th) day after the Subsequent
Transfer Date (or if such thirtieth day is not a Business Day, the succeeding
Business Day), the Trustee shall deliver to the Depositor, the Master Servicer
and CHL (on behalf of each Seller) a Delay Delivery Certification with respect
to the Subsequent Mortgage Loans substantially in the form annexed hereto as
Exhibit G-3, with any applicable exceptions noted thereon, together with a
Subsequent Certification substantially in the form annexed hereto as Exhibit
G-4. The Trustee shall be under no duty or obligation to inspect, review or
examine such documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records or
that they are other than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the
Trustee shall deliver to the Depositor, the Master Servicer, CHL (on behalf of
each Seller) and to any Certificateholder that so requests a Final
Certification with respect to the Subsequent Mortgage Loans substantially in
the form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
In connection with the Trustee's completion and delivery of such
Final Certification, the Co-Trustee shall review each Mortgage File with
respect to the Subsequent Mortgage Loans to determine that such Mortgage File
contains the following documents:
(i) the original Mortgage Note, endorsed by manual or
facsimile signature in blank, in the following form: "Pay to the order
of ________________ without recourse", with all intervening endorsements
that show a complete chain of
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endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right,
title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original Mortgage
Note has been lost or destroyed and not replaced, an original lost note,
stating that the original Mortgage Note was lost or destroyed, together
with a copy of the related Mortgage Note;
(ii) in the case of each Subsequent Mortgage Loan that is
not a MERS Mortgage Loan, the original recorded Mortgage, and in the
case of each Subsequent Mortgage Loan that is a MERS Mortgage Loan, the
original Mortgage, noting the presence of the MIN of the Subsequent
Mortgage Loan and language indicating that the Subsequent Mortgage Loan
is a MOM Loan if the Subsequent Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which Mortgage has been
recorded;
(iii) in the case of each Subsequent Mortgage Loan that is
not a MERS Mortgage Loan, a duly executed assignment of the Mortgage in
the form permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such Mortgage
(noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption,
modification, written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title
policy or a printout of the electronic equivalent and all riders
thereto.
If, in the course of such review, the Co-Trustee finds any
document or documents constituting a part of such Mortgage File that do not
meet the requirements of clauses (i)-(iv) and (vi) above, the Trustee shall
include such exceptions in such Final Certification (and the Trustee shall
state in such Final Certification whether any Mortgage File does not then
include the original or duplicate original lender's title policy or a printout
of the electronic equivalent and all riders thereto). If the public recording
office in which a Mortgage or assignment thereof is recorded retains the
original of such Mortgage or assignment, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable. CHL shall
promptly correct or cure such defect referred to above within 90 days from the
date it was so notified of such defect and, if CHL does not correct or cure
such defect within such period, CHL shall either (A) if the time to cure such
defect expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Subsequent Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to
the conditions set forth in Section 2.03, or (B) purchase such Subsequent
Mortgage Loan from the Trust Fund within 90 days from the date CHL was
notified of such defect in writing at the Purchase Price of such Subsequent
Mortgage Loan; provided that any such substitution pursuant to (A) above or
repurchase pursuant to (B) above shall not be effected
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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 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.
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(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 any Subsequent Transfer Agreement or
the ability of the Master Servicer to service the Mortgage Loans or to
perform any of its other obligations under this Agreement or any
Subsequent Transfer Agreement in accordance with the terms hereof or
thereof.
(6) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of, or compliance by the
Master Servicer with, this Agreement or the
78
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.
(8) The Master Servicer has fully furnished and will fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis for the Mortgage Loans in Loan
Group 3.
(b) CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Initial Cut-off Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Cut-off Date in the case of
the Subsequent Mortgage Loans (unless otherwise indicated or the context
otherwise requires, percentages with respect to the Initial Mortgage Loans in
the Trust Fund or in a Loan Group or Loan Groups are measured by the Cut-off
Date Principal Balance of the Initial Mortgage Loans in the Trust Fund or of
the Initial Mortgage Loans in the related Loan Group or Loan Groups, as
applicable):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of New
York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by CHL in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to ensure
its ability to enforce each Mortgage Loan, to sell the CHL Mortgage
Loans in accordance with the terms of this Agreement and each Subsequent
Transfer Agreement and to perform any of its other obligations under
this Agreement and each Subsequent Transfer Agreement in accordance with
the terms hereof and thereof.
(2) CHL has the full corporate power and authority to sell
each CHL Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly authorized
by all necessary corporate action on the part of CHL the execution,
delivery and performance of this Agreement and each 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.
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(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 Initial Mortgage Loan is true and correct in all
material respects as of the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans
to the Depositor as a sale of the CHL Mortgage Loans for all tax,
accounting and regulatory purposes.
(9) None of the Mortgage Loans is delinquent in payment of
principal and interest.
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(10) No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and
enforceable first lien on the related Mortgaged Property subject only to
(1) the lien of non-delinquent current real property taxes and
assessments, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording
of such Mortgage, such exceptions appearing of record being acceptable
to mortgage lending institutions generally or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan and (3) other matters to which like properties are
commonly subject that do not materially interfere with the benefits of
the security intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL
Mortgage Loan to the Depositor, CHL had good title to, and was the sole
owner of, such CHL Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any other
party, to sell and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against
any Mortgaged Property.
(14) There is no valid offset, claim, defense or
counterclaim to any Mortgage Note or Mortgage, including the obligation
of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note.
(15) There are no mechanics' liens or claims for work,
labor or material affecting any Mortgaged Property that are or may be a
lien prior to, or equal with, the lien of such Mortgage, except those
that are insured against by the title insurance policy referred to in
item (18) below.
(16) As of the Closing Date 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.
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(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Principal
Balance of each such Mortgage Loan or a commitment (binder) to issue the
same was effective on the date of the origination of each Mortgage Loan,
each such policy is valid and remains in full force and effect, and each
such policy was issued by a title insurer qualified to do business in
the jurisdiction where the Mortgaged Property is located and acceptable
to Xxxxxx Xxx 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 any 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.
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(23) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and
enforceable provisions that render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of
the benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(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 Initial Mortgage Loans in Loan Group 1,
Loan Group 2, Loan Group 3 and Loan Group 4 are secured by single family
detached dwellings. No more than approximately the percentage specified
in the Collateral Schedule of the Initial Mortgage Loans in Loan Group
1, Loan Group 2, Loan Group 3 and Loan Group 4 are secured by two- to
four-family dwellings. No more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans in
Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 are secured by
low-rise condominium units.
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No more than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans in Loan Group 1, Loan Group 2,
Loan Group 3 and Loan Group 4 are secured by high-rise condominium
units. No more than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group 1, Loan
Group 2, Loan Group 3 and Loan Group 4 are secured by manufactured
housing. No more than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group 1, Loan
Group 2, Loan Group 3 and Loan Group 4 are secured by PUDs.
(33) Each Initial Mortgage Loan in Loan Group 1, Loan Group
2, Loan Group 3 and Loan Group 4 was originated on or after the date
specified in the Collateral Schedule.
(34) Each Initial Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan or a
Three-Year Hybrid Mortgage Loan, had an initial Adjustment Date no later
than the applicable date specified on the Collateral Schedule; each
Initial Mortgage Loan that is a Two-Year Hybrid Mortgage Loan had an
initial Adjustment Date no later than the applicable date specified on
the Collateral Schedule; and each Initial Mortgage Loan that is a
Three-Year Hybrid Mortgage Loan had an initial Adjustment Date no later
than the applicable date specified on the Collateral Schedule.
(35) Approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group 1, Loan
Group 2, Loan Group 3 and Loan Group 4 provide for a prepayment penalty.
(36) On the basis of representations made by the Mortgagors
in their loan applications, no more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans in
Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4, respectively,
are secured by investor properties, and no less than approximately the
percentage specified in the Collateral Schedule of the Initial Mortgage
Loans in Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4
respectively, 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
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any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in
the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form meeting
the requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property with
a generally acceptable carrier in an amount representing coverage not
less than the least of (A) the original outstanding principal balance of
the Mortgage Loan, (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis, or (C) the maximum amount of
insurance that is available under the Flood Disaster Protection Act of
1973, as amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation
of the Mortgaged Property.
(40) There is no material monetary default existing under
any Mortgage or the related Mortgage Note and, to the best of CHL's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and no Seller has waived any
default, breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of CHL's knowledge, no improvement
to a Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date
have been consolidated with the outstanding principal amount secured by
the Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note does
not permit or obligate the Master Servicer to make future advances to
the Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or
ground rents that previously became due and owing have been paid, or an
escrow of funds has been established in an amount sufficient to pay for
every such item that remains unpaid and that has been assessed, but is
not yet due and payable. Except for (A) payments in the nature of escrow
payments, and (B) interest accruing from the date of the Mortgage Note
or date of disbursement of
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the Mortgage proceeds, whichever is later, to the day that precedes by
one month the Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments,
the Master Servicer has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten
in all material respects in accordance with CHL's underwriting
guidelines for credit blemished quality mortgage loans or, with respect
to Mortgage Loans purchased by CHL were underwritten in all material
respects in accordance with customary and prudent underwriting
guidelines generally used by originators of credit blemished quality
mortgage loans.
(46) Prior to the approval of the Mortgage Loan
application, an appraisal of the related Mortgaged Property was obtained
from a qualified appraiser, duly appointed by the originator, who had no
interest, direct or indirect, in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan; such appraisal is in a
form acceptable to 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 Initial Mortgage Loans
in Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 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) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable
Seller's portfolio at the Closing Date as to which the representations
and warranties made as to the Mortgage Loans set forth in this Section
2.03(b) and Section 2.03(c) can be made. No selection was made in a
manner that would adversely affect the interests of Certificateholders.
(50) The Gross Margins on the Initial Mortgage Loans in :
Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 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.
(51) Each of the Initial Mortgage Loans in the Mortgage
Pool has a Due Date on or before the date specified in the Collateral
Schedule.
(52) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
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(53) There is no obligation on the part of any Seller under
the terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(54) 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.
(55) 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.
(56) 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).
(57) 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.
(58) 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.
(59) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit.
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No borrower obtained a prepaid single-premium credit life, disability,
accident or health insurance policy in connection with the origination
of the Mortgage Loan;
(60) 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;
(61) 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
no Seller nor, to the best of CHL's knowledge, the Mortgagor, has
received any notice of any violation or potential violation of such law;
(62) 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 any Seller before or
by any court, administrative agency, arbitrator or governmental body;
(63) 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;
(64) Each Mortgage Loan has a fully assignable life of loan
tax service contract which may be assigned without the payment of any
fee;
(65) 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;
(66) 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;
(67) 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;
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(68) Each Mortgage Loan, at the time it was originated and
as of the Closing Date or the related Subsequent Transfer Date, as
applicable, complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all predatory and
abusive lending laws;
(69) None of the Mortgage Loans is a "high cost" mortgage
loan as defined by applicable federal, state and local predatory and
abusive lending laws;
(70) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and local
laws;
(71) 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; 815 Ill. Comp. Stat. 205/0.01
(2004);
(72) 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;
(73) 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
5.6b 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;
(74) 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;
(75) No Mortgage Loan in the Trust Fund is a "high cost
home," "covered" (excluding home loans defined as "covered home loans"
in the New Jersey Home Ownership Security Act of 2002 that were
originated between November 26, 2003 and July 7, 2004), "high risk home"
or "predatory" loan under any applicable state, federal or local law (or
a similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points and/or
fees);
(76) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003, which
is secured by property located in the State of Georgia;
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(77) Representations and Warranties relating to the
Mortgage Loans in Loan Group 3:
(i) No Mortgage Loan in Loan Group 3 is covered by HOEPA;
(ii) No borrower was required to purchase any single
premium credit insurance policy (e.g., life, disability, accident,
unemployment, or health insurance product) or debt cancellation
agreement as a condition of obtaining the extension of credit. No
borrower obtained a prepaid single-premium credit insurance policy
(e.g., life, disability, accident, unemployment, mortgage, or
health insurance) in connection with the origination of the
Mortgage Loan; No proceeds from any Mortgage Loan in Loan Group 3
were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as
a condition to closing, such Mortgage Loan;
(iii) No Mortgage Loan in Loan Group 3 originated on or
after October 1, 2002 will impose a prepayment premium for a term
in excess of three years. Any Mortgage Loan in Loan Group 3
originated prior to such date will not impose prepayment penalties
in excess of five years;
(iv) With respect to (a) any Mortgage Loan in Loan Group 3
originated by CHL from August 1, 2004 through April 30, 2005 and
(b) any Mortgage Loan in Loan Group 3 originated by any other
entity through April 30, 2005, if the related Mortgage or the
related Mortgage Note, or any document relating to the loan
transaction, contains a mandatory arbitration clause (that is, a
clause that requires the borrower to submit to arbitration to
resolve any dispute arising out of or relating in any way to the
mortgage loan transaction), CHL will (i) notify the related
borrower in writing within 60 days after the issuance of the
Certificates that none of the related seller, the related servicer
or any subsequent party that acquires an interest in the loan or
services such Mortgage Loan will enforce such arbitration clause
against the borrower, but that the borrower will continue to have
the right to submit a dispute to arbitration and (ii) place a copy
of such notice in the Mortgage File;
(v) Each Mortgage Loan in Loan Group 3 had an original
principal balance that conforms to Xxxxxxx Mac guidelines
concerning original principal balance limits at the time of the
origination of such mortgage loan; and
(78) Representations and Warranties relating to the
Mortgage Loans in Loan Group 4:
(i) Each Mortgage Loan in Loan Group 4 is in compliance
with the anti-predatory lending eligibility for purchase
requirements of Xxxxxx Mae's Selling Guide;
(ii) No Mortgage Loan in Loan Group 4 is subject to the
requirements of the Home Ownership and Equity Protection Act of
1994 ("HOEPA");
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(iii) Each Mortgage Loan in Loan Group 4 at the time it was
made complied in all material respects with applicable local,
state, and federal laws, including, but not limited to, all
applicable predatory and abusive lending laws;
(iv) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in the Georgia Fair Lending Act, as amended (the
"Georgia Act"). No Mortgage Loan in Loan Group 4 subject to the
Georgia Act and secured by owner occupied real property or an
owner occupied manufactured home located in the State of Georgia
was originated (or modified) on or after October 1, 2002 through
and including March 6, 2003;
(v) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in New York Banking Law 6-1;
(vi) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in the Arkansas Home Loan Protection Act
effective July 16, 2003 (Act 1340 of 2003);
(vii) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in the Kentucky high-cost home loan statute
effective June 24, 2003 (Ky. Rev. Stat. Section 360.100);
(viii) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 (N.J.S.A. 46:10B-22 et seq.);
(ix) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004 (N.M. Stat. Xxx. xx.xx. 58-21A-1 et
seq.);
(x) No Mortgage Loan in Loan Group 4 is a "High-Risk Home
Loan" as defined in the Illinois High-Risk Home Loan Act effective
January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.);
(xi) No Mortgage Loan in Loan Group 4 is a "High-Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. Xxx. Laws Ch.
183C);
(xii) No Mortgage Loan in Loan Group 4 is a "High Cost Home
Loan" as defined in the Indiana Home Loan Practices Act, effective
January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9);
(xiii) No Mortgage Loan in Loan Group 4 is a balloon
mortgage loan that has an original stated maturity of less than
seven (7) years;
(xiv) No borrower related to a Mortgage Loan in Loan Group 4
was encouraged or required to select a Mortgage Loan product
offered by the Mortgage Loan's originator which is a higher cost
product designed for less
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creditworthy borrowers, unless at the time of such Mortgage Loan's
origination, such borrower did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit
product then offered by such Mortgage Loan's originator or any
affiliate of the Mortgage Loan's originator. If, at the time of
loan application, the borrower may have qualified for a for a
lower-cost credit product then offered by any mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's
originator referred the borrower's application to such affiliate
for underwriting consideration;
(xv) The methodology used in underwriting the extension of
credit for each Mortgage Loan in Loan Group 4 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 such
Mortgage Loan;
(xvi) With respect to any Mortgage Loan in Loan Group 4 that
contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the loan's origination,
the borrower agreed to such premium in exchange for a monetary
benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the
option of obtaining a mortgage loan that did not require payment
of such a premium, (iii) the prepayment premium is disclosed to
the borrower in the loan documents pursuant to applicable state
and federal law, (iv) for loans originated on or after September
1, 2004, the duration of the prepayment period shall not exceed
three (3) years from the date of the note, unless the loan was
modified to reduce the prepayment period to no more than three
years from the date of the note and the borrower was notified in
writing of such reduction in prepayment period, and (v)
notwithstanding any state or federal law to the contrary, the
Servicer shall not impose such prepayment premium in any instance
when the mortgage debt is accelerated as the result of the
borrower's default in making the loan payments;
(xvii) No borrower related to a Mortgage Loan in Loan Group
4 was required to purchase any credit, life, disability, accident
or health insurance product as a condition of obtaining the
extension of credit. No borrower related to a Mortgage Loan in
Loan Group 4 obtained a prepaid single-premium credit, life,
disability, accident or health insurance policy in connection with
the origination of the Mortgage Loan in Loan Group 4; No proceeds
from any Mortgage Loan in Loan Group 4 were used to purchase
single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xviii) All points and fees related to each Mortgage Loan in
Loan Group 4 were disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation.
Except in the case of a Mortgage Loan in Loan Group
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4 in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no borrower was
charged "points and fees" (whether or not financed) in an amount
greater than 5% of the principal amount of such loan, such 5%
limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Xxx
Selling Guide;
(xix) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage
Loan in Loan Group 4 has been disclosed in writing to the borrower
in accordance with applicable state and federal law and
regulation; and
(xx) The Servicer will transmit full-file credit reporting
data for each Mortgage Loan pursuant to Xxxxxx Mae Guide
Announcement 95-19 and that for each Mortgage Loan, Servicer
agrees it shall report one of the following statuses each month as
follows: new origination, current, delinquent (30-, 60-, 90-days,
etc.), foreclosed, or charged-off.
(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 corporate 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
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
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(3) The execution and delivery of this Agreement 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 bylaws of Park Monaco or (B) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which Park Monaco is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to Park Monaco of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over Park Monaco; and Park Monaco is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair Park Monaco's
ability to perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park
Monaco's knowledge, threatened, against Park Monaco that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or 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 Park Monaco Mortgage Loan free and clear
of any pledge, lien, encumbrance or security interest and had full right
and authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to this
Agreement.
(d) Park Sienna hereby represents and warrants to the Depositor
and the Trustee as follows, as of the Cut-off Date:
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(1) Park Sienna is duly organized as a Delaware limited
liability company 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 Sienna in any
state in which a Mortgaged Property securing a Park Sienna 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 Sienna Mortgage Loan, to sell the Park
Sienna 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 Sienna has the full company power and authority
to sell each Park Sienna 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 Park Sienna
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 Sienna, enforceable against Park Sienna
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Sienna, the sale of the Park
Sienna Mortgage Loans by Park Sienna 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 Sienna and will not (A)
result in a material breach of any term or provision of the certificate
of formation or limited liability company agreement of Park Sienna 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 Sienna 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 Sienna of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Park Sienna; and Park Sienna 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 Sienna's ability to perform or meet any of its obligations
under this Agreement.
(4) No litigation is pending or, to the best of Park
Sienna's knowledge, threatened, against Park Sienna that would
materially and adversely affect the execution,
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delivery or enforceability of this Agreement or any Subsequent Transfer
Agreement or the ability of Park Sienna to sell the Park Sienna 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 Sienna of, or compliance by Park Sienna
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 Sienna has
obtained the same.
(6) Park Sienna will treat the transfer of the Park Sienna
Mortgage Loans to the Depositor as a sale of the Park Sienna Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park
Sienna Mortgage Loan to the Depositor, Park Sienna had good title to,
and was the sole owner of, such the Park Sienna 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.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (d) 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
(d) 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 or the Class AF-5B Insurer, 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
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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. Any breach of a representation set
forth in Section 2.03(a)(8), (b)(72), (b)(75), (b)(76) or (b)(77) shall be
deemed to materially and adversely affect the Certificateholders.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall deliver to
the Trustee for the benefit of the Certificateholders the related Mortgage
Note, Mortgage and assignment of the Mortgage, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No substitution will be
made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller delivering such Replacement Mortgage Loan on such
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the applicable Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
applicable Seller delivering such Replacement Mortgage Loan shall be deemed to
have made with respect to such Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties set forth in Section
2.03(b), (c) or (d) 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 any 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
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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.
(f) 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 and each Subsequent Transfer 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.
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(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 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 each Mortgage Loan, as of the Closing Date or the related Subsequent
Transfer Date, as applicable, following the transfer of such Mortgage Loan 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, with respect to any Mortgage Loan 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, with
respect to any Mortgage Loan 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
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cured, shall repurchase or replace the affected Mortgage Loan or Loans in
accordance with the procedure set forth in Section 2.03(e).
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 shall 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
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or
the substitution therefor shall occur (subject to compliance with Sections
2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such loan and (b) receipt by the Trustee of
an Opinion of Counsel to the effect that such repurchase or substitution, as
applicable, will not result in the events described in clause (i) or clause
(ii) of the preceding sentence.
(b) Upon discovery by the Depositor, any 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 five
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(e) 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.
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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 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. 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 or (ii) result in the imposition of any tax under section
860(a) or 860(d) of the Code, 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
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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 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 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.
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 (without
regard to the Class AF-5B Policy in the case of the Class AF-5B 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, the Class
AF-5B Insurer and the Trustee in Respect of the
Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer, the Class AF-5B 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
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Subservicing Agreement shall provide that each Subservicer shall afford) the
Depositor, the NIM Insurer, the Class AF-5B Insurer and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the 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, the Class AF-5B 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 Class AF-5B Insurer, 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 Class AF-5B
Insurer, the NIM Insurer or the Trust Fund, and in either case, the Depositor,
the Class AF-5B Insurer, 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
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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 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 on or 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;
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(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;
(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 April 2005, May 2005 and June
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.
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(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
(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.
(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
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the Master Servicer as servicing compensation and shall be remitted to it
monthly as provided 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
such Mortgage Loans and all related 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 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 for each Loan Group, 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 $300.00.
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 April 2005 Distribution Date, the
Trustee shall transfer $100.00 from the Principal Reserve Fund to the
Distribution Account and shall distribute such amount to the Class A-R
Certificates on such Distribution Date.
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On the Business Day before the Class PF Principal Distribution
Date, the Trustee shall transfer $100.00 from the Principal Reserve Fund to
the Distribution Account and shall distribute such amount to the Class PF
Certificates on the Class PF Principal Distribution Date. On the Business Day
before the Class PV Principal Distribution Date, the Trustee shall transfer
from the Principal Reserve Fund to the Distribution Account $100.00 and shall
distribute such amount to the Class PV Certificates on the Class PV Principal
Distribution Date. Following the distributions to be made in accordance with
the two preceding sentences, 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 and the Class AF-5B Insurer
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 clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
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(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 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.
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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 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
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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 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
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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 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
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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
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
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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.
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
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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 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
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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.
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
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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 2005 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 2005 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 2005, 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.
Section 3.19 The Corridor Contracts.
CHL shall cause The Bank of New York to enter into the Corridor
Contract Administration Agreement and shall assign all of its right, title and
interest in and to the interest rate corridor transactions evidenced by the
Corridor Contracts to, and shall cause all of its obligations in respect of
such transactions to be assumed by, the Corridor Contract Administrator, on
the terms and conditions set forth in the Corridor Contract Assignment
Agreement. The Trustee's rights to receive certain proceeds of the Corridor
Contracts as provided in the Corridor Contract Administration Agreement will
be an asset of the Trust Fund
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but will not be an asset of any REMIC. The Trustee shall deposit any amounts
received from time to time with respect to any Corridor Contract into the
Carryover Reserve Fund. The Master Servicer shall deposit any amounts received
on behalf of the Trustee from time to time with respect to any Corridor
Contract into the Carryover Reserve Fund.
No later than two Business Days following each Distribution Date,
the Trustee shall provide the Corridor Contract Administrator with information
regarding the aggregate Certificate Principal Balance of the Class(es) of
Certificates related to each Corridor Contract after all distributions on such
Distribution Date.
The Trustee shall direct the Corridor Contract Administrator to
terminate a Corridor Contract 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
Corridor Contract Administrator an amount in respect of such termination, and
the portion of such amount that is distributable to the Trust Fund pursuant to
the Corridor Contract Administration Agreement and 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 applicable Corridor Contract
Termination Date, but shall not be available for distribution to the
applicable Class of Class C Certificates pursuant to Section 4.07(c) or to CHL
pursuant to Section 4.07(c) until such applicable Corridor Contract
Termination Date. On the Corridor Contract Termination Date for the Class AF-1
Corridor Contract, Class 1-AV Corridor Contract, Class 2-AV Corridor Contract,
Class 3-AV Corridor Contract and Adjustable Rate Subordinate Corridor
Contract, after all other distributions on such date, if any such amounts in
respect of early termination of the Class AF-1 Corridor Contract, Class 1-AV
Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV Corridor Contract
or the Adjustable Rate Subordinate Corridor Contract remain in the Carryover
Reserve Fund, such amounts shall be distributed by the Trustee to (i) in the
case of any such amounts relating to the Class AF-1 Corridor Contract, the
Class CF Certificates, and (ii) in the case of any such amounts relating to
the Class 1-AV Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV
Corridor Contact and Adjustable Rate Subordinate Corridor Contract, the CV
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 a 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
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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 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
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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
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
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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 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) The Master Servicer shall, not later than the close of
business on the second Business Day immediately preceding each Distribution
Date, 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, any
Seller, the Trust Fund or the Certificateholders.
Section 4.03 [Reserved].
Section 4.04 Distributions.
(a) Distributions of Interest Funds for Loan Group 1. On each
Distribution Date, the Interest Funds for such Distribution Date for Loan
Group 1 shall be allocated from the Distribution Account in the following
order of priority:
(i) from the Interest Funds for Loan Group 1, concurrently
to the Class AF-5B Insurer, the Class AF-5B Premium for such
Distribution Date and to each Class of Class AF Certificates, the
Current Interest and Interest Carry Forward Amount for each such
Class and such Distribution Date, pro rata, based on their
respective entitlements,
(ii) from the remaining Interest Funds for Loan Group 1,
sequentially:
(a) to the Class AF-5B Insurer, any Class AF-5B
Reimbursement Amount,
(b) to the Class MF-1 Certificates, the Current
Interest for such Class,
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(c) to the Class MF-2 Certificates, the Current
Interest for such Class,
(d) to the Class MF-3 Certificates, the Current
Interest for such Class,
(e) to the Class MF-4 Certificates, the Current
Interest for such Class,
(f) to the Class MF-5 Certificates, the Current
Interest for such Class,
(g) to the Class MF-6 Certificates, the Current
Interest for such Class,
(h) to the Class MF-7 Certificates, the Current
Interest for such Class,
(i) to the Class MF-8 Certificates, the Current
Interest for such Class,
(j) to the Class BF Certificates, the Current
Interest for such Class, and
(k) any remainder as part of the Fixed Rate Loan
Group Excess Cashflow.
(b) Distributions of Interest Funds for Loan Group 2, Loan Group
3 and Loan Group 4. On each Distribution Date, the Interest Funds for such
Distribution Date with respect to Loan Group 2, Loan Group 3 and Loan Group 4
shall be allocated by the Trustee from the Distribution Account in the
following order of priority:
(i) concurrently:
(a) from Interest Funds for Loan Group 2,
concurrently to each Class of Class 1-AV Certificates, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Distribution Date, pro rata, based on
their respective entitlements,
(b) from Interest Funds for Loan Group 3,
concurrently to each Class of Class 2-AV Certificates, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Distribution Date, pro rata, based on
their respective entitlements,
(c) from Interest Funds for Loan Group 4,
concurrently to each Class of Class 3-AV Certificates, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Distribution Date, pro rata, based on
their respective entitlements,
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(ii) from the remaining Interest Funds for Loan Group 2,
Loan Group 3 and Loan Group 4, to each Class of Class AV
Certificates, any remaining Current Interest and Interest Carry
Forward Amount not paid pursuant to Section 4.04(b)(i), pro rata,
based on the Certificate Principal Balances thereof, to the extent
needed to pay any Current Interest and Interest Carry Forward
Amount for each such Class; provided that Interest Funds remaining
after such allocation to pay any Current Interest and Interest
Carry Forward Amount based on the Certificate Principal Balances
of the Certificates will be distributed to each Class of Class AV
Certificates with respect to which there remains any unpaid
Current Interest and Interest Carry Forward Amount (after the
distribution based on Certificate Principal Balances), pro rata,
based on the amount of such remaining unpaid Current Interest and
Interest Carry Forward Amount,
(iii) from the remaining Interest Funds for Loan Group 2,
Loan Group 3 and Loan Group 4, sequentially:
(a) to the Class MV-1 Certificates, the Current
Interest for such Class,
(b) to the Class MV-2 Certificates, the Current
Interest for such Class,
(c) to the Class MV-3 Certificates, the Current
Interest for such Class,
(d) to the Class MV-4 Certificates, the Current
Interest for such Class,
(e) to the Class MV-5 Certificates, the Current
Interest for such Class,
(f) to the Class MV-6 Certificates, the Current
Interest for such Class,
(g) to the Class MV-7 Certificates, the Current
Interest for such Class,
(h) to the Class MV-8 Certificates, the Current
Interest for such Class,
(i) to the Class BV Certificates, the Current
Interest for such Class, and
(j) any remainder as part of the Adjustable Rate
Loan Group Excess Cashflow.
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(c) On each Distribution Date, the Principal Distribution Amount
for such Distribution Date with respect to Loan Group 1 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 Fixed
Rate Stepdown Date or on which a Fixed Rate Trigger Event is in effect,
from the Principal Distribution Amount for Loan Group 1, sequentially:
(A) to the Class AF Certificates and to the Class AF-5B
Insurer, in the order and priorities set forth in clause (3)(A)
below,
(B) to the Class MF-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(C) to the Class MF-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(D) to the Class MF-3 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(E) to the Class MF-4 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(F) to the Class MF-5 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(G) to the Class MF-6 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(H) to the Class MF-7 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(I) to the Class MF-8 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(J) to the Class BF Certificates, until the Certificate
Principal Balance thereof is reduced to zero, and
(K) any remainder as part of the Fixed Rate Loan Group
Excess Cashflow.
(2) with respect to any Distribution Date on or after the Fixed
Rate Stepdown Date and so long as a Fixed Rate Trigger Event is not in
effect from the Principal Distribution Amount for Loan Group 1,
sequentially:
(A) in an amount up to the Class AF Principal Distribution
Amount, to the Class AF Certificates in the order and priorities
set forth in clause (3)(B) below, until the Certificate Principal
Balances thereof are reduced to zero,
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(B) to the Class AF-5B Insurer, any remaining Class AF-5B
Premium and any remaining Class AF-5B Reimbursement Amount, in
each case that has not been paid from Interest Funds for Loan
Group 1 for such Distribution Date,
(C) to the Class MF-1 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(D) to the Class MF-2 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(E) to the Class MF-3 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(F) to the Class MF-4 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(G) to the Class MF-5 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(H) to the Class MF-6 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(I) to the Class MF-7 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(J) to the Class MF-8 Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(K) to the Class BF Certificates, the Fixed Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero, and
(L) any remainder as part of the Fixed Rate Loan Group
Excess Cashflow.
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(3) On each Distribution Date on which any principal
amounts are to be distributed to the Class AF Certificates and the Class
AF-5B Insurer pursuant to clause (1)(A) or to the Class AF Certificates
pursuant to clause (2)(A) above, such amounts shall be distributed to
the Class AF Certificates and, if applicable, the Class AF-5B Insurer,
in the following order of priority:
(A) For each Distribution Date prior to the Fixed Rate
Stepdown Date or on which a Fixed Rate Trigger Event is in effect,
(i) the NAS Principal Distribution Amount to the Class
AF-6 Certificates, until the Certificate Principal Balance thereof
is reduced to zero,
(ii) sequentially, to the Class AF-1, Class AF-2, Class
AF-3 and Class AF-4 Certificates, in that order, in each case
until the Certificate Principal Balance thereof is reduced to
zero,
(iii) concurrently, to (x) the Class AF-5A Certificates and
(y) the Class AF-5B Certificates and the Class AF-5B Insurer, pro
rata (based on, with respect to clause (x), the Certificate
Principal Balance of the Class AF-5A Certificates, and with
respect to clause (y), the Certificate Principal Balance of the
Class AF-5B Certificates):
(a) to the Class AF-5A Certificates, until the
Certificate Principal Balance thereof is reduced to zero,
and
(b) sequentially:
(1) to the Class AF-5B Insurer, any remaining
Class AF-5B Premium that has not been paid from
Interest Funds for Loan Group 1 for such
Distribution Date, and
(2) to the Class AF-5B Certificates, until the
Certificate Principal Balance thereof is reduced
to zero,
(iv) to the Class AF-6 Certificates without regard to the
NAS Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero, and
(v) to the Class AF-5B Insurer, any remaining Class AF-5B
Reimbursement Amount that has not been paid from Interest Funds
for Loan Group 1 for such Distribution Date.
(B) For each Distribution Date on or after the Fixed Rate
Stepdown Date and so long as a Fixed Rate Trigger Event is not in
effect,
(i) the NAS Principal Distribution Amount to the Class
AF-6 Certificates, until the Certificate Principal Balance thereof
is reduced to zero,
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(ii) sequentially, to the Class AF-1, Class AF-2, Class
AF-3 and Class AF-4 Certificates, in that order, in each case
until the Certificate Principal Balance thereof is reduced to
zero,
(iii) concurrently, to the Class AF-5A Certificates and the
Class AF-5B Certificates, pro rata, based on the Certificate
Principal Balances thereof, until the Certificate Principal
Balances thereof are reduced to zero, and
(iv) to the Class AF-6 Certificates without regard to the
NAS Principal Distribution Amount, 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 AF Certificates
is greater than the sum of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 and any amount on deposit in the Pre-Funding
Account in respect of Loan Group 1, any principal amounts to be distributed to
the Class AF Certificates and the Class AF-5B Insurer shall be distributed
first, concurrently to each Class of Class AF Certificates, pro rata, based on
the Certificate Principal Balances thereof, in each case until the Certificate
Principal Balance thereof is reduced to zero, and second, to the Class AF-5B
Insurer, any remaining Class AF-5B Premium and any remaining Class AF-5B
Reimbursement Amount.
(d) On each Distribution Date, the Principal Distribution Amount
for such Distribution Date with respect to Loan Group 2, Loan Group 3 and Loan
Group 4 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
Adjustable Rate Stepdown Date or on which an Adjustable Rate Trigger
Event is in effect, sequentially:
(A) concurrently:
(i) from the Principal Distribution Amount for Loan Group
2, sequentially:
(a) to each Class of Class 1-AV Certificates, in the
order and priorities set forth in Section 4.04(d)(3) below,
until the Certificate Principal Balances thereof are reduced
to zero;
(b) pro rata (based on (x) the aggregate Certificate
Principal Balance of the Class 2-AV Certificates and (y) the
aggregate Class Certificate Balance of the Class 3-AV
Certificates), to (i) each Class of Class 2-AV Certificates
(after the distribution of the Principal Distribution Amount
from Loan Group 3 as provided in Section
4.04(d)(1)(A)(ii)(a) below), in the order and priorities set
forth in Section 4.04(d)(4) below, until the Certificate
Principal Balances thereof are reduced to zero and (ii) each
Class of Class 3-AV Certificates (after the distribution of
the Principal Distribution Amount from Loan Group 4 as
provided in Section 4.04(d)(1)(A)(iii)(a) below), in the
order and priorities set forth in Section
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4.04(d)(5) below, until the Certificate Principal Balances
thereof are reduced to zero;
(ii) from the Principal Distribution Amount for Loan Group
3, sequentially:
(a) to each Class of Class 2-AV Certificates, in the
order and priorities set forth in Section 4.04(d)(4) below,
until the Certificate Principal Balances thereof are reduced
to zero; and
(b) pro rata (based on (x) the aggregate Certificate
Principal Balance of the Class 1-AV Certificates and (y) the
aggregate Class Certificate Balance of the Class 3-AV
Certificates), to (i) each Class of Class 1-AV Certificates
(after the distribution of the Principal Distribution Amount
from Loan Group 2 as provided in Section 4.04(d)(1)(A)(i)(a)
above), in the order and priorities set forth in Section
4.04(d)(3) below, until the Certificate Principal Balances
thereof are reduced to zero and (ii) each Class of Class
3-AV Certificates (after the distribution of the Principal
Distribution Amount from Loan Group 4 as provided in Section
4.04(d)(1)(A)(iii)(a) below), in the order and priorities
set forth in Section 4.04(d)(5) below, until the Certificate
Principal Balances thereof are reduced to zero;
(iii) from the Principal Distribution Amount for Loan Group
4, sequentially:
(a) to each Class of Class 3-AV Certificates, in the
order and priorities set forth in Section 4.04(d)(5) below,
until the Certificate Principal Balances thereof are reduced
to zero; and
(b) pro rata (based on (x) the aggregate Certificate
Principal Balance of the Class 1-AV Certificates and (y) the
aggregate Class Certificate Balance of the Class 2-AV
Certificates), to (i) each Class of Class 1-AV Certificates
(after the distribution of the Principal Distribution Amount
from Loan Group 2 as provided in Section 4.04(d)(1)(A)(i)(a)
above), in the order and priorities set forth in Section
4.04(d)(3) below, until the Certificate Principal Balances
thereof are reduced to zero and (ii) each Class of Class
2-AV Certificates (after the distribution of the Principal
Distribution Amount from Loan Group 3 as provided in Section
4.04(d)(1)(A)(ii)(a) above), in the order and priorities set
forth in Section 4.04(d)(4) below, until the Certificate
Principal Balances thereof are reduced to zero;
(B) from the remaining Principal Distribution Amounts for
Loan Group 2, Loan Group 3 and Loan Group 4, sequentially:
(i) to the Class MV-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
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(ii) to the Class MV-2 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(iii) to the Class MV-3 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(iv) to the Class MV-4 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(v) to the Class MV-5 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(vi) to the Class MV-6 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(vii) to the Class MV-7 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(viii) to the Class MV-8 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(ix) to the Class BV Certificates, until the Certificate
Principal Balance thereof is reduced to zero, and
(x) any remainder as part of the Adjustable Rate Loan
Group Excess Cashflow.
(2) with respect to any Distribution Date on or after the
Adjustable Rate Stepdown Date and so long as an Adjustable Rate Trigger
Event is not in effect, from the Principal Distribution Amounts for Loan
Group 2, Loan Group 3 and Loan Group 4, sequentially:
(A) in an amount up to the Class AV Principal Distribution
Target Amount, pro rata based on the related Class AV Principal
Distribution Allocation Amount for the Class 1-AV Certificates,
Class 2-AV Certificates and the Class 3-AV Certificates,
respectively, concurrently, to (I) each Class of Class 1-AV
Certificates, in an amount up to the Class 1-AV Principal
Distribution Amount in the order and priorities set forth in
clause (3) below, until the Certificate Principal Balances thereof
are reduced to zero, (II) each Class of Class 2-AV Certificates,
in an amount up to the Class 2-AV Principal Distribution Amount in
the order and priorities set forth in clause (4) below, until the
Certificate Principal Balances thereof are reduced to zero and
(III) each Class of Class 3-AV Certificates, in an amount up to
the Class 3-AV Principal Distribution Amount in the order and
priorities set forth in clause (5) below, until the Certificate
Principal Balances thereof are reduced to zero; provided, however,
that if the aggregate Certificate Principal Balance of the Class
1-AV Certificates, Class 2-AV Certificates or Class 3-AV
Certificates is reduced to zero then any remaining unpaid Class AV
Principal Distribution Target Amount will be
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distributed pro rata to each Class of remaining Class AV
Certificates based on their remaining respective Certificate
Principal Balances after distributions from (I), (II) and (III)
above,
(B) to the Class MV-1 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(C) to the Class MV-2 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(D) to the Class MV-3 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(E) to the Class MV-4 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(F) to the Class MV-5 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(G) to the Class MV-6 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(H) to the Class MV-7 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(I) to the Class MV-8 Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero,
(J) to the Class BV Certificates, the Adjustable Rate
Subordinate Class Principal Distribution Amount for such Class
until the Certificate Principal Balance thereof is reduced to
zero, and
(K) any remainder as part of the Adjustable Rate Loan
Group Excess Cashflow.
(3) On each Distribution Date on which any principal
amounts are to be distributed to the Class 1-AV Certificates, such
amounts shall be distributed sequentially, to the Class 1-AV-1, Class
1-AV-2 and Class 1-AV-3 Certificates, in that order, in each case until
the Certificate Principal Balance thereof is reduced to zero.
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Notwithstanding the foregoing order of priority, on any Distribution Date on
which (x) the aggregate Certificate Principal Balance of the Class AV
Certificates is greater than the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2, Loan Group 3 and Loan Group 4 and (y) the
aggregate Certificate Principal Balance of the Class 1-AV Certificates is
greater than the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2, any principal amounts to be distributed to the Class 1-AV
Certificates shall be distributed concurrently, to each Class of Class 1-AV
Certificates, 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.
(4) On each Distribution Date on which any principal
amounts are to be distributed to the Class 2-AV Certificates, such
amounts shall be distributed concurrently, to the Class 2-AV-1 and Class
2-AV-2 Certificates, pro rata, based on the Certificate Principal
Balances thereof, in each case until the Certificate Principal Balance
thereof is reduced to zero; provided, however, that if a Group 3
Sequential Trigger Event is in effect, then any principal amounts to be
distributed to the Class 2-AV Certificates will be distributed to Class
2-AV-1 and Class 2-AV-2 Certificates, sequentially, in that order, in
each case until the Certificate Principal Balance thereof is reduced to
zero.
(5) On each Distribution Date on which any principal
amounts are to be distributed to the Class 3-AV Certificates, such
amounts shall be distributed pro rata (based on (x) the aggregate
Certificate Principal Balance of the Class 3-AV-1 and Class 3-AV-2
Certificates and (y) the Certificate Principal Balance of the Class
3-AV-3 Certificates) to (A) the Class 3-AV-1 and Class 3-AV-2
Certificates, sequentially, in that order, in each case until the
Certificate Principal Balance thereof is reduced to zero and (B) to the
Class 3-AV-3 Certificates, until the Certificate Principal Balance
thereof is reduced to zero; provided, however, that if a Group 4
Sequential Trigger Event is in effect, then any principal amounts to be
distributed to the Class 3-AV Certificates will be distributed to Class
3-AV-1, Class 3-AV-2 and Class 3-AV-3 Certificates, sequentially, in
that order, in each case until the Certificate Principal Balance thereof
is reduced to zero.
(e) With respect to any Distribution Date, any Fixed Rate Loan
Group Excess Cashflow and, in the case of clauses 1, 3, 5, 7, 9, 11, 13, 15,
17 and 19 below, any amounts in the Credit Comeback Excess Account available
for such Distribution Date, shall be paid to the Classes of Certificates in
the following order of priority, in each case first to the extent of the
remaining Credit Comeback Excess Cashflow, if applicable, and second to the
extent of the remaining Fixed Rate Loan Group Excess Cashflow:
1. to the Holders of the Class or Classes of Class AF
Certificates and Fixed Rate Subordinate Certificates then
entitled to receive distributions in respect of principal,
in an amount equal to the Extra Principal Distribution
Amount for Loan Group 1, payable to such Holders as part of
the Principal Distribution Amount for Loan Group 1 pursuant
to Section 4.04(c) above; provided, however, that Credit
Comeback Excess Cashflow (if any) shall only be distributed
pursuant to this clause, on or after the Distribution
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Date in May 2005 and if the Fixed Rate Overcollateralization
Target Amount has at any previous time been met;
2. to the Holders of the Class MF-1 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
3. to the Holders of the Class MF-1 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
4. to the Holders of the Class MF-2 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
5. to the Holders of the Class MF-2 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
6. to the Holders of the Class MF-3 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
7. to the Holders of the Class MF-3 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
8. to the Holders of the Class MF-4 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
9. to the Holders of the Class MF-4 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
10. to the Holders of the Class MF-5 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
11. to the Holders of the Class MF-5 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
12. to the Holders of the Class MF-6 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
13. to the Holders of the Class MF-6 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
14. to the Holders of the Class MF-7 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
15. to the Holders of the Class MF-7 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
16. to the Holders of the Class MF-8 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
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17. to the Holders of the Class MF-8 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
18. to the Holders of the Class BF Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
19. to the Holders of the Class BF Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
20. to the Carryover Reserve Fund and from the Carryover Reserve
Fund to each Class of Class AF Certificates and Fixed Rate
Subordinate Certificates (in the case of the Class AF-1
Certificates after application of AF-1 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
Fixed Rate Loan Group Excess Cashflow remaining after such
allocation to pay Net Rate Carryover based on the
Certificate Principal Balances of the Certificates shall be
distributed to each Class of Class AF Certificates and Fixed
Rate Subordinate Certificates with respect to which there
remains any unpaid Net Rate Carryover, pro rata, based on
the amount of such unpaid Net Rate Carryover;
21. on or after the Distribution Date in May 2005, if the
Adjustable Rate Overcollateralization Target Amount has at
any previous time been met, to the Holders of the Class or
Classes of Class AV Certificates and Adjustable Rate
Subordinate Certificates then entitled to receive
distributions in respect of principal, payable to such
Holders as part of the Principal Distribution Amount as
described under Section 4.04(d) above, in an amount equal to
the Extra Principal Distribution Amount for Loan Group 2,
Loan Group 3 and Loan Group 4 not covered by the Adjustable
Rate Loan Group Excess Cashflow allocated pro rata based on
the Extra Principal Distribution Amount for Loan Group 2,
Loan Group 3 and Loan Group 4 not covered by the Adjustable
Rate Loan Group Excess Cashflow;
22. pro rata, to the holders of the Class 2-AV-2 and Class
3-AV-3 Certificates, based on the amount of the Unpaid
Realized Loss Amount for such Class of Certificates, in an
amount equal to the Unpaid Realized Loss Amount for such
Class of Certificates remaining undistributed after
application of the Adjustable Rate Loan Group Excess
Cashflow;
23. to the Holders of the Class MV-1 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-1
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
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24. to the Holders of the Class MV-2 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-2
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
25. to the Holders of the Class MV-3 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-3
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
26. to the Holders of the Class MV-4 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-4
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
27. to the Holders of the Class MV-5 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-5
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
28. to the Holders of the Class MV-6 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-6
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
29. to the Holders of the Class MV-7 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-7
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
30. to the Holders of the Class MV-8 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MV-8
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
31. to the Holders of the Class BV Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class BV
Certificates remaining undistributed after application of
the Adjustable Rate Loan Group Excess Cashflow;
32. 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);
33. to the Class CF Certificateholders, the Class CF
Distributable Amount for such Distribution Date; and
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34. to the Class A-R Certificates, any remaining amount.
(f) With respect to any Distribution Date, any Adjustable Rate
Loan Group Excess Cashflow shall be paid to the Classes of Certificates in the
following order of priority, in each case to the extent of remaining
Adjustable Rate Loan Group Excess Cashflow:
1. to the Holders of the Class or Classes of Class AV
Certificates and Adjustable Rate Subordinate Certificates
then entitled to receive distributions in respect of
principal, in an aggregate amount equal to the Extra
Principal Distribution Amount for the Adjustable Rate Loan
Group, payable to such Holders of each such Class as part of
the Principal Distribution Amount for Loan Group 2, Loan
Group 3 and Loan Group 4 pursuant to Section 4.04(d) above;
2. pro rata, to the Holders of the Class 2-AV-2 and Class
3-AV-3 Certificates, based on the amount of the Unpaid
Realized Loss Amount for such Class of Certificates, in an
amount equal to the Unpaid Realized Loss Amount for each
such Class, respectively;
3. to the Holders of the Class MV-1 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
4. to the Holders of the Class MV-1 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
5. to the Holders of the Class MV-2 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
6. to the Holders of the Class MV-2 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
7. to the Holders of the Class MV-3 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
8. to the Holders of the Class MV-3 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
9. to the Holders of the Class MV-4 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
10. to the Holders of the Class MV-4 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
11. to the Holders of the Class MV-5 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
12. to the Holders of the Class MV-5 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
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13. to the Holders of the Class MV-6 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
14. to the Holders of the Class MV-6 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
15. to the Holders of the Class MV-7 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
16. to the Holders of the Class MV-7 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
17. to the Holders of the Class MV-8 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
18. to the Holders of the Class MV-8 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
19. to the Holders of the Class BV Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
20. to the Holders of the Class BV Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
21. to the Carryover Reserve Fund and from the Carryover
Reserve Fund to each Class of Class AV Certificates and
Adjustable Rate Subordinate Certificates (in each case
after application of amounts received under the applicable
Corridor Contract to cover Net Rate Carryover), pro rata
based on the Certificate Principal Balances thereof, to the
extent needed to pay any Net Rate Carryover for each such
Class remaining after application of amounts under the
applicable Corridor Contract; provided that any Adjustable
Rate Loan Group Excess Cashflow remaining after such
allocation to pay Net Rate Carryover based on the
Certificate Principal Balances of the Certificates shall be
distributed to each Class of Class AV Certificates and
Adjustable Rate Subordinate Certificates with respect to
which there remains any unpaid Net Rate Carryover (after
the distribution based on Certificate Principal Balances),
pro rata, based on the amount of such unpaid Net Rate
Carryover;
22. on or after the Distribution Date in May 2005, if the Fixed
Rate Overcollateralization Target Amount has at any
previous time been met, to the Holders of the Class or
Classes of Class AF Certificates and Fixed Rate Subordinate
Certificates then entitled to receive distributions in
respect of principal, payable to such Holders as part of
the Principal Distribution Amount pursuant to Section
4.04(c) above, in an amount equal to the Extra Principal
Distribution Amount for Loan Group 1 not covered by the
Fixed Rate Loan Group Excess Cashflow or Credit Comeback
Excess Cashflow;
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23. to the Holders of the Class MF-1 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-1
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
24. to the Holders of the Class MF-2 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-2
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
25. to the Holders of the Class MF-3 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-3
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
26. to the Holders of the Class MF-4 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-4
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
27. to the Holders of the Class MF-5 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-5
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
28. to the Holders of the Class MF-6 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-6
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
29. to the Holders of the Class MF-7 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-7
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
30. to the Holders of the Class MF-8 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class MF-8
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
31. to the Holders of the Class BF Certificates, in an amount
equal to the Unpaid Realized Loss Amount for the Class BF
Certificates remaining undistributed after application of
the Fixed Rate Loan Group Excess Cashflow and Credit
Comeback Excess Cashflow;
32. to the Carryover Reserve Fund, in an amount equal to the
Required Secondary Carryover Reserve Fund Deposit (after
giving effect to other
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deposits and withdrawals therefrom on such Distribution
Date without regard to any excess Corridor Contract
proceeds);
33. to the Class CV Certificateholders, the Class CV
Distributable Amount for such Distribution Date; and
34. to the Class A-R Certificates, any remaining amount.
(g) On each Distribution Date on or prior to each Corridor
Contract Termination Date, amounts received by the Trustee in respect of each
Corridor Contract for such Distribution Date shall be withdrawn from the
Carryover Reserve Fund and distributed:
(1) in the case of any such amounts received on the Class
AF-1 Corridor Contract, to the Class AF-1 Certificates to the extent
needed to pay any Net Rate Carryover with respect to such Class;
(2) in the case of any such amounts received on the Class
1-AV Corridor Contract, concurrently to each Class of Class 1-AV
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, any amounts remaining after such allocation to pay
Net Rate Carryover based on the Certificate Principal Balances of the
Class 1-AV Certificates shall be distributed to each Class of Class 1-AV
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;
(3) in the case of any such amounts received on the Class
2-AV Corridor Contract, concurrently to each Class of Class 2-AV
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, any amounts remaining after such allocation to pay
Net Rate Carryover based on the Certificate Principal Balances of the
Class 2-AV Certificates shall be distributed to each Class of Class 2-AV
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;
(4) in the case of any such amounts received on the Class
3-AV Corridor Contract, concurrently to each Class of Class 3-AV
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, any amounts remaining after such allocation to pay
Net Rate Carryover based on the Certificate Principal Balances of the
Class 3-AV Certificates shall be distributed to each Class of Class 3-AV
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
(5) in the case of any such amounts received on the
Adjustable Rate Subordinate Corridor Contract, concurrently to each
Class of Adjustable Rate Subordinate 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, any amounts
remaining after such allocation to pay Net Rate Carryover based on the
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Certificate Principal Balances of the Adjustable Rate Subordinate
Certificates shall be distributed to each Class of Adjustable Rate
Subordinate 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
(6) any remaining amounts to the Holders of the Class C
Certificates as provided in Section 4.07(c).
(h) To the extent that a Class of Interest Bearing Certificates
receives interest in excess of the applicable 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 (i) in the case of any such amounts relating to
the Class AF-1 Corridor Contract, the Class CF Certificates, and (ii) in the
case of any such amounts relating to the Class 1-AV Corridor Contract, Class
2-AV Corridor Contract, Class 3-AV Corridor Contract and Adjustable Rate
Subordinate Corridor Contract, the Class CV Certificates.
(i) 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) with respect to Loan Group 1
shall be allocated to the Class PF Certificates. 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)
with respect to Loan Group 2, Loan Group 3 and Loan Group 4 shall be allocated
to the Class PV Certificates. On the Class PF Principal Distribution Date, the
Trustee shall make the $100.00 distribution to the Class PF Certificates as
specified in Section 3.08. On the Class PV Principal Distribution Date, the
Trustee shall make the $100.00 distribution to the Class PV Certificates as
specified in Section 3.08.
(j) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount for Loan Group 1 to reduce the Certificate
Principal Balances of the Fixed Rate Subordinate Certificates in the following
order of priority:
(1) to the Class BF Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(2) to the Class MF-8 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(3) to the Class MF-7 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(4) to the Class MF-6 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(5) to the Class MF-5 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
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(6) to the Class MF-4 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(7) to the Class MF-3 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(8) to the Class MF-2 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(9) to the Class MF-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero.
(k) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount for Loan Group 2, Loan Group 3 and Loan Group 4
to reduce the Certificate Principal Balances of the Adjustable Rate
Subordinate Certificates in the following order of priority:
(1) to the Class BV Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(2) to the Class MV-8 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(3) to the Class MV-7 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(4) to the Class MV-6 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(5) to the Class MV-5 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(6) to the Class MV-4 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(7) to the Class MV-3 Certificates until the Certificate
Principal Balance thereof is reduced to zero;
(8) to the Class MV-2 Certificates until the Certificate
Principal Balance thereof is reduced to zero; and
(9) to the Class MV-1 Certificates until the Certificate
Principal Balance thereof is reduced to zero.
On each Distribution Date after the Certificate Principal Balances
of the Adjustable Rate Subordinate Certificates have been reduced to zero, the
Trustee shall allocate (i) the Applied Realized Loss Amount with respect to
Loan Group 3 to reduce the Certificate Principal Balance of the Class 2-AV-2
Certificates until the Certificate Principal Balance thereof
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is reduced to zero and (ii) the Applied Realized Loss Amount with respect to
Loan Group 4 to reduce the Certificate Principal Balance of the Class 3-AV-3
Certificates until the Certificate Principal Balance thereof is reduced to
zero.
(l) On each Distribution Date, the Trustee shall allocate the
amount of the Subsequent Recoveries for Loan Group 1, if any, to increase the
Certificate Principal Balances of the Fixed Rate Subordinate Certificates to
which Applied Realized Loss Amounts have been previously allocated in the
following order of priority:
(1) to the Class MF-1 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-1
Certificates;
(2) to the Class MF-2 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-2
Certificates;
(3) to the Class MF-3 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-3
Certificates;
(4) to the Class MF-4 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-4
Certificates;
(5) to the Class MF-5 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-5
Certificates;
(6) to the Class MF-6 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-6
Certificates;
(7) to the Class MF-7 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-7
Certificates;
(8) to the Class MF-8 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MF-8
Certificates; and
(9) to the Class BF Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class BF Certificates.
(m) On each Distribution Date, the Trustee shall allocate the
amount of the Subsequent Recoveries for Loan Group 2, Loan Group 3 and Loan
Group 4, if any, to increase the Certificate Principal Balances of the Class
2-AV-2 and Class 3-AV-3 Certificates and the Adjustable Rate Subordinate
Certificates to which Applied Realized Loss Amounts have been previously
allocated in the following order of priority:
(1) pro rata, to the Class 2-AV-2 and Class 3-AV-3
Certificates, based on the amount of the Unpaid Realized Loss Amount for
such Class of Certificates, but not by more than the amount of the
Unpaid Realized Loss Amount of such Class of Certificates;
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(2) to the Class MV-1 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-1
Certificates;
(3) to the Class MV-2 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-2
Certificates;
(4) to the Class MV-3 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-3
Certificates;
(5) to the Class MV-4 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-4
Certificates;
(6) to the Class MV-5 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-5
Certificates;
(7) to the Class MV-6 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-6
Certificates;
(8) to the Class MV-7 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-7
Certificates;
(9) to the Class MV-8 Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class MV-8
Certificates; and
(10) to the Class BV Certificates, but not by more than the
amount of the Unpaid Realized Loss Amount of the Class BV 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 five 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. Payments to the Class AF-5B Insurer shall be made
by wire transfer of immediately available funds to the following account,
unless the Class AF-5B Insurer notifies the Trustee in writing: Account Name:
Ambac Assurance Corporation, Citibank, NA, ABA # 000000000, DDA# 40609486, RE:
XX0000XX XXXXX 2005-1.
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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 by the Master Servicer and the Trustee (including,
without limitation, the actual mortgage rate for each Credit Comeback Loan)
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, the
Class AF-5B Insurer 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 and each Loan Group;
(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;
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(9) the amount of Advances for each Loan Group included in
the distribution on such Distribution Date;
(10) the number and aggregate principal amounts of Mortgage
Loans in each Loan Group: (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;
(11) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month in each Loan Group, 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 in each Loan Group 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 in each
Loan Group, the loan number and Stated Principal Balance relating
thereto;
(15) whether a Fixed Rate Trigger Event, an Adjustable Rate
Trigger Event, a Group 3 Sequential Trigger Event or a Group 4
Sequential Trigger Event has occurred;
(16) the amount of the distribution made to the Holders of
the Class P Certificates;
(17) 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 (B) the aggregate
Stated Principal Balances of the Subsequent Mortgage Loans for
Subsequent Transfer Dates occurring during the related Due Period; and
on the Distribution Date immediately following the end of the Funding
Period, any unused Pre-Funded Amount (if any) included in the Principal
Distribution Amount for such Distribution Date;
(18) the amount, if any, of Realized Losses and Subsequent
Recoveries allocated to the Class 2-AV-2 and Class 3-AV-3 Certificates,
the Fixed Rate Subordinate Certificates and the Adjustable Rate
Subordinate Certificates for such Distribution Date;
(19) the amount, if any, received in respect of each
Corridor Contract for such Distribution Date;
(20) all payments made by the Master Servicer in respect of
Compensating Interest for such Distribution Date;
147
(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 Depositor or the Master Servicer, the loan
number and Stated Principal Balance relating thereto;
(23) the amount paid by the Class AF-5B Insurer under the
Class AF-5B Policy for such Distribution Date; and
(24) all amounts paid to the Class AF-5B Insurer in respect
of the Class AF-5B Reimbursement Amount for such Distribution Date.
(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 make
the above information available to Certificateholders and the Class AF-5B
Insurer via the Trustee's website at xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.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
148
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.
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 Class AF-5B Policy; Rights of the Class AF-5B
Insurer.
(a) If, on the third Business Day before any Distribution Date,
the Trustee determines that there will be a Deficiency Amount for such
Distribution Date, the Trustee shall determine the amount of any such
deficiency and shall give notice to the Class AF-5B Insurer by telephone or
telecopy of the amount of such deficiency, confirmed in writing by notice
substantially in the form of Exhibit A to the Class AF-5B Policy, by 12:00
p.m., New York time on such third Business Day. The Trustee's responsibility
for delivering the notice to the Class AF-5B Insurer as provided in the
preceding sentence is limited to the availability, timeliness and accuracy of
the information provided by the Master Servicer.
(b) In the event the Trustee receives a certified copy of an order
of the appropriate court that any scheduled payment of principal or interest
on a Class AF-5B Certificate has been voided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall (i)
promptly notify the Class AF-5B Insurer and (ii) comply with the provisions of
the Class AF-5B Policy, to obtain payment by the Class AF-5B Insurer of such
voided scheduled payment. In addition, the Trustee shall mail notice to all
Holders of the Class AF-5B Certificates so affected that, in the event that
any such Holder's scheduled payment is so recovered, such Holder will be
entitled to payment pursuant to the terms of the Class AF-5B Policy, a copy of
which shall be made available to such Holders by the Trustee. The Trustee
shall furnish to the Class AF-5B Insurer its records listing the payments on
the affected Class AF-5B Certificates, if any, that have been made by the
Trustee and subsequently recovered from the affected Holders, and the dates on
which such payments were made by the Trustee.
(c) At the time of the execution hereof, and for the purposes
hereof, the Trustee shall establish a special purpose trust account in the
name of the Trustee for the benefit of Holders of the Class AF-5B Certificates
(the "Class AF-5B Policy Payments Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Class AF-5B Policy
Payments Account shall be an Eligible Account. The Trustee shall deposit any
amount paid under the Class AF-5B Policy into the Class AF-5B Policy Payments
Account and distribute
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such amount only for the purposes of making the payments to Holders of the
Class AF-5B Certificates, in respect of the related Deficiency Amount for
which the related claim was made under the Class AF-5B Policy. Such amounts
shall be allocated by the Trustee to Holders of Class AF-5B Certificates
affected by such shortfalls in the same manner as principal and interest
payments are to be allocated with respect to such Certificates pursuant to
Section 4.04. It shall not be necessary for such payments to be made by checks
or wire transfers separated from the checks or wire transfers used to make
regular payments hereunder with funds withdrawn from the Distribution Account.
However, any payments made on the Class AF-5B Certificates from funds in the
Class AF-5B Policy Payments Account shall be noted as provided in subsection
(e) below. Funds held in the Class AF-5B Policy Payments Account shall not be
invested by the Trustee.
(d) Any funds received from the Class AF-5B Insurer for deposit
into the Class AF-5B Policy Payments Account pursuant to the Class AF-5B
Policy in respect of a Distribution Date or otherwise as a result of any claim
under the Class AF-5B Policy shall be applied by the Trustee directly to the
payment in full (i) of the related Deficiency Amount on such Distribution Date
or (ii) of other amounts payable under the Class AF-5B Policy. Funds received
by the Trustee as a result of any claim under the Class AF-5B Policy shall be
used solely for payment to the Holders of the Class AF-5B Certificates and may
not be applied for any other purpose, including, without limitation,
satisfaction of any costs, expenses or liabilities of the Trustee, the Master
Servicer or the Trust Fund. Any funds remaining in the Class AF-5B Policy
Payments Account on the first Business Day after each Distribution Date shall
be remitted promptly to the Class AF-5B Insurer in accordance with the
instructions set forth in Section 4.04(i).
(e) The Trustee shall keep complete and accurate records in
respect of (i) all funds remitted to it by the Class AF-5B Insurer and
deposited into the Class AF-5B Policy Payments Account and (ii) the allocation
of such funds to (A) payments of interest on and principal in respect of any
Class AF-5B Certificates and (B) the amount of funds available to make
distributions on the Class AF-5B Certificates pursuant to Sections 4.04(a),
(b) and (d). The Class AF-5B Insurer shall have the right to inspect such
records at reasonable times during normal business hours upon three Business
Days' prior notice to the Trustee.
(f) The Trustee acknowledges, and each Holder of a Class AF-5B
Certificate by its acceptance of the Class AF-5B Certificate agrees, that,
without the need for any further action on the part of the Class AF-5B Insurer
or the Trustee, to the extent the Class AF-5B Insurer makes payments, directly
or indirectly, on account of principal of or interest on any Class AF-5B
Certificates, the Class AF-5B Insurer will be fully subrogated to the rights
of the Holders of such Class AF-5B Certificates to receive such principal and
interest from the Trust Fund. The Holders of the Class AF-5B Certificates, by
acceptance of the Class AF-5B Certificates, assign their rights as Holders of
the Class AF-5B Certificates to the extent of the Class AF-5B Insurer's
interest with respect to amounts paid under the Class AF-5B Policy. Anything
herein to the contrary notwithstanding, solely for purposes of determining the
Class AF-5B Insurer's rights, as applicable, as subrogee for payments
distributable pursuant to Section 4.04, any payment with respect to
distributions to the Class AF-5B Certificates which is made with funds
received pursuant to the terms of the Class AF-5B Policy shall not be
considered payment of the Class AF-5B Certificates from the Trust Fund and
shall not result in
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the distribution or the provision for the distribution in reduction of the
Certificate Principal Balance of the Class AF-5B Certificates within the
meaning of Article IV.
(g) Upon its becoming aware of the occurrence of an Event of
Default, the Trustee shall promptly notify the Class AF-5B Insurer of such
Event of Default.
(h) The Trustee shall promptly notify the Class AF-5B Insurer of
either of the following as to which it has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and
(B) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference Claim") of any
distribution made with respect to the Class AF-5B Certificates as to which it
has actual knowledge. Each Holder of a Class AF-5B Certificate, by its
purchase of Class AF-5B Certificates, and the Trustee hereby agrees that the
Class AF-5B Insurer (so long as no Class AF-5B Insurer Default exists) may at
any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Class AF-5B Insurer shall be subrogated to the rights of the
Trustee and each Holder of a Class AF-5B Certificate in the conduct of any
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.
(i) The Master Servicer shall designate a Class AF-5B Insurer
Contact Person who shall be available to the Class AF-5B Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
Class AF-5B Insurer Contact Person is to the attention of Secondary Marketing.
(j) The Trustee shall surrender the Class AF-5B Policy to the
Class AF-5B Insurer for cancellation upon the reduction of the Certificate
Principal Balance of the Class AF-5B Certificates to zero.
(k) The Trustee shall send to the Class AF-5B Insurer the reports
prepared pursuant to Sections 3.17 and 3.18 and the statements prepared
pursuant to Section 4.05, as well as any other statements or communications
sent to Holders of the Class AF-5B Certificates, in each case at the same time
such reports, statements and communications are otherwise sent.
(l) For so long as there is no continuing default by the Class
AF-5B Insurer under its obligations under the Class AF-5B Policy (a "Class
AF-5B Insurer Default"), each Holder of a Class AF-5B Certificate agrees that
the Class AF-5B Insurer shall be treated by the Depositor, the Master Servicer
and the Trustee as if the Class AF-5B Insurer were the Holder of all of the
Class AF-5B Certificates, for the purpose (and solely for the purpose) of the
giving of any consent, the making of any direction or the exercise of any
voting or other control rights otherwise given to the Holders of the Class
AF-5B Certificates hereunder.
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(m) With respect to this Section 4.06, the terms "Receipt" and
"Received" shall mean actual delivery to the Class AF-5B Insurer, if any,
prior to 12:00 p.m., New York time, on a Business Day; delivery either on a
day that is not a Business Day or after 12:00 p.m., New York time, shall be
deemed to be Receipt on the next succeeding Business Day. If any notice or
certificate given under the Class AF-5B Policy by the Trustee is not in proper
form or is not properly completed, executed or delivered, it shall be deemed
not to have been Received. The Class AF-5B Insurer shall promptly so advise
the Trustee and the Trustee may submit an amended notice.
(n) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Rating Agencies or the Class
AF-5B Certificateholders shall also be sent at such time to the Class AF-5B
Insurer at the notice address set forth in Section 10.05.
(o) The Class AF-5B Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions
hereof to the extent of the Class AF-5B Insurer's rights explicitly specified
herein as if a party hereto.
(p) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Class AF-5B Policy, in the case of the Class AF-5B Certificates.
Section 4.07 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 in respect of the Corridor Contracts 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 Class AF-1 Corridor Contract,
Class 1-AV Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV
Corridor Contract and Adjustable Rate Subordinate Corridor Contract with
respect to a Distribution Date and remaining after the distributions required
pursuant to Section 4.04(g) shall be distributed (i) in the case of any such
amounts relating to the Class AF-1 Corridor Contract, to the Class CF
Certificates, and (ii) in the case of any such amounts relating to the Class
1-AV Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV Corridor
Contract and Adjustable Rate Subordinate Corridor Contract, to the CV
Certificates; provided, however, that if the Class AF-1 Corridor Contract, the
Class 1-AV Corridor Contract, Class 2-AV Corridor Contract, Class 3-AV
Corridor Contract or Adjustable Rate Subordinate Corridor Contract is subject
to early termination, early termination payments received in respect of such
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
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for the applicable Classes of Certificates as provided in Section 4.04(g) on
the Distribution Dates following such termination to and including the
applicable 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 applicable Corridor Contract
Termination Date.
(d) (1) Funds in the Carryover Reserve Fund in respect of amounts
received under the Class AF-1 Corridor Contract may be invested in Permitted
Investments at the written direction of the Majority Holder of the Class CF
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 under the Class AF-1 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 CF
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.
(2) Funds in the Carryover Reserve Fund in respect of
amounts received under the Class 1-AV Corridor Contract, Class 2-AV
Corridor Contract, Class 3-AV Corridor Contract and Adjustable Rate
Subordinate Corridor Contract may be invested in Permitted Investments
at the written direction of the Majority Holder of the Class CV
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 under
the Class 1-AV Corridor Contract, Class 2-AV Corridor Contract, Class
3-AV Corridor Contract and Adjustable Rate Subordinate 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 CV 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.
(3) 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 4.07. 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.
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Section 4.08 Credit Comeback Excess Account.
(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
Credit Comeback Excess Account. The Credit Comeback Excess Account 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
Credit Comeback Excess Amounts in the Credit Comeback Excess Account. The
Trustee shall make withdrawals from the Credit Comeback Excess Account to make
distributions as and to the extent required by Section 4.04.
(c) Funds in the Credit Comeback Excess Account may be invested in
Permitted Investments at the written direction of the Majority Holder of the
Class CF 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 Credit Comeback Excess Account, 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 Credit Comeback Excess
Account 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 CF Certificates in accordance with their
Percentage Interests. Any losses incurred in the Credit Comeback Excess
Account in respect of any such investments shall be charged against amounts on
deposit in the Credit Comeback Excess Account (or such investments)
immediately as realized.
(d) 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 Credit Comeback Excess Account and made in accordance with this Section
4.08. The Credit Comeback Excess Account shall not constitute an asset of any
REMIC created hereunder. The Class CF Certificates shall evidence ownership of
the Credit Comeback Excess Account for federal tax purposes.
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:
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Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
------------------------------------------------------------------------------------------------------
AF-1 $20,000 $1,000 $198,467,000
AF-2 $20,000 $1,000 $22,435,000
AF-3 $20,000 $1,000 $130,575,000
AF-4 $20,000 $1,000 $35,623,000
AF-5A $20,000 $1,000 $39,500,000
AF-5B $20,000 $1,000 $30,000,000
AF-6 $20,000 $1,000 $60,000,000
MF-1 $20,000 $1,000 $16,800,000
MF-2 $20,000 $1,000 $14,700,000
MF-3 $20,000 $1,000 $9,000,000
MF-4 $20,000 $1,000 $9,000,000
MF-5 $20,000 $1,000 $7,500,000
MF-6 $20,000 $1,000 $7,200,000
MF-7 $20,000 $1,000 $6,000,000
MF-8 $20,000 $1,000 $6,000,000
BF $20,000 $1,000 $6,000,000
1-AV-1 $20,000 $1,000 $451,953,000
1-AV-2 $20,000 $1,000 $229,761,000
1-AV-3 $20,000 $1,000 $24,946,000
2-AV-1 $20,000 $1,000 $557,042,000
2-AV-2 $20,000 $1,000 $139,260,000
3-AV-1 $20,000 $1,000 $287,922,000
3-AV-2 $20,000 $1,000 $160,132,000
3-AV-3 $20,000 $1,000 $49,784,000
MV-1 $20,000 $1,000 $124,800,000
MV-2 $20,000 $1,000 $87,600,000
MV-3 $20,000 $1,000 $50,400,000
MV-4 $20,000 $1,000 $46,800,000
MV-5 $20,000 $1,000 $43,200,000
MV-6 $20,000 $1,000 $40,800,000
MV-7 $20,000 $1,000 $37,200,000
MV-8 $20,000 $1,000 $30,000,000
BV $20,000 $1,000 $30,000,000
A-R $99.95(1) N/A $100
CF N/A N/A N/A
CV N/A N/A N/A
PF N/A N/A $100
PV 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
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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 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
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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 (the "Transferor Certificate") and (i) deliver a letter in
substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A 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-1), 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
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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 and 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 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.
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(2) Except in connection with (i) the registration of the
Tax Matters Person Certificate in the name of the Trustee or (ii) 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-1.
(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 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
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Counsel, which Opinion of Counsel shall not be an expense of the Trustee, any
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.
(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, any 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 (and with respect to the
Class AF-5B Certificates, the Class AF-5B Insurer) 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, the NIM Insurer, the Class AF-5B
Insurer and any agent of the Master Servicer, the Trustee, the NIM Insurer or
the Class AF-5B Insurer 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, the NIM Insurer or
the Class AF-5B Insurer or any agent of the Master Servicer, the Trustee, the
NIM Insurer or the Class AF-5B Insurer shall be affected by any notice to the
contrary.
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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.
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;
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(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.
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.
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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 and the Class AF-5B Insurer of any change in such location
of any such office or agency.
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 any
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or any Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or any 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.
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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 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 (such determination to
be made without regard to the Class AF-5B Policy). Any such determination
pursuant to clause (i) of the preceding sentence permitting the
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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 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, the Class AF-5B
Insurer 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
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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
(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
(subject to the consent of the Class AF-5B Insurer, which consent shall not be
unreasonably withheld), 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,
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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.
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
(without regard to the Class AF-5B Policy, in the case of the Class AF-5B
Certificates) and the NIM Insurer guaranteed notes (without giving any 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
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 (without regard to the
Class AF-5B Policy, in the case of the Class AF-5B Certificates). No
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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 and the Class AF-5B Insurer. 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 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
Certificateholders, to the Class AF-5B Insurer and to each Rating Agency.
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(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.
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;
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(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.
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 the NIM Insurer or such Certificateholders,
the Trustee may require reasonable
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indemnity against such expense, or liability from the NIM Insurer or
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
(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.
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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 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 (without regard to the Class
AF-5B Policy, in the case of the Class AF-5B 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
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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 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
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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. In addition, if
any Corridor Contract is still outstanding, the Person appointed as successor
trustee shall execute, acknowledge and deliver to the predecessor trustee, CHL
and the Master Servicer an instrument accepting the appointment as successor
Corridor Contract Administrator under the Corridor Contract Administration
Agreement.
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 (without regard to the Class
AF-5B Policy, in the case of the Class AF-5B 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 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 or the NIM Insurer shall
not have approved 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
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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 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
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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 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
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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 ten 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 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 that occurred ratably within each Loan Group. 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
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Carryover funded by any Corridor Contract and in respect of any residual
payments from such Corridor Contract received by the Class CF or Class CV
Certificates, as the case may be, and (ii) the Holders of the Class CF and
Class CV Certificates in respect of (a) any monies distributed pursuant to
Sections 4.04(e)(20) and 4.04(f)(21) herein, in favor of the other
Certificateholders. Thus, the Class AF-1, Class 1-AV-1 and Class 2-AV
Certificates and the Adjustable Rate Subordinate 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 Class AF-1 Corridor
Contract, the Class 1-AV Corridor Contract, Class 2-AV Corridor Contract,
Class 3-AV Corridor Contract and Adjustable Rate Subordinate Corridor Contract
have values of $11,000, $200,000, $485,000, $241,000 and $683,000,
respectively. The Trustee shall treat the entitlement to Credit Comeback
Excess Amounts as owned by the Holders of the Class CF Certificates and not as
an asset of, or interest in, any REMIC created hereunder. Further, the Trustee
shall treat any payments of Credit Comeback Excess Amounts to Persons other
than the Holders of the Class CF Certificates as payments made by the Holders
of the Class CF Certificates pursuant to a credit enhancement contract under
Treasury Regulation 1.860G-2(c). The Trustee shall also treat any amount
payable to a Class CF Certificate with respect to an R-3-X Interest as
deposited into the Carryover Reserve Fund.
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.
(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 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
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(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 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.
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(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 their
respective ratings of any Class of Certificates (without regard to the Class
AF-5B Policy, in the case of the Class AF-5B 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.
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(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, the Class AF-5B 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, the Class
AF-5B 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, the Class AF-5B 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, the
Class AF-5B Insurer 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 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.
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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) plus, 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. If any such
termination will result in a Deficiency Amount on the Class AF-5B Policy, the
consent of the Class AF-5B Insurer will also be required prior to exercising
such option.
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 the Cut-off Date Principal Balance of the Initial Mortgage Loans and
the Pre-Funded Amount, (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 and (3) unless the
Class AF-5B Insurer otherwise consents, the purchase price for such Mortgage
Loans and REO Properties shall result in a final distribution on the Class
AF-5B Certificates and the Class AF-5B Insurer that is sufficient (x) to pay
such Class AF-5B Certificates in full and (y) to pay any amounts due and
payable to the Class AF-5B Insurer pursuant to the terms hereof.
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.
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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 in the Certificate Account related to such
Loan Group, the Master Servicer shall direct the Trustee to send a final
distribution notice promptly to each related Certificateholder and the Class
AF-5B Insurer 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 and the Class AF-5B Insurer 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,
the Class AF-5B Insurer 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 and
the Class AF-5B Insurer the amounts allocable to such Certificates and the
Class AF-5B Insurer 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
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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 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, the Class AF-5B Insurer, with respect to any
unpaid Class AF-5B Reimbursement Amounts (only to the extent of amounts
received in respect of the Group 1 Mortgage Loans), and 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
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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 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 (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein, (iii) to conform this Agreement to the Prospectus
Supplement or the Prospectus, (iv) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement to comply with any
rules or regulations promulgated by the Securities and Exchange Commission
from time to time, or (v) 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 (without regard to
the Class AF-5B Policy, in the case of the Class AF-5B 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 or 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.
Each party to this Agreement hereby agrees that it will cooperate with each
other party in amending this Agreement pursuant to clause (iv) above.
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
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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 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, (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, or (iv) adversely affect in
any material respect the rights and interests of the Class AF-5B Insurer in
any of the provisions of this Agreement without its consent, which consent
shall not be unreasonably withheld: (I) the definitions of "Class AF-5B
Premium" and "Reimbursement Amount" in Article I, (II) the priority of
payments to the Class AF-5B Insurer pursuant to Sections 4.04(a), (b) and (d)
and (III) Sections 4.06, 10.01, and 10.12.
Notwithstanding any contrary provision of this Agreement, the
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 the Class AF-5B Insurer and, if the amendment required the
consent of Certificateholders, to each Certificateholder 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.
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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.
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.
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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;
(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.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
(1) Each report to Certificateholders described in Section
4.05;
(2) Each annual statement as to compliance described in
Section 3.17; and
(3) Each annual independent public accountants' servicing
report described in Section 3.18.
(c) 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
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Master Servicer and the Trustee by the Sellers in writing; (iv) in the case of
Park Sienna, Park Sienna LLC, 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; (v) 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; (vi) 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 2005-1, or such other address as the
Trustee may hereafter furnish to the Depositor or the Master Servicer; (vii)
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; (viii) in the
case of the Rating Agencies, (x) Xxxxx'x Investors Service, Inc., Attention:
ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, and (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 (ix) in the case of the
Class AF-5B Insurer, Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Consumer Asset-Backed Securities Group or
such other address as may be hereafter furnished by the Class AF-5B Insurer.
Notices to Certificateholders shall be deemed given when mailed, first postage
prepaid, to their respective addresses appearing in the Certificate Register.
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
189
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 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, any 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, any 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
190
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
(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 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 Certificates
(without giving effect to any policy or guaranty provided by the NIM Insurer).
191
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: /s/ Xxxx Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx
-------------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
PARK MONACO INC.,
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx
-------------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
PARK SIENNA LLC,
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx
-------------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxx Xxxxxxx, Xx
-------------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxxx
Title: Vice President
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
as Co-Trustee
By: /s/ Xxxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Assistant Vice President
THE BANK OF NEW YORK
(solely with respect to its obligations
under Section 4.01(d))
By: /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of March, 2005, 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.
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of March, 2005, 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.
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of March, 2005, 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.
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of March, 2005, 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 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.
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 30th day of March, 2005, 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 an Assistant Vice President of Park
Sienna LLC, 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.
/s/ Xxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 30th day of March, 2005 before me, a notary public in and
for said State, appeared Xxxxxxxx Xxxxxxxxxxx, 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.
/s/ Xxxxxx Xxxxxxxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 25th day of March, 2005 before me, a notary public in and
for said State, appeared Xxxxxxxx Xxxxxx, personally known to me on the basis
of satisfactory evidence to be a AVP of The Bank of New York Trust Company,
N.A., 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.
/s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 30th day of March, 2005 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]
Exhibit A-1
through A-33
[Exhibits A-1 through A-33 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
Exhibit B-1 and Exhibit B-2 are photocopies
of the Class PF and Class PV Certificates
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C-1 and Exhibit C-2 are photocopies
of the Class CF and Class CV 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 2005-1
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2005 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, 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 manual or facsimile
signature in blank 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, 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 2005-1
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2005 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, the undersigned, as Trustee, and 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
__________, 2005 (the "Subsequent Transfer Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, 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) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(ii) 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
G-2-1
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;
(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 2005-1, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of March 1, 2005, without recourse", 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 (xvii) 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,
G-2-2
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 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]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2005-1
----------------------------------------------
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 March 1, 2005 (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Park Sienna LLC, 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 __________, 2005 (the
"Subsequent Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC,
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 manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(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 2005-1, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of March 1, 2005, without recourse", or, in
the case of each [Initial Mortgage Loan][Subsequent Mortgage
G-3-1
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]
[Sellers]
[Master Servicer]
Re: CWABS Asset-Backed Certificates, Series 2005-1
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2005 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, 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 manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;
(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, 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
G-4-1
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-4-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Sellers]
[Class AF-5B Insurer]
Re: CWABS Asset-Backed Certificates, Series 2005-1
----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2005 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Park Sienna LLC, 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
__________, 2005 (the "Subsequent Transfer Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, 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 manual or facsimile
signature in blank in the following form: "Pay to the order of
_________________ without recourse", with all intervening endorsements that
show a complete chain of endorsement from the originator to the Person
endorsing the Mortgage Note (each such endorsement being sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note), or, if the
original Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][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
H-1
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];
(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 2005-1, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of March 1, 2005, without recourse", 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 (xvii) 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-1
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 March 1, 2005 (the "Agreement"), by and among CWABS, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Park Sienna LLC, 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:
(i) 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.
(ii) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) 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-1 or
Exhibit I-2, respectively.
(iii) 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.
(iv) 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
I-1-5
shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
(v) 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 2005-1
---------------------------
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 March 1, 2005, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, 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 2005-1, 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 March 1, 2005, among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, 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 Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2005-1, 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
K-1
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 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 March 1, 2005, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, 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 2005-1, 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
L-1
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, 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 March 1, 2005, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, 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.:
------------------------------------
Co-Trustee
Name:
------------------------------------
Address:
------------------------------------
Co-Trustee
Mortgage File No.:
------------------------------------
The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2005-1, 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 March 1, 2005 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee and The Bank of New York Trust Company, N.A., as Co-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
M-1
the County of __________, State of _______________ in book/reel/docket
_______________ 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
OFFICER'S CERTIFICATE AND TRUST RECEIPT
ASSET-BACKED CERTIFICATES,
Series 2005-1
__________________________________________ 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"), PARK SIENNA LLC, a Delaware limited liability
company, in its capacity as a seller under the Pooling and Servicing Agreement
("Park Sienna" and, together with CHL and Park Monaco, the "Sellers") and The
Bank of New York, a New York banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Monaco, Park Sienna, 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 March 1, 2005 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2005-1 (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 $_______________; provided,
however, that such amount shall not exceed the amount on deposit in the
Pre-Funding Account.
(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; provided that no fixed rate mortgage loan that would be a
Credit Comeback Loan is eligible for conveyance to the Trust Fund on a
Subsequent Transfer Date occurring after March 31, 2005.
(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.
P-1
(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.
(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:
PARK SIENNA LLC
as a Seller
By:__________________________________
Name:
Title:
X-0
XXX XXXX XX XXX XXXX,
not in its individual capacity,
but solely as Trustee
By:__________________________________
Name:
Title:
P-4
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-5
START HERE
EXHIBIT Q-1
FORM OF CLASS AF-1 CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-1-1
EXHIBIT Q-2
FORM OF CLASS 1-AV
CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-2-1
EXHIBIT Q-3
FORM OF CLASS 2-AV CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-3-1
EXHIBIT Q-4
FORM OF CLASS 3-AV CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-4-1
EXHIBIT Q-5
FORM OF ADJUSTABLE RATE SUBORDINATE CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-5-1
EXHIBIT R
FORM OF CLASS AF-5B POLICY
Certificate Guaranty Insurance Policy Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Insured Obligations: Policy Number:
CWABS Asset-Backed Certificates Trust 2005-1 AB0867BE
Asset-Backed Certificates, Series 2005-1
Class AF-5B Certificates
Premium:
As specified in the
endorsement attached
hereto and made a part
hereof.
Ambac Assurance Corporation (Ambac), a Wisconsin stock insurance corporation,
in consideration of the payment of the premium and subject to the terms of
this Policy, hereby agrees unconditionally and irrevocably to pay to the
Trustee for the benefit of the Holders of the Insured Obligations, that
portion of the Insured Amounts which shall become Due for Payment but shall be
unpaid by reason of Nonpayment.
Ambac will make such payments to the Trustee from its own funds on the later
of (a) one (1) Business Day following notification to Ambac of Nonpayment or
(b) the Business Day on which the Insured Amounts are Due for Payment. Such
payments of principal or interest shall be made only upon presentation of an
instrument of assignment in form and substance satisfactory to Ambac,
transferring to Ambac all rights under such Insured Obligations to receive the
principal of and interest on the Insured Obligation. Ambac shall be subrogated
to all the Holders' rights to payment on the Insured Obligations to the extent
of the insurance disbursements so made. Once payments of the Insured Amounts
have been made to the Trustee, Ambac shall have no further obligation
hereunder in respect of such Insured Amounts.
In the event the Trustee for the Insured Obligations has notice that any
payment of principal or interest on an Insured Obligation which has become Due
for Payment and which is made to a Holder by or on behalf of the Trustee has
been deemed a preferential transfer and theretofore recovered from its Holder
pursuant to the United States Bankruptcy Code in accordance with a final,
nonappealable order of a court of competent jurisdiction, such Holder will be
entitled to payment from Ambac to the extent of such recovery if sufficient
funds are not otherwise available.
This Policy is noncancelable by Ambac for any reason, including failure to
receive payment of any premium due hereunder. The premium on this Policy is
not refundable for any reason. This
Policy does not insure against loss of any prepayment or other acceleration
payment which at any time may become due in respect of any Insured Obligation,
other than at the sole option of Ambac, nor against any risk other than
Nonpayment, including failure of the Trustee to make any payment due Holders
of Insured Amounts.
To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such
rights and defenses may be available to Ambac, to avoid payment of its
obligations under this Policy in accordance with the express provisions
hereof.
Any capitalized terms not defined herein shall have the meaning given such
terms in the endorsement attached hereto or in the Agreement.
In witness whereof, Ambac has caused this Policy to be affixed with its
corporate seal and to be signed by its duly authorized officers in facsimile
to become effective as their original signatures and binding upon Ambac by
virtue of the countersignature of its duly authorized representative.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxx
President [SEAL] Secretary
/s/ Xxxxxxxxx Xxxxxxxxx
Effective Date: March 30, 2005 Authorized Representative
CERTIFICATE GUARANTY INSURANCE POLICY ENDORSEMENT
Attached to and forming part of Effective Date of Endorsement:
Certificate Guaranty Insurance March 30, 2005
Policy #AB0867BE issued to:
The Bank of New York
as Trustee for the Holders of CWABS Inc.
Asset-Backed Certificates, Series 2005-1
Class AF-5B Certificates.
For all purposes of this Policy, the following terms shall have the
following meanings:
"Agreement" shall mean, for purposes of the Policy, the Pooling and
Servicing Agreement.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings and loan institutions in the State of California, the
State of New York or the cities in which the Corporate Trust Office of the
Trustee is located, are authorized or obligated by law or executive order to
be closed.
"Class AF-5B Available Funds" shall mean, with respect to any
Distribution Date, funds allocated from amounts available pursuant to the
Agreement to make distributions on the Class AF-5B Certificates on such
Distribution Date, other than any Insured Amounts.
"Class AF-5B Certificates" shall mean the CWABS Inc. Asset-Backed
Certificates, Series 2005-1, Class AF-5B Certificates, substantially in the
form set forth in Exhibit A-6 to the Agreement.
"Class AF-5B Certificate Insurer" shall mean Ambac Assurance
Corporation, or any successor thereto, as issuer of this Policy.
"Class AF-5B Premium" or "Premium" means with respect to the Class AF-5B
Policy and any Distribution Date, an amount that accrues at the Premium
Percentage on a balance equal to the Certificate Principal Balance of the
Class AF-5B Certificates immediately prior to such Distribution Date. The
Class AF-5B Premium shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
"Class AF-5B Realized Loss Amount" means for any Distribution Date after
the Certificate Principal Balance of the Fixed Rate Subordinate Certificates
has been reduced to zero, the amount equal to the excess of (x) the
Certificate Principal Balance of the Class AF-5B Certificates for such
Distribution Date (after taking into account all distributions to be made on
such Distribution Date) over (y) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 and the amount on deposit in the
Pre-Funding Account in respect of Loan Group 1 for such Distribution Date,
after taking into account all distributions to be made on such Distribution
Date.
"Deficiency Amount" shall mean (a) for any Distribution Date prior to
the Last Scheduled Distribution Date, the sum of (1) the excess, if any, of
the Current Interest on the Class AF-5B Certificates net of any interest
shortfalls resulting from Prepayment Interest Shortfalls and any interest
shortfalls resulting from the application of the Relief Act, or similar state
or local laws, over Class AF-5B Available Funds for such Distribution Date and
(2) the Class AF-5B Realized Loss Amount, if any, (b) for the Last Scheduled
Distribution Date, an amount equal to the sum of (1) the excess, if any, of
the Current Interest on the Class AF-5B Certificates net of any interest
shortfalls resulting from Prepayment Interest Shortfalls and any interest
shortfalls resulting from the application of the Relief Act, or similar state
or local laws over the Class AF-5B Available Funds for such Distribution Date
and (2) the Certificate Principal Balance of the Class AF-5B Certificates on
such Last Scheduled Distribution Date (after taking into account all
distributions to be made to the Class AF-5B Certificates on such Distribution
Date); and (c) for any date on which the acceleration of the Certificates has
been directed or consented to by the Class AF-5B Insurer, the excess of (i)
the amount required to pay the outstanding Certificate Principal Balance of
the Class AF-5B Certificates in full, together with accrued and unpaid
interest thereon through the date of payment of the Class AF-5B Certificates
and (ii) the Class AF-5B Available Funds for that Distribution Date.
"Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in April 2005.
"Due for Payment" shall mean with respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable pursuant to the
terms of the Agreement.
"First Distribution Date" shall mean April 25, 2005.
"Holder" shall mean the registered owner or beneficial owner of a Class
AF-5B Certificate, but shall not include the Trustee, the Co-Trustee, the
Sellers, the Depositor, the Master Servicer or any of their respective
affiliates.
"Insured Amounts" shall mean, with respect to any Distribution Date, the
Deficiency Amount for such Distribution Date.
"Insured Payments" shall mean, with respect to any Distribution Date,
the aggregate amount actually paid by the Class AF-5B Certificate Insurer to
the Trustee in respect of (i) Insured Amounts for a Distribution Date and (ii)
Preference Amounts for any given Business Day.
"Last Scheduled Distribution Date" shall mean the Distribution Date
occurring in July 2035.
"Late Payment Rate" shall mean for any Distribution Date, the lesser of
(i) the greater of (a) the rate of interest, as it is publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in such prime rate of interest to be effective on the date such
change is announced by Citibank, N.A.) plus 2% and (b) the then applicable
highest rate of interest on the Class AF-5B Certificates and (ii) the maximum
rate permissible under applicable usury or similar laws limiting interest
rates. The Late Payment Rate shall be computed on the basis of the actual
number of days elapsed over a year of 360 days.
"Nonpayment" shall mean, with respect to any Distribution Date, an
Insured Amount is Due for Payment but has not been paid pursuant to the
Agreement.
"Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by facsimile substantially in the form of Exhibit A to
this Policy, subsequently confirmed in writing, the original of which is sent
by registered or certified mail, from the Trustee specifying the Insured
Amount or Preference Amount which shall be due and owing on the applicable
Distribution Date.
"Policy" shall mean the Certificate Guaranty Insurance Policy together
with each and every endorsement thereto.
"Pooling and Servicing Agreement" shall mean the Pooling and Servicing
Agreement, dated as of March 1, 2005, among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, The Bank of New York, as Trustee and The Bank of New York Trust
Company, N.A., as Co-Trustee, as such agreement may be amended, modified or
supplemented from time to time.
"Preference Amount" shall mean any payment of principal or interest on a
Class AF-5B Certificate which has become Due for Payment and which was made to
a Holder by or on behalf of the Trust, which has been deemed a preferential
transfer and was previously recovered from the Holder pursuant to the United
States Bankruptcy Code in accordance with a final, non-appealable order a
court of competent jurisdiction.
"Premium Percentage" shall mean 0.08% per annum.
"Reimbursement Amount" shall mean, as to any Distribution Date, (i) all
Insured Payments paid by the Class AF-5B Certificate Insurer, but for which
the Class AF-5B Certificate Insurer has not been reimbursed prior to such
Distribution Date pursuant to Section 4.04 of the Agreement, plus (ii)
interest accrued on such Insured Payments not previously repaid, calculated at
the Late Payment Rate from the date such Insured Payments were made.
"Trustee" shall mean The Bank of New York or its successor-in-interest,
in its capacity as Trustee under the Agreement, or if any successor trustee
shall be appointed as provided therein, then "Trustee" shall also mean such
successor trustee, as the case may be, subject to the provisions thereof.
Capitalized terms used herein as defined terms and not otherwise defined
herein shall have the meaning assigned to them in the Agreement, without
regard to any amendment or modification thereof, unless such amendment or
modification has been approved in writing by the Class AF-5B Certificate
Insurer.
Notwithstanding any other provision of the Policy, the Class AF-5B
Certificate Insurer will pay any Insured Amount payable hereunder no later
than 12:00 noon, New York City time, on the later of (i) the Distribution Date
on which the related Insured Amount is Due for Payment and (ii) the second
Business Day following receipt in New York, New York on a Business Day by the
Class AF-5B Certificate Insurer of a Notice; provided that, if such Notice is
received after
12:00 noon, New York City time, on such Business Day, it shall be deemed to be
received on the following Business Day. If any such Notice is not in proper
form or is otherwise insufficient for the purpose of making a claim under the
Policy, it shall be deemed not to have been received for purposes of this
paragraph, and the Class AF-5B Certificate Insurer shall promptly so advise
the Trustee and the Trustee may submit an amended or corrected Notice.
The Class AF-5B Certificate Insurer shall pay any Preference Amount when
due to be paid pursuant to the Order referred to below, but in any event no
earlier than the third Business Day following receipt by the Class AF-5B
Certificate Insurer of (i) a certified copy of a final, non-appealable order
of a court or other body exercising jurisdiction in such insolvency proceeding
to the effect that the Trustee or Holder, as applicable, is required to return
such Preference Amount paid during the term of this Policy because such
payments were avoided as a preferential transfer or otherwise rescinded or
required to be restored by the Trustee or Holder (the "Order"), (ii) a notice
by or on behalf of the Trustee or Holder that the Order has been entered and
is not subject to any stay, (iii) an assignment, in form and substance
satisfactory to the Class AF-5B Certificate Insurer, duly executed and
delivered by the Trustee or Holder, as applicable, irrevocably assigning to
the Class AF-5B Certificate Insurer all rights and claims of the Trustee or
Holder relating to or arising under the Agreement against the estate of the
Trust or otherwise with respect to such Preference Amount and (iv) a Notice
(in the form attached hereto as Exhibit A) appropriately completed and
executed by the Trustee; provided, that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to
be received on the following Business Day; provided, further, that the Class
AF-5B Certificate Insurer shall not be obligated to make any payment in
respect of any Preference Amount representing a payment of principal on the
Class AF-5B Certificates prior to the time the Class AF-5B Certificate Insurer
would have been required to make a payment in respect of such principal
pursuant to the first paragraph of the Policy. Such payment shall be disbursed
to the receiver, conservator, debtor-in-possession or trustee in bankruptcy
named in the Order, and not to the Trustee or the Holder directly, unless the
Holder has made a payment of the Preference Amount to the court or such
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, in which case the Class AF-5B Certificate Insurer will pay the
Holder, subject to the delivery of (a) the items referred to in clauses (i),
(ii), (iii) and (iv) above to the Class AF-5B Certificate Insurer and (b)
evidence satisfactory to the Class AF-5B Certificate Insurer that payment has
been made to such court or receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order.
The Class AF-5B Certificate Insurer shall be subrogated to the rights of
each Holder to the extent of any payment by the Class AF-5B Certificate
Insurer under the Policy.
The Class AF-5B Certificate Insurer hereby agrees that if it shall be
subrogated to the rights of Holders by virtue of any payment under this
Policy, no recovery of such payment will occur unless the full amount of the
Holders' allocable distributions for such Distribution Date can be made. In so
doing, the Class AF-5B Certificate Insurer does not waive its rights to seek
full payment of all Reimbursement Amounts owed to it hereunder or under the
Agreement.
The Policy does not cover shortfalls, if any, attributable to Prepayment
Interest Shortfalls, any shortfalls resulting from the application of the
Relief Act or similar state or local law or any Net Rate Carryover allocable
to the Class AF-5B Certificates, nor does the Policy guarantee to
the Holders of the Class AF-5B Certificates any particular rate of principal
payment. In addition, the Policy does not cover shortfalls, if any,
attributable to the liability of the Trust, any REMIC or the Trustee for
withholding taxes, if any, (including interest and penalties in respect of any
liability for withholding taxes) nor any risk other than Nonpayment, including
the failure of the Trustee or Paying Agent to make any payment required under
the Agreement to the Holders of the Class AF-5B Certificates.
The terms and provisions of the Agreement constitute the instrument of
assignment referred to in the second paragraph of the face of this Policy.
A premium will be payable on this Policy on each Distribution Date as
provided in Section 4.04 of the Agreement, beginning with the First
Distribution Date, in an amount equal to the Class AF-5B Premium.
THE INSURANCE PROVIDED BY THE POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.
Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, provisions, agreements or limitations of the
above mentioned Policy other than as above stated.
To the extent the provisions of this endorsement conflict with the
provisions in the above-mentioned Policy, the provisions of this endorsement
shall govern.
The Policy and the obligations of the Class AF-5B Certificate Insurer
thereunder will terminate without any action on the part of the Class AF-5B
Certificate Insurer or any other person on the date following the later to
occur of (i) the date that is one year and one day following the date on which
all amounts required to be paid on the Class AF-5B Certificates have been paid
in full and (ii) if any proceeding referenced in the first full paragraph
which begins on page 4 of this Policy Endorsement has been commenced on or
prior to the date specified in clause (i) of this paragraph, the 30th day
after the entry of a final, non-appealable order in resolution or settlement
of such proceeding. Upon termination of this Policy, the Trustee shall deliver
the original of the Policy to the Class AF-5B Certificate Insurer.
No person other than the Trustee shall be entitled to present the
Notice.
No waiver of any rights or powers of the Class AF-5B Certificate
Insurer, the Holders or the Trustee or consent by any of them shall be valid
unless signed by an authorized officer or agent thereof.
This Policy is issued under and pursuant to, and shall be construed in
accordance with, the laws of the State of New York, without giving effect to
the conflict of laws principles thereof.
The Class AF-5B Certificate Insurer's obligations under the Policy will
be discharged to the extent that funds are received by the Trustee for payment
to the Holders of the Class AF-5B Certificates whether or not those funds are
properly paid by the Trustee. Payments of Insured
Amounts will be made only at the time set forth herein, and no accelerated
payments of Insured Amounts will be made regardless of any acceleration of the
Class AF-5B Certificates, unless the acceleration is at the sole option of the
Class AF-5B Certificate Insurer.
IN WITNESS WHEREOF, Ambac Assurance Corporation has caused this
endorsement to the Policy to be signed by its duly authorized officers.
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxxxxxx Xxxxxxxxx
-------------------- -----------------------
Assistant Secretary Vice President
EXHIBIT A
TO THE CERTIFICATE GUARANTY INSURANCE POLICY
Policy No. AB0867BE
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS AND PREFERENCE AMOUNTS
Date:
[ ]
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Reference is made to Certificate Guaranty Insurance Policy No. AB0867BE
(the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings
specified in the Policy and the Agreement, dated as of March 1, 2005, among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, The Bank of New York, as Trustee and
The Bank of New York Trust Company, N.A., as Co-Trustee, as the case may be,
unless the context otherwise requires.
The Trustee hereby certifies as follows:
1. The Trustee is the Trustee under the Agreement for the Holders.
2. The relevant Distribution Date is [date].
3. Payment on the Class AF-5B Certificates in respect of the
Distribution Date is due to be received on
________________________ under the Agreement in an amount
equal to $__________.
4. [There is an Insured Amount of $____________ in respect of the
Class AF-5B Certificates, which amount is Due for Payment
pursuant to the terms of the Agreement.] [There is a
Preference Amount of $______________ in respect of the Class
AF-5B Certificates, which is due and payable pursuant to the
terms of the Agreement.]
5. The Trustee has not heretofore made a demand for the [Insured
Amount] [Preference Amount] in respect of the Distribution
Date.
6. The Trustee hereby requests the payment of the [Insured Amount
that is Due For Payment] [Preference Amount] be made by Ambac
under the Policy and directs that payment under the Policy be
made to the following account by bank wire transfer of federal
or other immediately available funds in accordance with the
terms of the Policy to:
7. ______________________________ (Trustee's account number). The
Trustee hereby agrees that, following receipt of the [Insured
Amount] [Preference Amount] from Ambac, it shall (a) hold such
amounts in trust
R-1
and apply the same directly to the distribution of payment
on the Class AF-5B Certificates when due; (b) not apply such
funds for any other purpose; (c) deposit such funds to the
Class AF-5B Insurance Payments Account and not commingle
such funds with other funds held by Trustee and (d) maintain
an accurate record of such payments with respect to each
certificate and the corresponding claim on the Policy and
proceeds thereof.
ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE
COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE
OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A
CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE
CLAIM FOR EACH SUCH VIOLATION.
By:
Trustee
Title:
(Officer)
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EXHIBIT S-1
FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT
[See document delivered at closing.]
S-1
EXHIBIT S-2
FORM OF CORRIDOR CONTRACT ADMINISTRATION AGREEMENT
[See document delivered at closing.]
S-1
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2005-1
[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 March 1, 2005, (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Park Sienna LLC, 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
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(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
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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
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Characteristic Applicable Section Loan Group 1 Loan Group 2 Loan Group 3 Loan Group 4
------------------------------------------------------------------------------------------------------------------------------------
Single-Family Detached Dwellings 2.03(b)(32) 78.73% 73.60% 74.28% 74.48%
------------------------------------------------------------------------------------------------------------------------------------
Two- to Four-Family Dwellings 2.03(b)(32) 3.83% 5.13% 3.24% 2.59%
------------------------------------------------------------------------------------------------------------------------------------
Low-Rise Condominium Units 2.03(b)(32) 3.90% 4.90% 5.48% 6.07%
------------------------------------------------------------------------------------------------------------------------------------
High-Rise Condominium Units 2.03(b)(32) 0.28% 0.36% 0.43% 0.10%
------------------------------------------------------------------------------------------------------------------------------------
Manufactured Housing 2.03(b)(32) 0.04% 0.28% None None
------------------------------------------------------------------------------------------------------------------------------------
PUDs 2.03(b)(32) 13.22% 17.73% 16.57% 16.77%
------------------------------------------------------------------------------------------------------------------------------------
January 12, November 8, November 11, February 24,
Earliest Origination Date 2.03(b)(33) 1998 1996 1999 2004
------------------------------------------------------------------------------------------------------------------------------------
Prepayment Penalty 2.03(b)(35) 76.33% 70.70% 70.01% 67.97%
------------------------------------------------------------------------------------------------------------------------------------
Investor Properties 2.03(b)(36) 1.51% 0.52% 1.80% 0.83%
------------------------------------------------------------------------------------------------------------------------------------
Primary Residences 2.03(b)(36) 98.09% 98.95% 97.58% 98.72%
------------------------------------------------------------------------------------------------------------------------------------
Lowest Current Mortgage Rate 2.03(b)(48) 5.25% 3.50% 3.90% 4.20%
------------------------------------------------------------------------------------------------------------------------------------
Highest Current Mortgage Rate 2.03(b)(48) 12.125% 13.875% 12.000% 12.375%
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Current Mortgage Rate 2.03(b)(48) 7.034% 6.906% 7.466% 7.121%
------------------------------------------------------------------------------------------------------------------------------------
Lowest Gross Margin 2.03(b)(51) N/A 0.625% 2.250% 3.25%
------------------------------------------------------------------------------------------------------------------------------------
Highest Gross Margin 2.03(b)(51) N/A 10.650% 13.750% 8.000%
------------------------------------------------------------------------------------------------------------------------------------
Weighted Average Gross Margin 2.03(b)(51) N/A 6.646% 7.279% 6.721%
------------------------------------------------------------------------------------------------------------------------------------
Date before which each Initial Mortgage
Loan has a Due Date 2.03(b)(52) May 1, 2005 May 1, 2005 May 1, 2005 May 1, 2005
------------------------------------------------------------------------------------------------------------------------------------
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Three-Year
Adjustable Rate Mortgage Loans Two-Year Hybrid
Loan Adjustment Applicable (other than Two-Year and Hybrid Mortgage
Group Date Section Three-Year Hybrid Mortgage Loans) Mortgage Loans Loans
------------------------------------------------------------------------------------------------------------------------------------
Latest Next
2 Adjustment Date 2.03(b)(34) March 1, 2010 April 1, 2007 April 1, 2008
------------------------------------------------------------------------------------------------------------------------------------
Latest Next
3 Adjustment Date 2.03(b)(34) March 1, 2010 April 1, 2007 April 1, 2008
------------------------------------------------------------------------------------------------------------------------------------
Latest Next
4 Adjustment Date 2.03(b)(34) October 1, 2005 April 1, 2007 April 1, 2008
-----------------------------------------------------------------------------------------------------------------------------------
S-II-1
