===============================================================================
CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
FEDERAL NATIONAL MORTGAGE ASSOCIATION
Guarantor (with respect to the Class 1-AV-1 Certificates)
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.
Co-Trustee
--------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2004
--------------------------------------------
ASSET-BACKED CERTIFICATES, SERIES 2004-15
Table of Contents
-----------------
Page
----
ARTICLE I. DEFINITIONS 10
Section 1.01 Defined Terms................................................................10
Section 1.02 Certain Interpretive Provisions..............................................67
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES 67
Section 2.01 Conveyance of Mortgage Loans.................................................67
Section 2.02 Acceptance by Trustee of the Mortgage Loans..................................75
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and
the Sellers..................................................................80
Section 2.04 Representations and Warranties of the Depositor.............................100
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases.................................................................101
Section 2.06 Authentication and Delivery of Certificates.................................102
Section 2.07 Covenants of the Master Servicer............................................102
Section 2.08 Rights of the Guarantor.....................................................102
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 103
Section 3.01 Master Servicer to Service Mortgage Loans...................................103
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer.............105
Section 3.03 Rights of the Depositor, the Sellers, the Certificateholders, the NIM
Insurer, the Guarantor, the Class 1-AV-1 Insurer and the Trustee in
Respect of the Master Servicer..............................................107
Section 3.04 Trustee to Act as Master Servicer...........................................108
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account; Pre-Funding Account; Seller Shortfall Interest Requirement.........109
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts.........112
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage
Loans.......................................................................112
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution
Account, Carryover Reserve Fund and the Principal Reserve Fund..............113
Section 3.09 [Reserved]..................................................................116
Section 3.10 Maintenance of Hazard Insurance.............................................116
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements...................117
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess
Proceeds and Realized Losses; Repurchase of Certain Mortgage Loans..........118
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files..........................122
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be
Held for the Trustee........................................................123
Section 3.15 Servicing Compensation......................................................124
i
Section 3.16 Access to Certain Documentation.............................................124
Section 3.17 Annual Statement as to Compliance...........................................125
Section 3.18 Annual Independent Public Accountants' Servicing Statement; Financial
Statements..................................................................125
Section 3.19 The Corridor Contracts......................................................125
Section 3.20 Prepayment Charges..........................................................126
Section 3.21 Reports to the Guarantor; Certificate Account Statements....................127
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER 128
Section 4.01 Advances; Remittance Reports................................................128
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment
Interest Shortfalls.........................................................129
Section 4.03 [Reserved]..................................................................130
Section 4.04 Distributions...............................................................130
Section 4.05 Monthly Statements to Certificateholders....................................151
Section 4.06 ▇▇▇▇▇▇ ▇▇▇ Guaranty.........................................................154
Section 4.07 Class 1-AV-1 Policy.........................................................155
Section 4.08 Carryover Reserve Fund......................................................157
Section 4.09 Credit Comeback Excess Account..............................................159
ARTICLE V. THE CERTIFICATES 160
Section 5.01 The Certificates............................................................160
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates................................................................161
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........................165
Section 5.04 Persons Deemed Owners.......................................................165
Section 5.05 Access to List of Certificateholders' Names and Addresses...................166
Section 5.06 Book-Entry Certificates.....................................................166
Section 5.07 Notices to Depository.......................................................167
Section 5.08 Definitive Certificates.....................................................167
Section 5.09 Maintenance of Office or Agency.............................................168
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS 168
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the
Sellers.....................................................................168
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the
Sellers.....................................................................168
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the Master
Servicer, the NIM Insurer, the Guarantor and Others.........................169
Section 6.04 Limitation on Resignation of Master Servicer................................170
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds..............................170
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 171
Section 7.01 Events of Default...........................................................171
ii
Section 7.02 Trustee to Act; Appointment of Successor....................................172
Section 7.03 Notification to Certificateholders..........................................174
ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE 174
Section 8.01 Duties of Trustee...........................................................174
Section 8.02 Certain Matters Affecting the Trustee.......................................176
Section 8.03 Trustee Not Liable for Mortgage Loans.......................................177
Section 8.04 Trustee May Own Certificates................................................177
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses..........................177
Section 8.06 Eligibility Requirements for Trustee........................................178
Section 8.07 Resignation and Removal of Trustee..........................................178
Section 8.08 Successor Trustee...........................................................179
Section 8.09 Merger or Consolidation of Trustee..........................................180
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............................180
Section 8.11 Tax Matters.................................................................181
Section 8.12 Co-Trustee..................................................................184
Section 8.13 Access to Records of the Trustee............................................186
Section 8.14 Suits for Enforcement.......................................................187
ARTICLE IX. TERMINATION 187
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans............187
Section 9.02 Final Distribution on the Certificates......................................188
Section 9.03 Additional Termination Requirements.........................................190
ARTICLE X. MISCELLANEOUS PROVISIONS 191
Section 10.01 Amendment...................................................................191
Section 10.02 Recordation of Agreement; Counterparts......................................192
Section 10.03 Governing Law...............................................................193
Section 10.04 Intention of Parties........................................................193
Section 10.05 Notices.....................................................................194
Section 10.06 Severability of Provisions..................................................195
Section 10.07 Assignment..................................................................195
Section 10.08 Limitation on Rights of Certificateholders..................................195
Section 10.09 Inspection and Audit Rights.................................................196
Section 10.10 Certificates Nonassessable and Fully Paid...................................196
Section 10.11 Rights of NIM Insurer.......................................................196
Section 10.12 The Class 1-AV-1 Insurer Rights.............................................197
Exhibits
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-5 Certificate
iii
EXHIBIT A-6 Form of Class AF-6 Certificate
EXHIBIT A-7 Form of Class MF-1 Certificate
EXHIBIT A-8 Form of Class MF-2 Certificate
EXHIBIT A-9 Form of Class MF-3 Certificate
EXHIBIT A-10 Form of Class MF-4 Certificate
EXHIBIT A-11 Form of Class MF-5 Certificate
EXHIBIT A-12 Form of Class MF-6 Certificate
EXHIBIT A-13 Form of Class MF-7 Certificate
EXHIBIT A-14 Form of Class MF-8 Certificate
EXHIBIT A-15 Form of Class BF Certificate
EXHIBIT A-16 Form of Class 1-AV-1 Certificate
EXHIBIT A-17 Form of Class 2-AV-1 Certificate
EXHIBIT A-18 Form of Class 2-AV-2 Certificate
EXHIBIT A-19 Form of Class 2-AV-3 Certificate
EXHIBIT A-20 Form of Class MV-1 Certificate
EXHIBIT A-21 Form of Class MV-2 Certificate
EXHIBIT A-22 Form of Class MV-3 Certificate
EXHIBIT A-23 Form of Class MV-4 Certificate
EXHIBIT A-24 Form of Class MV-5 Certificate
EXHIBIT A-25 Form of Class MV-6 Certificate
EXHIBIT A-26 Form of Class MV-7 Certificate
EXHIBIT A-27 Form of Class MV-8 Certificate
EXHIBIT A-28 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
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
iv
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-1 Corridor Contract
EXHIBIT Q-3 Form of Class 2-AV Corridor Contract
EXHIBIT Q-4 Form of Adjustable Rate Subordinate Corridor
Contract
EXHIBIT R [Reserved]
EXHIBIT S Form of Corridor Contract Assignment Agreement
EXHIBIT T Officer's Certificate with respect to Prepayments
EXHIBIT U Form of Class 1-AV-1 Policy
EXHIBIT V Form of Trustee Notice with respect to REMIC
Provisions
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge
Summary
SCHEDULE II Collateral Schedule
SCHEDULE III Class AF-1 Target Balance Schedule
v
POOLING AND SERVICING AGREEMENT, dated as of December 1, 2004, by
and among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a seller ("CHL" or a
"Seller"), PARK MONACO INC., a Delaware corporation, as a seller ("Park Monaco"
or a "Seller", and together with CHL, the "Sellers"), COUNTRYWIDE HOME LOANS
SERVICING LP, a Texas limited partnership, as master servicer (the "Master
Servicer"), FEDERAL NATIONAL MORTGAGE ASSOCIATION, as Guarantor of the Class
1-AV-1 Certificates (the "Guarantor"), 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 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 Certificates
represent 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)
----------------------------------------- ------------------- -------------- ------------------
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-XF................................ (3) (7) 1
R-1-XV................................ (3) (7) 2 and 3
R-1-R................................. (4) (4) N/A
---------------
(1) The principal balance of each REMIC 1 Interest having an "I" designation
is the principal balance of all the Initial Mortgage Loans in the
Corresponding Loan Group.
(2) The principal balance of each REMIC 1 Interest having an "S" designation
is the principal balance of all the Subsequent Mortgage Loans in the
Corresponding Loan Group.
(3) This REMIC 1 Interest pays no principal.
(4) The R-1-R Interest is the sole class of residual interest in REMIC 1. It
has no principal balance and pays no principal or interest.
(5) The interest rate for this REMIC 1 Interest with respect to any
Distribution Date (and the related Accrual Period) through the
Distribution Date in February 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
February 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 February 2005 is a per annum rate equal to 0.00%. For
any Distribution Date (and the related Accrual Period) following the
Distribution Date in February 2005, the interest rate for this 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 February 2005, this REMIC 1 Interest is entitled to
all the interest payable with respect to the Subsequent Mortgage Loans in
the Corresponding Loan Group (or Groups). For any Distribution Date (and
the related Accrual Period) following the Distribution Date in February
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
(2) Principal. For any Distribution Date (and the related Accrual
Period) through the Distribution Date in February 2005, the Principal
Distribution Amount with respect to the Initial Mortgage Loans 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 February 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 and Loan Group 3 and the REMIC 2 Interests corresponding to Loan Group 2
and Loan Group 3 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-PF............................. $100 (6) N/A
R-2-PV............................. $100 (7) N/A
R-2-R.............................. (8) (8) N/A
R-2-XF............................. (9) (10) N/A
R-2-XV............................. (9) (11) N/A
---------------
(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
3
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 ▇-▇-▇, ▇-▇-▇, ▇-▇-▇ 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) 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.
(7) The R-2-PV Interest is entitled to all Prepayment Charges collected with
respect to the Mortgage Loans in Loan Group 2 and Loan Group 3. It pays no
interest.
(8) 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.
(9) This REMIC 2 Interest pays no principal.
(10) This REMIC 2 Interest is entitiled to all amounts payable with respect to
the R-1-XF Interest.
(11) 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 ▇-▇-▇, ▇-▇-▇, ▇-▇-▇ 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
4
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 both
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 (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 Group, the
aggregate R-2-A and R-2-B Interests of which are less than one percent of the
Subordinate Component Balance. If the 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 Adjusted Subordinate Net Rate Cap,
Principal Relocation Payments will be made proportionately to the R-2-C
Interests prior to any other principal distributions from each such
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 Adjusted Subordinate Net Rate
Cap, Principal Relocation Payments will be made proportionately to the
outstanding R-2-D Interests prior to any other principal distributions
from each such 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 Adjusted Subordinate Net Rate Cap. With respect to each Variable Loan
Group, if (and to the extent that) the sum of (a) the
5
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 Group, the
aggregate R-2-C and R-2-D Interests of which are less than one percent of the
Adjusted Subordinate Component Balance. If the 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.
6
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 Pass-Through Corresponding Class
REMIC 3 Interests Principal 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-5........................... (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-3-2-AV-1......................... (4) (6) 2-AV-1
R-3-2-AV-2......................... (4) (6) 2-AV-2
R-3-2-AV-3......................... (4) (6) 2-AV-3
R-3-MV-1........................... (4) (7) MV-1
R-3-MV-2........................... (4) (7) MV-2
R-3-MV-3........................... (4) (7) MV-3
R-3-MV-4........................... (4) (7) MV-4
R-3-MV-5........................... (4) (7) MV-5
R-3-MV-6........................... (4) (7) MV-6
R-3-MV-7........................... (4) (7) MV-7
R-3-MV-8........................... (4) (7) MV-8
R-3-BV............................. (4) (7) BV
R-3-$100........................... $100 (8) A-R
R-3-V-Accrual...................... $0.00 (9) N/A
R-3-V-PO........................... $6,765,000.00 (8) CV
R-3-PV............................. $100 (10) PV
R-3-R.............................. (11) (11) N/A
R-3-XF............................. (12) (13) CF
R-3-XV............................. (12) (14) 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,
7
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 2 Interest has a principal balance that is initially equal to
50% of its Corresponding Certificate Class issued by the Master REMIC.
Principal payments, both scheduled and prepaid, Realized Losses,
Subsequent Recoveries and interest accruing on the 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 and Loan Group 3 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 Adjusted Subordinate Net Rate Cap. For federal income tax
purposes the Adjusted Subordinate Net Rate Cap will equal the Calculation
Rate with respect to the R-2-C and R-2-D Interests.
(8) This REMIC 3 Interest pays no interest.
(9) 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 and
(ii) the Loan Group 3 Net Rate Cap (the "Loan Group 2/3 Net Rate Cap").
(10) The R-3-PV Interest is entitled to all amounts collected with respect to
the R-2-PV Interest. It pays no interest.
(11) 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.
(12) This REMIC 3 Interest pays no principal.
(13) This REMIC 3 Interest is entitled to all amounts payable with respect to
the R-2-XF Interest.
(14) 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.
8
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.......................... $124,635,000.00 (1)
Class AF-2.......................... $23,718,000.00 (1)
Class AF-3.......................... $82,221,000.00 (1)
Class AF-4.......................... $29,882,000.00 (1)
Class AF-5.......................... $45,144,000.00 (1)
Class AF-6.......................... $40,000,000.00 (1)
Class MF-1.......................... $11,400,000.00 (1)
Class MF-2.......................... $9,600,000.00 (1)
Class MF-3.......................... $5,800,000.00 (1)
Class MF-4.......................... $6,400,000.00 (1)
Class MF-5.......................... $5,522,000.00 (1)
Class MF-6.......................... $4,000,000.00 (1)
Class MF-7.......................... $4,000,000.00 (1)
Class MF-8.......................... $4,000,000.00 (1)
Class BF............................ $4,000,000.00 (1)
Class 1-AV-1........................ $569,880,000.00 (1)
Class 2-AV-1........................ $160,065,000.00 (1)
Class 2-AV-2........................ $215,572,000.00 (1)
Class 2-AV-3........................ $28,028,000.00 (1)
Class MV-1.......................... $63,345,000.00 (1)
Class MV-2.......................... $46,125,000.00 (1)
Class MV-3.......................... $25,830,000.00 (1)
Class MV-4.......................... $22,755,000.00 (1)
Class MV-5.......................... $22,140,000.00 (1)
Class MV-6.......................... $19,680,000.00 (1)
Class MV-7.......................... $19,680,000.00 (1)
Class MV-8.......................... $15,375,000.00 (1)
Class BV............................ $14,760,000.00 (1)
Class CF............................ (2) (3)
Class CV............................ (2) (4)
Class PF............................ $100.00 (5)
Class PV............................ $100.00 (5)
Class A-R........................... $100.00 (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, Class MF and Class BF
Certificates will be subject to a cap equal to the Loan Group 1 Net Rate
Cap, (ii) the Class 1-AV-1 Certificates will be subject to a cap equal to
the Loan Group 2 Net Rate Cap minus the Class 1-AV-1 Guaranty Fee Rate and
the Class 1-AV-1 Policy Premium Rate, (iii) the Class 2-AV Certificates
will be subject to a cap equal to the Loan Group 3 Net Rate Cap, and (iv)
the Class MV Certificates and the Class BV Certificates will be subject to
a cap equal to the Adjusted 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,
9
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 and Group 3 "I" and "S" Interests
equal to the excess of the Loan Group 2/3 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 and Group 3 "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 and Group 3 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 Certificates be entitled to any cash flows pursuant to this
agreement except as provided in Section 3.08 hereunder (that is, its entitlement
to $100).
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
10
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 and Loan Group 3 from
(and including) 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 or Loan Group 3 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 and Loan Group 3, the Group 2 Pre-Funded Amount and the Group
3 Pre-Funded Amount, as set forth below:
Distribution Date Percentage
January 2008 -- December 2008......... 3.25% with respect to January
2008, plus an additional 1/12th
of 1.75% for each month
thereafter through December 2008
January 2009 -- December 2009......... 5.00% with respect to January
2009, plus an additional 1/12th
of 1.50% for each month
thereafter through December 2009
January 2010 -- December 2010......... 6.50% with respect to January
2010, plus an additional 1/12th
of 0.50% for each month
thereafter through December 2010
January 2011 and thereafter........... 7.00%
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 and Loan Group 3 equals or
exceeds the product of 31.00% and the Adjustable Rate Senior Enhancement
Percentage for such Distribution Date.
11
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, the payment of the Class 1-AV-1 Guaranty
Fee and any Class 1-AV-1 Guarantor Reimbursement Amount to the Guarantor and
the payment of the monthly premium for the Class 1-AV-1 Policy and any Class
1-AV-1 Policy Reimbursement Amount to the Class 1-AV-1 Insurer, in each case
for such Distribution Date, pursuant to Section 4.04(b)(iii)(j), and (ii) the
amount remaining after the distribution of principal to Certificateholders,
the payment of any unpaid Class 1-AV-1 Guaranty Fee and any unpaid Class
1-AV-1 Guarantor Reimbursement Amount to the Guarantor and the payment of any
unpaid monthly premium for the Class 1-AV-1 Policy and any unpaid Class 1-AV-1
Policy Reimbursement Amount to the Class 1-AV-1 Insurer, in each case for such
Distribution Date, pursuant to Section 4.04(d)(1)(B)(x) or 4.04(d)(2)(B)(x).
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 and Loan Group 3, the Group 2
Pre-Funded Amount and the Group 3 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
and Loan Group 3 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 3.80% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans in Loan Group 2 and Loan Group 3, the
Group 2 Pre-Funded Amount and the Group 3 Pre-Funded Amount and (c) on or
after the Adjustable Rate Stepdown Date, the greater of (i) an amount equal to
7.60% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 and Loan Group 3 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 and Loan Group
3 for such Distribution Date and any amount on deposit in the Pre-Funding
Account in respect of Loan Group 2 and Loan Group 3 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 and Loan Group 3 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
and Loan Group 3 for the preceding Distribution Date over (b)
12
(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 preceding Master Servicer Advance Date, and (2) the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 and Loan Group 3 for the preceding Distribution Date.
Adjustable Rate Stepdown Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class AV Certificates is reduced to zero, and (ii) the later to occur of (x)
the Distribution Date in January 2008 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class AV Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 51.80% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 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 Trustee pursuant to
the Corridor Contract Assignment Agreement), a form of which is attached
hereto as Exhibit Q-4.
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 Certificate Principal Balance of the Class 1-AV-1 Certificates)
and (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), 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.
13
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 each of Loan Group 2 and Loan Group 3, (i) the Stated
Principal Balance of the Mortgage Loans in such Loan Group as of the first day
of the related Due Period less (ii) the product of (a) the Adjustable Rate
Overcollateralized Amount and (b)(I) the Stated Principal Balance of the
Mortgage Loans in such Loan Group, divided by (II) the sum of the Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3, in
each case, as of the first day of the related Due Period, less (iii) the
principal balance of the Class 1-AV-1 Certificates in the case of Loan Group 2
and the Class 2-AV Certificates in the case of Loan Group 3.
Adjusted Subordinate Net Rate Cap: With respect to any Distribution
Date, the weighted average of the Loan Group 2 Net Rate Cap and Loan Group 3
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 Adjusted Subordinate Net Rate Cap will be the Calculation Rate
in respect of the R-2-C and R-2-D Interests.
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.
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, the sum of the Realized Losses with respect to the
Mortgage Loans in Loan
14
Group 1 which are to be applied in reduction of the Certificate Principal
Balances of the Fixed Rate Subordinate Certificates pursuant to this
Agreement, which shall equal the amount, if any, by which the aggregate
Certificate Principal Balance of the Fixed Rate 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 and (y) the amount on deposit in the Pre-Funding Account in
respect of Loan Group 1, and (ii) Loan Group 2 and Loan Group 3, the sum of
the Realized Losses with respect to the Mortgage Loans in Loan Group 2 and
Loan Group 3 which are to be applied in reduction of the Certificate Principal
Balances of the Adjustable Rate Subordinate Certificates pursuant to this
Agreement, which shall equal the amount, if any, by which, the aggregate
Certificate Principal Balance of the Adjustable Rate 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
and Loan Group 3 and (y) the amount on deposit in the Pre-Funding Account in
respect of Loan Group 2 and Loan Group 3.
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, (ii) a
day on which the Class 1-AV-1 Insurer or banking institutions in the State of
New York or California are authorized or obligated by law or executive order
to be closed or (iii) a day on which the Federal Reserve Bank of New York
authorizes banking institutions in the Second Federal Reserve District 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.
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of
15
the Certificateholders and designated "The Bank of New York in trust for
registered holders of CWABS, Inc., Asset-Backed Certificates, Series 2004-15".
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 ▇-▇▇, ▇▇▇▇▇▇▇▇ ▇-▇ 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 2004-15". 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 1-AV-1 Certificates only,
payments under the Class 1-AV-1 Policy relating to principal and payments
under the ▇▇▇▇▇▇ ▇▇▇ Guaranty relating to principal, and (iii) with respect to
any 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 Subordinate Certificates,
any Subsequent Recoveries allocated to such Subordinate 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 1-AV-1 Insurer arising under Section 4.07 hereof, the
"Certificate Principal Balance" of the Class 1-AV-1 Certificates shall not be
reduced by the amount of any payments made by the Class 1-AV-1 Insurer in
respect of principal on such Certificates under the Class 1-AV-1 Policy,
except to the extent such payment shall have been reimbursed to the Class
1-AV-1 Insurer pursuant to the provisions of this Agreement.
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register (initially, Cede & Co., as nominee
for the Depository, in the case of any Class of Book-Entry Certificates),
except that solely for the purpose of giving any consent
16
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-16 hereto,
representing the right to distributions as set forth herein.
Class 1-AV-1 Certificate Deficiency Amount: With respect to
Scheduled Payments on the Insured Obligations and any Distribution Date, an
amount equal to the sum of the following amounts, in each case after giving
effect to distributions made on the Class 1-AV-1 Certificates on such
Distribution Date from sources other than the Class 1-AV-1 Policy:
(i) the excess of (A) the Current Interest and Interest Carry
Forward Amount on the Class 1-AV-1 Certificates for such Distribution Date
over (B) the Interest Remittance Amount and Principal Distribution Amount
allocated to pay such amounts pursuant to Section 4.04 of the Agreement;
(ii) the Class 1-AV-1 Principal Loss Amount, if any, for such
Distribution Date; and
(iii) without duplication of the amount specified in clause (ii),
the Certificate Principal Balance of the Class 1-AV-1 Certificates on their
Final Scheduled Distribution Date.
Class 1-AV-1 Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-1.
Class 1-AV-1 Corridor Contract Termination Date: With respect to the
Class 1-AV-1 Corridor Contract, the Distribution Date in June 2009.
17
Class 1-AV-1 Final Scheduled Distribution Date: The Distribution
Date occurring in June 2035.
Class 1-AV-1 Guaranteed Interest Distribution Amount: With respect
to any Distribution Date and the Guaranteed Certificates, the amount, if any,
by which (i) the sum of (x) the Current Interest payable on the Guaranteed
Certificates for such Distribution Date, minus the amount of Prepayment
Interest Shortfalls that reduced the amount of Current Interest paid on the
Guaranteed Certificates for such Distribution Date plus (y) any Unpaid
Compensating Interest for such Distribution Date, exceeds (ii) the amount of
interest actually paid to the Holders of the Guaranteed Certificates on such
Distribution Date (after giving effect to any application of payments of
Compensating Interest and payments under the Class 1-AV-1 Policy on such
Distribution Date, but prior to giving effect to any Guarantor Payment on such
Distribution Date and without giving effect to the payment of any related Net
Rate Carryover).
Class 1-AV-1 Guaranteed Principal Distribution Amount: With respect
to any Distribution Date and the Guaranteed Certificates, the sum of (a) the
amount, if any, by which (i) the Certificate Principal Balance of the
Guaranteed Certificates (after giving effect to the application of payments of
principal on the Guaranteed Certificates and payments under the Class 1-AV-1
Policy but prior to giving effect to any Guarantor Payment on such
Distribution Date) exceeds (ii) the aggregate Stated Principal Balance of the
Group 2 Mortgage Loans for such date and (b) the remaining Certificate
Principal Balance of the Guaranteed Certificates on the Last Scheduled
Distribution Date (after giving effect to all other payments thereon for such
Distribution Date).
Class 1-AV-1 Guarantor Reimbursement Amount: For any Distribution
Date, the sum of all amounts paid by the Guarantor in respect of the 1-AV-1
Guaranty on all prior Distribution Dates to the extent not previously
reimbursed.
Class 1-AV-1 Guaranty Fee: For any Distribution Date and with
respect to the Class 1-AV-1 Certificates, the fee payable to the Guarantor in
respect of its services as guarantor that accrues at the Class 1-AV-1 Guaranty
Fee Rate for the Class 1-AV-1 Certificates on a balance equal to the
Certificate Principal Balance of the Class 1-AV-1 Certificates immediately
prior to such Distribution Date.
Class 1-AV-1 Guaranty Fee Rate: The rate per annum specified in the
letter agreement dated the date hereof from the Guarantor addressed to the
Trustee, the Depositor, the CHL and the Master Servicer.
Class 1-AV-1 Insured Payment: With respect to any Distribution Date,
that portion of the Class 1-AV-1 Scheduled Payments that shall become due for
payment but shall be unpaid by reason of Nonpayment on such Distribution Date
(which shall equal the amount of any related Class 1-AV-1 Certificate
Deficiency Amount).
Class 1-AV-1 Insurer: XL Capital Assurance Inc., or any successor
thereto.
Class 1-AV-1 Insurer Default: A continuing default by the Class
1-AV-1 Insurer under its obligations under the Class 1-AV-1 Policy.
18
Class 1-AV-1 Late Payment Rate: The lesser of (a) the greater of (i)
the prime rate as published in the Wall Street Journal (or if no such rate is
published thereby, in a publication selected by XLCA) (any change in such rate
of interest to be effective on the date such change is published) plus 2%, and
(ii) the then applicable highest pass-through rate on any Class 1-AV-1
Certificate and (b) 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. The
Late Payment Rate shall be calculated by XLCA and evidenced by a certificate
of XLCA delivered to the Trustee.
Class 1-AV-1 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 less the sum of (a) the Class 1-AV-1 Guaranty Fee Rate
and (b) the Class 1-AV-1 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 1-AV-1 Policy: The irrevocable Certificate Guaranty Insurance
Policy, No. CA01538A, including any endorsements thereto, issued by the Class
1-AV-1 Insurer with respect to the Class 1-AV-1 Certificates, attached hereto
as Exhibit U.
Class 1-AV-1 Policy Payments Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.07(a) in the name
of the Trustee for the benefit of the Class 1-AV-1 Certificateholders and
designated "The Bank of New York in trust for registered Holders of CWABS,
Inc., Asset-Backed Certificates, Series 2004-15, Class 1-AV-1". Funds in the
Class 1-AV-1 Policy Payments Account shall be held in trust for the Class
1-AV-1 Certificateholders for the uses and purposes set forth in this
Agreement.
Class 1-AV-1 Portion: For any Distribution Date, a percentage,
expressed as a fraction, the numerator of which is the Certificate Principal
Balance of the Class 1-AV-1 Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Certificate
Principal Balances of the Class AV Certificates immediately prior to such
Distribution Date.
Class 1-AV-1 Preference Amount: Any amount previously distributed to
a Class 1-AV-1 Certificateholder that is recoverable and sought to be
recovered as a voidable preference by a trustee in bankruptcy pursuant to the
United States Bankruptcy Code (11 U.S.C.), as amended from time to time, in
accordance with a final nonappealable order of a court having competent
jurisdiction.
Class 1-AV-1 Premium: With respect to the Class 1-AV-1 Policy and
any Distribution Date, an amount equal to the product of (i) one-twelfth
(1/12) of the Class 1-AV-1 Premium Rate and (ii) the Class 1-AV-1 Certificate
Principal Balance immediately prior to such Distribution Date.
Class 1-AV-1 Premium Rate: Solely for purposes of calculating the
Net Rate Cap with respect to the Class 1-AV-1 Certificates, the "premium
percentage" set forth in the Premium Letter, dated as of December 30, 2004,
between Class 1-AV-1 Insurer, CHL, the Trustee and the Co-Trustee relating to
the Class 1-AV-1 Policy.
19
Class 1-AV-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the Certificate Principal Balance of the
Class 1-AV-1 Certificates immediately prior to such Distribution Date, over
(2) the lesser of (x) 51.80% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 for
such Distribution Date minus 0.50% of the sum of the aggregate Cut-off Date
Principal Balance of the Initial Mortgage Loans in Loan Group 2 and the Group
2 Pre-Funded Amount.
Class 1-AV-1 Principal Distribution Target Amount: With respect to
any Distribution Date, the product of: (1) the Class AV Principal Distribution
Target Amount for such Distribution Date, and (2) a fraction, the numerator of
which is the Class 1-AV-1 Principal Distribution Amount for such Distribution
Date and the denominator of which is the sum of the Class 1-AV-1 Principal
Distribution Amount for such Distribution Date and the Class 2-AV Principal
Distribution Amount for such Distribution Date.
Class 1-AV-1 Principal Loss Amount: With respect to any Distribution
Date, the excess, if any, of the Certificate Principal Balance of the Class
1-AV-1 Certificates (after taking into account all distributions of principal
to the Class 1-AV-1 Certificates for such Distribution Date from sources other
than the Class 1-AV-1 Policy) over the aggregate Stated Principal Balance of
the Group 2 Mortgage Loans for such Distribution Date.
Class ▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇: With respect to any Distribution
Date, (i) all Class 1-AV-1 Insured Payments paid by the Class 1-AV-1 Insurer,
but for which the Class 1-AV-1 Insurer has not been reimbursed prior to such
Distribution Date, plus (ii) interest accrued on such Class 1-AV-1 Insured
Payments not previously repaid calculated at the Class 1-AV-1 Late Payment
Rate.
Class 1-AV-1 Scheduled Payment: Has the meaning assigned to
"Scheduled Payment" under the Class 1-AV-1 Policy.
Class 2-AV Certificate: Any Class 2-AV-1, Class 2-AV-2 or Class
2-AV-3 Certificate.
Class 2-AV Corridor Contract: The transaction evidenced by the
related Confirmation (as assigned to the Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-3.
Class 2-AV Corridor Contract Termination Date: With respect to the
Class 2-AV Corridor Contract, the Distribution Date in June 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 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) 51.80% of the aggregate
20
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 Cut-off Date Principal Balance of the Initial Mortgage
Loans in Loan Group 3 and the Group 3 Pre-Funded Amount.
Class 2-AV Principal Distribution Target Amount: With respect to any
Distribution Date, the product of: (1) the Class AV Principal Distribution
Target Amount for such Distribution Date, and (2) a fraction, the numerator of
which is the Class 2-AV Principal Distribution Amount for such Distribution
Date and the denominator of which is the sum of the Class 1-AV-1 Principal
Distribution Amount for such Distribution Date and the Class 2-AV Principal
Distribution Amount for such Distribution Date.
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-17 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-18 hereto,
representing the right to distributions as set forth herein.
Class 2-AV-3 Certificate: Any Certificate designated as a "Class
2-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 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) 68.00% 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 Trustee pursuant to the Corridor
Contract Assignment Agreement), a form of which is attached hereto as Exhibit
Q-1.
21
Class AF-1 Corridor Contract Termination Date: With respect to the
Class AF-1 Corridor Contract, the Distribution Date in October 2006.
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 Certificate designated as a "Class AF-5
Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class AF-6 Certificate: Any Certificate designated as a "Class AF-6
Certificate" on the face thereof, in the form of Exhibit A-6 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-1 or Class 2-AV Certificate.
Class AV Principal Distribution Target Amount: With respect to any
Distribution Date. the excess of: (1) the aggregate Certificate Principal
Balance of the Class AV Certificates immediately prior to such Distribution
Date, over (2) the lesser of (i) 51.80% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for such
Distribution Date and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor.
Class BF Certificate: Any Certificate designated as a "Class BF
Certificate" on the face thereof, in the form of Exhibit A-15 hereto,
representing the right to distributions as set forth herein.
22
Class BF Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date) (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date), (g) the Certificate
Principal Balance of the Class MF-6 Certificates (after taking into account
distribution of the Class MF-6 Principal Distribution Amount for such
Distribution Date), (h) the Certificate Principal Balance of the Class MF-7
Certificates (after taking into account distribution of the Class MF-7
Principal Distribution Amount for such Distribution Date), (i) the Certificate
Principal Balance of the Class MF-8 Certificates (after taking into account
distribution of the Class MF-8 Principal Distribution Amount for such
Distribution Date) and (i) the Certificate Principal Balance of the Class BF
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 95.20% 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; provided, however, that if the Class BF
Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class BF Certificates 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.
Class BV Certificate: Any Certificate designated as a "Class BV
Certificate" on the face thereof, in the form of Exhibit A-28 hereto,
representing the right to distributions as set forth herein.
Class BV Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class 1-AV-1 and Class 2-AV Certificates (after
taking into account distributions of the Class 1-AV-1 Principal Distribution
Amount and Class 2-AV Principal Distribution Amount for such Distribution
Date), (b) the Certificate Principal Balance of the Class MV-1 Certificates
(after taking into account distribution of the Class MV-1 Principal
Distribution Amount on such Distribution Date), (c) the Certificate Principal
Balance of the Class MV-2 Certificates (after taking into account distribution
of the Class MV-2 Principal Distribution Amount on such Distribution Date),
(d) the Certificate Principal Balance of the Class MV-3 Certificates (after
taking into account distribution of the Class MV-3 Principal Distribution
Amount on such Distribution Date), (e) the Certificate Principal Balance of
the Class MV-4 Certificates (after taking into account distribution of the
Class MV-4 Principal Distribution Amount on such Distribution Date), (f) the
Certificate Principal Balance of the Class MV-5 Certificates (after taking
into account distribution of the Class MV-5 Principal Distribution Amount on
such
23
Distribution Date), (g) the Certificate Principal Balance of the Class MV-6
Certificates (after taking into account distribution of the Class MV-6
Principal Distribution Amount on such Distribution Date), (h) the Certificate
Principal Balance of the Class MV-7 Certificates (after taking into account
distribution of the Class MV-7 Principal Distribution Amount on such
Distribution Date), (i) the Certificate Principal Balance of the Class MV-8
Certificates (after taking into account distribution of the Class MV-8
Principal Distribution Amount on such Distribution Date) and (j) the
Certificate Principal Balance of the Class BV Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 92.40% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class BV
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class BV Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.
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 Factor: With respect to the Guaranteed Certificates and any
Distribution Date, the percentage equivalent (expressed to at least eight
decimal places) of a fraction, the numerator of which is equal to the
Certificate Principal Balance of the Guaranteed Certificates after all
distributions that are to be made on such Distribution Date, and the
denominator of which is equal to the initial Certificate Principal Balance of
the Guaranteed Certificates.
Class MF-1 Certificate: Any Certificate designated as a "Class MF-1
Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class MF-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date) and (b) the Certificate Principal Balance of the Class MF-1
Certificates immediately prior to such Distribution Date, over (ii) the lesser
of (x) 73.70% 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; provided, however, that if the Class MF-
24
1 Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MF-1 Certificates 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.
Class MF-2 Certificate: Any Certificate designated as a "Class MF-2
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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date) and (c) the
Certificate Principal Balance of the Class MF-2 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 78.50% 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; provided, however, that if the Class MF-2 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-2 Certificates 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.
Class MF-3 Certificate: Any Certificate designated as a "Class MF-3
Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
Class MF-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date) and (d) the Certificate Principal Balance of the Class MF-3
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 81.40% 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; provided, however, that if the Class MF-3
Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MF-3 Certificates 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.
25
Class MF-4 Certificate: Any Certificate designated as a "Class MF-4
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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date) and (e) the
Certificate Principal Balance of the Class MF-4 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 84.60% 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; provided, however, that if the Class MF-4 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-4 Certificates 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.
Class MF-5 Certificate: Any Certificate designated as a "Class MF-5
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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date) and (f) the Certificate Principal Balance of the Class MF-5
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 87.20% of the aggregate Stated Principal Balance of the Mortgage Loans
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; provided, however, that if the Class MF-5
Certificates are the only Class of Fixed Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MF-5 Certificates 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.
26
Class MF-6 Certificate: Any Certificate designated as a "Class MF-6
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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date) and (g) the
Certificate Principal Balance of the Class MF-6 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 89.20% 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; provided, however, that if the Class MF-6 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-6 Certificates 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.
Class MF-7 Certificate: Any Certificate designated as a "Class MF-7
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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date), (g) the Certificate
Principal Balance of the Class MF-6 Certificates (after taking into account
distribution of the Class MF-6 Principal Distribution Amount for such
Distribution Date) and (h) the Certificate Principal Balance of the Class MF-7
Certificates
27
immediately prior to such Distribution Date over (ii) the lesser of (x) 91.20%
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; provided, however, that if the Class MF-7 Certificates are the
only Class of Fixed Rate Subordinate Certificates outstanding on such
Distribution Date, the Class MF-7 Certificates 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.
Class MF-8 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 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AF Certificates (after taking into account
distribution of the Class AF Principal Distribution Amount for such
Distribution Date), (b) the Certificate Principal Balance of the Class MF-1
Certificates (after taking into account distribution of the Class MF-1
Principal Distribution Amount for such Distribution Date), (c) the Certificate
Principal Balance of the Class MF-2 Certificates (after taking into account
distribution of the Class MF-2 Principal Distribution Amount for such
Distribution Date), (d) the Certificate Principal Balance of the Class MF-3
Certificates (after taking into account distribution of the Class MF-3
Principal Distribution Amount for such Distribution Date), (e) the Certificate
Principal Balance of the Class MF-4 Certificates (after taking into account
distribution of the Class MF-4 Principal Distribution Amount for such
Distribution Date), (f) the Certificate Principal Balance of the Class MF-5
Certificates (after taking into account distribution of the Class MF-5
Principal Distribution Amount for such Distribution Date), (g) the Certificate
Principal Balance of the Class MF-6 Certificates (after taking into account
distribution of the Class MF-6 Principal Distribution Amount for such
Distribution Date, (h) the Certificate Principal Balance of the Class MF-7
Certificates (after taking into account distribution of the Class MF-7
Principal Distribution Amount for such Distribution Date) and (h) the
Certificate Principal Balance of the Class MF-8 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 93.20% 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; provided, however, that if the Class MF-7 Certificates are the only
Class of Fixed Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MF-7 Certificates 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.
Class MV-1 Certificate: Any Certificate designated as a "Class MV-1
Certificate" on the face thereof, in the form of Exhibit A-20 hereto,
representing the right to distributions as set forth herein.
Class MV-1 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution
28
Amount and Class 2-AV Principal Distribution Amount for such Distribution
Date) and (b) the Certificate Principal Balance of the Class MV-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (x) 62.10%
of the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
2 and Loan Group 3 for such Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for
such Distribution Date minus the Adjustable Rate OC Floor; provided, however,
that if the Class MV-1 Certificates are the only Class of Adjustable Rate
Subordinate Certificates outstanding on such Distribution Date, the Class MV-1
Certificates will be entitled to receive the entire remaining aggregate
Principal Distribution Amount for Loan Group 2 and Loan Group 3 until the
Certificate Principal Balance thereof is reduced to zero.
Class MV-2 Certificate: Any Certificate designated as a "Class MV-2
Certificate" on the face thereof, in the form of Exhibit A-21 hereto,
representing the right to distributions as set forth herein.
Class MV-2 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date) and (c) the Certificate Principal Balance of the Class MV-2
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 69.60% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-2 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-2 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.
Class MV-3 Certificate: Any Certificate designated as a "Class MV-3
Certificate" on the face thereof, in the form of Exhibit A-22 hereto,
representing the right to distributions as set forth herein.
Class MV-3 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date) and (d) the
Certificate Principal Balance of the Class MV-3 Certificates immediately prior
to such Distribution Date over (ii) the lesser of (x) 73.80% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date and (y) the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 2 and Loan Group 3
29
for such Distribution Date minus the Adjustable Rate OC Floor; provided,
however, that if the Class MV-3 Certificates are the only Class of Adjustable
Rate Subordinate Certificates outstanding on such Distribution Date, the Class
MV-3 Certificates will be entitled to receive the entire remaining aggregate
Principal Distribution Amount for Loan Group 2 and Loan Group 3 until the
Certificate Principal Balance thereof is reduced to zero.
Class MV-4 Certificate: Any Certificate designated as a "Class MV-4
Certificate" on the face thereof, in the form of Exhibit A-23 hereto,
representing the right to distributions as set forth herein.
Class MV-4 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date) and (e) the Certificate Principal Balance of the Class MV-4
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 77.50% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-4 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-4 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.
Class MV-5 Certificate: Any Certificate designated as a "Class MV-5
Certificate" on the face thereof, in the form of Exhibit A-24 hereto,
representing the right to distributions as set forth herein.
Class MV-5 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date) and (f) the
Certificate Principal Balance of the Class MV-5 Certificates immediately prior
to such
30
Distribution Date over (ii) the lesser of (x) 81.10% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for
such Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor; provided, however, that if the Class MV-5
Certificates are the only Class of Adjustable Rate Subordinate Certificates
outstanding on such Distribution Date, the Class MV-5 Certificates will be
entitled to receive the entire remaining aggregate Principal Distribution
Amount for Loan Group 2 and Loan Group 3 until the Certificate Principal
Balance thereof is reduced to zero.
Class MV-6 Certificate: Any Certificate designated as a "Class MV-6
Certificate" on the face thereof, in the form of Exhibit A-25 hereto,
representing the right to distributions as set forth herein.
Class MV-6 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date), (f) the Certificate
Principal Balance of the Class MV-5 Certificates (after taking into account
distribution of the Class MV-5 Principal Distribution Amount on such
Distribution Date) and (g) the Certificate Principal Balance of the Class MV-6
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 84.30% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-6 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-6 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.
Class MV-7 Certificate: Any Certificate designated as a "Class MV-7
Certificate" on the face thereof, in the form of Exhibit A-26 hereto,
representing the right to distributions as set forth herein.
Class MV-7 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the
31
Certificate Principal Balance of the Class MV-2 Certificates (after taking
into account distribution of the Class MV-2 Principal Distribution Amount on
such Distribution Date), (d) the Certificate Principal Balance of the Class
MV-3 Certificates (after taking into account distribution of the Class MV-3
Principal Distribution Amount on such Distribution Date), (e) the Certificate
Principal Balance of the Class MV-4 Certificates (after taking into account
distribution of the Class MV-4 Principal Distribution Amount on such
Distribution Date), (f) the Certificate Principal Balance of the Class MV-5
Certificates (after taking into account distribution of the Class MV-5
Principal Distribution Amount on such Distribution Date), (g) the Certificate
Principal Balance of the Class MV-6 Certificates (after taking into account
distribution of the Class MV-6 Principal Distribution Amount on such
Distribution Date) and (h) the Certificate Principal Balance of the Class MV-7
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 87.50% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the Class MV-7 Certificates are the only Class of
Adjustable Rate Subordinate Certificates outstanding on such Distribution
Date, the Class MV-7 Certificates will be entitled to receive the entire
remaining aggregate Principal Distribution Amount for Loan Group 2 and Loan
Group 3 until the Certificate Principal Balance thereof is reduced to zero.
Class MV-8 Certificate: Any Certificate designated as a "Class MV-8
Certificate" on the face thereof, in the form of Exhibit A-27 hereto,
representing the right to distributions as set forth herein.
Class MV-8 Principal Distribution Amount: With respect to any
Distribution Date the excess of (i) the sum of (a) the aggregate Certificate
Principal Balance of the Class AV Certificates (after taking into account
distributions of the Class 1-AV-1 Principal Distribution Amount and Class 2-AV
Principal Distribution Amount for such Distribution Date), (b) the Certificate
Principal Balance of the Class MV-1 Certificates (after taking into account
distribution of the Class MV-1 Principal Distribution Amount on such
Distribution Date), (c) the Certificate Principal Balance of the Class MV-2
Certificates (after taking into account distribution of the Class MV-2
Principal Distribution Amount on such Distribution Date), (d) the Certificate
Principal Balance of the Class MV-3 Certificates (after taking into account
distribution of the Class MV-3 Principal Distribution Amount on such
Distribution Date), (e) the Certificate Principal Balance of the Class MV-4
Certificates (after taking into account distribution of the Class MV-4
Principal Distribution Amount on such Distribution Date), (f) the Certificate
Principal Balance of the Class MV-5 Certificates (after taking into account
distribution of the Class MV-5 Principal Distribution Amount on such
Distribution Date), (g) the Certificate Principal Balance of the Class MV-6
Certificates (after taking into account distribution of the Class MV-6
Principal Distribution Amount on such Distribution Date), (h) the Certificate
Principal Balance of the Class MV-7 Certificates (after taking into account
distribution of the Class MV-7 Principal Distribution Amount on such
Distribution Date) and (i) the Certificate Principal Balance of the Class MV-8
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (x) 90.00% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 2 and Loan Group 3 for such Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 and
Loan Group 3 for such Distribution Date minus the Adjustable Rate OC Floor;
provided, however, that if the
32
Class MV-8 Certificates are the only Class of Adjustable Rate Subordinate
Certificates outstanding on such Distribution Date, the Class MV-8
Certificates will be entitled to receive the entire remaining aggregate
Principal Distribution Amount for Loan Group 2 and Loan Group 3 until the
Certificate Principal Balance thereof is reduced to zero.
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 and Loan Group 3 that have a Prepayment Charge
Period.
Closing Date: December 30, 2004.
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 December 17, 2004
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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Attention: Corporate Trust MBS Administration), telephone:
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Corridor Contract: The Class AF-1 Corridor Contract, the Class
1-AV-1 Corridor Contract, the Class 2-AV Corridor Contract or the Adjustable
Rate Subordinate Corridor Contract, as applicable.
33
Corridor Contract Assignment Agreement: The Assignment Agreement
dated as of the Closing Date among CHL, the Trustee and the Corridor Contract
Counterparty, the form of which is attached hereto as Exhibit S.
Corridor Contract Counterparty: Bear ▇▇▇▇▇▇▇ Financial Products Inc.
and its successors.
Corridor Contract Termination Date: The Adjustable Rate Subordinate
Corridor Contract Termination Date, Class 1-AV-1 Corridor Contract Termination
Date, Class 2-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
association, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.
Credit Comeback Excess Account: The separate Eligible Account
created and initially maintained by the Trustee pursuant to Section 4.09 in
the name of the Trustee for the benefit of the Certificateholders and
designated "The Bank of New York in trust for registered holders of CWABS,
Inc., Asset-Backed Certificates, Series 2004-15". 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 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 and Loan Group 3 (after taking into account principal distributions on
such Distribution Date), a
34
Cross-Over Situation shall exist (i) with respect to the R-2-A and R-2-B
Interests, if the R-2-A and R-2-B Interests are in the aggregate less than 1%
of the Subordinate Component Balance of Loan Group 2 and Loan Group 3 and (ii)
with respect to the R-2-C and R-2-D Interests, if the R-2-C and R-2-D
Interests are in the aggregate less than 1% of the Adjusted Subordinate
Component Balance of Loan Group 2 and Loan Group 3.
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) December 1, 2004 and (y) the date of origination of such Mortgage Loan
(the "Initial Cut-off Date"), and in the case of any Subsequent Mortgage Loan,
the later of (x) the first day of the month of the related Subsequent Transfer
Date and (y) the date of origination of such Subsequent Mortgage Loan (the
related "Subsequent Cut-off Date"). When used with respect to any Mortgage
Loan the "Cut-off Date" shall mean the related Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date
after application of all payments of principal due on or prior to the Cut-off
Date, whether or not received, and all Principal Prepayments received on or
prior to the Cut-off Date, but without giving effect to any installments of
principal received in respect of Due Dates after the Cut-off Date.
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 any Distribution Date, the sum of
(i) the Class 1-AV-1 Guaranteed Interest Distribution Amount and (ii) the
Class 1-AV-1 Guaranteed Principal Distribution Amount.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount
less than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not delivered
to the Co-Trustee on or prior to the Closing Date, and (ii) the Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage Loans set
35
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 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.
36
Determination Date: With respect to any Distribution Date, the 15th
day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-15". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:00
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each month, or if such day is not
a Business Day, on the first Business Day thereafter, commencing in January
2005.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for Scheduled Payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the
month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if ▇▇▇▇▇'▇ 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 1-AV-1 Policy or the ▇▇▇▇▇▇ Mae
Guaranty, in the case of the Class 1-AV-1 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.
37
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 1-AV-1 Certificates, Class
A-R Certificates, Class P Certificates, Class C Certificates and Certificates
of any Class that ceases to satisfy the applicable rating requirement under
the Underwriter's Exemption.
Escrow Account: As defined in Section 3.06.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds and Subsequent
Recoveries are in excess of the sum of (i) the unpaid principal balance of
such Liquidated Mortgage Loan as of the date of liquidation of such Liquidated
Mortgage Loan plus (ii) interest at the Mortgage Rate from the Due Date as to
which interest was last paid or advanced to Certificateholders (and not
reimbursed to the Master Servicer) up to the Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidated Mortgage Loan outstanding during each Due Period as
to which such interest was not paid or advanced.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of (i)
the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date 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 and Loan Group 3, 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 and Loan Group 3, pro rata, based on the
Certificate Principal Balances of the Senior Certificates related to each such
Loan Group immediately prior to such Distribution Date.
▇▇▇▇▇▇ ▇▇▇: 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.
▇▇▇▇▇▇ Mae Guaranty: The obligation of ▇▇▇▇▇▇ ▇▇▇ specified in
Section 4.06.
▇▇▇▇▇▇ Mae Mortgage Loan: Any mortgage loan which is owned,
securitized or serviced by ▇▇▇▇▇▇ ▇▇▇.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
38
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, Class 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 occurs if (x) the aggregate amount of Realized
Losses on the Mortgage Loans in Loan Group 1 from (and including) 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
January 2008 -- December 2008......... 1.50% with respect to January
2008, plus an additional 1/12th of
0.75% for each month thereafter
through December 2008
January 2009 -- December 2009......... 2.25% with respect to January
2009, plus an additional 1/12th of
0.75% for each month thereafter
through December 2009
January 2010 -- December 2010......... 3.00% with respect to January
2010, plus an additional 1/12th of
0.50% for each month thereafter
through December 2010
January 2011 and thereafter........... 3.50%
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
46.00% 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 for such Distribution Date, pursuant to
Section 4.04(a)(ii)(j), and (ii) the amount remaining after the distribution
of principal to Certificateholders for such Distribution Date, pursuant to
Section 4.04(c)(1)(K) or 4.04(c)(2)(K).
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.
39
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 2.40% 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 4.80% 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.
Fixed Rate Overcollateralized Amount: With respect to any
Distribution Date, the amount, if any, by which (x) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 1 for such Distribution
Date 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 preceding
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 Stepdown Date: The earlier to occur of (i) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class AF Certificates is reduced to zero, and (ii) the later to occur of (x)
the Distribution Date in January 2008 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class AF Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 68.00% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 for such Distribution Date.
40
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.
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.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from the Closing Date to and including
the earlier to occur of (x) the date the amount in the Pre-Funding Account is
less than $25,000 and (y) February 14, 2005.
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 $75,562,061.09.
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 $105,476,625.30.
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 $70,982,152.05.
41
Group Net Rate Cap: With respect to Loan Group 2, the Loan Group 2
Net Rate Cap, and with respect to Loan Group 3, the Loan Group 3 Net Rate Cap.
Guaranteed Certificates: The Class 1-AV-1 Certificates.
Guarantor: ▇▇▇▇▇▇ ▇▇▇, or its successor in interest.
Guarantor Payment: Any payment required to be made by the Guarantor
in respect of a Deficiency Amount with respect to the Guaranteed Certificates.
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.
Information Circular: The Information Circular dated December 20,
2004 relating to the Class 1-AV-1 Certificates.
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.
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.
42
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 ▇▇▇▇▇▇ ▇▇▇ under the ▇▇▇▇▇▇ Mae Guaranty or by the Class 1-AV-1
Insurer under the Class 1-AV-1 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.
Insolvency Proceeding: As defined in Section 4.07(h).
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
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 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, December 28, 2004. 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.
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.
43
Investment Letter: As defined in Section 5.02(b).
Last Scheduled Distribution Date: With respect to the Class 1-AV-1
Certificates and the Class 1-AV-1 Policy, the Distribution Date occurring in
June 2035.
Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such
liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property received in connection with or prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan, less the sum of related unreimbursed Advances,
Servicing Fees and Servicing Advances.
Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3.
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 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.
44
Majority Holder: The Holders of Certificates evidencing at least 51%
of the Voting Rights allocated to such Class of Certificates.
Margin: With respect to any Accrual Period and Class of Adjustable
Rate Certificates, the per annum rate indicated in the following table:
------------------------------------ ------------ --------------
Class Margin (1) Margin (2)
------------------------------------ ------------ --------------
Class AF-1 0.200% 0.200%
------------------------------------ ------------ --------------
Class 1-AV-1 0.160% 0.320%
------------------------------------ ------------ --------------
Class 2-AV-1 0.150% 0.300%
------------------------------------ ------------ --------------
Class 2-AV-2 0.270% 0.540%
------------------------------------ ------------ --------------
Class 2-AV-3 0.370% 0.740%
------------------------------------ ------------ --------------
Class MV-1 0.510% 0.765%
------------------------------------ ------------ --------------
Class MV-2 0.540% 0.810%
------------------------------------ ------------ --------------
Class MV-3 0.580% 0.870%
------------------------------------ ------------ --------------
Class MV-4 0.850% 1.275%
------------------------------------ ------------ --------------
Class MV-5 0.900% 1.350%
------------------------------------ ------------ --------------
Class MV-6 1.050% 1.575%
------------------------------------ ------------ --------------
Class MV-7 1.600% 2.400%
------------------------------------ ------------ --------------
Class MV-8 1.700% 2.550%
------------------------------------ ------------ --------------
Class BV 2.700% 4.050%
------------------------------------ ------------ --------------
(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.
45
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, the minimum rate of interest set forth as such in the related Mortgage
Note.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: ▇▇▇▇▇'▇ 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;
(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;
46
(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
(h) the Gross Margin;
(xviii) a code indicating whether the Mortgage Loan is a
CHL Mortgage Loan or a Park Monaco 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.
47
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 and Group 3 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 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
January 2005 - December 2007................. 0%
January 2008 - December 2009................. 45%
January 2010 - December 2010................. 80%
January 2011 - December 2011................. 100%
January 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
48
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, the Class AF Net Rate Cap, (ii) with respect to the Class 1-AV-1
Certificates, the Class 1-AV-1 Net Rate Cap, (iii) with respect to each Class
of Class 2-AV Certificates, the Class 2-AV Net Rate Cap, (iv) with respect to
each Class of Fixed Rate Subordinate Certificates, the Fixed Rate Subordinate
Net Rate Cap and (v) 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.
Nonpayment: With respect to any Distribution Date, the failure of
the Trustee to receive in full, in accordance with the terms of this
Agreement, funds legally available to pay all or a portion of the Class 1-AV-1
Scheduled Payment that is due for payment with respect to such Distribution
Date.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise.
Non-United States Person : A Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more United States persons have authority to control
all substantial decisions of the trustor.
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
49
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 2.42000% 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.
Order: As defined in Section 4.07(c) of this Agreement.
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.
50
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.
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.
51
------------------------------- -------------------- -------------------
Pass-Through Rate Pass-Through Rate
Class (1) (2)
------------------------------- -------------------- -------------------
AF-2 3.775% 3.775%
-------------------------- -------------------- ------------------------
AF-3 4.025% 4.025%
-------------------------- -------------------- ------------------------
AF-4 4.614% 4.614%
-------------------------- -------------------- ------------------------
AF-5 5.227% 5.727%
------------------------------- -------------------- -------------------
AF-6 4.613% 4.613%
------------------------------- -------------------- -------------------
MF-1 5.163% 5.163%
------------------------------- -------------------- -------------------
MF-2 5.213% 5.213%
------------------------------- -------------------- -------------------
MF-3 5.311% 5.311%
------------------------------- -------------------- -------------------
MF-4 5.541% 5.541%
------------------------------- -------------------- -------------------
MF-5 5.610% 5.610%
------------------------------- -------------------- -------------------
MF-6 5.690% 5.690%
-------------------------- -------------------- ------------------------
MF-7 5.858% 5.858%
-------------------------- -------------------- ------------------------
MF-8 5.900% 5.900%
-------------------------- -------------------- ------------------------
BF 5.900% 5.900%
------------------------------- -------------------- -------------------
(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..
Payment Notice: As defined in the Class 1-AV-1 Policy.
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 1-AV-1 Policy or the
▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class 1-AV-1 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
52
regard to the Class 1-AV-1 Policy or the ▇▇▇▇▇▇ Mae Guaranty, in the
case of the Class 1-AV-1 Certificates);
(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 ▇▇▇▇▇'▇ 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 1-AV-1 Policy or the
▇▇▇▇▇▇ Mae Guaranty, in the case of the Class 1-AV-1 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 1-AV-1 Policy or
the ▇▇▇▇▇▇ Mae Guaranty, in the case of the Class 1-AV-1
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 1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇
Guaranty, in the case of the Class 1-AV-1 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
53
originally assigned to the Certificates by such Rating Agency
(without regard to the Class 1-AV-1 Policy or the ▇▇▇▇▇▇ Mae
Guaranty, in the case of the Class 1-AV-1 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 assigned to the
Certificates by any Rating Agency (without regard to the Class
1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class
1-AV-1 Certificates), as evidenced by a signed writing delivered by
each Rating Agency, and reasonably acceptable to the NIM Insurer and
the Guarantor, as evidenced by a signed writing delivered by the NIM
Insurer and the Guarantor;
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
54
authority to control all substantial decisions of the trustor unless such
Person has furnished the transferor and the Trustee with a duly completed
Internal Revenue Service Form W-8ECI, and (vii) any other Person so designated
by the Trustee based upon an Opinion of Counsel that the Transfer of an
Ownership Interest in a Class A-R Certificate to such Person may cause any
REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Pool Stated Principal Balance: The aggregate of the Stated Principal
Balances of the Mortgage Loans which were Outstanding Mortgage Loans.
Pre-Funded Amount: The amount deposited in the Pre-Funding Account
on the Closing Date, which shall equal $252,020,845.44.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "The Bank of New
York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-15." 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.
55
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, the NIM Insurer and to the Guarantor, upon its written
request.
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
56
month in which such Distribution Date occurs (or, with respect to the first
Distribution Date, the period beginning on December 1, 2004) and ending on the
close of business on the fifteenth day of the month in which such Distribution
Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
Principal Distribution Amount: With respect to each Distribution
Date 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 Reduction: With respect to any Distribution Date and for
each Loan Group, the sum of the Principal Remittance Amount and any Realized
Losses from the Mortgage Loans in the related Loan Group, less any Subsequent
Recoveries from the Mortgage Loans in the related Loan Group. Principal
Reductions shall consist proportionately of principal allocations comprising
the Principal Remittance Amount and Realized Losses, and the REMIC 1 Interest
allocated a principal payment shall receive such payment on such Distribution
Date and shall have its principal balance reduced by an allocation of Realized
Losses.
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 or the Guarantor
with respect to such Distribution Date, (iv) the amount, if any, by which the
aggregate unpaid principal balance of any Replacement
57
Mortgage Loans is less than the aggregate unpaid principal balance of any
Deleted Mortgage Loans delivered by the Sellers in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds (to the
extent such Liquidation Proceeds related to principal) and Subsequent
Recoveries collected during the related Due Period; less (b) all
Nonrecoverable Advances relating to principal and certain expenses
reimbursable pursuant to Section 6.03 and reimbursed during the related Due
Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2004-15". 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
mortgage pass-through certificates to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated December 20,
2004, relating to the public offering of the certain Classes of Certificates
offered thereby.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by a Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased
by the Depositor pursuant to Section 2.04 hereof, or (y) that the Master
Servicer or the Guarantor 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 and (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.
58
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received in
connection with such liquidation during the month in which such liquidation
occurs, to the extent applied as recoveries of principal of the Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has become the subject
of a Deficient Valuation, (i) if the value of the related Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, the
amount by which the value of the Mortgaged Property was reduced below the
principal balance of the related Mortgage Note, and (ii) if the principal
amount due under the related Mortgage Note has been reduced, the difference
between the principal balance of the Mortgage Loan outstanding immediately
prior to such Deficient Valuation and the principal balance of the Mortgage
Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution
Date, the amount, if any, by which the related Scheduled Payment was reduced.
Record Date: With respect to any Distribution Date and the
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.
59
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Relief Act: The Servicemembers Civil Relief Act.
Relief Act Interest Shortfall: With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction
in the amount of interest collectible thereon for the most recently ended Due
Period as a result of the application of the Relief Act, the amount of such
reduction for such Due Period.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee, the NIM Insurer and the Guarantor in accordance with
Section 4.04.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for File Release, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) with respect to any
Adjustable Rate Mortgage Loan: (a) have a Maximum Mortgage Rate no more than
1% per annum higher or lower than the Maximum Mortgage Rate of the Deleted
Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1% per annum
higher or lower than the Minimum Mortgage Rate of the Deleted Mortgage Loan;
(c) have the same Index and intervals between Adjustment Dates as that of the
Deleted Mortgage Loan; (d) have a Gross Margin not more than 1% per annum
higher or lower than that of the Deleted Mortgage Loan; and (e) have an
Initial Periodic Rate Cap and a Subsequent Periodic Rate Cap each not more
than 1% lower than that of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) be accruing interest at a rate not more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or vice versa; (viii) provide for a Prepayment
Charge on terms substantially similar to those of the Prepayment Charge, if
any, of the Deleted Mortgage Loan; (ix) have the same occupancy type and lien
priority as the Deleted Mortgage Loan; (x) comply with each representation and
warranty set forth in Section 2.03 as of the date of substitution; (xii) with
respect to any Group 2 Mortgage Loan, have had an original Stated Principal
Balance that conformed to the loan limits of the Guarantor; (xiii) with
respect to any Group 2 Mortgage Loan originated on or after January 1, 2005,
not be subject to mandatory arbitration; and (xiv) with respect to any Group 2
Mortgage Loan, be otherwise acceptable to the Guarantor; 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
60
comply with one or more of clauses (i), (ii), (iv), (viii), (ix) and/or (xii)
of this definition, then such proposed Replacement Mortgage Loan need not
comply with one or more of clauses (i), (ii), (iv), (viii), (ix) and/or (xii)
to the extent, and only to the extent, necessary to assure that the
Replacement Mortgage Loan otherwise complies with clause (x).
Representing Party: As defined in Section 2.03(d).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted by
the Master Servicer to the Co-Trustee, substantially in the form of Exhibit N.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Required Secondary Carryover Reserve Fund Deposit: With respect to
any Distribution Date, an amount equal to the excess of (i) $10,000 over (ii)
the amount of funds on deposit in the Carryover Reserve Fund.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any Distribution
Date on or after the Stepdown Date 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
▇▇▇▇▇▇-▇▇▇▇ 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.
61
Securities Act: The Securities Act of 1933, as amended.
Sellers: CHL, in its capacity as a seller of the CHL Mortgage Loans
to the Depositor, and Park Monaco, in its capacity as a seller of the Park
Monaco Mortgage Loans to the Depositor.
Seller Shortfall Interest Requirement: With respect to the Master
Servicer Advance Date in each of January, February and March 2005, is the sum
of:
(a) the product of: (1) the excess of the aggregate Stated Principal
Balances for such Distribution Date of the Mortgage Loans (including the
Subsequent Mortgage Loans, if any) owned by the Trust Fund at the beginning of
the related Due Period, over the aggregate Stated Principal Balance for such
Distribution Date of such Mortgage Loans (including such Subsequent Mortgage
Loans, if any) that have a scheduled payment of interest due in the related
Due Period, and (2) a fraction, the numerator of which is the weighted average
Net Mortgage Rate of such Mortgage Loans (including such Subsequent Mortgage
Loans, if any) (weighted on the basis of the Stated Principal Balances thereof
for such Distribution Date) and the denominator of which is 12; and
(b) the lesser of:
(i) the product of: (1) the amount on deposit in the
Pre-Funding Account at the beginning of the related Due Period, and (2) a
fraction, the numerator of which is the weighted average Net Mortgage Rate of
the Mortgage Loans (including Subsequent Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related Due Period (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, the Class 1-AV-1 Premium and the Class 1-AV-1 Guaranty
Fee, 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
62
that accompanies a Principal Prepayment in full made by the Mortgagor,
interest at the Servicing Fee Rate on the Stated Principal Balance of such
Mortgage Loan for the period covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant
to this Agreement, as such list may from time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date on
or after the 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.
Subordinate Certificates: The Fixed Rate Subordinate Certificates
and the Adjustable Rate Subordinate Certificates.
63
Subordinate Component Balance: With respect to any Distribution Date
and for each of Loan Group 2 and Loan Group 3, 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 Certificate Principal Balance
of the Class 1-AV-1 Certificates in the case of Loan Group 2, and the Class
2-AV Certificates in the case of Loan Group 3.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all amounts in
respect of (i) principal of the related Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and received by the Master Servicer on or
before such Subsequent Transfer Date and not applied in computing the Cut-off
Date Principal Balance thereof and (ii) interest on the such Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and received by the
Master Servicer on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: As defined in the definition of Cut-off
Date.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee
on a Subsequent Transfer Date, and listed on the related Loan Number and
Borrower Identification Mortgage Loan Schedule delivered pursuant to Section
2.01(f). When used with respect to a single Subsequent Transfer Date,
"Subsequent Mortgage Loan" shall mean a Subsequent Mortgage Loan conveyed to
the Trustee on such Subsequent Transfer Date.
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.
64
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.
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) each Corridor Contract, (iv)
property that secured a Mortgage Loan and has been acquired by
65
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loan; (vi)
the rights of the Trustee for the benefit of the Class 1-AV-1
Certificateholders under the Class 1-AV-1 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.
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, ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. and Greenwich Capital Markets, Inc.
Unpaid Compensating Interest: As to any Distribution Date and the
Class 1-AV-1 Certificates, any Compensating Interest required to be paid, but
not paid, by the Master Servicer pursuant to Section 4.02 in respect of the
Class 1-AV-1 Certificates.
Unpaid Realized Loss Amount: For any Class of Subordinate
Certificates and any Distribution Date, (x) the portion of the aggregate
Applied Realized Loss Amount previously allocated to that Class remaining
unpaid from prior Distribution Dates minus (y) any increase in the Certificate
Principal Balance of that Class due to the allocation of Subsequent Recoveries
to the Certificate Principal Balance of that Class pursuant to Section 4.04(l)
or 4.04(m).
66
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, unless a Class 1-AV-1 Insurer Default has occurred and is
continuing with respect to the Class 1-AV-1 Certificates, on any date on which
the Class 1-AV-1 Certificates are outstanding or any amounts are owing to the
Class 1-AV-1 Insurer, the Class 1-AV-1 Insurer will have all the Voting Rights
of the Class 1-AV-1 Certificates. Moreover, unless the Guarantor defaults in
its obligation under the ▇▇▇▇▇▇ Mae Guaranty, on any date on which a
Certificate Insurer Default is continuing and either the Class I-AV-1
Certificates are outstanding or any amounts are owed to the Guarantor, the
Guarantor will have all the voting rights of the holders of the Class 1-AV-1
Certificates.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate, agreement or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and
all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; (b) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement (or the certificate, agreement
or other document in which they are used) as a whole and not to any particular
provision of this Agreement (or such certificate, agreement or document); (c)
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement, and references to any
paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (d) the term "including" means "including without
limitation"; (e) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (f) references to any agreement refer to that agreement as amended
from time to time; and (g) references to any Person include that Person's
permitted successors and assigns.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable 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
67
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, without recourse, all right title and interest in the
Initial Mortgage Loans and (ii) causes the Class 1-AV-1 Insurer to deliver the
Class 1-AV-1 Policy to the Trustee.
CHL further agrees to assign all of its right, title and interest in
and to the interest rate corridor transaction evidenced by each Confirmation,
and to cause all of its obligations in respect of such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Corridor Contract Assignment Agreement.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, each Seller sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal
received and receivable by such Seller on or with respect to such Subsequent
Mortgage Loans after the related Subsequent Cut-off Date (to the extent not
applied in computing the Cut-off Date Principal Balance thereof) or deposited
into the Certificate Account by the Master Servicer on behalf of such Seller
as part of any related Subsequent Certificate Account Deposit as provided in
this Agreement, other than principal due on such Subsequent Mortgage Loans on
or prior to the related Subsequent Cut-off Date and interest accruing prior to
the related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage Loans
referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders, without recourse, all right title and interest in the
Subsequent Mortgage Loans.
(c) Each Seller has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders,
without recourse, all right title and interest in the portion of the Trust
Fund not otherwise conveyed to the Trustee pursuant to Section 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by CHL
to the Trustee, the Sellers, the Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer Agreement. After the execution and
delivery of such Subsequent Transfer
68
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 any ratings
assigned to the Certificates by the Ratings Agencies;
(3) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions
set forth in this Section 2.01(e) required to be satisfied by such
Subsequent Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties
applicable to it under this Agreement, provided, however, that with
respect to a breach of a representation and warranty with respect to
a Subsequent Mortgage Loan set forth in this clause (4), the
obligation under Section 2.03(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;
69
Loan Group 1
Permitted
Characteristic Value Variance or Range
Average Stated Principal Balance.................... $183,764 10%
Weighted Average Mortgage Rate...................... 6.789% 0.10%
Weighted Average Original Loan-to-Value Ratio....... 74.23% 3%
Weighted Average Remaining Term to Maturity......... 348 months 3 months
Weighted Average Credit Bureau Risk Score........... 616 points 5 points
Loan Group 2
Permitted
Characteristic Value Variance or Range
Average Stated Principal Balance.................... $171,760 10%
Weighted Average Mortgage Rate...................... 7.00% 0.10%
Weighted Average Original Loan-to-Value Ratio....... 80.40% 3%
Weighted Average Remaining Term to Maturity......... 360 months 3 months
Weighted Average Credit Bureau Risk Score........... 597 points 5 points
Loan Group 3
Permitted
Characteristic Value Variance or Range
Average Stated Principal Balance.................... $206,817 10%
Weighted Average Mortgage Rate...................... 7.280% 0.10%
Weighted Average Original Loan-to-Value Ratio....... 81.33% 3%
Weighted Average Remaining Term to Maturity......... 359 months 3 months
Weighted Average Credit Bureau Risk Score........... 594 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;
(9) no Subsequent Mortgage Loan for Loan Group 2 conveyed
on such Subsequent Transfer Date, originated on or after January 1,
2005, is subject to mandatory arbitration; and
(10) 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
70
transactions" on the Trust Fund or contributions after the Startup Date,
as defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively
or (ii) cause any REMIC formed hereunder to fail to qualify as a REMIC,
such opinion to be delivered as provided in Section 2.01(f).
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within six Business Days after each Subsequent Transfer Date,
upon (1) delivery to the Trustee by the Depositor of the Opinions of Counsel
referred to in Section 2.01(e)(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 the applicable
Seller or the originator of such Mortgage Loan, without recourse, in
the following form: "Pay to the order of ________________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the applicable Seller,
or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the applicable
Seller, stating
71
that the original Mortgage Note was lost or destroyed, together with
a copy of the related Mortgage Note;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage, and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence
of the MIN of the Mortgage Loan and language indicating that the
Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has
been recorded;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2004-15, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of December 1, 2004,
without recourse" (each such assignment, when duly and validly
completed, to be in recordable form and sufficient to effect the
assignment of and transfer to the assignee thereof, under the
Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such
Mortgage (noting the presence of a MIN in the case of each MERS
Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto
or, in the event such original title policy has not been received
from the insurer, such original or duplicate original lender's title
policy and all riders thereto shall be delivered within one year of
the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has
done so) that such Mortgage Loans have been assigned by such Seller to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer
files (a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY
THE FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Sellers further agree that they will not, and will not
permit the Master Servicer to, and the Master Servicer agrees that it will
not, alter the codes referenced in this paragraph with respect to any Mortgage
Loan during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement.
72
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements
of clause (ii), (iii) or (iv) concurrently with the execution and delivery
hereof, such Seller shall deliver or cause to be delivered to the Co-Trustee a
true copy of such Mortgage and of each such undelivered interim assignment of
the Mortgage each certified by such Seller, the applicable title company,
escrow agent or attorney, or the originator of such Mortgage, as the case may
be, to be a true and complete copy of the original Mortgage or assignment of
Mortgage submitted for recording. For any such Mortgage Loan that is not a
MERS Mortgage Loan each Seller shall promptly deliver or cause to be delivered
to the Co-Trustee such original Mortgage and such assignment or assignments
with evidence of recording indicated thereon upon receipt thereof from the
public recording official, or a copy thereof, certified, if appropriate, by
the relevant recording office, but in no event shall any such delivery be made
later than 270 days following the Closing Date; provided that in the event
that by such date such Seller is unable to deliver or cause to be delivered
each such Mortgage and each interim assignment by reason of the fact that any
such documents have not been returned by the appropriate recording office, or,
in the case of each interim assignment, because the related Mortgage has not
been returned by the appropriate recording office, such Seller shall deliver
or cause to be delivered such documents to the Co-Trustee as promptly as
possible upon receipt thereof. If the public recording office in which a
Mortgage or interim assignment thereof is recorded retains the original of
such Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and
complete by such recording office, shall satisfy a Seller's obligations in
Section 2.01. If any document submitted for recording pursuant to this
Agreement is (x) lost prior to recording or rejected by the applicable
recording office, the applicable Seller shall immediately prepare or cause to
be prepared a substitute and submit it for recording, and shall deliver copies
and originals thereof in accordance with the foregoing or (y) lost after
recording, the applicable Seller shall deliver to the Co-Trustee a copy of
such document certified by the applicable public recording office to be a true
and complete copy of the original recorded document. Each Seller shall
promptly forward or cause to be forwarded to the Co-Trustee (x) from time to
time additional original documents evidencing an assumption or modification of
a Mortgage Loan and (y) any other documents required to be delivered by the
Depositor or the Master Servicer to the Co-Trustee within the time periods
specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan
as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel reasonably
satisfactory to the Guarantor, delivered by CHL to the Trustee, the Guarantor
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
73
than MERS Mortgage Loans (i) either Seller, the Depositor, the Master
Servicer, the Guarantor or the NIM Insurer gives written notice to the Trustee
that recording is required to protect the right, title and interest of the
Trustee on behalf of the Certificateholders in and to any Mortgage Loan, (ii)
a court recharacterizes any sale of the Mortgage Loans as a financing, or
(iii) as a result of any change in or amendment to the laws of the State or
jurisdiction described in the first sentence of this paragraph or any
applicable political subdivision thereof, or any change in official position
regarding application or interpretation of such laws, including a holding by a
court of competent jurisdiction, such recording is so required, the Co-Trustee
shall complete the assignment in the manner specified in clause (iii) of the
second paragraph of this Section 2.01(g) and CHL shall submit or cause to be
submitted for recording as specified above or, should CHL fail to perform such
obligations, the Trustee shall cause the Master Servicer, at 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
74
the proviso of the preceding sentence. On or before the thirtieth (30th) day
(or if such thirtieth day is not a Business Day, the succeeding Business Day)
after the Closing Date (in the case of Initial Mortgage Loans) or within
twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), the Trustee shall, in accordance with the
provisions of Section 2.02, send a Delay Delivery Certification substantially
in the form annexed hereto as Exhibit G-3 (with any applicable exceptions
noted thereon) for all Delay Delivery Mortgage Loans delivered within thirty
(30) days after such date. The Trustee will promptly send a copy of such Delay
Delivery Certification to the Guarantor and 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, the Guarantor 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,
75
certificates or other papers to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded in the real estate records or that they are other than
what they purport to be on their face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, the Guarantor, the Class 1-AV-1
Insurer and CHL (on behalf of each Seller), and to any Certificateholder that
so requests, a Final Certification with respect to the Initial Mortgage Loans
substantially in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
In connection with the Trustee's completion and delivery of such
Final Certification, the Co-Trustee, at the Trustee's direction, shall review
each Mortgage File with respect to the Initial Mortgage Loans to determine
that such Mortgage File contains the following documents:
(i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse, in
the following form: "Pay to the order of ________________ without
recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to such Seller, or, if the
original Mortgage Note has been lost or destroyed and not replaced,
an original lost note affidavit from such Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy
of the related Mortgage Note;
(ii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, and in the case
of each Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the
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
76
(vi) above, the Trustee shall include such exceptions in such Final
Certification (and the Trustee shall state in such Final Certification whether
any Mortgage File does not then include the original or duplicate original
lender's title policy or a printout of the electronic equivalent and all
riders thereto). If the public recording office in which a Mortgage or
assignment thereof is recorded retains the original of such Mortgage or
assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall be deemed to satisfy the requirements of clause (ii),
(iii) or (iv) above, as applicable. CHL shall promptly correct or cure such
defect referred to above within 90 days from the date it was so notified of
such defect and, if CHL does not correct or cure such defect within such
period, CHL shall either (A) if the time to cure such defect expires prior to
the end of the second anniversary of the Closing Date, substitute for the
related Initial Mortgage Loan a Replacement Mortgage Loan, which substitution
shall be accomplished in the manner and subject to the conditions set forth in
Section 2.03, or (B) purchase such Initial Mortgage Loan from the Trust Fund
within 90 days from the date CHL was notified of such defect in writing at the
Purchase Price of such Initial Mortgage Loan; provided that any such
substitution pursuant to (A) above or repurchase pursuant to (B) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any substitution pursuant to (A) above
shall not be effected prior to the additional delivery to the Co-Trustee of a
Request for File Release. No substitution will be made in any calendar month
after the Determination Date for such month. The Purchase Price for any such
Initial Mortgage Loan shall be deposited by CHL in the Certificate Account
and, upon receipt of such deposit and Request for File Release with respect
thereto, the Co-Trustee shall release the related Mortgage File to CHL and
shall execute and deliver at CHL's request such instruments of transfer or
assignment as CHL has prepared, in each case without recourse, as shall be
necessary to vest in CHL, or a designee, the Trustee's interest in any Initial
Mortgage Loan released pursuant hereto. If pursuant to the foregoing
provisions CHL repurchases an Initial Mortgage Loan that is a MERS Mortgage
Loan, the Master Servicer shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from
MERS to CHL and shall cause such Mortgage to be removed from registration on
the MERS(R) System in accordance with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. Each Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of
such Seller from time to time.
It is understood and agreed that the obligation of the Sellers 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, the Guarantor and any Certificateholder against the Sellers.
It is understood and agreed that the obligation of a Seller 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 such Seller within 90 days from the date it was
notified of such defect, shall constitute the sole remedy respecting such
defect available to
77
the Trustee, the Co-Trustee, the Depositor, the Guarantor and any
Certificateholder against the Sellers.
(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, the Class 1-AV-1
Insurer, CHL (on behalf of each Seller), the Guarantor 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:
78
(i) the original Mortgage Note, endorsed by the applicable
Seller or the originator of such Mortgage Loan, without recourse, in the
following form: "Pay to the order of ________________ without recourse",
with all intervening endorsements that show a complete chain of
endorsement from the originator to such Seller, or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Seller, stating that the original Mortgage
Note was lost or destroyed, together with a copy of the related Mortgage
Note;
(ii) in the case of each Subsequent Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage, and in the case of
each Subsequent Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage, noting the presence of the MIN of the Subsequent Mortgage Loan
and language indicating that the Subsequent Mortgage Loan is a MOM Loan
if the Subsequent Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which Mortgage has been recorded;
(iii) in the case of each Subsequent Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage in the
form permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage together with all interim recorded assignments of such Mortgage
(noting the presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a printout of the electronic equivalent and all riders thereto.
If, in the course of such review, the Co-Trustee finds any document
or documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include
such exceptions in such Final Certification (and the Trustee shall state in
such Final Certification whether any Mortgage File does not then include the
original or duplicate original lender's title policy or a printout of the
electronic equivalent and all riders thereto). If the public recording office
in which a Mortgage or assignment thereof is recorded retains the original of
such Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and
complete by such recording office, shall be deemed to satisfy the requirements
of clause (ii), (iii) or (iv) above, as applicable. CHL shall promptly correct
or cure such defect referred to above within 90 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
79
such substitution pursuant to (A) above or repurchase pursuant to (B) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05 hereof and any substitution pursuant to (A)
above shall not be effected prior to the additional delivery to the Trustee of
a Request for File Release. No substitution will be made in any calendar month
after the Determination Date for such month. The Purchase Price for any such
Subsequent Mortgage Loan shall be deposited by CHL in the Certificate Account
and, upon receipt of such deposit and Request for File Release with respect
thereto, the Trustee shall release the related Mortgage File to CHL and shall
execute and deliver at CHL's request such instruments of transfer or
assignment as CHL has prepared, in each case without recourse, as shall be
necessary to vest in CHL, or a designee, the Trustee's interest in any
Subsequent Mortgage Loan released pursuant hereto. If pursuant to the
foregoing provisions CHL repurchases a Subsequent Mortgage Loan that is a MERS
Mortgage Loan, the Master Servicer shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from
MERS to CHL and shall cause such Mortgage to be removed from registration on
the MERS(R) System in accordance with MERS' rules and regulations.
The Co-Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. Each Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of
such Seller from time to time.
It is understood and agreed that the obligation of the Sellers to
substitute for or to purchase, pursuant to Section 2.02(b), any Subsequent
Mortgage Loan whose Mortgage File contains any document or documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and which defect
is not corrected or cured by such Seller within 90 days from the date it was
notified of such defect, shall constitute the sole remedy respecting such
defect available to the Trustee, the Co-Trustee, the Depositor, the Guarantor
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.
80
(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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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
81
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, the Master
Servicer has obtained the same.
(7) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans for as long
as such Mortgage Loans are registered with MERS.
(b) CHL hereby represents and warrants to the Depositor and the
Trustee as follows, as of the Initial Cut-off Date in the case of the Initial
Mortgage Loans and as of the related Subsequent Cut-off Date in the case of
the Subsequent Mortgage Loans (unless otherwise indicated or the context
otherwise requires, percentages with respect to the Initial Mortgage Loans in
the Trust Fund or in a Loan Group 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, 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.
(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
82
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
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(5) No litigation is pending or, to the best of CHL's knowledge,
threatened, against CHL that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or any Subsequent
Transfer Agreement or the ability of CHL to sell the CHL Mortgage Loans
or to perform any of its other obligations under this Agreement or any
Subsequent Transfer Agreement in accordance with the terms hereof or
thereof.
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by CHL of, or compliance by CHL with, this Agreement or any
Subsequent Transfer Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, CHL has obtained the same.
(7) The information set forth on Exhibit F-1 hereto with respect to
each Initial Mortgage Loan is true and correct in all material respects
as of the Closing Date.
(8) CHL will treat the transfer of the CHL Mortgage Loans to the
Depositor as a sale of the CHL Mortgage Loans for all tax, accounting and
regulatory purposes.
(9) None of the Mortgage Loans is delinquent in payment of principal
and interest.
(10) No Mortgage Loan 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
83
such Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in the
appraisal made in connection with the origination of the related Mortgage
Loan and (3) other matters to which like properties are commonly subject
that do not materially interfere with the benefits of the security
intended to be provided by such Mortgage.
(12) Immediately prior to the assignment of each CHL Mortgage Loan
to the Depositor, CHL had good title to, and was the sole owner of, such
CHL Mortgage Loan free and clear of any pledge, lien, encumbrance or
security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to sell
and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(14) There is no valid offset, claim, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal of or interest on such Mortgage Note.
(15) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior
to, or equal with, the lien of such Mortgage, except those that are
insured against by the title insurance policy referred to in item (18)
below.
(16) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, to the best of CHL's knowledge, each Mortgaged
Property is free of material damage and is in good repair.
(17) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, neither CHL nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument that has
been recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which
has been delivered to the Trustee); satisfied, cancelled or subordinated
such Mortgage in whole or in part; released the related Mortgaged
Property in whole or in part from the lien of such Mortgage; or executed
any instrument of release, cancellation, modification (except as
expressly permitted above) or satisfaction with respect thereto.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable,
in an amount at least equal to the Cut-off Date Principal Balance of each
such Mortgage Loan or a 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
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac
84
and is in a form acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, which policy
insures the Sellers and successor owners of indebtedness secured by the
insured Mortgage, as to the first priority lien, of the Mortgage subject
to the exceptions set forth in paragraph (11) above; to the best of CHL's
knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including either
Seller, has done, by act or omission, anything that would impair the
coverage of such mortgage title insurance policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the Closing Date.
No Subsequent Mortgage Loan was the subject of a Principal Prepayment in
full between the Subsequent Cut-off Date and the Subsequent Transfer
Date.
(20) To the best of CHL's knowledge, all of the improvements that
were included for the purpose of determining the Appraised Value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on or
being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of CHL's knowledge, all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities, unless the lack
thereof would not have a material adverse effect on the value of such
Mortgaged Property, and the Mortgaged Property is lawfully occupied under
applicable law.
(22) The Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. To the best of CHL's knowledge, all
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(23) The proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvements and
as to disbursements of any 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
85
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
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ 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 and Loan Group 3 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 and
Loan Group 3 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 and Loan Group 3 are
secured by low-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 and Loan Group 3 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 and Loan Group 3 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 and Loan Group 3 are secured by PUDs.
86
(33) Each Initial Mortgage Loan in Loan Group 1, Loan Group 2 and
Loan Group 3 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 and
Loan Group 3 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 and Loan Group 3, 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 and Loan Group 3 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 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
87
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 neither Seller has waived
any default, breach, violation or event of acceleration.
(41) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units and dwelling units in
PUDs. To the best of CHL's knowledge, no improvement to a Mortgaged
Property includes a cooperative or a mobile home or constitutes other
than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master Servicer.
(43) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note does
not permit or obligate the Master Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents that
previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item that
remains unpaid and that has been assessed, but is not yet due and
payable. Except for (A) payments in the nature of escrow payments, and
(B) interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is later, to the day
that precedes by one month the Due Date of the first installment of
principal and interest, including without limitation, taxes and insurance
payments, the Master Servicer has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in all
material respects in accordance with CHL's underwriting guidelines for
credit blemished quality mortgage loans or, with respect to Mortgage
Loans purchased by CHL were
88
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 ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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 and Loan Group 3 as of the Cut-off Date ranged
between the approximate per annum percentages specified on the Collateral
Schedule and the weighted average Mortgage Rate as of the Cut-off Date
was approximately the per annum rate specified on the Collateral
Schedule.
(49) [Reserved].
(50) The Mortgage Loans were selected from among the outstanding
one- to four-family mortgage loans in the applicable Seller's portfolio
at the Closing Date as to which the representations and warranties made
as to the Mortgage Loans set forth in this Section 2.03(b) and Section
2.03(c) can be made. No selection was made in a manner that would
adversely affect the interests of Certificateholders.
(51) The Gross Margins on the Initial Mortgage Loans in Loan Group 2
and Loan Group 3 range between the approximate percentages specified on
the Collateral Schedule, and the weighted average Gross Margin was
approximately the percentage specified in the Collateral Schedule.
(52) Each of the Initial Mortgage Loans in the Mortgage Pool has a
Due Date on or before the date specified in the Collateral Schedule.
(53) The Mortgage Loans, individually and in the aggregate, conform
in all material respects to the descriptions thereof in the Prospectus
Supplement, and with respect to the Mortgage Loans in Loan Group 2 and
Loan Group 3, the Information Circular.
(54) There is no obligation on the part of either Seller under the
terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(55) Any leasehold estate securing a Mortgage Loan has a term of not
less than five years in excess of the term of the related Mortgage Loan.
89
(56) Each Mortgage Loan represents a "qualified mortgage" within the
meaning of Section 860(a)(3) of the Code (but without regard to the rule
in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar
successor provision) and applicable Treasury regulations promulgated
thereunder.
(57) No Mortgage Loan was either a "consumer credit contract" or a
"purchase money loan" as such terms are defined in 16 C.F.R. ss. 433 nor
is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss. 1602(aa).
(58) To the extent required under applicable law, each originator
and subsequent mortgagee or servicer of the Mortgage Loan complied with
all licensing requirements and was authorized to transact and do business
in the jurisdiction in which the related Mortgaged Property is located at
all times when it held or serviced the Mortgage Loan. Any and all
requirements of any federal, state or local laws or regulations,
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, anti-predatory
lending, fair credit reporting, unfair collection practice, equal credit
opportunity, fair housing and disclosure laws and regulations, applicable
to the solicitation, origination, collection and servicing of such
Mortgage Loan have been complied with in all material respects; and any
obligations of the holder of the Mortgage Note, Mortgage and other loan
documents have been complied with in all material respects; servicing of
each Mortgage Loan has been in accordance with prudent mortgage servicing
standards, any applicable laws, rules and regulations and in accordance
with the terms of the Mortgage Notes, Mortgage and other loan documents,
whether such origination and servicing was done by the applicable Seller,
its affiliates, or any third party which originated the Mortgage Loan on
behalf of, or sold the Mortgage Loan to, any of them, or any servicing
agent of any of the foregoing;
(59) The methodology used in underwriting the extension of credit
for the Mortgage Loan employs objective mathematical principles which
relate the borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of
the borrower's equity in the collateral as the principal determining
factor in approving such credit extension. Such underwriting methodology
confirmed that at the time of origination (application/approval) the
borrower had a reasonable ability to make timely payments on the Mortgage
Loan;
(60) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan;
(61) If the Mortgage Loan provides that the interest rate on the
principal balance of the related Mortgage Loan may be adjusted, all of
the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
90
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien;
(62) The Mortgaged Property complies with all applicable laws, rules
and regulations relating to environmental matters, including but not
limited to those relating to radon, asbestos and lead paint and neither
Seller nor, to the best of CHL's knowledge, the Mortgagor, has received
any notice of any violation or potential violation of such law;
(63) There is no action, suit or proceeding pending, or to the best
of CHL's knowledge, threatened or likely to be asserted with respect to
the Mortgage Loan against or affecting either Seller before or by any
court, administrative agency, arbitrator or governmental body;
(64) No action, inaction, or event has occurred and no state of fact
exists or has existed that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard
insurance policy, irrespective of the cause of such failure of coverage.
In connection with the placement of any such insurance, no commission,
fee, or other compensation has been or will be received by CHL or any
designee of CHL or any corporation in which CHL or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(65) Each Mortgage Loan has a fully assignable life of loan tax
service contract which may be assigned without the payment of any fee;
(66) No Mortgagor has notified CHL or the Master Servicer on CHL's
behalf, and CHL has no knowledge, of any relief requested or allowed to a
Mortgagor under the Relief Act;
(67) Each Mortgage Loan in Loan Group 2 and Loan Group 3 was
originated by a savings and loan association, savings bank, commercial
bank, credit union, insurance company, or mortgage banking company which
is supervised and examined by a federal or state authority, or by a
mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 2.03 and 2.11 of the National Housing Act;
(68) Each Mortgage Loan in Loan Group 2 and Loan Group 3 was (A)
originated no earlier than six months prior to the time the applicable
Seller purchased such Mortgage Loan pursuant to a mortgage loan purchase
agreement or other similar agreement and (B) underwritten or
reunderwritten by the applicable Seller in accordance with the applicable
Seller's underwriting guidelines in effect at the time the loan was
underwritten or reunderwritten, as applicable;
(69) Each Mortgage Loan, at the time it was originated and as of the
Closing Date or the 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;
91
(70) None of the Mortgage Loans is a "high cost" mortgage loan as
defined by applicable federal, state and local predatory and abusive
lending laws;
(71) Each Prepayment Charge is enforceable and was originated in
compliance with all applicable federal, state and local laws;
(72) 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));
(73) There is no Mortgage Loan in the Trust Fund that was originated
on or after March 7, 2003, which is a "high cost home loan" as defined
under the Georgia Fair Lending Act;
(74) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as applicable (as such terms are defined in the
then-current Standard & Poor's LEVELS(R) Glossary which is now Version
5.6 Revised, Appendix E) and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act;
(75) Each Mortgage Loan is secured by a "single family residence"
within the meaning of Section 25(e)(10) of the Internal Revenue Code of
1986 (as amended) (the "Code"). The fair market value of the manufactured
home securing each Mortgage Loan was at least equal to 80% of the
adjusted issue price of the contract at either (i) the time the contract
was originated (determined pursuant to the REMIC Provisions) or (ii) the
time the contract is transferred to the purchaser. Each Mortgage Loan is
a "qualified mortgage" under Section 860G(a)(3) of the Code;
(76) As of the Closing Date with respect to any Initial Mortgage
Loan and as of the applicable Subsequent Transfer Date with respect to
any Subsequent Mortgage Loan, the related Mortgaged Property has not been
damaged by the hurricanes which struck the southeastern United States in
August and September of 2004 in a manner which materially affects the
value of such Mortgaged Property. For purposes of clarification, any
damage to a Mortgaged Property occurring after the Closing Date as a
result of the hurricanes referred to in the preceding sentence or any
other hurricane, tornado or casualty shall not result in a breach of the
preceding representation and warranty; and
(77) Representations and Warranties relating to the Mortgage Loans
in Loan Group 2:
(i) No Mortgage Loan in Loan Group 2 has an original
principal balance that exceeds ▇▇▇▇▇▇ Mae's conforming loan
limits as specified in Part 1, Section 310 of ▇▇▇▇▇▇ Mae's
Selling Guide;
(ii) Each Mortgage Loan in Loan Group 2 is in compliance
with the anti-predatory lending eligibility for purchase
requirements of ▇▇▇▇▇▇ Mae's Selling Guide;
92
(iii) No Mortgage Loan in Loan Group 2 is subject to the
requirements of the Home Ownership and Equity Protection Act of
1994 ("HOEPA");
(iv) Each Mortgage Loan in Loan Group 2 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;
(v) No Mortgage Loan in Loan Group 2 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 2 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;
(vi) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in New York Banking Law 6-1;
(vii) No Mortgage Loan in Loan Group 2 is a "High-Cost
Home Loan" as defined in the Arkansas Home Loan Protection Act
effective July 16, 2003 (Act 1340 of 2003);
(viii) No Mortgage Loan in Loan Group 2 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);
(ix) No Mortgage Loan in Loan Group 2 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.);
(x) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004 (N.M. Stat. ▇▇▇. ▇▇.▇▇. 58-21A-1 et
seq.);
(xi) No Mortgage Loan in Loan Group 2 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.);
(xii) No Mortgage Loan in Loan Group 2 is a "High-Cost
Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Loan Practices Act, effective November 7, 2004 (Mass. ▇▇▇.
Laws Ch. 183C);
(xiii) No Mortgage Loan in Loan Group 2 is a "High Cost
Home Loan" as defined in the Indiana Home Loan Practices Act,
effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1
through 24-9-9);
(xiv) No borrower related to a Mortgage Loan in Loan Group
2 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 creditworthy
93
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 the Mortgage Loan's originator
or any affiliate of such Mortgage Loan's originator. If, at the
time of loan application, the borrower may have qualified 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 2 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 2
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
Master 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 2 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 related to a Mortgage Loan in Loan Group 2 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 in Loan Group 2; No proceeds from any Mortgage Loan in
Loan Group 2 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;
94
(xviii)All points and fees related to each Mortgage Loan
in Loan Group 2 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
2 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 ▇▇▇▇▇▇
Mae's anti-predatory lending requirements as set forth in the
▇▇▇▇▇▇ Mae 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 2 has been disclosed in writing to
the borrower in accordance with applicable state and federal
law and regulation;
(xx) No Mortgage Loan in Loan Group 2 had a Loan-to-Value
Ratio as of the Cut-off Date in excess of 100.00%;
(xxi) A Credit Bureau Risk Score was obtained in
connection with the origination of each Mortgage Loan in Loan
Group 2 and no Credit Bureau Risk Score for any Mortgage Loan
in Loan Group 2 was less than 500;
(xxii) No Mortgage Loan in Loan Group 2 has a current
Mortgage Rate in excess of 13.00% per annum;
(xxiii)No Mortgage Loan in Loan Group 2 has a Gross Margin
in excess of 8.00% per annum;
(xxiv) No Mortgage Loan in Loan Group 2 was originated
under a no income/no asset or "NINA" underwriting program;
(xxv) No Mortgage Loan in Loan Group 2 has an Initial
Periodic Rate Cap in excess of 5.000%;
(xxvi) No Mortgage Loan in Loan Group 2 is a balloon
mortgage loan that has an original stated maturity of less than
seven (7) years;
(xxvii)The Master Servicer will transmit full-file credit
reporting data for each Mortgage Loan in Loan Group 2 pursuant
to ▇▇▇▇▇▇ ▇▇▇ Guide Announcement 95-19 and that for each
Mortgage Loan in Loan Group 2, Master 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;
(xxviii) No Mortgage Loan in Loan Group 2 has a Minimum
Mortgage Rate in excess of 13.00% per annum;
95
(xxix) No Mortgage Loan in Loan Group 2 has a Minimum
Mortgage Rate in excess of the original Mortgage Rate;
(xxx) No Mortgaged Property in Loan Group 2 consists of
more than four units;
(xxxi) No Mortgage Loan in Loan Group 2 was 30 days
Delinquent more than once during the twelve months immediately
preceding the Cut-off Date; and
(xxxii)No Mortgage Loan in Loan Group 2 is secured by
manufactured housing.
(c) Park Monaco hereby represents and warrants to the Depositor and
the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by Park Monaco in any state in which a
Mortgaged Property securing a Park Monaco Mortgage Loan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Park Monaco Mortgage Loan, to sell the Park Monaco Mortgage Loans in
accordance with the terms of this Agreement and each Subsequent Transfer
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(2) Park Monaco has the full company power and authority to
sell each Park Monaco Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly authorized
by all necessary company action on the part of Park Monaco the execution,
delivery and performance of this Agreement and each Subsequent Transfer
Agreement; and this Agreement and each Subsequent Transfer Agreement,
assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes a legal, valid and binding obligation
of Park Monaco, enforceable against Park Monaco in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Monaco, the sale of the Park Monaco
Mortgage Loans by Park Monaco under this Agreement and each Subsequent
Transfer Agreement, the consummation of any other of the transactions
contemplated by this Agreement and each Subsequent Transfer Agreement,
and the fulfillment of or compliance with the terms
96
hereof are in the ordinary course of business of Park Monaco and will not
(A) result in a material breach of any term or provision of the
certificate of incorporation or by-laws of Park Monaco or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which Park Monaco is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to Park Monaco of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
Park Monaco; and Park Monaco is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair Park Monaco's ability
to perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Monaco's
knowledge, threatened, against Park Monaco that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Monaco to sell the Park Monaco Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Monaco of, or compliance by Park Monaco with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Monaco has obtained
the same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans to the Depositor as a sale of the Park Monaco Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Monaco
Mortgage Loan to the Depositor, Park Monaco had good title to, and was
the sole owner of, such Park Monaco Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement with,
any other party, to sell and assign the same pursuant to this Agreement.
(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (c) that
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan or the Guarantor, with respect to any Mortgage Loan in Loan
Group 2 or Loan Group 3, the party discovering such breach shall give prompt
notice thereof to the other parties and the NIM Insurer. Each of the Master
Servicer and the Sellers (each, a "Representing Party") hereby covenants with
respect to the representations and warranties set forth in Sections 2.03(a)
through (c) that within 90 days of the earlier of the discovery by such
Representing Party or receipt of written notice by such Representing Party
97
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 1-AV-1 Insurer and the
Guarantor, with respect to any Mortgage Loan in Loan Group 2 or Loan Group 3,
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 and, upon
request, to the Guarantor, 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,
the Guarantor or the Trustee for any expenses reasonably incurred by the
Master Servicer, the Guarantor or the Trustee in respect of enforcing the
remedies for such breach. To enable the Master Servicer to amend the Mortgage
Loan Schedule, any Representing Party liable for a breach under this Section
2.03 shall, unless it cures such breach in a timely fashion pursuant to this
Section 2.03, promptly notify the Master Servicer whether such Representing
Party intends either to repurchase, or to substitute for, the Mortgage Loan
affected by such breach. With respect to the representations and warranties
described in this Section that are made to the best of the Representing
Party's knowledge, if it is discovered by any of the Depositor, the Master
Servicer, the Sellers or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan, notwithstanding the
Representing Party's lack of knowledge with respect to the substance of such
representation or warranty, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall deliver to
the Trustee for the benefit of the Certificateholders the related Mortgage
Note, Mortgage and assignment of the Mortgage, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. No substitution will be
made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Replacement Mortgage Loans in the Due
Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller delivering such Replacement 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 with
a copy to the Guarantor. Upon such substitution, the Replacement Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all
98
respects, and the applicable Seller delivering such Replacement Mortgage Loan
shall be deemed to have made with respect to such Replacement Mortgage Loan or
Loans, as of the date of substitution, the representations and warranties set
forth in Section 2.03(b) or (c) with respect to such Mortgage Loan. Upon any
such substitution and the deposit to the Certificate Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Co-Trustee shall release to the
Representing Party the Mortgage File relating to such Deleted Mortgage Loan
and held for the benefit of the Certificateholders and shall execute and
deliver at the Master Servicer's direction such instruments of transfer or
assignment as have been prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the applicable Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.
For any month in which either Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution
is less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) of all such
Deleted Mortgage Loans. An amount equal to the aggregate of the deficiencies
described in the preceding sentence (such amount, the "Substitution Adjustment
Amount") shall be forwarded by the applicable Seller to the Master Servicer
and deposited by the Master Servicer into the Certificate Account not later
than the Determination Date for the Distribution Date relating to the
Prepayment Period during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on the Determination Date for the Distribution Date
in the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if
any, and the receipt of a Request for File Release, the Co-Trustee shall
release the related Mortgage File held for the benefit of the
Certificateholders to such Seller, and the Trustee shall execute and deliver
at such Person's direction the related instruments of transfer or assignment
prepared by such Seller, in each case without recourse, as shall be necessary
to transfer title from the Trustee for the benefit of the Certificateholders
and transfer the Trustee's interest to such Seller to any Mortgage Loan
purchased pursuant to this Section 2.03. It is understood and agreed that the
obligation under this Agreement of the Sellers to cure, repurchase or replace
any Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against the Sellers respecting such breach
available to Certificateholders, the Depositor or the Trustee.
(e) The representations and warranties set forth in this Section
2.03 shall survive delivery of the respective Mortgage Files to the Co-Trustee
for the benefit of the Certificateholders with respect to each Mortgage Loan
and the Guarantor, with respect to each Mortgage Loan in Loan Group 2 or Loan
Group 3.
99
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.
(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.
100
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Depositor has obtained
the same.
The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans and to the Guarantor with respect to the Group 2
Mortgage Loans and the Group 3 Mortgage Loans, that with respect to each such
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 such Mortgage Loan, 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, or the Guarantor with respect
to any Mortgage Loan in Loan Group 2 or Loan Group 3, 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, or the Guarantor with respect to any Mortgage
Loan in Loan Group 2 or Loan Group 3, 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 or the Guarantor in any Group 2 Mortgage Loan or Group 3
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, shall repurchase or replace the affected Mortgage Loan
or Loans in accordance with the procedure set forth in Section 2.03(d).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee, and, upon request, to the Guarantor, an
Opinion of Counsel addressed to the Trustee, and, upon request, to the
Guarantor, to the effect that such repurchase or substitution would not (i)
result in the imposition of the tax on "prohibited transactions" of the Trust
Fund or contributions after the Closing Date, as defined in sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the any REMIC
formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or
the substitution therefor shall occur (subject to compliance with Sections
2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such loan and (b) receipt by the Trustee,
and, upon request, delivery to the
101
Guarantor, of an Opinion of Counsel to the effect that such repurchase or
substitution, as applicable, will not result in the events described in clause
(i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, either Seller, the Master
Servicer, the Guarantor 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(d) with respect to substitutions are satisfied, a Replacement
Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected
Mortgage Loan within 90 days of such discovery in the same manner as it would
a Mortgage Loan for a breach of representation or warranty contained in
Section 2.03. The Trustee shall reconvey to CHL the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor and the
Trustee, and, with respect to the Group 2 Mortgage Loans and the Group 3
Mortgage Loans, to the Guarantor, 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.
Section 2.08 Rights of the Guarantor.
In addition to the specific rights of the Guarantor identified in
this Agreement but subject to the provisions of Section 8.01(a)(3) and Section
8.02(a)(9), the Guarantor shall have the right to direct the Trustee relating
to the exercise of any remedy available to the Trustee or to
102
the exercise of any power conferred on the Trustee pursuant to this Agreement
(with the prior consent of the Class 1-AV-1 Insurer (which consent shall not
be unreasonably withheld), unless a Class 1-AV-1 Insurer Default has occurred
and is continuing). Notwithstanding anything to the contrary anywhere in this
Agreement, all rights of the Guarantor hereunder, except any rights to
indemnification, shall permanently terminate upon the later to occur of (A)
such time as the Guaranteed Certificates shall no longer be outstanding and
(B) the payment in full to the Guarantor of any amounts owed to the Guarantor
in respect of the ▇▇▇▇▇▇ ▇▇▇ Guaranty; provided that the Guarantor shall not
have any rights hereunder, except indemnification rights, so long as any
default has occurred and is continuing under the ▇▇▇▇▇▇ Mae Guaranty.
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(a), 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 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
103
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, the Guarantor and any successor master servicer in respect of
any such liability; provided, that in the case of the Guarantor such indemnity
shall only apply with respect to Mortgage Loans in Loan Group 2 and Loan Group
3. 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.
104
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 1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of
the Class 1-AV-1 Certificates), as evidenced by a letter to that effect
delivered by each Rating Agency to the Depositor, the Guarantor and the NIM
Insurer and (iii) each of the NIM Insurer and the Guarantor 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 Guarantor and
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. Each of the Master Servicer, with the written
consent of the Guarantor and the NIM Insurer (which consent shall not be
unreasonably withheld), and the Guarantor 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.
(c) The Guarantor may require the Master Servicer to enter into a
special subservicing agreement with a servicer with expertise in servicing
delinquent mortgage loans as designated by the Guarantor (the "Special
Servicer") (with the prior consent of the Class 1-AV-1 Insurer (which consent
shall not be unreasonably withheld), unless a Class 1-AV-1 Insurer Default has
occurred and is continuing) on or after the earliest Distribution Date with
respect to which the Certificate Principal Balance of the Class BV
Certificates has been reduced to zero. The parties hereto agree that, as of
the Closing Date, ▇▇▇▇▇▇ Loan Servicing LP is an approved
105
Special Servicer. Such special subservicing agreement shall relate to the
servicing of only Group 2 Mortgage Loans that (x) have been delinquent in
payment with respect to three or more Monthly Payments (provided, however,
that the third such Monthly Payment shall not be deemed to be delinquent for
purposes of this clause (x) until the close of business on the last day of the
month in which such Monthly Payment first became due) and (y) have been
transferred to the Special Servicer in accordance with this Section 3.02 and
the related special subservicing agreement (a "Specially Serviced Mortgage
Loan").
(d) The special subservicing agreement shall be consistent with the
provisions of this Agreement. In addition, any special subservicing agreement
with a Special Servicer appointed in accordance with Section 3.02(c) shall be
on terms which shall be reasonably acceptable to the Guarantor and the Master
Servicer and shall provide, at a minimum that:
(1) the Special Servicer shall service only the Specially
Serviced Mortgage Loans in a manner consistent with the provisions with
this Agreement except as provided otherwise in the special subservicing
agreement;
(2) the Special Servicer shall use the ▇▇▇▇▇▇ ▇▇▇ foreclosure
network (and pay the customary fees therefor) for foreclosures and
bankruptcies relating to Specially Serviced Mortgage Loans;
(3) the Special Servicer shall use the ▇▇▇▇▇▇ Mae disposition
service (and pay the customary fees therefor) for the disposition of REO
Property related to Specially Serviced Mortgage Loans;
(4) the Special Servicer shall make Servicing Advances on the
Specially Serviced Mortgage Loans to the same extent and in the same
manner as the Master Servicer with respect to the Group 2 Mortgage Loans
pursuant to this Agreement;
(5) the Special Servicer shall be entitled to receive the
Servicing Fee with respect to all Specially Serviced Mortgage Loans;
(6) prior to the transfer of servicing to the Special Servicer,
the Master Servicer and the Special Servicer shall have provided all
notices relating to such transfer of servicing as required to be
delivered to the borrowers by applicable state and federal law;
(7) the Special Servicer shall indemnify the Master Servicer
and the Trustee for any liabilities to them arising from failures of the
Special Servicer to perform its obligations according to the terms of the
subservicing agreement;
(8) the Master Servicer shall promptly give notice thereof to
the Trustee and the Guarantor of the transfer of servicing to the Special
Servicer, including the loan number together with the borrower's name and
the unpaid principal balance of the transferred Mortgage Loan at the time
of transfer;
(9) each of the respective obligations, duties, and liabilities
of the Master Servicer and the Special Servicer (or either of them) with
respect to the servicing
106
of the Specially Serviced Mortgage Loans that have arisen prior to the
date on which the servicing of such Specially Serviced Mortgage Loan was
transferred to the Special Servicer (the "Effective Date"), or that arise
on and after the Effective Date, under this Agreement and the
subservicing agreement and that remain unperformed or unsatisfied shall
survive any transfer of servicing;
(10) once a Group 2 Mortgage Loan becomes a Specially Serviced
Mortgage Loan, such Mortgage Loan shall remain a Specially Serviced
Mortgage Loan, and shall continue to be serviced by the Special Servicer,
until the earlier of the liquidation or other disposition of such
Mortgage Loan or the termination of the subservicing agreement,
regardless of delinquency status or otherwise;
(11) the Guarantor may remove the Special Servicer if the
Special Servicer at any time fails to meet any of the above criteria or
otherwise, in the judgment of the Guarantor, fails to perform according
to the terms of the subservicing agreement and the provisions of this
Section 3.02; provided that prior to any such removal the Guarantor shall
designate a successor Special Servicer meeting the requirements of this
Section 3.02, and no removal of a Special Servicer shall be effective
until a successor Special Servicer has entered into a special
subservicing agreement meeting the requirements of this Section 3.02 and
agreed to assume the duties of the Special Servicer or the Master
Servicer has undertaken such duties (in each case, with the prior consent
of the Class 1-AV-1 Insurer (which consent shall not be unreasonably
withheld), unless a Class 1-AV-1 Insurer Default has occurred and is
continuing); and
(12) in connection with any transfer of a Group 2 Mortgage Loan
to the Special Servicer as a Specially Serviced Mortgage Loan, the Master
Servicer shall execute any appropriate assignments or other documents
reasonable and necessary to further the prosecution of the Special
Servicer obligations under the special subservicing agreement.
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer, the Guarantor, the
Class 1-AV-1 Insurer and the Trustee in Respect of the
Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer, the Guarantor, the Class 1-AV-1 Insurer or the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise. The Master Servicer shall afford (and
any Subservicing Agreement shall provide that each Subservicer shall afford)
the Depositor, the NIM Insurer, the Guarantor, the Class 1-AV-1 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; provided, that access to records for the
Guarantor shall be limited to those related to the Mortgage Loans in Loan
Group 2 and Loan Group 3 and its origination programs relating to mortgage
loans similar to the Mortgage Loans. Upon request, the Master Servicer shall
furnish to the Depositor, the NIM Insurer, the Class 1-AV-1 Insurer, the
Guarantor and the
107
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; provided, that any
such information furnished to the Guarantor shall be limited to that which is
related to the Mortgage Loans in Loan Group 2 and Loan Group 3. To the extent
such information is not otherwise available to the public, the Depositor, the
NIM Insurer, the Class 1-AV-1 Insurer, the Guarantor and the Trustee shall not
disseminate any information obtained pursuant to the preceding two sentences
without the Masters Servicer's (or any such Subservicer's) written consent,
except as required pursuant to this Agreement or to the extent that it is
necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Depositor, the Trustee, the NIM Insurer, the Class 1-AV-1 Insurer, the
Guarantor or the Trust Fund, and in either case, the Depositor, the NIM
Insurer, the Guarantor, the Class 1-AV-1 Insurer or the Trustee, as the case
may be, shall use its reasonable best efforts to assure the confidentiality of
any such disseminated non-public information. The Depositor may, but is not
obligated to, enforce the obligations of the Master Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer under this Agreement
or exercise the rights of the Master Servicer under this Agreement; provided
by virtue of such performance by the Depositor of its designee. The Depositor
shall not have any responsibility or liability for any action or failure to
act by the Master Servicer and is not obligated to supervise the performance
of the Master Servicer under this Agreement or otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its designee shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the predecessor Master
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02
or 2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant
to Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of
Section 6.02 hereof). If the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default), the Trustee
(or any other successor servicer) may, at its option, succeed to any rights
and obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in
its capacity as servicer under a subservicing agreement arising prior to the
date of such succession unless it expressly elects to succeed to the rights
and obligations of the Master Servicer thereunder; and the Master Servicer
shall not thereby be relieved of any liability or obligations under the
subservicing agreement arising prior to the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each
108
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, provided the Guarantor shall have otherwise consented, 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 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;
(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 to the extent not previously paid to or
withheld by the Master Servicer);
(3) all Insurance Proceeds;
109
(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;
(10) all Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts; and
(11) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer
into the Certificate Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall
remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the institution maintaining the Certificate Account, to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.08.
No later than 1:00 p.m. Pacific time on the Business Day prior to
the Master Servicer Advance Date in each of January, February and March ▇▇▇▇,
▇▇▇ shall remit to the Master Servicer, and the Master Servicer shall deposit
in the Certificate Account, the Seller Shortfall Interest Requirement (if any)
for such Master Servicer Advance Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a); and
110
(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 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-
111
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, the Guarantor, 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, the Guarantor, 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, the Guarantor 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.
Section 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor, the NIM Insurer, the
Trustee and, with respect to the Group 2 Mortgage Loans and the Group 3
Mortgage Loans, the Guarantor and the Class 1-AV-1 Insurer, reasonable access
to all records and documentation regarding such Mortgage Loans and all related
accounts, insurance policies and other matters relating to this
112
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, the Guarantor 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 or, with respect to the Group 2 Mortgage Loans and the Group 3
Mortgage Loans, by the Guarantor.
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;
(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
113
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 Guarantor, 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 the last sentence of the
first paragraph of 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; and provided, further, that any
reimbursement to the Guarantor may only be drawn from amounts on
deposit in the Certificate Account in respect of the Group 2
Mortgage Loans and the Group 3 Mortgage Loans; and provided,
further, that the Master Servicer shall give notice to the Guarantor
of any withdrawal pursuant to this subsection;
(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 January 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.
114
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, the Guarantor and the Class 1-AV-1
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.
115
(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.
116
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 and the Guarantor 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. If the Class BV
Certificates are no longer outstanding or if the number of Mortgage Loans in
Loan Group 2 and Loan Group 3 which have been the subject of a substitution,
modification or assumption agreement exceeds 5% of the number of Mortgage
Loans in Loan Group 2 and Loan Group 3 as of the Closing Date, the Master
Servicer shall not take or enter into any substitution, assumption or
modification agreement without obtaining the prior written consent of the
Guarantor to such substitution, assumption or modification agreement. The
Master Servicer shall submit to the Guarantor, with its request for consent,
such information related to the proposed substitution, assumption or
modification agreement as can be expected to be needed by the Guarantor to
evaluate the Master Servicer's request, including the terms of the proposed
substitution, assumption or modification and the reasons for the Master
Servicer's decision that such substitution, assumption or modification
agreement should be taken or entered into with respect to such Loan Group 2 or
Loan Group 3 Mortgage Loan. The Guarantor shall be deemed to have consented to
the Master Servicer's request in the event that the Guarantor does not either
provide the Master Servicer with its written consent to such requested
substitution, assumption or modification agreement or written notice of its
objection to such substitution, assumption or modification agreement within
five Business Days of its receipt of the Master Servicer's request. Such
requests shall be sent to the Guarantor at: ▇▇▇▇▇▇ ▇▇▇, Special Products
117
Group, Mail Stop 5H-5W-03, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Director (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇). The Master Servicer
shall give written notice to the Guarantor with respect to each substitution,
assumption or modification agreement to the following address: ▇▇▇▇▇▇ Mae,
Special Products Group, Mail Stop 5H-5W-03, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Director (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇). Such notice
shall be delivered within thirty Business Days following the date of such
substitution, assumption or modification agreement and shall include
information with respect to the modification, including, without limitation,
the interest rate, the principal balance and the maturity date of the Loan
Group 2 or Loan Group 3 Mortgage Loan before and after such modification.
Notwithstanding the foregoing, the Master Servicer shall not be deemed to be
in default under this Section 3.11(a) by reason of any transfer or assumption
that the Master Servicer reasonably believes it is restricted by law from
preventing.
(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 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
118
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
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
119
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
and, with respect to the Mortgage Loans in Loan Group 2 and Loan Group 3, the
Master Servicer shall not foreclose or accept a deed in lieu of foreclosure
without the prior written consent of the Guarantor.
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 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
and the Guarantor shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee or the Guarantor) 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
120
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 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) On each Determination Date, the Master Servicer shall determine
the respective aggregate amounts of Excess Proceeds and Realized Losses, if
any, for the related Prepayment Period and shall remit such information with
respect to the Mortgage Loans in Loan
121
Group 2 and Loan Group 3 to the Guarantor upon request, together with an
Officer's Certificate of the Master Servicer with regard to the same.
(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. In addition, if the Class BV Certificates are no
longer outstanding, the Guarantor shall be entitled to purchase from the Trust
Fund, any Mortgage Loan in Loan Group 2 or Loan Group 3 that is 90 days or
more delinquent at a price equal to the Purchase Price. 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 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
122
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 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
123
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 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.
For a period of two years from the Closing Date, the Guarantor may
contact the applicable Seller to confirm that the applicable Seller continues
to actively engage in a program to originate mortgage loans to low-income
families and to obtain other non-proprietary information about the Seller's
activities that may assist the Guarantor in completing its own regulatory
requirements during normal business hours and subject to reimbursement for
expenses. The applicable Seller shall use reasonable efforts to provide such
information to the Guarantor.
124
Section 3.17 Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor, the Guarantor
and the Trustee on or before the 80th day after the end of the Master
Servicer's fiscal year, commencing with its 2004 fiscal year, an Officer's
Certificate stating, as to the signer thereof, that (i) a review of the
activities of the Master Servicer during the preceding calendar year and of
the performance of the Master Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof and (iii) to
the best of such officer's knowledge, each Subservicer has fulfilled all its
obligations under its Subservicing Agreement throughout such year, or, if
there has been a default in the fulfillment of any such obligation specifying
each such default known to such officer and the nature and status thereof. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Copies of such statement shall be provided by the Trustee to any
Certificateholder or Certificate Owner upon request at the Master Servicer's
expense, provided such statement is delivered by the Master Servicer to the
Trustee.
Section 3.18 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before the later of (i) the 80th day after the end of the
Master Servicer's fiscal year, commencing with its 2004 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2004, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, CHL or
any affiliate thereof) that is a member of the American Institute of Certified
Public Accountants to furnish a report to the Trustee, the Guarantor, 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 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 Trustee on behalf of the Trust Fund, on the terms and
conditions set forth in the Corridor Contract Assignment Agreement. The
Corridor Contracts will be assets of the Trust Fund but will not be an asset
of any REMIC. The Master Servicer, on behalf of the Trustee, shall deposit any
amounts received from time to time with respect to any Corridor Contract into
the Carryover Reserve Fund.
125
The Master Servicer, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under each Corridor Contract.
The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate a Corridor Contract, in each case
upon the occurrence of certain events of default or termination events to the
extent specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Trustee or the Master Servicer for
the benefit of the Trust Fund an amount in respect of such termination. Any
amounts received by the Trustee or the Master Servicer for the benefit of the
Trust Fund, as the case may be, in respect of such termination shall be
deposited and held in the Carryover Reserve Fund to pay Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(e) on the
Distribution Dates following such termination to and including the applicable
Corridor Contract Termination Date, but shall not be available for
distribution to the applicable Class of Class C Certificates pursuant to
Section 4.08(c) or to CHL pursuant to Section 4.08(c) until such applicable
Corridor Contract Termination Date. On the Corridor Contract Termination Date
for the Class AF-1 Subordinate Corridor Contract, the Class 1-AV-1 Corridor
Contract, the Class 2-AV Corridor Contract and the 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,
the Class 1-AV-1 Corridor Contract, the Class 2-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-1 Corridor Contract, the Class 2-AV Corridor Contract and the 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 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
126
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.
Section 3.21 Reports to the Guarantor; Certificate Account
Statements
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Guarantor, upon request, a statement prepared by
the Master Servicer setting forth the status of the Certificate Account as of
the close of business on such Distribution Date and showing, for the period
covered by such statement, the aggregate amount of deposits into and
withdrawals from the Certificate Account of each category of deposit specified
in Section 3.05(b) and each category of withdrawal specified in Section
3.08(a). Such statement may be in the form of the then-current ▇▇▇▇▇▇ ▇▇▇
Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program
with appropriate additions and changes, and shall also include information as
to the aggregate of the outstanding principal balances of all of the Mortgage
Loans as of the last day of the calendar month immediately preceding such
Distribution Date. In addition, the Master Servicer will transmit full-file
credit reporting data for each Mortgage Loan in Loan Group 2 pursuant to
▇▇▇▇▇▇ Mae Guide Announcement 95-19 and that for each Mortgage Loan in Loan
Group 2, the Master 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.
127
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 Guarantor and the Trustee by facsimile or
electronic mail (or by such other means as the Master Servicer, the Guarantor
and the Trustee, as the case may be, may agree from time to time) a Remittance
Report with respect to the related Distribution Date. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Trustee will provide
notice to the Guarantor and 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, the Guarantor
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.,
128
New York time, on the Business Day immediately preceding the related Master
Servicer Advance Date, specifying the amount that it will be unable to deposit
(each such amount an "Advance Deficiency") and certifying that such Advance
Deficiency constitutes an Advance hereunder and is not a Nonrecoverable
Advance. If the Trustee receives a Trustee Advance Notice on or before 3:30
p.m., (New York time) on a Master Servicer Advance Date, the Trustee shall,
not later than 3:00 p.m., (New York time), on the related Distribution Date,
deposit in the Distribution Account an amount equal to the Advance Deficiency
identified in such Trustee Advance Notice unless it is prohibited from so
doing by applicable law. Notwithstanding the foregoing, the Trustee shall not
be required to make such deposit if the Trustee shall have received written
notification from the Master Servicer that the Master Servicer has deposited
or caused to be deposited in the Certificate Account an amount equal to such
Advance Deficiency. All Advances made by the Trustee pursuant to this Section
4.01(d) shall accrue interest on behalf of the Trustee at the Trustee Advance
Rate from and including the date such Advances are made to but excluding the
date of repayment, with such interest being an obligation of the Master
Servicer and not the Trust Fund. The Master Servicer shall reimburse the
Trustee for the amount of any Advance made by the Trustee pursuant to this
Section 4.01(d) together with accrued interest, not later than 6:00 p.m. (New
York time) on the Business Day following the related Distribution Date. In the
event that the Master Servicer does not reimburse the Trustee in accordance
with the requirements of the preceding sentence, the Trustee shall immediately
(i) terminate all of the rights and obligations of the Master Servicer under
this Agreement in 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,
either Seller, the Guarantor, the Trust Fund, the Class 1-AV-1 Insurer or the
Certificateholders.
129
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
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 MF-1 Certificates, the Current Interest
for such Class,
(b) to the Class MF-2 Certificates, the Current Interest
for such Class,
(c) to the Class MF-3 Certificates, the Current Interest
for such Class,
(d) to the Class MF-4 Certificates, the Current Interest
for such Class,
(e) to the Class MF-5 Certificates, the Current Interest
for such Class,
(f) to the Class MF-6 Certificates, the Current Interest
for such Class,
(g) to the Class MF-7 Certificates, the Current Interest
for such Class,
(h) to the Class MF-8 Certificates, the Current Interest
for such Class,
(i) to the Class BF Certificates, the Current Interest for
such Class, and
(j) any remainder as part of the Fixed Rate Loan Group
Excess Cashflow.
(b) Distributions of Interest Funds for Loan Group 2 and Loan Group
3. On each Distribution Date, the Interest Funds for such Distribution Date
with respect to Loan Group
130
2 and Loan Group 3 shall be allocated by the Trustee from the Distribution
Account in the following order of priority until such Interest Funds have been
fully distributed:
(i) concurrently:
(a) from Interest Funds for Loan Group 2, sequentially (1)
to the Class 1-AV-1 Insurer, the premium payable with respect
to the Class 1-AV-1 Policy for such Distribution Date, (2) to
the Guarantor, the amount of the Class 1-AV-1 Guaranty Fee for
such Distribution Date, (3) to the Class 1-AV-1 Certificates,
the Current Interest for such Class and Distribution Date, (4)
to the Guarantor, the Class 1-AV-1 Guarantor Reimbursement
Amount for such Distribution Date in respect of any amounts
previously paid by the Guarantor under the Guaranty other than
any amounts used to cover Unpaid Compensating Interest, (5) to
the Class 1-AV-1 Insurer, any Class ▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Amount
for such Distribution Date, (6) to the Guarantor, the Class
1-AV-1 Guarantor Reimbursement Amount for such Distribution
Date in respect of any amounts previously paid by the Guarantor
to cover Unpaid Compensating Interest, and (7) to the Class
1-AV-1 Certificates, the Interest Carry Forward Amount for such
Class and such Distribution Date,
(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,
(ii) from the remaining Interest Funds for Loan Group 2 and Loan
Group 3, in the following order of priority:
(a) to the Class 1-AV-1 Insurer, any remaining premium
payable with respect to the Class 1-AV-1 Policy for such
Distribution Date not paid pursuant to Section 4.04(b)(i)(a)(1)
above,
(b) to the Guarantor, the amount of the Class 1-AV-1
Guaranty Fee not paid pursuant to Section 4.04(b)(i)(a)(2)
above,
(c) to each Class of Class AV Certificates, any remaining
Current Interest not paid pursuant to Section 4.04(b)(i)(a)(3)
and Section 4.04(b)(i)(b) above, pro rata, based on the
Certificate Principal Balances thereof, to the extent needed to
pay any Current Interest for each such Class; provided that
Interest Funds remaining after such allocation to pay any
Current Interest 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 (after the distribution based on Certificate
Principal Balances), pro rata, based on the amount of such
remaining unpaid Current Interest,
131
(d) to the Guarantor, the Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor under the Guaranty
other than any amounts used to cover Unpaid Compensating
Interest not paid pursuant to Section 4.04(b)(i)(a)(4) above,
(e) to the Class 1-AV-1 Insurer, any remaining Class
▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Amount not paid pursuant to Section
4.04(b)(i)(a)(5) above,
(f) to the Guarantor, the Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor to cover Unpaid
Compensating Interest not paid pursuant to Section
4.04(b)(i)(a)(6) above, and
(g) to each Class of Class AV Certificates, any remaining
Interest Carry Forward Amount not paid pursuant to Section
4.04(b)(i)(a)(7) and Section 4.04(b)(i)(b) above, pro rata,
based on the Certificate Principal Balances thereof, to the
extent needed to pay any Interest Carry Forward Amount for each
such Class; provided that Interest Funds remaining after such
allocation to pay any 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 Interest Carry Forward Amount
(after the distribution based on Certificate Principal
Balances), pro rata, based on the amount of such remaining
unpaid Interest Carry Forward Amount,
(iii) from the remaining Interest Funds for Loan Group 2 and
Loan Group 3, 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,
132
(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.
(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, in the order and priorities
set forth in Section 4.04(c)(3) below until the Certificate
Principal Balances thereof are reduced to zero,
(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,
133
(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 Section 4.04(c)(3) below, until the Certificate Principal
Balances thereof are reduced to zero,
(B) to the Class MF-1 Certificates, the Class MF-1 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(C) to the Class MF-2 Certificates, the Class MF-2 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(D) to the Class MF-3 Certificates, the Class MF-3 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(E) to the Class MF-4 Certificates, the Class MF-4 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(F) to the Class MF-5 Certificates, the Class MF-5 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(G) to the Class MF-6 Certificates, the Class MF-6 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(H) to the Class MF-7 Certificates, the Class MF-7 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(I) to the Class MF-8 Certificates, the Class MF-8 Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero,
(J) to the Class BF Certificates, the Class BF Principal
Distribution Amount until the Certificate Principal Balance thereof
is reduced to zero, and
134
(K) any remainder as part of the Fixed Rate Loan Group Excess
Cashflow.
(3) On each Distribution Date on which any principal amounts
are to be distributed to the Class AF Certificates, such amounts shall be
distributed to the Class AF Certificates in the following order of
priority:
(A) the NAS Principal Distribution Amount to the Class AF-6
Certificates, until the Certificate Principal Balance thereof is
reduced to zero,
(B) sequentially, to the Class AF-1, Class AF-2, Class AF-3,
Class AF-4 and Class AF-5 Certificates, in that order, in each case
until the Certificate Principal Balance thereof is reduced to zero,
(C) 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 shall be distributed pro rata, based on the
Certificate Principal Balances thereof, in each case until the Certificate
Principal Balance thereof is reduced to zero, and not as described above.
(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to Loan Group 2 and Loan Group 3 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 the Class 1-AV-1 Insurer, any remaining premium
payable with respect to the Class 1-AV-1 Policy, to the extent
not paid pursuant to Section 4.04(b) above,
(b) to the Guarantor, the amount of any remaining Class
1-AV-1 Guaranty Fee, to the extent not paid pursuant to Section
4.04(b) above,
(c) to the Class 1-AV-1 Certificates, until the
Certificate Principal Balance thereof is reduced to zero,
135
(d) to the Guarantor, any remaining Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor under the
Guaranty, other than any amounts used to cover Unpaid
Compensating Interest, to the extent not paid pursuant to
Section 4.04(b) above,
(e) to the Class 1-AV-1 Insurer, any remaining Class
▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, to the extent not paid pursuant to
Section 4.04(b) above,
(f) to the Guarantor, any remaining Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor to cover Unpaid
Compensating Interest, to the extent not paid pursuant to
Section 4.04(b) above, and
(g) to 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)(3) 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)(3) below, until the
Certificate Principal Balances thereof are reduced to zero, and
(b) from any remaining Principal Distribution Amount for
Loan Group 3, sequentially:
(1) to the Class 1-AV-1 Insurer any remaining premium
payable with respect to the Class 1-AV-1 Policy for such
Distribution Date, to the extent not previously paid
pursuant to Section 4.04(d)(1)(A)(i)(a) above,
(2) to the Guarantor any remaining Class 1-AV-1
Guaranty Fee, to the extent not previously paid pursuant
to Section 4.04(d)(1)(A)(i)(b) above,
(3) to the Class 1-AV-1 Certificates (after the
distribution of the Principal Distribution Amount from
Loan Group 2 as provided in Section 4.04(d)(1)(A)(i)(c)
above), until the Certificate Principal Balance thereof is
reduced to zero,
(4) to the Guarantor, any remaining Class 1-AV-1
Guarantor Reimbursement Amount for such Distribution Date
in respect of any amounts previously paid by the Guarantor
under the
136
Guaranty, other than amounts used to cover Unpaid
Compensating Interest, to the extent not previously paid
pursuant to Section 4.04(d)(1)(A)(i)(d) above,
(5) to the Class 1-AV-1 Insurer any remaining Class
▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Amount not previously paid pursuant
to Section 4.04(d)(1)(A)(i)(e) above, and
(6) to the Guarantor, any remaining Class 1-AV-1
Guarantor Reimbursement Amount for such Distribution Date
in respect of any amounts previously paid by the Guarantor
to cover Unpaid Compensating Interest, to the extent not
previously paid pursuant to Section 4.04(d)(1)(A)(i)(f)
above,
(B) from the remaining Principal Distribution Amounts for Loan
Group 2 and Loan Group 3, sequentially:
(i) to the Class MV-1 Certificates, until the Certificate
Principal Balance thereof is reduced to zero,
(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.
137
(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 in not effect, from the Principal Distribution Amounts for Loan
Group 2 and Loan Group 3, sequentially:
(A) concurrently:
(i) from the Principal Distribution Amount for Loan Group 2,
sequentially:
(a) to the Class 1-AV-1 Insurer, any remaining premium
payable with respect to the Class 1-AV-1 Policy, to the extent
not paid pursuant to Section 4.04(b) above,
(b) to the Guarantor, the amount of any remaining Class
1-AV-1 Guaranty Fee, to the extent not paid pursuant to Section
4.04(b) above,
(c) to the Class 1-AV-1 Certificates, in an amount up to
the lesser of the Class 1-AV-1 Principal Distribution Amount
and the Class 1-AV-1 Principal Distribution Target Amount,
until the Certificate Principal Balance thereof is reduced to
zero,
(d) to the Guarantor, any remaining Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor under the
Guaranty, other than any amounts used to cover Unpaid
Compensating Interest, to the extent not paid pursuant to
Section 4.04(b) above,
(e) to the Class 1-AV-1 Insurer, any remaining Class
▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, to the extent not paid pursuant to
Section 4.04(b) above,
(f) to the Guarantor, any remaining Class 1-AV-1 Guarantor
Reimbursement Amount for such Distribution Date in respect of
any amounts previously paid by the Guarantor to cover Unpaid
Compensating Interest, to the extent not paid pursuant to
Section 4.04(b) above, and
(g) to each Class of Class 2-AV Certificates, in an amount
up to the lesser of the Class 2-AV Principal Distribution
Amount and the Class 2-AV Principal Distribution Target Amount
(in each case, after the distribution of the Principal
Distribution Amount from Loan Group 3 as provided in Section
4.04(d)(2)(A)(ii)(a) below), in the order and priorities set
forth in Section 4.04(d)(3) below, until the Certificate
Principal Balances thereof are reduced to zero,
(ii) from the Principal Distribution Amount for Loan Group 3,
sequentially:
138
(a) to each Class of Class 2-AV Certificates, in an
amount up to the lesser of the Class 2-AV Principal
Distribution Amount and the Class 2-AV Principal
Distribution Target Amount, 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
(b) to the Class 1-AV-1 Certificates, in an amount up
to the lesser of the Class 1-AV-1 Principal Distribution
Amount and the Class 1-AV-1 Principal Distribution Target
Amount (in each case, after the distribution of the
Principal Distribution Amount from Loan Group 2 as
provided in Section 4.04(d)(2)(A)(i)(c) above) until the
Certificate Principal Balance thereof is reduced to zero,
(B) from the remaining Principal Distribution Amounts for
Loan Group 2 and Loan Group 3, sequentially:
(i) to the Class MV-1 Certificates, the Class MV-1
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(ii) to the Class MV-2 Certificates, the Class MV-2
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(iii) to the Class MV-3 Certificates, the Class MV-3
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(iv) to the Class MV-4 Certificates, the Class MV-4
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(v) to the Class MV-5 Certificates, the Class MV-5
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(vi) to the Class MV-6 Certificates, the Class MV-6
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(vii) to the Class MV-7 Certificates, the Class MV-7
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
(viii) to the Class MV-8 Certificates, the Class MV-8
Principal Distribution Amount until the Certificate Principal
Balance thereof is reduced to zero,
139
(ix) to the Class BV Certificates, the Class BV Principal
Distribution Amount until the Certificate Principal Balance
thereof is reduced to zero, and
(x) 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 2-AV Certificates, such
amounts shall be distributed sequentially, to the Class 2-AV-1, Class
2-AV-2 and Class 2-AV-3 Certificates, in that order, in each case until
the Certificate Principal Balance thereof is reduced to zero.
Notwithstanding the foregoing order of priority, on any Distribution Date on
which (x) the aggregate Certificate Principal Balance of the Class AV
Certificates is greater than the sum of (i) the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 and (ii) any
amount on deposit in the Pre-Funding Account in respect of Loan Group 2 and
Loan Group 3 and (y) the aggregate Certificate Principal Balance of the Class
2-AV Certificates is greater than the sum of (i) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 3 and (ii) any amount on
deposit in the Pre-Funding Account in respect of Loan Group 3, any principal
amounts to be distributed to the Class 2-AV Certificates shall be distributed
pro rata, based on the Certificate Principal Balances thereof, in each case
until the Certificate Principal Balance thereof is reduced to zero, and not as
described above.
(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 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 Date in February 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;
140
(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;
(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 amounts received under the
141
Class 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 February 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 and Loan Group 3 not covered by the Adjustable
Rate Loan Group Excess Cashflow, allocated pro rata based on the Extra
Principal Distribution Amount for Loan Group 2 and Loan Group 3 not
covered by the Adjustable Rate Loan Group Excess Cashflow;
(22) 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;
(23) 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;
(24) 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;
(25) 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;
(26) 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;
(27) 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;
(28) 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;
142
(29) 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;
(30) 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;
(31) 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);
(32) to the Class CF Certificateholders, the Class CF
Distributable Amount for such Distribution Date; and
(33) 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 amount equal to
the aggregate Extra Principal Distribution Amount of Loan Group 2 and
Loan Group 3, payable to such Holders of each such Class as part of the
Principal Distribution Amount for Loan Group 2 and Loan Group 3,
respectively, pursuant to Section 4.04(d) above;
(2) to the Holders of the Class MV-1 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
(3) to the Holders of the Class MV-1 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(4) to the Holders of the Class MV-2 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
(5) to the Holders of the Class MV-2 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(6) to the Holders of the Class MV-3 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
(7) to the Holders of the Class MV-3 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
143
(8) to the Holders of the Class MV-4 Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
(9) to the Holders of the Class MV-4 Certificates, in an amount
equal to the Unpaid Realized Loss Amount for such Class;
(10) to the Holders of the Class MV-5 Certificates, in an
amount equal to any Interest Carry Forward Amount for such Class;
(11) to the Holders of the Class MV-5 Certificates, in an
amount equal to the Unpaid Realized Loss Amount for such Class;
(12) to the Holders of the Class MV-6 Certificates, in an
amount equal to any Interest Carry Forward Amount for such Class;
(13) to the Holders of the Class MV-6 Certificates, in an
amount equal to the Unpaid Realized Loss Amount for such Class;
(14) to the Holders of the Class MV-7 Certificates, in an
amount equal to any Interest Carry Forward Amount for such Class;
(15) to the Holders of the Class MV-7 Certificates, in an
amount equal to the Unpaid Realized Loss Amount for such Class;
(16) to the Holders of the Class MV-8 Certificates, in an
amount equal to any Interest Carry Forward Amount for such Class;
(17) to the Holders of the Class MV-8 Certificates, in an
amount equal to the Unpaid Realized Loss Amount for such Class;
(18) to the Holders of the Class BV Certificates, in an amount
equal to any Interest Carry Forward Amount for such Class;
(19) to the Holders of the Class BV 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 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;
144
(21) on or after the Distribution Date in February 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;
(22) 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 or Credit Comeback Excess Cashflow;
(23) 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 or Credit Comeback Excess Cashflow;
(24) 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 or Credit Comeback Excess Cashflow;
(25) 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 or Credit Comeback Excess Cashflow;
(26) 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 or Credit Comeback Excess Cashflow;
(27) 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 or Credit Comeback Excess Cashflow;
(28) 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 or Credit Comeback Excess Cashflow;
(29) 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 or Credit Comeback Excess Cashflow;
145
(30) 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 or Credit Comeback Excess Cashflow;
(31) 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);
(32) to the Class CV Certificateholders, the Class CV
Distributable Amount for such Distribution Date; and
(33) 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-1 Corridor Contract, to the Class 1-AV-1 Certificates to the extent
needed to pay any Net Rate Carryover with respect to such Class;
(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 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 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
146
(5) any remaining amounts to the Holders of the Class C
Certificates as provided in Section 4.08(c).
(h) To the extent that a Class of Interest Bearing Certificates
receives interest in excess of the Net Rate Cap, such interest shall be deemed
to have been paid to the Carryover Reserve Fund and then paid by the Carryover
Reserve Fund to those Certificateholders. For purposes of the Code, amounts
deemed deposited in the Carryover Reserve Fund shall be deemed to have first
been distributed (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-1 Corridor Contract, the Class 2-AV
Corridor Contract and the 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 and Loan Group 3 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;
(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;
147
(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 and Loan Group 3 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.
(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;
148
(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 and Loan Group 3, if any, to
increase the Certificate Principal Balances of the Adjustable Rate Subordinate
Certificates to which Applied Realized Loss Amounts have been previously
allocated in the following order of priority:
(1) 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;
(2) 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;
(3) 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;
(4) 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;
(5) 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;
(6) 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;
(7) 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;
149
(8) 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;
(9) 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 Guarantor on each Distribution Date shall be made by
wire transfer of immediately available funds to the following account:
FNMA Federal Reserve Account
Telegraphic FNMA NYC ABA ▇▇▇▇▇▇▇▇▇
Ref. GR466 04-T10
Payments to the Class 1-AV-1 Insurer on each Distribution Date shall
be made by wire transfer of immediately available funds to the following
account:
Bank: Fleet Bank NA
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ABA #▇▇▇▇▇▇▇▇▇
For the Account of: XL Capital Assurance Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Account Number: 94278 35841
On or before 5:00 p.m. Pacific time on the second Business Day
following each Determination 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
150
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.
On or before 5:00 p.m. Eastern time on the fourth Business Day
preceding each Distribution Date or, upon request, on or before 5:00 p.m.
Pacific time on the second Business Day following each Determination Date, the
Master Servicer shall deliver a report to the Guarantor (using the internet
and the following domain name: ▇▇▇▇▇_▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ or by such other
means as the Master Servicer and the Guarantor may agree from time to time)
containing such data and information regarding the Group 2 Mortgage Loans and
Group 3 Mortgage Loans as is specified in Guarantor's "Private Label Wrap
Deals - Quick Start Guide for Lenders" or such other data and information as
the Master Servicer and the Guarantor may agree from time to time.
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
Guarantor, the Class 1-AV-1 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;
151
(8) the Net Rate Carryover paid on any Class of Certificates on
such Distribution Date and any Net Rate Carryover remaining on any Class
of Certificates on such Distribution Date;
(9) the amount of Advances 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 or an Adjustable Rate
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 Fixed Rate Subordinate Certificates and the
Adjustable Rate Subordinate Certificates for such Distribution Date;
(19) the amount, if any, received under each Corridor Contract
for such Distribution Date;
152
(20) all payments made by the Master Servicer in respect of
Compensating Interest for such Distribution Date;
(21) the information set forth in the Prepayment Charge
Schedule;
(22) with respect to any Mortgage Loan repurchased by a Seller
or purchased by the Depositor, the Guarantor or the Master Servicer, the
loan number and Stated Principal Balance relating thereto;
(23) the amount paid by the Guarantor under the ▇▇▇▇▇▇ ▇▇▇
Guaranty for such Distribution Date;
(24) all amounts paid to the Guarantor in respect of the
Guarantor Reimbursement Amount for such Distribution Date;
(25) the amount paid by the Class 1-AV-1 Insurer under the
Class 1-AV-1 Policy for such Distribution Date; and
(26) all amounts paid to the Class 1-AV-1 Insurer in respect of
the Class ▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ 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, the Class 1-AV-1 Insurer, the Guarantor
and the NIM Insurer. The Trustee may make the above information available to
Certificateholders and the Class 1-AV-1 Insurer via the Trustee's website at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
On the third Business Day preceding each Distribution Date, the
Trustee shall deliver to the Guarantor (by electronic medium as specified in
the next sentence) a statement identifying the Class Factor for the Class
1-AV-1 Certificates. The Trustee shall deliver such statement on or before
12:00 p.m. (New York time) on such day via the internet using the following
domain name: ▇▇▇▇_▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇. If a Guarantor Payment will be payable
on a Distribution Date, all information required under Section 4.05(a) must
also be similarly delivered to the Guarantor on such third Business Day
preceding such Distribution Date. The second consecutive failure by the
Trustee to deliver such Class Factor for the Class 1-AV-1 Certificates (or to
deliver an accurate Class Factor for the Class 1-AV-1 Certificates) to the
Guarantor shall constitute an event of default and permit the Guarantor to
remove the Trustee for cause; provided that the Master Servicer had delivered
the information set forth above for the related Distribution Date to the
Trustee.
(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
153
have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code as
from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each
Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:
(1) The original projected principal and interest cash flows on
the Closing Date on each related Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(2) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related Class
of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(3) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(4) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through
the end of such calendar quarter with respect to each related Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
(5) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the
timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(6) The amount and timing of any non-interest expenses of the
related REMIC; and
(7) Any taxes (including penalties and interest) imposed on the
related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property"
or state or local income or franchise taxes.
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 ▇▇▇▇▇▇ Mae Guaranty.
On each Distribution Date following receipt of a statement (as set
forth in Section 4.05) that indicates a Deficiency Amount for such
Distribution Date, the Guarantor shall distribute a Guarantor Payment in an
aggregate amount equal to the Deficiency Amount for such Distribution Date
directly to the Holders of the Guaranteed Certificates, without first
depositing
154
such amount in the Distribution Account, as follows: (i) the Class 1-AV-1
Guaranteed Interest Distribution Amount shall be distributed as interest with
respect to the Guaranteed Certificates, as provided in Section 4.04(b)(i); and
(ii) the Class 1-AV-1 Guaranteed Principal Distribution Amount shall be
distributed as principal with respect to the applicable Guaranteed
Certificates, as provided in Section 4.04(d)(1)(A)(i) or Section
4.04(d)(2)(A)(i), as applicable.
Section 4.07 Class 1-AV-1 Policy.
(a) The Trustee shall establish a separate non-interest bearing
trust account which shall be an Eligible Account for the benefit of Holders of
the Class 1-AV-1 Certificates and the Class 1-AV-1 Insurer referred to herein
as the "Class 1-AV-1 Policy Payments Account" over which the Trustee shall
have exclusive control and sole right of withdrawal. The Trustee shall deposit
upon receipt any amount paid under the Class 1-AV-1 Policy in the Class 1-AV-1
Policy Payments Account and distribute such amount only for purposes of
payment to the Class 1-AV-1 Certificates of the Class 1-AV-1 Insured Payment
for which a claim was made and such amount may not be applied to satisfy any
costs, expenses or liabilities of the Master Servicer, the Trustee, the
Co-Trustee or the Trust Fund or to pay any other Class of Certificates.
Amounts paid under the Class 1-AV-1 Policy, to the extent needed to pay any
Class 1-AV-1 Certificate Deficiency Amount, shall be transferred to the
Distribution Account on the related Distribution Date, and the portion thereof
representing the Class 1-AV-1 Certificate Deficiency Amount shall be disbursed
by the Trustee to the Class 1-AV-1 Certificateholders, in each case as if it
were a distribution to the Holders of such Certificates pursuant to Section
4.04. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay other
distributions to the Class 1-AV-1 Certificateholders, as applicable, with
other funds available to make such payment. However, the amount of any payment
of principal or of interest on the Class 1-AV-1 Certificates to be paid from
funds transferred from the Class 1-AV-1 Policy Payments Account shall be noted
as provided in paragraph (d) below and in the statement to be furnished to
Holders of such Class of Certificates pursuant to Section 4.05. Funds held in
the Class 1-AV-1 Policy Payments Account shall not be invested. Any funds
remaining in the Class 1-AV-1 Policy Payments Account on the first Business
Day following a Distribution Date shall be returned to the Class 1-AV-1
Insurer pursuant to the written instructions of the Class 1-AV-1 Insurer by
the end of such Business Day.
(b) If the Trustee has determined that a Class 1-AV-1 Certificate
Deficiency Amount is required to be paid under the Class 1-AV-1 Policy with
respect to such Distribution Date, it shall deliver a Payment Notice (in the
form attached as Exhibit A to the Class 1-AV-1 Policy) to the Class 1-AV-1
Insurer no later than 12:00 noon, New York City time on the second Business
Day preceding such Distribution Date and shall provide a copy thereof to the
Master Servicer at or prior to the time such Payment Notice is received by the
Class 1-AV-1 Insurer. The Payment Notice shall constitute a claim therefor
pursuant to the Class 1-AV-1 Policy.
(c) If the Trustee receives a certified copy of an order of the
appropriate court (an "Order") that any prior distribution made on the Class
1-AV-1 Certificates constitutes an Avoided Payment, the Trustee shall so
notify the Class 1-AV-1 Insurer, shall comply with the provisions of the Class
1-AV-1 Policy to obtain payment by the Class 1-AV-1 Insurer of such Avoided
Payment and shall, at the time it provides notice to the Class 1-AV-1 Insurer,
notify each holder of the affected Class 1-AV-1 Certificates by mail that (x)
subject to the terms of the
155
Class 1-AV-1 Policy, the Class 1-AV-1 Insurer will disburse the Avoided
Payment directly to the receiver, conservator, debtor-in-possession or trustee
in bankruptcy named in the Order on the fourth Business Day following such
Certificateholder's making timely delivery to the Trustee of (i) a certified
copy of a final order of a court exercising jurisdiction in the related
insolvency proceeding to the effect that the Certificateholder or the Trustee
on behalf of the Certificateholder is required to return any such payment or
portion thereof because such payment was voided under applicable law, with
respect to which order the appeal period has expired without an appeal having
been filed, (ii) an assignment (substantially in the form attached as Exhibit
B to the Class 1-AV-1 Policy), properly completed and executed by such
Certificateholder, irrevocably assigning to the Class 1-AV-1 Insurer all
rights and claims of such Owner relating to or arising under such Avoided
Payment and (iii) a Payment Notice (in the form attached as Exhibit A to the
Class 1-AV-1 Policy), appropriately completed and executed by the Trustee,
provided that if such documents are received after 10:00 a.m., New York time,
on such Business Day, they will be deemed to be received on the following
Business Day, and (y) if any such Avoided Payment is recovered from such
Certificateholder pursuant to such Order, such Certificateholder will be
entitled to payment pursuant to the Class 1-AV-1 Policy. A copy of the Class
1-AV-1 Policy shall be made available to each affected Certificateholder
through the Trustee, and the Trustee shall furnish to the Class 1-AV-1 Insurer
or its fiscal agent, if any, a copy of its records evidencing the payments
that have been made by the Trustee and subsequently recovered from
Certificateholders and the dates on which such payments were made.
(d) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class 1-AV-1
Certificates from moneys received under the Class 1-AV-1 Policy. The Class
1-AV-1 Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon two Business Day's prior notice to the
Trustee.
(e) The Holders of the Class 1-AV-1 Certificates are not entitled to
institute proceedings directly against the Class 1-AV-1 Insurer. Each Holder
of the Class 1-AV-1 Certificates, by its purchase of Class 1-AV-1 Certificates
hereby agrees that the Class 1-AV-1 Insurer may at any time during the
continuation of any proceeding relating to an Avoided Payment, direct all
matters relating to such Avoided Payment on their behalf, including, without
limitation, the direction of any appeal of any order relating to such
preference claim and the posting of any surety, supersedes or performance bond
pending any such appeal.
(f) Any payments to the Class 1-AV-1 Insurer shall be made by wire
transfer of immediately available funds to the following Federal Reserve
Account (unless and until the Class 1-AV-1 Insurer notifies the Trustee of a
change in such account information in writing):
Fleet Bank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ABA Number: ▇▇▇▇▇▇▇▇▇
For the Account of: XL Capital Assurance Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
156
Account #: ▇▇▇-▇▇▇-▇▇▇▇
Reference: Policy Number CA01538A-CWABS 2004-15
(g) The Trustee shall, upon retirement of the Class 1-AV-1
Certificates, furnish to the Class 1-AV-1 Insurer a notice of such retirement,
and, after retirement of the Class 1-AV-1 Certificates and the expiration of
the term of the Class 1-AV-1 Policy, surrender the Class 1-AV-1 Insurance
Policy to the Class 1-AV-1 Insurer for cancellation.
(h) The Trustee shall hold the Class 1-AV-1 Policy in trust as agent
for the Holders of the Class 1-AV-1 Certificates for the purpose of making
claims thereon and distributing the proceeds thereof. Neither the Class 1-AV-1
Policy nor the amounts paid on the Class 1-AV-1 Policy shall constitute part
of the Trust Fund created by this Agreement. Each Holder of Class 1-AV-1
Certificates, by accepting its Class 1-AV-1 Certificates, appoints the Trustee
as attorney-in-fact for the purpose of making claims on the Class 1-AV-1
Policy.
(i) Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Class 1-AV-1 Certificates
which is made with moneys received pursuant to the terms of the Class 1-AV-1
Policy shall not be considered payment of the Class 1-AV-1 Certificates from
the Trust Fund. The Depositor, the Master Servicer, the Trustee and the
Co-Trustee acknowledge, and each Holder by its acceptance of a Class 1-AV-1
Certificate agrees, that without the need for any further action on the part
of the Class 1-AV-1 Insurer, the Depositor, the Master Servicer, the Trustee,
the Co-Trustee or the Certificate Registrar (a) to the extent the Class 1-AV-1
Insurer makes payments, directly or indirectly, on account of principal of or
interest on the Class 1-AV-1 Certificates to the Holders of such Class of
Certificates, the Class 1-AV-1 Insurer shall be fully subrogated to, and each
such Certificateholder, the Master Servicer, the Co-Trustee and the Trustee
hereby delegate and assign to the Class 1-AV-1 Insurer, to the fullest extent
permitted by law, the rights of such Holders to receive such principal and
interest from the Trust Fund, and (b) the Class 1-AV-1 Insurer shall be paid
such amounts from the sources and in the manner provided herein for the
payment of such amounts and as provided in this Agreement until full
reimbursement of all Class 1-AV-1 Insured Payments (together with interest
thereon at the Class 1-AV-1 Late Payment Rate from the date paid by the Class
1-AV-1 Insurer until the date of reimbursement thereof).
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $10,000 therein. The Carryover
Reserve Fund shall be an Eligible Account, and funds on deposit therein shall
be held separate and apart from, and shall not be commingled with, any other
moneys, including without limitation, other moneys held by the Trustee
pursuant to this Agreement.
(b) On each Distribution Date, the Trustee shall deposit all amounts
received pursuant to the Corridor 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.
157
(c) Any amounts received on the Class AF-1 Corridor Contract, the
Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor Contract and the
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-1 Corridor Contract,
the Class 2-AV Corridor Contract and the Adjustable Rate Subordinate Corridor
Contract, to the CV Certificates; provided, however, that if the Class AF-1
Corridor Contract, the Class 1-AV-1 Corridor Contract, the Class 2-AV Corridor
Contract and the Adjustable Rate Subordinate Corridor Contract is subject to
early termination, early termination payments received on 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 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 of 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 of 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 of under the Class 1-AV-1 Corridor Contract, the Class 2-AV
Corridor Contract and the 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 of under the Class 1-AV-1 Corridor Contract,
the Class 2-AV Corridor Contract and the Adjustable Rate Subordinate
Corridor Contract shall be invested by the Trustee in The Bank of New
158
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
4.08. The Carryover Reserve Fund shall not constitute an asset of any
REMIC created hereunder. The Class C Certificates shall evidence
ownership of the Carryover Reserve Fund for federal tax purposes.
Section 4.09 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
4.09. 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.
159
ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through ▇-▇▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇ 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:
Minimum Integral Multiples in Original Certificate
Class Denomination Excess of Minimum Principal Balance
--------------- ----------------- --------------------- -----------------
AF-1 $20,000 $1,000 $124,635,000
AF-2 $20,000 $1,000 $23,718,000
AF-3 $20,000 $1,000 $82,221,000
AF-4 $20,000 $1,000 $29,882,000
AF-5 $20,000 $1,000 $45,144,000
AF-6 $20,000 $1,000 $40,000,000
MF-1 $20,000 $1,000 $11,400,000
MF-2 $20,000 $1,000 $9,600,000
MF-3 $20,000 $1,000 $5,800,000
MF-4 $20,000 $1,000 $6,400,000
MF-5 $20,000 $1,000 $5,200,000
MF-6 $20,000 $1,000 $4,000,000
MF-7 $20,000 $1,000 $4,000,000
MF-8 $20,000 $1,000 $4,000,000
BF $20,000 $1,000 $4,000,000
1-AV-1 $20,000 $1,000 $569,880,000
2-AV-1 $20,000 $1,000 $160,065,000
2-AV-2 $20,000 $1,000 $215,572,000
2-AV-3 $20,000 $1,000 $28,028,000
MV-1 $20,000 $1,000 $63,345,000
MV-2 $20,000 $1,000 $46,125,000
MV-3 $20,000 $1,000 $25,830,000
MV-4 $20,000 $1,000 $22,755,000
MV-5 $20,000 $1,000 $22,140,000
MV-6 $20,000 $1,000 $19,680,000
MV-7 $20,000 $1,000 $19,680,000
MV-8 $20,000 $1,000 $15,375,000
BV $20,000 $1,000 $14,760,000
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.
160
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication
and delivery. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their 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.
161
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such
Certificateholder's prospective transferee shall (except in connection with
any transfer of a Private Certificate to an affiliate of the Depositor (either
directly or through a nominee) on or about the Closing Date) each certify to
the Trustee in writing the facts surrounding the Transfer in substantially the
forms set forth in Exhibit J (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 purchaser is an
insurance company which is purchasing such Certificate with funds contained in
an "insurance company general account" (as such term is defined in
162
section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and that the purchase and holding of such Certificate satisfy the requirements
for exemptive relief under Sections I and III of PTCE 95-60 or (ii) in the
case of any ERISA-Restricted Certificate presented for registration in the
name of an employee benefit plan or arrangement subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments), or a trustee of any such plan or arrangement or
any other person acting on behalf of any such plan or arrangement, an Opinion
of Counsel satisfactory to the Trustee to the effect that the purchase or
holding of such ERISA-Restricted Certificate will not result in a non-exempt
prohibited transaction under ERISA or the Code and will not subject the
Trustee to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Trustee.
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 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.
163
(2) Except in connection with any registration in the name of,
or transfer of a Class A-R Certificate to, an affiliate of the Depositor
(either directly or through a nominee) on or about the Closing Date, no
Ownership Interest in a Class A-R Certificate may be registered or
transferred, and the Trustee shall not register the Transfer of any Class
A-R Certificate unless, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class A-R
Certificate, or to cause the Transfer of an Ownership Interest in a Class
A-R Certificate to any other Person, if it has actual knowledge that such
Person is not a Permitted Transferee or that such Transfer Affidavit is
false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Class A-R Certificate in violation of the provisions
of this Section 5.02(c), then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the date
of registration of Transfer of such Class A-R Certificate. The Trustee
shall be under no liability to any Person for any registration of
Transfer of a Class A-R Certificate that is in fact not permitted by
Section 5.02(b) and this Section 5.02(c) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Transfer was registered after receipt of the related Transfer
Affidavit and Transferor Certificate. The Trustee shall be entitled but
not obligated to recover from any Holder of a Class A-R Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Class
A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth
in this section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, either Seller
or the
164
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, either Seller or the Master
Servicer.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Master Servicer and the Trustee (and with respect to the
Class 1-AV-1 Certificates, the Guarantor and the Class 1-AV-1 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 1-AV-1
Insurer, the Guarantor and any agent of the Master Servicer, the Trustee, the
NIM Insurer or the Class 1-AV-1 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 1-AV-1 Insurer or any agent of the Master Servicer, the
Trustee, the NIM Insurer or the Class 1-AV-1 Insurer shall be affected by any
notice to the contrary.
165
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;
166
(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.
167
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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the
Certificateholders and the Class 1-AV-1 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 either
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or either Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or either Seller, shall be the successor of the Depositor,
the Master Servicer or such Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified to
service mortgage loans on behalf of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
168
Section 6.03 Limitation on Liability of the Depositor, the Sellers,
the Master Servicer, the NIM Insurer, the Guarantor and
Others.
None of the Depositor, the Sellers, the NIM Insurer, the Guarantor
or the Master Servicer or any of the directors, officers, employees or agents
of the Depositor, the Sellers, the NIM Insurer, the Guarantor 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, the Guarantor or any
such Person against any breach of representations or warranties made by it
herein or protect the Depositor, the Sellers, the Master Servicer, the
Guarantor 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, the Guarantor and any director, officer, employee or agent of the
Depositor, the Sellers, the NIM Insurer, the Guarantor 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, the
Guarantor (only to the extent of amounts received in respect of the Group 2
Mortgage Loans and the Group 3 Mortgage Loans) and any director, officer,
employee or agent of the Depositor, the Sellers, the NIM Insurer, the
Guarantor (only to the extent of amounts received in respect of the Group 2
Mortgage Loans and the Group 3 Mortgage Loans) 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, the Guarantor
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, the
Guarantor 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, the Guarantor (only to the extent of amounts received in respect
of the Group 2 Mortgage Loans and the Group 3 Mortgage Loans) and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.
The Master Servicer (except the Trustee to the extent it has
succeeded the Master Servicer as required hereunder) indemnifies and holds the
Guarantor harmless against any and all claims, losses, penalties, fines,
forfeitures, reasonable legal fees and related costs, judgments, and any other
costs, fees and expenses that the Guarantor may sustain in any way related to
the
169
failure of the Master Servicer to perform its duties and service the Mortgage
Loans in compliance with the terms of this Agreement. The Master Servicer
shall immediately notify the Guarantor if a claim is made that may result in
such claims, losses, penalties, fines, forfeitures, legal fees or related
costs, judgments, or any other costs, fees and expenses, and the Master
Servicer shall assume (with the consent of the Guarantor) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against the Master Servicer and/or the Guarantor in
respect of such claim. The provisions of this paragraph shall survive the
termination of this Agreement and the payment of the outstanding Certificates.
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, the NIM
Insurer and the Guarantor and the written confirmation from each Rating Agency
(which confirmation shall be furnished to the Depositor, the Trustee, the
Guarantor 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 1-AV-1 Policy or the
▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class 1-AV-1 Certificates). Any such
determination pursuant to clause (i) of the preceding sentence permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No resignation of the Master Servicer
shall become effective until the Trustee or a successor servicer designated by
the Guarantor (subject to Section 2.08) 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. If the Guarantor shall not have designated a successor servicer
within 15 days after the receipt by it of a request so to do, the Trustee
shall have the power to make such appointment.
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 ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac
for persons performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae
and ▇▇▇▇▇▇▇ 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 Guarantor, the
Class 1-AV-1 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.
170
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 Guarantor or 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 Guarantor or the Holders of Certificates evidencing not
less than 25% of the Voting Rights; provided that the sixty-day cure
period shall not apply to the initial delivery of the Mortgage File for
Delay Delivery Mortgage Loans nor the failure to repurchase or substitute
in lieu thereof; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(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
171
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 (i) at the direction of either the NIM Insurer or the Holders of
Certificates evidencing not less than 25% of the Voting Rights (in each case
subject to the consent of the Guarantor and the Class 1-AV-1 Insurer (in each
case which consent shall not be unreasonably withheld)), by notice in writing
to the Master Servicer and the Guarantor (with a copy to each Rating Agency),
or (ii) at the direction of the Guarantor (with the prior consent of the Class
1-AV-1 Insurer (which consent shall not be unreasonably withheld), unless a
Class 1-AV-1 Insurer Default has occurred and is continuing), by notice in
writing to the Master Servicer, terminate all of the rights and obligations of
the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof, other than its rights as a Certificateholder hereunder.
On or after the receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer hereunder, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee.
The Trustee shall thereupon make any Advance described in Section 4.01 hereof
subject to Section 3.04 hereof. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such
termination shall affect any obligation of the Master Servicer to pay amounts
owed pursuant to Article VIII. The Master Servicer agrees to cooperate with
the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Certificate Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of
the occurrence of an Event of Default.
Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating such Master Servicer's rights and obligations
as Master Servicer hereunder and received after such notice, that portion
thereof to which such Master Servicer would have been entitled pursuant to
Sections 3.08(a)(i) through (viii), and any other amounts payable to such
Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
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
172
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
Guarantor and the NIM Insurer (as evidenced by the prior written consent of
each such party), or (ii) if it is unable for 60 days to appoint a successor
servicer reasonably acceptable to the Guarantor and 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 1-AV-1
Policy or the ▇▇▇▇▇▇ Mae Guaranty, in the case of the Class 1-AV-1
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
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ 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 1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class
1-AV-1 Certificates). No appointment of a successor to the Master Servicer
hereunder shall be effective until the Trustee shall have consented thereto,
and written notice of such proposed appointment shall have been provided by
the Trustee to each Certificateholder and the Class 1-AV-1 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, the Guarantor and the Mortgagors of such change of
servicer and shall, during the term
173
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 Guarantor, to the Class 1-AV-1 Insurer and to each
Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the Guarantor
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
174
instrument is found not to conform to the requirements of this Agreement in a
material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure
to perform its obligations in compliance with this Agreement, or any liability
that would be imposed by reason of its willful misfeasance or bad faith;
provided that:
(1) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(2) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
grossly negligent or acted in bad faith or with willful misfeasance;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the
Guarantor or 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.
175
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, the Guarantor 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, the Guarantor or
such Certificateholders, the Trustee may require reasonable indemnity
against such expense, or liability from the NIM Insurer, the Guarantor 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);
176
(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 or
the Guarantor, pursuant to the provisions of this Agreement, unless the
NIM Insurer, the Guarantor or such Certificateholders, as applicable,
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein
or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in the ordinary
course of the duties of a trustee, paying agent or certificate registrar, in
the absence of a breach or default by any party hereto, the reasonable
compensation, expenses and disbursements of such persons, except any such
expense, disbursement or advance as may arise
177
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
1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class 1-AV-1
Certificates) below the ratings issued on the Closing Date (or having provided
such security from time to time as is sufficient to avoid such reduction). If
such corporation or association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 8.06 the
combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified
in Section 8.07 hereof. The corporation or national banking association
serving as Trustee may have normal banking and trust relationships with the
Depositor, the Sellers and the Master Servicer and their respective
affiliates; provided that such corporation cannot be an affiliate of the
Master Servicer other than the Trustee in its role as successor to the Master
Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice of resignation to the Guarantor, the
Depositor, the Master Servicer, Certificateholders, the Class 1-AV-1 Insurer
and each Rating Agency. Upon receiving such notice of resignation, the
Guarantor shall promptly appoint a successor trustee (reasonably acceptable to
the Depositor and the Master Servicer) by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor Trustee and to the Holders of Certificates entitled to at least 51%
of the Voting Rights. A copy of such instrument shall be delivered to the
Depositor, the Certificateholders, the Trustee and the Master Servicer by the
Guarantor. 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.
178
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, the Guarantor 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 Guarantor, the Master Servicer or,
subject to the consent of the Guarantor (which consent may not be unreasonably
withheld), the NIM Insurer, 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, with the consent of the Guarantor, may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered by
the successor Trustee to the Master Servicer one complete set to the Trustee
so removed and one complete set to the successor so appointed. Notice of any
removal of the Trustee shall be given to each Rating Agency by the successor
Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then-current ratings of the
Certificates (without regard to the Class 1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇
Guaranty, in the case of the Class 1-AV-1 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, the Guarantor and all Holders of
Certificates. If the Depositor fails to mail such notice
179
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 both the NIM
Insurer and the Guarantor 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 Guarantor and
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 or the Guarantor shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee
under Section 8.06 and no notice to Certificateholders of the appointment of
any co-trustee or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(1) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Fund or
any
180
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 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 and the Guarantor 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
181
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, after consultation with the Guarantor
and upon recommendation of the Guarantor's reasonable requests, the Trust Fund
in any administrative or judicial proceedings relating to an examination or
audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any REMIC created hereunder, enter into
settlement agreements with any governmental taxing agency, extend any statute
of limitations relating to any tax item of the Trust Fund, and otherwise act
on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC. Additionally, on or before April 15 of each year,
the Trustee will deliver to the Guarantor, upon request, a certificate of
compliance with the REMIC Provisions for the preceding calendar year,
substantially in the form of Exhibit V.
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
182
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 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)(18) and 4.04(f)(20)
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-1 Corridor Contract, the Class 2-AV Corridor Contract
and the Adjustable Rate Subordinate Corridor Contract have values of $6,000,
$563,000, $240,000 and $441,000, respectively. The Trustee shall treat the
entitlement to Credit Comeback Excess Amounts as owned by the Holders of the
Class C
183
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 C Certificates
as payments made by the Holders of the Class C Certificates pursuant to a
credit enhancement contract under Treasury Regulation 1.860G-2(c).
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
(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
184
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.
(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
185
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
1-AV-1 Policy or the ▇▇▇▇▇▇ ▇▇▇ Guaranty, in the case of the Class 1-AV-1
Certificates) below the ratings issued on the Closing Date (or having provided
such security from time to time as is sufficient to avoid such reduction). If
such corporation or association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section 8.12 the
combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Co-Trustee shall
cease to be eligible in accordance with the provisions of this Section 8.12,
the Co-Trustee shall resign immediately in the manner and with the effect
specified in paragraph (h) below. The corporation or national banking
association serving as Co-Trustee may have normal banking and trust
relationships with the Depositor, the Sellers and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
(h) The Co-Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days prior written notice of resignation to
the Trustee, the Depositor and the Master Servicer. Upon such resignation the
Trustee (x) may appoint a successor Co-Trustee meeting the requirements in
paragraph (g) above and acceptable to the Master Servicer, the Guarantor 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 Guarantor, the Class
1-AV-1 Insurer and each Certificate Owner
186
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 Guarantor, the Class 1-AV-1 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 Guarantor, the Class 1-AV-1
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 Guarantor, the Class 1-AV-1 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, the Guarantor or the NIM Insurer, the Trustee shall proceed to
protect and enforce its rights and the rights of the Certificateholders, the
Guarantor 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, the Guarantor
and the Certificateholders.
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Sellers, the Guarantor, 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
187
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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of
St. James's, living on the date hereof and (ii) the Latest Possible Maturity
Date.
The right to purchase all Mortgage Loans and REO Properties by the
Terminator pursuant to clause (a) of the immediately preceding paragraph shall
be conditioned upon (1) the Stated Principal Balance of the Mortgage Loans, at
the time of any such repurchase, aggregating ten percent (10%) or less of the
sum of 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, (3) unless the
Guarantor otherwise consents, the purchase price for such Mortgage Loans and
REO Properties shall result in a final distribution on the Guaranteed
Certificates that is sufficient (x) to pay such Guaranteed Certificates in
full (without the need for any Guarantor Payment) and (y) to pay any amounts
due and payable to the Guarantor pursuant to the terms hereof, and (4) unless
the Class 1-AV-1 Insurer otherwise consents, the purchase price for such
Mortgage Loans and REO Properties shall result in a final distribution on the
Class 1-AV-1 Certificates that is sufficient (x) to pay such Class 1-AV-1
Certificates in full and (y) to pay any amounts due and payable to the Class
1-AV-1 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.
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, the Guarantor
and the Class 1-AV-1 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, the Guarantor and the
Class 1-AV-1 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 Guarantor, the Class 1-AV-1 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.
188
Notice of any termination, specifying the Distribution Date on which
related Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to related Certificateholders mailed not earlier than the 10th day and
no later than the 15th day of the month immediately preceding the month of
such final distribution. Any such notice shall specify (a) the Distribution
Date upon which final distribution on related Certificates will be made upon
presentation and surrender of such Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and
(d) that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
such Certificates at the office therein specified. The Terminator will give
such notice to each Rating Agency at the time such notice is given to the
affected Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of
the Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for File Release therefor, the Co-Trustee shall promptly release to
the Master Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class,
the Guarantor and the Class 1-AV-1 Insurer the amounts allocable to such
Certificates, the Guarantor and the Class 1-AV-1 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
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 1-AV-1 Insurer, with respect any
unpaid Class ▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Amounts (only to the extent of amounts
received in respect of the Group 2 Mortgage Loans and the Group 3 Mortgage
Loans), the Guarantor, with respect to any unpaid Class 1-AV-1 Guarantor
Reimbursement Amounts (only to the extent of amounts received in respect of
the Group 2 Mortgage Loans and the Group 3
189
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 and the Guarantor have 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, the Guarantor and the
Depositor obtained at the expense of the Terminator;
(2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the
Trust Fund to the Terminator for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on
hand (other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders. The Trustee shall attach a statement to the final federal
income tax return for each of any REMIC created hereunder stating that
pursuant to Treasury Regulation Section 1.860F-1, the first day of the 90-day
liquidation period for each the REMIC was the date on which the Trustee sold
the assets of the Trust Fund to the Terminator.
(c) The Trustee as agent for each REMIC created hereunder hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1), and together 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.
190
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 Guarantor, 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, the Prospectus or the Information Circular, (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 1-AV-1 Policy or the ▇▇▇▇▇▇ Mae
Guaranty, in the case of the Class 1-AV-1 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, the Prospectus Supplement or the Information Circular 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 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, the
Guarantor and the Sellers with the consent of the NIM Insurer may also at any
time and from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the Trust Fund as a REMIC under the Code or to avoid or minimize the risk
of the imposition of any tax on the Trust Fund pursuant to the Code that would
be a claim against the Trust Fund at any time prior to the final redemption of
the Certificates, provided that the Trustee have been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Sellers, the Co-Trustee, the Guarantor and
the Trustee with the consent of
191
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 1-AV-1 Insurer in any
of the provisions of this Agreement without its consent, which consent shall
not be unreasonably withheld.
Notwithstanding any contrary provision of this Agreement, the
Guarantor, 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, the Guarantor 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, the Guarantor 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 Guarantor, the Class 1-AV-1 Insurer and, if the amendment required the
consent of Certificateholders, to each Certificateholder, the Class 1-AV-1
Insurer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee, the Guarantor 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
192
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.
The Depositor for the benefit of the Certificateholders, the
Guarantor 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.
193
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency, to the Guarantor and the Class 1-AV-1 Insurer,
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, and upon request, to the Guarantor and the Class 1-AV-1 Insurer,
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., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or such other
address as may be hereafter furnished to the Sellers, the Master Servicer, the
Guarantor and the Trustee by the Depositor in writing; (ii) in the case of
CHL, Countrywide Home Loans, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or such
other address as may be hereafter furnished to the Depositor, the Master
Servicer, the Guarantor and the Trustee by the Sellers in writing; (iii) in
the case of Park Monaco, Park Monaco Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇, or
such other address as may be hereafter furnished to the Depositor, the Master
Servicer and the Trustee by the Sellers in writing; (iv) in the case of the
Master Servicer, Countrywide Home Loans Servicing LP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇ or
such other address as may be hereafter furnished to the Depositor, the
Sellers, the Guarantor and the Trustee by the Master Servicer in writing; (v)
in the case of the Trustee, The Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust MBS Administration, CWABS,
Series 2004-15, or such other address as the Trustee may hereafter furnish to
the Depositor or the Master Servicer; (vi) in the case of the Co-Trustee, The
Bank of New York Trust Company,
194
N.A., ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
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;
(vii) in the case of the Guarantor, ▇▇▇▇▇▇ Mae, Special Products Group, Mail
Stop 5H-5W-03, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Director
(facsimile number (▇▇▇) ▇▇▇-▇▇▇▇); (viii) in the case of the Rating Agencies,
(x) ▇▇▇▇▇'▇ Investors Service, Inc., Attention: ABS Monitoring Department, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and (y) Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Attention: Mortgage
Surveillance Group, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; and
(ix) in the case of the Class 1-AV-1 Insurer, XL Capital Assurance Inc., ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Surveillance, Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇ or such
other address as may be hereafter furnished by the Class 1-AV-1 Insurer.
Notices to Certificateholders shall be deemed given when mailed, first postage
prepaid, to their respective addresses appearing in the Certificate Register.
A copy of any notice required to be given hereunder shall also be mailed, upon
request, to the Guarantor.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon
195
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, either Seller, the NIM Insurer,
the Guarantor 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, the
Guarantor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by
the Depositor, either Seller, the NIM Insurer, the Guarantor or the Trustee of
any right under this Section 10.09 shall be borne by the party requesting such
inspection; all other such expenses shall be borne by the Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Trustee pursuant to this Agreement, are and shall be deemed
fully paid.
Section 10.11 Rights of NIM Insurer.
(a) The rights of the NIM Insurer under this Agreement shall exist
only so long as either:
196
(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).
Section 10.12 The Class 1-AV-1 Insurer Rights.
(a) All notices, statements reports, certificates or opinions
required by this Agreement to be sent to the Rating Agencies or the Class
1-AV-1 Certificateholders shall also be sent at such time to the Class 1-AV-1
Insurer at the notice address set forth in Section 10.05.
197
(b) The Class 1-AV-1 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 1-AV-1 Insurer's rights explicitly specified
herein as if a party hereto.
(c) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Class 1-AV-1 Policy, in the case of the Class 1-AV-1
Certificates.
198
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWABS, INC.,
as Depositor
By:________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By:________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
PARK MONACO INC.,
as a Seller
By:________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
COUNTRYWIDE HOME LOANS SERVICING
LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By:________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By:________________________
Name:
Title:
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
as Co-Trustee
By:________________________
Name:
Title:
THE BANK OF NEW YORK
(solely with respect to its obligations
under Section 4.01(d))
By:________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇,
as Guarantor (with respect to the Class
1-AV-1 Certificates)
By:________________________
Name:
Title:
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ___ day of December, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., personally known to me on the
basis of satisfactory evidence to be a Senior Vice President of Countrywide
Home Loans, Inc., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ___ day of December, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., personally known to me on the
basis of satisfactory evidence to be a Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ___ day of December, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., personally known to me on the
basis of satisfactory evidence to be a Vice President of CWABS, Inc., one of
the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this ___ day of December, 2004, before me, a notary public in and
for said State, appeared ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., 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.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of December, 2004 before me, a notary public in and
for said State, appeared ________________, personally known to me on the basis
of satisfactory evidence to be a ________________ 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]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELE )
On this ___ day of December, 2004 before me, a notary public in and
for said State, appeared ________________, personally known to me on the basis
of satisfactory evidence to be a ________________ 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.
----------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of December, 2004 before me, a notary public in and
for said State, appeared ___________, personally known to me on the basis of
satisfactory evidence to be a ______________ 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]
STATE OF __________ )
) ss.:
COUNTY OF ___________ )
On this ____ day of December, 2004 before me, a notary public in and
for said State, appeared ___________, personally known to me on the basis of
satisfactory evidence to be a ______________ of Federal National Mortgage
Association, the entity 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-28
[Exhibits A-1 through A-28 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
(INITIAL MORTGAGE LOANS)
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Guarantor]
Re: CWABS Asset-Backed Certificates, Series 2004-15
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, the undersigned, as Trustee, The Bank of New York Trust Company,
N.A., as Co-Trustee, Federal National Mortgage Association, as Guarantor, the
undersigned, as Trustee, hereby certifies that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed in the attached list of exceptions) the Co-Trustee has
received:
(i) the original Mortgage Note, endorsed by the applicable Seller or
the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of ______________, without recourse", or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original lost
note affidavit from the applicable Seller, stating that the original Mortgage
Note was lost or destroyed, together with a copy of the related Mortgage Note;
and
(ii) a duly executed assignment of the Mortgage in the form
permitted by Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of
G-1-1
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-1-2
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:
G-1-3
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Guarantor]
Re: CWABS Asset-Backed Certificates, Series 2004-15
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, Federal National Mortgage Association, as Guarantor, 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 __________, 2004 (the "Subsequent Transfer
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller,] and The Bank of New York, as
Trustee], except as listed in the following paragraph, as to each [Initial
Mortgage Loan][Subsequent Mortgage Loan] listed in the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule]
(other than any [Mortgage Loan][Loan Number and Borrower Identification
Mortgage Loan Schedule] paid in full or listed on the attached list of
exceptions) the Co-Trustee has received:
(i) original Mortgage Note, endorsed by the applicable Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(ii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage, and in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that is a
MERS Mortgage Loan, the original Mortgage, noting thereon the presence of the
MIN of the [Initial Mortgage Loan][Subsequent Mortgage Loan] and language
indicating that the [Initial Mortgage Loan][Subsequent Mortgage
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 2004-15, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of December 1, 2004, without recourse", or,
in the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with
respect to property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);
(iv) 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]
[Guarantor]
Re: CWABS Asset-Backed Certificates, Series 2004-15
Gentlemen:
[Reference is made to the Initial Certification of Trustee relating
to the above-referenced series, with the schedule of exceptions attached
thereto, delivered by the undersigned, as Trustee, on the Closing Date in
accordance with Section 2.02 of the Pooling and Servicing Agreement dated as
of December 1, 2004 (the "Pooling and Servicing Agreement") among CWABS, Inc.,
as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as
a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the
undersigned, as Trustee, The Bank of New York Trust Company, N.A., as
Co-Trustee.] The undersigned hereby certifies that [, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement, dated as of __________, 2004 (the "Subsequent Transfer Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, and The Bank of New York, as Trustee,] as to
each Delay Delivery Mortgage Loan listed on the Schedule A attached hereto
(other than any [Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full
or listed on Schedule B attached hereto) it has received:
(1) the original Mortgage Note, endorsed by the applicable Seller or
the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _______________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(2) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Asset-Backed Certificates, Series 2004-15, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of December 1, 2004, without recourse", or,
in the case of each [Initial Mortgage Loan][Subsequent
G-3-1
Mortgage Loan] with respect to property located in the State of California
that is not a MERS Mortgage Loan, a duly executed assignment of the Mortgage
in blank (each such assignment, when duly and validly completed, to be in
recordable form and sufficient to effect the assignment of and transfer to the
assignee thereof, under the Mortgage to which such assignment relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the [Initial
Mortgage Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any
such [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:______________________________
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Guarantor]
Re: CWABS Asset-Backed Certificates, Series 2004-15
-----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, Federal National Mortgage Association, as Guarantor, the
undersigned, as Trustee, The Bank of New York Trust Company, N.A., as
Co-Trustee, the undersigned hereby certifies that, as to each Subsequent
Mortgage Loan listed in the Loan Number and Borrower Identification Mortgage
Loan Schedule (other than any Subsequent Mortgage Loan paid in full or listed
in the attached list of exceptions) the Co-Trustee has received:
(1) the original Mortgage Note, endorsed by the applicable Seller or
the originator of such Subsequent Mortgage Loan, without recourse in the
following form: "Pay to the order of _______________ without recourse", with
all intervening endorsements that show a complete chain of endorsement from
the originator to the applicable Seller, or, if the original Mortgage Note has
been lost or destroyed and not replaced, an original lost note affidavit from
the applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(2) a duly executed assignment of the Mortgage in the form permitted
by Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency,
G-3-1
enforceability or genuineness of any of the documents contained in each
Mortgage File of any of the Subsequent Mortgage Loans identified on the Loan
Number and Borrower Identification Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Subsequent Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By: ____________________________________
Name:
Title:
G-3-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Sellers]
[Guarantor]
[Class 1-AV-1 Insurer]
Re: CWABS Asset-Backed Certificates, Series 2004-15
-----------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of December 1, 2004 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Countrywide Home Loans Servicing LP, Park Monaco Inc., as a Seller, as Master
Servicer, Federal National Mortgage Association, as Guarantor, the
undersigned, as Trustee, The Bank of New York Trust Company, N.A., as
Co-Trustee, the undersigned, as Trustee, hereby certifies that that[, with
respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________, 2004 (the "Subsequent
Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, and The Bank of New York, as
Trustee,] as to each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed
in the [Mortgage Loan Schedule][Loan Number and Borrower Identification
Mortgage Loan Schedule] (other than any [Initial Mortgage Loan][Subsequent
Mortgage Loan] paid in full or listed on the attached Document Exception
Report) it has received:
(i) the original Mortgage Note, endorsed by the applicable Seller or
the originator of such Mortgage Loan, without recourse in the following form:
"Pay to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the applicable Seller, or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit from the
applicable Seller, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage, and in
the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] that is a
MERS Mortgage Loan, the original Mortgage, noting thereon the presence of the
MIN of the [Initial Mortgage
H-1
Loan][Subsequent Mortgage Loan] and language indicating that the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage to "Asset-Backed Certificates, Series 2004-15, CWABS, Inc., by
The Bank of New York, a New York banking corporation, as trustee under the
Pooling and Servicing Agreement dated as of December 1, 2004, without
recourse", or, in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] with respect to property located in the State of California that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage in blank
(each such assignment, when duly and validly completed, to be in recordable
form and sufficient to effect the assignment of and transfer to the assignee
thereof, under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage (noting the
presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording
thereon if recordation thereof is permissible under applicable law; and
(vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii), (ix) and (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 December 1, 2004 (the "Agreement"), by and among CWABS, Inc., as
depositor (the "Depositor"), Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, The Bank of New York Trust Company, N.A., as Co-Trustee, Federal
National Mortgage Association, as Guarantor, 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) 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 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
I-1-5
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
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset Backed
Certificates, Series 2004-15
----------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that the Transferee is not a Permitted
Transferee. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of December 1, 2004, among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home
Loans Servicing LP, as Master Servicer, The Bank of New York Trust Company,
N.A., as Co-Trustee, Federal National Mortgage Association, as Guarantor, and
The Bank of New York, as Trustee.
Very truly yours,
-------------------------------------
Name of Transferor
By: _________________________________
Name:
Title:
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-15, Class [ ]
Ladies and Gentlemen:
In connection with our disposition of the above-captioned
Certificates we certify that (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act. All capitalized terms used herein but not
defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of December 1, 2004, among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of
New York Trust Company, N.A., as Co-Trustee, Federal National Mortgage
Association, as Guarantor, and The Bank of New York, as Trustee.
Very truly yours,
----------------------------------
Name of Transferor
J-2-1
By: _______________________________
Name:
Title:
J-2-2
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, Inc.,
as Depositor
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-15, 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 December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, Federal National Mortgage Association, as Guarantor, 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
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: CWABS, Inc. Asset-Backed Certificates,
Series 2004-15, 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 December 1, 2004, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, The Bank of New York Trust Company, N.A., as
Co-Trustee, Federal National Mortgage Association, as Guarantor, 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
agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
L-6
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 2004-15, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in
this Request for Document Release shall have the meanings given them in the
Pooling and Servicing Agreement dated as of December 1, 2004 (the "Pooling and
Servicing Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Monaco Inc., as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, Federal National Mortgage Association, as
Guarantor, 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 2004-15
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
____________ _____________________
DATED:____________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[See appropriate documents delivered at closing.]
O-1
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_]
(this "Subsequent Transfer Agreement"), among CWABS, INC., a Delaware
corporation, as depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a
New York corporation, in its capacity as a seller under the Pooling and
Servicing Agreement referred to below ("CHL"), PARK MONACO INC., a Delaware
corporation, in its capacity as a seller under the Pooling and Servicing
Agreement ("Park Monaco" and, together with CHL, the "Sellers"), and The Bank
of New York, a New York banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Monaco, the Trustee and
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York Trust Company, N.A., as Co-Trustee, have entered in the Pooling and
Servicing Agreement, dated as of December 1, 2004 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2004-15 (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. by the Sellers as follows.
(d) Annex A hereto set forth a list of the Mortgage Loans which are
Delay Delivery Mortgage Loans.
(e) In case any provision of this Subsequent Transfer Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
(f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
P-1
(g) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of
New York.
(h) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer Agreement have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
CWABS, INC.,
as Depositor
By:__________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By:__________________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By:__________________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee
By:___________________________________
Name:
Title:
P-3
Annex I
Mortgage Loans for which All or a Portion of a Related Mortgage File is not
Delivered to the Trustee on or prior to the Subsequent Transfer Date
P-4
EXHIBIT Q-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-1
CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-2-1
EXHIBIT Q-3
FORM OF CLASS 2-AV CORRIDOR CONTRACT
Q-3-1
EXHIBIT Q-4
FORM OF ADJUSTABLE RATE SUBORDINATE CORRIDOR CONTRACT
S-1
EXHIBIT R
[RESERVED]
S-1
EXHIBIT S
FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT
[see document delivered at closing]
S-1
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2004-15
[Date]
Via Facsimile
The Bank of New York,
as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as
of December 1, 2004, (the "Pooling and Servicing Agreement") among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
The Bank of New York Trust Company, N.A., as Co-Trustee, Federal National
Mortgage Association, as Guarantor, and The Bank of New York, as Trustee.
Capitalized terms used herein shall have the meanings ascribed to such terms
in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note
with respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with
a foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law; and
4. We certify that all amounts due in connection with the waiver of
a Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
--------------------------------- ------------------------------- -------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
--------------------------------- ------------------------------- -------------------------------
T-3
EXHIBIT U
FORM OF CLASS 1-AV-1 POLICY
[GRAPHIC OMITTED] CAPITAL ASSURANCE
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FINANCIAL GUARANTY
INSURANCE POLICY
Insured Policy No: CA01538A
Obligations: CWABS, Inc. Asset-Backed Certificates,
Series 2004-15
U.S. $569,880,000 Class 1-AV-1 Effective Date: December 30, 2004
XL Capital Assurance Inc. (XLCA), a New York stock insurance company, in
consideration of the payment of the premium, hereby unconditionally and
irrevocably guarantees to the Trustee for the benefit of the Owners of the
Insured Obligations, the full and complete payment of the Scheduled Payments
in respect of the Insured Obligations, subject only to the terms of this
Policy (which includes the Endorsement attached hereto).
XLCA will pay the Insured Amount to the Trustee upon the presentation of
a Payment Notice to XLCA (which Payment Notice shall include an irrevocable
assignment to XLCA of all rights and claims in respect of the relevant Insured
Obligation, as specified in the Payment Notice, free of any adverse claim), on
the later of (a) one (1) Business Day following receipt by XLCA of a Payment
Notice or (b) the Business Day on which Scheduled Payments are due for
payment. XLCA shall be subrogated to the Owners' rights to payment on the
Insured Obligations to the extent of any payment by XLCA hereunder. The
obligations of XLCA with respect to a Scheduled Payment will be discharged to
the extent funds to pay such Scheduled Payment are deposited in the account
specified in the Payment Notice, whether such funds are properly applied by
the Trustee or claimed by an Owner.
In addition, in the event that any Scheduled Payment which has become due
for payment and which is made to an Owner by or on behalf of the Trustee is
recovered or is recoverable from the Owner pursuant to a final order of a
court of competent jurisdiction in an Insolvency Proceeding that such payment
constitutes an Avoided Payment to such Owner within the meaning of any
applicable bankruptcy law, XLCA unconditionally and irrevocably guarantees
payment of the amount of such recovery if sufficient funds are not otherwise
available (in accordance with Endorsement No. 1 hereto).
This Policy sets forth in full the undertaking of XLCA and shall not be
cancelled or revoked by XLCA for any reason, including failure to receive
payment of any premium due hereunder, and may not be further endorsed or
modified without the written consent of XLCA. 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 XLCA, nor
against any risk other than Nonpayment and Avoided Payment, including any
shortfalls, if any, attributable to the liability of the Obligor for taxes or
withholding taxes if any, including interest and penalties in respect of such
liability.
THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY
FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
Any capitalized terms not defined herein shall have the meaning given
such terms in the Endorsement attached hereto and forming a part hereof. In
witness whereof, XLCA has caused this Policy to be executed as of the
Effective Date.
---------------------------- ---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Managing Director Title: General Counsel
U-1
Financial Guaranty Insurance Policy Endorsement
Effective Date December 30, 2004
Attached to and forming part of
Financial Guaranty Insurance Policy No. CA01538A
Obligor: The trust formed pursuant to the Pooling and
Servicing Agreement referred to herein (the
"Trust")
Insured Obligations: CWABS, Inc. Asset-Backed Certificates, Series
2004-15
U.S. $569,880,000 Class 1-AV-1
Beneficiary: The Bank of New York, not in its individual
capacity, but solely as Trustee of the Trust, for
the benefit of the Owners of the Insured
Obligations
Capitalized terms used herein and not otherwise defined herein or in the
Policy shall have the meanings assigned to them in the Pooling and Servicing
Agreement.
As used herein the term "Business Day" means any day other than a
Saturday, a Sunday or a day on which either XLCA or banking or savings and
loan institutions in the State of New York, or in the city in which the
Corporate Trust Office of the Trustee is located, are authorized or obligated
by law or executive order to be closed.
As used herein the term "Class 1-AV-1 Certificate Deficiency Amount"
means, with respect to Scheduled Payments on the Insured Obligations and any
Distribution Date, an amount equal to the sum of the following amounts, in
each case after giving effect to distributions made on the Insured Obligations
on such Distribution Date from sources other than this Policy:
(i) the excess of (A) the Current Interest and Interest Carry
Forward Amount on the Insured Obligations for such Distribution Date over
(B) any Interest Remittance Amounts allocated to pay such amounts
pursuant to Section 4.04 of the Pooling and Servicing Agreement;
(ii) the Class 1-AV-1 Principal Loss Amount, if any, for such
Distribution Date; and
(iii) without duplication of the amount specified in clause (ii),
the Certificate Principal Balance of the Insured Obligations on their
Final Scheduled Distribution Date.
As used herein, the term "Class 1-AV-1 Principal Loss Amount" means, as
to any Distribution Date, the excess, if any, of the Certificate Principal
Balance of the Insured Obligations, after taking into account distributions in
reduction of such Certificate Principal Balance from sources other than this
Policy on such Distribution Date, over the aggregate Stated Principal Balance
of the Group 2 Mortgage Loans for such Distribution Date.
As used herein the term "Final Scheduled Distribution Date" means the
Distribution Date occurring in June 2035.
U-2
As used herein the term "Insolvency Proceeding" means the commencement,
after the date hereof, of any bankruptcy, insolvency, readjustment of debt,
reorganization, marshalling of assets and liabilities or similar proceedings
by or against any Person, the commencement, after the date hereof, of any
proceedings by or against any Person for the winding up or liquidation of its
affairs, or the consent, after the date hereof, to the appointment of a
trustee, conservator, receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, reorganization, marshalling of assets and liabilities or
similar proceedings of or relating to any Person.
As used herein the term "Insured Amount" means on any Distribution Date,
that portion of the Scheduled Payments that shall become due for payment but
shall be unpaid by reason of Nonpayment on such Distribution Date (which shall
equal the amount of any related Class 1-AV-1 Certificate Deficiency Amount).
As used herein the term "Nonpayment" means, with respect to any
Distribution Date, the failure of the Trustee to receive in full, in
accordance with the terms of the Pooling and Servicing Agreement, funds
legally available to pay all or a portion of the Scheduled Payment that is due
for payment with respect to such Distribution Date.
As used herein the term "Owner" means the registered owner of any Insured
Obligation as indicated in the registration books maintained by or on behalf
of the Trustee for such purpose or, if the Insured Obligation is in bearer
form, the holder of the Insured Obligation not including any such owner that
is the Trustee, the Seller, the Depositor, the Master Servicer or any of their
respective affiliates.
As used herein, the term "Person" means an individual, a partnership, a
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization, and a government or any department or agency
thereof.
As used herein, the term "Pooling and Servicing Agreement" means the
Pooling and Servicing Agreement, dated as of December 1, 2004, among CWABS,
Inc., as depositor, Countrywide Home Loans, Inc., as a seller, Park Monaco
Inc., as a seller, Countrywide Home Loans Servicing LP, as master servicer,
Federal National Mortgage Association, as guarantor (with respect to the Class
1-AV-1 Certificates), the Trustee and The Bank of New York Trust Company,
N.A., as co-trustee, as amended, supplemented or otherwise modified in
accordance with its terms.
As used herein the term "Scheduled Payment" means, with respect to any
Distribution Date with respect to the Insured Obligations during the Term of
this Policy, (i) the Current Interest and Interest Carry Forward Amount due
and payable in respect of the Insured Obligations on such Distribution Date
and (ii) (A) for any Distribution Date earlier than the Final Scheduled
Distribution Date, distributions allocated to reduce the Certificate Principal
Balance of the Insured Obligations in an amount at least sufficient to ensure
that no Class 1-AV-1 Principal Loss Amount exists on such Distribution Date
and (B) without duplication of the amount specified in clause (ii)(A), for the
Final Scheduled Distribution Date, the Certificate Principal Balance of the
Insured Obligations outstanding on such Distribution Date, in each case, in
accordance with the original terms of the Insured Obligations and the Pooling
and Servicing Agreement when the Insured Obligations were issued and without
regard to any subsequent
U-3
amendment or modification of the Insured Obligations or the Pooling and
Servicing Agreement that has not been consented to in writing by XLCA.
Notwithstanding the foregoing, "Scheduled Payments" shall in no event include
payments which become due on an accelerated basis as a result of an optional
termination, in whole or in part, or any other cause, unless XLCA elects, in
its sole discretion, to pay such amounts in whole or in part (in which event
"Scheduled Payments" shall include such accelerated payments as, when, and to
the extent so elected by XLCA). In the event that XLCA does not make such
election, "Scheduled Payments" shall include payments due in accordance with
the original scheduled terms of the Insured Obligations without regard to any
acceleration. In addition, "Scheduled Payments" shall not include, nor shall
coverage be provided under this Policy in respect of, (i) any amounts due in
respect of the Insured Obligations attributable to any increase in interest
rate, penalty or other sum payable by the Obligor by reason of any default or
event of default in respect of the Insured Obligations, or by reason of any
deterioration of the creditworthiness of the Obligor, (ii) any Relief Act
Interest Shortfalls, (iii) any Net Rate Carryover, (iv) any Prepayment
Interest Shortfalls or (v) any taxes, withholding or other charge imposed by
any governmental authority due in connection with the payment of any Scheduled
Payment to any Owner of an Insured Obligation.
As used herein the term "Term of this Policy" means the period from and
including the Effective Date to and including the first date on which (i) all
Scheduled Payments have been paid that are required to be paid under the
Pooling and Servicing Agreement; (ii) any period during which any Scheduled
Payment could have been avoided in whole or in part as a preference payment
under applicable bankruptcy, insolvency, receivership or similar law has
expired, and (iii) if any proceedings requisite to avoidance as a preference
payment have been commenced prior to the occurrence of (i) and (ii) above, a
final and nonappealable order in resolution of each such proceeding has been
entered; provided, further, that if the Owners are required to return any
Avoided Payment (as defined below) as a result of such Insolvency Proceeding,
then the Term of the Policy shall terminate on the date on which XLCA has made
all payments required to be made under the terms of this Policy in respect of
all such Avoided Payments.
To make a claim under the Policy, the Trustee shall deliver to XLCA a
Payment Notice in the form of Exhibit A hereto (a "Payment Notice"),
appropriately completed and executed by the Trustee. A Payment Notice under
this Policy may be presented to XLCA by (i) delivery of the original Payment
Notice to XLCA at its address set forth below, or (ii) facsimile transmission
of the original Payment Notice to XLCA at its facsimile number set forth
below. If presentation is made by facsimile transmission, the Trustee shall
(x) simultaneously confirm transmission by telephone to XLCA at its telephone
number set forth below, and (y) as soon as reasonably practicable, deliver the
original Payment Notice to XLCA at its address set forth below. Any Payment
Notice received by XLCA after 10:00 a.m., New York City time, on a Business
Day, or on any day that is not a Business Day, will be deemed to be received
by XLCA at 9:00 a.m., New York City time, on the next succeeding Business Day.
Following receipt by XLCA of a Payment Notice from the Trustee, XLCA
shall unconditionally and irrevocably pay an amount payable hereunder in
respect of an Insured Amount resulting from a Class 1-AV-1 Certificate
Deficiency Amount out of the funds of XLCA on the later to occur of (a) 12:00
noon, New York City time, on the first Business Day following such receipt and
(b) 12:00 noon, New York City time, on the Distribution Date to which such
Class 1-AV-1 Certificate Deficiency Amount relates. Payments due hereunder in
respect of an
U-4
Insured Amount resulting from a Class 1-AV-1 Certificate Deficiency Amount
will be disbursed by wire transfer of immediately available funds to the
Policy Payment Account established pursuant to the Pooling and Servicing
Agreement or, if no such Policy Payment Account has been established, to the
Trustee.
Subject to the foregoing, if the payment of any amount with respect to
the Scheduled Payment is voided (a "Preference Event") as a result of an
Insolvency Proceeding and as a result of such Preference Event, an Owner is
required to return such voided payment, or any portion of such voided payment,
made in respect of the Insured Obligation (an "Avoided Payment"), XLCA will
pay an amount equal to such Avoided Payment, following receipt by XLCA from
the Trustee on behalf of such Owner of (x) a certified copy of a final order
of a court exercising jurisdiction in such Insolvency Proceeding to the effect
that the Owner or the Trustee on behalf of the Owner is required to return any
such payment or portion thereof because such payment was avoided under
applicable law, with respect to which order the appeal period has expired
without an appeal having been filed (the "Final Order"), (y) an assignment,
substantially in the form attached hereto as Exhibit B, properly completed and
executed by such Owner irrevocably assigning to XLCA all rights and claims of
such Owner relating to or arising under such Avoided Payment, and (z) a
Payment Notice in the form of Exhibit A hereto appropriately completed and
executed by the Trustee.
XLCA shall make payments due in respect of Avoided Payments no later than
2:00 p.m. New York City time on the Business Day following XLCA's receipt of
the documents required under clauses (x) through (z) of the preceding
paragraph. Any such documents received by XLCA after 10:00 a.m. New York City
time on any Business Day or on any day that is not a Business Day shall be
deemed to have been received by XLCA at 9:00 a.m., New York City time, on the
next succeeding Business Day. All payments made by XLCA hereunder on account
of any Avoided Payment shall be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order and not
to the Trustee or any Owner directly (unless an Owner has provided evidence
satisfactory to XLCA that it has previously paid such amount to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Final
Order, in which case such payment shall be disbursed to the Trustee). XLCA
hereby waives, and agrees not to assert, any and all rights to require the
Trustee to make demand on or to proceed against any person, party or security
prior to the Trustee demanding payment under this Policy.
No defenses, set-offs and counterclaims of any kind available to XLCA so
as to deny payment of any amount due in respect of this Policy will be valid
and XLCA hereby waives, and agrees not to assert, any and all such defenses
(including, without limitation, defense of fraud in the inducement or fact, or
any other circumstances which would have the effect of discharging a surety in
law or in equity), set-offs and counterclaims, including, without limitation,
any such rights acquired by subrogation, assignment or otherwise. Upon any
payment hereunder, in furtherance and not in limitation of XLCA's equitable
right of subrogation and XLCA's rights under the Pooling and Servicing
Agreement, XLCA will be subrogated to the rights of the Owner in respect of
which such payment was made to receive any and all amounts due in respect of
the obligations in respect of which XLCA has made a payment hereunder. Any
rights of subrogation acquired by XLCA as a result of any payment made under
this Policy shall, in all respects, be subordinate and junior in right of
payment to the prior indefeasible payment in full of any
U-5
amounts due the Owner on account of payments due under the Insured Obligation.
Notwithstanding the foregoing, XLCA does not waive its rights to seek payment
in full of all Class ▇-▇▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ Amounts owed to it under the Pooling
and Servicing Agreement.
This Policy is neither transferable nor assignable, in whole or in part,
except to a successor trustee duly appointed and qualified under the Pooling
and Servicing Agreement. All Payment Notices and other notices, presentations,
transmissions, deliveries and communications made by the Trustee to XLCA with
respect to this Policy shall specifically refer to the number of this Policy
and shall be made to XLCA at:
XL Capital Assurance Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (212) 478- 3597
or such other address, telephone number or facsimile number as XLCA may
designate to the Trustee in writing from time to time. Each such Payment
Notice and other notice, presentation, transmission, delivery and
communication shall be effective only upon actual receipt by XLCA.
The obligations of XLCA under this Policy are irrevocable, primary,
absolute and unconditional, subject to satisfaction of the conditions for
making a claim under this Policy, and neither the failure of any Person to
perform any covenant or obligation in favor of XLCA (or otherwise), nor the
commencement of any Insolvency Proceeding shall in any way affect or limit
XLCA's obligations under this Policy. If a successful action or proceeding to
enforce this Policy is brought by the Trustee, the Trustee shall be entitled
to recover from XLCA costs and expenses reasonably incurred, including,
without limitation, reasonable fees and expenses of counsel.
This Policy and the obligations of XLCA hereunder shall terminate on the
expiration of the Term of this Policy. This Policy shall be returned to XLCA
by the Trustee upon the expiration of the Term of this Policy.
The Property/Casualty Insurance Security Fund specified in Article 76 of
the New York Insurance Law does not cover this Policy. The Florida Insurance
Guaranty Association created under Part II of Chapter 631 of the Florida
Insurance Code does not cover this Policy. In the event that XLCA were to
become insolvent, the California Insurance Guaranty Association, established
pursuant to Article 14.2 of Chapter 1 of Part 2 of Division 1 of the
California Insurance Code excludes from coverage any claims arising under this
Policy.
THIS POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THAT
WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
U-6
In the event any term or provision of this Policy is inconsistent with
the provisions of this Endorsement, the provisions of this Endorsement shall
take precedence and be binding.
[Remainder of Page Intentionally Left Blank]
U-7
IN WITNESS WHEREOF, XL Capital Assurance Inc. has caused this Endorsement
to the Policy to be executed on the Effective Date.
----------------------------------- -----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Managing Director Title: General Counsel
U-8
Exhibit A to Financial Guaranty Insurance Policy No. CA01538A
XL Capital Assurance Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance
PAYMENT NOTICE
UNDER FINANCIAL GUARANTY INSURANCE POLICY NO. CA01538A
The Bank of New York, as Trustee (the "Trustee"), hereby certifies to XL
Capital Assurance Inc. ("XLCA") with reference to that certain Financial
Guaranty Insurance Policy, No. CA01538A, dated December 30, 2004 together with
the Endorsement attached thereto (the "Policy"), issued by XLCA in favor of
the Trustee on behalf of the Owner under the Pooling and Servicing Agreement,
as follows:
1. The Trustee is the Trustee under the Pooling and Servicing Agreement
and the Beneficiary on behalf of each Owner of the Policy.
2. The Trustee is entitled to make a demand under the Policy pursuant to
Section 4.06 of the Pooling and Servicing Agreement.
3. This notice relates to the [insert date] Distribution Date. The amount
demanded is to be paid in immediately available funds to the [Specify Account]
at [Identify Financial Institution Holding Account] account number[_____].
[For a Payment Notice in respect of Insured Amounts resulting from a
Class 1-AV-1 Certificate Deficiency Amount, use paragraph 4.]
4. The Trustee demands payment of $________ which is an amount equal to
the sum of the following amounts:
(i) $_________, which is the amount of the excess of (A) the Current
Interest and Interest Carry Forward Amount on the Insured Obligations for
such Distribution Date over (B) any Interest Remittance Amounts allocated
to pay such amounts pursuant to Section 4.04 of the Pooling and Servicing
Agreement;
(ii) $_________, which is the amount of the Class 1-AV-1 Principal
Loss Amount, if any, for such Distribution Date; and
(iii) without duplication of the amount specified in clause (ii),
$_________, which is the amount of the Certificate Principal Balance of
the Insured Obligations on the current Distribution Date, which is the
Final Scheduled Distribution Date.
[For a Payment Notice in respect of an Avoided Payment use the following
paragraphs [4] or [5].]
U-9
[4.] or [5.] The Trustee hereby represents and warrants, based upon
information available to it, that (i) the amount entitled to be drawn under
the Policy on the date hereof in respect of Avoided Payments is the amount
paid or to be paid simultaneously with such draw on the Policy, by the Owner
on account of a Preference Event [$________] (the "Avoided Payment Amount")
and (ii) the documents required by the Policy to be delivered in connection
with such Avoided Payment and Avoided Payment Amount have previously been
presented to XLCA or are attached hereto.
[6] The Trustee agrees that, following payment of funds by XLCA, it shall
use reasonable efforts to ensure (a) that such amounts are applied directly to
the payment of any Insured Amount which is due for payment; (b) that such
funds are not applied for any other purpose; and (c) the maintenance of an
accurate record of such payments in respect of each Insured Obligation and the
corresponding claim on the Policy and the proceeds thereof.
[7] The Trustee, on behalf of itself and the Owners, hereby assigns to
XLCA all rights and claims (including rights of actions and claims in respect
of securities laws violations or otherwise) of the Trustee and the Owners with
respect to the Insured Obligation to the extent of any payments under the
Policy. The foregoing assignment is in addition to, and not in limitation of,
rights of subrogation otherwise available to XLCA in respect of such payments.
The Trustee shall take such action and deliver such instruments as may be
reasonably required by XLCA to effectuate the purposes of provisions of this
Clause 7.
[8] The Trustee, on behalf of itself and the Owners, hereby appoints XLCA
as agent and attorney-in-fact for the Trustee and the Owners in any legal
proceeding in respect of the Insured Obligation. The Trustee, on behalf of
itself and the Owners, hereby (and without limiting the generality of the
preceding sentence) agrees that XLCA may at any time during the continuation
of any proceeding by or against any debtor with respect to which a Preference
Claim (as defined below) or other claim with respect to the Insured Obligation
is asserted under any Insolvency Proceeding, direct all matters relating to
such Insolvency Proceeding, including, without limitation, (a) all matters
relating to any claim in connection with an Insolvency Proceeding seeking the
avoidance as a preferential transfer of any payment made with respect to the
obligations (a "Preference Claim"), (b) the direction of any appeal of any
order relating to any Preference Claim and (c) the posting of any surety,
supersedes or performance bond pending any such appeal. In addition, the
Trustee, on behalf of itself and the Owners, hereby agrees that XLCA shall be
subrogated to, and the Trustee, on behalf of itself and the Owners, hereby
delegates and assigns, to the fullest extent permitted by law, the rights of
the Trustee and the Owners in the conduct of any Insolvency Proceeding,
including, without limitation, all rights of any party to an adversary
proceeding or action with respect to any court order issued in connection with
any such Insolvency Proceeding.
U-10
s
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Policy or the Pooling and Servicing
Agreement.
IN WITNESS WHEREOF, this notice has been executed this ____ day of
________, ____.
THE BANK OF NEW YORK, not in its individual
capacity, but solely as Trustee for CWABS, Inc.
Asset-Backed Certificates, Series 2004-15
By:
-----------------------------------------
Authorized Officer
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 Thereof, 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
U-11
Exhibit B to Financial Guaranty Insurance Policy, No. CA001538A
Form of Assignment
Reference is made to the Financial Guaranty Insurance Policy ▇▇.
▇▇▇▇▇▇▇▇, dated December 30, 2004 (together with the Endorsement attached
thereto, the "Policy") issued by XL Capital Assurance Inc. ("XLCA") relating
to the CWABS, Inc. Asset-Backed Certificates, Series 2004-15, Class 1-AV-1.
Unless otherwise defined herein, capitalized terms used in this Assignment
shall have the meanings assigned thereto in the Policy as incorporated by
reference therein. In connection with the Avoided Payment of [$________] paid
by the undersigned (the "Owner") on [__________] and the payment by XLCA in
respect of such Avoided Payment pursuant to the Policy, the Owner hereby
irrevocably and unconditionally, without recourse, representation or warranty
(except as provided below), sells, assigns, transfers, conveys and delivers
all of such Owner's rights, title and interest in and to any rights or claims,
whether accrued, contingent or otherwise, which the Owner now has or may
hereafter acquire, against any person relating to, arising out of or in
connection with such Avoided Payment. The Owner represents and warrants that
such claims and rights are free and clear of any lien or encumbrance created
or incurred by such Owner.(1)
----------------------------------
Owner
----------------
1 In the event that the terms of this form of assignment are reasonably
determined to be insufficient solely as a result of a change of law or
applicable rules after the date of the Policy to fully vest all of the Owner's
right, title and interest in such rights and claims, the Owner and XLCA shall
agree on such other form as is reasonably necessary to effect such assignment,
which assignment shall be without recourse, representation or warranty except
as provided above.
U-12
EXHIBIT V
FORM OF TRUSTEE NOTICE WITH RESPECT TO REMIC PROVISIONS
[date]
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sir:
Reference is hereby made to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of December 1, 2004, among CWABS,
Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco
Inc., as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
Federal National Mortgage Association, as Guarantor, The Bank of New York
Trust Company, N.A., as Co-Trustee, and The Bank of New York, as Trustee. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in Pooling and Servicing Agreement.
The undersigned, an officer of the Trustee, hereby certifies to you
that the Trustee has complied with the REMIC Provisions for the preceding
calendar year.
THE BANK OF NEW YORK
By:
Name:
Title:
V-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
S-I-1
SCHEDULE II
COLLATERAL SCHEDULE
--------------------------------------- -------------- ------------- -------------- ---------------
Characteristic Applicable Loan Group 1 Loan Group 2 Loan Group 3
Section
--------------------------------------- -------------- ------------- -------------- ---------------
Single-Family Detached Dwellings 2.03(b)(32) 79.94% 74.23% 75.41%
--------------------------------------- -------------- ------------- -------------- ---------------
Two- to Four-Family Dwellings 2.03(b)(32) 3.75% 3.79% 4.24%
--------------------------------------- -------------- ------------- -------------- ---------------
Low-Rise Condominium Units 2.03(b)(32) 3.73% 5.59% 4.86%
--------------------------------------- -------------- ------------- -------------- ---------------
High-Rise Condominium Units 2.03(b)(32) 0.15% 0.3% 0.43%
--------------------------------------- -------------- ------------- -------------- ---------------
Manufactured Housing 2.03(b)(32) 0.15% 0% 0.13%
--------------------------------------- -------------- ------------- -------------- ---------------
PUDs 2.03(b)(32) 12.28% 16.09% 15.49%
--------------------------------------- -------------- ------------- -------------- ---------------
Earliest Origination Date 2.03(b)(33) 7/29/1999 9/10/2004 3/20/2000
--------------------------------------- -------------- ------------- -------------- ---------------
Prepayment Penalty 2.03(b)(35) 77.23% 67.97% 67.47%
--------------------------------------- -------------- ------------- -------------- ---------------
Investor Properties 2.03(b)(36) 1.7% 0.94% 1.28%
--------------------------------------- -------------- ------------- -------------- ---------------
Primary Residences 2.03(b)(36) 97.67% 98.62% 97.89%
--------------------------------------- -------------- ------------- -------------- ---------------
Lowest Current Mortgage Rate 2.03(b)(48) N/A 4.5% 5%
--------------------------------------- -------------- ------------- -------------- ---------------
Highest Current Mortgage Rate 2.03(b)(48) N/A 12% 16%
--------------------------------------- -------------- ------------- -------------- ---------------
Weighted Average Current Mortgage Rate 2.03(b)(48) N/A 6.973% 7.332%
--------------------------------------- -------------- ------------- -------------- ---------------
Lowest Gross Margin 2.03(b)(51) N/A 2.25% 2.25%
--------------------------------------- -------------- ------------- -------------- ---------------
Highest Gross Margin 2.03(b)(51) N/A 8% 12.43%
--------------------------------------- -------------- ------------- -------------- ---------------
Weighted Average Gross Margin 2.03(b)(51) N/A 6.465% 7.007%
--------------------------------------- -------------- ------------- -------------- ---------------
Date before which each Initial 2.03(b)(52) 12/28/2004 12/24/2004 12/28/2004
Mortgage Loan has a Due Date
--------------------------------------- -------------- ------------- -------------- ---------------
---------------------- ------------------ -------------------------- -------------- --------------
Adjustment Date Applicable Adjustable Rate Mortgage Two-Year Three-Year
Section Loans (other than Hybrid Hybrid
Two-Year and Three-Year Mortgage Mortgage
Hybrid Mortgage Loans) Loans Loans
---------------------- ------------------ -------------------------- -------------- --------------
Latest Next 2.03(b)(34) 7/1/2005 1/1/2007 1/1/2008
Adjustment Date
---------------------- ------------------ -------------------------- -------------- --------------
S-III-1