-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GLWkIlT3ewPCb9OxB9foFRz1u/OGx2NScvUJ2tIrANmxbtO9A3dCkoO0kiDpBnxV pZ2KGkQfl5ga2jPgJhRgjA== 0000905148-04-004764.txt : 20041108 0000905148-04-004764.hdr.sgml : 20041108 20041108153909 ACCESSION NUMBER: 0000905148-04-004764 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20041029 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CWABS Revolving Home Equity Loan Trust Series, 2004-P CENTRAL INDEX KEY: 0001307409 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-118926-02 FILM NUMBER: 041125698 BUSINESS ADDRESS: STREET 1: 4500 PARK GRANADA CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: (818) 225-4898 MAIL ADDRESS: STREET 1: 4500 PARK GRANADA CITY: CALABASAS STATE: CA ZIP: 91302 8-K 1 efc4-1981_form8k.txt - ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest Event Reported) October 29, 2004 CWABS, INC. (as depositor under the Sale and Servicing Agreement, dated as of October 29, 2004, relating to the Revolving Home Equity Loan Asset Backed Notes, Series 2004-P). CWABS, INC. ----------- (Exact name of registrant as specified in its charter) Delaware 333-118926 95-4596514 - ---------------------------- ----------- ---------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 4500 Park Granada Calabasas, California 91302 ------------------------ ----------- (Address of Principal (Zip Code) Executive Offices) Registrant's telephone number, including area code (818) 225-3240 - ------------------------------------------------------------------------------ Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Section 8. - ---------- Item 8.01. Other Events. - ---- ------------ Description of the Notes and the Mortgage Pool* - ---------------------------------------------- On October 29, 2004, CWABS, Inc. (the "Company") entered into a Sale and Servicing Agreement dated as of October 29, 2004 (the "Sale and Servicing Agreement"), by and among the Company, as depositor, Countrywide Home Loans, Inc. ("CHL"), as sponsor and as master servicer, CWABS Master Trust (the "Trust") and JPMorgan Chase Bank, as indenture trustee (the "Indenture Trustee"), relating to the Revolving Home Equity Loan Asset Backed Notes, Series 2004-P (the "Notes"). The Sale and Servicing Agreement is annexed hereto as Exhibit 99.1. The Company and CHL entered into a Purchase Agreement, dated as of October 29, 2004 (the "Mortgage Loan Purchase Agreement"), providing for the purchase and sale of the Mortgage Loans to be delivered pursuant to the Sale and Servicing Agreement. The Mortgage Loan Purchase Agreement is annexed hereto as Exhibit 99.2. The Trust and the Indenture Trustee entered into an Indenture, dated as of October 29, 2004 (the "Indenture"), providing for the issuance of the Notes. The Indenture is annexed hereto as Exhibit 99.3. In addition to the above agreements, MBIA Insurance Corporation issued a Surety Bond, dated October 29, 2004 (the "Surety Bond"), providing for the guarantee of certain payments with respect to the Notes upon certain conditions. The Surety Bond is annexed hereto as Exhibit 99.4. Wilmington Trust Company, as owner trustee (the "Owner Trustee") and the Company entered into a Trust Agreement, dated as of October 25, 2004 (the "Trust Agreement"), providing for the creation of the Trust. The Trust Agreement is annexed hereto as Exhibit 99.5. - -------------------- * Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Prospectus dated October 25, 2004 and the Prospectus Supplement dated October 27, 2004, of CWABS, Inc., relating to its Revolving Home Equity Loan Asset Backed Notes, Series 2004-P (the "Prospectus"). Section 9. - ---------- Item 9.01. Financial Statements, Pro Forma Financial - ---- ----------------------------------------- Information And Exhibits. ------------------------ (a) Not applicable. (b) Not applicable. (c) Exhibits: 99.1 The Sale and Servicing Agreement, dated as of October 29, 2004, by and among the Company, CHL, the Trust and the Indenture Trustee. 99.2 The Purchase Agreement, dated as of October 29, 2004, by and between the Company and CHL. 99.3 The Indenture, dated as of October 29, 2004, by and between the Trust and the Indenture Trustee. 99.4 The Note Guaranty Surety Bond, dated as of October 29, 2004, issued by MBIA Insurance Corporation. 99.5 The Trust Agreement, dated as of October 25, 2004, by and among Wilmington Trust Company, as owner trustee (the "Owner Trustee") and the Company. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CWABS, INC. By: /s/ Celia Coulter -------------------- Celia Coulter Vice President Dated: November 5, 2004 3 EXHIBIT INDEX - ------------- Exhibit Description - ------- ----------- 99.1 The Sale and Servicing Agreement, dated as of October29, 2004, by and among the Company, CHL, the Trust and the Indenture Trustee. 99.2 The Purchase Agreement, dated as of October29, 2004, by and between the Company and CHL. 99.3 The Indenture, dated as of October29, 2004, by and between the Trust and the Indenture Trustee. 99.4 The Note Guaranty Surety Bond, dated as of October29, 2004, issued by MBIA Insurance Corporation. 99.5 The Trust Agreement, dated as of October 25, 2004, by and among Wilmington Trust Company, as owner trustee (the "Owner Trustee") and the Company. 4 EX-99.1 2 efc4-1981_5613462ex991.txt EXHIBIT 99.1 EXECUTION COPY ============================================================================== CWABS, INC. Depositor COUNTRYWIDE HOME LOANS, INC. Sponsor and Master Servicer CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P the Trust JPMORGAN CHASE BANK Indenture Trustee -------------------------------- SALE AND SERVICING AGREEMENT Dated as of October 29, 2004 -------------------------------- REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES SERIES 2004-P ==============================================================================
Table of Contents Page ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01. Definitions. .........................................................1 Section 1.02. Other Terms. .........................................................1 Section 1.03. Rules of Construction. ...............................................1 Section 1.04. Interest Calculations. ...............................................1 ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TAX TREATMENT Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances Under Credit Line Agreements. .....................3 Section 2.02. Acceptance by Indenture Trustee. .....................................6 Section 2.03. Representations, Warranties, and Covenants Regarding the Master Servicer. ...........................................8 Section 2.04. Representations and Warranties of the Sponsor Regarding the Mortgage Loans; Retransfer of Certain Mortgage Loans. ......9 Section 2.05. Covenants of the Depositor. .........................................21 Section 2.06. Transfers of Mortgage Loans at Election of Transferor. ..............21 Section 2.07. Tax Treatment. ......................................................23 Section 2.08. Representations and Warranties of the Depositor. ....................23 ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS Section 3.01. The Master Servicer. ................................................23 Section 3.02. Collection of Certain Mortgage Loan Payments; Establishment of Accounts. .................................................27 Section 3.03. Deposits to Payment Account. ........................................28 Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses. ......29 Section 3.05. Assumption and Modification Agreements. .............................29 Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans. ...................................30 Section 3.07. Indenture Trustee to Cooperate. .....................................31 Section 3.08. Servicing Compensation; Payment of Certain Expenses by Master Servicer. .................................................32 Section 3.09. Annual Statement as to Compliance. ..................................32 Section 3.10. Annual Servicing Report. ............................................33 Section 3.11. Access to Certain Documentation and Information Regarding the Mortgage Loans. ...........................................33 Section 3.12. Maintenance of Certain Servicing Insurance Policies. ................33 Section 3.13. Reports to the Securities and Exchange Commission. ..................34
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Section 3.14. Tax Treatment. ......................................................34 Section 3.15. Information Required by the Internal Revenue Service Generally and Reports of Foreclosures and Abandonments of Mortgaged Property. .......................................34 ARTICLE IV SERVICING CERTIFICATE Section 4.01. Servicing Certificate. ..............................................35 Section 4.02. Acknowledgement and Cooperation. ....................................38 Section 4.03. Optional Advances of the Master Servicer. ...........................38 Section 4.04. Statements to Noteholders. ..........................................38 ARTICLE V THE MASTER SERVICER, THE SPONSOR, AND THE DEPOSITOR Section 5.01. Liability of the Sponsor, the Master Servicer, and the Depositor. ................................................40 Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Master Servicer or the Depositor. .................40 Section 5.03. Limitation on Liability of the Master Servicer and Others. ..........41 Section 5.04. Master Servicer Not to Resign. ......................................41 Section 5.05. Delegation of Duties. ...............................................42 Section 5.06. Indemnification by the Master Servicer. .............................42 ARTICLE VI SERVICING TERMINATION Section 6.01. Events of Servicing Termination. ....................................43 Section 6.02. Indenture Trustee to Act; Appointment of Successor. .................45 Section 6.03. Notification to Noteholders and the Transferor. .....................46 ARTICLE VII TERMINATION Section 7.01. Termination. ........................................................46 ARTICLE VIII MISCELLANEOUS PROVISIONS Section 8.01. Amendment. ..........................................................48 Section 8.02. Governing Law. ......................................................48 Section 8.03. Notices. ...........................................................48 Section 8.04. Severability of Provisions. .........................................50 Section 8.05. Assignment. .........................................................50 Section 8.06. Third-Party Beneficiaries. ..........................................50 Section 8.07. Counterparts. .......................................................50 Section 8.08. Effect of Headings and Table of Contents. ...........................51
ii EXHIBIT A - MORTGAGE LOAN SCHEDULE..........................................A-1 EXHIBIT B - FORM OF CREDIT LINE AGREEMENT...................................B-1 EXHIBIT C - LETTER OF REPRESENTATIONS.......................................C-1 EXHIBIT D - FORM OF REQUEST FOR RELEASE.....................................D-1 EXHIBIT E - STANDARD & POOR'S GLOSSARY......................................E-1 ANNEX 1 DEFINITIONS.................................................ANN-1-1 ANNEX 2 ADOPTION ANNEX..............................................ANN-2-1 iii This SALE AND SERVICING AGREEMENT, dated as of October 29, 2004, among CWABS, INC., as depositor, COUNTRYWIDE HOME LOANS, Inc., as sponsor and master servicer, CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P, and JPMORGAN CHASE BANK, as Indenture Trustee, WITNESSETH THAT: The parties agree as follows: ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01. Definitions. Unless the context requires a different meaning, capitalized terms are used in this Agreement as defined in Annex 1. Section 1.02. Other Terms. Capitalized terms used in this Agreement that are not otherwise defined have the meanings given to them in the Indenture. Defined terms that are used only in one section or only in another definition may be omitted from the list of defined terms in Annex 1. Defined terms used in this Agreement are sometimes defined after their first use without a reference such as "(as hereinafter defined)." Section 1.03. Rules of Construction. Except as otherwise expressly provided in this Agreement or unless the context clearly requires otherwise: (a) Defined terms include, as appropriate, all genders and the plural as well as the singular. (b) References to designated articles, sections, subsections, exhibits, and other subdivisions of this Agreement, such as "Section 6.12 (a)," refer to the designated article, section, subsection, exhibit, or other subdivision of this Agreement as a whole and to all subdivisions of the designated article, section, subsection, exhibit, or other subdivision. The exhibits and other attachments to this Agreement are a part of this Agreement. The words "herein," "hereof," "hereto," "hereunder," and other words of similar import refer to this Agreement as a whole and not to any particular article, section, exhibit, or other subdivision of this Agreement. (c) The recitals located before Article I are not a part of the agreement of the parties. Whether or not they are correct shall not affect the agreement of the parties or the interpretation of this Agreement, and they shall not be interpreted as representations, warranties, covenants, or any other matter of substance. The headings of the various Articles and Sections 1 in this Agreement are for convenience of reference only and shall not define or limit any of the provisions of this Agreement. (d) Any term that relates to a document or a statute, rule, or regulation includes any amendments, modifications, supplements, or any other changes that may have occurred since the document, statute, rule, or regulation came into being, including changes that occur after the date of this Agreement. References to law are not limited to statutes. References to statutes include any rules or regulations promulgated under them by a governmental authority charged with the administration of the statute. Any reference to any person includes references to its successors and assigns. (e) Any party may execute any of the requirements under this Agreement either directly or through others, and the right to cause something to be done rather than doing it directly shall be implicit in every requirement under this Agreement. Unless a provision is restricted as to time or limited as to frequency, all provisions under this Agreement are implicitly available from time to time. (f) The term "including" and all its variations mean "including but not limited to." Except when used in conjunction with the word "either," the word "or" is always used inclusively (for example, the phrase "A or B" means "A or B or both," not "either A or B but not both"). (g) A reference to "a [thing]" or "any [of a thing]" does not imply the existence or occurrence of the thing referred to even though not followed by "if any," and "any [of a thing]" is any and all of it. A reference to the plural of anything as to which there could be either one or more than one does not imply the existence of more than one (for instance, the phrase "the obligors on a note" means "the obligor or obligors on a note"). "Until [something occurs]" does not imply that it must occur, and will not be modified by the word "unless." The word "due" and the word "payable" are each used in the sense that the stated time for payment has passed. The word "accrued" is used in its accounting sense, i.e., an amount paid is no longer accrued. In the calculation of amounts of things, differences and sums may generally result in negative numbers, but when the calculation of the excess of one thing over another results in zero or a negative number, the calculation is disregarded and an "excess" does not exist. Portions of things may be expressed as fractions or percentages interchangeably. The word "shall" is used in its imperative sense, as for instance meaning a party agrees to something or something must occur or exist. (h) All accounting terms used in an accounting context and not otherwise defined, and accounting terms partly defined in this Agreement, to the extent not completely defined, shall be construed in accordance with generally accepted accounting principles in the United States. To the extent that the definitions of accounting terms in this Agreement are inconsistent with their meanings under generally accepted accounting principles, the definitions in this Agreement shall control. Capitalized terms used in this Agreement without definition that are defined in the Uniform Commercial Code of the relevant jurisdiction are used in this Agreement as defined in that Uniform Commercial Code. 2 (i) In the computation of a period of time from a specified date to a later specified date or an open-ended period, the words "from" and "beginning" mean "from and including," the word "after" means "from but excluding," the words "to" and "until" mean "to but excluding," and the word "through" means "to and including." Likewise, in setting deadlines or other periods, "by" means "on or before." The words "preceding," "following," and words of similar import, mean immediately preceding or following. References to a month or a year refer to calendar months and calendar years. (j) Any reference to the enforceability of any agreement against a party means that it is enforceable against the party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. Section 1.04. Interest Calculations. All calculations of interest on the Asset Balance of a Mortgage Loan under this Agreement are on a daily basis using a 365-day year. All calculations of interest on the Notes are on the basis of the actual number of days in an Interest Period and a year of 360 days. The calculation of the Servicing Fee is on the basis of a 360-day year consisting of twelve 30-day months. All dollar amounts calculated under this Agreement are rounded to the nearest cent with one-half of one cent being rounded down. ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TAX TREATMENT Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances Under Credit Line Agreements. (a) Concurrently with the execution and delivery of this Agreement, the Depositor hereby transfers to the Trust without recourse (subject to Sections 2.02 and 2.04) all of its right, title, and interest in (i) each Mortgage Loan, including its Asset Balance (including all Additional Balances), the related Mortgage File, all property that secures the Mortgage Loan, and all collections received on it after the Cut-off Date (excluding payments due by the Cut-off Date); (ii) property that secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's rights under the Purchase Agreement; (iv) the Depositor's rights under the hazard insurance policies; (v) all rights under any guaranty executed in connection with a Mortgage Loan; (vi) all other assets included or to be included in the Trust for the benefit of the Noteholders and the Credit Enhancer; and 3 (vii) all proceeds of the foregoing. This transfer to the Trust is to the Owner Trustee, on behalf of the Trust, and each reference in this Agreement to this transfer shall be construed accordingly. In addition, by the Closing Date, the Depositor shall cause the Credit Enhancer to deliver the Policy to the Indenture Trustee for the benefit of the Noteholders. (b) Reserved. (c) Additional Balances; Future Fundings. Additional Balances shall be part of the Asset Balance and are hereby transferred to the Trust on the Closing Date pursuant to this Section 2.01, and therefore are part of the Trust property. Neither the Owner Trustee nor the Trust nor the Indenture Trustee assumes the obligation under any Credit Line Agreement that provides for the funding of future advances to the mortgagor under it, and neither the Trust nor the Owner Trustee nor the Indenture Trustee may fund these future advances. (d) Delayed Delivery. In connection with the transfer under Section 2.01(a) by the Depositor, the Depositor shall effect delivery of the Mortgage Loan Schedule to the Trust and the Indenture Trustee by the Closing Date and delivery of the Mortgage Files to the Trust, and the Trust shall deliver them to the Indenture Trustee, (i) no later than the Closing Date, with respect to no less than 50% of the Mortgage Loans in each Loan Group, (ii) no later than the twentieth day after the Closing Date, with respect to no less than 40% of the Mortgage Loans in each Loan Group in addition to those delivered on the Closing Date, and (iii) within thirty days following the Closing Date, with respect to the remaining Mortgage Loans. (e) Substitution and Repurchase. If the Indenture Trustee does not receive the Mortgage File for any Mortgage Loan as required by Section 2.01(e), that Mortgage Loan shall automatically be retransferred to the Sponsor, subject to the conditions in Section 2.02(b) (as if that Mortgage Loan were otherwise subject to these provisions). If a Transfer Deficiency results, the Sponsor shall substitute an Eligible Substitute Mortgage Loan for the related Mortgage Loan within five Business Days of notification of the Transfer Deficiency by the Indenture Trustee or, if unable to effect this substitution, deposit into the Collection Account the Transfer Deposit Amount in immediately available funds equal to the Transfer Deficiency (or effect a combination of substitution and deposit). This substitution or deposit shall be accomplished in the manner specified in, and have the effect specified in, Section 2.02(b) (as if the related Mortgage Loan were otherwise subject to these provisions). (f) Mark Records. The Sponsor hereby confirms to the Owner Trustee and the Indenture Trustee that it has caused the portions of the Electronic Ledgers relating to the Mortgage Loans to be clearly and unambiguously marked, and has made the appropriate entries in its general accounting records, to indicate that the Mortgage Loans have been transferred to the Trust at the direction of the Depositor. The Master Servicer hereby confirms to the Owner 4 Trustee and the Indenture Trustee that it has clearly and unambiguously made appropriate entries in its general accounting records indicating that those Mortgage Loans constitute part of the Trust and are serviced by it on behalf of the Trust in accordance with this Agreement. (g) UCC Filings. The Depositor and the Trust agree (subject to paragraph (i) below) to effect any actions and execute any documents necessary to perfect and protect the Trust's, the Indenture Trustee's, the Noteholders', and the Credit Enhancer's interests in each Cut-off Date Asset Balance and Additional Balances and their proceeds, including filing all necessary Continuation Statements for the UCC-1 Financing Statements filed in the State of Delaware (which shall have been filed by the Closing Date) describing the Cut-off Date Asset Balances and Additional Balances and naming the Depositor as debtor and the Trust as secured party or naming the Trust as debtor and the Indenture Trustee as secured party and any amendments to UCC-1 Financing Statements required to reflect a change in the UCC or in the name or organizational structure of the Depositor or the Trust or the filing of any additional UCC-1 Financing Statements due to the change in the state of organization of the Depositor or the Trust (within 30 days of any event necessitating the filing). (h) Sponsor Rating Downgrade. If either an Event of Servicing Termination has occurred and not been waived or the long term senior unsecured corporate debt rating of Countrywide Home Loans, Inc. falls below "BBB" by Standard & Poor's or "Baa2" by Moody's, then as promptly as practicable but in any case within 90 days of the event, the Master Servicer shall, at its expense, either (x) request that the Indenture Trustee deliver to it the original Assignment of Mortgage previously delivered to the Indenture Trustee pursuant to Section 2.01(e) and then record the Assignment of Mortgage in favor of the Indenture Trustee (which may be a blanket assignment if permitted by applicable law) in the appropriate real property or other records. (y) deliver to the Indenture Trustee an Opinion of Counsel addressed to the Indenture Trustee and the Credit Enhancer to the effect that recording is not required to protect the Indenture Trustee's interest in the related Mortgage Loan or, in case a court should recharacterize the sale of the Mortgage Loans as a financing, to perfect a first priority Security Interest in favor of the Indenture Trustee in the related Mortgage Loan, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating Agencies (as evidenced in writing) and the Credit Enhancer, or (z) cause the MERS(R) System to indicate (and provide evidence to the Indenture Trustee that it has done so) that the Mortgage Loans have been assigned by the Trust to the Indenture Trustee in accordance with this Agreement for the benefit of the Noteholders and the Credit Enhancer by including (or deleting, in the case of Mortgage Loans that are repurchased in accordance with this Agreement) in the MERS computer files (a) the appropriate code that identifies the Indenture Trustee in the field for identifying the assignee and (b) the appropriate code that has been assigned to identify the Notes to the MERS(R) System in the field "Pool Field" identifying the Notes issued in connection with the Mortgage Loans. 5 (i) Sale Treatment. Notwithstanding the characterization of the Notes as debt of the Transferor for federal, state, and local income and franchise tax purposes, the transfer of the Mortgage Loans is a sale by the Sponsor to the Depositor and by the Depositor to the Trust of all the Sponsor's and then all the Depositor's interest in the Mortgage Loans and other property described above. From the time the Notes are issued until such time as all or a portion of the Notes are sold to one or more unaffiliated parties, the Sponsor will report the transfer of the Mortgage Loans and the related Additional Balances to the Depositor as a transfer of assets in exchange for beneficial interests in the form of asset-backed securities and servicing rights. If the transfer were to be characterized as a transfer for security and not as a sale, however, then the Depositor hereby grants to the Trust a Security Interest in all of the Depositor's right, title, and interest in the Mortgage Loans whether existing now or in the future, all monies due or to become due on the Mortgage Loans, and all their proceeds; and this Agreement shall constitute a Security Agreement under applicable law. Section 2.02. Acceptance by Indenture Trustee. (a) On the Closing Date, the Custodian shall execute and deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Credit Enhancer) the Initial Certification pursuant to the Custodial Agreement. If Mortgage Loans have been delivered after the Closing Date pursuant to Section 2.01(e), the Custodian shall execute and deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Credit Enhancer) a Delay Delivery Certification pursuant to the Custodial Agreement within the period specified in the Custodial Agreement. Within 180 days after the Closing Date, Custodian shall deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Credit Enhancer) a Final Certification pursuant to the Custodial Agreement. The Sponsor shall correct any defect noted in the Final Certification within 90 days of its receipt. (b) All interest of the Trust in the Mortgage Loan shall be retransferred without recourse, representation, or warranty to the Sponsor and the Asset Balance of the Mortgage Loan shall be deducted from the Loan Group Balance of the related Loan Group on the next Business Day after the Transfer Deposit Amount is deposited to the Collection Account and any other applicable requirements are satisfied if (i) the time to correct any defect in any Mortgage Loan noted on the Final Certification has expired, (ii) the Trust ever incurs any loss on any Mortgage Loan because any document in its Mortgage File is defective, or (iii) an Assignment of Mortgage to the Indenture Trustee has not been recorded in accordance with Section 2.01(i) and the Mortgage Loan is not registered on the MERS(R) System. Interest accrued on the Asset Balance of the Mortgage Loan to the end of the related Collection Period shall be the property of the Trust. The Indenture Trustee shall determine if reducing the relevant Loan Group Balance by the Asset Balance of the retransferred Mortgage Loan would cause a Transfer Deficiency for the 6 related Loan Group. If so, the Indenture Trustee shall notify the Sponsor of the deficiency, and within five Business Days after the retransfer the Sponsor shall either (x) substitute an Eligible Substitute Mortgage Loan, (y) deposit into the Collection Account an amount (the "Transfer Deposit Amount") in immediately available funds equal to the Transfer Deficiency, or (z) do a combination of both (x) and (y) above. The reduction or substitution and the actual payment of any Transfer Deposit Amount shall be payment in full for the Mortgage Loan. The Owner Trustee shall execute any documents of transfer presented by the Sponsor, without recourse, representation, or warranty, and take any other actions reasonably requested by the Sponsor to effect the transfer by the Trust of the Defective Mortgage Loan pursuant to this Section on receipt of any Eligible Substitute Mortgage Loan or notice from a Servicing Officer to the effect that the Transfer Deposit Amount for a Defective Mortgage Loan has been deposited into the Collection Account or, if the related Allocated Transferor Interest is not reduced below the greater of the related Minimum Transferor Interest and the related Required Transferor Subordinated Amount as a result of the retransfer of a Defective Mortgage Loan, as promptly as practicable following the transfer. The sole remedy of the Noteholders, the Transferor, the Owner Trustee, the Indenture Trustee, and the Credit Enhancer against the Sponsor for the transfer of a Defective Mortgage Loan to the Trust is the Sponsor's obligation to accept a transfer of a Defective Mortgage Loan and to either convey an Eligible Substitute Mortgage Loan or to make a deposit of any Transfer Deposit Amount into the Collection Account. The foregoing shall not preclude the Credit Enhancer from pursuing any independent remedies or rights it has against the Sponsor under Section 3.04(b) of the Insurance Agreement, Section 5.12(b) of the Indenture, and Section 9.02 of the Trust Agreement. Promptly following the transfer of any Defective Mortgage Loan or Eligible Substitute Mortgage Loan from or to the Trust pursuant to this Section, the Master Servicer shall amend the Mortgage Loan Schedule, deliver the amended Mortgage Loan Schedule to the Indenture Trustee, and make appropriate entries in its general account records to reflect the transfer. Following the retransfer, the Master Servicer shall appropriately mark its records to indicate that it is no longer servicing the Mortgage Loan on behalf of the Trust. The Sponsor shall appropriately mark its Electronic Ledger and make appropriate entries in its general account records to reflect the transfer promptly following the transfer. Notwithstanding any other provision of this Section, a retransfer of a Defective Mortgage Loan to the Sponsor pursuant to this Section that would cause the Allocated Transferor Interest for the related Loan Group to be less than the greater of the Minimum Transferor Interest for the related Loan Group and the Required Transferor Subordinated Amount for the related Loan Group shall not occur if either the Sponsor fails to convey an Eligible Substitute Mortgage Loan or to deposit into the Collection Account any Transfer Deposit Amount required by this Section with respect to the transfer of the Defective Mortgage Loan. 7 (c) The Sponsor shall deliver to the Indenture Trustee any documents required to be held by the Indenture Trustee in accordance with Section 2.01 with respect to any Eligible Substitute Mortgage Loans. The Master Servicer shall determine the Transfer Deposit Amount in any Collection Period during which the Sponsor substitutes Eligible Substitute Mortgage Loans and the Sponsor shall deposit that amount in the Collection Account at the time of substitution. All amounts received on the Eligible Substitute Mortgage Loans during the Collection Period in which the circumstances giving rise to the substitution occur shall not be a part of the Trust and shall not be deposited by the Master Servicer in the Collection Account. All amounts received on a removed Defective Mortgage Loan during the Collection Period in which the circumstances giving rise to the substitution occur shall be a part of the Trust and shall be deposited by the Master Servicer in the Collection Account. An Eligible Substitute Mortgage Loan will be subject to the terms of this Agreement in all respects when transferred to the Trust, and the Sponsor hereby makes the representations, warranties, and covenants in Section 2.04 with respect to the Eligible Substitute Mortgage Loan as of the date of substitution. The procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage Loan shall not be materially adverse to the interests of the Indenture Trustee, the Transferor, the Noteholders, or the Credit Enhancer. (d) The Custodian shall retain possession of each Mortgage File on behalf of the Indenture Trustee in accordance with the Custodial Agreement. The Master Servicer shall promptly deliver to the Indenture Trustee the originals of any other documents constituting the Mortgage File coming into its possession on their execution or receipt. Any documents to be delivered to the Indenture Trustee under this Agreement may be delivered to the Custodian acting on behalf of the Indenture Trustee. Section 2.03. Representations, Warranties, and Covenants Regarding the Master Servicer. The Master Servicer represents and warrants to the Indenture Trustee and the Credit Enhancer that as of the Closing Date: (i) The Master Servicer is a New York corporation, validly existing and in good standing under the laws of the State of New York, and has the corporate power to own its assets and to transact the business in which it is currently engaged. The Master Servicer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of its business or any properties owned or leased by it requires such qualification and in which the failure so to qualify would have a material adverse effect on the business, properties, assets, or condition (financial or other) of the Master Servicer. (ii) The Master Servicer has the power and authority to make, execute, deliver, and perform this Agreement and all of the transactions contemplated under this Agreement, and has taken all necessary corporate action to authorize the execution, delivery, and performance of this Agreement. When executed and delivered, this Agreement will constitute a valid and legally binding obligation of the Master Servicer enforceable in accordance with its terms. 8 (iii) The Master Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau, or agency in connection with the execution, delivery, performance, validity, or enforceability of this Agreement, except for consents, licenses, approvals or authorizations, or registrations or declarations that have been obtained or filed, as the case may be, before the Closing Date. (iv) The execution, delivery, and performance of this Agreement by the Master Servicer will not violate any existing law or regulation or any order or decree of any court applicable to the Master Servicer or the certificate of incorporation or bylaws of the Master Servicer, or constitute a material breach of any mortgage, indenture, contract, or other agreement to which the Master Servicer is a party or by which the Master Servicer may be bound. (v) No litigation or administrative proceeding of or before any court, tribunal, or governmental body is currently pending, or to the knowledge of the Master Servicer threatened, against the Master Servicer or any of its properties or with respect to this Agreement, the Indenture, or the Notes that in the opinion of the Master Servicer has a reasonable likelihood of resulting in a material adverse effect on the transactions contemplated by the Transaction Documents. (vi) If any Mortgage Loan has been registered on the MERS(R) System, the Master Servicer is a member of MERS in good standing. The Master Servicer covenants that it will fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its credit files for the related Mortgagor for each Mortgage Loan to Equifax, Experian, and Trans Union Credit Information Company on a monthly basis. The representations, warranties, and covenants in this Section shall survive the transfer of the Mortgage Loans to the Trust. Upon discovery of a breach of any representation, warrant, or covenant that materially and adversely affects the interests of the Transferor, the Noteholders, or the Credit Enhancer, the person discovering the breach shall give prompt notice to the other parties and to the Credit Enhancer. The Master Servicer shall cure in all material respects any breach of any representation, warranty, or covenant within 90 days of becoming aware of it or, with the consent of a Responsible Officer of the Indenture Trustee, any longer period specified in the consent. Section 2.04. Representations and Warranties of the Sponsor Regarding the Mortgage Loans; Retransfer of Certain Mortgage Loans. (a) The Sponsor represents and warrants to the Indenture Trustee, the Trust, and the Credit Enhancer that as of the Cut-off Date, unless specifically stated otherwise: (i) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution) this Agreement constitutes a valid and legally binding obligation of the Sponsor, enforceable against the Sponsor in accordance with its terms. 9 (ii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), either (A) the Purchase Agreement constitutes a valid transfer to the Depositor of all right, title, and interest of the Sponsor in the Mortgage Loans, all collections received thereon after the Cut-off Date (excluding payments due by the Cut-off Date), all proceeds of the Mortgage Loans, and any funds from time to time deposited in the Collection Account and in the Payment Account and all other property specified in Section 2.01(a) or (b), as applicable, and this Agreement constitutes a valid transfer to the Trust of the foregoing property such that, on execution of this Agreement, it is owned by the Trust free of all liens and other encumbrances, and is part of the corpus of the Trust conveyed to the Trust by the Sponsor, and upon payment for the Additional Balances, the Purchase Agreement and this Agreement will constitute a valid transfer to the Trust of all right, title, and interest of the Sponsor in the Additional Balances, all monies due or to become due on them, all proceeds of the Additional Balances, and all other property specified in Section 2.01(a) relating to the Additional Balances free of all liens and other encumbrances, or (B) the Purchase Agreement or this Agreement, as appropriate, constitutes a Grant of a Security Interest to the Owner Trustee on behalf of the Trust in the property described in clause (A) above and the Indenture constitutes a Grant of a Security Interest to the Indenture Trustee in the Collateral. The Indenture Trustee has a first priority perfected Security Interest in the Collateral, subject to the effect of Section 9-315 of the UCC with respect to collections on the Mortgage Loans that are deposited in the Collection Account in accordance with the next to last paragraph of Section 3.02(b), and if this Agreement constitutes the Grant of a Security Interest in the property described in clause (A) above to the Trust, the Trust has a first priority perfected Security Interest in the property, subject to the same limitations. This Security Interest is enforceable as such against creditors of and purchasers from the Trust, the Depositor, and the Sponsor. (iii) The Sponsor has not authorized the filing of and is not aware of any financing statements against the Sponsor that include a description of collateral covering the Collateral other than any financing statement (A) relating to the Security Interests granted to the Depositor, the Trust, or the Indenture Trustee under the Indenture, (B) that has been terminated, or (C) that names the Depositor, the Trust, or the Indenture Trustee as secured party. (iv) As of the Closing Date, the information in the Mortgage Loan Schedule for the Mortgage Loans is correct in all material respects. As of the applicable date of substitution for an Eligible Substitute Mortgage Loan, the information with respect to the Eligible Substitute Mortgage Loan in the Mortgage Loan Schedule is correct in all material respects. As of the date any Additional Balance is created, the information as 10 to the Mortgage Loan identification number and the Additional Balance of that Mortgage Loan reported for inclusion in the Mortgage Loan Schedule is correct in all material respects. (v) The Mortgage Loans have not been assigned or pledged, and the Sponsor is their sole owner and holder free of any liens, claims, encumbrances, participation interests, equities, pledges, charges, or Security Interests of any nature, and immediately before the sale of the applicable Mortgage Loans to the Depositor, the Sponsor has good and marketable title, and has full authority, under all governmental and regulatory bodies having jurisdiction over the ownership of the Mortgage Loans, to transfer them pursuant to the Purchase Agreement. (vi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the related Mortgage Note and the mortgage for each Mortgage Loan have not been assigned or pledged, and immediately before the sale of the Mortgage Loans to the Depositor, the Sponsor was the sole owner and holder of the Mortgage Loan free of any liens, claims, encumbrances, participation interests, equities, pledges, charges, or Security Interests of any nature, and has full authority, under all governmental and regulatory bodies having jurisdiction over the ownership of the Mortgage Loans, to transfer it pursuant to the Purchase Agreement. (vii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the related mortgage is a valid and subsisting first or second lien on the property described in it, as shown on the Mortgage Loan Schedule, and as of the Cut-off Date or date of substitution, as applicable, the related Mortgaged Property is free of all encumbrances and liens having priority over the first or second lien, as applicable, of the mortgage except for liens for (A) real estate taxes and special assessments not yet delinquent; (B) any first mortgage loan secured by the Mortgaged Property and specified on the Mortgage Loan Schedule; (C) covenants, conditions and restrictions, rights of way, easements, and other matters of public record as of the date of recording that are acceptable to mortgage lending institutions generally; and (D) 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 the mortgage. (viii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no obligor has a valid offset, defense, or counterclaim under any Credit Line Agreement or mortgage. (ix) To the best knowledge of the Sponsor, as of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), 11 no related Mortgaged Property has any delinquent recording or other tax or fee or assessment lien against it. (x) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no proceeding is pending or, to the best knowledge of the Sponsor, threatened for the total or partial condemnation of the related Mortgaged Property, and the property is free of material damage and is in good repair. (xi) To the best knowledge of the Sponsor, as of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no mechanics' or similar liens or claims have been filed for work, labor, or material affecting the related Mortgaged Property that are, or may be, liens prior or equal to the lien of the related mortgage, except liens that are fully insured against by the title insurance policy referred to in clause (xv). (xii) No Minimum Monthly Payment on a Mortgage Loan being transferred on the Closing Date is more than 59 days delinquent (measured on a contractual basis) and no Minimum Monthly Payment on any other Mortgage Loan subsequently being transferred is more than 30 days delinquent (measured on a contractual basis) on the relevant transfer date and for each Loan Group no more than the applicable percentage of the Mortgage Loans in that Loan Group specified in the Adoption Annex being transferred on the Closing Date (by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a contractual basis). (xiii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), for each Mortgage Loan, the related Mortgage File contains each of the documents specified to be included in it. (xiv) At origination, each Mortgage Loan and the related Mortgage Note complied in all material respects with applicable state and federal laws, including all applicable predatory and abusive lending laws, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, or disclosure laws applicable to the Mortgage Loan, and the servicing practices used by the Master Servicer with respect to each Mortgage Loan have been consistent with the practices and the degree of skill and care the Master Servicer exercises in servicing for itself loans that it owns that are comparable to the Mortgage Loans. (xv) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no Mortgage Loan is classified as (1) a "high cost" loan under the Home Ownership and Equity Protection Act of 1994 or (2) a "high cost," "threshold," "covered," "predatory," or similar loan under any other applicable state, federal, or local law that applies to mortgage loans (or a similar classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points, or fees). 12 (xvi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act; and "High Cost Loan" and "Covered Loan" have the meaning assigned to them in the Standard & Poor's LEVELS(R) Glossary attached as Exhibit E (the "Glossary") where (x) a "High Cost Loan" is each loan identified in the column "Category under applicable anti-predatory lending law" of the table entitled "Standard & Poor's High Cost Loan Categorization" in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State or jurisdiction specified in such table and (y) "Covered Loan" is each loan identified in the column "Category under applicable anti-predatory lending law" of the table entitled "Standard & Poor's Covered Loan Categorization" in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State of jurisdiction specified in such table. (xvii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), either a lender's title insurance policy or binder was issued or a guaranty of title customary in the relevant jurisdiction was obtained, on the date of origination of the Mortgage Loan being transferred on the relevant date and each policy is valid and remains in full force. (xviii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), none of the Mortgaged Properties is a mobile home or a manufactured housing unit that is not considered or classified as part of the real estate under the laws of the jurisdiction in which it is located. (xix) No more than the percentage specified in the Adoption Annex of the Mortgage Loans in each Loan Group, by aggregate principal balance of the related Mortgage Loans, are secured by Mortgaged Properties located in one United States postal zip code. (xx) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Combined Loan-to-Value Ratio for each Mortgage Loan in each Loan Group was not in excess of the percentage specified in the Adoption Annex. (xxi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no selection procedure reasonably believed by the Sponsor to be adverse to the interests of the Transferor, the Noteholders, or the Credit Enhancer was used in selecting the Mortgage Loans. (xxii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Sponsor has not transferred the 13 Mortgage Loans to the Trust with any intent to hinder, delay, or defraud any of its creditors. (xxiii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Minimum Monthly Payment with respect to any Mortgage Loan is not less than the interest accrued at the applicable Loan Rate on the average daily Asset Balance during the interest period relating to the date on which the Minimum Monthly Payment is due. (xxiv) The Mortgage Notes constitute either "instruments" or "general intangibles" as defined in the UCC. (xxv) By the Closing Date (or, within 30 days of the applicable date of substitution with respect to any Eligible Substitute Mortgage Loan), the Sponsor will file UCC-1 financing statements in the proper filing office in the appropriate jurisdiction to perfect the Security Interest in the Collateral Granted under the Indenture. (xxvi) The Mortgage Notes that constitute or evidence the Collateral do not have any marks or notations indicating that they have been pledged, assigned, or otherwise transferred to any person other than the Depositor, the Trust, or the Indenture Trustee. All financing statements filed or to be filed against the Sponsor in favor of the Depositor, the Trust, or the Indenture Trustee in connection with this Agreement, the Purchase Agreement, or the Indenture describing the Collateral contain a statement to the following effect: "A purchase of the Mortgage Loans included in the collateral covered by this financing statement will violate the rights of the Depositor, the Trust, or the Indenture Trustee." (xxvii) As of the Closing Date, the Sponsor will have received a written acknowledgement from the Custodian that is acting solely as agent of the Indenture Trustee. (xxviii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Credit Line Agreement and each Mortgage Loan is an enforceable obligation of the related mortgagor. (xxix) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Sponsor has not received a notice of default of any senior mortgage loan related to a Mortgaged Property that has not been cured by a party other than the Master Servicer. (xxx) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the definition of "prime rate" in each Credit Line Agreement relating to a Mortgage Loan does not differ materially from the definition in the form of Credit Line Agreement in Exhibit B. (xxxi) The weighted average remaining term to maturity of the Mortgage Loans in each Loan Group on a contractual basis as of the Cut-off Date is 14 approximately the number of months specified for that Loan Group in the Adoption Annex. On each date that the Loan Rates have been adjusted, interest rate adjustments on the Mortgage Loans were made in compliance with the related mortgage and Mortgage Note and applicable law. Over the term of each Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap. The Loan Rate Cap for the Mortgage Loans ranges between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Loan Rate Cap is approximately the percentage specified in the Adoption Annex for that Loan Group. The Gross Margins for the Mortgage Loans in each Loan Group range between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Gross Margin is approximately the percentage specified in the Adoption Annex for that Loan Group as of the Cut-off Date. The Loan Rates on the Mortgage Loans in each Loan Group range between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Loan Rate on the Mortgage Loans is approximately the percentage specified in the Adoption Annex for that Loan Group. All of the Mortgage Loans in the Loan Group specified in the Adoption Annex conform to Fannie Mae or Freddie Mac maximum principal balance (by credit limit) guidelines. (xxxii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Mortgaged Property consists of a single parcel of real property with a one-to-four unit single family residence erected on it, or an individual condominium unit, planned unit development unit, or townhouse. (xxxiii) No more than the percentage specified in the Adoption Annex (by Cut-off Date Loan Balance) for each Loan Group of the Mortgage Loans in the related Loan Group are secured by real property improved by individual condominium units, units in planned unit developments, townhouses or two-to-four family residences erected on them, and at least the percentage specified in the Adoption Annex (by Cut-off Date Loan Balance) for each Loan Group of the Mortgage Loans in the related Loan Group are secured by real property with a detached one-family residence erected on them; (xxxiv) The Credit Limits on the Mortgage Loans in each Loan Group range between approximately the dollar amounts specified in the Adoption Annex for that Loan Group with an average of approximately the dollar amount specified in the Adoption Annex for that Loan Group. As of the Cut-off Date, no Mortgage Loan in either Loan Group had a principal balance in excess of approximately the dollar amount specified in the Adoption Annex for that Loan Group and the average principal balance of the Mortgage Loans in each Loan Group is equal to approximately the dollar amounts specified in the Adoption Annex for that Loan Group. (xxxv) Approximately the percentages specified in the Adoption Annex of the Mortgage Loans, by aggregate principal balance as of the Cut-off Date, are secured by first and second liens. 15 (xxxvi) As of the Closing Date, no more than the percentage specified in the Adoption Annex for each Loan Group of the Mortgage Loans in the related Loan Group, by aggregate principal balance, were appraised electronically. (xxxvii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no default exists under any Mortgage Note or Mortgage Loan and no event that, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default under any Mortgage Note or Mortgage Loan has occurred and been waived. As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no modifications to the Mortgage Notes and Mortgage Loans have been made and not disclosed. (xxxviii)As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Mortgage Loan was originated in accordance with the Sponsor's underwriting guidelines and the Sponsor had no knowledge of any fact that would have caused a reasonable originator of mortgage loans to conclude on the date of origination of each Mortgage Loan that each such Mortgage Loan would not be paid in full when due. (xxxix) To the best knowledge of the Sponsor at the time of origination of each Mortgage Loan, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances. (xl) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), 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. (xli) Based on the drawn balances of the Mortgage Loans, the Mortgage Loans had the characteristics set out in the Adoption Annex for each Loan Group in respect of the following: weighted average Combined Loan-to-Value Ratio; range of Combined Loan-to-Value Ratios; percentage of primary residences; weighted average FICO score; range of FICO scores; Weighted Average Net Loan Rate; range of net Loan Rates; weighted average original stated term to maturity; range of original term to maturity; range of remaining term to maturity; average drawn balance; weighted average utilization ratio; percentage of the Mortgage Loans which have their respective Mortgaged Properties located in the top five states, measured by aggregate drawn balances. (xlii) Any Mortgage Loan that has been modified in any manner has been so modified in accordance with the policies and procedures of the Master Servicer and in a manner that was permitted by the Sale and Servicing Agreement, the Indenture, and any other Transaction Document. (xliii) Each Mortgage Loan was originated (within the meaning of Section 3(a)(41) of the Securities Exchange Act of 1934) by an entity that satisfied at the time 16 of origination the requirements of Section 3(a)(41) of the Securities Exchange Act of 1934. (xliv) At the time each Mortgage Loan was originated, the Sponsor was, and the Sponsor is an approved seller of conventional mortgage loans for Fannie Mae and Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. (xlv) 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 principal balance of the related Mortgage Loan as of the Cut-off Date 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 each such policy was issued by a title insurer qualified to do business in the jurisdiction where the Mortgaged Property is located and acceptable to Fannie Mae and Freddie Mac and is in a form acceptable to Fannie Mae and Freddie Mac, which policy insures the Sponsor and successor owners of indebtedness secured by the insured Mortgage, as to the first priority lien, of the Mortgage subject to the exceptions in paragraph (vii) above. (xlvi) At the Cut-off Date, the improvements on 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 the 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 the policy will be sufficient to prevent the Mortgagor 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 (xlv) below contain a standard mortgagee clause naming the Sponsor or the original mortgagee, and its successors in interest, as mortgagee, and the Sponsor 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 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 expense and to seek reimbursement therefor from the Mortgagor. (xlvii) 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 the Mortgaged Property with a generally acceptable carrier in an amount representing coverage not less than the least of (A) the original outstanding principal balance of the Mortgage Loan, (B) the minimum amount required to compensate for damage or loss 17 on a replacement cost basis, or (C) the maximum amount of insurance that is available under the Flood Disaster Protection Act of 1973. (xlviii) Each Mortgage Note and the related Mortgage are genuine, and each is the valid and legally binding obligation of its maker, enforceable in accordance with its terms and under applicable law, except that (a) its enforceability 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 the Sponsor'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. (xlix) No Mortgage Loan has a shared appreciation feature, or other contingent interest feature. (l) To the best of the Sponsor'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 the Mortgaged Property, and no improvements on adjoining properties encroach on the Mortgaged Property. (li) To the best of the Sponsor'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 certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities, unless their lack would not have a material adverse effect on the value of the Mortgaged Property, and the Mortgaged Property is lawfully occupied under applicable law. (lii) Each Mortgage contains customary and enforceable provisions that render the rights and remedies of its holder adequate for the realization against the Mortgaged Property of the benefits of the security intended to be provided by it, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. (liii) Before the approval of the Mortgage Loan application, an appraisal of the related Mortgaged Property was obtained from a qualified appraiser, duly appointed by the Sponsor, who had no interest, direct or indirect, in the Mortgaged Property or in any loan secured by the Mortgaged Property, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan. (liv) 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 Period of the first installment of principal and interest and taxes and insurance 18 payments, the Sponsor 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. (lv) As of the Closing Date, no foreclosure proceedings are pending against the Mortgaged Property and the Mortgage Loan is not subject to any pending bankruptcy or insolvency proceeding. (lvi) There is no homestead exemption available and enforceable that materially interferes with the right to sell the related Mortgaged Property at a trustee's sale or the right to foreclose the related Mortgage. (lvii) No Mortgage Loan is covered by the Home Ownership and Equity Protection Act of 1994. (lviii) No Mortgage Loan originated on or after October 1, 2002 and before March 7, 2003 is secured by Mortgaged Property located in the State of Georgia. (lix) No borrower was required to purchase any single premium credit insurance policy (e.g., life, disability, accident, unemployment, or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit. No borrower obtained a prepaid single-premium credit insurance policy (e.g., life, disability, accident, unemployment, mortgage, or health insurance) in connection with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan 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, the Mortgage Loan. (lx) No subprime Mortgage Loan originated on or after October 1, 2002 will impose a prepayment premium after the third anniversary of the Mortgage Loan. No subprime Mortgage Loan originated before October 1, 2002, and no non-subprime Mortgage Loan, will impose a prepayment penalty after the fifth anniversary of the Mortgage Loan. (lxi) The servicer for each Mortgage Loan has fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union Credit Information Company, on a monthly basis. (lxii) The Mortgage Loans, individually and in the aggregate, conform in all material respects to their descriptions in the Prospectus Supplement. (lxiii) As of the Closing Date, no Mortgaged Property has been damaged by the hurricanes that struck the southeastern United States in August and September of 2004 in a manner that materially affects the value of the Mortgaged Property. 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 this representation and warranty. 19 If the substance of any representation and warranty in this Section made to the best of the Sponsor's knowledge or as to which the Sponsor has no knowledge is inaccurate and the inaccuracy materially and adversely affects the interest of the Trust, the Noteholders or the Credit Enhancer in the related Mortgage Loan then, notwithstanding that the Sponsor did not know the substance of the representation and warranty was inaccurate at the time the representation or warranty was made, the inaccuracy shall be a breach of the applicable representation or warranty. (b) The representations and warranties in this Section shall survive delivery of the respective Mortgage Files to the Custodian pursuant to the Custodial Agreement and the termination of the rights and obligations of the Master Servicer pursuant to Section 5.04 or 6.02. If the Sponsor, the Depositor, the Master Servicer, the Credit Enhancer, or a Responsible Officer of the Indenture Trustee discovers a breach of any of the foregoing representations and warranties, without regard to any limitation concerning the knowledge of the Sponsor, that materially and adversely affects the interests of the Trust, the Indenture Trustee under the Indenture, the Noteholders, or the Credit Enhancer in the Mortgage Loan, the party discovering the breach shall give prompt notice to the other parties and the Credit Enhancer. The Sponsor shall use all reasonable efforts to cure in all material respects any breach (other than a breach of the representation and warranty in Section 2.04(a)(v)) within 90 days of becoming aware of it or shall, not later than the Business Day before the Payment Date in the month following the Collection Period in which the cure period expired (or any later date that the Indenture Trustee and the Credit Enhancer consent to), either (1) accept a transfer of the Mortgage Loan from the Trust or (2) substitute an Eligible Substitute Mortgage Loan in accordance with Section 2.02. The cure for any breach of a representation and warranty relating to the characteristics of the Mortgage Loans in the related Loan Group in the aggregate shall be a repurchase of or substitution for only the Mortgage Loans necessary to cause the characteristics to comply with the related representation and warranty. Upon accepting the transfer and making any required deposit into the Collection Account or substitution of an Eligible Substitute Mortgage Loan, as the case may be, the Owner Trustee shall execute any documents of transfer presented by the Sponsor, without recourse, representation, or warranty, and take any other actions reasonably requested by the Sponsor to effect the transfer by the Trust of the Mortgage Loans. The sole remedy of the Noteholders, the Indenture Trustee on behalf of Noteholders, the Owner Trustee, and the Credit Enhancer against the Sponsor for the breach of a representation or warranty other than Section 2.04(a)(v) is the Sponsor's obligation to accept a transfer of a Mortgage Loan as to which a breach has occurred and is continuing and to make any required deposit in the Collection Account or to substitute an Eligible Substitute Mortgage Loan. If the representation and warranty in Section 2.04(a)(v) is breached, the transfer of the affected Mortgage Loans to the Trust shall be void and the Sponsor shall pay to the Trust the sum of (i) the amount of the related Asset Balances, plus accrued interest on each Asset Balance at the applicable Loan Rate to the date of payment and (ii) the amount of any loss or expense incurred by the Transferor, the Noteholders, the Trust, or the Credit Enhancer with respect to 20 the affected Mortgage Loans. The Indenture Trustee may enforce the Sponsor's obligations under this Section in its own right or as the owner of the Trust's right to seek enforcement as the assignee of the Trust's rights under this Agreement pursuant to the Indenture. The Sponsor shall defend and indemnify the Indenture Trustee, the Owner Trustee, the Credit Enhancer, and the Noteholders against all reasonable costs and expenses, and all losses, damages, claims, and liabilities, including reasonable fees and expenses of counsel and the amount of any settlement entered into with the consent of the Sponsor (this consent not to be unreasonably withheld), that may be asserted against or incurred by any of them as a result of any third-party action arising out of any breach of a representation and warranty. Section 2.05. Covenants of the Depositor. The Depositor covenants that: (a) Security Interests. Except for the transfer under this Agreement, the Depositor will not transfer any Mortgage Loan to any other person, or create or suffer to exist any Lien on any Mortgage Loan or any interest in one, whether existing now or in the future; the Depositor will notify the Indenture Trustee of the existence of any Lien on any Mortgage Loan immediately on its discovery; and the Depositor will defend the right, title, and interest of the Trust in the Mortgage Loans, whether existing now or in the future, against all claims of third parties claiming through the Depositor. Nothing in this Section shall prohibit the Depositor from suffering to exist on any Mortgage Loan any Liens for municipal or other local taxes and other governmental charges if the taxes or governmental charges are not due at the time or if the Depositor is contesting their validity in good faith by appropriate proceedings and has set aside on its books adequate reserves with respect to them. (b) Negative Pledge. The Depositor shall not transfer or grant a Security Interest in the Transferor Certificates except in accordance with Section 3.10 of the Trust Agreement. (c) Additional Indebtedness. So long as the Notes are outstanding the Depositor will not incur any debt other than debt that (i) is non-recourse to the assets of the Depositor other than the mortgage loans specifically pledged as security for the debt, (ii) is subordinated in right of payment to the rights of the Noteholders, or (iii) is assigned a rating by each of the Rating Agencies that is the same as the then current rating of the Notes. (d) Downgrading. The Depositor will not engage in any activity that would result in a downgrading of the Notes without regard to the Policy. (e) Amendment to Certificate of Incorporation. The Depositor will not amend its Certificate of Incorporation or state of incorporation without prior notice to the Rating Agencies, the Indenture Trustee, and the Credit Enhancer. Section 2.06. Transfers of Mortgage Loans at Election of Transferor. Subject to the conditions below, the Transferor may require the transfer of Mortgage Loans in a Loan Group from the Trust to the Transferor as of the close of business on a Payment Date (the "Transfer Date"). In connection with any transfer, the related Allocated Transferor Interest shall be reduced by the aggregate Asset Balances as of their Transfer Date of 21 the Mortgage Loans transferred. On the fifth Business Day (the "Transfer Notice Date") before the Transfer Date designated in the notice, the Transferor shall give the Owner Trustee, the Indenture Trustee, the Master Servicer, and the Credit Enhancer a notice of the proposed transfer that contains a list of the Mortgage Loans to be transferred. These transfers of Mortgage Loans shall be permitted if the following conditions are satisfied: (i) No Rapid Amortization Event has occurred. (ii) On the Transfer Date the Allocated Transferor Interest with respect to the related Loan Group (after giving effect to the removal of the Mortgage Loans proposed to be transferred) exceeds the greater of the related Minimum Transferor Interest and the related Required Transferor Subordinated Amount. (iii) The transfer of any Mortgage Loans from either Loan Group on any Transfer Date during the Managed Amortization Period shall not, in the reasonable belief of the Transferor, cause a Rapid Amortization Event to occur or an event that with notice or lapse of time or both would constitute a Rapid Amortization Event. (iv) By the Transfer Date, the Transferor shall have delivered to the Indenture Trustee a revised Mortgage Loan Schedule, reflecting the proposed transfer and the Transfer Date, and the Master Servicer shall have marked the Electronic Ledger to show that the Mortgage Loans transferred to the Transferor are no longer owned by the Trust. (v) The Transferor shall represent and warrant that the Mortgage Loans to be removed from the Trust were selected randomly. (vi) In connection with each transfer of Mortgage Loans pursuant to this Section, each Rating Agency and the Credit Enhancer shall have received by the related Transfer Notice Date notice of the proposed transfer of Mortgage Loans and, before the Transfer Date, each Rating Agency shall have notified the Transferor, the Indenture Trustee, and the Credit Enhancer that the transfer of Mortgage Loans would not result in a reduction or withdrawal of its then current rating of the Notes without regard to the Policy. (vii) The Transferor shall have delivered to the Owner Trustee, the Indenture Trustee, and the Credit Enhancer an Officer's Certificate certifying that the items in subparagraphs (i) through (vi), inclusive, have been performed or are true, as the case may be. The Owner Trustee and the Indenture Trustee may conclusively rely on the Officer's Certificate, shall have no duty to make inquiries with regard to the matters in it, and shall incur no liability in so relying. Upon receiving the requisite information from the Transferor, the Master Servicer shall perform in a timely manner those acts required of it, as specified above. Upon satisfaction of the above conditions, on the Transfer Date the Indenture Trustee shall effect delivery to the Transferor the Mortgage File for each Mortgage Loan being so transferred, and the Indenture Trustee shall execute and deliver to the Transferor any other documents prepared by the 22 Transferor reasonably necessary to transfer the Mortgage Loans to the Transferor. This transfer of the Trust's interest in Mortgage Loans shall be without recourse, representation, or warranty by the Indenture Trustee or the Trust to the Transferor. Section 2.07. Tax Treatment. The Depositor and the Transferor intend that the Notes will be indebtedness of the Transferor for federal, state, and local income and franchise tax purposes and for purposes of any other tax imposed on or measured by income. The Transferor and the Depositor agree to treat the Notes for purposes of federal, state, and local income or franchise taxes and any other tax imposed on or measured by income, as indebtedness of the Transferor secured by the assets of the Trust and to report the transactions contemplated by this Agreement on all applicable tax returns in a manner consistent with this treatment. The Administrator pursuant to the Administration Agreement will prepare and file all tax reports required under this Agreement on behalf of the Trust. Section 2.08. Representations and Warranties of the Depositor. The Depositor represents and warrants to the Indenture Trustee on behalf of the Noteholders and the Credit Enhancer as follows: (i) This Agreement constitutes a valid and legally binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms. (ii) Immediately before the sale and assignment by the Depositor to the Trust of each Mortgage Loan, the Depositor was the sole beneficial owner of each Mortgage Loan (insofar as the title was conveyed to it by the Sponsor) subject to no prior lien, claim, participation interest, mortgage, Security Interest, pledge, charge, or other encumbrance or other interest of any nature. (iii) As of the Closing Date, the Depositor has transferred all right, title, and interest in the Mortgage Loans to the Trust and, as of each applicable date of substitution, the Depositor has transferred all right, title, and interest in the Eligible Substitute Mortgage Loan to the Trust. (iv) The Depositor has not transferred the Mortgage Loans to the Trust with any intent to hinder, delay, or defraud any of its creditors. ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS Section 3.01. The Master Servicer. The Master Servicer shall service and administer the Mortgage Loans in a manner consistent with the terms of this Agreement and with general industry practice and shall have full power and authority, acting alone or through a subservicer, (i) to execute and deliver, on behalf of the Noteholders, the Trust, and the Indenture Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any Mortgaged Property and 23 assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided in this Agreement), (iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan. The Master Servicer shall remain responsible to the parties to this Agreement and the Credit Enhancer for its obligations under this Agreement. Any amounts received by any subservicer on a Mortgage Loan shall be considered to have been received by the Master Servicer whether or not actually received by it. Without limiting the generality of the foregoing, the Master Servicer may execute and deliver, on behalf of itself, the Noteholders, and the Indenture Trustee, or any of them, any 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, in each case to the extent not inconsistent with this Agreement. At the request of a Servicing Officer, the Indenture Trustee shall furnish the Master Servicer with any powers of attorney and other documents appropriate to enable the Master Servicer to carry out its servicing and administrative duties under this Agreement. The Master Servicer in this capacity may also consent to the placing of a lien senior to that of any mortgage on the related Mortgaged Property, if (i) the new senior lien secures a mortgage loan that refinances an existing first mortgage loan and (ii) either (a) the Loan-to-Value Ratio of the new mortgage loan (without taking into account any closing costs that may be financed by the new mortgage loan) is equal to or less than the Loan-to-Value Ratio of the first mortgage loan to be replaced (for purposes of calculating the Loan-to-Value Ratio, the Valuation of the Mortgaged Property will be measured by the lesser of (A) the Valuation of the Mortgaged Property as of the Cut-off Date and (B) the Valuation of the Mortgaged Property as of the date of the refinancing referenced in clause (i)) or (b) the Combined Loan-to-Value Ratio of the new mortgage loan (without taking into account any closing costs that may be financed by the new mortgage loan) and the existing Mortgage Loan is equal to less than 70% (for purposes of calculating the Combined Loan-to-Value Ratio, the Valuation of the Mortgaged Property will be measured as the lesser of (A) the Valuation of the Mortgage Loan as of the Cut-off Date and (B) the Valuation of the Mortgage Loan as of the date of the refinancing referenced in clause (i)). The aggregate Asset Balance of the Mortgage Loans with respect to which the senior lien may be modified in accordance with clause (ii)(A) may not exceed 10% of the Original Note Principal Balance and clause (ii)(B) may not exceed 40% of the Original Note Principal Balance. The aggregate Asset Balance of all the Mortgage Loans with respect to which the senior lien may be so modified may not exceed 100% of the Original Note Principal Balance (this 100% referred to as the "Increased Senior Lien Limitation"). 24 The Master Servicer may also, without approval from the Rating Agencies or the Credit Enhancer, increase the Credit Limits on Mortgage Loans if (i) new appraisals are obtained and the weighted average Combined Loan-to-Value Ratios of the Mortgage Loans after giving effect to the increase are less than or equal to the weighted average Combined Loan-to-Value Ratios of the Mortgage Loans as of the Cut-off Date and (ii) the increases are consistent with the Master Servicer's underwriting policies. In addition, the Master Servicer may increase the Credit Limits on Mortgage Loans having aggregate Asset Balances of up to an additional 5.0% of the Original Note Principal Balance, if (w) the increase does not cause the Combined Loan-to-Value Ratio of the Mortgage Loans in the related Loan Group to exceed 80%, (x) the increase in the Credit Limit of a Mortgage Loan does not cause the Combined Loan-to-Value Ratio of the Mortgage Loan to exceed 100%, (y) the increase in the Credit Limit of a Mortgage Loan does not cause the Combined Loan-to-Value Ratio of the Mortgage Loan to increase by more than 25% (for example, a Combined Loan-to-Value Ratio of 50% can be increased to 75%, a Combined Loan-to-Value Ratio of 60% can be increased to 85%, and so forth), and (z) the increase is consistent with the Master Servicer's underwriting policies. Furthermore, the Originator, without prior approval from the Rating Agencies or the Credit Enhancer, may solicit mortgagors for a reduction in Loan Rates. Loan Rates of Mortgage Loans in a Loan Group having Asset Balances at the time of the proposed modification that aggregate over time not more than 5.0% of the related Original Note Principal Balance may be subject to reduction. If a mortgagor notifies the Originator or the Master Servicer that it wants a reduction in Loan Rate, the Originator shall purchase the Mortgage Loan from the Trust as described below. Effective immediately on the same Business Day on which the Originator delivers the Purchase Price for the relevant Mortgage Loan to the Master Servicer, all interest of the Trust in the relevant Mortgage Loan shall automatically be transferred and assigned to the Originator and all benefits and burdens of ownership of the relevant Mortgage Loan, including the right to accrued interest on it from the date of purchase and the risk of default on the Mortgage Loan, shall pass to the Originator. The Master Servicer shall promptly deliver to the Indenture Trustee a certification signed by a Servicing Officer to the effect that all of the requirements for a purchase of a Mortgage Loan in connection with a request by a mortgagor for a reduction in Loan Rate have been satisfied with respect to the relevant Mortgage Loan. The Originator shall deliver the Purchase Price for the relevant Mortgage Loan to the Master Servicer promptly after a mortgagor notifies the Originator or the Master Servicer that it wants a reduction in Loan Rate, and the Master Servicer shall deposit it in the Collection Account pursuant to Section 3.02 within one Business Day. Upon receipt by the Indenture Trustee of written notification of the 25 deposit signed by a Servicing Officer, the Indenture Trustee shall release to the Originator the related Mortgage File and shall execute and deliver any instruments of transfer or assignment delivered to it for execution and reasonably acceptable to it, in each case without recourse, representation, or warranty, necessary to release the Mortgage Loan from the lien of this Indenture and vest in the Originator the Mortgage Loan previously transferred and assigned pursuant to this provision. The certification and written notification of the deposit each from a Servicing Officer may be delivered to the Indenture Trustee electronically, and to the extent the transmission originates on its face from a Servicing Officer, need not be manually signed. In addition, the Master Servicer may agree to changes in the terms of a Mortgage Loan at the request of the mortgagor if the changes (i) do not materially and adversely affect the interests of Noteholders, the Transferor, or the Credit Enhancer and (ii) are consistent with prudent and customary business practice as evidenced by a certificate signed by a Servicing Officer delivered to the Indenture Trustee and the Credit Enhancer. In addition, the Master Servicer may solicit mortgagors to change any other terms of the related Mortgage Loans if the changes (i) do not materially and adversely affect the interests of the Noteholders, the Transferor, or the Credit Enhancer, (ii) are consistent with prudent and customary business practice as evidenced by a certificate signed by a Servicing Officer delivered to the Indenture Trustee and the Credit Enhancer, and (iii) do not extend the maturity date of the Mortgage Loan beyond the final maturity date of the Notes of the related Class. Nothing in this Agreement shall limit the right of the Master Servicer to solicit mortgagors with respect to new loans (including mortgage loans) that are not Mortgage Loans. The Master Servicer may register any Mortgage Loan on the MERS(R) System, or cause the removal from registration of any Mortgage Loan on the MERS(R) System, and execute and deliver, on behalf of the Owner Trustee, any instruments of assignment and other comparable instruments with respect to the assignment or re-recording of a mortgage in the name of MERS, solely as nominee for the Owner Trustee and its successors and assigns. For so long as any Mortgage Loan is registered on the MERS(R) System, the Master Servicer shall maintain in good standing its membership in MERS and shall 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. If any Mortgage Loans are registered on the MERS(R) System, the Master Servicer may cause MERS to execute and deliver an assignment of mortgage in recordable form to transfer any of the Mortgage Loans registered on the MERS(R) System from MERS to the Owner Trustee. The Master Servicer shall promptly notify MERS of any transfer of beneficial ownership or release of any Security Interest in any MOM Loan. The relationship of the Master Servicer to the Trust and the Indenture Trustee under this Agreement is intended by the parties to be that of an independent contractor and not that of a joint venturer, partner, or agent of the Trust or the Indenture Trustee. (b) If the rights and obligations of the Master Servicer are terminated under this Agreement, any successor to the Master Servicer in its sole discretion may terminate the existing subservicer arrangements with any subservicer or assume the terminated Master 26 Servicer's rights under those subservicing arrangements to the extent permitted by applicable law and the subservicing agreements. Section 3.02. Collection of Certain Mortgage Loan Payments; Establishment of Accounts. (a) The Master Servicer shall make reasonable efforts to collect all payments called for under the Mortgage Loans, and shall follow the collection procedures it follows for mortgage loans in its servicing portfolio it owns comparable to the Mortgage Loans, to the extent consistent with this Agreement. Consistent with the foregoing, and without limiting the generality of the foregoing, the Master Servicer may in its discretion (i) waive any late payment charge or any assumption fees or other fees that may be collected in the ordinary course of servicing the Mortgage Loans and (ii) arrange with a mortgagor a schedule for the payment of interest due and unpaid if the arrangement is consistent with the Master Servicer's policies with respect to the mortgage loans it owns or services. Notwithstanding any arrangement, the Mortgage Loans will be included in the information regarding delinquent Mortgage Loans in the Servicing Certificate and monthly statement to Noteholders pursuant to Section 7.04 of the Indenture. (b) The Master Servicer shall establish and maintain a trust account (the "Collection Account") with the title specified in the Adoption Annex. The Collection Account shall be an Eligible Account. The Master Servicer or the Sponsor, as the case may be, shall deposit or cause to be deposited within two Business Days following its receipt the following payments and collections received or made by it (without duplication): (1) all collections on the Mortgage Loans; (2) the amounts deposited to the Collection Account pursuant to Section 4.03; (3) Net Liquidation Proceeds net of any related Foreclosure Profit; (4) Insurance Proceeds; and (5) any amounts required to be deposited pursuant to Section 7.01. No other amounts are to be deposited to the Collection Account, including amounts representing Foreclosure Profits, fees (including annual fees) or late charge penalties payable by mortgagors, or amounts received by the Master Servicer for the accounts of mortgagors for application towards the payment of taxes, insurance premiums, assessments, excess pay off amounts, and similar items. The Master Servicer shall remit all Foreclosure Profits to the Sponsor. The Master Servicer may retain, from payments of interest on the Mortgage Loans in each Loan Group in each Collection Period, the related Servicing Fee for the Collection Period and any unreimbursed optional advance with respect to the related Loan Group made by the Master Servicer pursuant to Section 4.03. The Master Servicer may make a net deposit in the Collection Account of the amounts required by this Section. On the Business Day before each Payment Date to the extent on deposit in the Collection Account, the Master Servicer shall withdraw from the Collection Account and remit 27 to the Indenture Trustee, the amount to be applied on the next Payment Date by the Indenture Trustee pursuant to Section 8.03 of the Indenture, and the Indenture Trustee will deposit that amount in the Payment Account pursuant to the Indenture. The Indenture Trustee shall hold amounts deposited in the Payment Account as trustee for the Noteholders, the Transferor, and the Credit Enhancer. In addition, the Master Servicer shall notify the Indenture Trustee and the Credit Enhancer on each Determination Date of the amount of collections in the Collection Account to be transferred to the Payment Account and their allocation to Interest Collections and Principal Collections for the Mortgage Loans in each Loan Group for the related Payment Date. Following this notification, the Master Servicer may withdraw from the Collection Account and retain any amounts that constitute income realized from the investment of the collections. The Master Servicer will be entitled to receive, as additional servicing compensation, income earned on the collections in the Payment Account. Amounts on deposit in the Collection Account will be invested in Eligible Investments maturing no later than the day before the next Payment Date at the direction of the Master Servicer. All income realized from any investment in Eligible Investments of funds in the Collection Account shall be the property of the Master Servicer and may be withdrawn from time to time from the Collection Account. Any losses incurred on these investments that reduce their principal amount shall be deposited in the Collection Account by the Master Servicer out of its own funds immediately as realized. Section 3.03. Deposits to Payment Account. The Master Servicer shall (i) on the Business Day before each of the first three Payment Dates, deposit in the Payment Account any shortfall in the amount required to pay the Note Interest on those Payment Dates for each Class of Notes resulting solely from the failure of certain Mortgage Loans to be fully indexed and (ii) on the Business Day before the first Payment Date, deposit in the Payment Account (A) an amount for each Loan Group equal to the excess of the aggregate amount payable pursuant to Sections 8.03(a)(i) and (ii) of the Indenture for that Loan Group on the first Payment Date over what the aggregate Investor Interest Collections for that Loan Group would be if the Minimum Monthly Payments on the related Mortgage Loans due during the first Collection Period were made on each Mortgage Loan and (B) for each Loan Group any amounts representing payments on, and any collections in respect of, the Mortgage Loans in each Loan Group received after the Cut-off Date and before the Closing Date (exclusive of payments of accrued interest due by the Cut-off Date). 28 Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses. The Master Servicer shall cause to be maintained for each Mortgage Loan hazard insurance naming the Master Servicer or the related subservicer as loss payee under it providing extended coverage in an amount that is at least equal to the lesser of (i) the maximum insurable value of the improvements securing the Mortgage Loan from time to time or (ii) the combined principal balance owing on the Mortgage Loan and any mortgage loan senior to the Mortgage Loan from time to time. The Master Servicer shall also maintain on property acquired through foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended coverage in an amount which is at least equal to the lesser of (i) the maximum insurable value from time to time of the improvements that are a part of the property or (ii) the combined principal balance owing on the Mortgage Loan and any mortgage loan senior to the Mortgage Loan at the time of the foreclosure or deed in lieu of foreclosure plus accrued interest and the good-faith estimate of the Master Servicer of related Liquidation Expenses to be incurred. Amounts collected by the Master Servicer under these policies shall be deposited in the Collection Account to the extent called for by Section 3.02. The hazard insurance to be maintained for the related Mortgage Loan shall include flood insurance when the Mortgaged Property is located in a federally designated flood area. The flood insurance shall be in the amount required under applicable guidelines of the Federal Flood Emergency Act. No other insurance need be carried on any Mortgaged Properties pursuant to this Agreement. Section 3.05. Assumption and Modification Agreements. When a Mortgaged Property has been or is about to be conveyed by the mortgagor, the Master Servicer shall exercise its right to accelerate the maturity of the Mortgage Loan consistent with the then current practice of the Master Servicer and without regard to the inclusion of the Mortgage Loan in the Trust. If it elects not to enforce its right to accelerate or if it is prevented from doing so by applicable law, the Master Servicer (so long as its action conforms with the underwriting standards generally acceptable in the industry at the time for new origination) may enter into an assumption and modification agreement with the person to whom the Mortgaged Property has been or is about to be conveyed, pursuant to which that person becomes liable under the Credit Line Agreement and, to the extent permitted by applicable law, the mortgagor remains liable on it. The Master Servicer shall notify the Indenture Trustee that any assumption and modification agreement has been completed by delivering to the Indenture Trustee an Officer's Certificate certifying that the agreement is in compliance with this Section and by forwarding the original copy of the assumption and modification agreement to the Indenture Trustee. Any assumption and modification agreement shall be a part of the related Mortgage File. No change in the terms of the related Credit Line Agreement may be made by the Master Servicer in connection with the assumption to the extent that the change would not be permitted to be made in the original Credit Line Agreement pursuant to Section 3.01(a). Any fee collected by the Master Servicer for entering into the assumption and modification agreement will be retained by the Master Servicer as additional servicing compensation. 29 Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans. The Master Servicer shall foreclose or otherwise comparably convert to ownership Mortgaged Properties securing defaulted Mortgage Loans when, in the opinion of the Master Servicer based on normal and usual practices and procedures, no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.02. Alternatively, the Master Servicer may forego foreclosure and charge off a defaulted Mortgage Loan if in the Master Servicer's opinion the proceeds of foreclosure and liquidation are likely to produce an amount less than the unpaid principal balance of senior liens on the Mortgaged Property. If the Master Servicer has actual knowledge or reasonably believes that any Mortgaged Property is affected by hazardous or toxic wastes or substances and that the acquisition of the Mortgaged Property would not be commercially reasonable, then the Master Servicer will not cause the Trust to acquire title to the Mortgaged Property in a foreclosure or similar proceeding. In connection with foreclosure or other conversion (or a decision to forego foreclosure and charge off a defaulted Mortgage Loan), the Master Servicer shall follow the practices and procedures it deems appropriate and that are normal and usual in its general mortgage servicing activities, including advancing funds to correct a default on a related senior mortgage loan. However, the Master Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the correction of any default on a related senior mortgage loan or restoration of any property unless it determines that the expenditure will increase Net Liquidation Proceeds. If title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale shall be issued to the Indenture Trustee, or to its nominee on behalf of Noteholders. The Master Servicer shall dispose of the Mortgaged Property as soon as practicable in a manner that maximizes its Liquidation Proceeds. The Master Servicer, in its sole discretion, may purchase for its own account from the Trust any Mortgage Loan that is 151 days or more delinquent. The price for any Mortgage Loan purchased shall be 100% of its Asset Balance plus accrued interest on it at the applicable Loan Rate from the date through which interest was last paid by the related mortgagor to the first day of the month in which the purchase price is to be distributed to the Noteholders. The purchase price shall be deposited in the Collection Account. The Master Servicer may only exercise this right on or before the penultimate day of the calendar month in which the Mortgage Loan became 151 days delinquent. Any delinquent Mortgage Loan that becomes current but thereafter again becomes 151 days or more delinquent may be purchased by the Master Servicer pursuant to this Section. Upon receipt of a certificate from the Master Servicer in the form of Exhibit D, the Indenture Trustee shall release to the Master Servicer the related Mortgage File and shall execute and deliver any instruments of transfer prepared by the Master Servicer, without recourse, necessary to vest in the purchaser of the Mortgage Loan any Mortgage Loan released to it and the Master Servicer shall succeed to all the Trust's interest in the Mortgage Loan and all related security and documents. This assignment shall be an assignment outright and not for 30 security. The Master Servicer shall then own the Mortgage Loan, and all security and documents, free of any further obligation to the Trust, the Owner Trustee, the Indenture Trustee, the Credit Enhancer, the Transferor, or the Noteholders with respect to it. The certification by the Master Servicer may be delivered to the Indenture Trustee electronically, and if it is, its form may differ from Exhibit D so long as it contains the information required by Exhibit D (that is, the relevant loan number, at least one of the five reasons for requesting file as found in Exhibit D, and the acknowledgment that the Mortgage File will be held in accordance with the Sale and Servicing Agreement and will promptly be returned to the Indenture Trustee when the need for it by the Master Servicer no longer exists unless the Mortgage Loan has been liquidated or retransferred), and to the extent the transmission originates on its face from a Servicing Officer, need not be manually signed. Section 3.07. Indenture Trustee to Cooperate. By each Payment Date, the Master Servicer will notify the Indenture Trustee whenever the Asset Balance of any Mortgage Loan has been paid in full during the preceding Collection Period. A Servicing Officer shall certify that the Mortgage Loan has been paid in full and that all amounts received in connection with the payment that are required to be deposited in the Collection Account pursuant to Section 3.02 have been so deposited or credited. Upon payment in full pursuant to Section 3.01, the Master Servicer is authorized to execute an instrument of satisfaction regarding the related mortgage, which instrument of satisfaction shall be recorded by the Master Servicer if required by applicable law and be delivered to the person entitled to it. If the mortgage has been registered on the MERS(R) System, the Master Servicer shall cause the removal of the mortgage from registration on the MERS(R) System and execute and deliver, on behalf of the Indenture Trustee and the Noteholders, any instruments of satisfaction or cancellation or of partial or full release. No expenses incurred in connection with the instrument of satisfaction or transfer shall be reimbursed from amounts deposited in the Collection Account or the Payment Account. As appropriate for the servicing or foreclosure of any Mortgage Loan, or in connection with the payment in full of the Asset Balance of any Mortgage Loan, upon request of the Master Servicer and delivery to the Indenture Trustee of a Request for Release substantially in the form of Exhibit D signed by a Servicing Officer, the Indenture Trustee shall release the related Mortgage File to the Master Servicer and the Indenture Trustee shall execute any documents provided by the Master Servicer necessary to the prosecution of any proceedings or the taking of other servicing actions. The Request for Release by a Servicing Officer may be delivered to the Indenture Trustee electronically, and if it is, its form may differ from Exhibit D so long as it contains the information required by Exhibit D (that is, the relevant loan number, at least one of the five reasons for requesting file as found in Exhibit D, and the acknowledgment that the Mortgage File will be held in accordance with the Sale and Servicing Agreement and will promptly be returned to the Indenture Trustee when the need for it by the Master Servicer no longer exists unless the Mortgage Loan has been liquidated or retransferred), and to the extent the transmission originates on its face from a Servicing Officer, need not be manually signed. The Master Servicer shall return the Mortgage File to the Indenture Trustee when the need for it 31 by the Master Servicer no longer exists, unless the Mortgage Loan is liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that specified above, the Request for Release shall be released by the Indenture Trustee to the Master Servicer. To facilitate the foreclosure of the mortgage securing any Mortgage Loan that is in default following recordation of the assignments of mortgage in accordance with this Agreement, if so requested by the Master Servicer, the Indenture Trustee shall execute an appropriate assignment in the form provided to the Indenture Trustee by the Master Servicer to assign the Mortgage Loan for the purpose of collection to the Master Servicer or a subservicer. The assignment shall unambiguously indicate that the assignment is for the purpose of collection to the Master Servicer or a subservicer. The assignment shall unambiguously indicate that the assignment is for the purpose of collection only. The Master Servicer will then bring all required actions in its own name and otherwise enforce the terms of the Mortgage Loan and deposit the Net Liquidation Proceeds, exclusive of Foreclosure Profits, in the Collection Account. If all delinquent payments due under the Mortgage Loan are paid by the mortgagor and any other defaults are cured, then the Master Servicer shall promptly reassign the Mortgage Loan to the Indenture Trustee and return the related Mortgage File to the place where it was being maintained. Section 3.08. Servicing Compensation; Payment of Certain Expenses by Master Servicer. The Master Servicer may retain the Servicing Fee pursuant to Section 3.02 as compensation for its services in servicing the Mortgage Loans. Moreover, additional servicing compensation in the form of late payment charges or other receipts not required to be deposited in the Collection Account (other than Foreclosure Profits) shall be retained by the Master Servicer. The Master Servicer must pay all expenses incurred by it in connection with its activities under this Agreement (including payment of all other fees and expenses not expressly stated under this Agreement to be for the account of another person) and shall not be entitled to reimbursement under this Agreement except as specifically provided in this Agreement. Liquidation Expenses are reimbursable to the Master Servicer FIRST, from related Liquidation Proceeds and SECOND, from the Payment Account from funds attributable to the related Loan Group pursuant to Section 8.03(a)(x) of the Indenture. Section 3.09. Annual Statement as to Compliance. (a) The Master Servicer will deliver to the Indenture Trustee, the Credit Enhancer, and the Rating Agencies, by the date in each year specified in the Adoption Annex, beginning on the date specified in the Adoption Annex, an Officer's Certificate stating that (i) a review of the activities of the Master Servicer during the preceding fiscal year (or the applicable shorter period for the first report) and of its performance under this Agreement has been made under the officer's supervision and (ii) to the best of the officer's knowledge, based on the review, the Master Servicer has fulfilled all of its material obligations under this Agreement throughout the fiscal year, or, if there has been a default in the fulfillment of those obligations, specifying each default known to the officer and its nature and status. 32 (b) Within five Business Days after obtaining knowledge of it, the Master Servicer shall notify the Indenture Trustee, the Credit Enhancer, and each of the Rating Agencies of any event that with the giving of notice or the lapse of time would become an Event of Servicing Termination by delivering an Officer's Certificate describing the event. Section 3.10. Annual Servicing Report. By the date in each year specified in the Adoption Annex, beginning on the date specified in the Adoption Annex, the Master Servicer, at its expense, shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Master Servicer) to furnish a report to the Indenture Trustee, the Credit Enhancer, and each Rating Agency to the effect that the firm has examined certain documents and records relating to the servicing of mortgage loans during the most recent fiscal year then ended under sale and servicing agreements or pooling and servicing agreements (substantially similar to this Agreement, including this Agreement), that the examination was conducted substantially in compliance with the audit guide for audits of non-supervised mortgagees approved by the Department of Housing and Urban Development for use by independent public accountants (to the extent that the procedures in the audit guide are applicable to the servicing obligations in those agreements), and that the examination has disclosed no items of noncompliance with this Agreement that, in the opinion of the firm, are material, except for the items of noncompliance described in the report. Section 3.11. Access to Certain Documentation and Information Regarding the Mortgage Loans. (a) The Master Servicer shall provide to the Indenture Trustee, the Credit Enhancer, any Noteholders or Note Owners that are federally insured savings and loan associations, the Office of Thrift Supervision, successor to the Federal Home Loan Bank Board, the FDIC, and the supervisory agents and examiners of the Office of Thrift Supervision access to the documentation regarding the Mortgage Loans required by applicable regulations of the Office of Thrift Supervision and the FDIC (acting as operator of the Savings Association Insurance Fund or the Bank Insurance Fund). The Master Servicer will provide access without charge but only after reasonable notice and during normal business hours at the offices of the Master Servicer. Nothing in this Section shall derogate from 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 this obligation shall not constitute a breach of this Section. (b) The Master Servicer shall supply the information needed to make required distributions and to furnish required reports to Noteholders and to make any claim under the Policy, in the form the Indenture Trustee reasonably requests, to the Indenture Trustee and any Paying Agent by the start of the Determination Date preceding the related Payment Date. Section 3.12. Maintenance of Certain Servicing Insurance Policies. The Master Servicer shall during the term of its service as master servicer maintain in force (i) policies of insurance covering errors and omissions in the performance of its obligations as master servicer under this Agreement and (ii) a fidelity bond covering its officers, 33 employees, or agents. Each policy and bond together shall comply with the requirements from time to time of Fannie Mae for persons performing servicing for mortgage loans purchased by Fannie Mae. Section 3.13. Reports to the Securities and Exchange Commission. The Administrator shall, on behalf of the Trust, effect filing with the Securities and Exchange Commission of any periodic reports required to be filed under the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission under it. At the request of the Administrator, each of the Sponsor, the Master Servicer, the Depositor, the Indenture Trustee, and the Transferor shall cooperate with the Administrator in the preparation of these reports and shall provide to the Indenture Trustee in a timely manner all information or documentation the Indenture Trustee reasonably requests in connection with the performance of its obligations under this Section. The Master Servicer shall prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder. Section 3.14. Tax Treatment. The Transferor shall treat the Mortgage Loans as its property for all federal, state, or local tax purposes and shall report all income earned thereon (including amounts payable as fees to the Master Servicer) as its income for income tax purposes. The Master Servicer shall prepare all tax information required by law to be distributed to Noteholders. The Master Servicer shall not be liable for any liabilities, costs, or expenses of the Trust, the Noteholders, the Transferor, or the Note Owners arising under any tax law, including federal, state, or local income and franchise or excise taxes or any other tax imposed on or measured by income (or any interest or penalty with respect to any tax or arising from a failure to comply with any tax requirement). Section 3.15. Information Required by the Internal Revenue Service Generally and Reports of Foreclosures and Abandonments of Mortgaged Property. The Master Servicer shall prepare and deliver all federal and state information reports when and as required by all applicable state and federal income tax laws. In particular, with respect to the requirement under Section 6050J of the Code for reports of foreclosures and abandonments of any mortgaged property, the Master Servicer shall file reports relating to each instance occurring during the previous calendar year in which the Master Servicer (i) on behalf of the Indenture Trustee acquires an interest in any Mortgaged Property through foreclosure or other comparable conversion in full or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any Mortgaged Property has been abandoned. The reports from the Master Servicer shall be in form, substance, and timing sufficient to meet the reporting requirements imposed by Section 6050J of the Code. 34 ARTICLE IV SERVICING CERTIFICATE Section 4.01. Servicing Certificate. Not later than each Determination Date, the Master Servicer shall deliver (a) to the Indenture Trustee, the data necessary to prepare the items below and the statement for Noteholders required to be prepared pursuant to Section 4.04 and (b) to the Indenture Trustee, the Owner Trustee, the Sponsor, the Depositor, the Paying Agent, the Credit Enhancer, and each Rating Agency a Servicing Certificate (in written form or the form of computer readable media or such other form as may be agreed to by the Indenture Trustee and the Master Servicer), together with an Officer's Certificate to the effect that the Servicing Certificate is correct in all material respects, stating the related Collection Period, Payment Date, the series number of the Notes, the date of this Agreement, and: (i) the aggregate amount of collections received on the Mortgage Loans in each Loan Group by the Determination Date for the related Collection Period; (ii) the aggregate amount of (a) Interest Collections for each Loan Group for the related Collection Period and (b) Principal Collections for each Loan Group for the related Collection Period; (iii) the Investor Floating Allocation Percentage and the Investor Fixed Allocation Percentage for each Loan Group for the related Collection Period; (iv) the Investor Interest Collections and Investor Principal Collections for each Loan Group for the related Collection Period; (v) the Interest Collections that are not Investor Interest Collections and Transferor Principal Collections for each Loan Group for the related Collection Period; (vi) the Note Interest and the applicable Note Rate for each Class of Notes for the related Interest Period; (vii) the amount of the Note Interest that is not payable to the Holders of each Class of Notes because of insufficient Investor Interest Collections for the related Loan Group; (viii) the Unpaid Investor Interest Shortfall for each Class of Notes and the amount of interest on the shortfall at the applicable Note Rate for each Class of Notes applicable from time to time (separately stated) to be distributed on the related Payment Date; (ix) the remaining Unpaid Investor Interest Shortfall for each Class of Notes after the distribution on the related Payment Date; (x) the amount of any Basis Risk Carryforward for each Class of Notes in the distribution; (xi) the amount of the remaining Basis Risk Carryforward for each Class of Notes after giving effect to the related distribution; 35 (xii) the Accelerated Principal Payment Amount and the portion of it that will be distributed pursuant to Section 8.03(a)(vii) of the Indenture for each Loan Group; (xiii) the Scheduled Principal Collections Payment Amount for each Loan Group, separately stating its components; (xiv) the amount of any Transfer Deposit Amount for each Loan Group paid by the Sponsor or the Depositor pursuant to Section 2.02 or 2.04; (xv) any accrued Servicing Fees for the Mortgage Loans in each Loan Group for previous Collection Periods and the Servicing Fee for the related Collection Period; (xvi) the Investor Loss Amount for each Loan Group for the related Collection Period; (xvii) the aggregate amount of Investor Loss Reduction Amounts for previous Payment Dates that have not been previously reimbursed to the Holders of each Class of Notes pursuant to Section 8.03(a)(iv) of the Indenture; (xviii) the aggregate Asset Balance of the Mortgage Loans in each Loan Group as of the end of the preceding Collection Period and as of the end of the second preceding Collection Period; (xix) [Deleted]; (xx) the Note Principal Balance for each Class of Notes and loan factor after giving effect to the distribution on each Class of Notes on the related Payment Date and to any reduction because of the related Investor Loss Amount; (xxi) the Transferor Interest and the Available Transferor Subordinated Amount for each Loan Group after giving effect to the distribution on the Payment Date; (xxii) the aggregate amount of Additional Balances created on the Mortgage Loans in each Loan Group during the previous Collection Period; (xxiii) for each Loan Group, the number and aggregate Asset Balances of Mortgage Loans (x) as to which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89 days, and 90 or more days, respectively and (y) that have become REO, in each case as of the end of the preceding Collection Period; (xxiv) whether a Rapid Amortization Event has occurred since the prior Determination Date, specifying the Rapid Amortization Event if one has occurred; (xxv) whether an Event of Servicing Termination has occurred since the prior Determination Date, specifying the Event of Servicing Termination if one has occurred; (xxvi) the amount to be distributed to the Credit Enhancer pursuant to Section 8.03(a)(vi), Section 8.03(a)(ix), and Section 8.03(a)(xi) of the Indenture, stated separately; (xxvii) the Guaranteed Principal Payment Amount for each Class of Notes for the Payment Date; 36 (xxviii) the Credit Enhancement Draw Amount for each Class of Notes for the related Payment Date; (xxix) the amount to be distributed on the Mortgage Loans in each Loan Group to the Transferor pursuant to Section 8.03(a)(xiii) of the Indenture; (xxx) the amount to be paid to the Master Servicer pursuant to Section 8.03(a)(x) of the Indenture; (xxxi) the Maximum Rate for the related Collection Period and the Weighted Average Net Loan Rate for the Mortgage Loans in each Loan Group; (xxxii) the expected amount of any optional advances pursuant to Section 4.03 by the Master Servicer on the Mortgage Loans in each Loan Group included in the distribution on the related Payment Date and the aggregate expected amount of optional advances pursuant to Section 4.03 by the Master Servicer outstanding on the Mortgage Loans in each Loan Group as of the close of business on the related Payment Date; (xxxiii) the Available Subordinated Transferor Amount for each Loan Group after giving effect to the distribution to be made on the related Payment Date; (xxxiv) the number and principal balances of any Mortgage Loans in each Loan Group transferred to the Transferor pursuant to Section 2.06; (xxxv) in the Servicing Certificates for the first and second Payment Dates, the number and Cut-off Date Asset Balance of Mortgage Loans for each Loan Group for which the Mortgage Loan File was not delivered to the Indenture Trustee within 30 days of the Closing Date; (xxxvi) the number and aggregate Asset Balances of Mortgage Loans in each Loan Group as to which the Minimum Monthly Payment is delinquent for 180 or more days; (xxxvii) the number and aggregate Asset Balances of Mortgage Loans in each Loan Group that are in foreclosure; (xxxviii)the number and aggregate Asset Balances of Mortgage Loans in each Loan Group for which the Master Servicer has received a written notice of the filing of bankruptcy or insolvency proceedings with respect to the mortgagor; and (xxxix) the sum of the Asset Balances for the three largest outstanding Mortgage Loans in each Loan Group. The Indenture Trustee and the Owner Trustee shall conclusively rely on the information contained in a Servicing Certificate for purposes of making distributions pursuant to Section 8.03 of the Indenture or distributions on the Transferor Certificates, shall have no duty to inquire into this information and shall have no liability in so relying. The format and content of the Servicing Certificate may be modified by the mutual agreement of the Master Servicer, the Indenture Trustee and the Credit Enhancer. The Master Servicer shall give notice of any changes to the Rating Agencies. 37 Section 4.02. Acknowledgement and Cooperation. The Depositor, the Master Servicer, and the Indenture Trustee acknowledge that without the need for any further action on the part of the Credit Enhancer, the Depositor, the Master Servicer, the Indenture Trustee, or the Note Registrar (a) to the extent the Credit Enhancer makes payments, directly or indirectly, on account of principal of or interest or other amounts on any Notes to the Holders of the Notes or the Credit Enhancer, as applicable, will be fully subrogated to the rights of these Holders to receive the principal and interest from the Trust and (b) the Credit Enhancer shall be paid the principal and interest or other amounts but only from the sources and in the manner provided in this Agreement for the payment of the principal and interest or other amounts. The Indenture Trustee and the Master Servicer shall cooperate in all respects with any reasonable request by the Credit Enhancer for action to preserve or enforce the Credit Enhancer's rights or interests under this Agreement and the Indenture without limiting the rights or affecting the interests of the Holders as otherwise stated in this Agreement and the Indenture. Section 4.03. Optional Advances of the Master Servicer. The Master Servicer, in its sole discretion, may advance the interest component of any delinquent Minimum Monthly Payment (or any portion of it) by depositing the amount into the Collection Account by the related Determination Date. Section 4.04. Statements to Noteholders. Concurrently with each payment to Noteholders, the Master Servicer shall deliver to the Indenture Trustee the data necessary to prepare a statement (the "Monthly Statement") for each Payment Date with the following information with respect to each Loan Group: (i) the related Investor Floating Allocation Percentage for the preceding Collection Period; (ii) the aggregate amount to be paid to the related Class of Noteholders; (iii) the amount of Note Interest in the payment related to each Class of Notes and the applicable Note Rate; (iv) the amount of any related Unpaid Investor Interest Shortfall in the payment; (v) the amount of the remaining related Unpaid Investor Interest Shortfall after giving effect to the payment; (vi) the amount of principal in the payment, separately stating its components; (vii) the amount of the reimbursement of previous related Investor Loss Amounts in the payment; (viii) the amount of the aggregate of unreimbursed related Investor Loss Reduction Amounts after giving effect to the payment; (ix) the amount of any related Basis Risk Carryforward in the payment; 38 (x) the amount of the remaining related Basis Risk Carryforward after giving effect to the payment; (xi) the Servicing Fee for the Payment Date; (xii) the Note Principal Balance of the related Class of Notes and the factor to seven decimal places obtained by dividing the Note Principal Balance of the related Class of Notes for the Payment Date by the Original Note Principal Balance of the related Class of Notes after giving effect to the payment; (xiii) the Loan Group Balance as of the end of the preceding Collection Period; (xiv) any Credit Enhancement Draw Amount for the related Class of Notes; (xv) the number and aggregate Asset Balances of Mortgage Loans in the related Loan Group as to which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89 days, and 90 or more days, respectively, as of the end of the preceding Collection Period; (xvi) the book value (within the meaning of 12 C.F.R. ss. 571.13 or comparable provision) of any real estate acquired through foreclosure or grant of a deed in lieu of foreclosure for the related Loan Group; (xvii) the amount of any optional advances on the Mortgage Loans in the related Loan Group pursuant to Section 4.03 by the Master Servicer included in the payment on the Payment Date and the aggregate amount of optional advances pursuant to Section 4.03 on Mortgage Loans in the related Loan Group by the Master Servicer outstanding as of the close of business on the Payment Date; (xviii) the Note Rate for the related Class of Notes for the Payment Date; (xix) the number and principal balances of any Mortgage Loans in that Loan Group retransferred to the Transferor pursuant to each of Section 2.04 and Section 2.06; (xx) the amount of Subordinated Transferor Collections for the Mortgage Loans in that Loan Group included in the payment; (xxi) the amount of Overcollateralization Step-Down Amount for that Loan Group included in the payment; (xxii) the Available Transferor Subordinated Amount for that Loan Group and the Payment Date; and (xxiii) for the first Payment Date, the number and Cut-off Date Asset Balance of Mortgage Loans in that Loan Group for which the Mortgage Loan File was not delivered to the Indenture Trustee within 30 days of the Closing Date. The amounts furnished pursuant to clauses (ii), (iii) (for Note Interest), (iv), (v), (vi), (vii), and (viii) above shall be expressed as a dollar amount per $1,000 increment of Notes. 39 If the Monthly Statement is not accessible to any of the Noteholders, the Master Servicer, the Credit Enhancer, or either Rating Agency on the Indenture Trustee's internet website, the Indenture Trustee shall forward a hard copy of it to each Noteholder, the Master Servicer, the Credit Enhancer, and each Rating Agency immediately after the Indenture Trustee becomes aware that the Monthly Statement is not accessible to any of them via the Indenture Trustee's internet website. The address of the Indenture Trustee's internet website where the Monthly Statement will be accessible is https://www.jpmorgan.com/sfr. Assistance in using the Indenture Trustee's internet website may be obtained by calling the Indenture Trustee's customer service desk at (877) 722-1095. The Indenture Trustee shall notify each Noteholder, the Master Servicer, the Credit Enhancer, and each Rating Agency in writing of any change in the address or means of access to the internet website where the Monthly Statement is accessible. Within 60 days after the end of each calendar year, the Master Servicer shall prepare and forward to the Indenture Trustee the information in clauses (iii) and (vi) above aggregated for the calendar year. This requirement of the Master Servicer shall be satisfied if substantially comparable information is provided by the Master Servicer or a Paying Agent pursuant to any requirements of the Code. The Indenture Trustee shall prepare (in a manner consistent with the treatment of the Notes as indebtedness of the Transferor, or as may be otherwise required by Section 3.14) Internal Revenue Service Form 1099 (or any successor form) and any other tax forms required to be filed or furnished to Noteholders for payments by the Indenture Trustee (or the Paying Agent) on the Notes and shall file and distribute such forms as required by law. ARTICLE V THE MASTER SERVICER, THE SPONSOR, AND THE DEPOSITOR Section 5.01. Liability of the Sponsor, the Master Servicer, and the Depositor. The Sponsor, the Depositor, and the Master Servicer shall be liable only for their express agreements under this Agreement. Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Master Servicer or the Depositor. Any corporation into which the Master Servicer or the Depositor may be merged or consolidated, or any corporation resulting from any merger, conversion, or consolidation to which the Master Servicer or the Depositor is a party, or any corporation succeeding to the business of the Master Servicer or the Depositor, shall be the successor of the Master Servicer or the Depositor, as the case may be, under this Agreement, without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, notwithstanding anything in this Agreement to the contrary. 40 Section 5.03. Limitation on Liability of the Master Servicer and Others. Neither the Master Servicer nor any of its directors, officers, employees, or agents is liable to the Trust, the Owner Trustee, the Transferor, or the Noteholders for the Master Servicer's taking any action or refraining from taking any action in good faith pursuant to this Agreement, or for errors in judgment. This provision shall not protect the Master Servicer or any of its directors, officers, employees, or agents against any liability that would otherwise be imposed for misfeasance, bad faith, or gross negligence in the performance of the duties of the Master Servicer or for reckless disregard of the obligations of the Master Servicer. The Master Servicer and any of its directors, officers, employees, or agents may rely in good faith on any document of any kind prima facie properly executed and submitted by any person about anything arising under this Agreement. The Master Servicer and each of its directors, officers, employees, and agents shall be indemnified by the Trust (but only from funds available from the applicable Loan Group) and held harmless against any loss, liability, or expense incurred in connection with any legal action relating to this Agreement, the Transferor Certificates, or the Notes, other than any loss, liability, or expense related to any specific Mortgage Loan that is otherwise not reimbursable pursuant to this Agreement and any loss, liability, or expense incurred due to its willful misfeasance, bad faith, or gross negligence in the performance of duties under this Agreement or due to its reckless disregard of its obligations under this Agreement. The Master Servicer need not appear in, prosecute, or defend any legal action that is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement, and that in its opinion may involve it in any expense or liability. The Master Servicer may in its sole discretion undertake any action that it deems appropriate with respect to this Agreement and the interests of the Noteholders. If so, the reasonable legal expenses and costs of the action and any resulting liability shall be expenses, costs, and liabilities of the Trust, and the Master Servicer shall only be entitled to be reimbursed pursuant to Section 8.03(a)(x) of the Indenture (but only from funds available from the applicable Loan Group). The Master Servicer's right to indemnity or reimbursement pursuant to this Section shall survive any resignation or termination of the Master Servicer pursuant to Section 5.04 or 6.01 with respect to any losses, expenses, costs, or liabilities arising before its resignation or termination (or arising from events that occurred before its resignation or termination). Section 5.04. Master Servicer Not to Resign. Subject to Section 5.02, the Master Servicer shall not resign as Master Servicer under this Agreement except (i) if the performance of its obligations under this Agreement are no longer permissible under applicable law or due to applicable law are in material conflict with any other activities carried on by it or its subsidiaries or Affiliates that are of a type and nature carried on by the Master Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii) if 41 (a) the Master Servicer has proposed a successor Master Servicer to the Indenture Trustee and the proposed successor Master Servicer is reasonably acceptable to the Indenture Trustee; (b) each Rating Agency has delivered a letter to the Indenture Trustee before the appointment of the successor Master Servicer stating that the proposed appointment of the successor Master Servicer as Master Servicer under this Agreement will not result in the reduction or withdrawal of the then current rating of the Notes without regard to the Policy; and (c) the proposed successor Master Servicer is reasonably acceptable to the Credit Enhancer in its sole discretion, as evidenced by a letter to the Indenture Trustee. No resignation by the Master Servicer shall become effective until the Indenture Trustee or successor Master Servicer designated by the Master Servicer has assumed the Master Servicer's obligations under this Agreement or the Indenture Trustee has designated a successor Master Servicer in accordance with Section 6.02. Any resignation shall not relieve the Master Servicer of responsibility for any of the obligations specified in Sections 6.01 and 6.02 as obligations that survive the resignation or termination of the Master Servicer. Any determination permitting the resignation of the Master Servicer pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to that effect delivered to the Indenture Trustee and the Credit Enhancer. The Master Servicer shall have no claim (whether by subrogation or otherwise) or other action against the Transferor, any Noteholder, or the Credit Enhancer for any amounts paid by the Master Servicer pursuant to any provision of this Agreement. Section 5.05. Delegation of Duties. In the ordinary course of business, the Master Servicer may delegate any of its duties under this Agreement at any time to any person who agrees to act in accordance with standards comparable to those with which the Master Servicer complies pursuant to Section 3.01, including any of its Affiliates or any subservicer referred to in Section 3.01. This delegation shall not relieve the Master Servicer of its obligations under this Agreement and shall not constitute a resignation within the meaning of Section 5.04. Section 5.06. Indemnification by the Master Servicer. The Master Servicer shall indemnify the Trust, the Owner Trustee, and the Indenture Trustee against any loss, liability, expense, damage, or injury suffered or sustained due to the Master Servicer's actions or omissions in servicing or administering the Mortgage Loans that are not in accordance with this Agreement, including any judgment, award, settlement, reasonable attorneys' fees, and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding, or claim. This indemnification is not payable from the assets of the Trust. This indemnity shall run directly to and be enforceable by an injured party subject to any applicable limitations. The Indenture Trustee and any director, officer, employee or agent of the Indenture 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, the 42 Indenture, the Custodial Agreement, the Administration Agreement, the Notes, or the Transferor Certificates, or in connection with the performance of any of the Indenture Trustee's duties thereunder, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of any of the Indenture Trustee's duties under this Agreement, the Indenture or the Custodial Agreement or by reason of reckless disregard of the Indenture Trustee's obligations and duties hereunder. The indemnity provisions of this Section shall survive the termination of this Agreement or the resignation or removal of the Indenture Trustee hereunder. Section 5.07. Credit Enhancer's Rights Regarding Actions, Proceedings, or Investigations. Until the Notes have been paid in full, all amounts owed to the Credit Enhancer have been paid in full, the Insurance Agreement has terminated, and the Policy has been returned to the Credit Enhancer for cancellation, notwithstanding anything contained in this Agreement or in the other Transaction Documents to the contrary, the Credit Enhancer shall have the right to participate in, to direct the enforcement or defense of, and, at the Credit Enhancer's sole option, to institute or assume the defense of, any action, proceeding, or investigation (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that could adversely affect the Collateral, the Issuer, or the rights or obligations of the Credit Enhancer under the Policy or the Transaction Documents, including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, or any affiliate of any of them. Following notice to the Owner Trustee and the Indenture Trustee, the Credit Enhancer shall have exclusive right to determine, in its sole discretion, the actions necessary to preserve and protect the Collateral and the Issuer. All costs and expenses of the Credit Enhancer in connection with such action, proceeding, or investigation, including any judgment or settlement entered into affecting the Credit Enhancer or the Credit Enhancer's interests, shall be included in reimbursement amount owed to the Credit Enhance under Section 8.03(a)(ix) and Section 8.03(a)(xi) of the Indenture. ARTICLE VI SERVICING TERMINATION Section 6.01. Events of Servicing Termination. If any one of the following events ("Events of Servicing Termination") shall occur and be continuing: (i) any failure by the Master Servicer to deposit in the Collection Account any deposit required to be made under this Agreement or to remit to the Indenture Trustee amounts required to be deposited to the Payment Account that continues unremedied either beyond the relevant Payment Date or for five Business Days (or, if the Master Servicer is permitted to remit collections on a monthly basis pursuant to Section 3.02(b), three Business Days) after the date when notice of the failure has been 43 given to the Master Servicer by the Indenture Trustee or to the Master Servicer and the Indenture Trustee by the Credit Enhancer or Holders of Notes representing not less than 25% of the Outstanding Amount of both Classes of Notes; or (ii) failure by the Master Servicer duly to observe or perform in any material respect any other covenants or agreements of the Master Servicer in the Notes or in this Agreement that materially and adversely affects the interests of the Noteholders or the Credit Enhancer and continues unremedied for a period of 60 days after the date on which notice of the failure, requiring it to be remedied, and stating that the notice is a "Notice of Default" under this Agreement, has been given to the Master Servicer by the Indenture Trustee or to the Master Servicer and the Indenture Trustee by the Credit Enhancer or the Holders of Notes representing not less than 25% of the Outstanding Amount of both Classes of Notes; or (iii) an Insolvency Event occurs with respect to the Master Servicer; then, until the Event of Servicing Termination has been remedied by the Master Servicer, either the Indenture Trustee (with the consent of the Credit Enhancer), the Credit Enhancer, or the Holders of Notes representing not less than 51% of the Outstanding Amount of both Classes of Notes with the consent of the Credit Enhancer by notice then given to the Master Servicer (and to the Indenture Trustee if given by the Credit Enhancer or the Holders of Notes) may terminate all of the rights and obligations of the Master Servicer as servicer under this Agreement. This notice to the Master Servicer shall also be given to each Rating Agency and the Credit Enhancer. From the receipt by the Master Servicer of the notice, all the rights and obligations of the Master Servicer under this Agreement, whether with respect to the Notes or the Mortgage Loans or otherwise, shall pass to and be vested in the Indenture Trustee pursuant to this Section; and the Indenture Trustee is authorized to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any documents, and to do anything else appropriate to effect the purposes of the notice of termination, whether to complete the transfer and endorsement of each Mortgage Loan and related documents, or otherwise. The Master Servicer agrees to cooperate with the Indenture Trustee in effecting the termination of the rights and obligations of the Master Servicer under this Agreement, including the transfer to the Indenture Trustee for the administration by it of all cash amounts that are held by the Master Servicer and are to be deposited by it in the Collection Account, or that have been deposited by the Master Servicer in the Collection Account or are subsequently received by the Master Servicer with respect to the Mortgage Loans. All reasonable costs and expenses (including attorneys' fees) incurred in connection with transferring the Mortgage Files to the successor Master Servicer and amending this Agreement to reflect the succession as Master Servicer pursuant to this Section shall be paid by the predecessor Master Servicer (or if the predecessor Master Servicer is the Indenture Trustee, the initial Master Servicer) on presentation of reasonable documentation of the costs and expenses. Notwithstanding the foregoing, a delay in or failure of performance under Section 6.01(i) for a period of five or more Business Days or under Section 6.01(ii) for a period 44 of 60 or more days, shall not constitute an Event of Servicing Termination if the delay or failure could not be prevented by the exercise of reasonable diligence by the Master Servicer and the delay or failure was caused by an act of God or the public enemy, acts of declared or undeclared war, public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods, or similar causes. The preceding sentence shall not relieve the Master Servicer from using its best efforts to perform its obligations in a timely manner in accordance with the terms of this Agreement, and the Master Servicer shall provide the Indenture Trustee, the Depositor, the Transferor, the Credit Enhancer, and the Noteholders with an Officers' Certificate giving prompt notice of its failure or delay, together with a description of its efforts to perform its obligations. The Master Servicer shall immediately notify the Indenture Trustee of any Events of Servicing Termination. In connection with the termination of the Master Servicer if any mortgage is registered on the MERS(R) System, then, either (i) the successor Master Servicer, including the Indenture Trustee if the Indenture 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 all the mortgages registered on the MERS(R) System from MERS to the Indenture Trustee and to execute and deliver any other notices and documents appropriate to effect a transfer of those mortgages or the servicing of the Mortgage Loan on the MERS(R) System to the successor Master Servicer. The predecessor Master Servicer shall file the assignment in the appropriate recording office. The successor Master Servicer shall deliver the assignment to the Indenture Trustee promptly upon receipt of the original with evidence of recording on it or a copy certified by the public recording office in which the assignment was recorded. Section 6.02. Indenture Trustee to Act; Appointment of Successor. (a) From the time the Master Servicer receives a notice of termination pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Indenture Trustee shall be the successor in all respects to the Master Servicer in its capacity as Master Servicer under this Agreement and the transactions contemplated by this Agreement and shall be subject to all the obligations of the Master Servicer under this Agreement except (i) the obligation to repurchase or substitute for any Mortgage Loan, (ii) with respect to any representation or warranty of the Master Servicer, or (iii) for any act or omission of either a predecessor or successor Master Servicer other than the Indenture Trustee. As its compensation under this Agreement, the Indenture Trustee shall be entitled to the compensation the Master Servicer would have been entitled to under this Agreement if no notice of termination had been given. In addition, the Indenture Trustee will be entitled to compensation with respect to its expenses in connection with conversion of certain information, documents, and record keeping, as provided in Section 6.01. Notwithstanding the above, (i) if the Indenture Trustee is unwilling to act as successor Master Servicer, or (ii) if the Indenture Trustee is legally unable to so act, the Indenture Trustee 45 may (in the situation described in clause (i)) or shall (in the situation described in clause (ii)) appoint, or petition a court of competent jurisdiction to appoint, any established housing and home finance institution, bank, or other mortgage loan or home equity loan servicer having a net worth of not less than $15,000,000 as the successor to the Master Servicer under this Agreement to assume of any obligations of the Master Servicer under this Agreement. The successor Master Servicer must be acceptable to the Credit Enhancer in its sole discretion, as evidenced by the Credit Enhancer's prior consent, as applicable, which consent shall not be unreasonably withheld. The appointment of the successor Master Servicer must not result in the qualification, reduction, or withdrawal of the ratings assigned to the Notes by the Rating Agencies without regard to the Policy. Pending appointment of a successor to the Master Servicer, unless the Indenture Trustee is prohibited by law from so acting, the Indenture Trustee shall act as Master Servicer. In connection with this appointment and assumption, the successor shall be entitled to receive compensation out of payments on Mortgage Loans in an amount equal to the compensation that the Master Servicer would otherwise have received pursuant to Section 3.08 (or any lesser compensation the Indenture Trustee and the successor agree to). The Indenture Trustee and the successor shall take any action, consistent with this Agreement, necessary to effectuate the succession. (b) The appointment of a successor Master Servicer shall not affect any liability of the predecessor Master Servicer that may have arisen under this Agreement before its termination as Master Servicer (including any deductible under an insurance policy pursuant to Section 3.04), nor shall any successor Master Servicer be liable for any acts or omissions of the predecessor Master Servicer or for any breach by the predecessor Master Servicer of any of its representations or warranties contained in this Agreement. Except for any compensation agreement with the Indenture Trustee, any successor Master Servicer shall be subject to all the terms of this Agreement from the time that it accepts its appointment to the same extent as if it were originally named as Master Servicer. Section 6.03. Notification to Noteholders and the Transferor. Upon any termination or appointment of a successor to the Master Servicer pursuant to this Article or Section 5.04, the Indenture Trustee shall give prompt notice of it to the Noteholders at their respective addresses appearing in the Note Register, the Transferor, the Credit Enhancer, and each Rating Agency. ARTICLE VII TERMINATION Section 7.01. Termination. (a) The respective obligations and responsibilities of the Sponsor, the Master Servicer, the Depositor, the Trust, and the Indenture Trustee created by this Agreement (other than the obligation of the Master Servicer to send certain notices) shall terminate on the earlier of 46 (i) the transfer of all the Mortgage Loans pursuant to Section 7.01(b), (ii) the termination of the Trust Agreement or the Indenture, and (iii) the final payment or other liquidation of the last Mortgage Loan remaining in the Trust or the disposition of all property acquired in foreclosure or by deed in lieu of foreclosure of any Mortgage Loan. Upon termination in accordance with this Section, the Indenture Trustee shall execute any documents and instruments of transfer presented by the Transferor, in each case without recourse, representation, or warranty, and take any other actions the Transferor reasonably requests to effect the transfer of the Mortgage Loans to the Transferor. Notwithstanding the termination of this Agreement, the Master Servicer shall comply with this Agreement in winding up activities under this Agreement after termination if necessary. (b) With the consent of the Credit Enhancer the Transferor may effect the transfer of all the Mortgage Loans at their termination purchase price on any Payment Date from the Payment Date immediately before which the aggregate Note Principal Balance of both Classes of Notes is less than or equal to 10% of the aggregate Original Note Principal Balance of both Classes of Notes and require the Issuer to redeem the Notes pursuant to Section 10.01 of the Indenture with the proceeds. If the Transferor does not effect this transfer, the Credit Enhancer, with the prior consent of the Transferor (which consent will not be unreasonably withheld), may elect to purchase all the Mortgage Loans at their termination purchase price and require the Issuer to redeem the Notes pursuant to Section 10.01 of the Indenture with the proceeds. The termination purchase price is the sum of: (i) the aggregate Note Principal Balance for both Classes of Notes, (ii) accrued aggregate Note Interest through the day preceding the final Payment Date, and (iii) interest accrued on any aggregate Unpaid Investor Interest Shortfall, to the extent legally permissible. (c) The Transferor must notify the Issuer, the Credit Enhancer, the Trust, and the Indenture Trustee of any election to effect the transfer of the Mortgage Loans pursuant to Section 7.01(b) no later than the first day of the month before the month in which the transfer is to occur. The proceeds from the purchase of the Mortgage Loans, for purposes of payments on the Notes, shall be considered to have been received in the Collection Period before the Collection Period in which the Payment Date on which the purchase takes place occurs. ARTICLE VIII MISCELLANEOUS PROVISIONS Section 8.01. Amendment. This Agreement may be amended from time to time by the Sponsor, the Master Servicer, the Depositor, the Credit Enhancer, the Owner Trustee, and the Indenture Trustee, if 47 the Rating Agency Condition is satisfied (in connection with which the consent of the Credit Enhancer shall not be unreasonably withheld). However, no amendment that significantly changes the permitted activities of the Trust may be promulgated without the consent of a majority of the aggregate Outstanding Amount of both Classes of Notes. For this purpose no Notes owned by the Sponsor or any of its affiliates may vote, nor shall their Notes be considered outstanding. This Agreement may also be amended from time to time by the Sponsor, the Master Servicer, the Depositor, the Owner Trustee, and the Indenture Trustee, with the consent of the Credit Enhancer (which consent shall not be unreasonably withheld) and Holders of not less than 662/3% of the aggregate Outstanding Amount of both Classes of Notes. The Indenture Trustee may enter into any amendment of this Agreement as to which the Rating Agency Condition is satisfied, and when so requested by an Issuer Request, the Indenture Trustee shall enter into any amendment of this Agreement (i) that does not impose further obligations or liabilities on the Indenture Trustee, and (ii) as to which either the Rating Agency Condition is satisfied or Holders of not less than 662/3% of the aggregate Outstanding Amount of both Classes of Notes and the Credit Enhancer have consented. Following the execution and delivery of any amendment to this Agreement or to the Policy to which the Credit Enhancer was required to consent, either the Transferor, if the Transferor requested the amendment, or the Master Servicer, if the Master Servicer requested the amendment, shall reimburse the Credit Enhancer for the reasonable out-of-pocket costs and expenses incurred by them in connection with the amendment. Before the execution of the amendment, the party to this Agreement requesting the amendment shall notify each Rating Agency of the substance of the amendment. The Indenture Trustee shall deliver fully executed original counterparts of the instruments effecting the amendment to the Credit Enhancer. Section 8.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE. Section 8.03. Notices. All notices, demands, instructions, consents, and other communications required or permitted under this Agreement shall be in writing and signed by the party giving the same and shall be personally delivered or sent by first class or express mail (postage prepaid), national overnight courier service, or by facsimile transmission or other electronic communication device capable of transmitting or creating a written record (confirmed by first class mail) and shall be considered to be given for purposes of this Agreement on the day that the writing is delivered when personally delivered or sent by facsimile or overnight courier or three Business Days after it was sent to its intended recipient if sent by first class mail. A facsimile has been delivered when the sending machine issues an electronic confirmation of transmission. Unless 48 otherwise specified in a notice sent or delivered in accordance with the provisions of this Section, notices, demands, instructions, consents, and other communications in writing shall be given to or made on the respective parties at their respective addresses indicated below: if to the Trust at: CWABS Revolving Home Equity Loan Trust, Series 2004-P Wilmington Trust Company, as Owner Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration Telecopy: 302-651-8882 if to the Depositor at: CWABS, Inc. 4500 Park Granada Calabasas, California 91302 Attention: Legal Department Telecopy: (818) 225-8882 if to the Master Servicer at: Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, California 91302 Attention: Legal Department, Telecopy: (818) 225-4028 if to the Indenture Trustee at: the Corporate Trust Office Telecopy: 312-336-8840 if to the Credit Enhancer at: MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Attention: Insured Portfolio Management-Structured Finance ("IPM-SF") (CWABS Revolving Home Equity Loan Trust, Series 2004-P) Telecopy: (914) 765-3810 Confirmation: (914) 273-4545 if to Moody's at: Residential Loan Monitoring Group, 4th Floor 99 Church Street New York, New York 10007 49 and if to Standard & Poor's at: 55 Water Street New York, New York 10041 Whenever a notice or other communication to the Credit Enhancer refers to an Event of Servicing Termination or with respect to which failure on the part of the Credit Enhancer to respond would constitute consent or acceptance, then a copy of the notice or other communication shall also be sent to the attention of the General Counsel of the Credit Enhancer and shall be marked to indicate "URGENT MATERIAL ENCLOSED." Section 8.04. Severability of Provisions. Any provisions of this Agreement that are held invalid for any reason or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and the prohibition or unenforceability in a jurisdiction shall not invalidate or render unenforceable that provision in any other jurisdiction. Section 8.05. Assignment. Except as provided in Sections 5.02 and 5.04, this Agreement may not be assigned by the Depositor or the Master Servicer without the prior consent of the Credit Enhancer. Section 8.06. Third-Party Beneficiaries. This Agreement will be binding on the parties to this Agreement, and inure to the benefit of the parties to this Agreement, the Noteholders, the Transferor, the Note Owners, the Owner Trustee, and the Credit Enhancer and their respective successors and permitted assigns. The Credit Enhancer is a third party beneficiary of this Agreement. No other person will have any rights under this Agreement. Section 8.07. Counterparts. This Agreement may be executed in any number of copies, and by the different parties on the same or separate counterparts, each of which shall be considered to be an original instrument. Section 8.08. Effect of Headings and Table of Contents. The Article and Section headings in this Agreement and the Table of Contents are for convenience only and shall not affect the construction of this Agreement. 50 IN WITNESS WHEREOF, the Depositor, the Sponsor and Master Servicer, the Trust, and the Indenture Trustee have caused this Agreement to be duly executed by their respective officers all as of the day and year first above written. CWABS, INC. Depositor By: /s/ Leon Daniels, Jr. ------------------------------ Name: Leon Daniels, Jr. Title: Vice President COUNTRYWIDE HOME LOANS, INC. Sponsor and Master Servicer By: /s/ Leon Daniels, Jr. ------------------------------ Name: Leon Daniels, Jr. Title: Senior Vice President JPMORGAN CHASE BANK Indenture Trustee By: /s/ Steven E. Charles ------------------------------ Name: Steven E. Charles Title: Authorized Officer 51 CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: /s/ Patricia A. Evans ------------------------------ Name: Patricia A. Evans Title: Assistant Vice President 52 State of CALIFORNIA ) ) ss.: County of LOS ANGELES ) On the 29th day of October, 2004 before me, a notary public in and for the State of California, personally appeared Leon Daniels, Jr., known to me who, being by me duly sworn, did depose and say that he resides at Calabasas, California; that he is the Vice President of CWABS, Inc. a Delaware corporation, one of the parties that executed the foregoing instrument; that he signed his name thereto by order of the Board of Directors of said corporation. /s/ Glenda J. Daniel - ---------------------------- Notary Public Glenda J. Daniel Commission # 1325392 Notary Public - California Los Angeles County My Comm. Expires October 15, 2005. 53 State of CALIFORNIA ) ) ss.: County of LOS ANGELES ) On the 29th day of October, 2004 before me, a notary public in and for the State of California, personally appeared Leon Daniels, Jr., known to me who, being by me duly sworn, did depose and say that he resides at Calabasas, California; that he is the Senior Vice President of Countrywide Home Loans, Inc., a New York corporation, one of the parties that executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said corporation. /s/ Glenda J. Daniel - -------------------------- Notary Public Glenda J. Daniel Commission # 1325392 Notary Public - California Los Angeles County My Comm. Expires October 15, 2005. 54 State of ILLINOIS ) ) ss.: County of COOK ) On the 29th day of October, 2004 before me, a notary public in and for the State of Illinois, personally appeared Steven E. Charles, known to me who, being by me duly sworn, did depose and say that he resides at Batavia, Illinois; that he is the Authorized Officer of JPMorgan Chase Bank, a New York corporation, one of the parties that executed the foregoing instrument; that he signed his name thereto by order of the Board of Directors of said corporation. /s/ Sheila Sheree Reaves --------------------------------- OFFICIAL SEAL Notary Public, State of Illinois My Commission Expires: August 9, 2005 -------------- 55 State of DELAWARE ) ) ss.: County of NEW CASTLE ) On the 2nd day of November, 2004 before me, a notary public in and for the State of Delaware, personally appeared Patricia A. Evans, known to me who, being by me duly sworn, did depose and say that she resides at Wilmington, Delaware; that she is the Assistant Vice President of Wilmington Trust Company, not in its individual capacity but in its capacity as Owner Trustee of CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P, one of the parties that executed the foregoing instrument; that he signed his name thereto by order of the Board of Directors of said corporation. /s/ Janel R. Havrilla --------------------- Notary Public My Commission Expires May 17, 2006 56 EXHIBIT A MORTGAGE LOAN SCHEDULE [Delivered to Indenture Trustee Only] A-1 EXHIBIT B FORM OF CREDIT LINE AGREEMENT B-1 EXHIBIT C FORM OF LETTER OF REPRESENTATIONS C-1 EXHIBIT D FORM OF REQUEST FOR RELEASE OF DOCUMENTS [DATE] JPMorgan Chase Bank as Indenture Trustee 4 New York Plaza 6th Floor New York, New York 10004 Attention: Institutional Trust Services, Countrywide HEL CWABS 2004-P Attn: Corporate Trust Services Division Re: CWABS, Inc. Revolving Home Equity Loan Asset Backed Notes, Series 2004-P --------------------------------- Gentlemen: In connection with the administration of the Mortgage Loans held by you as Indenture Trustee under the Sale and Servicing Agreement, dated as of October 29, 2004, among CWABS, Inc. as Depositor, Countrywide Home Loans, Inc., as Sponsor and Master Servicer, CWABS Revolving Home Equity Loan Trust, Series 2004-P and you, as Indenture Trustee (the "Agreement"), we hereby request a release of the Mortgage File held by you as Indenture Trustee with respect to the following described Mortgage Loan for the reason indicated below. Loan No.: - -------- [MIN No.] ------- Reason for requesting file: - -------------------------- _______________________ 1. Mortgage Loan paid in full. (The Master Servicer hereby certifies that all amounts received in connection with the payment in full of the Mortgage Loan which are required to be deposited in the Collection Account pursuant to Section 3.02 of the Agreement have been so deposited). _______________________ 2. Retransfer of Mortgage Loan. (The Master Servicer hereby certifies that the Transfer Deposit Amount has been deposited in the Collection Account pursuant to the Agreement). _______________________ 3. The Mortgage Loan is being foreclosed. _______________________ 4. The Mortgage Loan is being re-financed by another depository institution. (The Master Servicer hereby certifies that all amounts received in connection with the payment in full of the Mortgage Loan which are required to be deposited in the Collection Account pursuant to Section 3.02 of the Agreement have been so deposited). _______________________ 5. Other (Describe). The undersigned acknowledges that the above Mortgage File will be held by the undersigned in accordance with the provisions of the Agreement and will promptly be returned D-1 to the Indenture Trustee when the need therefor by the Master Servicer no longer exists unless the Mortgage Loan has been liquidated or retransferred. Capitalized terms used herein shall have the meanings ascribed to them in the Agreement. COUNTRYWIDE HOME LOANS, INC. By:_______________________________ Name: Title: Servicing Officer D-2 EXHIBIT E STANDARD & POOR'S GLOSSARY Standard & Poor's Predatory Lending Categorization Standard & Poor's has categorized loans governed by anti-predatory lending laws in the jurisdictions listed below into three categories based on a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor's High Cost Loan category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry.
- --------------------------------------------------------------------------------------------------------- Standard & Poor's High-Cost Loan Categorization - --------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - --------------------------------------------------------------------------------------------------------- Arkansas High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Cleveland Heights, Ohio Covered Loan - --------------------------------------------------------------------------------------------------------- Colorado Covered Loan - --------------------------------------------------------------------------------------------------------- Connecticut High Cost Home Loan - --------------------------------------------------------------------------------------------------------- District of Columbia Covered Loan - --------------------------------------------------------------------------------------------------------- Florida High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002 - March 6, 2003) High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Georgia as amended (March 7, 2003 - current) High Cost Home Loan - --------------------------------------------------------------------------------------------------------- HOEPA Section 32 High Cost Loan - --------------------------------------------------------------------------------------------------------- Illinois High Risk Home Loan - --------------------------------------------------------------------------------------------------------- Kansas High Loan-to-Value Consumer Loans and High APR Consumer Loans - --------------------------------------------------------------------------------------------------------- Kentucky High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Los Angeles, Calif. High Cost Refinance Home Loan - --------------------------------------------------------------------------------------------------------- Maine High Rate High Fee mortgage - --------------------------------------------------------------------------------------------------------- Massachusetts High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Nevada Home Loan - --------------------------------------------------------------------------------------------------------- New Jersey High Cost Home Loan - --------------------------------------------------------------------------------------------------------- New York High Cost Home Loan - --------------------------------------------------------------------------------------------------------- New Mexico High Cost Home Loan - --------------------------------------------------------------------------------------------------------- North Carolina High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Oakland, Calif. High Cost Home Loan - --------------------------------------------------------------------------------------------------------- Ohio Covered Loan - --------------------------------------------------------------------------------------------------------- Oklahoma Subsection 10 Mortgage - --------------------------------------------------------------------------------------------------------- South Carolina High Cost Home Loan - --------------------------------------------------------------------------------------------------------- West Virginia West Virginia Mortgage Loan Act Loan - -------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- Standard & Poor's Covered Loan Categorization - --------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - --------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002 - March 6, 2003) Covered Loan - --------------------------------------------------------------------------------------------------------- New Jersey Covered Home Loan - ---------------------------------------------------------------------------------------------------------
E-1
- --------------------------------------------------------------------------------------------------------- Standard & Poor's Home Loan Categorization - --------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - --------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002- March 6, 2003) Home Loan - --------------------------------------------------------------------------------------------------------- New Jersey Home Loan - --------------------------------------------------------------------------------------------------------- New Mexico Home Loan - --------------------------------------------------------------------------------------------------------- North Carolina Consumer Home Loan - --------------------------------------------------------------------------------------------------------- Oakland, Calif. Home Loan - --------------------------------------------------------------------------------------------------------- South Carolina Consumer Home Loan - ---------------------------------------------------------------------------------------------------------
E-2 ANNEX 1 DEFINITIONS "Affiliate" of any person means any other person controlling, controlled by or under common control with the person. For purposes of this definition, "control" means the power to direct the management and policies of a person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and "controlling" and "controlled" shall have meanings correlative to the foregoing. "Agreement" means this Sale and Servicing Agreement. "Appraised Value" for any Mortgaged Property means the value established by any of the following: (i) with respect to Credit Line Agreements with Credit Limits greater than $100,000, by a full appraisal, (ii) with respect to Credit Line Agreements with Credit Limits equal to or less than $100,000, by either a drive by inspection or electronic appraisal of the Mortgaged Property made to establish compliance with the underwriting criteria then in effect in connection with the application for the Mortgage Loan secured by the Mortgaged Property, and (iii) with respect to any Mortgage Loan as to which the Servicer consents to a new senior lien pursuant to Section 3.01(a), in compliance with the underwriting criteria then in effect in connection with the application for the related senior mortgage loan. "Collection Account" means the Eligible Account or Eligible Accounts created and maintained for the benefit of the Noteholders, the Transferor, and the Credit Enhancer pursuant to Section 3.02(b). "Combined Loan-to-Value Ratio" for any Mortgage Loan as of any date means a fraction o whose numerator is the sum of (i) the Credit Limit and (ii) the outstanding principal balance as of the date of execution of the related original Credit Line Agreement (or any subsequent date as of which the outstanding principal balance may be determined in connection with an increase in the Credit Limit for the Mortgage Loan) of any mortgage loans that are senior or equal in priority to the Mortgage Loan and that are secured by the same Mortgaged Property and o whose denominator is the Valuation of the related Mortgaged Property. "Credit Limit Utilization Rate" for any Mortgage Loan means a fraction whose numerator is the Cut-off Date Asset Balance for the Mortgage Loan and whose denominator is the related Credit Limit. "Cut-off Date Loan Balance" means the Loan Balance calculated as of the Cut-off Date. "Defective Mortgage Loan" means a Mortgage Loan subject to retransfer pursuant to Section 2.02 or 2.04. "Delay Delivery Certification" has the meaning given to it in the Custodial Agreement. "Depositor" means CWABS, Inc., a Delaware corporation, or its successor in interest. Ann-1-1 "Draw" for any Mortgage Loan means an additional borrowing by the mortgagor after the Cut-off Date, in accordance with the related Mortgage Note. "Due Date" for any Mortgage Loan means the fifteenth day of the month. "Electronic Ledger" means the electronic master record of home equity credit line mortgage loans maintained by the Master Servicer or by the Sponsor, as appropriate. "Eligible Substitute Mortgage Loan" means a Mortgage Loan substituted by the Sponsor for a Defective Mortgage Loan that must, on the date of the substitution, (i) have an outstanding Asset Balance (or in the case of a substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an aggregate Asset Balance), not 10% more or 10% less than the Transfer Deficiency relating to the Defective Mortgage Loan; (ii) have a Loan Rate not less than the Loan Rate of the Defective Mortgage Loan and not more than 1.000% in excess of the Loan Rate of the Defective Mortgage Loan; (iii) have a Loan Rate based on the same Index with adjustments to the Loan Rate made on the same Interest Rate Adjustment Date as that of the Defective Mortgage Loan; (iv) have a FICO score not less than the FICO score of the Defective Mortgage Loan and not more than 50 points higher than the Defective Mortgage Loan; (v) have a Gross Margin that is not less than the Gross Margin of the Defective Mortgage Loan and not more than 100 basis points higher than the Gross Margin for the Defective Mortgage Loan; (vi) have a mortgage of the same or higher level of priority as the mortgage relating to the Defective Mortgage Loan at the time the mortgage was transferred to the Trust; (vii) have a remaining term to maturity not more than six months earlier than the remaining term to maturity of the Defective Mortgage Loan, not later than the maturity date of the related Notes, and not more than 60 months later than the remaining term to maturity of the Defective Mortgage Loan; (viii) comply with each representation and warranty in Section 2.04 (to be made as of the date of substitution); and (ix) have an original Combined Loan-to-Value Ratio not greater than that of the Defective Mortgage Loan. More than one Eligible Substitute Mortgage Loan may be substituted for a Defective Mortgage Loan if the Eligible Substitute Mortgage Loans meet the foregoing attributes in the aggregate and the substitution is approved in advance by the Credit Enhancer. "Event of Servicing Termination" has the meaning given to it in Section 6.01. Ann-1-2 "Excess Spread Percentage" has the meaning given to it in the Insurance Agreement. "FDIC" means the Federal Deposit Insurance Corporation or any successor to it. "Foreclosure Profit" on a Liquidated Mortgage Loan means the amount by which (i) the aggregate of its Net Liquidation Proceeds exceeds (ii) the related Asset Balance (plus accrued and unpaid interest on it at the applicable Loan Rate from the date interest was last paid to the end of the Collection Period during which the Mortgage Loan became a Liquidated Mortgage Loan) of the Liquidated Mortgage Loan immediately before the final recovery of its Liquidation Proceeds. "Gross Margin" for any Mortgage Loan means the percentage shown as the "Gross Margin" for the Mortgage Loan on Exhibit A to the Sale and Servicing Agreement. "Increased Senior Lien Limitation" has the meaning given to it in Section 3.01(a). "Indenture" means the indenture of even date with this Agreement between the Trust and the Indenture Trustee. "Indenture Trustee Fee" means a fee that is separately agreed to between the Master Servicer and the Indenture Trustee. "Indenture Trustee Fee Rate" means the per annum rate at which the Indenture Trustee Fee is calculated. "Index" for each Interest Rate Adjustment Date for a Mortgage Loan means the highest "prime rate" as published in the "Money Rates" table of The Wall Street Journal as of the first business day of the calendar month. "Insurance Proceeds" means proceeds paid by any insurer (other than the Credit Enhancer under the Policy) pursuant to any insurance policy covering a Mortgage Loan net of any amount (i) covering any expenses of the Master Servicer in connection with obtaining the proceeds, (ii) applied to the restoration or repair of the related Mortgaged Property, (iii) released to the mortgagor in accordance with the Master Servicer's normal servicing procedures, or (iv) required to be paid to any holder of a mortgage senior to the Mortgage Loan. "Interest Rate Adjustment Date" for each Mortgage Loan means any date on which the Loan Rate is adjusted in accordance with the related Credit Line Agreement. "Lien" means any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation, deposit arrangement, encumbrance, lien (statutory or other), preference, priority right, or interest or other Security Agreement or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any Financing Statement under the UCC (other than any Financing Statement filed for informational purposes only) or comparable law of any jurisdiction to evidence any of the foregoing except that any assignment pursuant to Section 5.02 is not a Lien. "Lifetime Rate Cap" for each Mortgage Loan whose related Mortgage Note provides for a lifetime rate cap means the maximum Loan Rate permitted over the life of the Mortgage Ann-1-3 Loan under the terms of the related Credit Line Agreement, as shown on the Mortgage Loan Schedule. "Liquidated Mortgage Loan" for any Payment Date means any Mortgage Loan in respect of which the Master Servicer has determined, in accordance with the servicing procedures specified in this Agreement, as of the end of the related Collection Period, that all Liquidation Proceeds which it expects to recover with respect to the disposition of the Mortgage Loan or the related REO have been recovered. "Liquidation Expenses" means out-of-pocket expenses (exclusive of overhead) that are incurred by the Master Servicer in connection with the liquidation of any Mortgage Loan and not recovered under any insurance policy, including legal fees and expenses, any unreimbursed amount expended pursuant to Section 3.06 (including amounts advanced to correct defaults on any mortgage loan which is senior to the Mortgage Loan and amounts advanced to keep current or pay off a mortgage loan that is senior to the Mortgage Loan) respecting the related Mortgage Loan and any related and unreimbursed expenditures with respect to real estate property taxes, water or sewer taxes, condominium association dues, property restoration or preservation or insurance against casualty, loss or damage. "Liquidation Proceeds" means proceeds (including Insurance Proceeds but not including amounts drawn under the Policy) received in connection with the liquidation of any Mortgage Loan or related REO, whether through trustee's sale, foreclosure sale or otherwise. "Loan Rate Cap" for each Mortgage Loan means the lesser of (i) the Lifetime Rate Cap or (ii) the applicable state usury ceiling. "Loan-to-Value Ratio" for any date of determination for any mortgage loan means a fraction whose numerator is the outstanding principal balance of the mortgage loan as of the date of determination and whose denominator is the Valuation of the related Mortgaged Property. "Master Servicer" means Countrywide Home Loans, Inc., a New York corporation and any successor to it and any successor under this Agreement. "Minimum Monthly Payment" for any Mortgage Loan and any month means the minimum amount required to be paid by the related mortgagor in that month. "Net Liquidation Proceeds" for any Liquidated Mortgage Loan means Liquidation Proceeds net of Liquidation Expenses. "Officer's Certificate" means a certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Managing Director, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant Secretaries of the Depositor, the Sponsor, the Transferor, or the Master Servicer, or (ii), if provided for in this Agreement, signed by a Servicing Officer. "Opinion of Counsel" means a written opinion of counsel acceptable to the Indenture Trustee, who may be in-house counsel for the Depositor, the Sponsor, the Master Servicer, or the Transferor (except that any opinion pursuant to Section 5.04 or relating to taxation must be Ann-1-4 an opinion of independent outside counsel) and who, in the case of opinions delivered to the Credit Enhancer or the Rating Agency, is reasonably acceptable to it. "Purchase Price" with respect to any Mortgage Loan required to be purchased by a Sponsor pursuant to Section 2.03 or 2.04 or purchased at the option of the Master Servicer pursuant to Section 3.01 or 3.06 means an amount equal to the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan on the date of such purchase, (ii) accrued interest on the Mortgage Loan at the applicable Mortgage Rate (or at the applicable Adjusted Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if the purchaser is Countrywide and Countrywide is an affiliate of the Master Servicer) from the date through which interest was last paid by the Mortgagor to the Due Date in the month in which the Purchase Price is to be distributed to Noteholders, and (iii) in the case of any Mortgage Loan required to be purchased by a Sponsor because of, or that arises out of, a violation of any predatory or abusive lending law with respect to the related Mortgage Loan, any costs and damages incurred by the Trust relating to such violation of any predatory or abusive lending law with respect to the related Mortgage Loan. "REO" means a Mortgaged Property that is acquired by the Trust in foreclosure or by deed in lieu of foreclosure. "Servicing Certificate" means a certificate completed and executed by a Servicing Officer in accordance with Section 4.01. "Servicing Officer" means any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee (with a copy to the Credit Enhancer) by the Master Servicer on the Closing Date, as the list may be amended from time to time. "Sponsor" means Countrywide Home Loans, Inc., a New York corporation and any successor to it. "Spread Rate" has the meaning given to it in the Insurance Agreement. "Transfer Date" has the meaning given to it in Section 2.06. "Transfer Deficiency" means that the related Allocated Transferor Interest after a retransfer of a Mortgage Loan in the related Loan Group pursuant to Section 2.02(b) would be less than the sum of (i) the greater of the related Minimum Transferor Interest and the related Required Transferor Subordinated Amount and (ii) in the case of any Mortgage Loan required to be purchased by a Sponsor because of, or that arises out of, a violation of any predatory or abusive lending law with respect to the related Mortgage Loan, any costs and damages incurred Ann-1-5 by the Trust relating to such violation of any predatory or abusive lending law with respect to the related Mortgage Loan. "Transfer Deposit Amount" has the meaning given to it in Section 2.02(b). "Transfer Notice Date" has the meaning given to it in Section 2.06. "Valuation" of any Mortgaged Property means the lesser of (i) the Appraised Value of the Mortgaged Property and (ii) in the case of a Mortgaged Property purchased within one year of the origination of the related Mortgage Loan, the purchase price of the Mortgaged Property. Ann-1-6 The following have the meanings given to them in the Indenture: Accelerated Principal Payment Amount Additional Balance Asset Balance Assignment of Mortgage Available Transferor Subordinated Amount Basis Risk Carryforward Business Day Closing Date Code Collection Period Corporate Trust Office Credit Enhancement Draw Amount Credit Enhancer Credit Enhancer Default Credit Limit Credit Line Agreement Custodial Agreement Cut-off Date Cut-off Date Asset Balance Determination Date Eligible Account Eligible Investments Guaranteed Principal Payment Amount Indenture Trustee Insolvency Event Insurance Agreement Interest Collections Interest Formula Rate Interest Period Investor Fixed Allocation Percentage Investor Floating Allocation Percentage Investor Interest Collections Investor Loss Amount Investor Loss Reduction Amount Investor Principal Collections Loan Group Loan Group Balance Loan Rate Managed Amortization Period Maximum Rate MERS MERS(R) System MIN Minimum Transferor Interest MOM Loan Moody's Mortgage File Mortgage Loan Mortgage Loan Schedule Mortgage Note Mortgaged Property Note Note Rate Note Interest Note Principal Balance Noteholder or Holder Note Owner Note Register and Note Registrar Original Note Principal Balance Outstanding Amount Paying Agent Payment Date Policy Principal Collections Purchase Agreement Rapid Amortization Event Rating Agency Required Transferor Subordinated Amount Responsible Officer Scheduled Principal Collections Payment Amount Servicing Fee Standard & Poor's Transferor Transferor Certificates Transferor Interest Transferor Principal Collections Trust Trust Agreement UCC Unpaid Investor Interest Shortfall Weighted Average Net Loan Rate Ann-1-7 ANNEX 2 ADOPTION ANNEX The items referred to in the representations and warranties in Section 2.04(a) are: (xii) 0% and 0% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, being transferred on the relevant date (by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a contractual basis). (xix) As of the Cut-off Date no more than 3.00% and 3.00% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, are secured by Mortgaged Properties located in one United States postal zip code. (xx) The Combined Loan-to-Value Ratio for each Mortgage Loan was not in excess of 100%. (xxxi) The weighted average remaining term to maturity of the Mortgage Loans on a contractual basis as of the Cut-off Date is approximately 299 and 298 months with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Loan Rate Caps for the Mortgage Loans range between 16.000% and 21.000% and 16.000% and 21.000% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate Cap is approximately 17.9666% and 17.952%, with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Gross Margins for the Mortgage Loans range between -0.500% and 11.250% and -0.999% and 8.000% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Gross Margin is approximately 2.294% and 1.752% as of the Cut-off Date for the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Loan Rates on the Mortgage Loans range between 3.000% and 15.750% and 3.000% and 12.500% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate on the Mortgage Loans is approximately 5.729% and 5.651% with respect to the Mortgage Loans in Loan Group1 and Loan Group 2, respectively. As of the Cut-off Date, 100% and 24.996% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, have original principal balances (by credit limit) that conform to Fannie Mae or Freddie Mac guidelines. (xxxiii) No more than 33.11% and 29.71% (by Cut-off Date Loan Balance) of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured by real property improved by individual condominium units, units in planned unit developments, townhouses, or two-to-four family residences erected on them, and at least 66.89% and 70.29% (by Cut-off Date Loan Balance) of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured by real property with a detached one-family residence erected on them. Ann-2-1 (xxxiv) The Credit Limits on the Mortgage Loans range between approximately $32,200 and $166,300 and $6,499 and $2,000,000 with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, with an average of approximately $60,382 and $77,128 with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. As of the Cut-off Date, no Mortgage Loan had a principal balance in excess of approximately $125,000 and $2,000,000 and the average principal balance of the Mortgage Loans is equal to approximately $57,701 and $64,777 with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. (xxxv) Approximately 0% and 100% of the Mortgage Loans of each Loan Group, by aggregate principal balance as of the Cut-off Date for the Mortgage Loans, are first and second liens, respectively. (xxxvi) As of the Closing Date, no more than 3.86 % and 1.68 % of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, were appraised electronically. (xli) As of the Cut-off Date (based on the drawn balances), the Mortgage Loans had a weighted average Combined Loan-to-Value Ratio of 88.43 % and 83.85 %; a range of Combined Loan-to-Value Ratios between 8.31 % and 100.00 % and 7.78 % and 100.00 %; a percentage of primary residences of 95.25 % and 93.78 %; a weighted average FICO score of 710 and 712; a range of FICO scores between 514 and 838 and 531 and 842; a Weighted Average Net Loan Rate of 5.229 % and 5.151 %; a range of net Loan Rates between 2.500 % and 15.250 % and 2.500 % and 12.000 %; a weighted average original stated term to maturity of 300 and 300 months; a range of original term to maturity between 120 and 360 months and 120 and 360 months; a range of remaining term to maturity between 110 and 350 months and 78 and 351 months; an average drawn balance of $57,701 and $64,777; a weighted average utilization ratio of 97.22 % and 93.88 %; and 62.08 % and 75.73 % of the Mortgage Loans have their respective Mortgaged Properties located in the top five states, measured by aggregate drawn balances, all with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The initial aggregate principal amount of the Notes is $1,500,000,000, the initial aggregate principal amount of the Class 1-A Notes is $570,164,000, and the initial aggregate principal amount of the Class 2-A Notes is $929,836,000. The title of the Collection Account is "JPMorgan Chase Bank, as Indenture Trustee, Collection Account in trust for the registered holders of Revolving Home Equity Loan Asset Backed Notes, Series 2004-P and MBIA Insurance Corporation." The date on which the Master Servicer delivers the Officer's Certificate in each year is March 31, and the first Officer's Certificate pursuant to Section 3.09 is March 31, 2005. Ann-2-2 The date on which the Master Servicer delivers the annual servicing report in each year is March 15, and the first annual servicing report pursuant to Section 3.10 is March 15, 2005. Ann-2-3 EX-99.2 3 efc4-1981_5613463ex992.txt EXHIBIT 99.2 EXECUTION COPY ============================================================================== COUNTRYWIDE HOME LOANS, INC. Seller CWABS, INC. Purchaser ---------------------------------- PURCHASE AGREEMENT Dated as of October 29, 2004 ---------------------------------- REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES Series 2004-P ==============================================================================
Table of Contents Page ARTICLE I DEFINITIONS Section 1.01. Definitions. ....................................................................3 ARTICLE II SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE Section 2.01. Sale of the Mortgage Loans. .....................................................4 Section 2.02. Obligations of Seller Upon Sale. ................................................4 Section 2.03. Payment of Purchase Price for the Mortgage Loans. ...............................7 ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH Section 3.01. Seller Representations and Warranties. ..........................................7 Section 3.02. Seller Representations and Warranties Relating to the Mortgage Loans. ...........8 ARTICLE IV SELLER'S COVENANTS Section 4.01. Covenants of the Seller. .......................................................21 ARTICLE V SERVICING Section 5.01. Servicing. .....................................................................21 ARTICLE VI TERMINATION Section 6.01. Termination. ...................................................................21 ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.01. Amendment. .....................................................................21 Section 7.02. Governing Law. .................................................................22 Section 7.03. Notices. .......................................................................22 Section 7.04. Severability of Provisions. ....................................................22 Section 7.05. Counterparts. ..................................................................23
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Section 7.06. Further Agreements. ............................................................23 Section 7.07. Successors and Assigns: Assignment of Purchase Agreement. ......................23 Section 7.08. Survival. ......................................................................23 SCHEDULES AND ANNEXES Schedule I ...........................................................................Sch-I-1 Schedule II ..........................................................................Sch-II-1 Annex 1 ...........................................................................Ann-1-1
ii THIS PURCHASE AGREEMENT, dated as of October 29, 2004 (the "Agreement"), between COUNTRYWIDE HOME LOANS, INC., a New York corporation (the "Seller"), and CWABS, INC., a Delaware corporation (the "Purchaser"), W I T N E S S E T H: WHEREAS, the Seller is the owner of the notes or other evidence of indebtedness indicated on Schedule I and certain other notes or other evidence of indebtedness made or to be made in the future, and Related Documentation; and WHEREAS, by the date of their transfer, the Seller will own the mortgages on the properties securing the Mortgage Loans, including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds of any hazard insurance policies on the Mortgaged Properties; and WHEREAS, the Seller wants to sell the Mortgage Loans to the Purchaser pursuant to this Agreement; and WHEREAS, pursuant to the Sale and Servicing Agreement, of even date with this Agreement (the "Sale and Servicing Agreement"), among the Purchaser, as depositor, the Seller, as sponsor and master servicer, the Trust, and the Indenture Trustee, the Purchaser will transfer the Mortgage Loans to the Trust; NOW, THEREFORE, the parties agree as follows. ARTICLE I DEFINITIONS Section 1.01. Definitions. Capitalized terms used in this Agreement that are not otherwise defined have the meanings given to them in the Indenture, and if not defined there, in the Sale and Servicing Agreement. In addition, Section 1.04 (Rules of Construction) of the Indenture is incorporated by reference with appropriate substitution of this Agreement for references in that Section to the Indenture so that the language of that Section will read appropriately as applying to this Agreement. 3 ARTICLE II SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE Section 2.01. Sale of the Mortgage Loans. (a) The Mortgage Loans. Concurrently with the execution and delivery of this Agreement, the Seller hereby transfers to the Purchaser, without recourse, all of its right, title and interest existing now or in the future in, (i) each Mortgage Loan, including its Asset Balance (including all Additional Balances), the related Mortgage File, all property that secures the Mortgage Loan, and all collections received on it after the Cut-off Date (excluding payments due by the Cut-off Date); (ii) property that secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure; (iii) the Seller's rights under the hazard insurance policies; (iv) all rights under any guaranty executed in connection with a Mortgage Loan; (v) all other assets included or to be included in the Trust for the benefit of the Noteholders and the Credit Enhancer; and (vi) all proceeds of the foregoing. (b) By the sale of the Mortgage Loan and its Additional Balances, the Seller has sold to the Purchaser, and the Purchaser has purchased from the Seller, each future draw of new borrowing under the related Credit Line Agreement. The Purchaser shall pay the Seller for each Additional Balance in cash in an amount equal to the principal amount of the Additional Balance as it arises. The Trust, the Seller, and the Purchaser may agree to a netting arrangement in connection with this transaction, when appropriate, rather than actually moving cash. Section 2.02. Obligations of Seller Upon Sale. In connection with any transfer pursuant to Section 2.01, the Seller further agrees, at its own expense: (a) to deliver to the Purchaser by the Closing Date a Mortgage Loan Schedule containing an accurate list of all Mortgage Loans, specifying for each Mortgage Loan, among other things, its account number and its Cut-off Date Asset Balance; and (b) to indicate in its books and records that the Mortgage Loans have been sold to the Indenture Trustee, as assignee of the Purchaser, pursuant to this Agreement by the Closing Date for the Mortgage Loans. 4 The Mortgage Loan Schedule is Exhibit A to the Sale and Servicing Agreement and shall also be marked as Schedule I to this Agreement and is hereby incorporated into this Agreement. The Seller agrees to perfect and protect the Purchaser's interest in each Mortgage Loan and its proceeds by preparing, executing, and filing a UCC-1 Financing Statement with the Secretary of State in the State of New York describing the Mortgage Loans and naming the Seller as debtor and the Purchaser as secured party and indicating that the Mortgage Loans have been assigned to the Trust and all necessary Continuation Statements and any additional UCC-1 Financing Statements due to a change in the name or the state of incorporation of the Seller. The Financing Statement shall be filed by the Closing Date. This Financing Statement will state in bold-faced type that a purchase of the Mortgage Loans included in the collateral covered by the Financing Statement from the debtor will violate the rights of the secured party and its assignee. The Purchaser agrees to perfect and protect the Trust's interest in each Mortgage Loan and its proceeds by preparing, executing, and filing a UCC-1 Financing Statement with the Secretary of State in the State of Delaware describing the Mortgage Loans and naming the Purchaser as debtor and the Trust as secured party (and indicating that the Mortgage Loans have been pledged to the Indenture Trustee) and all necessary Continuation Statements and any additional UCC-1 Financing Statements due to a change in the name or the state of incorporation of the Purchaser. The Financing Statement shall be filed by the Closing Date. This Financing Statement will state in bold-faced type that a purchase of the Mortgage Loans included in the collateral covered by the Financing Statement from the debtor will violate the rights of the secured party and its assignee. In connection with any transfer by the Seller, the Seller shall deliver to the order of the Purchaser the following documents for each Mortgage Loan (the "Related Documentation"): (i) the original Mortgage Note endorsed in blank 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, misplaced, or destroyed, together with a copy of the related Mortgage Note; (ii) unless the Mortgage Loan is registered on the MERS(R) System, an original assignment of mortgage in blank in recordable form; (iii) the original recorded mortgage with evidence of recording on it (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) or, if the original recorded mortgage with evidence of recording on it cannot be delivered by the Closing Date because of a delay caused by the public recording office where the original Mortgage has been delivered for recordation or because the original Mortgage has been lost, the 5 Seller shall deliver to the Indenture Trustee an accurate copy of the mortgage, together with (i) when the delay is caused by the public recording office, an Officer's Certificate of the Seller or the Purchaser stating that the original mortgage has been dispatched to the appropriate public recording official or (ii) when the original mortgage has been lost, a certificate by the appropriate county recording office where the mortgage is recorded; (iv) any original intervening assignments needed for a complete chain of title to the Trust with evidence of recording on them, or, if any original intervening assignment has not been returned from the applicable recording office or has been lost, an accurate copy of it, together with (i) when the delay is caused by the public recording office, an Officer's Certificate of the Seller or the Purchaser stating that the original intervening assignment has been dispatched to the appropriate public recording official for recordation or (ii) when the original intervening assignment has been lost, a certificate by the appropriate county recording office where the mortgage is recorded; (v) a title policy for each Mortgage Loan with a Credit Limit in excess of $100,000; (vi) the original of any guaranty executed in connection with the Mortgage Note; (vii) the original of each assumption, modification, consolidation, or substitution agreement relating to the Mortgage Loan; and (viii) any security agreement, chattel mortgage, or equivalent instrument executed in connection with the Mortgage. The Related Documentation will be delivered: (i) no later than the Closing Date, with respect to no less than 50% of the Mortgage Loans, (ii) no later than the twentieth day after the Closing Date, with respect to no less than 40% of the Mortgage Loans in addition to those delivered on the Closing Date, and (iii) within thirty days following the Closing Date, with respect to the remaining Mortgage Loans. The Seller confirms to the Purchaser that, as of the Closing Date, it has caused the portions of the Electronic Ledger relating to the Mortgage Loans maintained by the Seller to be clearly and unambiguously marked to indicate that the Mortgage Loans have been sold to the Purchaser, and sold by the Purchaser to the Trust, and Granted by the Trust to the Indenture Trustee, and that a purchase of those Mortgage Loans from the Seller or the Purchaser will 6 violate the rights of the Trust, as secured party with respect to those Mortgage Loans. By the applicable date of substitution, the Seller shall cause the portions of the Electronic Ledgers relating to the relevant Eligible Substitute Mortgage Loans, as the case may be, to be clearly and unambiguously marked, and shall make appropriate entries in its general accounting records, to indicate that those Mortgage Loans have been transferred to the Trust at the direction of the Purchaser and that they have been Granted by the Trust to the Indenture Trustee, and that a purchase of the Mortgage Loans from the Seller or the Purchaser will violate the rights of the Trust, as secured party with respect to those Mortgage Loans. The Purchaser accepts all right, title, and interest of the Seller existing now or in the future in the Mortgage Loans and other property transferred to it pursuant to this Section. Notwithstanding the characterization of the Notes as debt for federal, state, and local income and franchise tax purposes, the transfer of the Mortgage Loans is a sale by the Seller to the Purchaser of all the Seller's interest in the Mortgage Loans and other property described above. However, if the transfer were to be characterized as a transfer for security and not as a sale, then the Seller hereby Grants to the Purchaser a Security Interest in all of the Seller's right, title and interest in the Mortgage Loans and other property described above, whether existing now or in the future, to secure all of the Seller's obligations under this Agreement; and this Agreement shall constitute a Security Agreement under applicable law. Section 2.03. Payment of Purchase Price for the Mortgage Loans. In consideration of the sale of the Mortgage Loans from the Seller to the Purchaser on the Closing Date, the Purchaser agrees to transfer to the Seller on the Closing Date the purchase price for the Mortgage Loans provided in the Adoption Annex. ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH Section 3.01. Seller Representations and Warranties. The Seller represents and warrants to the Purchaser as of the Closing Date: (a) The Seller is a New York corporation, validly existing and in good standing under the laws of the State of New York, and has the corporate power to own its assets and to transact the business in which it is currently engaged. The Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the business transacted by it or any properties owned or leased by it requires such qualification and in which the failure so to qualify would have a material adverse effect on the business, properties, assets, or condition (financial or other) of the Seller; 7 (b) The Seller has the power and authority to make, execute, deliver, and perform this Agreement and all of the transactions contemplated by this Agreement, and has taken all necessary corporate action to authorize the execution, delivery, and performance of this Agreement. When executed and delivered, this Agreement will constitute the valid and legally binding obligation of the Seller enforceable in accordance with its terms; (c) The Seller is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau, or agency in connection with the execution, delivery, performance, validity, or enforceability of this Agreement, except for any consents, licenses, approvals or authorizations, or registrations or declarations, that have been obtained or filed, as the case may be, before the Closing Date; (d) The execution, delivery, and performance of this Agreement by the Seller will not violate any provision of any existing law or regulation or any order or decree of any court applicable to the Seller or any provision of the certificate of incorporation or bylaws of the Seller, or constitute a material breach of any mortgage, indenture, contract, or other agreement to which the Seller is a party or by which the Seller may be bound; and (e) No litigation or administrative proceeding of or before any court, tribunal, or governmental body is currently pending, or to the knowledge of the Seller threatened, against the Seller or any of its properties or with respect to this Agreement or the Notes that in the opinion of the Seller has a reasonable likelihood of resulting in a material adverse effect on the transactions contemplated by this Agreement. The representations and warranties in this Section shall survive the transfer of the Mortgage Loans to the Purchaser. The Seller shall cure a breach of any representations and warranties in accordance with the Sale and Servicing Agreement. The remedy specified in the Sale and Servicing Agreement shall constitute the sole remedy against the Seller respecting any breach. Section 3.02. Seller Representations and Warranties Relating to the Mortgage Loans. The Seller represents and warrants to the Purchaser as of the Cut-off Date, unless otherwise specifically set forth in this Agreement: (i) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution) this Agreement constitutes a valid and legally binding obligation of the Seller, enforceable against the Seller in accordance with its terms. 8 (ii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution) either (A) this Agreement constitutes a valid transfer to the Purchaser of all right, title, and interest of the Seller in the Mortgage Loans, and all collections received on it after the Cut-off Date (excluding payments due by the Cut-off Date), all proceeds of the Mortgage Loans, and all other property specified in Section 2.01(a) or (b) of this Agreement, and the Sale and Servicing Agreement constitutes a valid transfer to the Trust of the foregoing property and all other property specified in Section 2.01(a) or (b) of the Sale and Servicing Agreement such that, on execution of the Sale and Servicing Agreement, it is owned by the Trust free of all liens and other encumbrances, and is part of the corpus of the Trust transferred to the Trust by the Purchaser, and upon payment for the Additional Balances, this Agreement and the Sale and Servicing Agreement will constitute a valid transfer to the Trust of all interest of the Seller in the Additional Balances, all proceeds of the Additional Balances, and all other property specified in Section 2.01(a) of the Sale and Servicing Agreement relating to the Additional Balances free of all liens and other encumbrances, and the Indenture constitutes a valid Grant of a Security Interest to the Indenture Trustee in that property, and the Indenture Trustee has a first priority perfected Security Interest in the property, subject to the effect of Section 9-315 of the UCC with respect to collections on the Mortgage Loans that are deposited in the Collection Account in accordance with the next to last paragraph of Section 3.02(b) of the Sale and Servicing Agreement, or (B) this Agreement or the Sale and Servicing Agreement, as appropriate, constitutes a Grant of a Security Interest to the Owner Trustee on behalf of the Trust and the Indenture constitutes a Grant of a Security Interest to the Indenture Trustee in the property described in clause (A) above. If this Agreement and the Sale and Servicing Agreement constitute the Grant of a Security Interest to the Trust and the Indenture constitutes a Grant of a Security Interest to the Indenture Trustee in such property, the Indenture Trustee will have a first priority perfected Security Interest in the property, subject to the effect of Section 9-315 of the UCC with respect to collections on the Mortgage Loans that are deposited in the Collection Account in accordance with the next to last paragraph of Section 3.02(b) of the Sale and Servicing Agreement. This Security Interest is enforceable as such against creditors of and purchasers from the Trust, the Purchaser, and the Seller. 9 (iii) The Seller has not authorized the filing of and is not aware of any financing statements against the Seller that include a description of collateral covering the Collateral other than any financing statement (A) relating to the Security Interests granted to the Depositor, the Trust, or the Indenture Trustee hereunder, pursuant to the Sale and Servicing Agreement or pursuant to the Indenture, (B) that has been terminated, or (C) that names the Depositor, the Trust, or the Indenture Trustee as secured party. (iv) As of the Closing Date, the information in the Mortgage Loan Schedule for the Mortgage Loans is correct in all material respects. As of the applicable date of substitution for an Eligible Substitute Mortgage Loan, the information with respect to the Eligible Substitute Mortgage Loan in the Mortgage Loan Schedule is correct in all material respects. As of the date any Additional Balance is created, the information as to the Mortgage Loan identification number and the Additional Balance of that Mortgage Loan reported for inclusion in the Mortgage Loan Schedule is correct in all material respects. (v) The Mortgage Loans have not been assigned or pledged, and the Seller is their sole owner and holder free of any liens, claims, encumbrances, participation interests, equities, pledges, charges, or Security Interests of any nature, and has full authority, under all governmental and regulatory bodies having jurisdiction over the ownership of the Mortgage Loans, to transfer them pursuant to this Agreement. (vi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the related Mortgage Note and the mortgage for each Mortgage Loan have not been assigned or pledged, and immediately before the sale of the Mortgage Loans to the Purchaser, the Seller was the sole owner and holder of the Mortgage Loan free of any liens, claims, encumbrances, participation interests, equities, pledges, charges, or Security Interests of any nature, and has full authority, under all governmental and regulatory bodies having jurisdiction over the ownership of the Mortgage Loans, to transfer it pursuant to this Agreement. (vii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the related mortgage is a valid and subsisting first or second lien on the property described in it, as shown on the Mortgage Loan Schedule, and as of the Cut-off Date or date of substitution, as applicable, the related Mortgaged Property is free of all encumbrances and liens having priority over the first or second lien, as applicable, of the mortgage except for liens for (A) real estate taxes and special assessments not yet delinquent; (B) any first mortgage loan secured by the Mortgaged Property and specified on the Mortgage Loan Schedule; 10 (C) covenants, conditions and restrictions, rights of way, easements, and other matters of public record as of the date of recording that are acceptable to mortgage lending institutions generally; and (D) 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 the mortgage. (viii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no obligor has a valid offset, defense, or counterclaim under any Credit Line Agreement or mortgage. (ix) To the best knowledge of the Seller, as of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no related Mortgaged Property has any delinquent recording or other tax or fee or assessment lien against it. (x) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no proceeding is pending or, to the best knowledge of the Seller, threatened for the total or partial condemnation of the related Mortgaged Property, and the property is free of material damage and is in good repair. (xi) To the best knowledge of the Seller, as of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no mechanics' or similar liens or claims have been filed for work, labor, or material affecting the related Mortgaged Property that are, or may be, liens prior or equal to the lien of the related mortgage, except liens that are fully insured against by the title insurance policy referred to in clause (xv). (xii) No Minimum Monthly Payment on a Mortgage Loan being transferred on the Closing Date is more than 59 days delinquent (measured on a contractual basis) and no Minimum Monthly Payment on any other Mortgage Loan subsequently being transferred is more than 30 days delinquent (measured on a contractual basis) on the relevant transfer date and for each Loan Group no more than the applicable percentage of the Mortgage Loans in that Loan Group specified in the Adoption Annex being transferred on the Closing Date (by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a contractual basis). (xiii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), for each Mortgage Loan, the related Mortgage File contains each of the documents specified to be included in it. (xiv) At origination, each Mortgage Loan and the related Mortgage Note complied in all material respects with applicable state and federal laws, including all 11 applicable predatory and abusive lending laws, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, or disclosure laws applicable to the Mortgage Loan, and the servicing practices used by the Master Servicer with respect to each Mortgage Loan have been consistent with the practices and the degree of skill and care the Master Servicer exercises in servicing for itself loans that it owns that are comparable to the Mortgage Loans. (xv) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no Mortgage Loan is classified as (1) a "high cost" loan under the Home Ownership and Equity Protection Act of 1994 or (2) a "high cost," "threshold," "covered," "predatory," or similar loan under any other applicable state, federal, or local law that applies to mortgage loans (or a similar classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points, or fees). (xvi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act; and "High Cost Loan" and "Covered Loan" have the meaning assigned to them in the Standard & Poor's LEVELS(R) Glossary attached as Exhibit E (the "Glossary") where (x) a "High Cost Loan" is each loan identified in the column "Category under applicable anti-predatory lending law" of the table entitled "Standard & Poor's High Cost Loan Categorization" in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State or jurisdiction specified in such table and (y) "Covered Loan" is each loan identified in the column "Category under applicable anti-predatory lending law" of the table entitled "Standard & Poor's Covered Loan Categorization" in the Glossary as each such loan is defined in the applicable anti-predatory lending law of the State of jurisdiction specified in such table. (xvii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), either a lender's title insurance policy binder was issued or guaranty of title customary in the relevant jurisdiction was obtained, on the date of origination of the Mortgage Loan being transferred on the relevant date and each policy is valid and remains in full force. (xviii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), none of the Mortgaged Properties 12 is a mobile home or a manufactured housing unit that is not considered or classified as part of the real estate under the laws of the jurisdiction in which it is located. (xix) No more than the percentage specified in the Adoption Annex of the Mortgage Loans in each Loan Group, by aggregate principal balance of the related Mortgage Loans, are secured by Mortgaged Properties located in one United States postal zip code. (xx) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Combined Loan-to-Value Ratio for each Mortgage Loan in each Loan Group was not in excess of the percentage specified in the Adoption Annex. (xxi) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no selection procedure reasonably believed by the Seller to be adverse to the interests of the Transferor, the Noteholders, or the Credit Enhancer was used in selecting the Mortgage Loans. (xxii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Seller has not transferred the Mortgage Loans to the Trust with any intent to hinder, delay, or defraud any of its creditors. (xxiii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Minimum Monthly Payment with respect to any Mortgage Loan is not less than the interest accrued at the applicable Loan Rate on the average daily Asset Balance during the interest period relating to the date on which the Minimum Monthly Payment is due. (xiv) The Mortgage Notes constitute either "instruments" or "general intangibles" as defined in the UCC. (xxv) By the Closing Date (or, within 30 days of the applicable date of substitution with respect to any Eligible Substitute Mortgage Loan), the Sponsor will file UCC-1 financing statements in the proper filing office in the appropriate jurisdiction to perfect the Security Interest in the Collateral Granted under the Indenture. (xxvi) The Mortgage Notes that constitute or evidence the Collateral do not have any marks or notations indicating that they have been pledged, assigned, or otherwise transferred to any person other than the Purchaser, the Trust, or the Indenture Trustee. All financing statements filed or to be filed against the Seller in favor of the Purchaser, the Trust, or the Indenture Trustee in connection with this Agreement, the Sale and Servicing Agreement, or the Indenture describing the Collateral contain a statement to the following effect: "A purchase of the Mortgage Loans included in the collateral 13 covered by this financing statement will violate the rights of the Purchaser, the Trust, or the Indenture Trustee." (xxvii) As of the Closing Date, the Seller will have received a written acknowledgement from the Custodian that is acting solely as agent of the Indenture Trustee. (xxviii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Credit Line Agreement and each Mortgage Loan is an enforceable obligation of the related mortgagor. (xxix) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the Seller has not received a notice of default of any senior mortgage loan related to a Mortgaged Property that has not been cured by a party other than the Master Servicer. (xxx) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), the definition of "prime rate" in each Credit Line Agreement relating to a Mortgage Loan does not differ materially from the definition in the form of Credit Line Agreement in Exhibit B of the Sale and Servicing Agreement. (xxxi) The weighted average remaining term to maturity of the Mortgage Loans in each Loan Group on a contractual basis as of the Cut-off Date is approximately the number of months specified for that Loan Group in the Adoption Annex. On each date that the Loan Rates have been adjusted, interest rate adjustments on the Mortgage Loans were made in compliance with the related mortgage and Mortgage Note and applicable law. Over the term of each Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap. The Loan Rate Cap for the Mortgage Loans ranges between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Loan Rate Cap is approximately the percentage specified in the Adoption Annex for that Loan Group. The Gross Margins for the Mortgage Loans in each Loan Group range between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Gross Margin is approximately the percentage specified in the Adoption Annex for that Loan Group as of the Cut-off Date. The Loan Rates on the Mortgage Loans in each Loan Group range between the percentages specified in the Adoption Annex for that Loan Group and the weighted average Loan Rate on the Mortgage Loans is approximately the percentage specified in the Adoption Annex for that Loan Group. All of the Mortgage Loans in the Loan Group specified in the Adoption Annex conform to Fannie Mae or Freddie Mac maximum principal balance (by credit limit) guidelines. 14 (xxxii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Mortgaged Property consists of a single parcel of real property with a one-to-four unit single family residence erected on it, or an individual condominium unit, planned unit development unit, or townhouse. (xxxiii) No more than the percentage specified in the Adoption Annex (by Cut-off Date Loan Balance) for each Loan Group of the Mortgage Loans in the related Loan Group are secured by real property improved by individual condominium units, units in planned unit developments, townhouses or two-to-four family residences erected on them, and at least the percentage specified in the Adoption Annex (by Cut-off Date Loan Balance) for each Loan Group of the Mortgage Loans in the related Loan Group are secured by real property with a detached one-family residence erected on them; (xxxiv) The Credit Limits on the Mortgage Loans in each Loan Group range between approximately the dollar amounts specified in the Adoption Annex for that Loan Group with an average of approximately the dollar amount specified in the Adoption Annex for that Loan Group. As of the Cut-off Date, no Mortgage Loan in either Loan Group had a principal balance in excess of approximately the dollar amount specified in the Adoption Annex for that Loan Group and the average principal balance of the Mortgage Loans in each Loan Group is equal to approximately the dollar amounts specified in the Adoption Annex for that Loan Group. (xxxv) Approximately the percentages specified in the Adoption Annex of the Mortgage Loans, by aggregate principal balance as of the Cut-off Date, are secured by first and second liens. (xxxvi) As of the Closing Date, no more than the percentage specified in the Adoption Annex for each Loan Group of the Mortgage Loans in the related Loan Group, by aggregate principal balance, were appraised electronically. (xxxvii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no default exists under any Mortgage Note or Mortgage Loan and no event that, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default under any Mortgage Note or Mortgage Loan has occurred and been waived. As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), no modifications to the Mortgage Notes and Mortgage Loans have been made and not disclosed. (xxxviii) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), each Mortgage Loan was originated in accordance with the Sponsor's underwriting guidelines and the Sponsor had no knowledge of any fact that would have caused a reasonable originator of 15 mortgage loans to conclude on the date of origination of each Mortgage Loan that each such Mortgage Loan would not be paid in full when due. (xxxix) To the best knowledge of the Seller at the time of origination of each Mortgage Loan, no improvement located on or being part of the Mortgaged Property was in violation of any applicable zoning and subdivision laws or ordinances. (xl) As of the Closing Date (or, with respect to any Eligible Substitute Mortgage Loan, the applicable date of substitution), 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. (xli) Based on the drawn balances of the Mortgage Loans, the Mortgage Loans had the characteristics set out in the Adoption Annex for each Loan Group in respect of the following: weighted average Combined Loan-to-Value Ratio; range of Combined Loan-to-Value Ratios; percentage of primary residences; weighted average FICO score; range of FICO scores; Weighted Average Net Loan Rate; range of net Loan Rates; weighted average original stated term to maturity; range of original term to maturity; range of remaining term to maturity; average drawn balance; weighted average utilization ratio; percentage of the Mortgage Loans which have their respective Mortgaged Properties located in the top five states, measured by aggregate drawn balances. (xlii) Any Mortgage Loan that has been modified in any manner has been so modified in accordance with the policies and procedures of the Master Servicer and in a manner that was permitted by the Sale and Servicing Agreement, the Indenture, and any other Transaction Document. (xliii) Each Mortgage Loan was originated (within the meaning of Section 3(a)(41) of the Securities Exchange Act of 1934) by an entity that satisfied at the time of origination the requirements of Section 3(a)(41) of the Securities Exchange Act of 1934. (xliv) At the time each Mortgage Loan was originated, the Sponsor was, and the Sponsor is an approved seller of conventional mortgage loans for Fannie Mae and Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. (xlv) 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 principal balance of the related Mortgage Loan as of the Cut-off Date 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 each such policy was issued by a title insurer qualified to do business in the jurisdiction where the 16 Mortgaged Property is located and acceptable to Fannie Mae and Freddie Mac and is in a form acceptable to Fannie Mae and Freddie Mac, which policy insures the Sponsor and successor owners of indebtedness secured by the insured Mortgage, as to the first priority lien, of the Mortgage subject to the exceptions in paragraph (vii) above. (xlvi) At the Cut-off Date, the improvements on 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 the 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 the policy will be sufficient to prevent the Mortgagor 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 (xlv) below contain a standard mortgagee clause naming the Sponsor or the original mortgagee, and its successors in interest, as mortgagee, and the Sponsor 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 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 expense and to seek reimbursement therefor from the Mortgagor. (xlvii) 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 the Mortgaged Property with a generally acceptable carrier in an amount representing coverage not less than the least of (A) the original outstanding principal balance of the Mortgage Loan, (B) the minimum amount required to compensate for damage or loss on a replacement cost basis, or (C) the maximum amount of insurance that is available under the Flood Disaster Protection Act of 1973. (xlviii) Each Mortgage Note and the related Mortgage are genuine, and each is the valid and legally binding obligation of its maker, enforceable in accordance with its terms and under applicable law, except that (a) its enforceability 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 17 discretion of the court before which any proceeding therefor may be brought. To the best of the Sponsor'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. (xlix) No Mortgage Loan has a shared appreciation feature, or other contingent interest feature. (l) To the best of the Sponsor'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 the Mortgaged Property, and no improvements on adjoining properties encroach on the Mortgaged Property. (li) To the best of the Sponsor'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 certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities, unless their lack would not have a material adverse effect on the value of the Mortgaged Property, and the Mortgaged Property is lawfully occupied under applicable law. (lii) Each Mortgage contains customary and enforceable provisions that render the rights and remedies of its holder adequate for the realization against the Mortgaged Property of the benefits of the security intended to be provided by it, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. (liii) Before the approval of the Mortgage Loan application, an appraisal of the related Mortgaged Property was obtained from a qualified appraiser, duly appointed by the Sponsor, who had no interest, direct or indirect, in the Mortgaged Property or in any loan secured by the Mortgaged Property, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan. (liv) 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 Period of the first installment of principal and interest and taxes and insurance payments, the Sponsor 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. 18 (lv) As of the Closing Date, no foreclosure proceedings are pending against the Mortgaged Property and the Mortgage Loan is not subject to any pending bankruptcy or insolvency proceeding. (lvi) There is no homestead exemption available and enforceable that materially interferes with the right to sell the related Mortgaged Property at a trustee's sale or the right to foreclose the related Mortgage. (lvii) No Mortgage Loan is covered by the Home Ownership and Equity Protection Act of 1994. (lviii) No Mortgage Loan originated on or after October 1, 2002 and before March 7, 2003 is secured by Mortgaged Property located in the State of Georgia. (lix) No borrower was required to purchase any single premium credit insurance policy (e.g., life, disability, accident, unemployment, or health insurance product) or debt cancellation agreement as a condition of obtaining the extension of credit. No borrower obtained a prepaid single-premium credit insurance policy (e.g., life, disability, accident, unemployment, mortgage, or health insurance) in connection with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan 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, the Mortgage Loan. (lx) No subprime Mortgage Loan originated on or after October 1, 2002 will impose a prepayment premium after the third anniversary of the Mortgage Loan. No subprime Mortgage Loan originated before October 1, 2002, and no non-subprime Mortgage Loan, will impose a prepayment penalty after the fifth anniversary of the Mortgage Loan. (lxi) The servicer for each Mortgage Loan has fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax, Experian, and Trans Union Credit Information Company, on a monthly basis. (lxii) The Mortgage Loans, individually and in the aggregate, conform in all material respects to their descriptions in the Prospectus Supplement. (lxiii) To the Seller's knowledge, the transfer of the Mortgage Loans by the Seller pursuant to this Agreement is not subject to, and will not result in any, tax, fee, or governmental charge payable by the Seller, the Purchaser, the Trust, or the Indenture trustee to any federal, state, or local government other than those that have or will be paid by the Seller as due. (lxiv) As of the Closing Date, no Mortgaged Property has been damaged by the hurricanes that struck the southeastern United States in August and September of 2004 in a manner that materially affects the value of the Mortgaged Property. Any 19 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 this representation and warranty. If the substance of any representation or warranty under the Sale and Servicing Agreement or in this Section made to the best of the Seller's knowledge or as to which the Seller has no knowledge is inaccurate and the inaccuracy materially and adversely affects the interest of the Purchaser or its assignee in the related Mortgage Loan, then, notwithstanding that the Seller did not know the substance of the representation and warranty was inaccurate at the time the representation or warranty was made, the inaccuracy shall be a breach of the applicable representation or warranty and the Seller shall cure the breach, repurchase the Mortgage Loan, or substitute for the Mortgage Loan in accordance with the Sale and Servicing Agreement. The representations and warranties in this Section shall survive the transfer and assignment of the Mortgage Loans to the Purchaser. The sole remedy of the Purchaser, the Noteholders, the Indenture Trustee on behalf of Noteholders, and the Credit Enhancer against the Seller for the breach of a representation or warranty is the Seller's obligation to accept a transfer of a Mortgage Loan as to which a breach has occurred and is continuing and to make any required deposit in the Collection Account or to substitute an Eligible Substitute Mortgage Loan. The Purchaser acknowledges that the Seller, as Master Servicer, in its sole discretion, may purchase for its own account from the Trust any Mortgage Loan that is 151 days or more delinquent. The price for any Mortgage Loan purchased shall be calculated in the same manner as in Section 3.06 of the Sale and Servicing Agreement and shall be deposited in the Collection Account. When it receives a certificate from the Master Servicer in the form of Exhibit D to the Sale and Servicing Agreement, the Trust shall release to the purchaser of the Mortgage Loan the related Mortgage File and shall execute and deliver any instruments of transfer prepared by the purchaser of the Mortgage Loan, without recourse, necessary to vest in the purchaser of the Mortgage Loan any Mortgage Loan released pursuant to this Agreement, and the purchaser of the Mortgage Loan shall succeed to all the Trust's interest in the Mortgage Loan and all security and documents. This assignment shall be an assignment outright and not for security. The purchaser of the Mortgage Loan shall then own the Mortgage Loan, and all security and documents, free of any further obligation to the Trust, the Owner Trustee, the Indenture Trustee, the Transferor, the Credit Enhancer, or the Noteholders with respect to it. 20 ARTICLE IV SELLER'S COVENANTS Section 4.01. Covenants of the Seller. Except for the transfer under this Agreement, the Seller will not transfer to any other person, or create or suffer to exist any Lien on any Mortgage Loan, or any interest in one; the Seller will notify the Indenture Trustee of the existence of any Lien on any Mortgage Loan immediately on its discovery; and the Seller will defend the right, title and interest of the Trust and the Indenture Trustee in the Mortgage Loans against all claims of third parties claiming through the Seller. Nothing in this Section shall prohibit the Seller from suffering to exist on any of the Mortgage Loans any Liens for municipal or other local taxes and other governmental charges if they are not due at the time or if the Seller is contesting their validity in good faith by appropriate proceedings and set aside on its books adequate reserves with respect to them. ARTICLE V SERVICING Section 5.01. Servicing. The Seller will be the Master Servicer of the Mortgage Loans pursuant to the Sale and Servicing Agreement. ARTICLE VI TERMINATION Section 6.01. Termination. The respective obligations of the Seller and the Purchaser created by this Agreement shall terminate when the Indenture terminates in accordance with its terms. ARTICLE VII MISCELLANEOUS PROVISIONS Section 7.01. Amendment. This Agreement may be amended from time to time by the Seller and the Purchaser, with the written consent of the Credit Enhancer by written agreement signed by the Seller and the Purchaser. 21 Section 7.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE. Section 7.03. Notices. All notices, demands, instructions, consents, and other communications required or permitted under this Agreement shall be in writing and signed by the party giving the same and shall be personally delivered or sent by first class or express mail (postage prepaid), national overnight courier service, or by facsimile transmission or other electronic communication device capable of transmitting or creating a written record (confirmed by first class mail) and shall be considered to be given for purposes of this Agreement on the day that the writing is delivered when personally delivered or sent by facsimile or overnight courier or three Business Days after it was sent to its intended recipient if sent by first class mail. A facsimile has been delivered when the sending machine issues an electronic confirmation of transmission. Unless otherwise specified in a notice sent or delivered in accordance with the provisions of this Section, notices, demands, instructions, consents, and other communications in writing shall be given to or made on the respective parties at their respective addresses indicated below: (i) if to the Seller at: Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, CA 91302 Ref: CWABS 2004-P and (ii) if to the Purchaser at: CWABS, Inc. 4500 Park Granada Calabasas, CA 91302 Ref: CWABS 2004-P Section 7.04. Severability of Provisions. Any provisions of this Agreement that are held invalid for any reason or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the invalidity or unenforceability without invalidating the remaining provisions of this Agreement, and the prohibition or unenforceability in a jurisdiction shall not invalidate or render unenforceable that provision in any other jurisdiction. 22 Section 7.05. Counterparts. This Agreement may be executed in any number of copies, and by the different parties on the same or separate counterparts, each of which shall be considered to be an original instrument. Section 7.06. Further Agreements. The Purchaser and the Seller each agree to execute and deliver to the other any additional documents appropriate to effectuate the purposes of this Agreement or in connection with the issuance of the Notes. Section 7.07. Successors and Assigns: Assignment of Purchase Agreement. This Agreement shall bind and inure to the benefit of and be enforceable by the Seller, the Purchaser, the Trust, the Indenture Trustee, and the Credit Enhancer. The obligations of the Seller under this Agreement cannot be assigned or delegated to a third party without the consent of the Purchaser and the Credit Enhancer, except that the Seller may assign its obligations under this Agreement to any person into which the Seller is merged or any corporation resulting from any merger, conversion, or consolidation to which the Seller is a party or any person succeeding to the business of the Seller. The Purchaser is acquiring the Mortgage Loans to further transfer them to the Trust, and the Trust will Grant a Security Interest in them to the Indenture Trustee under the Indenture pursuant to which the Trust will issue a series of Notes secured by the Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage Loans, the Seller consents to the assignment by the Purchaser to the Trust, and by the Trust to the Indenture Trustee of all of the Purchaser's rights against the Seller under this Agreement insofar as they relate to Mortgage Loans transferred to the Trust and to the enforcement or exercise of any right against the Seller pursuant to this Agreement by the Indenture Trustee under the Sale and Servicing Agreement and the Indenture. Enforcement of a right by the Indenture Trustee shall have the same effect as if the right had been exercised by the Purchaser directly. Section 7.08. Survival. The representations and warranties in Article III shall survive the purchase of the Mortgage Loans. 23 IN WITNESS WHEREOF, the Seller and the Purchaser have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. CWABS, INC. Purchaser By: /s/ Leon Daniels, Jr ------------------------------------- Name: Leon Daniels, Jr. Title: Vice President COUNTRYWIDE HOME LOANS, INC. Seller By: /s/ Leon Daniels, Jr. ------------------------------------- Name: Leon Daniels, Jr. Title: Senior Vice President 24 STATE OF CALIFORNIA) ) ss.: COUNTY OF LOS ANGELES) On the 29th day of October, 2004 before me, a Notary Public in and for said State, personally appeared Leon Daniels, Jr., known to me to be a Vice President of CWABS, Inc., the corporation that executed the within instrument, and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. /s/ Glenda J. Daniel ----------------------------------- Notary Public Glenda J. Daniel Commission # 1325392 Notary Public - California Los Angeles County My Comm. Expires October 15, 2005. 25 STATE OF CALIFORNIA ) ) ss.: COUNTY OF LOS ANGELES ) On the 29th day of October, 2004 before me, Leon Daniels, Jr. of Countrywide Home Loans, Inc., personally appeared, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity on behalf of which the person acted, executed the instrument. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. /s/ Glenda J. Daniel ----------------------------------- Notary Public Glenda J. Daniel Commission # 1325392 Notary Public - California Los Angeles County My Comm. Expires October 15, 2005. 26 SCHEDULE I SCHEDULE OF MORTGAGE LOANS [Delivered to the Indenture Trustee only] Sch-I-1 SCHEDULE II STANDARD & POOR'S GLOSSARY Standard & Poor's Predatory Lending Categorization Standard & Poor's has categorized loans governed by anti-predatory lending laws in the jurisdictions listed below into three categories based on a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor's High Cost Loan category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry.
- ---------------------------------------------------------------------------------------------------------------------------------- Standard & Poor's High-Cost Loan Categorization - ---------------------------------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - ---------------------------------------------------------------------------------------------------------------------------------- Arkansas High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Cleveland Heights, Ohio Covered Loan - ---------------------------------------------------------------------------------------------------------------------------------- Colorado Covered Loan - ---------------------------------------------------------------------------------------------------------------------------------- Connecticut High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- District of Columbia Covered Loan - ---------------------------------------------------------------------------------------------------------------------------------- Florida High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002 - March 6, 2003) High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Georgia as amended (March 7, 2003 - current) High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- HOEPA Section 32 High Cost Loan - ---------------------------------------------------------------------------------------------------------------------------------- Illinois High Risk Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Kansas High Loan-to-Value Consumer Loans and High APR Consumer Loans - ---------------------------------------------------------------------------------------------------------------------------------- Kentucky High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Los Angeles, Calif. High Cost Refinance Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Maine High Rate High Fee mortgage - ---------------------------------------------------------------------------------------------------------------------------------- Massachusetts High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Nevada Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- New Jersey High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- New York High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- New Mexico High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- North Carolina High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Oakland, Calif. High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Ohio Covered Loan - ---------------------------------------------------------------------------------------------------------------------------------- Oklahoma Subsection 10 Mortgage - ---------------------------------------------------------------------------------------------------------------------------------- South Carolina High Cost Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- West Virginia West Virginia Mortgage Loan Act Loan - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- Standard & Poor's Covered Loan Categorization - ---------------------------------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - ---------------------------------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002 - March 6, 2003) Covered Loan - ---------------------------------------------------------------------------------------------------------------------------------- New Jersey Covered Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Sch-II-1 - ---------------------------------------------------------------------------------------------------------------------------------- Standard & Poor's Home Loan Categorization - ---------------------------------------------------------------------------------------------------------------------------------- State/jurisdiction Category under applicable anti-predatory lending law - ---------------------------------------------------------------------------------------------------------------------------------- Georgia (Oct. 1, 2002- March 6, 2003) Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- New Jersey Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- New Mexico Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- North Carolina Consumer Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- Oakland, Calif. Home Loan - ---------------------------------------------------------------------------------------------------------------------------------- South Carolina Consumer Home Loan - ----------------------------------------------------------------------------------------------------------------------------------
Sch-II-2 ANNEX 1 ADOPTION ANNEX The purchase price for the Mortgage Loans pursuant to Section 2.03 is the transfer to the Seller on the Closing Date of the Notes and the Transferor Certificates. The items referred to in the representations and warranties in Section 3.02 are: (xii) 0% and 0]% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, being transferred on the relevant date (by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a contractual basis). (xix) As of the Cut-off Date no more than 3.00% and 3.00% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, are secured by Mortgaged Properties located in one United States postal zip code. (xx) The Combined Loan-to-Value Ratio for each Mortgage Loan was not in excess of 100%. (xxxi) The weighted average remaining term to maturity of the Mortgage Loans on a contractual basis as of the Cut-off Date is approximately 299 and 298 months with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Loan Rate Caps for the Mortgage Loans range between 16.000% and 21.000% and 16.000% and 21.000% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate Cap is approximately 17.966% and 17.952%, with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Gross Margins for the Mortgage Loans range between -0.500% and 11.250% and -0.999% and 8.000% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Gross Margin is approximately 2.294% and 1.752% as of the Cut-off Date for the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. The Loan Rates on the Mortgage Loans range between 3.000% and 15.750% and 3.000% and 12.500% with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan Rate on the Mortgage Loans is approximately 5.729% and 5.651% with respect to the Mortgage Loans in Loan Group1 and Loan Group 2, respectively. As of the Cut-off Date, 100% and 0% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, have original principal balances (by credit limit) that conform to Fannie Mae or Freddie Mac guidelines. (xxxiii) No more than 33.11% and 29.71% (by Cut-off Date Loan Balance) of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured by real property improved by individual condominium units, units in planned unit developments, townhouses, or two-to-four family residences erected on them, and at least 66.89% and 70.29% (by Cut-off Date Loan Balance) of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, are secured by real property with a detached one-family residence erected on them. Ann-1-1 (xxxiv) The Credit Limits on the Mortgage Loans range between approximately $32,200 and $166,300 and $6,499 and $2,000,000 with an average of approximately $60,382 and $77,128 with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. As of the Cut-off Date, no Mortgage Loan had a principal balance in excess of approximately $125,000 and $2,000,000 and the average principal balance of the Mortgage Loans is equal to approximately $57,701 and $64,777 with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. (xxxv) Approximately 0% and 100% of the Mortgage Loans of each Loan Group, by aggregate principal balance as of the Cut-off Date for the Mortgage Loans, are first and second liens, respectively. (xxxvi) As of the Closing Date, no more than 3.86% and 1.68% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate principal balance, were appraised electronically. (xli) As of the Cut-off Date (based upon the drawn balances), the Mortgage Loans had a weighted average Combined Loan-to-Value Ratio of 88.43% and 83.85%; a range of Combined Loan-to-Value Ratios between 8.31% and 100.00% and 7.78% and 100%; a percentage of primary residences of 95.25% and 93.80%; a weighted average FICO score of 710 and 712; a range of FICO scores between 514 and 838 and 531 and 842; a Weighted Average Net Loan Rate of 5.229% and 5.151%; a range of net Loan Rates between 2.500% and 15.250% and 2.500% and 12.000%; a weighted average original stated term to maturity of 300 and 300 months; a range of original term to maturity between 120 and 360 months and 120 and 360 months; a range of remaining term to maturity between 110 and 350 months and 78 and 351 months; an average drawn balance of $57,701 and $64,777; a weighted average utilization ratio of 97.22% and 93.88%; and 62.08% and 75.73% of the Mortgage Loans have their respective Mortgaged Properties located in the top five states, measured by aggregate drawn balances, all with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively. Ann-1-2 EX-99.3 4 efc4-1981_5613461ex993.txt EXECUTION COPY ============================================================================== CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P Issuer and JPMORGAN CHASE BANK ---------------------------- INDENTURE Dated as of October 29, 2004 ---------------------------- ============================================================================== TABLE OF CONTENTS Page ARTICLE I Definitions And Other Provisions Of General Application Section 1.01. Definitions...............................................3 Section 1.02. Incorporation by Reference of Trust Indenture Act.........3 Section 1.03. Other Terms...............................................3 Section 1.04. Rules of Construction.....................................3 ARTICLE II The Notes Section 2.01. Form......................................................5 Section 2.02. Execution, Authentication, and Delivery...................6 Section 2.03. Registration; Registration of Transfer and Exchange.......6 Section 2.04. Mutilated, Destroyed, Lost, or Stolen Notes...............7 Section 2.05. Persons Considered Owner..................................8 Section 2.06. Payment of Principal and Interest; Defaulted Interest.....8 Section 2.07. Cancellation..............................................9 Section 2.08. Book-Entry Notes.........................................10 Section 2.09. Notices To Depository....................................11 Section 2.10. Definitive Notes.........................................11 Section 2.11. Tax Treatment............................................11 Section 2.12. Transfer Restrictions; Restrictive Legends...............11 ARTICLE III Covenants Section 3.01. Payment of Principal and Interest........................12 Section 3.02. Maintenance of Office or Agency..........................13 Section 3.03. Money For Payments To Be Held in Trust...................13 Section 3.04. Existence................................................14 Section 3.05. Protection of the Collateral.............................15 Section 3.06. Opinions About Collateral................................16 Section 3.07. Performance of Obligations...............................16 Section 3.08. Negative Covenants.......................................17 Section 3.09. Annual Compliance Statement..............................19 Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms......19 Section 3.11. Successor or Transferee..................................20 Section 3.12. Further Instruments and Acts.............................20 Section 3.13. Compliance with Laws.....................................20 Section 3.14. Master Servicer as Agent and Bailee of the Indenture Trustee........................................20 Section 3.15. Investment Company Act...................................20 Section 3.16. Representations..........................................21 i ARTICLE IV Satisfaction and Discharge Section 4.01. Satisfaction and Discharge of Indenture..................22 Section 4.02. Application of Trust Money...............................23 Section 4.03. Subrogation and Cooperation..............................23 Section 4.04. Release of Collateral....................................24 ARTICLE V Remedies Section 5.01. Events of Default........................................25 Section 5.02. Acceleration of Maturity; Rescission and Annulment.......25 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.....................................26 Section 5.04. Indenture Trustee May File Proofs of Claim...............27 Section 5.05. Remedies; Priorities.....................................28 Section 5.06. Optional Preservation of the Collateral..................30 Section 5.07. Limitation of Suits......................................30 Section 5.08. Unconditional Right to Receive Principal and Interest....31 Section 5.09. Restoration of Rights and Remedies.......................31 Section 5.10. Rights and Remedies Cumulative...........................31 Section 5.11. Delay or Omission Not a Waiver...........................31 Section 5.12. Control by Credit Enhancer or Noteholders................31 Section 5.13. Waiver of Past Defaults..................................32 Section 5.14. Undertaking For Costs....................................34 Section 5.15. Waiver of Stay or Extension Laws.........................34 Section 5.16. Rapid Amortization Events................................34 Section 5.17. Sale of Collateral.......................................36 Section 5.18. Performance and Enforcement of Certain Obligations.......36 ARTICLE VI The Indenture Trustee Section 6.01. Duties of Indenture Trustee..............................37 Section 6.02. Notice of Defaults.......................................38 Section 6.03. Rights of Indenture Trustee..............................39 Section 6.04. Indenture Trustee Not Responsible for Certain Things.....40 Section 6.05. Individual Rights of Indenture Trustee...................41 Section 6.06. Money Held in Trust......................................41 Section 6.07. Compensation.............................................41 Section 6.08. Eligibility..............................................41 Section 6.09. Preferential Collection of Claims Against Issuer.........41 Section 6.10. Replacement of Indenture Trustee.........................42 Section 6.11. Acceptance of Appointment by Successor...................42 Section 6.12. Successor Indenture Trustee by Merger....................43 Section 6.13. Appointment of Co-Indenture Trustee or Separate Indenture Trustee........................................43 Section 6.14. Representations and Warranties of Indenture Trustee......44 ii ARTICLE VII Noteholders' Lists and Reports Section 7.01. Issuer to Furnish Names and Addresses of Noteholders.....45 Section 7.02. Preservation of Information; Communications..............45 Section 7.03. Reports of Issuer........................................45 Section 7.04. Reports by Indenture Trustee.............................46 ARTICLE VIII Accounts, Disbursements, and Releases Section 8.01. Accounts.................................................47 Section 8.02. Withdrawals from the Collection Account..................47 Section 8.03. Payments.................................................48 Section 8.04. Calculation of the Note Rate.............................51 Section 8.05. Claims on the Policy; Policy Payments Account............51 Section 8.06. Replacement Policy.......................................53 ARTICLE IX Supplemental Indentures Section 9.01. Supplemental Indentures Without Consent of Noteholders...53 Section 9.02. Supplemental Indentures with Consent of Noteholders......54 Section 9.03. Execution of Supplemental Indentures.....................56 Section 9.04. Effect of Supplemental Indenture.........................56 Section 9.05. Reference in Notes to Supplemental Indentures............56 Section 9.06. Tax Opinion..............................................56 ARTICLE X Redemption of Notes Section 10.01. Redemption...............................................56 Section 10.02. Form of Redemption Notice................................58 Section 10.03. Notes Payable on Redemption Date.........................58 ARTICLE XI Miscellaneous Section 11.01. Compliance Certificates and Opinions, etc................58 Section 11.02. Form of Documents Delivered to Indenture Trustee.........60 Section 11.03. Acts of Noteholders......................................61 Section 11.04. Notices..................................................61 Section 11.05. Notices to Noteholders; Waiver...........................62 Section 11.06. Alternate Payment and Notice Provisions..................63 Section 11.07. Conflict with Trust Indenture Act........................63 Section 11.08. Effect of Headings and Table of Contents.................63 iii Section 11.09. Successors and Assigns...................................64 Section 11.10. Separability.............................................64 Section 11.11. Benefits of Indenture....................................64 Section 11.12. Legal Holidays...........................................64 Section 11.13. Governing Law............................................64 Section 11.14. Counterparts.............................................64 Section 11.15. Recording of Indenture...................................64 Section 11.16. No Petition..............................................65 Section 11.17. Act on Instructions from Credit Enhancer.................65 Section 11.18. Non-recourse.............................................65 Section 11.19. Trust Obligation.........................................65 EXHIBITS Exhibit A - FORM OF NOTES A-1 ANNEX 1 - DEFINITIONS ANN-1-1 ANNEX 2 - ADOPTION ANNEX ANN-2-1 iv THIS INDENTURE, dated as of October 29, 2004, between CWABS Revolving Home Equity Loan Trust, Series 2004-P, a Delaware statutory trust, and the INDENTURE TRUSTEE, as indenture trustee, WITNESSETH THAT Each party agrees for the benefit of the other party and for the benefit of the Noteholders and the Credit Enhancer as follows. GRANTING CLAUSE The Issuer Grants to the Indenture Trustee for the series referred to in the Adoption Annex at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Class 1-A Notes and the Credit Enhancer, all of the Issuer's interest existing now or in the future in: o the Loan Group 1 Mortgage Loans including their Asset Balances (including all Additional Balances) and the related Mortgage Files and all property that secures the Loan Group 1 Mortgage Loans and all property that is acquired by foreclosure or deed in lieu of foreclosure, and all collections received on each Group 1 Mortgage Loan after the Cut-off Date (excluding payments due by the Cut-off Date); o the Issuer's rights under hazard insurance policies related to the Loan Group 1 Mortgage Loans ; o the interest of the Issuer in the Sale and Servicing Agreement and the Purchase Agreement (including the Issuer's right to cause the Loan Group 1 Mortgage Loans to be repurchased); o all rights under any guaranty executed in connection with the Loan Group 1 Mortgage Loans ; o the Collection Account and the Payment Account maintained to hold collections related to the Loan Group 1 Mortgage Loans and their contents related to Loan Group 1; o any Crossover Amount from Loan Group 2; and o all present and future claims, demands, causes of action, and choses in action regarding any of the foregoing and all payments on and all proceeds from any of the foregoing, including all proceeds of their conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of every kind, and other forms of obligations, instruments, and other property that at any time constitute any part of or are included in the proceeds of any of the foregoing (collectively, the "Group 1 Collateral"). The Issuer Grants to the Indenture Trustee for the notes referred to in the Adoption Annex at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Class 2-A Notes and the Credit Enhancer, all of the Issuer's interest existing now or in the future in: o the Loan Group 2 Mortgage Loans including their Asset Balances (including all Additional Balances) and the related Mortgage Files and all property that secures the Loan Group 2 Mortgage Loans and all property that is acquired by foreclosure or deed in lieu of foreclosure, and all collections received on each Group 2 Mortgage Loan after the Cut-off Date (excluding payments due by the Cut-off Date); o the Issuer's rights under hazard insurance policies related to the Loan Group 2 Mortgage Loans; o the interest of the Issuer in the Sale and Servicing Agreement and the Purchase Agreement (including the Issuer's right to cause the Loan Group 2 Mortgage Loans to be repurchased); o all rights under any guaranty executed in connection with the Loan Group 2 Mortgage Loans ; o the Collection Account and the Payment Account maintained to hold collections related to the Loan Group 2 Mortgage Loans and their contents related to Loan Group 2; o any Crossover Amount from Loan Group 1, and o all present and future claims, demands, causes of action, and choses in action regarding any of the foregoing and all payments on and all proceeds from any of the foregoing, including all proceeds of their conversion, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of every kind, and other forms of obligations, instruments, and other property that at any time constitute any part of or are included in the proceeds of any of the foregoing (collectively, the "Group 2 Collateral"). The Notes will have the benefit of the Insurance policy issued by the Credit Enhancer. These Grants are made in trust to secure the payment of principal and interest on, and any other amounts owing on, the Notes, without prejudice, priority, or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture. The foregoing Grants shall inure to the benefit of the Credit Enhancer to the extent of draws made on the Policy and amounts owing under the Insurance Agreement, and shall continue for the benefit of the Credit Enhancer until all amounts owed the Credit Enhancer have been repaid in full. 2 The Indenture Trustee, as Indenture Trustee on behalf of the Noteholders and the Credit Enhancer, acknowledges the Grants, accepts the trusts under this Indenture in accordance with this Indenture, and agrees to perform its duties required in this Indenture in accordance with its terms and the terms of the Transaction Documents. ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.01. Definitions. Unless the context requires a different meaning, capitalized terms are used in this Indenture as defined in Annex 1 or the Adoption Annex. Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference into this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the Securities and Exchange Commission. "indenture securities" means the Notes. "indenture security holder" means a Noteholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Indenture Trustee. "obligor" on the indenture securities means the Issuer and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute, or defined by Commission rule have the meanings so assigned to them. Section 1.03. Other Terms. Defined terms that are used only in one section or only in another definition may be omitted from the list of defined terms in Annex 1. Defined terms used in this Indenture are sometimes defined after their first use without a reference such as "(as hereinafter defined)." Section 1.04. Rules of Construction. Except as otherwise expressly provided in this Indenture or unless the context clearly requires otherwise: (a) Defined terms include, as appropriate, all genders and the plural as well as the singular. (b) References to designated articles, sections, subsections, exhibits, and other subdivisions of this Indenture, such as "Section 6.12 (a)," refer to the designated article, section, 3 subsection, exhibit, or other subdivision of this Indenture as a whole and to all subdivisions of the designated article, section, subsection, exhibit, or other subdivision. The exhibits and other attachments to this Indenture are a part of this Indenture. The words "herein," "hereof," "hereto," "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular article, section, exhibit, or other subdivision of this Indenture. (c) The headings of the various Articles and Sections in this Indenture are for convenience of reference only and shall not define or limit any of the provisions of this Indenture. (d) Any term that relates to a document or a statute, rule, or regulation includes any amendments, modifications, supplements, or any other changes that may have occurred since the document, statute, rule, or regulation came into being, including changes that occur after the date of this Indenture. References to law are not limited to statutes. References to statutes include any rules or regulations promulgated under them by a governmental authority charged with the administration of the statute. Any reference to any person includes references to its successors and assigns. (e) Any party may execute any of the requirements under this Indenture either directly or through others, and the right to cause something to be done rather than doing it directly shall be implicit in every requirement under this Indenture. Unless a provision is restricted as to time or limited as to frequency, all provisions under this Indenture are implicitly available from time to time. (f) The term "including" and all its variations mean "including but not limited to." Except when used in conjunction with the word "either," the word "or" is always used inclusively (for example, the phrase "A or B" means "A or B or both," not "either A or B but not both"). (g) A reference to "a [thing]" or "any [of a thing]" does not imply the existence or occurrence of the thing referred to even though not followed by "if any," and "any [of a thing]" is any and all of it. A reference to the plural of anything as to which there could be either one or more than one does not imply the existence of more than one (for instance, the phrase "the obligors on a note" means "the obligor or obligors on a note"). "Until [something occurs]" does not imply that it must occur, and will not be modified by the word "unless." The word "due" and the word "payable" are each used in the sense that the stated time for payment has passed. The word "accrued" is used in its accounting sense, i.e., an amount paid is no longer accrued. In the calculation of amounts of things, differences and sums may generally result in negative numbers, but when the calculation of the excess of one thing over another results in zero or a negative number, the calculation is disregarded and an "excess" does not exist. Portions of things may be expressed as fractions or percentages interchangeably. The word "shall" is used in its imperative sense, as for instance meaning a party agrees to something or something must occur or exist. 4 (h) All accounting terms used in an accounting context and not otherwise defined, and accounting terms partly defined in this Indenture, to the extent not completely defined, shall be construed in accordance with generally accepted accounting principles in the United States. To the extent that the definitions of accounting terms in this Indenture are inconsistent with their meanings under generally accepted accounting principles, the definitions in this Indenture shall control. Capitalized terms used in this Indenture without definition that are defined in the Uniform Commercial Code of the relevant jurisdiction are used in this Indenture as defined in that Uniform Commercial Code. (i) In the computation of a period of time from a specified date to a later specified date or an open-ended period, the words "from" and "beginning" mean "from and including," the word "after" means "from but excluding," the words "to" and "until" mean "to but excluding," and the word "through" means "to and including." Likewise, in setting deadlines or other periods, "by" means "on or before." The words "preceding," "following," and words of similar import, mean immediately preceding or following. References to a month or a year refer to calendar months and calendar years. (j) Any reference to the enforceability of any agreement against a party means that it is enforceable against the party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (k) Generally only the registered holder of a Note is recognized, such as in Section 2.05. Persons Considered Owner and payment provisions. However, for the purposes of the transfer restrictions and related provisions, such as agreements, representations, and warranties by holders of Notes, references to Noteholders, holders, and the like refer equally to beneficial owners who have an interest in a Note but are not reflected in the note register as the owner and references to transfers of Notes include transfers of interests in a Note. ARTICLE II THE NOTES Section 2.01. Form The Notes, together with the Indenture Trustee's certificate of authentication, shall be in substantially the form of Exhibit A, with any appropriate insertions, omissions, substitutions, and other variations required or permitted by this Indenture. The Notes may have any letters, numbers, or other marks of identification and any legends or endorsements placed on them that the officers executing them determine appropriate and that are consistent with this Indenture, as evidenced by their execution of the Notes. Any portion of the text of any Note may be on its reverse. 5 The Notes may be typewritten, printed, lithographed, or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing them, as evidenced by their execution of them. The terms of the Notes are part of the terms of this Indenture. Section 2.02. Execution, Authentication, and Delivery. (a) The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that they may have ceased to hold their offices before the authentication and delivery of the Notes or did not hold their offices at the date of the Notes. (b) The Indenture Trustee shall upon Issuer Order authenticate and deliver for original issue the Class 1-A and Class 2-A Notes in the amounts reflected in the Adoption Annex. The aggregate principal amount of Class 1-A and Class 2-A Notes outstanding at any time may not exceed those amounts except as provided in Section 2.04. Each Note shall be dated the date of its authentication. The Notes shall be issuable as registered Notes in the minimum denomination of $25,000 and in integral multiples of $1,000 above that. (c) No Note shall be entitled to any benefit under this Indenture or be a valid obligation of the Issuer for any purpose, unless a certificate of authentication appears on it executed by the Indenture Trustee by the manual signature of one of its authorized signatories. A certificate of authentication on any Note shall be conclusive evidence, and the only evidence, that it has been duly authenticated and delivered under this Indenture. Section 2.03. Registration; Registration of Transfer and Exchange. (a) The Issuer shall cause a register (the "Note Register") to be kept in which the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee initially shall be the "Note Registrar" for registering Notes and transfers of Notes. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to, it shall assume the duties of Note Registrar. If the Issuer appoints a person other than the Indenture Trustee to be Note Registrar, the Issuer will give the Indenture Trustee prompt notice of the appointment of the Note Registrar and of the location, and any change in the location, of the Note Register. The Indenture Trustee may inspect the Note Register at all reasonable times and obtain copies of it. The Indenture Trustee may rely on a certificate executed on behalf of the Note Registrar by one of its Authorized Officers as to the names and addresses of the Noteholders and the principal amounts and number of the Notes. (b) Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained pursuant to Section 3.02, if the requirements of this Indenture and 6 Section 8-401(a) of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferees, new Notes of the same Class in any authorized denominations, of a like aggregate principal amount. (c) At the option of the Holder, Notes may be exchanged for other Notes of the same Class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Issuer maintained pursuant to Section 3.02. Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are met the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive. (d) All Notes issued on any registration of transfer or exchange of Notes shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered for registration of transfer or exchange. (e) Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, its Holder or any attorney for its Holder duly authorized in writing. The endorsement signature shall be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or any other "signature guarantee program" chosen by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. (f) No Holder shall incur a service charge for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed on any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.04 or 9.05 not involving any transfer. (g) The preceding provisions of this Section notwithstanding, the Note Registrar need not register and the Issuer need not make transfers or exchanges of Notes selected for redemption or transfers or exchanges of any Note during the 15 days preceding the due date for any payment on it. Section 2.04. Mutilated, Destroyed, Lost, or Stolen Notes. If (i) the Indenture Trustee receives evidence to its satisfaction of the destruction, loss, or theft of any Note and the Indenture Trustee and the Credit Enhancer receive the security or indemnity they require to hold the Issuer, the Credit Enhancer, and the Indenture Trustee harmless, or (ii) any mutilated Note is surrendered to the Indenture Trustee, then, in the absence of notice to the Issuer, the Note Registrar, or the Indenture Trustee that the Note has been acquired by a Protected Purchaser, and if the requirements of Section 8-406 of the UCC are met and subject to Section 8-405 of the UCC, the Issuer shall execute, and on its request the 7 Indenture Trustee shall authenticate and deliver, in exchange for the Note, a replacement Note of the same Class of like tenor and principal amount. If the mutilated, destroyed, lost, or stolen Note is, or within seven days becomes, payable, or is called for redemption, instead of issuing a replacement Note the Issuer may pay the mutilated, destroyed, lost, or stolen Note when payable or on its redemption date. If, after the delivery of the replacement Note or payment of a destroyed, lost, or stolen Note pursuant to the preceding sentence, a Protected Purchaser of the original Note in lieu of which the replacement Note was issued presents it for payment, the Issuer and the Indenture Trustee may recover the replacement Note (or the payment) from the person to whom it was delivered or any person taking the replacement Note from the person to whom the replacement Note was delivered or any assignee of that person, except a Protected Purchaser, and may recover on the security or indemnity provided for it to the extent of any expense incurred by the Issuer, the Credit Enhancer, or the Indenture Trustee in connection with it. Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Holder of the Note of a sum sufficient to cover any tax or other governmental charge that may be imposed on it and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) in connection with it. Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost, or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Note is enforceable by anyone at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any other Notes duly issued under this Indenture. The provisions of this Section are exclusive and shall preclude all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost, or stolen Notes. Section 2.05. Persons Considered Owner. Before due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee, the Credit Enhancer, and any agent of the Issuer, the Credit Enhancer, or the Indenture Trustee may treat the person in whose name any Note is registered (as of the day of determination) as the owner of the Note for the purpose of receiving payments of principal and interest on the Note and for all other purposes whatsoever, whether or not the Note is overdue. None of the Issuer, the Credit Enhancer, the Indenture Trustee, or any agent of the Issuer, the Credit Enhancer, or the Indenture Trustee shall be affected by notice to the contrary. Section 2.06. Payment of Principal and Interest; Defaulted Interest. (a) Each Class of Notes shall accrue interest on its outstanding balance at its Note Rate before and after maturity. Interest shall be payable on each Payment Date as specified in Section 8.03 or 5.05, subject to Section 3.01. Any installment of interest or principal payable on a Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date 8 shall be paid to the person in whose name the Note (or its predecessor Note) is registered on the Record Date by wire transfer of immediately available funds to the account designated by the Holder at a bank or other entity having appropriate facilities, if the Holder has so notified the Indenture Trustee in writing at least five Business Days before the Record Date and is either the Depository or owner of record of Notes having an aggregate principal amount of at least $1,000,000, and otherwise by check mailed first-class postage prepaid to the Holder's address as it appears on the Note Register on the Record Date, or by any other means the Noteholder and the Indenture Trustee agree to, except for the final installment of principal payable on the Note on a Payment Date, a redemption date, or the Scheduled Maturity Date (and except for the redemption price for any Class of Notes called for redemption pursuant to Section 10.01) which shall be payable as provided below. (b) The principal of each Note shall be payable, if not previously paid, on the related Scheduled Maturity Date in the manner specified in Section 8.03. All principal payments on each Class of Notes shall be made pro rata to the Noteholders of that Class. The Indenture Trustee shall send a notice to each person in whose name a Note is registered at the close of business on the Record Date preceding the Scheduled Maturity Date. The notice shall be sent by first-class mail, postage prepaid, or by facsimile (promptly confirmed by mail) not later than ten days before the Scheduled Maturity Date to each Holder of Notes as of the close of business on the Record Date preceding the Scheduled Maturity Date, at the Holder's address or facsimile number appearing in the Note Register, and shall specify that the principal of the Note will be payable only on presentation and surrender of the Note and shall specify the place where the Note may be presented and surrendered for payment. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02. (c) If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on the defaulted interest to the extent lawful) at the applicable Note Rate in any lawful manner. The Issuer may pay the defaulted interest to the persons who are Noteholders on a subsequent special record date, which date shall be at least five Business Days before the payment date. The Issuer shall fix the special record date and payment date, and, at least 15 days before the special record date, the Issuer shall mail to each Noteholder a notice that states the special record date, the payment date, and the amount of defaulted interest to be paid. Section 2.07. Cancellation. All Notes surrendered for payment, registration of transfer, exchange, or redemption shall, if surrendered to any person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered under this Indenture that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be authenticated instead of or in exchange for any Notes cancelled as provided in this Section, 9 except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless before their disposal the Issuer directs by an Issuer Order that they be returned to it. Section 2.08. Book-Entry Notes. (a) The Notes, on original issuance, will be issued by the Issuer in the form of typewritten Notes representing the book-entry Notes, to the Depository Trust Company, the initial Depository. The book-entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Depository, and no Note Owner will receive a definitive Note representing its interest in a Note, except as provided in Section 2.10. Until definitive, fully registered Notes have been issued to the Note Owners pursuant to Section 2.10: (i) the provisions of this Section shall be in full force; (ii) the Note Registrar and the Indenture Trustee may deal with the Depository for all purposes of this Indenture (including the payment of principal and interest on the Notes and accepting instructions under this Indenture) as the sole holder of the Notes, and shall have no obligation to the Note Owners; (iii) to the extent that this Section conflicts with any other provisions of this Indenture, this Section shall control; (iv) the rights of Note Owners shall be exercised only through the Depository and shall be limited to those established by law and agreements between the Note Owners and the Depository; (v) until definitive Notes are issued pursuant to Section 2.10, the Depository will make book-entry transfers among the Depository's participants and receive and transmit payments of principal and interest on the Notes to the Depository's participants; (vi) whenever this Indenture requires or permits actions to be taken based on instructions from Holders of Notes evidencing a specified percentage of the Outstanding Amount, the Depository shall be treated as representing that percentage only to the extent that it has received instructions to that effect from Note Owners owning the required percentage of the beneficial interest in the Notes and has delivered the instructions to the Indenture Trustee; and (vii) the Indenture Trustee may conclusively rely on information furnished by the Depository about its participants and furnished by the participants about indirect participating firms and persons shown on the books of the indirect participating firms as direct or indirect Note Owners. (b) The book-entry Notes may not be transferred except as a whole and then only by the Depository to its nominee or by its nominee to the 10 Depository or another nominee of the Depository, or by the Depository or its nominee to a successor to the Depository or the successor's nominee. Section 2.09. Notices To Depository. Whenever a communication to the Noteholders is required under this Indenture, until definitive Notes have been issued to the Note Owners pursuant to Section 2.10, the Indenture Trustee shall communicate with the Depository as Holder of the Notes, and shall have no obligation to the Note Owners. Section 2.10. Definitive Notes. If (i) the Issuer advises the Indenture Trustee in writing that the Depository is no longer willing or able to discharge its responsibilities properly with respect to the book-entry Notes and the Issuer is unable to locate a qualified successor, or (ii) after the occurrence of an Event of Default, Note Owners of not less than 51% of the aggregate Outstanding Amount of both Classes advise the Depository in writing that the continuation of a book-entry system through the Depository is no longer in the best interests of the Note Owners, then the Depository shall notify all Note Owners and the Indenture Trustee of the occurrence of the event and of the availability of definitive Notes to Note Owners requesting them. Upon surrender to the Indenture Trustee of the book-entry Notes by the Depository, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver the definitive Notes in accordance with the instructions of the Depository. None of the Issuer, the Note Registrar, or the Indenture Trustee shall be liable for any delay in delivery of the instructions and may conclusively rely on, and shall be protected in relying on, the instructions. On the issuance of definitive Notes, the Indenture Trustee shall recognize the Holders of the definitive Notes as Noteholders. Section 2.11. Tax Treatment. The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for all purposes including federal, State, and local income, single business, and franchise tax purposes, the Notes will qualify as indebtedness secured by the Collateral. The Issuer, by entering into this Indenture, and each Noteholder, by its acquisition of a Note (and each Note Owner by its acquisition of an interest in a book-entry Note), agree to treat the Notes for all purposes including federal, State, and local income, single business, and franchise tax purposes as indebtedness. Section 2.12. Transfer Restrictions; Restrictive Legends. (a) Each transferee or purchaser of a Note that is a plan or is investing plan assets shall represent (or, in the case of a book-entry Note, shall be deemed to represent) that the investment and holding of the Note satisfy the conditions for exemptive relief under PTCE 84- 11 14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similar exemption. A "plan" is an employee benefit plan (as defined in section 3(3) of ERISA) that is subject to Title I of ERISA, a plan (as defined in and subject to section 4975 of the Code) and any entity whose underlying assets include plan assets by reason of a plan's investment in the entity or otherwise. (b) Unless the Indenture Trustee receives an Opinion of Counsel to the effect that it is no longer appropriate, each definitive Note shall bear the following legend on its face: "Each transferee or purchaser of this Note that is a plan or is investing plan assets, by acceptance of this Note or an interest in this Note, represents that the investment and holding of this Note satisfy the conditions for exemptive relief under PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similar exemption. A "plan" is an employee benefit plan (as defined in section 3(3) of ERISA) that is subject to Title I of ERISA, a plan (as defined in and subject to section 4975 of the Code) and any entity whose underlying assets include plan assets by reason of a plan's investment in the entity or otherwise. Any transfer in violation of either of the foregoing will be void ab initio, and will not operate to transfer any rights to the transferee, notwithstanding any instructions to the contrary." (c) Each book-entry Note shall bear the following legend on its face: "Unless this Note is presented by an authorized representative of the Depository to the Issuer or its agent for registration of transfer, exchange, or payment, and any Note issued in exchange for this Note is registered in the name of the Depository or in another name requested by an authorized representative of the Depository (and any payment on this Note is made to the Depository or to another entity requested by an authorized representative of the Depository), any transfer, pledge, or other use of this Note for value or otherwise by or to any person is wrongful inasmuch as the registered owner of this Note, the Depository, has an interest in this Note." ARTICLE III. COVENANTS Section 3.01. Payment of Principal and Interest. The Issuer will duly and punctually pay the principal and interest and other amounts payable on the Notes in accordance with the terms of the Notes and this Indenture. Amounts properly withheld under the Code or other applicable tax laws by any person from a payment to any Noteholder of interest or principal or other amounts shall be considered to have been paid by the Issuer to the Noteholder for all purposes of this Indenture. 12 The Notes are non-recourse obligations of the Issuer and are limited in right of payment to amounts available from the Trust. The Issuer shall not otherwise be liable for payments on the Notes. Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices to and demands on the Issuer regarding the Notes and this Indenture may be served. The Issuer initially appoints the Indenture Trustee to serve as its agent for these purposes. The Indenture Trustee will give prompt notice to the Issuer of the location, and of any change in the location, where the Indenture Trustee maintains this office or agency. If the Issuer ever fails to maintain the required office or agency, then surrenders, notices, and demands may be made or served at the Corporate Trust Office. Section 3.03. Money For Payments To Be Held in Trust. All payments of amounts payable on any Notes pursuant to Section 8.03, shall be made from amounts deposited in the Payment Account by the Indenture Trustee or by another Paying Agent, and no amounts so deposited in the Payment Account for payments of Notes shall be paid over to the Issuer except as provided in this Section or Section 8.03. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which the Paying Agent agrees with the Indenture Trustee that it will, and the Indenture Trustee hereby agrees in its capacity as Paying Agent that it will: (i) hold all sums held by it for the payment of amounts due on the Notes in trust for the benefit of the persons entitled to them until they are paid to the persons entitled to them or otherwise disposed of as provided in this Indenture, and pay them to the persons entitled to them as provided in this Indenture; (ii) give the Indenture Trustee and the Credit Enhancer notice of any payment default by the Issuer on the Notes of which it has actual knowledge; (iii) at any time during the continuance of any payment default on the Notes, at the request of the Indenture Trustee, immediately pay to the Indenture Trustee all sums held in trust by it for the payment of the Notes; (iv) immediately resign as a Paying Agent and immediately pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; (v) be bound by Section 11.16; and 13 (vi) comply with all requirements of the Code to withhold from any payments made by it on any Notes any applicable withholding taxes imposed on them and comply with any applicable reporting requirements. To obtain the satisfaction and discharge of this Indenture or for any other purpose, the Issuer may at any time by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held by it in trust. Those sums shall be held by the Indenture Trustee on the same trusts as those on which the sums were held by the Paying Agent. On payment by a Paying Agent to the Indenture Trustee, it shall be released from all further liability with respect to that money. Subject to applicable laws on abandoned property, any money held in trust by the Indenture Trustee or any Paying Agent for the payment of any amount due on any Note remaining unclaimed for two years after it has become payable shall be discharged from the trust and be paid to the Issuer on Issuer Request with the consent of the Credit Enhancer. If any of that money had been previously deposited by the Credit Enhancer for the payment of principal or interest on the Notes, to the extent any amounts are owing to the Credit Enhancer that money shall be promptly paid to the Credit Enhancer. After that the Holder of the unpaid Note shall look only to the Issuer for its payment as an unsecured general creditor (but only to the extent of the amounts paid to the Issuer). On its payment to the Issuer all liability of the Indenture Trustee or the Paying Agent with respect to that trust money shall cease. The Indenture Trustee or the Paying Agent, before being required to make the payment to the Issuer, shall at the expense and direction of the Issuer cause to be published once a notice that the money remains unclaimed and that, after a date specified in the notice not less than 30 days from the date of the publication, any unclaimed balance of the money then remaining will be repaid to the Issuer. The notice shall be published in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York. The Indenture Trustee may also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of the repayment (including mailing notice of the repayment to their last address of record to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent). Section 3.04. Existence. The Issuer will preserve its existence, rights, and franchises as a Delaware statutory trust (unless it or any successor becomes organized under the laws of any other State or of the United States, in which case the Issuer will preserve its existence, rights, and franchises under the laws of that other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which qualification to do business is necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral, and each other material agreement of the Issuer. 14 Section 3.05. Protection of the Collateral. (a) The Issuer intends the Security Interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders and the Credit Enhancer to be before all other liens on the Collateral (except as otherwise provided in the Transaction Documents). The Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders and the Credit Enhancer, a first priority perfected Security Interest in the Collateral (except as otherwise provided in the Transaction Documents). The Issuer will execute and deliver any supplements and amendments to this Indenture and any Financing Statements, Continuation Statements, instruments of further assurance, and other instruments and will take any other action appropriate to: (i) Grant more effectively any portion of the Collateral; (ii) preserve the Security Interest (and its priority) created by this Indenture or carry out more effectively the purposes of this Indenture; (iii) perfect, publish notice of, or protect the validity of any Grant made or to be made by this Indenture; (iv) enforce any rights with respect to any of the Collateral; (v) preserve and defend title to the Collateral and the rights of the Indenture Trustee, the Credit Enhancer, and the Noteholders in the Collateral against all adverse claims; or (vi) pay all taxes or assessments levied or assessed on the Collateral when due. (b) Except as otherwise provided in this Indenture or the other Transaction Documents, the Indenture Trustee shall not remove any portion of the Collateral that consists of money or is evidenced by an instrument, certificate, or other writing from the jurisdiction in which it was held at the date of the most recent Opinion of Counsel delivered pursuant to Section 3.06 unless the Indenture Trustee and the Credit Enhancer receive an Opinion of Counsel to the effect that the lien and Security Interest created by this Indenture will continue to be maintained on any removed property after giving effect to its removal. (c) The Issuer designates the Indenture Trustee its agent and attorney-in-fact to execute any Financing Statement, Continuation Statement, or other instrument required to be executed pursuant to this Section. The Issuer authorizes the Indenture Trustee to file Financing Statements or Continuation Statements, and amendments to them, relating to any part of the Collateral without the signature of the Issuer where permitted by law. A carbon, photographic, or other reproduction of this Indenture or any filed Financing Statement covering the Collateral or any part of it shall be sufficient as a Financing Statement where permitted by law. The Indenture Trustee will promptly send to the Issuer any Financing Statements or Continuation Statements that it files without the signature of the Issuer. Any Financing Statement filed 15 relating to any part of the Collateral will state in bold-faced type that a purchase of the Mortgage Loans included in the collateral covered by the Financing Statement from the debtor will violate the rights of the secured party and its assignee. Section 3.06. Opinions About Collateral. (a) On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Credit Enhancer an Opinion of Counsel either stating that, in its opinion, all action has been taken (i) with respect to the recording and filing of this Indenture, any indentures supplemental to this Indenture, and any other requisite documents and (ii) with respect to the execution and filing of any Financing Statements and Continuation Statements necessary to perfect the Security Interest of this Indenture in the Mortgage Loans, and reciting the details of the action, or stating that, in its opinion, no action is necessary to perfect the Security Interest of this Indenture in the Mortgage Loans. (b) By the date specified in the Adoption Annex in each calendar year beginning in the year specified in the Adoption Annex, the Issuer shall furnish to the Indenture Trustee and the Credit Enhancer an Opinion of Counsel either stating that, in its opinion, all action has been taken (i) with respect to the recording, filing, re-recording, and refiling of this Indenture, any indentures supplemental to this Indenture, and any other requisite documents and (ii) with respect to the execution and filing of any Financing Statements and Continuation Statements necessary to maintain the perfected Security Interest created by this Indenture in the Mortgage Loans and reciting the details of the action, or stating that, in its opinion, no action is necessary to maintain the perfected Security Interest of this Indenture in the Mortgage Loans. The Opinion of Counsel shall also describe the recording, filing, re-recording, and refiling of this Indenture, any indentures supplemental to this Indenture, and any other requisite documents and the execution and filing of any Financing Statements and Continuation Statements that will, in counsel's opinion, be required to maintain the perfected Security Interest of this Indenture in the Mortgage Loans until the date specified in the Adoption Annex in the following calendar year. Section 3.07. Performance of Obligations. (a) The Issuer will not take any action (and will not permit others to take any action) that would release any person from any of their material obligations under any of the Transaction Documents, that would create any Security Interests that are not provided for in the Transaction Documents, or that would change or impair the validity or effectiveness of the Transaction Documents or any Security Interest granted under them, except as expressly 16 provided in the Transaction Documents. The Indenture Trustee, as pledgee of the Mortgage Loans and an assignee of the Issuer's rights under the Sale and Servicing Agreement may exercise all of the rights of the Issuer to direct the actions of the Master Servicer pursuant to the Sale and Servicing Agreement. Unless granted or permitted by the Credit Enhancer, the Issuer may not waive any default by the Master Servicer under the Sale and Servicing Agreement or terminate the Master Servicer under the Sale and Servicing Agreement. (b) The Issuer may contract with other persons to assist it in performing its duties under this Indenture, and the performance of those duties by a person identified to the Indenture Trustee in an Officer's Certificate shall be considered to be action taken by the Issuer. (c) The Issuer will punctually perform all of its obligations under the Transaction Documents, including properly filing all Financing Statements and Continuation Statements required to be filed by the Transaction Documents. The Rating Agency Condition must be satisfied in connection with any amendment, termination, or material change in a Transaction Document. The Issuer shall not amend, terminate, or otherwise change any Transaction Document without the consent of the Indenture Trustee and the Credit Enhancer. The Issuer will provide notice of any termination, amendment, or material change in any Transaction Document to the Rating Agencies. The consent of the Indenture Trustee will not be required if the Rating Agency Condition is satisfied with respect to the proposed action. (d) Without derogating from the Grants to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee under this Indenture, the Issuer agrees (i) that it will not, without the prior consent of the Credit Enhancer and either the Indenture Trustee or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes, change or waive, or agree to or otherwise permit any change to or waiver of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement); and (ii) that any change in the terms of any Collateral shall not (A) increase or reduce the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders (except as may be incidental to changes or waivers allowed under (d)(i)) or (B) reduce the percentage of the Notes that is required to consent to any change in the terms of any Collateral without the consent of the Holders of all the Outstanding Notes. If the Credit Enhancer and either the Indenture Trustee or the requisite percentage of Holders consent to any change in the terms of any Collateral, the Issuer agrees, promptly following a request by the Indenture Trustee to do so, to execute and deliver, in its own name and at its own expense, any documents the Indenture Trustee deems appropriate under the circumstances. Section 3.08. Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not: 17 (a) dispose of any of the Collateral or other properties or assets of the Issuer, except as expressly permitted by this Indenture or the Sale and Servicing Agreement, unless directed to do so by the Indenture Trustee with the consent of the Credit Enhancer; (b) claim any credit on, or make any deduction from the principal or interest or other amounts payable on, the Notes (other than amounts properly withheld from payments under the Code or applicable State law) or assert any claim against any present or former Noteholder for the payment of the taxes levied or assessed on any part of the Collateral; (c) (i) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be changed (except as otherwise provided in the Sale and Servicing Agreement), or permit any person to be released from any obligations on the Notes or under this Indenture except as expressly permitted by this Indenture, (ii) permit any lien, charge, excise, claim, Security Interest, mortgage, or other encumbrance (other than the lien of this Indenture and as otherwise provided in the Sale and Servicing Agreement) to affect any part of the Collateral, or any interest in it or its proceeds, or (iii) permit the lien of this Indenture not to constitute a valid first priority Security Interest in the Collateral; or (d) dissolve or liquidate in whole or in part; (e) make any distributions on any ownership interest in the Issuer (except as expressly provided for in the Transaction Documents), redeem, purchase, or otherwise retire or acquire for value any ownership interest in the Issuer (except as expressly provided for in the Transaction Documents), or set aside any amounts for any of these purposes; (f) engage in any business other than financing, purchasing, owning, selling, and managing the Collateral; issuing the Notes; and activities incidental to those contemplated businesses, in each case, in the manner contemplated by the Transaction Documents; (g) issue, incur, assume, guarantee, or otherwise have the Trust become liable, directly or indirectly, for any indebtedness except for its liabilities under the Transaction Documents and other expenses for which the Issuer is entitled to reimbursement under this Indenture or the Sale and Servicing Agreement; (h) make any loan or advance of credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation), endorse (except for endorsement of instruments for collection in the ordinary course of business), or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks, or dividends of, or own, purchase, repurchase, or acquire (or agree contingently to do so) any stock, obligations, assets, or securities of, or any other interest in, or make any capital contribution to, any other person out of the Trust; (i) make any expenditure (by long-term or operating lease or otherwise) for capital assets; or 18 (j) subject to the Master Servicer's servicing the Mortgage Loans in accordance with the Sale and Servicing Agreement, waive or impair, or fail to assert rights under, the Mortgage Loans, or effect impairment of the Issuer's interest in the Mortgage Loans, the Sale and Servicing Agreement, or any other Transaction Document, if the action would materially and adversely affect the interests of the Noteholders or the Credit Enhancer. Section 3.09. Annual Compliance Statement. Within 80 days after the end of each year (commencing with the year specified in the Adoption Annex) the Issuer will deliver to the Indenture Trustee and the Credit Enhancer an Officer's Certificate stating, as to the Authorized Officer signing the Officer's Certificate, that: (i) a review of the activities of the Issuer during the calendar year and of its performance under this Indenture and the Trust Agreement has been made under the Authorized Officer's supervision; and (ii) to the best of the Authorized Officer's knowledge, based on that review, the Issuer has complied with all its obligations under this Indenture and the Trust Agreement throughout that year or, if there has been a default in its compliance with any obligation, specifying each default known to the Authorized Officer and its nature and status. Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms. The Issuer shall not consolidate or merge with or into or transfer all or substantially all of its properties or assets to any other person, unless: (i) the person (if other than the Issuer) formed by or surviving the consolidation or merger or to which the transfer is made is organized and existing under the laws of the United States or any State and expressly assumes the due and punctual payment of the principal and interest on the Notes and the performance of every obligation under each Transaction Document on the part of the Issuer to be performed by an indenture supplemental to this Indenture, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee and the Credit Enhancer; (ii) immediately after giving effect to the transaction, no Incipient Default has occurred and is continuing; (iii) the Rating Agency Condition has been satisfied with respect to the transaction; (iv) the Issuer has delivered to the Indenture Trustee and the Credit Enhancer an Opinion of Counsel to the effect that the transaction will not have any material adverse tax consequence to the Issuer or any Noteholder; (v) any action that is necessary to maintain the Security Interest created by this Indenture has been taken; and 19 (vi) the Issuer has delivered to the Indenture Trustee and the Credit Enhancer an Officer's Certificate and an Opinion of Counsel each stating that the consolidation or merger and the supplemental indenture comply with this Article and that all conditions precedent in this Indenture relating to the transaction have been complied with (including any filing required by the Exchange Act). Section 3.11. Successor or Transferee. Upon any consolidation or merger of the Issuer or transfer of all or substantially all of its properties or assets in accordance with Section 3.10, the person formed by or surviving the consolidation or merger (if other than the Issuer) or to which the transfer is made shall succeed to, and be substituted for, and may exercise every right of, the Issuer under this Indenture with the same effect as if it had been named as the Issuer in this Indenture. Section 3.12. Further Instruments and Acts. On request of the Indenture Trustee or the Credit Enhancer, the Issuer will execute and deliver any further instruments and do any further acts that may be appropriate to carry out more effectively the purpose of this Indenture. Section 3.13. Compliance with Laws. The Issuer shall comply with the requirements of all laws the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes or any Transaction Document. Section 3.14. Master Servicer as Agent and Bailee of the Indenture Trustee. Solely for the purposes of perfection under Section 9-313(c) of the UCC or other similar applicable law, rule, or regulation of the state in which property is held by the Master Servicer, the Master Servicer is acting as agent and bailee of the Indenture Trustee in holding amounts subject to deposit to the Collection Account, as well as its agent and bailee in holding any Mortgage File released to the Master Servicer, and any other items of Collateral that come into the possession of the Master Servicer. By the Master Servicer's execution of the Sale and Servicing Agreement, the Indenture Trustee, as a secured party of the Mortgage Loans, has possession of these items for the purposes of Section 9-313(c) of the UCC of the state in which the Issuer is organized. Section 3.15. Investment Company Act. The Issuer shall not become an "investment company" or under the "control" of an "investment company" as those terms are defined in the Investment Company Act of 1940 and the rules and regulations under it (taking into account not only the general definition of the term "investment company" but also any available exceptions to the general definition). The Issuer shall be in compliance with this Section 3.15 if it obtains an order exempting it from regulation as an "investment company" so long as it is in compliance with the conditions imposed in the order. 20 Section 3.16. Representations. (a) The Issuer represents and warrants to the Indenture Trustee and the Credit Enhancer that as of the Closing Date, unless specifically stated otherwise: (i) This Indenture creates a valid and continuing Security Interest in the Collateral in favor of the Indenture Trustee. The Security Interest created by this Indenture is a first priority perfected Security Interest and it is enforceable as such against creditors of, and purchasers from, the Issuer. (ii) The Mortgage Notes are "instruments" as defined in the UCC. (iii) Before the Grants of the Security Interest pursuant to the Granting Clause of this Indenture, the Issuer owns, and has good and marketable title to, the Mortgage Loans free of any lien, claim, or encumbrance of any person. (iv) By the Closing Date with respect to the Mortgage Loans and within 10 days of the applicable date of substitution with respect to any Eligible Substitute Mortgage Loan, the Issuer will file Financing Statements in the proper filing office in the appropriate jurisdiction to perfect the Security Interest in the Collateral Granted under this Indenture. (v) The Issuer has received a written acknowledgement from the Custodian that the Custodian is acting solely as agent of the Indenture Trustee. (vi) The Issuer has not authorized the filing of and is not aware of any Financing Statements against the Issuer that include a description of collateral covering the Collateral other than any financing statement (A) relating to the Security Interests granted to the Indenture Trustee pursuant to this Indenture, (B) that has been terminated, or (C) that names the Indenture Trustee as secured party. (vii) The Mortgage Notes that constitute or evidence the Collateral do not have any marks or notations indicating that they have been pledged, assigned, or otherwise conveyed to any person other than the Indenture Trustee. All Financing Statements filed or to be filed against the Issuer in favor of the Indenture Trustee in connection with this Indenture describing the Collateral contain a statement to the following effect: "A purchase of the Mortgage Loans included in the collateral covered by this financing statement will violate the rights of the Indenture Trustee." (viii) On the Closing Date, the Issuer is a "Qualifying SPE" as such term is defined in the statement of Accounting Standards No. 140 of the Financial Accounting Standards Board, as in effect on the Closing Date. (b) The representations and warranties in this Section 3.16 shall survive delivery of the respective Mortgage Files to the Custodian pursuant to the Custodial Agreement and the termination of the Sale and Servicing Agreement. 21 (c) The Indenture Trustee and the Credit Enhancer shall not, without the prior written consent of the Rating Agencies, waive any of the representations and warranties in Section 3.16(a). ARTICLE IV SATISFACTION AND DISCHARGE Section 4.01. Satisfaction and Discharge of Indenture. Except for rights of conversion or transfer or exchange of Notes expressly provided for, the rights of the Indenture Trustee under Section 6.07, the rights of Noteholders as beneficiaries of this Indenture, and the rights of the Credit Enhancer as subrogee of the Noteholders, this Indenture shall cease to be of further effect, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when the option of the Issuer or the Credit Enhancer to redeem the Notes as described in Section 10.01 is exercised or, if not exercised then: (i) either: (A) all Notes previously authenticated and delivered have been delivered to the Indenture Trustee for cancellation (other than (1) Notes that have been destroyed, lost, or stolen and that have been replaced or paid as provided in Section 2.04 and (2) Notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer and later repaid to the Issuer or discharged from the trust, as provided in Section 3.03); or (B) all Notes not previously delivered to the Indenture Trustee for cancellation: (1) have become payable, (2) will become payable at their Scheduled Maturity Date within one year, or (3) are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of (1), (2), or (3) above, has irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States (which will mature before the date the amounts are payable), in trust for these purposes, in an amount sufficient to pay the entire indebtedness when due on the Notes not previously delivered to the Indenture Trustee for cancellation to the applicable Scheduled Maturity Date or 22 redemption date (if Notes have been called for redemption pursuant to Section 10.01), as the case may be; (ii) the Issuer has paid all other sums payable under this Indenture by the Issuer; and (iii) the Issuer has delivered to the Indenture Trustee an Officer's Certificate, an Opinion of Counsel, and (if required by the TIA, the Indenture Trustee, or the Credit Enhancer) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01, each stating that all conditions precedent provided for in this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. Section 4.02. Application of Trust Money. All money deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the Notes and this Indenture, to the payment to the Holders of the particular Notes for the payment or redemption of which the money has been deposited with the Indenture Trustee, of all sums due and to become due on them for principal and interest. That money need not be segregated from other funds except to the extent required in this Indenture or required by law. Section 4.03. Subrogation and Cooperation. (a) To the extent the Credit Enhancer makes payments of principal or interest on the Notes under the Policy, the Credit Enhancer will be fully subrogated to the rights of the Noteholders to receive that principal and interest from the Mortgage Loans and any other related Collateral, and the Credit Enhancer shall be paid that principal and interest, but only from the sources and in the manner provided in this Indenture and the Sale and Servicing Agreement for the payment of that principal and interest. Any payment of principal or interest on a Class of Notes made with moneys received under the Policy shall not be considered payment of that Class of Notes from the Trust and shall not result in the payment of or the provision for the payment of the principal or interest on that Class of Notes under Section 4.01. The Credit Enhancer shall be paid principal and interest from Mortgage Loans only from the sources and in the manner provided in this Indenture and in the Insurance Agreement. The Indenture Trustee shall cooperate in all respects with any reasonable request or direction by the Credit Enhancer to take any of the following actions to preserve or enforce the Credit Enhancer's interest under each of this Indenture and the Sale and Servicing Agreement, consistent with this Indenture and without limiting the rights of the Noteholders under this Indenture, including upon the occurrence and continuance of a Credit Enhancer Default: (i) institute Proceedings for the collection of all amounts then payable on the Notes or under this Indenture with respect to the Notes and all amounts payable under the Insurance Agreement and to enforce any judgment obtained and collect from the Issuer monies adjudged due; 23 (ii) sell any part of Collateral or interests in it at one or more public or private sales called and conducted in any manner permitted by law; (iii) file or record all Assignments of Mortgage that have not previously been recorded; (iv) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture; and (v) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the interests of the Credit Enhancer under this Indenture. Following the payment in full of the Notes, the Credit Enhancer shall continue to have all the rights given to it under this Section and in all other provisions of this Indenture, until all amounts owing to the Credit Enhancer have been paid in full. Section 4.04. Release of Collateral. (a) Upon satisfaction and discharge of this Indenture pursuant to Section 4.01 and otherwise as permitted by this Indenture, the Indenture Trustee shall execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee's interest in the property, in a manner and under circumstances that are not inconsistent with this Indenture. No party relying on an instrument executed by the Indenture Trustee as provided in this Section shall be bound to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent, or see to the application of any moneys. (b) When no Notes are Outstanding, the Indenture Trustee shall release any remaining Collateral that secured the Notes from the lien of this Indenture and release to the Issuer any funds then on deposit in any account other than funds held in trust for the satisfaction of Notes that have not been surrendered for payment. The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section only on receipt of an Issuer Request accompanied by an Officer's Certificate. (c) Whenever a Mortgage Loan has been substituted for in accordance with Section 2.01(f) or 2.02(b) of the Sale and Servicing Agreement, purchased in accordance with Section 3.06 of the Sale and Servicing Agreement, or designated for transfer in accordance with Section 2.06 of the Sale and Servicing Agreement, the Indenture Trustee shall execute appropriate documents to release the Mortgage Loan from the lien of this Indenture and deliver the Mortgage File to the appropriate party. (d) The Indenture Trustee shall release property from the lien of this Indenture only on receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel, and Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(l) or an Opinion of Counsel in lieu of Independent Certificates to the effect that the TIA does not require any Independent Certificates. 24 ARTICLE V REMEDIES Section 5.01. Events of Default. Any one of the following events is an "Event of Default" whatever the reason: (i) default by the Issuer in the payment of any interest on any Note when it becomes payable, and the default continues for five days; or (ii) default by the Issuer in the payment of the principal of any Note when it becomes payable and the default continues for five days; or (iii) default in the performance of any obligation of the Issuer under this Indenture (other than an obligation specifically dealt with elsewhere in this Section), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered in connection with this Indenture proves to have been materially incorrect as of the time when it was made, and the default or the circumstance making the representation or warranty incorrect has not been cured within 60 days after notice to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Credit Enhancer (or, if a Credit Enhancer Default exists, by the Holders of at least 25% of the Outstanding Amount of both Classes of Notes) by registered or certified mail specifying the default or incorrect representation or warranty and requiring it to be remedied and stating that the notice is a notice of default under this Indenture; or (iv) an Insolvency Event occurs with respect to the Issuer. The Issuer shall deliver to the Indenture Trustee and the Credit Enhancer, within five days after its occurrence, notice in the form of an Officer's Certificate of any Incipient Default under clause (iii), its status, and what action the Issuer is taking or proposes to take with respect to the event. Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then the Indenture Trustee or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes, in either case with the consent of the Credit Enhancer, or the Credit Enhancer may declare all the Notes to be immediately payable, by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon that declaration the unpaid principal amount of the Notes, together with accrued interest on them through the date of acceleration, shall become immediately payable. At any time after the declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee, the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes, with the 25 consent of the Credit Enhancer, or the Credit Enhancer, by notice to the Issuer and the Indenture Trustee, may rescind the declaration and its consequences if: (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay: (A) all payments of principal and interest on the Notes and all other amounts that would then be due under this Indenture or on the Notes if the Event of Default giving rise to the acceleration had not occurred; and (B) all sums paid or advanced by the Indenture Trustee under this Indenture and the reasonable compensation, expenses, disbursements, and advances of the Indenture Trustee and its agents and counsel; and (ii) all Events of Default, other than the nonpayment of the principal or interest of the Notes that have become due solely by the acceleration, have been cured or waived as provided in Section 5.13. No rescission shall affect any subsequent default or impair any right consequent to it. Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. (a) The Issuer covenants that if the Notes are accelerated following an Event of Default, then the Issuer will pay to the Indenture Trustee on demand, for the benefit of the Noteholders or the Credit Enhancer if the Credit Enhancer has made a payment on the Notes under the Policy, the whole amount then payable on the Notes and, in addition, any further amount needed to cover the expenses of collection, including the reasonable compensation and expenses of the Indenture Trustee and its agents and counsel. (b) If the Issuer fails to pay those amounts immediately on demand, the Indenture Trustee, in its own name and as trustee of an express trust, subject to Section 11.16 may, and at the direction of the Credit Enhancer shall, institute a Proceeding for the collection of the sums due, and may prosecute the Proceeding to final decree, and may enforce the judgment against the Issuer (or other obligor on the Notes) and collect in the manner provided by law out of the property of the Issuer (or other obligor on the Notes) wherever situated, the moneys determined to be payable. (c) If an Event of Default occurs and is continuing, the Indenture Trustee subject to Section 11.16 may in its discretion with the consent of the Credit Enhancer (subject to Section 5.04), and at the direction of the Credit Enhancer shall, proceed to protect and enforce its rights and the rights of the Noteholders and the Credit Enhancer, by Proceedings the Indenture Trustee deems most effective to protect and enforce those rights, whether for the specific enforcement of any agreement in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law. 26 (d) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of this Indenture to which the Indenture Trustee is a party), the Indenture Trustee shall be held to represent all the Noteholders and the Credit Enhancer, and it shall not be necessary to make any Noteholder or the Credit Enhancer a party to the Proceedings. (e) All rights of action and assertion of claims under this Indenture, the Sale and Servicing Agreement, or any of the Notes may be enforced by the Indenture Trustee without the possession of any of the Notes or their production in any Proceedings regarding them. Any Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust. Any recovery of judgment, subject to the payment of the expenses, disbursements, and compensation of the Indenture Trustee, each predecessor Indenture Trustee, and their agents and counsel, shall be for the ratable benefit of the Noteholders and the Credit Enhancer. Section 5.04. Indenture Trustee May File Proofs of Claim. (a) If (1) Proceedings under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency, or other similar law are pending relating to the Issuer or any other obligor on the Notes or any person having or claiming an ownership interest in the Collateral, or (2) a receiver, assignee, or trustee in bankruptcy or reorganization, or liquidator, sequestrator, or similar official has been appointed for or taken possession of the Issuer or its property or the other obligor or person, or (3) any other comparable judicial Proceedings are pending relating to the Issuer or other obligor on the Notes, or to the creditors or property of the Issuer or the other obligor, then, irrespective of whether the principal of any Notes is then payable as expressed in them or by declaration or otherwise and irrespective of whether the Indenture Trustee has made any demand pursuant to this Section, with the consent of the Credit Enhancer the Indenture Trustee is authorized by intervention in the Proceedings or otherwise: (i) to file and prove claims for the entire amount of principal and interest and other amounts owing on the Notes and to file any other documents appropriate to have the claims of the Indenture Trustee, the Credit Enhancer, and of the Noteholders allowed in the Proceedings (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith); 27 (ii) to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee, or person performing similar functions in the Proceedings; and (iii) to collect and receive any moneys or other property payable on any claims and to distribute all amounts received on the claims of the Noteholders, the Credit Enhancer, and of the Indenture Trustee on their behalf; and any trustee, receiver, liquidator, custodian, or other similar official in any Proceeding is hereby authorized by each of the Noteholders to make payments to the Indenture Trustee and, if the Indenture Trustee consents to the Noteholders receiving payments directly, to pay to the Indenture Trustee amounts sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee, and their respective agents and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith, and to pay all amounts due to the Credit Enhancer. (b) Nothing contained in this Indenture authorizes the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder or the Credit Enhancer any plan of reorganization, arrangement, adjustment, or composition affecting the Notes or the rights of any Noteholder or the Credit Enhancer or authorizes the Indenture Trustee to vote on the claim of any Noteholder or the Credit Enhancer in any such proceeding except to vote for the election of a trustee in bankruptcy or similar person. Section 5.05. Remedies; Priorities. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee subject to Section 11.16 may with the consent of the Credit Enhancer, and at the direction of the Credit Enhancer shall, do any of the following (subject to Section 5.11): (i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture, whether by declaration or otherwise, and all amounts payable under the Sale and Servicing Agreement, and enforce any judgment obtained, and collect from the Issuer and any other obligor on the Notes moneys adjudged due; (ii) institute Proceedings for the complete or partial foreclosure of this Indenture with respect to the Collateral; (iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights of the Indenture Trustee, the Credit Enhancer, and the Noteholders; (iv) exercise all rights of the Issuer in connection with the Purchase Agreement and the Sale and Servicing Agreement against the Sponsor, the Depositor, or the Master Servicer or otherwise; and 28 (v) sell any portion of the Collateral or interests in it as directed by the Credit Enhancer, at one or more public or private sales called and conducted in any manner permitted by law. The Indenture Trustee, however, may not sell or otherwise liquidate Collateral following an Event of Default unless (A) the Indenture Trustee obtains the consent of the Credit Enhancer and the Holders of 100% of the aggregate Outstanding Amount of the Notes of both Classes, (B) the proceeds of the sale or liquidation distributable to the Noteholders and the Credit Enhancer are sufficient to discharge in full all amounts then due on the Notes and to reimburse the Credit Enhancer for any unreimbursed Credit Enhancement Draw Amounts and any other amounts due the Credit Enhancer under the Insurance Agreement, or (C) the Indenture Trustee determines that the Collateral will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of the Credit Enhancer and the Holders of a majority of the aggregate Outstanding Amount of the Notes of both Classes. In determining the sufficiency or insufficiency under clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely on an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of the proposed action and as to the sufficiency of the Collateral for the purpose. If a Credit Enhancer Default exists at the time any consent is required or direction may be given under this Section 5.05(a), the consent or direction shall be by Holders representing at least 66-2/3% of the Outstanding Amount of both Classes instead of by the Credit Enhancer. (b) If the Indenture Trustee collects any money or property with respect to a Loan Group under this Article, it shall pay out the money or property in the following order with respect to the Loan Group: FIRST: to the Indenture Trustee for the fee of the Indenture Trustee (separately agreed to between the Master Servicer and the Indenture Trustee) then due and any expenses incurred by it in connection with the enforcement of the remedies under this Article and to the Owner Trustee for the fee of the Owner Trustee (separately agreed to between the Master Servicer and the Owner Trustee) then due and any expenses due to the Owner Trustee under any of the Transaction Documents, each with respect to the relevant Loan Group; SECOND: any premium owing to the Credit Enhancer, with respect to the relevant Loan Group; THIRD: to the related Noteholders for interest due on the related Notes, pro rata according to the amounts due on those Notes for interest; FOURTH: to the related Noteholders for amounts due on the related Notes for principal, pro rata according to the principal due on those Notes until the Note Principal Balance of the applicable Class of Notes is reduced to zero; 29 FIFTH: to the unrelated Noteholders, any amounts that if they were being distributed on a Payment Date pursuant to Section 8.03 would be Crossover Amounts distributable on the unrelated Notes; SIXTH: to the Credit Enhancer, any other amounts owed to the Credit Enhancer under the Insurance Agreement with respect to either Loan Group; and SEVENTH: to the Issuer for distribution in accordance with the Trust Agreement. Section 5.06. Optional Preservation of the Collateral. If the Notes have been declared to be due under Section 5.02 following an Event of Default and the declaration and its consequences have not been annulled, the Indenture Trustee may with the consent of the Credit Enhancer, but need not unless so directed by the Credit Enhancer, elect to maintain possession of the Collateral. The parties and the Noteholders want sufficient funds to exist at all times for the payment of principal of and interest on the Notes and other obligations of the Issuer including payments to the Credit Enhancer, and the Indenture Trustee shall take that into account when determining whether or not to maintain possession of any Collateral. In determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need not, obtain and rely on an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of the proposed action and as to the sufficiency of the Collateral for the purpose. Section 5.07. Limitation of Suits. No Noteholder may institute any Proceeding with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy under this Indenture, unless the Credit Enhancer has consented and subject to Section 11.16: (i) the Holder has previously given notice to the Indenture Trustee of a continuing Event of Default; (ii) the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes have requested the Indenture Trustee in writing to institute a Proceeding with respect to the Event of Default in its own name as Indenture Trustee under this Indenture; (iii) the Holders have offered the Indenture Trustee reasonable indemnity against the costs and liabilities to be incurred in complying with the request; (iv) the Indenture Trustee for 60 days after its receipt of the request and offer of indemnity has failed to institute Proceedings; (v) no direction inconsistent with the request has been given to the Indenture Trustee during the 60-day period by the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes; and (vi) the Holders have obtained the consent of the Credit Enhancer. 30 No Holders of Notes shall have any right in any manner whatever because of this Indenture to affect the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner provided in this Indenture. If the Indenture Trustee receives inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than 51% of the aggregate Outstanding Amount of both Classes, the Indenture Trustee in its sole discretion may determine what action shall be taken. Section 5.08. Unconditional Right to Receive Principal and Interest. Notwithstanding any other provisions in this Indenture, every Noteholder has an absolute and unconditional right to receive payment of the principal and interest and other amounts payable on its Note after their due dates (or, in the case of redemption, after the redemption date) and to institute suit for the enforcement of any payment, and this right shall not be impaired without the consent of the Holder. Section 5.09. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right under this Indenture and the Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to the Noteholder, then the Issuer, the Indenture Trustee, the Credit Enhancer, and the Noteholders shall, subject to any determination in the Proceeding, be restored severally and respectively to their former positions under this Indenture, and all rights of the Indenture Trustee and the Noteholders shall continue as though no Proceeding had been instituted. Section 5.10. Rights and Remedies Cumulative. No right given to the Indenture Trustee, the Credit Enhancer, or to the Noteholders in this Indenture is intended to be exclusive of any other right, and every right shall, to the extent permitted by law, be cumulative to every other right given under this Indenture or existing at law or in equity or otherwise. The assertion of any right under this Indenture, or otherwise, shall not prevent the concurrent assertion of any other appropriate right. Section 5.11. Delay or Omission Not a Waiver. No delay in exercising or failure to exercise any right accruing on any Incipient Default shall impair the right or constitute a waiver of the Incipient Default or an acquiescence in it. Every right given by this Article or by law to the Indenture Trustee, to the Credit Enhancer, or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, by the Credit Enhancer, or by the Noteholders. Section 5.12. Control by Credit Enhancer or Noteholders. (a) If no Credit Enhancer Default exists, then the Credit Enhancer, otherwise the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes, may direct the time, method, and place of conducting any Proceeding for any remedy available to the 31 Indenture Trustee with respect to the Notes or exercising any right conferred on the Indenture Trustee. No direction shall be binding unless: (i) it does not conflict with any rule of law or with this Indenture; and (ii) if no Credit Enhancer Default exists, it is by the Credit Enhancer, otherwise by the Holders of Notes representing not less than 100% of the aggregate Outstanding Amount of both Classes if the direction to the Indenture Trustee is to sell or liquidate the Collateral. The Indenture Trustee may take any other action it deems proper that is not inconsistent with the direction, Section 5.04, or Section 5.05. (b) If no Credit Enhancer Default exists, then until the Notes have been paid in full, all amounts owed to the Credit Enhancer have been paid in full, the Insurance Agreement has terminated, and the Policy has been returned to the Credit Enhancer for cancellation, the following provisions shall apply: (i) Notwithstanding anything in this Indenture or in the other Transaction Documents to the contrary, the Credit Enhancer shall have the right to participate in, to direct the enforcement or defense of, and, at the Credit Enhancer's sole option, to institute or assume the defense of, any action, proceeding, or investigation (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that could adversely affect the Collateral, the Issuer, or the rights or obligations of the Credit Enhancer under this Indenture or under the Policy or the other Transaction Documents, including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, or any affiliate of any of them. Following written notice to the Indenture Trustee, the Credit Enhancer shall have exclusive right to determine, in its sole discretion, the actions necessary to preserve and protect the Collateral and the Issuer. All costs and expenses of the Credit Enhancer in connection with such action, proceeding, or investigation, including any judgment or settlement entered into affecting the Credit Enhancer or the Credit Enhancer's interests, shall be included in reimbursement amounts owed to the Credit Enhancer under Section 8.03(a)(ix) and Section 8.03(a)(xi). (ii) In connection with any action, proceeding, or investigation that could adversely affect the Collateral, the Issuer, or the rights or obligations of the Credit Enhancer under this Indenture or under the Policy or the other Transaction Documents (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities), including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, or any affiliate of any of them, the Indenture Trustee agrees to cooperate with, and to take any reasonable action directed by, the Credit Enhancer, including entering into 32 agreements and settlements as directed the Credit Enhancer, in its sole discretion, without the consent of any Transferor Certificateholder or any Noteholder. (iii) The Indenture Trustee agrees to provide to the Credit Enhancer prompt written notice of any action, proceeding, or investigation that a Responsible Officer of the Indenture Trustee has actual knowledge of (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that names the Issuer or the Indenture Trustee as a party or that could adversely affect the Collateral, the Issuer, or the rights or obligations of the Credit Enhancer under this Indenture or under the Policy or the other Transaction Documents, including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, or any affiliate of any of them. (iv) Notwithstanding anything in this Indenture or in any of the other Transaction Documents to the contrary, the Indenture Trustee shall not, without the Credit Enhancer's prior written consent or unless directed in writing by the Credit Enhancer, undertake or join any litigation or agree to any settlement of any action, proceeding, or investigation affecting the Collateral, the Issuer, or the rights or obligations of the Credit Enhancer under this Indenture or under the Policy or the other Transaction Documents (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities). (v) Each Noteholder, by acceptance of its Note, and the Indenture Trustee agree that Credit Enhancer shall have the rights provided in this Section, which are in addition to any rights of the Credit Enhancer pursuant to the other provisions of the Transaction Documents, that the rights provided in this Section may be exercised by the Credit Enhancer, in its sole discretion, without the need for the consent or approval of any Noteholder or the Indenture Trustee, notwithstanding any other provision in this Indenture or in any of the other Transaction Documents, and that nothing in this Section shall be deemed to be an obligation of the Credit Enhancer to exercise any of the rights provided for in this Indenture. Section 5.13. Waiver of Past Defaults. Before the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Credit Enhancer or, if a Credit Enhancer Default exists, the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes may waive any past default and its consequences except a default (i) in payment of principal or interest on any of the Notes or (ii) regarding a provision of this Indenture that cannot be changed without the consent of the Holder of each affected Note. 33 After any such waiver, the Incipient Default shall cease to exist and be considered to have been cured and not to have occurred, and any Event of Default arising from it shall be considered to have been cured and not to have occurred, for every purpose of this Indenture. No waiver shall extend to any subsequent or other default or impair any right consequent to it. Section 5.14. Undertaking For Costs. All parties to this Indenture agree, and each Holder of a Note by its acceptance of its Note agrees, that in any suit for the enforcement of any right under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered, or omitted by it as Indenture Trustee, any court may in its discretion require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and that the court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. The provisions of this Section shall not apply to (i) any suit instituted by the Indenture Trustee or the Credit Enhancer, (ii) any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 25% of the aggregate Outstanding Amount of both Classes, or (iii) any suit instituted by any Noteholder for the enforcement of the payment of principal or interest on any Note after the due dates expressed in the Note and in this Indenture (or, in the case of redemption, after the redemption date). Section 5.15. Waiver of Stay or Extension Laws. To the extent that it may lawfully do so, the Issuer covenants that it will not at any time insist on, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time after this in force, that may affect the covenants or the performance of this Indenture. To the extent that it may lawfully do so, the Issuer expressly waives all benefit of any such law, and covenants that it will not hinder, delay, or impede the execution of any power granted in this Indenture to the Indenture Trustee, but will permit the execution of every power as though the law had not been enacted. Section 5.16. Rapid Amortization Events. If any one of the following events occurs during the Managed Amortization Period: (a) The failure of the Sponsor or the Master Servicer to make any payment or deposit required by the Sale and Servicing Agreement within three Business Days after the payment or deposit was required to be made; (b) The failure of the Sponsor or the Master Servicer to cause the Depositor to observe or perform in any material respect the covenants of the Depositor in Section 2.01(h) or 2.05 of the Sale and Servicing Agreement.; 34 (c) The failure of the Sponsor to observe or perform in any material respect any other covenants of the Sponsor in the Sale and Servicing Agreement that materially and adversely affects the interests of the Noteholders or the Credit Enhancer and that continues unremedied and continues to affect materially and adversely the interests of the Noteholders or the Credit Enhancer for 60 days (five days in the case of any failure to take the action specified in the second sentence of Section 2.01(f) of the Sale and Servicing Agreement or Section 2.04(b)(2) of the Sale and Servicing Agreement) after the date on which written notice of the failure, requiring it to be remedied, shall have been given to the Sponsor by the Indenture Trustee, or to the Sponsor and the Indenture Trustee by the Credit Enhancer or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes of Notes; (d) Any representation or warranty made by the Sponsor or the Depositor in the Sale and Servicing Agreement proves to have been incorrect in any material respect when made, as a result of which the interests of the Noteholders or the Credit Enhancer are materially and adversely affected and that continues to be incorrect in any material respect and continues to affect materially and adversely the interests of the Noteholders or the Credit Enhancer for 60 days after the date on which notice of the failure, requiring it to be remedied, shall have been given to the Sponsor or the Depositor, as the case may be, by the Indenture Trustee, or to the Sponsor, the Depositor, and the Indenture Trustee by either the Credit Enhancer or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes. A Rapid Amortization Event pursuant to this subparagraph (d) shall not occur if the Sponsor has accepted retransfer of the related Mortgage Loans or substituted for them during the 60-day period (or such longer period (not to exceed an additional 60 days) as the Indenture Trustee may specify) in accordance with the Sale and Servicing Agreement. (e) An Insolvency Event occurs with respect to the Transferor or the Depositor, but for this purpose the 60-day periods in the definition of Insolvency Event shall be 30 days; (f) The Trust becomes subject to registration as an "investment company" under the Investment Company Act of 1940, as amended; (g) Any draw has been made under the Policy and the Credit Enhancer has not been reimbursed for the draw within 90 days of the date of the draw; or (h) The occurrence of an Event of Servicing Termination; then, when any event described in subparagraph (a), (b), (c), (d), or (h) occurs, either the Indenture Trustee (with the consent of the Credit Enhancer), the Credit Enhancer, or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes (with the consent of the Credit Enhancer), by notice given in writing to the Transferor, the Depositor, and the Master Servicer (and to the Indenture Trustee if given by either the Credit Enhancer or the Noteholders) may declare that an early amortization event (a "Rapid Amortization Event") has occurred as of the date of the notice, and in the case of any event described in subparagraph (e), (f), or (g), a 35 Rapid Amortization Event shall occur without any notice or other action on the part of the Indenture Trustee, the Credit Enhancer, or the Noteholders, immediately upon its occurrence. Section 5.17. Sale of Collateral. (a) The power to effect any sale or other disposition (a "Sale") of any portion of the Collateral pursuant to Section 5.05 is subject to this Section 5.17. The Indenture Trustee waives its right to any amount fixed by law as compensation for any Sale. (b) In connection with a Sale of any of the Collateral, (i) any Holder of Notes may bid for the property offered for sale, and on compliance with the terms of sale may own the property without further accountability, and may, in paying its purchase price, deliver any Notes or claims for interest on them rather than cash up to the amount that would be payable on them from the distribution of the net proceeds of the sale, and the Notes shall be returned to the Holders after being appropriately stamped to show partial payment if the amount payable for the property is less than the amount due on the Notes; (ii) the Indenture Trustee may bid for and acquire the property offered for Sale, and may purchase any portion of the Collateral in a private sale, and rather than paying cash, may settle the purchase price by crediting the gross Sale price against the amount that would be distributable as a result of the Sale in accordance with Section 5.05(b) on the next Payment Date after the Sale without being required to produce the Notes to complete the Sale or for the net Sale price to be credited against the Notes, and any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with this Indenture; (iii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Collateral in connection with its Sale; (iv) the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer its interest in any portion of the Collateral in connection with its Sale, and to take all action necessary to effect the Sale; and (v) no purchaser or transferee at a Sale need ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent, or see to the application of any monies. Section 5.18. Performance and Enforcement of Certain Obligations. The Indenture Trustee, as pledgee of the Mortgage Loans, may, and at the direction of the Credit Enhancer (or the Holders of 66-2/3% of the Outstanding Amount of both Classes if a Credit Enhancer Default exists) shall exercise all rights of the Issuer against the Sponsor or the Master Servicer in connection with the Sale and Servicing Agreement, including the right to take any action to obtain performance by the Seller or the Master Servicer, as the case may be, 36 of each of their obligations to the Issuer under the Sale and Servicing Agreement and to give any consent, request, notice, direction, approval, extension, or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall not be suspended. Any direction by the Credit Enhancer under this Section may be by telephone, promptly confirmed in writing. ARTICLE VI THE INDENTURE TRUSTEE Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would use under the circumstances in the conduct of its own affairs, except when this Indenture or the Sale and Servicing Agreement requires it to follow the directions of the Credit Enhancer. (b) Except during the continuance of an Event of Default: (i) obligations of the Indenture Trustee shall be determined solely by the express provisions of this Indenture and the Sale and Servicing Agreement, the Indenture Trustee undertakes to perform only the duties specifically stated in this Indenture and the Sale and Servicing Agreement, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and (ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed in them, on certificates, opinions, or other documents furnished to the Indenture Trustee and conforming to the requirements of this Indenture and the Sale and Servicing Agreement, and the Indenture Trustee need not investigate into any of the matters expressed in them; but in the case of certificates or opinions specifically required to be furnished to the Indenture Trustee, the Indenture Trustee must examine them to determine whether or not they conform to the requirements of this Indenture and the Sale and Servicing Agreement. If any instrument is found not to conform to the requirements of this Indenture or the Sale and Servicing Agreement and is not timely corrected to the Indenture Trustee's satisfaction, the Indenture Trustee shall notify the Credit Enhancer and request written instructions as to the action the Credit Enhancer deems appropriate to have the instrument corrected, and if the instrument is not so corrected, the Indenture Trustee will so notify the Credit Enhancer, who may then direct the Indenture Trustee as to any action to be taken. (c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 37 (i) this subsection does not limit the effect of Section 6.01(b); (ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; (iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with the direction of the Credit Enhancer or in accordance with a direction received by it from the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes relating to the method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any right conferred on the Indenture Trustee under this Indenture or the Sale and Servicing Agreement; (iv) the Indenture Trustee shall not be charged with knowledge of the occurrence of an Incipient Default, a Rapid Amortization Event, or of any failure by the Master Servicer to comply with its obligations under Section 6.01(i) or (ii) of the Sale and Servicing Agreement unless a Responsible Officer at the Corporate Trust Office obtains actual knowledge of the failure or the Indenture Trustee receives notice of the failure; and (v) no provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under this Indenture or in the exercise of any of its rights, if it has reasonable grounds to believe that repayment of the funds or adequate indemnity against the risk is not reasonably assured to it. (d) Every provision of this Indenture relating to the conduct or affecting the liability of the Indenture Trustee shall be subject to the provisions of this Section and the TIA. (e) The limitations on the obligations of the Indenture Trustee under this Indenture shall not affect any obligations of the Indenture Trustee acting as Master Servicer under the Sale and Servicing whenever it may be so acting. Section 6.02. Notice of Defaults. If an Incipient Default or Rapid Amortization Event occurs and is continuing and if a Responsible Officer knows of it, the Indenture Trustee shall notify the Credit Enhancer and mail to each Noteholder notice of the Incipient Default or Rapid Amortization Event within 90 days after it occurs. Except in the case of an Incipient Default in payment of principal or interest on any Note, the Indenture Trustee may withhold the notice to Noteholders so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders. 38 Section 6.03. Rights of Indenture Trustee. (a) The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer's Certificate or Opinion of Counsel unless other evidence is specifically required. (c) The Indenture Trustee may execute any of the trusts or powers under this Indenture or perform any duties under this Indenture either directly or through agents or counsel or a custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any agent, counsel, custodian, or nominee appointed with due care by it under this Indenture. (d) The Indenture Trustee may consult with counsel, and the written advice of counsel with respect to legal matters relating to this Indenture, the Transaction Documents, and the Notes and any Opinion of Counsel shall be full authorization and protection from liability for any action taken, omitted, or suffered by it under this Indenture in good faith and in accordance with the advice of counsel or any Opinion of Counsel. (e) The Indenture Trustee may enter into any amendment of the Sale and Servicing Agreement as to which the Rating Agency Condition is satisfied, and when so requested by an Issuer Request and the Rating Agency Condition is satisfied, the Indenture Trustee shall enter into any amendment of the Sale and Servicing Agreement (i) that does not impose further obligations or liabilities on the Indenture Trustee, and (ii) as to which either the Rating Agency Condition is satisfied or Holders of not less than 662/3% of the aggregate Outstanding Amount of both Classes and the Credit Enhancer have consented. (f) With the consent of the Master Servicer and the Credit Enhancer, the Indenture Trustee may appoint Custodians to hold any portion of the Collateral as agent for the Indenture Trustee, by entering into a Custodial Agreement substantially in the form of Exhibit B. Subject to this Article, the Indenture Trustee agrees to comply with each Custodial Agreement and to enforce each Custodial Agreement against the custodian for the benefit of the Noteholders and the Credit Enhancer. Each custodian shall be a depository institution (or an affiliate of a depository institution) subject to supervision by federal or state authority and shall be qualified to do business in the jurisdiction in which it holds any Collateral. Each Custodial Agreement may be amended only with the consent of the Credit Enhancer, which shall not be unreasonably withheld. 39 Section 6.04. Indenture Trustee Not Responsible for Certain Things. The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of the Collateral or any Transaction Document (other than the signature and authentication of the Indenture Trustee on the Notes). It shall not be responsible for any statement in this Indenture other than Section 6.14 or in any document issued in the sale of the Notes or in the Notes other than the Indenture Trustee's certificate of authentication. The Indenture Trustee is not accountable for the use or application by the Issuer of any of the Notes or of the proceeds of the Notes, or for the use or application of any funds paid to the Depositor or the Master Servicer on the Mortgage Loans or deposited in or withdrawn from the Collection Account by the Master Servicer. The Indenture Trustee shall not be responsible for: (i) the validity and enforceability of any Mortgage or any Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance of its perfection and priority, or for the sufficiency of the Trust or its ability to generate the payments to be distributed to Noteholders under this Indenture, or the sufficiency or validity of MERS or the MERS(R) System, including the existence, condition, and ownership of any Mortgaged Property; (ii) the existence and enforceability of any hazard insurance on any Mortgaged Property; (iii) the validity of the assignment of any Mortgage Loan to the Indenture Trustee or of any intervening assignment; (iv) the completeness of any Mortgage Loan; (v) the performance or enforcement of any Mortgage Loan; (vi) any investment of monies by or at the direction of the Master Servicer or any resulting loss; (vii) the acts or omissions of any of the Depositor, the Master Servicer, any subservicer, or any mortgagor under a Mortgage; (viii)any action of the Master Servicer or any subservicer taken in the name of the Indenture Trustee; or (ix) the failure of the Master Servicer or any subservicer to act or perform any duties required of it as agent of the Indenture Trustee. The Indenture Trustee shall have no responsibility for filing any Financing or Continuation Statement in any public office at any time or otherwise to perfect or maintain the perfection of any Security Interest or lien granted to it under this Indenture or to prepare or file any Commission filing for the Trust or to record this Indenture. 40 Section 6.05. Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer, the Sponsor, and their affiliates with the same rights it would have if it were not Indenture Trustee. Any co-trustee, Paying Agent, Note Registrar, co-registrar, or co-paying agent may do the same with like rights. Section 6.06. Money Held in Trust. Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the Transaction Documents. The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing. Section 6.07. Compensation. The compensation of the Indenture Trustee will be separately agreed to between the Master Servicer and the Indenture Trustee and, to the extent not paid otherwise, will be payable after an Event of Default as provided in Section 5.05(b). To the extent funds available under Section 5.05(b) are insufficient to pay the full amount of the fees, they will be paid by the Master Servicer. Except for amounts available for the purpose as provided in Section 5.05(b), the Indenture Trustee shall have no claim against the Issuer or any of the Collateral for the payment of any of its fees and expenses. The Indenture Trustee shall not fail to perform its duties under the Transaction Documents if its fees and expenses are not paid. Section 6.08. Eligibility. The Indenture Trustee shall be a corporation organized and doing business under the laws of the United States or any State, authorized under those laws to exercise trust powers, and shall satisfy the requirements of Rule 3a-7(a)(4)(i) of the Investment Company Act of 1940. The Indenture Trustee shall satisfy the requirements of TIA Section 310(a) at all times. The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as shown in its most recent published annual report of condition. The Indenture Trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9). However, any indentures under which other securities of the Issuer are outstanding shall be excluded from the operation of TIA Section 310(b)(1) if the requirements for the exclusion in TIA Section 310(b)(1) are met. The principal office of any successor Indenture Trustee shall be in a state for which an Opinion of Counsel has been delivered to the successor Indenture Trustee and the Credit Enhancer at the time it is appointed to the effect that the Trust will not be a taxable entity under the laws of the state of its principal office. Whenever an Indenture Trustee ceases to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign immediately in accordance with Section 6.10. Section 6.09. Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. 41 Section 6.10. Replacement of Indenture Trustee. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee. The Indenture Trustee may resign at any time by so notifying the Issuer, the Transferor, the Depositor, the Master Servicer, and the Credit Enhancer. The Credit Enhancer or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes may remove the Indenture Trustee at any time and the Issuer shall then appoint a successor Indenture Trustee reasonably acceptable to the Credit Enhancer by so notifying the Indenture Trustee, the Transferor, the Depositor, the Master Servicer, and the Credit Enhancer. The Issuer (and if the Issuer fails to do so, the Transferor) shall remove the Indenture Trustee and appoint a successor reasonably acceptable to the Credit Enhancer if: (i) the Indenture Trustee fails to satisfy Section 6.08; (ii) an Insolvency Event occurs with respect to the Indenture Trustee; or (iii) the Indenture Trustee otherwise becomes incapable of acting. If the Indenture Trustee fails to satisfy Section 6.08, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer, the Transferor, the Depositor, the Master Servicer, the Credit Enhancer, or the Holders of not less than 51% of the aggregate Outstanding Amount of both Classes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason, the Issuer, with the approval of the Transferor and the Credit Enhancer, shall promptly appoint a successor Indenture Trustee for the retiring Indenture Trustee. Section 6.11. Acceptance of Appointment by Successor. A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer, the Transferor, the Depositor, the Master Servicer, and the Credit Enhancer. The resignation or removal of the retiring Indenture Trustee shall become effective on receipt of the written acceptance, and the successor Indenture Trustee shall have all the rights and obligations, and automatically succeed to the estate, of the Indenture Trustee under this Indenture without any further act or transfer. The successor Indenture Trustee shall mail a notice of its succession to the Noteholders. The retiring Indenture Trustee shall promptly deliver any instruments of transfer with respect to the trust estate requested by the Issuer or the successor Indenture Trustee and deliver all property held by it as Indenture Trustee to the successor Indenture Trustee. No proposed successor Indenture Trustee shall accept its appointment unless at the time of its acceptance it is eligible under Section 6.08. 42 Section 6.12. Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving, or transferee corporation shall be the successor Indenture Trustee if it is otherwise eligible under Section 6.08 without any further act on the part of anyone. The Indenture Trustee shall provide the Credit Enhancer and each Rating Agency notice of any such transaction. If any of the Notes have been authenticated but not delivered when the successor Indenture Trustee takes over, it may adopt the certificate of authentication of any predecessor Indenture Trustee and deliver the authenticated Notes with the same effect as if it had authenticated the Notes. Section 6.13. Appointment of Co-Indenture Trustee or Separate Indenture Trustee. (a) Notwithstanding any other provision of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Collateral may at the time be located, the Indenture Trustee and the Issuer, acting jointly, may execute and deliver instruments to appoint one or more persons approved by the Master Servicer and the Credit Enhancer to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of any part of the Collateral, and to vest in them, in that capacity and for the benefit of the Noteholders and the Credit Enhancer, title to any part of the Collateral and any rights and obligations the Indenture Trustee considers appropriate, subject to the other provisions of this Section. No co-trustee or separate trustee under this Indenture need satisfy the requirements for a successor trustee under Section 6.08, and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.09. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following: (i) all rights and obligations of the Indenture Trustee shall be performed by the Indenture Trustee and any separate trustee or co-trustee jointly (the separate trustee or co-trustee is not authorized to act without the Indenture Trustee joining in the act), except to the extent that under any law of any jurisdiction in which any particular acts are to be performed the Indenture Trustee is unable to perform the acts, in which case the rights and obligations (including holding title to any part of the Collateral) shall be performed singly by the separate trustee or co-trustee, but solely at the direction of the Indenture Trustee; (ii) no trustee under this Indenture shall be personally liable for any act or omission of any other trustee under this Indenture; and (iii) the Indenture Trustee, the Master Servicer, and the Issuer may at any time accept the resignation of or remove any separate trustee or co-trustee. 43 (c) Any notice, request, or other writing given to the Indenture Trustee shall be considered 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 Indenture and the conditions of this Article. Each separate trustee and co-trustee, on its acceptance of the trusts conferred, shall be subject to this Indenture and vested with the estates specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided in the instrument of appointment. Every instrument of appointment shall be filed with the Indenture Trustee and a copy of it given to the Issuer. (d) Any separate trustee or co-trustee may at any time constitute the Indenture 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 this Indenture on its behalf and in its name. If any separate trustee or co-trustee dies, becomes incapable of acting, resigns or is removed, all of its estates, rights, and obligations shall vest in the Indenture Trustee, to the extent permitted by law, without the appointment of a new trustee. Section 6.14. Representations and Warranties of Indenture Trustee. The Indenture Trustee represents and warrants that on the Closing Date: (i) it is a corporation duly organized, validly existing, and in good standing under the laws of its place of incorporation; (ii) it has full power and authority to execute, deliver, and perform this Indenture and the Sale and Servicing Agreement, and has taken all necessary action to authorize the execution, delivery, and performance by it of this Indenture and the Sale and Servicing Agreement; (iii) the consummation of the transactions contemplated by this Indenture and the fulfillment of its terms do not conflict with, result in any breach of, or constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or bylaws of the Indenture Trustee or any agreement or other instrument to which it is a party or by which it is bound; (iv) it does not have notice of any adverse claim (as used in Section 8-302 of the UCC in effect in Delaware) with respect to the Mortgage Loans; (v) it satisfies the requirements of Section 6.08; and (vi) to the Indenture Trustee's best knowledge, no proceedings or investigations concerning the Indenture Trustee are pending or threatened before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over or its properties: (A) asserting the invalidity of this Indenture, 44 (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture, or (C) seeking any determination that might affect its performance of its obligations under this Indenture or the validity or enforceability of this Indenture. ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS Section 7.01. Issuer to Furnish Names and Addresses of Noteholders. The Issuer will furnish to the Indenture Trustee not more than five days after each Record Date a list of the names and addresses of the Holders of Notes as of the Record Date in the form the Indenture Trustee reasonably requires, and at any other times the Indenture Trustee or Credit Enhancer requests in writing, within 30 days after the Issuer receives the request, a list of similar form and content as of a date not more than ten days before the time the list is furnished. So long as the Indenture Trustee is the Note Registrar, the Issuer need not furnish these lists. Section 7.02. Preservation of Information; Communications. (a) The Indenture Trustee shall preserve the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar in as current a form as is reasonably practicable. The Indenture Trustee may destroy any list furnished to it under Section 7.01 on receipt of a new list so furnished. (b) Noteholders may communicate with other Noteholders with respect to their rights under this Indenture or under the Notes in the manner provided under TIA Section 312(b). (c) The Issuer, the Indenture Trustee, and the Note Registrar shall have the protections provided under TIA Section 312(c). Section 7.03. Reports of Issuer. (a) The Issuer shall: (i) file with the Commission, the Indenture Trustee, and the Credit Enhancer copies of the annual reports and of the information, documents, and other reports (or copies of the portions of any of these the Commission prescribes in its rules and regulations) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, within 15 days after the Issuer is required to file the same with the Commission; 45 (ii) file with the Indenture Trustee, the Credit Enhancer, and the Commission in accordance with the Commission's rules and regulations any additional information, documents, and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture the rules and regulations require; and (iii) supply to the Indenture Trustee and the Credit Enhancer summaries of any information, documents, and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section and by the rules and regulations of the Commission (and the Indenture Trustee shall transmit them by mail to all Noteholders described in TIA Section 313(c)). (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year. Section 7.04. Reports by Indenture Trustee. If required by TIA Section 313(a), within 60 days after the date in each year specified in the Adoption Annex, beginning with the date specified in the Adoption Annex, the Indenture Trustee shall mail to each Noteholder as required by TIA Section 313(c) and to the Credit Enhancer a brief report dated that date that complies with TIA Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b). A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each securities exchange on which the Notes are listed. The Issuer shall notify the Indenture Trustee and the Credit Enhancer before the Notes are listed on any securities exchange. The Indenture Trustee shall deliver to each Noteholder the information necessary for the Holder to prepare its federal and State income tax returns. On each Payment Date, the Indenture Trustee shall make available to each Noteholder, the Master Servicer, the Credit Enhancer, and each Rating Agency on its Internet website the statement for Noteholders prepared by the Master Servicer and delivered to it pursuant to Section 4.04 of the Sale and Servicing Agreement for the Payment Date. If the statement for Noteholders is not accessible to any of the Noteholders, the Master Servicer, the Credit Enhancer, or either Rating Agency on the Indenture Trustee's internet website, the Indenture Trustee shall forward a hard copy of it to each Noteholder, the Master Servicer, the Credit Enhancer, and each Rating Agency immediately after the Indenture Trustee becomes aware that it is not accessible to any of them via its website. The address of the Indenture Trustee's internet website where the statement for Noteholders will be accessible is https://www.jpmorgan.com/sfr. Assistance in using the Indenture Trustee's internet website may be obtained by calling the Indenture Trustee's customer service desk at (877) 722-1095. The Indenture Trustee shall notify each Noteholder, the Master Servicer, the Credit Enhancer, and each Rating Agency in writing of any change in the address or means of access to the internet website where the statement for Noteholders is accessible. 46 The Indenture Trustee shall prepare (in a manner consistent with the treatment of the Notes as indebtedness of the Transferor, Internal Revenue Service Form 1099 (or any successor form) and any other tax forms required to be filed or furnished to Noteholders covering payments by the Indenture Trustee (or the Paying Agent) on the Notes and shall file and distribute them as required by law. In addition, the Indenture Trustee shall promptly furnish any information reasonably requested by the Issuer that is reasonably available to the Indenture Trustee to enable the Issuer to perform its federal and state income tax reporting obligations. ARTICLE VIII ACCOUNTS, DISBURSEMENTS, AND RELEASES Section 8.01. Accounts. The Indenture Trustee will establish and maintain on behalf of the Noteholders an Eligible Account (the "Payment Account") with the title specified in the Adoption Annex. The Indenture Trustee shall hold amounts deposited in the Payment Account as Indenture Trustee for the benefit of the Noteholders and the Credit Enhancer. The Indenture Trustee will, promptly upon receipt, deposit in the Payment Account and retain in it the aggregate amount remitted by the Master Servicer pursuant to the Sale and Servicing Agreement. Pursuant to the Sale and Servicing Agreement, the Master Servicer has established the Collection Account. The Sale and Servicing Agreement requires the Master Servicer to deposit specified collections on the Mortgage Loans into the Collection Account no later than two Business Days before each Payment Date and, not later than the Business Day before each Payment Date, to withdraw from the Collection Account and remit to the Indenture Trustee the amount to be applied on the next Payment Date by the Indenture Trustee pursuant to Section 8.03, to the extent on deposit in the Collection Account. All income received with respect to amounts deposited in the Payment Account shall be for the benefit of the Master Servicer. If on a Determination Date the Master Servicer notifies the Indenture Trustee and the Credit Enhancer of the amount in the Collection Account allocable to Interest Collections and Principal Collections for the Mortgage Loans in each Loan Group for the related Payment Date, then the Master Servicer may withdraw from the Collection Account and retain any amounts that constitute income and gain realized from the investment of the collections. Any losses incurred on funds in the Payment Account that reduce their principal amount shall be immediately deposited in the Payment Account by the Master Servicer out of its own funds. Section 8.02. Withdrawals from the Collection Account. Upon delivery of an Officer's Certificate to the Indenture Trustee, the Master Servicer may withdraw funds with respect to the relevant Loan Group from the Collection Account for the following purposes: 47 (i) to pay to the Master Servicer its Servicing Fee to the extent that it has not been retained pursuant to Section 3.02(b) of the Sale and Servicing Agreement; (ii) to pay to the Master Servicer net earnings on amounts on deposit in the Collection Account as provided in Section 8.01; and (iii) to pay from Principal Collections for the relevant Loan Group the amounts provided for the purchase of Additional Balances pursuant to Section 2.01 of the Sale and Servicing Agreement. If the Master Servicer deposits in the Collection Account any amount not required to be deposited or any amount representing payments by mortgagors made by checks subsequently returned uncollected, it may at any time withdraw that amount from the Collection Account upon delivery of an Officer's Certificate to the Indenture Trustee. Section 8.03. Payments. (a) Payments of Investor Interest Collections and Investment Proceeds. On each Payment Date, the Indenture Trustee shall distribute out of the Payment Account (to the extent of Investor Interest Collections for a Loan Group collected during the related Collection Period, the deposits by the Master Servicer pursuant to Section 3.03 of the Sale and Servicing Agreement, and any Crossover Amounts) the following amounts and in the following order of priority to the following persons (based on the information in the Servicing Certificate), for each Loan Group: (i) to pay the premium related to that Loan Group pursuant to the Insurance Agreement to the Credit Enhancer; (ii) to pay the Aggregate Investor Interest (with interest on overdue interest (exclusive of Basis Risk Carryforward) to the extent permitted by applicable law) for that Class of Notes for the Payment Date to the related Noteholders; (iii) to pay the Investor Loss Amount for that Class of Notes for the Payment Date to the related Noteholders as principal in reduction of the related Note Principal Balance; (iv) to pay the aggregate amount of the Investor Loss Reduction Amounts for previous Payment Dates that have not been previously reimbursed to the related Noteholders pursuant to this clause (iv) to the Noteholders as principal in reduction of the related Note Principal Balance; (v) to pay any amounts described in items (iii) and (iv) above that remain unpaid to the Holders of the unrelated Class of Notes on the Payment Date (after taking into account the allocation of 100% of the Investor Interest Collections relating to the unrelated Class of Notes on the Payment Date) to the Holders of the unrelated Class of Notes; 48 (vi) to pay previously unreimbursed Credit Enhancement Draw Amounts related to that Loan Group together with interest on them at the applicable rate in the Insurance Agreement to the Credit Enhancer; (vii) to pay the related Accelerated Principal Payment Amount to the related Class of Noteholders as principal in reduction of the related Note Principal Balance; (viii) to pay any amounts described in item (ii) above that remain unpaid to the Holders of the unrelated Class of Notes on the Payment Date (after taking into account payments of Investor Interest Collections to the unrelated Class of Notes on the Payment Date) to the Holders of the unrelated Class of Notes (ix) to pay any amounts related to the Loan Group owed to the Credit Enhancer pursuant to the Insurance Agreement to the Credit Enhancer; (x) to pay any amounts required to be paid to the Master Servicer with respect to the related Class of Notes pursuant to Sections 3.08 and 5.03 of the Sale and Servicing Agreement that have not been previously paid to the Master Servicer; (xi) to pay previously unreimbursed Credit Enhancement Draw Amounts related to the unrelated Loan Group together with interest on them at the applicable rate in the Insurance Agreement and any other amounts owed under the Insurance Agreement with respect to the unrelated Loan Group to the Credit Enhancer; (xii) to pay any Basis Risk Carryforward to the related Noteholders; and (xiii) any remaining amount to the Issuer for distribution in accordance with the Trust Agreement. (b) Payment of Principal Collections and Release of Overcollateralization Step-Down Amounts. Except on the Payment Date in the month specified in the Adoption Annex, on each Payment Date, the Indenture Trustee shall distribute out of the Payment Account to the Holders of each Class of Notes the Principal Collections from the related Loan Group up to the related Scheduled Principal Collections Payment Amount but not in excess of the related Note Principal Balance. On the Payment Date in the month specified in the Adoption Annex, the Indenture Trustee shall distribute to the Holders of each Class of Notes the Principal Collections from the related Loan Group up to the related Note Principal Balance. The dollar amount of any Overcollateralization Step-Down Amount for a Loan Group will be deducted from the Scheduled Principal Collections Payment Amount for that Loan Group and paid to the Transferor. (c) Application of Subordinated Transferor Collections. If, after applying Investor Interest Collections, the deposits by the Master Servicer pursuant to Section 3.03 of the Sale and Servicing Agreement, and any Crossover Amounts as provided in Section 8.03(a), any Required Amount remains unpaid for a Class, the Indenture Trustee shall, based on information in the 49 Servicing Certificate for the Payment Date, apply Subordinated Transferor Collections for the related Loan Group to pay the unpaid Required Amounts for the Class. If, after making those payments the Required Amount for the Class remains unpaid, the Indenture Trustee shall apply any remaining Subordinated Transferor Collections for the unrelated Loan Group (after application of Subordinated Transferor Collections for the unrelated Loan Group pursuant to this subsection to pay Required Amounts for the Class related to that unrelated Loan Group) to pay any unpaid Required Amount for the Class. If, after making both of those payments the Required Amount remains unpaid, then the remaining Investor Loss Amount for that Class shall be allocated to the Allocated Transferor Interest to the extent of the related Available Transferor Subordinated Amount and not to such Notes. However, no allocation of Investor Loss Amounts for a Loan Group shall reduce the related Allocated Transferor Interest below zero. (d) Payment of the Credit Enhancement Draw Amount. The Indenture Trustee will make payments to the related Class of Noteholders from the Credit Enhancement Draw Amount (but not including any portion of it representing a Preference Claim) drawn under the Policy for any Payment Date and Class pursuant to Section 8.05 on the Payment Date as follows: FIRST, as an addition to the amount distributed pursuant to Section 8.03(a)(ii); and SECOND, the portion of the Credit Enhancement Draw Amount remaining after the application of the amounts referred to in First above, as an addition to the amounts distributed pursuant to Section 8.03(b). The aggregate amount of principal distributed to the Holders of either Class of Notes under this Indenture shall not exceed the related Original Note Principal Balance. (e) Distributions to Holders of Transferor Certificates. On each Payment Date, based on the information in the Servicing Certificate for the Payment Date and subject to Section 8.03(a),(b), and (c), the Indenture Trustee shall distribute to the Issuer from amounts in the Payment Account (i) the Interest Collections for each Loan Group that are not Investor Interest Collections on the Payment Date for the related Collection Period and (ii) the portion of Transferor Principal Collections for each Loan Group for the related Collection Period in excess of Additional Balances created on the Mortgage Loans in that Loan Group during the Collection Period. Collections allocable to the Transferor Certificates pursuant to this Section 8.03(e) will be distributed to the Issuer only to the extent that the distribution will not reduce the applicable Allocated Transferor Interest as of the related Payment Date below the related Minimum Transferor Interest. Amounts not distributed to the Issuer because of this limitation will be retained in the Payment Account until the applicable Allocated Transferor Interest exceeds the related Minimum Transferor Interest, at which time the excess shall be released to the Issuer. If any such amounts are still retained in the Payment Account at the commencement of the Rapid Amortization Period or are collected thereafter, they will be paid to the related Noteholders as a reduction of the applicable Note Principal Balance. 50 Section 8.04. Calculation of the Note Rate. On each Adjustment Date, the Indenture Trustee shall determine LIBOR for the related Interest Period and inform the Master Servicer (at the facsimile number given to the Indenture Trustee in writing) of the rate. On each Determination Date, the Indenture Trustee shall determine the applicable Note Rate for each Class of Notes for the related Payment Date. Section 8.05. Claims on the Policy; Policy Payments Account. (a) If the Credit Enhancement Draw Amount for a Class specified in the Servicing Certificate for a Payment Date is more than zero (determined as of the close of business on the third Business Day before the Payment Date), then the Indenture Trustee shall notify the Credit Enhancer by telephone or telecopy of the Credit Enhancement Draw Amount for the Class of Notes. The notice shall be confirmed to the Credit Enhancer in writing in the form of the Notice of Nonpayment and Demand for Payment of Insured Amounts in Exhibit A to the Policy, by 10:00 A.M., New York City time, on the second Business Day before the Payment Date. Following receipt by the Credit Enhancer of the notice in that form, the Credit Enhancer will pay any amount payable under the Policy for the Class of Notes in the form (that is not a Preference Amount) on the later to occur of (i) 12:00 NOON, New York City time, on the second Business Day following the receipt and (ii) 12:00 NOON, New York City time, on the Payment Date to which the deficiency relates. The Credit Enhancer will pay any Credit Enhancement Draw Amount that is a Preference Amount on the Business Day following receipt on a Business Day by 12:00 NOON, New York City time, by the Fiscal Agent (as defined in the Policy) of (1) a certified copy of the order requiring the return of a preference payment, (2) an opinion of counsel satisfactory to the Credit Enhancer that the order is final and not subject to appeal, (3) an assignment in any form reasonably required by the Credit Enhancer irrevocably assigning to the Credit Enhancer all rights and c1aims of the Holder relating to or arising under the Notes against the debtor that made the preference payment or otherwise with respect to the preference payment, and (4) appropriate instruments in any form reasonably required by the Credit Enhancer to effect the appointment of the Credit Enhancer as agent for the Holder in any legal proceeding related to the preference payment. If the documents in (1) through (4) above are received after 12:00 NOON, New York City time, on a Business Day, they will be deemed to be received on the following Business Day. Any Credit Enhancement Draw Amount that is a Preference Amount will be distributed by the Indenture Trustee to the receiver or trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the Holder and not to any Holder directly unless the Holder has returned principal or interest paid on the Notes to the receiver or trustee in bankruptcy, in which case such payment shall be distributed by the Indenture Trustee to the Holder. (b) The Indenture Trustee shall establish the Policy Payments Account. The Indenture Trustee shall deposit any amount paid under the Policy in the Policy Payments Account and distribute the amount only to pay Holders of the Notes the Guaranteed Payment 51 for their Class of Notes for which a claim was made. No payments under the Policy may be used to pay any costs, expenses, or liabilities of the Master Servicer, the Indenture Trustee, or the Trust (other than payments of principal and interest on the Notes). Amounts paid under the Policy shall be transferred to the Payment Account in accordance with the next paragraph and disbursed by the Indenture Trustee to Holders of the related Class of Notes in accordance with Section 8.03. Payments from draws on the Policy need not be made by checks or wire transfers separate from the checks or wire transfers used to pay other funds paid to Noteholders on the Payment Date. The portion of any payment of principal of or interest on the related Class of Notes paid from funds transferred from the Policy Payments Account, however, shall be noted in the statement to be furnished to Holders of the Notes pursuant to Section 7.04. Funds held in the Policy Payments Account shall not be invested. On any Payment Date (or the day on which a payment on the Policy is received, if later) for which a claim has been made under the Policy, the amount of any funds received by the Indenture Trustee as a result of any claim under the Policy, to the extent required to make the Guaranteed Payment on the related Class of Notes on the Payment Date, shall be withdrawn from the Policy Payments Account and deposited in the Payment Account and applied by the Indenture Trustee, together with the other funds to be paid from the Payment Account pursuant to Section 8.03, directly to the payment in full of the Guaranteed Payment due on the applicable Class of Notes. Any funds remaining in the Policy Payments Account on the first Business Day following the later of the Payment Date and the Business Day after the day on which a payment on the Policy has been paid to the Holders of the applicable Class of Notes shall be remitted to the Credit Enhancer, pursuant to the instructions of the Credit Enhancer, by the end of the Business Day. (c) The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid on any Note from moneys received under the Policy. The Credit Enhancer may inspect the records at reasonable times during normal business hours on one Business Day's notice to the Indenture Trustee. (d) The Indenture Trustee shall promptly notify the Credit Enhancer of any Preference Claim of which a Responsible Officer has actual knowledge. Each Noteholder by its purchase of Notes, the Master Servicer, and the Indenture Trustee agree that the Credit Enhancer may at any time during the continuation of any proceeding relating to a Preference Claim direct all matters relating to the Preference Claim, including (i) the direction of any appeal of any order relating to the Preference Claim and (ii) the posting of any surety, supersedeas, or performance bond pending any appeal. In addition and without limiting the foregoing, the Credit Enhancer shall be subrogated to the rights of the Master Servicer, the Indenture Trustee, and each Noteholder in the conduct of any Preference Claim, including all rights of any party to an adversary proceeding action with respect to any court order issued in connection with any Preference Claim. 52 Section 8.06. Replacement Policy. If a Credit Enhancer Default occurs, the Depositor may substitute new surety bonds for the existing Policy so long as (i) the new rating of the Notes would be an improvement over their then current rating, (ii) the new surety bond will qualify as a "similar commercially available credit enhancement contract" within the meaning of Treas. Reg. ss. 1.1001-3(e)(4)(iv)(B), and (iii) the Rating Agency Condition is satisfied. No new credit enhancement may be substituted, however, unless the Indenture Trustee receives a legal opinion, acceptable in form and substance to the Indenture Trustee, from counsel to the provider of the new credit enhancement with respect to its enforceability and any other matters the Indenture Trustee reasonably requires. Within five Business Days after the Indenture Trustee takes physical possession of the new credit enhancement and the opinion of counsel, it will deliver the replaced Policy to the Credit Enhancer. Any other form of credit enhancement may also be substituted for the Policy after a Credit Enhancer Default if the new rating of the Notes would be an improvement over their then current rating and the Indenture Trustee receives an Opinion of Counsel to the effect that the substitution will not be treated as a significant modification within the meaning of Treas. Reg. ss. 1.1001-3. ARTICLE IX SUPPLEMENTAL INDENTURES Section 9.01. Supplemental Indentures Without Consent of Noteholders. (a) Without the consent of the Holders of any Notes but with the consent of the Credit Enhancer (which shall not be unreasonably withheld) and with prior notice to each Rating Agency, subject to Section 9.06, the Issuer and the Indenture Trustee may enter into indentures supplemental to this Indenture, in form satisfactory to the Indenture Trustee, for any of the following purposes: (i) to correct or amplify the description of any property subject to the lien of this Indenture, or to confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject additional property to the lien of this Indenture; (ii) to evidence the succession of another person to the Issuer pursuant to this Indenture, and the assumption by the successor of the covenants of the Issuer in this Indenture and the Notes in compliance with the applicable provisions of this Indenture; (iii) to add to the covenants of the Issuer, for the benefit of the Noteholders or the Credit Enhancer, or to surrender any right conferred on the Issuer in this Indenture; (iv) to convey, transfer, assign, mortgage, or pledge any property to or with the Indenture Trustee; 53 (v) to cure any ambiguity or mistake; (vi) to correct or supplement any provision in this Indenture or in any supplemental indenture that may be inconsistent with any other provision in this Indenture or in any supplemental indenture or the other Transaction Documents; (vii) to conform this Indenture to the final prospectus supplement issued in respect of the Notes referred to in the Adoption Annex; (viii) to modify, eliminate, or add to the provisions of this Indenture as required by any Rating Agency or any other nationally recognized statistical rating organization to maintain or improve any rating of the Notes without taking the Policy into account; (ix) to modify, eliminate, or add to the provisions of this Indenture to comply with any requirement imposed by the Code; (x) to modify, eliminate, or add to the provisions of this Indenture to the extent necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture other provisions expressly required by the TIA; or (xi) to provide for the acceptance of the appointment of a successor trustee under this Indenture and to add to or change any of the provisions of this Indenture necessary to facilitate the administration of the trusts under this Indenture by more than one trustee, pursuant to the requirements of Article VI. The Indenture Trustee is authorized to join in the execution of any supplemental indenture and to make any further appropriate agreements and stipulations that may be contained in it. (b) Without the consent of any of the Noteholders but with satisfaction of the Rating Agency Condition (in connection with which the consent of the Credit Enhancer shall not be unreasonably withheld), subject to Section 9.06, the Issuer and the Indenture Trustee may enter into indentures supplemental to this Indenture to change this Indenture in any manner or to modify the rights of the Noteholders or the Credit Enhancer under this Indenture except (x) amendments that pursuant to Section 9.02 require the consent of each affected Noteholder and (y) amendments that adversely affect in any material respects the interests of any Noteholder. Section 9.02. Supplemental Indentures with Consent of Noteholders. No supplemental indenture shall, without the consent of each affected Noteholder by an Act of the applicable Noteholders delivered to the Issuer and the Indenture Trustee and without the consent of the Credit Enhancer and subject to Section 9.06: (i) change the date of payment of any installment of principal or interest on any Note, or reduce its principal amount, its interest rate, or its redemption price, or 54 change any place of payment where, or the coin or currency in which, any Note or its interest is payable; (ii) impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of available funds to the payment of any amount due on the Notes after their due dates (or, in the case of redemption, after the redemption date), as provided in Article V; (iii) reduce the percentage of the Outstanding Amount the consent of the Holders of which is required for any supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults under this Indenture and their consequences or to direct the liquidation of the Collateral; (iv) modify any provision of this Section except to increase any percentage specified in this Indenture or provide that certain additional provisions of this Indenture or the Transaction Documents cannot be modified or waived without the consent of the Holder of each Note affected by it; modify any of the provisions of this Indenture in a manner affecting the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of the calculation) or affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained in this Indenture; or (v) permit the creation of any lien ranking before or on a parity with the lien of this Indenture with respect to any part of the Collateral (except any change in any mortgage's lien status in accordance with the Sale and Servicing Agreement) or, except as otherwise permitted or contemplated in this Indenture, terminate the lien of this Indenture on any property at any time subject to this Indenture or deprive the Holder of any Note of the security provided by the lien of this Indenture. The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and that determination shall be conclusive on the Holders of all Notes, whether authenticated and delivered under this Indenture before or after that. The Indenture Trustee shall not be liable for any determination made in good faith. An Act of Noteholders under this Section need not approve the particular form of any proposed supplemental indenture, but is sufficient if it approves the substance of the supplemental indenture. Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Noteholders to which the supplemental indenture relates a notice stating in general terms the substance of the supplemental indenture. Any failure of the Indenture Trustee to mail a notice, 55 or any defect in it, shall not, however, in any way impair or affect the validity of the supplemental indenture. Section 9.03. Execution of Supplemental Indentures. In executing any supplemental indenture permitted by this Article, the Indenture Trustee may require and, subject to Sections 6.01 and 6.03, shall be fully protected in relying on an Opinion of Counsel (addressed to the Indenture Trustee and the Credit Enhancer) stating that the execution of the supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but need not, enter into any supplemental indenture that affects the Indenture Trustee's own rights or obligations under this Indenture or otherwise. Section 9.04. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to this Indenture, this Indenture shall be changed in accordance with the supplemental indenture, and the Indenture Trustee, the Issuer, and the Noteholders shall bound by the supplemental indenture. Section 9.05. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in the supplemental indenture. If the Issuer so determines, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to the supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. Section 9.06. Tax Opinion. This Indenture may not be amended under this Article or otherwise unless, in connection with the amendment, an Opinion of Counsel is furnished to the Indenture Trustee and the Credit Enhancer that the amendment will not (i) adversely affect the status of the Notes as debt, or cause the beneficial owners of the Note to recognize gain or loss, for federal income or applicable state tax purposes; (ii) result in the Trust being taxable at the entity level; or (iii) result in the Trust being classified as a taxable mortgage pool (as defined in Section 7701(i) of the Code). ARTICLE X REDEMPTION OF NOTES Section 10.01. Redemption. (a) The Notes are subject to optional redemption by the Issuer with the consent of the Credit Enhancer in whole on any Payment Date from the Payment Date immediately before which the aggregate Note Principal Balance of both Classes of Notes is less than or equal to 10% of the aggregate Original Note Principal Balance of both Classes of Notes. If the Issuer does not exercise this option to redeem the Notes, the Credit Enhancer, with the consent of the 56 Issuer (which consent may not be unreasonably withheld), may require the Issuer to redeem both Classes of Notes if the Credit Enhancer provides the funds required by Section 10.01(b). The redemption price for each Class of Notes shall be the Note Principal Balance for that Class plus accrued aggregate Note Interest for that Class through the day before the redemption date plus interest accrued on the aggregate Unpaid Investor Interest Shortfall for that Class of Notes, to the extent legally permissible. No premium or penalty will be payable by the Issuer in any redemption of the Notes. (b) The Issuer or the Credit Enhancer, as applicable, shall notify the Indenture Trustee of its election to redeem the Notes not later than the first day of the month preceding the month of the redemption. The Indenture Trustee shall first notify the Credit Enhancer and the Master Servicer and then notify the Noteholders by letter mailed or sent by facsimile transmission not earlier than the 15th day and not later than the 25th day of the month before the month of the redemption. Payment on the Notes will only be made on presentation and surrender of the Notes at the office or agency of the Indenture Trustee specified in the redemption notice. By the redemption date, the Issuer or the Credit Enhancer, as applicable, shall deposit in the Payment Account in immediately available funds an amount that, when added to the funds on deposit in the Payment Account that are payable to the Noteholders, equals the redemption price for each Class of Notes, whereupon all the Notes called for redemption shall be payable on the redemption date. (c) On presentation and surrender of the Notes, the Indenture Trustee shall pay to the Holders of Notes on the redemption date an amount equal to their redemption price. On the redemption date, the Indenture Trustee shall, based on the information in the Servicing Certificate for the relevant Payment Date, withdraw from the Payment Account and remit to the Credit Enhancer the lesser of (x) the amount available for distribution on the redemption date, net of the amount needed to pay the redemption price and (y) the unpaid amounts due to the Credit Enhancer for unpaid premiums and unreimbursed draws on the Policy (together with interest on them as provided under the Insurance Agreement) and any other sums owed under the Insurance Agreement. If all of the Noteholders do not surrender their Notes for final payment and cancellation by the redemption date, the Indenture Trustee shall hold in the Payment Account, for the benefit of the Noteholders and the Issuer, the remaining amounts representing the redemption price not distributed in redemption to Noteholders. (d) Any election to redeem Notes pursuant to Section 10.01(a) shall be evidenced by an Issuer Order. The Issuer Order shall specify the items required in the notice of redemption to be mailed to Noteholders. The Issuer shall notify each Rating Agency of the redemption. 57 Section 10.02. Form of Redemption Notice. Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile or other reliable electronic means (promptly confirmed by mail) to each Holder of Notes and to the Credit Enhancer as of the close of business on the Record Date preceding the redemption date, at the Holder's address or facsimile number appearing in the Note Register. All notices of redemption shall state: (i) the redemption date; (ii) the redemption price; (iii) the amount of interest accrued to the redemption date; (iv) the place where Notes are to be surrendered for payment of the redemption price (which shall be the office or agency of the Issuer maintained pursuant to Section 3.02); and (v) that on the redemption date, the redemption price will become payable on each Note and that interest on the Notes shall cease to accrue beginning on the redemption date. Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect in it, to any Holder of any Note shall not affect the validity of the redemption of any other Note. Section 10.03. Notes Payable on Redemption Date. Following notice of redemption as required by Section 10.02, on the redemption date the Notes shall become payable at the redemption price and (unless the Issuer defaults in the payment of the redemption price) no interest shall accrue on the redemption price for any period after the date to which accrued interest is calculated for purposes of calculating the redemption price. ARTICLE XI MISCELLANEOUS Section 11.01. Compliance Certificates and Opinions, etc. (a) Whenever the Issuer requests the Indenture Trustee to take any action under this Indenture, the Issuer shall furnish to the Indenture Trustee and the Credit Enhancer (i) an Officer's Certificate stating that any conditions precedent provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in its opinion any conditions precedent have been complied with. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: 58 (i) a statement that each signatory of the certificate or opinion has read the covenant or condition and the definitions in this Indenture relating to it; (ii) a brief statement as to the nature and scope of the examination or investigation on which the statements or opinions contained in the certificate or opinion are based; (iii) a statement that, in the opinion of each signatory, the signatory has made any examination or investigation necessary for the signatory to express an informed opinion about whether or not the covenant or condition has been complied with; (iv) a statement as to whether, in the opinion of each signatory, the condition or covenant has been complied with; and (v) if the signer of the certificate is required to be Independent, the statement required by the definition of Independent. (b) (i) Before the deposit of any Collateral or other property with the Indenture Trustee that is to be made the basis for the release of any property subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Credit Enhancer an Officer's Certificate stating the opinion of each person signing the certificate as to the fair value (within 90 days of the deposit) to the Issuer of the Collateral or other property to be deposited. (ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer's Certificate stating the opinion of any signer as to the matters described in clause (b)(i), the Issuer shall also deliver to the Indenture Trustee and the Credit Enhancer an Independent Certificate as to the same matters, if the fair value to the Issuer of the property to be deposited as the basis of any release and of all other property made the basis of any release since the commencement of the then-current calendar year as described in the certificates delivered pursuant to clause (b)(i) is 10% or more of the aggregate Outstanding Amount of both Classes of Notes, but the certificate need not be furnished for any securities deposited, if their fair value to the Issuer as described in the related Officer's Certificate is less than $25,000 or less than 1% of the then aggregate Outstanding Amount of both Classes of Notes. (iii) Whenever any property is to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee and the Credit Enhancer an Officer's Certificate stating the opinion of each person signing the certificate as to the fair value (within 90 days of the release) of the property proposed to be released and 59 stating that in the opinion of that person the proposed release will not impair the security under this Indenture in contravention of the provisions of this Indenture. (iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer's Certificate stating the opinion of any signer as to the matters described in clause (b)(iii), the Issuer shall also furnish to the Indenture Trustee and the Credit Enhancer an Independent Certificate as to the same matters if the fair value of the property and of all other property released from the lien of this Indenture since the commencement of the then-current calendar year, as described in the certificates required by clause (b)(iii) and this clause (b)(iv), equals 10% or more of the aggregate Outstanding Amount of both Classes of Notes, but the certificate need not be furnished for any release of property if its fair value as described in the related Officer's Certificate is less than $25,000 or less than 1% of the then aggregate Outstanding Amount of both Classes of Notes. (v) Notwithstanding any provision of this Indenture, the Issuer may, without compliance with the other requirements of this Section, (A) collect, liquidate, sell, or otherwise dispose of Collateral as and to the extent permitted by the Transaction Documents, and (B) make cash payments out of the Collection Account as and to the extent permitted by the Transaction Documents, so long as the Issuer delivers to the Indenture Trustee and the Credit Enhancer every six months, beginning six months after the date of this Indenture, an Officer's Certificate of the Issuer stating that all the dispositions of Collateral described in clauses (A) and (B) that occurred during the preceding six months were in the ordinary course of the Issuer's business and that their proceeds were applied in accordance with the Transaction Documents. Section 11.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified person, all the matters need not be certified by, or covered by the opinion of, only one person, or be certified or covered by only one document. One person may certify or give an opinion with respect to some matters and one or more other persons as to other matters, and any person may certify or give an opinion as to one matter in one or several documents. Any certificate or opinion of an Authorized Officer of the Issuer may be based on a certificate or opinion of counsel insofar as it relates to legal matters, unless the officer knows, or in the exercise of reasonable care should know, that with respect to the matters on which the officer's certificate or opinion is based the certificate or opinion is erroneous. Any certificate of an Authorized Officer or Opinion of Counsel may be based on a certificate or opinion of officers of any appropriate party to any of the Transaction Documents insofar as it relates to factual matters, stating that the information with respect to the factual matters is in the possession of the party, unless the person signing knows, or in the exercise of reasonable care should know, that the certificate or opinion is erroneous. 60 Where any person is required to deliver two or more documents under this Indenture, they may, but need not, be consolidated into one document. If the Issuer is required to deliver any document as a condition of the granting of any request, or as evidence of its compliance with this Indenture, the request may be denied or the certification of compliance will be unacceptable if the document is inaccurate. This provision shall not, however, affect the Indenture Trustee's right to rely on accuracy of any statement or opinion in any document as provided in Article VI. Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver, or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by Noteholders in person or by agents duly appointed in writing. Except as otherwise expressly provided in this Indenture the action shall become effective when the instruments are delivered to the Indenture Trustee and, if expressly required, to the Issuer. The instruments (and the action embodied in them) are referred to as the "Act" of the Noteholders signing the instruments. Proof of execution of any instrument or of a writing appointing an agent for a Noteholder shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any person of any instrument may be proved by an affidavit of a witness to the execution or the certificate of any notary public or other person authorized by law to acknowledge the execution of deeds. Any certificate on behalf of a jural entity executed by a person purporting to have authority to act on behalf of the jural entity shall itself be sufficient proof of the authority of the person executing it to act. The fact and date of the execution by any person of any instrument may also be proved in any other manner that the Indenture Trustee deems sufficient. (c) The Note Register shall prove the ownership of Notes. (d) Any Act by the Holder of a Note shall bind every Holder of the same Note and every Note issued on its transfer or in exchange for it or in lieu of it, in respect of anything done, omitted, or suffered to be done by the Indenture Trustee or the Issuer in reliance on the Act, whether or not notation of the action is made on the Note. Section 11.04. Notices. Any request, demand, authorization, direction, notice, consent, waiver, Act, or other action or other documents provided or permitted by this Indenture to be given to: (i) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose under this Indenture if given in writing and delivered by first-class mail, postage prepaid, overnight courier, personally delivered, or facsimile 61 (followed by the original by any other means authorized by this Section) to the Indenture Trustee at its Corporate Trust Office, or (ii) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose under this Indenture if given in writing and delivered by first-class mail, postage prepaid, overnight courier, personally delivered, or facsimile (followed by the original by any other means authorized by this Section) to the Issuer addressed as provided in the Adoption Annex or at any other address previously furnished in writing to the Indenture Trustee by the Issuer; or (iii) the Credit Enhancer by the Issuer, the Indenture Trustee, or by any Noteholder shall be sufficient for every purpose under this Indenture if given in writing and delivered by first-class mail, postage prepaid, overnight courier, personally delivered, or facsimile (followed by the original by any other means authorized by this Section) (unless otherwise specifically provided) to the Credit Enhancer addressed as provided in the Adoption Annex or at any other address previously furnished in writing to the Indenture Trustee by the Credit Enhancer, except that whenever a notice or other communication to the Credit Enhancer refers to an Event of Default, Event of Servicing Termination, a claim under the Policy, or with respect to which failure on the part of the Credit Enhancer to respond would constitute consent or acceptance, then a copy of the notice or other communication shall also be sent to the attention of the General Counsel of the Credit Enhancer and shall be marked to indicate "URGENT MATERIAL ENCLOSED"; or (iv) to each Rating Agency by the Issuer or the Indenture Trustee shall be sufficient for every purpose under this Indenture if given in writing and delivered by first-class mail, postage prepaid, overnight courier, personally delivered, or facsimile (followed by the original by any other means authorized by this Section) to the parties at the addresses as provided in the Adoption Annex or at any other address previously furnished in writing to the Indenture Trustee and the Issuer. Any consent or waiver under this Indenture or any other Transaction Document by the Credit Enhancer must be in writing and signed by the Credit Enhancer to be effective. Section 11.05. Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of any event, the notice shall be sufficiently given (unless otherwise expressly provided in this Indenture) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by the event, at the Holder's address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of the notice. Whenever notice to Noteholders is given by mail, neither the failure to mail the notice nor any defect in a notice mailed to any particular Noteholder shall affect the sufficiency of the notice with respect to other Noteholders. Any 62 notice that is mailed in the manner provided in this Indenture shall conclusively be presumed to have been duly given. Where this Indenture provides for notice in any manner, any person entitled to receive it may waive the notice in writing, either before or after the event, and the waiver shall be the equivalent of notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but the filing shall not be a condition precedent to the validity of any action taken in reliance on a waiver. If it is impractical to mail notice of any event to Noteholders when the notice is required to be given pursuant to this Indenture because of the suspension of regular mail service as a result of a strike, work stoppage, or similar activity, then any manner of giving the notice satisfactory to the Indenture Trustee shall be considered to be a sufficient giving of the notice. Where this Indenture provides for notice to each Rating Agency, failure to give the notice shall not affect any other rights or obligations created under this Indenture, and shall not under any circumstance constitute an Incipient Default. Section 11.06. Alternate Payment and Notice Provisions. Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to the Holder, that is different from the methods provided for in this Indenture. The agreement may not accelerate the timing or increase the amount of any payments to the Noteholder; cause any release of or other change in any Collateral; or affect the timing, amount, or method of any payments by the Credit Enhancer under the Policy. The Issuer will furnish to the Indenture Trustee and the Credit Enhancer a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with them. Section 11.07. Conflict with Trust Indenture Act. If any provision of this Indenture limits, qualifies, or conflicts with another provision of this Indenture that is required to be included in this Indenture by the Trust Indenture Act, the required provision shall control. The provisions of TIA Sections 310 through 317 that impose duties on any person (including the provisions automatically included in this Indenture unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained in this Indenture. Section 11.08. Effect of Headings and Table of Contents. The Article and Section headings and the Table of Contents are for convenience only and shall not affect the construction of this Indenture. 63 Section 11.09. Successors and Assigns. All agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, assigns, co-trustees, and agents. Section 11.10. Separability. If any provision in this Indenture or in the Notes is invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Indenture and the Notes shall not be affected in any way. Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any person, other than the parties to this Indenture and their successors under this Indenture, the Master Servicer (under Article VIII), the Credit Enhancer, any person with an ownership interest in the Trust, and the Noteholders, any benefit or any legal or equitable right under this Indenture. The Credit Enhancer is a third party beneficiary of this Indenture. Section 11.12. Legal Holidays. If the date on which any payment is due is not a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on that date, but may be made on the next Business Day with the same force as if made on the date on which nominally due, and no interest shall accrue for the period after the nominal due date. Section 11.13. Governing Law. THIS INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE. Section 11.14. Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be considered an original, but all the counterparts shall together constitute a single instrument. Section 11.15. Recording of Indenture. This Indenture is a Security Agreement under the UCC. If this Indenture is subject to recording in any appropriate public recording offices, the recording is to be effected by the Issuer but only at the request and expense of Noteholders accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that the recording materially and beneficially affects the interests of the Noteholders or any other person secured under this Indenture or the enforcement of any right granted to the Indenture Trustee under this Indenture. 64 Section 11.16. No Petition. The Indenture Trustee, by entering into this Indenture, any Paying Agent, by accepting its appointment as such, the Issuer, and each Noteholder, by accepting a Note, hereby covenant that they will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings, or other proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture, or any of the other Transaction Documents. This Section shall survive the termination of this Indenture. Section 11.17. Act on Instructions from Credit Enhancer. Notwithstanding any provision of this Indenture to the contrary other than Section 9.02, so long as no Credit Enhancer Default exists, the Credit Enhancer shall at all times be treated as if it were the exclusive owner of all Notes Outstanding for the purposes of all approvals, consents, waivers, and the institution of any action and the direction of all remedies, and the Indenture Trustee shall act in accordance with the directions of the Credit Enhancer so long as it is indemnified therefor to its reasonable satisfaction. The Credit Enhancer shall not be treated as if it were the exclusive owner of any Notes (other than those it may actually own) for the purposes of Section 9.02. Section 11.18. Non-recourse. The Issuer and each Noteholder, by its acceptance of its Note, agree that the indebtedness represented by the Notes is non-recourse to the Issuer, and is payable solely from the assets of the Trust. Section 11.19. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection this Indenture, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, or (iii) any partner, owner, beneficiary, agent, officer, director, employee, or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee, or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity. For all purposes of this Indenture, in the performance of any obligations of the Issuer under this Indenture, the Owner Trustee shall be subject to, and entitled to the benefits of, Articles VI, VII, and VIII of the Trust Agreement. 65 IN WITNESS WHEREOF, the parties to this Indenture have caused this Indenture to be duly executed by their officers, thereunto duly authorized, all as of the day and year first above written. CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P By: WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee By: /s/ Janel R. Havrilla ---------------------------------- Name: Janel R. Havrilla Title: Financial Services Officer JPMORGAN CHASE BANK not in its individual capacity but solely as Indenture Trustee, By: /s/ Steven E. Charles ---------------------------------- Name: Steven E. Charles Title: Authorized Officer 66 EXHIBIT A FORM OF NOTES Each transferee or purchaser of this Note that is a plan or is investing plan assets, by acceptance of this Note or an interest in this Note, represents that the investment and holding of this Note satisfy the conditions for exemptive relief under PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similar exemption. A "plan" is an employee benefit plan (as defined in section 3(3) of ERISA) that is subject to Title I of ERISA, a plan (as defined in and subject to section 4975 of the Code) and any entity whose underlying assets include plan assets by reason of a plan's investment in the entity or otherwise. Any transfer in violation of either of the foregoing will be void ab initio, and will not operate to transfer any rights to the transferee, notwithstanding any instructions to the contrary. A-1 CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P REVOLVING HOME EQUITY LOAN ASSET BACKED NOTE SERIES 2004-P - ----------------------------------------------------------------------------- Registered Principal Amount: $[___________] - ----------------------------------------------------------------------------- No. [____] Percentage Interest: [__]% - ----------------------------------------------------------------------------- CUSIP No. [_______] Initial Payment Date: [___________] - ----------------------------------------------------------------------------- Note Rate: Variable - ----------------------------------------------------------------------------- Unless this Note is presented by an authorized representative of the Depository to the Issuer or its agent for registration of transfer, exchange, or payment, and any Note issued in exchange for this Note is registered in the name of the Depository or in another name requested by an authorized representative of the Depository (and any payment on this Note is made to the Depository or to another entity requested by an authorized representative of the Depository), any transfer, pledge, or other use of this Note for value or otherwise by or to any person is wrongful inasmuch as the registered owner of this Note, the Depository, has an interest in this Note. The Issuer, CWABS Revolving Home Equity Loan Trust, Series 2004-P, promises to pay to CEDE & CO. or registered assigns the Principal Amount, payable on each Payment Date in an amount equal to the Percentage Interest of the aggregate amount payable from the Payment Account as principal on the Notes pursuant to Section 8.03 of the Indenture, dated as of October 29, 2004 (the "Indenture"), between the Issuer and JPMorgan Chase Bank, as Indenture Trustee. The entire remaining outstanding principal balance of this Note is payable on the Payment Date in March 2034. Capitalized terms used in this Note that are not otherwise defined have the meanings given to them in the Indenture, and if not defined there, in the Sale and Servicing Agreement, and if not defined there, in the Trust Agreement between the Issuer and Wilmington Trust Company, as Owner Trustee. Interest will be paid on the 15th day of each month or if that is not a Business Day, then on the next Business Day (the "Payment Date"), commencing on the first Payment Date specified above, to the person in whose name this Note is registered at the close of business on the last day preceding the Payment Date (the "Record Date") at the Note Rate. Interest will be computed on the basis of the actual number of days in the Interest Period and a 360-day year. The "Note Rate" is a per annum rate equal to [______]% for the first Interest Period, and for any subsequent Interest Period, a per annum rate equal to the least of: (i) the sum of (a) LIBOR as of the second LIBOR Business Day before the first day of the Interest Period and (b) [______]% (ii) the Maximum Rate for the Notes for the Interest Period, and (iii) [______]%. A-2 The "Maximum Rate" for any Interest Period is the Weighted Average Net Loan Rate for the Mortgage Loans for the Collection Period during which the Interest Period begins (adjusted to an effective rate reflecting accrued interest calculated on the basis of the actual number of days in the Collection Period commencing in the month in which the Interest Period commences and a year assumed to consist of 360 days). "LIBOR" for any day means the rate for United States dollar deposits for one month that appears on the Moneyline Telerate Screen Page 3750 as of 11:00 A.M., London time that day. If LIBOR does not appear on that page (or a page replacing that page on that service or, if that service is no longer offered, any other service for displaying LIBOR or comparable rates reasonably selected by the Depositor after consultation with the Indenture Trustee), the rate will be the reference bank rate. The reference bank rate for an Interest Period means the arithmetic mean (rounded upwards to the nearest one sixteenth of a percent) of the offered rates for United States dollar deposits offered by three major banks engaged in transactions in the London interbank market, selected by the Depositor after consultation with the Indenture Trustee and after obtaining the consent of the Credit Enhancer, as of 11:00 A.M., London time, on the second LIBOR Business Day before the first day of the Interest Period, to prime banks in the London interbank market for a period of one month in amounts approximately equal to the outstanding Note Principal Balance if at least two of the banks provide an offered rate. If fewer than two offered rates are quoted, the reference bank rate will be the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by the Depositor after consultation with the Indenture Trustee and after obtaining the consent of the Credit Enhancer, as of 11:00 A.M., New York City time, on the second LIBOR Business Day before the first day of the Interest Period, for loans in U.S. dollars to leading European banks for a period of one month in amounts approximately equal to the outstanding Note Principal Balance. If no such quotations can be obtained, the reference bank rate shall be LIBOR for the preceding Interest Period. "LIBOR Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of New York or in the City of London, England are required or authorized by law to be closed. This Note is one of the Notes from a duly authorized issue of Notes issued by CWABS Revolving Home Equity Loan Trust, Series 2004-P, designated as Revolving Home Equity Loan Asset Backed Notes, Series 2004-P. Payments on this Note will be made by the Indenture Trustee, or by the Paying Agent appointed pursuant to the Indenture, by check mailed to the person entitled thereto as its name and address appears on the Note Register or, upon written request by the person delivered to the Indenture Trustee at least five Business Days before the related Record Date, by wire transfer (but only if the person owns of record Notes having principal denominations aggregating at A-3 least $1,000,000), or by any other means of payment the person and the Indenture Trustee agree to. Notwithstanding the above, the final payment on this Note will be made after due notice by the Indenture Trustee or the Paying Agent, and only upon presentation and surrender of this Note at the office or agency appointed by the Indenture Trustee for that purpose. This Note does not purport to summarize the Indenture and reference is made to the Indenture for the rights and obligations under it. The Transferor, the Depositor, and the Noteholders intend that the Notes will be indebtedness for federal, State, and local income and franchise tax purposes and for purposes of any other tax imposed on or measured by income. The Depositor, the Indenture Trustee, and the Holder (or beneficial owner) of this Note by acceptance of this Note (or by acquiring its beneficial interest in this Note) agrees to treat the Notes, for purposes of federal, State, and local income or franchise taxes and any other tax imposed on or measured by income, as indebtedness secured by the Collateral and to report the transactions contemplated by the Indenture on all applicable tax returns in a manner consistent with that treatment. Each Holder of this Note agrees that it will cause any beneficial owner acquiring an interest in this Note through it to comply with the Indenture as to treatment as indebtedness for federal, State, and local income and franchise tax purposes and for purposes of any other tax imposed on or measured by income. Without the consent of the Holders of any Notes but with the consent of the Credit Enhancer, the Issuer and the Indenture Trustee may amend the Indenture in certain limited ways. Without the consent of any of the Noteholders but with satisfaction of the Rating Agency Condition, the Issuer and the Indenture Trustee may amend the Indenture to change the Indenture in any manner or to modify the rights of the Noteholders or the Credit Enhancer under the Indenture except amendments that require the consent of each affected Noteholder. No supplemental indenture may, without the consent of each affected Noteholder: (i) change the date of payment of any installment of principal or interest on any Note, or reduce its principal amount, its interest rate, or its redemption price, or change any place of payment where, or the coin or currency in which, any Note or its interest is payable; (ii) impair the right to institute suit for the enforcement of the provisions of the Indenture requiring the application of available funds to the payment of any amount due on the Notes after their due dates (or, in the case of redemption, after the redemption date); (iii) reduce the percentage of the Outstanding Amount the consent of the Holders of which is required for any supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of the Indenture or certain defaults under the Indenture and their consequences or to direct the liquidation of the Collateral; A-4 (iv) modify any provision of the Section of the Indenture covering indenture supplements only with the consent of affected Noteholders except to increase any percentage specified in the Indenture or provide that certain additional provisions of the Indenture or the Transaction Documents cannot be modified or waived without the consent of the Holder of each Note affected by it; modify any of the provisions of the Indenture in a manner affecting the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of the calculation) or affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained in the Indenture; or (v) permit the creation of any lien ranking before or on a parity with the lien of the Indenture with respect to any part of the Collateral (except any change in any mortgage's lien status in accordance with the Sale and Servicing Agreement) or, except as otherwise permitted or contemplated in the Indenture, terminate the lien of the Indenture on any property at any time subject to the Indenture or deprive the Holder of any Note of the security provided by the lien of the Indenture. As provided in the Indenture, the transfer of this Note is registrable in the Note Register of the Note Registrar on surrender of this Note for registration of transfer at the office or agency maintained by the Note Registrar for that purpose, accompanied by a written instrument of transfer in form satisfactory to the Master Servicer, the Indenture Trustee, and the Note Registrar duly executed by its Holder or the Holder's attorney duly authorized in writing, and thereupon new Notes of the same Class and of authorized denominations and evidencing the same aggregate Percentage Interest of the Notes will be issued to the designated transferees. The Notes are issuable only as registered Notes without coupons in denominations specified in the Indenture. As provided in the Indenture, Notes are exchangeable for new Notes of like tenor in authorized denominations and evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same. No service charge will be made for any registration of transfer or exchange, but the Indenture Trustee or the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Before due presentment for registration of transfer of this Note, the Issuer, the Credit Enhancer, the Indenture Trustee, and any agent of the Issuer, the Credit Enhancer, or the Indenture Trustee may treat the person in whose name this Note is registered as its owner for all purposes, whether or not this Note is overdue, and none of the Issuer, the Indenture Trustee, or any such agent shall be affected by notice to the contrary. The Issuer or the Credit Enhancer may effect an early retirement of both Classes of Notes by paying the retransfer price and accepting retransfer of the Trust Assets on any A-5 Payment Date after the Note Principal Balance of both Classes of Notes is less than or equal to 10% of the Original Note Principal Balance of both Classes of Notes. Each Holder or beneficial owner of a Note, by acceptance of a Note or, in the case of a beneficial owner of a Note, a beneficial interest in a Note, agrees by accepting the benefits of the Indenture that will not at any time institute against the Depositor, the Sponsor, the Master Servicer, or the Issuer, or join in any institution against any of them of, any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings under any United Stated federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, or the Transaction Documents. Anything in this Note to the contrary notwithstanding, none of Wilmington Trust Company in its individual capacity, JPMorgan Chase Bank, in its individual capacity, any owner of a beneficial interest in the Issuer, or any of their respective partners, beneficiaries, agents, officers, directors, employees, or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the obligations under the Indenture. The holder of this Note by its acceptance of this Note agrees that the holder shall have no claim against any of the foregoing for any deficiency, loss, or claim. Nothing in this Note shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any obligations under the Indenture or in this Note. The Issuer and each Noteholder, by its acceptance of its Note, agree that the indebtedness represented by the Notes is non-recourse to the Issuer, and is payable solely from the assets of the Issuer and their proceeds. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE. Unless the certificate of authentication on this Note has been executed by or on behalf of the Indenture Trustee, by manual or facsimile signature, this Note shall not be entitled to any benefit under the Indenture, or be valid for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed. Dated: Wilmington Trust Company not in its individual capacity but solely as Owner Trustee on behalf of the Trust By: ____________________________ A-6 Certificate of Authentication: This is one of the Notes referenced in the within-mentioned Indenture. JPMORGAN CHASE BANK By: ________________________ Authorized Officer A-7 ANNEX 1 DEFINITIONS "Accelerated Principal Payment Amount" for each Payment Date and each Class of Notes means the amount of Investor Interest Collections for the related Loan Group applied on that Payment Date as a payment of principal to decrease the Note Principal Balance of the related Class of Notes until the difference between the Note Principal Balance and the Loan Balance of the related Loan Group is an amount equal to the related Required Transferor Subordinated Amount for the Payment Date. "Act" has the meaning specified in Section 11.03(a). "Additional Balance" as to any Mortgage Loan means the aggregate amount of all additional borrowings by the mortgagor under the relevant Credit Line Agreement after the Cut-off Date for the Mortgage Loan. "Adjustment Date" for any Interest Period commencing with the second Interest Period, the second LIBOR Business Day preceding the first day of the Interest Period. "Administration Agreement" means the Administration Agreement specified in the Adoption Annex. "Administrator" means the person acting as such under the Administration Agreement. "Adoption Annex" means Annex 2 to this Indenture. "Aggregate Investor Interest" for each Payment Date and each Class of Notes means the Note Interest for that Class of Notes for the Payment Date and the related Unpaid Investor Interest Shortfall (other than any related Basis Risk Carryforward) for the Payment Date (after giving effect to the distribution of all amounts actually distributed on the related class of notes on that date). "Allocated Transferor Interest" for any Payment Date and each Loan Group means the excess of o the related Loan Group Balance as of the close of business on the day before the date of determination and any amounts retained in the Payment Account pursuant to Section 8.03(e) over o the Note Principal Balance of the related Class of Notes on the date of determination (after giving effect to the distribution of all amounts actually distributed on the Notes on the date of determination). "Alternative Principal Payment" for each Payment Date and each Class of Notes means the excess of the Principal Collections for the related Loan Group for the Payment Date Ann-1-1 over the aggregate of Additional Balances for the related Loan Group created during the related Collection Period, but not less than zero. "Asset Balance" on any day for any Mortgage Loan other than a liquidated mortgage loan means its Cut-off Date Asset Balance, plus (i) any Additional Balance for the Mortgage Loan, minus (ii) all collections credited as principal against the Asset Balance of the Mortgage Loan in accordance with the related Credit Line Agreement. A liquidated mortgage loan is any Mortgage Loan that as of the end of the related Collection Period the Master Servicer has determined in accordance with the servicing standards in the Sale and Servicing Agreement that all liquidation proceeds that it expects to recover on the Mortgage Loan or the related Mortgaged Property have been recovered. "Assignment of Mortgage" for any mortgage means an assignment, notice of transfer or equivalent instrument, in recordable form, sufficient under the laws of the jurisdiction in which the related Mortgaged Property is located to reflect the sale of the mortgage to the Trust, which assignment, notice of transfer, or equivalent instrument may be in the form of one or more blanket assignments covering the Mortgage Loans secured by Mortgaged Properties located in the same jurisdiction. "Authorized Officer" for any corporation or other entity establishing such designations, means the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary, or the Treasurer of the corporation, for any partnership means any of its general partners, and for any person means any person who is identified on a list of Authorized Officers delivered by the person to the Indenture Trustee on the Closing Date. These lists may be updated from time to time. "Available Investor Interest" for any Payment Date and each Loan Group means the sum of the following amounts, but in each case only to the extent they will be available to be applied to make payments pursuant to Section 8.03(a)(ii) on the Payment Date: (i) the amount of Investor Interest Collections for the Loan Group on deposit in the Collection Account or the Payment Account as of the close of business on the third Business Day preceding the Payment Date, (ii) the amount of Investor Interest Collections for the unrelated Loan Group on deposit in the Collection Account or the Payment Account as of the close of business on the third Business Day preceding the Payment Date to the extent those Investor Interest Collections are not applied to the payment of the Aggregate Investor Interest, Investor Loss Amount, Investor Loss Reduction Amount, or Accelerated Principal Payment Amount of the unrelated Class of Notes; (iii) the funds to be deposited into the Collection Account or the Payment Account as a single deposit on the Business Day preceding the Payment Date in accordance with Section 3.03 of the Sale and Servicing Agreement (but only to the extent of Interest Collections) with Ann-1-2 respect to the related Loan Group, as reported by the Master Servicer to the Credit Enhancer in the servicing certificate delivered on the preceding Determination Date, (iv) the amount on deposit in the Collection Account or the Payment Account for the Payment Date as of the close of business on the preceding Determination Date from optional advances for the related Loan Group by the Master Servicer made pursuant to Section 4.03 of the Sale and Servicing Agreement, and (v) the amount of the Subordinated Transferor Collections for the related Loan Group on deposit in the Collection Account or the Payment Account on the third Business Day preceding the Payment Date and the amount of the Subordinated Transferor Collections for the unrelated Loan Group on deposit in the Collection Account or the Payment Account on the third Business Day preceding the Payment Date not to be applied to payments with respect to its Class of Notes pursuant to Section 8.03(c). "Available Transferor Subordinated Amount" for any Payment Date and any Loan Group means an amount equal to the lesser of the related Allocated Transferor Interest and the related Required Transferor Subordinated Amount for the Payment Date. "Basis Risk Carryforward" for any Payment Date and Class of Notes means the sum of o Basis Risk Carryforward for that Class of Notes remaining unpaid from prior Payment Dates, o in any Interest Period in which the related Note Rate has been determined pursuant to the Weighted Average Net Loan Rate, the excess of (a) the amount of interest that would have accrued on that Class of Notes during the related Interest Period had interest been determined pursuant to the related Interest Formula Rate over (b) the interest actually accrued at the related Note Rate on that Class of Notes during the Interest Period, and o interest at the related Interest Formula Rate (as adjusted from time to time) on Basis Risk Carryforward for that Class of Notes remaining unpaid from prior Payment Dates for the period from previous Payment Date to the current the Payment Date. Basis Risk Carryforward will not be included in interest payments on the Notes for any Payment Date for which an addition to Basis Risk Carryforward is created and will be paid on future Payment Dates only to the extent funds are available therefor under Section 8.03(a)(xi). "Billing Cycle" for any Mortgage Loan and Collection Period means the billing period specified in the related Credit Line Agreement and with respect to which amounts billed are received during the Collection Period. "Business Day" means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, California, or Illinois are authorized or obligated by law, regulation, or executive order to remain closed. Ann-1-3 "Class" means the Class 1-A Notes or the Class 2-A Notes, as applicable. "Class 1-A Note" means any note executed by the Owner Trustee and authenticated by the Indenture Trustee substantially in the form of Exhibit A and related to Loan Group 1. "Class 1-A Note Rate" means the rate specified in the Adoption Annex. "Class 2-A Note" means any note executed by the Owner Trustee and authenticated by the Indenture Trustee substantially in the form of Exhibit A and related to Loan Group 2. "Class 2-A Note Rate" means the rate specified in the Adoption Annex. "Closing Date" means the Closing Date stated in the Adoption Annex. "Code" means the Internal Revenue Code of 1986 and Treasury regulations promulgated under the Code. "Collateral" means either the Group 1 Collateral or the Group 2 Collateral, as applicable, or both the Group 1 Collateral and Group 2 Collateral as the context may require. "Collection Account" means the account so designated established by the Master Servicer pursuant to the Sale and Servicing Agreement. "Collection Period" for any Payment Date and any Mortgage Loan means the calendar month preceding the month of the Payment Date (or, in the case of the first Collection Period, the period from the Cut-off Date through the date specified in the Adoption Annex). "Corporate Trust Office" means the principal office of the Indenture Trustee at which at any particular time its corporate trust business is administered specified in the Adoption Annex, or at any other address the Indenture Trustee designates by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee at the address designated by the successor Indenture Trustee by notice to the Noteholders and the Issuer. "Credit Enhancement Draw Amount" for each Class of Notes means (a) for each Payment Date, the excess of the related Guaranteed Payment for the Payment Date over the related Available Investor Interest for the Payment Date and (b) for each applicable date in accordance with the Policy, the related Preference Amount for the relevant date. "Credit Enhancer" means the Credit Enhancer identified in the Adoption Annex. "Credit Enhancer Default" means the failure by the Credit Enhancer to make a payment required under the Policy in accordance with its terms. "Credit Limit" means the maximum Asset Balance for each Mortgage Loan permitted under the terms of the related Credit Line Agreement. "Credit Line Agreement" means the related credit line account agreement for a Mortgage Loan executed by the related mortgagor and any amendment or modification of it. Ann-1-4 "Crossover Amount" for a Class of Notes and any Payment Date means the portion of the Investor Interest Collections for the unrelated Loan Group that are available pursuant to Sections 8.03(a)(v) and (viii). "Custodial Agreement" means the Custodial Agreement specified in the Adoption Annex. "Cut-off Date" means the Cut-off Date specified in the Adoption Annex. "Cut-off Date Asset Balance" for any Mortgage Loan acquired by the Trust on the Closing Date means its unpaid principal balance as of the Cut-off Date. "Cut-off Date Loan Balance" means the Loan Balance calculated as of the Cut-off Date. "Depositor" means CWABS, Inc., a Delaware corporation, or its successor in interest. "Depository" means a financial institution or other person maintaining ownership records and effecting book-entry transfers and pledges of the Notes deposited with it pursuant to an agreement with the Issuer. The Depository shall at all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the UCC of the State of New York. "Determination Date" for any Payment Date means the third Business Day before the Payment Date. "Eligible Account" means (a) an account that is maintained with a depository institution whose debt obligations throughout the time of any deposit in it have one of the two highest short-term debt ratings by Standard and Poor's and the highest short-term debt rating by Moody's, (b) an account with a depository institution having a minimum long-term unsecured debt rating of "AA-" by Standard & Poor's and "Baa3" by Moody's, which accounts are fully insured by either the Savings Association Insurance Fund or the Bank Insurance Fund of the Federal Deposit Insurance Corporation, (c) a segregated trust account maintained with the Indenture Trustee or an affiliate of the Indenture Trustee in its fiduciary capacity, or (d) an account otherwise acceptable to each Rating Agency and the Credit Enhancer, as evidenced at closing by delivery of a rating letter by each Rating Agency and thereafter by delivery of a letter from (i) each Rating Agency to the Indenture Trustee, within 30 days of receipt of notice of the deposit, to the effect that the deposit will not cause the Rating Agency to reduce or withdraw its then-current rating of the Notes (without regard to the Policy) and Ann-1-5 (ii) from the Credit Enhancer to the Indenture Trustee, within 30 days of receipt of notice of the deposit, to the effect that the account is acceptable to it. "Eligible Investments" means (a) obligations of, or guaranteed as to principal and interest by, the United States or any U.S. agency or instrumentality that is backed by the full faith and credit of the United States; (b) general obligations of or obligations guaranteed by any State receiving the highest long-term debt rating of each Rating Agency, or any lower rating that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); (c) commercial paper issued by Countrywide Home Loans, Inc. or any of its affiliates if it is rated no lower than A-1 by Standard & Poor's and P-2 by Moody's, and the long-term debt of Countrywide Home Loans, Inc. is rated at least A3 by Moody's, or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); (d) commercial or finance company paper that is then receiving the highest commercial or finance company paper rating of each Rating Agency, or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); (e) 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 any State and subject to supervision and examination by federal or State banking authorities, if the commercial paper or long term unsecured debt obligations of the 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 the holding company, but only if Moody's is not a Rating Agency) are then rated in one of the two highest long-term and the highest short-term ratings of each Rating Agency for the securities, or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); (f) demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that the deposits are fully insured by the FDIC; (g) guaranteed reinvestment agreements issued by any bank, insurance company, or other corporation that, at the time of the issuance of the agreements, will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); Ann-1-6 (h) repurchase obligations with respect to any security described in clauses (a) and (b) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (e) above; (i) securities (other than stripped bonds, stripped coupons, or instruments sold at a purchase price in excess of 115% of its face amount) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any State that, at the time of the investment, have one of the two highest ratings of each Rating Agency (except if the Rating Agency is Moody's, the rating must be the highest commercial paper rating of Moody's for the securities), or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy) as evidenced by a signed writing delivered by each Rating Agency; (j) interests in any money market fund that, at the date of acquisition of the interests in the fund and throughout the time the interests are held in the fund, have the highest applicable rating by each Rating Agency, or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); (k) short term investment funds sponsored by any trust company or national banking association incorporated under the laws of the United States or any State that, on the date of acquisition, have been rated by each Rating Agency in their respective highest applicable rating category, or any lower ratings that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy); and (l) any other investments having a specified stated maturity and bearing interest or sold at a discount acceptable to each Rating Agency that will not result in a downgrade or withdrawal of the rating then assigned to the Notes by any Rating Agency (without regard to the Policy), as evidenced by a signed writing delivered by each Rating Agency; No Eligible Investment may evidence either the right to receive (a) only interest on the obligations underlying these instruments or (b) both principal and interest payments from obligations underlying these instruments where the interest and principal payments on the instruments provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations. No Eligible Investment may be purchased at a price greater than par if that instrument may be prepaid or called at a price less than its purchase price before stated maturity. "ERISA" means the Employee Retirement Income Security Act of 1974. "Event of Default" has the meaning specified in Section 5.01. "Exchange Act" means the Securities Exchange Act of 1934. Ann-1-7 "Grant" means mortgage, pledge, bargain, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien on and a Security Interest in and a right of set-off against, deposit, set over, and confirm pursuant to the Indenture. A Grant of the Collateral or of any other agreement or instrument includes all rights (but none of the obligations) of the granting party under the agreement or instrument, including the immediate and continuing right after an Event of Default to claim for, collect, receive, and give receipt for principal and interest payments on the Collateral and all other moneys payable on the Collateral, to require the repurchase of Mortgage Loans, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive regarding the Collateral. "Group 1 Collateral" has the meaning given to it in the Granting Clause. "Group 2 Collateral" has the meaning given to it in the Granting Clause. "Guaranteed Payment" for each Class of Notes and any Payment Date means the sum of (i) the related Guaranteed Principal Payment Amount plus (ii) the related Aggregate Investor Interest for the Payment Date. "Guaranteed Principal Payment Amount" for each Class of Notes means: (a) on their Scheduled Maturity Date, the excess of o the related outstanding Note Principal Balance (after giving effect to Interest Collections from the related Loan Group allocable and distributable as principal on that Class of Notes on the Scheduled Maturity Date and Interest Collections from the other Loan Group allocable and distributable as principal on the other Class of Notes on the Scheduled Maturity Date to the extent not distributed as principal to the Holders of the other Class of Notes) over o the sum of the amounts on deposit in the Collection Account and the Payment Account for the related Loan Group available to be distributed to the Holders of the related Class of Notes pursuant to Section 8.03(b), together with Interest Collections on deposit in the Collection Account and the Payment Account for the other Loan Group that are allocable to principal on the other Class of Notes to the extent not distributed as Principal Collections; (b) on any Payment Date on or before the Available Transferor Subordinated Amount for a Class of Notes first increases to zero, if the Available Transferor Subordinated Amount for that Payment Date for that Class of Notes is less than the highest Available Transferor Subordinated Amount for any preceding Payment Date for that Class of Notes, the excess of o the highest Available Transferor Subordinated Amount for any preceding Payment Date for that Class of Notes over Ann-1-8 o the Available Transferor Subordinated Amount for the current Payment Date for that Class of Notes; (c) on any Payment Date after the date on which the Available Transferor Subordinated Amount for a Class of Notes has first increased to zero, if the Available Transferor Subordinated Amount for that Class of Notes has been reduced to zero or below, the excess of o the related Note Principal Balance (after giving effect to the distributions of Interest Collections and Principal Collections that are allocable to principal on that Class of Notes on the Payment Date and distributions of Interest Collections that are allocable to principal on the other Class of Notes to the extent not distributed as principal to the Holders of the other Class of Notes) over o the related Loan Group Balance (at the end of the related Collection Period); and (d) on any other Payment Date, zero. "Holder" or "Noteholder" means the person in whose name a Note is registered in the Note Register. "Incipient Default" means any occurrence that is, or with notice or lapse of time or both would become, an Event of Default. "Indenture" means this Indenture. "Indenture Trustee" means the Indenture Trustee identified in the Adoption Annex, as Indenture Trustee under this Indenture, or any successor Indenture Trustee under this Indenture. "Independent" means that a person (a) is in fact independent of the Issuer, any other obligor on the Notes, the Transferor, and any affiliate of any of them, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any other obligor on the Notes, the Transferor, or any affiliate of any of them, and (c) is not connected with the Issuer, any other obligor on the Notes, the Transferor, or any affiliate of any of them as an officer, employee, promoter, underwriter, trustee, partner, director, or person performing similar functions. "Independent Certificate" means a certificate or opinion to be delivered to the Indenture Trustee made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care and the Credit Enhancer, and the opinion or certificate states that the Issuer has read the definition of "Independent" in this Indenture and that the signer is Independent. "Insolvency Event" regarding a specified person means Ann-1-9 (a) the person generally fails to pay its debts as they become due or admits in writing its inability to pay its debts generally as they become due; (b) the person has a decree or order for relief by a court or agency or supervisory authority having jurisdiction in the premises entered against it or any substantial part of its property in an involuntary case under any applicable bankruptcy, insolvency, or other similar law and the decree or order remains unstayed and in effect for a period of 60 days; (c) the person has a conservator, receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official appointed for it or for all or any substantial part of its property in any bankruptcy, insolvency, readjustment of debt, marshalling of assets and liabilities, or other similar proceedings, and the decree or order remains unstayed and in effect for a period of 60 days; (d) the person's business is ordered to be wound-up or liquidated or the person's business is subject to readjustment of debt, marshalling of assets and liabilities, or other similar proceedings, and the decree or order or the proceedings remain unstayed and in effect for a period of 60 days; or (e) the person commences a voluntary case under any applicable bankruptcy, insolvency, or other similar law, or consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment of or taking possession by a conservator, receiver, liquidator, assignee for the benefit of creditors, a custodian, trustee, sequestrator, or similar official for the person or for all or any substantial part of its property, or the person makes any general assignment for the benefit of creditors. "Insurance Agreement" means the insurance agreement identified in the Adoption Annex. "Interest Collections" for each Payment Date and each Class of Notes means the sum of all payments effected by mortgagors of Mortgage Loans in the related Loan Group and any other amounts constituting interest collected by the Master Servicer under the Mortgage Loans in the related Loan Group during the related Collection Period plus any optional advance for the related Loan Group made by the Master Servicer pursuant to Section 4.03 of the Sale and Servicing Agreement for which the Master Servicer has not been reimbursed minus the Servicing Fee for the related Loan Group for the related Collection Period. These amounts include any net liquidation proceeds and net proceeds from any insurer pursuant to any insurance policy covering a Mortgage Loan in the related Loan Group allocable to interest on the applicable Mortgage Loan. These amounts exclude any fees (including annual fees) or late charges or similar administrative fees paid by the mortgagors. The related Credit Line Agreement shall determine the portion of each payment on the Mortgage Loan that constitutes principal or interest. Net liquidation proceeds are liquidation proceeds net of insurance policy recoveries and out-of-pocket expenses (exclusive of overhead) that are incurred by the Master Servicer in connection with the liquidation of any Mortgage Loan. Ann-1-10 "Interest Formula Rate" for a Class of Notes means the lesser of the rates in clauses (i) and (iii) of the definition of Class 1-A Note Rate or Class 2-A Note Rate, as applicable. "Interest Period" for the first Payment Date means the period beginning on the Closing Date and ending on the day preceding the first Payment Date and for any other Payment Date means the period beginning on the preceding Payment Date and ending on the day before the Payment Date. "Investor Fixed Allocation Percentage" for any Payment Date and a Class of Notes is calculated as provided in the Adoption Annex. "Investor Floating Allocation Percentage" for any Payment Date and each Class of Notes means the lesser of 100% and a fraction whose numerator is the related Note Principal Balance and whose denominator is the related Loan Group Balance, calculated as of the beginning of the related Collection Period. "Investor Interest Collections" for any Class of Notes and Payment Date means the product of (i) the Interest Collections received on the related Loan Group during the related Collection Period and (ii) the related Investor Floating Allocation Percentage for the Payment Date. "Investor Loss Amount" for any Class of Notes and Payment Date means the product of (i) the Investor Floating Allocation Percentage for the Class of Notes and Payment Date and (ii) the aggregate of the liquidation loss amounts on the Mortgage Loans in the related Loan Group for the Payment Date. Liquidation loss amounts for any Payment Date and any Mortgage Loan that becomes a liquidated Mortgage Loan during the related Collection Period are the unrecovered Asset Balance of the Mortgage Loan at the end of the Collection Period after reducing the Asset Balance for the net liquidation proceeds. Net liquidation proceeds are liquidation proceeds net of insurance policy recoveries and out-of-pocket expenses (exclusive of overhead) that are incurred by the Master Servicer in connection with the liquidation of any Mortgage Loan. "Investor Loss Reduction Amount" for any Class of Notes and Payment Date means the portion of the Investor Loss Amount for the Class of Notes for all prior Payment Dates that has not been paid to the Holders of the Class of Notes on the Payment Date pursuant to Section 8.03(a)(iii), (iv), or (v), pursuant to Section 8.03(c), or by a Credit Enhancement Draw Amount, or absorbed by allocation to the Allocated Transferor Interest pursuant to Section 8.03(c). "Investor Principal Collections" for any Class of Notes and Payment Date means the related Investor Fixed Allocation Percentage of Principal Collections on the Mortgage Loans in the related Loan Group for the Payment Date. "Issuer" means CWABS Revolving Home Equity Loan Trust, Series 2004-P until a successor replaces it and, after that, means its successor. Ann-1-11 "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "LIBOR" for any day means the rate for United States dollar deposits for one month that appears on the Moneyline Telerate Screen Page 3750 as of 11:00 A.M., London time that day. If LIBOR does not appear on that page (or a page replacing that page on that service or, if that service is no longer offered, any other service for displaying LIBOR or comparable rates reasonably selected by the Depositor after consultation with the Indenture Trustee and obtaining the consent of the Credit Enhancer), the rate will be the Reference Bank Rate. "LIBOR Business Day" means any day other than of a Saturday, a Sunday, or a day on which banking institutions in the State of New York or in the City of London, England are required or authorized by law to be closed. "Loan Group" means Loan Group 1 or Loan Group 2, as applicable. "Loan Group 1" means all Mortgage Loans identified as Loan Group 1 Mortgage Loans on the Mortgage Loan Schedule. "Loan Group 1 Balance" for any date is the aggregate of the Asset Balances of all Mortgage Loans in Loan Group 1 as of the date. "Loan Group 2" means all Mortgage Loans identified as Loan Group 2 Mortgage Loans on the Mortgage Loan Schedule. "Loan Group 2 Balance" for any date is the aggregate of the Asset Balances of all Mortgage Loans in Loan Group 2 as of the date. "Loan Group Balance" means the Loan Group 1 Balance or the Loan Group 2 Balance, as applicable. "Loan Rate" for any Mortgage Loan and on any day means the per annum rate of interest applicable under the related Credit Line Agreement to the calculation of interest for the day on the Asset Balance of the Mortgage Loan. "Managed Amortization Period" means the period from the Closing Date to the Rapid Amortization Commencement Date. "Master Servicer" means Countrywide Home Loans, Inc., a New York corporation and any successor. "Maximum Principal Payment" for any Class of Notes and Payment Date means the related Investor Fixed Allocation Percentage of the Principal Collections from the Mortgage Loans in the related Loan Group for the Payment Date. "MERS" means Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor to it. Ann-1-12 "MERS(R) System" means the system of recording transfers of mortgages electronically maintained by MERS. "MIN" means the Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS(R) System. "MOM Loan" means any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of the Mortgage Loan and its successors and assigns. "Moneyline Telerate Screen Page 3750" means the display designated as page 3750 on the Moneyline Telerate Information Services, Inc. (or any page replacing that page on that service for the purpose of displaying London inter-bank offered rates of major banks). "Moody's" means Moody's Investors Service, Inc. or its successor in interest. A "mortgage" is any conveyance to secure the performance of an obligation including a deed of trust to secure debt and other comparable security instruments. "Mortgage File" for each of the Mortgage Loans means the following documents: (i) the original Mortgage Note endorsed in blank or, if the original Mortgage Note has been lost or destroyed and not replaced, an original lost note affidavit from the Sponsor stating that the original Mortgage Note was lost, misplaced, or destroyed, together with a copy of the Mortgage Note; (ii) unless the Mortgage Loan is registered on the MERS(R) System, an original Assignment of Mortgage for the Mortgage Loan in blank in recordable form; (iii) the original recorded mortgage with evidence of recording on it (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) or, if the original recorded mortgage with evidence of recording on it cannot be delivered by the Closing Date because of a delay caused by the public recording office where the original mortgage has been delivered for recordation or because the original mortgage has been lost, a true copy of the mortgage, together with (i) in the case of a delay caused by the public recording office, an Officer's Certificate of the Sponsor or the Depositor, which may be a blanket certificate covering more than one mortgage, stating that the original mortgage has been dispatched to the appropriate public recording official for recordation or (ii) in the case of an original mortgage that has been lost, a certificate by the appropriate county recording office where the mortgage is recorded; (iv) if applicable, the original of each intervening assignment needed for a complete chain of title for the mortgage from its original mortgagee or beneficiary to the Trust (or, if the Mortgage Loan is registered on the MERS(R) System, to MERS and noting the presence of a MIN) with evidence of recording on them, or, if any original intervening assignment has not been returned from the applicable recording office or Ann-1-13 has been lost, a true copy of it, together with (i) in the case of a delay caused by the public recording office, an Officer's Certificate of the Sponsor or the Depositor, which may be a blanket certificate covering more than one intervening assignment, stating that the original intervening assignment has been dispatched to the appropriate public recording official for recordation or (ii) in the case of an original intervening assignment that has been lost, a certificate by the appropriate county recording office where the mortgage is recorded; (v) a title policy for each Mortgage Loan with a Credit Limit in excess of $100,000; (vi) the original of any guaranty executed in connection with the Mortgage Note; (vii) the original of each assumption, modification, consolidation, or substitution agreement relating to the Mortgage Loan; and (viii) any security agreement, chattel mortgage, or equivalent instrument executed in connection with the Mortgage Loan; An optical image or other representation of a document specified in clauses (iii) through (viii) above for a Mortgage Loan may be held by the Indenture Trustee or assignee in lieu of the physical documents specified if (a) as evidenced by an Opinion of Counsel delivered to and in form and substance satisfactory to the Indenture Trustee and the Credit Enhancer, (x) an optical image or other representation of the related documents specified in clauses (iii) through (viii) above are enforceable in the relevant jurisdictions to the same extent as the original of the document and (y) the optical image or other representation does not impair the ability of an owner of the Mortgage Loan to transfer its interest in the Mortgage Loan, and (b) written confirmation that the retention of the documents in that format will not result in a reduction in the then current rating of the Notes, without regard to the Policy. A copy of any Opinion of Counsel shall in each case be addressed and delivered to the Credit Enhancer. "Mortgage Loan" means each of the mortgage loans, including Additional Balances for it, that are transferred to the Trust pursuant to Section 2.01(a) and (b) of the Sale and Servicing Agreement, together with all related Mortgage Files, exclusive of Mortgage Loans that are retransferred to the Depositor, the Master Servicer, or the Sponsor or purchased by the Master Servicer pursuant to Section 2.02, 2.04, 2.06, or 3.06 of the Sale and Servicing Agreement, held as a part of the Trust. The Mortgage Loans originally so held are identified in the Mortgage Loan Schedule delivered on the Closing Date. The Mortgage Loans shall also include any Eligible Substitute Mortgage Loan (as defined in the Sale and Servicing Agreement) substituted Ann-1-14 by the Sponsor for a defective Mortgage Loan pursuant to Sections 2.02 and 2.04 of the Sale and Servicing Agreement. "Mortgage Loan Schedule" on any date means the schedule of Mortgage Loans in a Loan Group included in the Trust on the date identifying each Mortgage Loan and specifying the items identified in the Adoption Annex. The initial schedule of Mortgage Loans as of the Cut-off Date is Exhibit A of the Sale and Servicing Agreement. The Mortgage Loan Schedule will automatically include any Additional Balances. The Indenture Trustee is not responsible for preparing the Mortgage Loan Schedule. "Mortgage Note" means the Credit Line Agreement for a Mortgage Loan pursuant to which the related mortgagor agrees to pay the indebtedness evidenced by it and secured by the related mortgage. "Mortgaged Property" means the underlying property securing a Mortgage Loan. "Note" means any Class 1-A Note or Class 2-A Note executed by the Issuer and authenticated by the Indenture Trustee substantially in the form of Exhibit A. "Note Interest" for any Class of Notes and Payment Date means interest for the related Interest Period at the applicable Note Rate on the related Note Principal Balance as of the first day of the Interest Period (after giving effect to the distributions made on the first day of the Interest Period). "Note Owner" means the beneficial owner of a book-entry Note, as reflected on the books of the Indenture Trustee as agent for the Depository. "Note Principal Balance" for any Payment Date and Class of Notes means (a) the related Original Note Principal Balance less (b) the aggregate of amounts actually distributed as principal on the Class of Notes before the Payment Date. "Note Rate" means, for a Class of Notes, the related rate specified in the Adoption Annex. "Note Register" and "Note Registrar" have the meanings specified in Section 2.03. "Officer's Certificate" means a certificate signed by any Authorized Officer of the Issuer or other specified party under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 and delivered to the Indenture Trustee. "Opinion of Counsel" means written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be an employee of or counsel to the Issuer, the Depositor, the Sponsor, the Master Servicer, or the Transferor (except that any opinion pursuant to Section 8.06 or relating to taxation must be an opinion of independent outside counsel) and who is reasonably acceptable to the parties to whom it is to be delivered. The opinions shall be addressed to the Indenture Trustee as Indenture Trustee, any other designated party, shall comply with any applicable requirements of Section 11.01, and shall be in form and substance Ann-1-15 reasonably satisfactory to the parties to whom it is to be delivered. Copies of all Opinions of Counsel shall be delivered to the Credit Enhancer. "Original Note Principal Balance" means the Original Note Principal Balance of both Classes of Notes, or the Original Note Principal Balance of the Class 1-A Notes or the Class 2-A Notes, as applicable, each as reflected in the Adoption Annex. "Outstanding" means, as of the date of determination, all Notes that have been authenticated and delivered under this Indenture except: (i) Notes that have been cancelled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof the payment for which money in the necessary amount has been deposited with the Indenture Trustee or any Paying Agent in trust for the Noteholders, and if the Notes are to be redeemed, notice of the redemption has been duly given pursuant to this Indenture or notice has been provided for in a manner satisfactory to the Indenture Trustee; and (iii) Notes in exchange for or instead of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that those Notes are held by a Protected Purchaser. In determining whether the Holders of the requisite Outstanding Amount of the Notes have Acted under this Indenture or under any Transaction Document, Notes owned by the Issuer, the Depositor, or the Transferor, or any of their affiliates shall be disregarded and treated as not being Outstanding, except that, in determining whether the Indenture Trustee shall, if the Notes have first been transferred to a non-affiliate, be protected in relying on any Act, only Notes that a Responsible Officer knows to be so owned shall be disregarded. Notes so owned that have been pledged in good faith, or for whose owner the Issuer, the Depositor, or the Transferor, or any of their affiliates is acting as trustee or nominee, may be regarded as Outstanding if the pledgee or other person establishes to the satisfaction of the Indenture Trustee the pledgee's or other person's right to Act for the Notes and that the pledgee or other person is not the Issuer, the Depositor, or the Transferor, or any of their affiliates. To effectuate the Credit Enhancer's right of subrogation under Section 4.03, all Notes that have been paid with funds provided under the Policy shall be Outstanding until the Credit Enhancer has been paid all amounts due to it pursuant to the Insurance Agreement with respect to those Notes. "Outstanding Amount" means the aggregate principal amount of all Notes, or of a Class of Notes, as applicable, that are Outstanding at the date of determination. "Overcollateralization Step-Down Amount" for any Class of Notes and Payment Date means the lesser of (i) the Scheduled Principal Collections Payment Amount for the Class of Notes without the reduction for the current related Overcollateralization Step-Down Amount Ann-1-16 and (ii) the excess of the related Available Transferor Subordinated Amount over the related Required Transferor Subordinated Amount for the Payment Date. "Paying Agent" means the Indenture Trustee or any other person that meets the eligibility standards for the Indenture Trustee specified in Section 6.08 and is authorized by the Issuer to make payments to and distributions from the Payment Account, including payments of principal or interest on the Notes on behalf of the Issuer. "Payment Account" means the Eligible Account established and maintained by the Indenture Trustee on behalf of and for the benefit of the Noteholders, the Transferor, and the Credit Enhancer pursuant to Section 8.01. "Payment Date" means the day of each month specified in the Adoption Annex, or if that is not a Business Day, then the next Business Day. "Policy" means the note guaranty insurance policy identified in the Adoption Annex and all its endorsements, dated as of the Closing Date, issued by the Credit Enhancer to the Indenture Trustee for the benefit of the Noteholders. "Policy Payments Account" means a separate special purpose trust account that is an Eligible Account, for the benefit of Holders of the Notes and the Credit Enhancer over which the Indenture Trustee has exclusive control and sole right of withdrawal. "Preference Amount" has the meaning given to it in the Policy. "Preference Claim" means any proceeding or the institution of any action seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership, or similar law of any distribution made with respect to the Notes (other than Basis Risk Carryforward). "Principal Collections" for the Mortgage Loans in any Loan Group and any Payment Date means the sum of all payments effected by the mortgagors and any other amounts constituting principal collected by the Master Servicer under the Mortgage Loans in that Loan Group during the related Collection Period. These amounts include any net liquidation proceeds and net proceeds from any insurer pursuant to any insurance policy covering a Mortgage Loan allocable to principal of the applicable Mortgage Loan and Transfer Deposit Amounts (as defined in the Sale and Servicing Agreement), but exclude foreclosure profits. The terms of the related Credit Line Agreement shall determine the portion of each payment on a Mortgage Loan that constitutes principal or interest. Net liquidation proceeds are liquidation proceeds net of out-of-pocket expenses (exclusive of overhead) that are incurred by the Master Servicer in connection with the liquidation of any Mortgage Loan. Foreclosure profits on a liquidated Mortgage Loan are the excess of its net liquidation proceeds over the Asset Balance of the Mortgage Loan before the final recovery on it (plus accrued and unpaid interest thereon at the applicable Loan Rate from the date interest was last paid to the end of the Collection Period during which the Mortgage Loan became a liquidated Mortgage Loan). Ann-1-17 "Proceeding" means any suit in equity, action at law, or other judicial or administrative proceeding. "Purchase Agreement" means the Purchase Agreement of even date with this Indenture between Countrywide Home Loans, Inc., as seller, and the Depositor, as purchaser, with respect to the Mortgage Loans. "Rapid Amortization Commencement Date" means the earlier of (i) the Payment Date in the month specified in the Adoption Annex and (ii) the Payment Date after the Collection Period in which a Rapid Amortization Event occurs. "Rapid Amortization Event" has the meaning given to it in Section 5.16. "Rapid Amortization Period" means the period beginning on the Rapid Amortization Commencement Date until the termination of the Indenture. "Rating Agency" means any statistical credit rating agency, or its successor, that rated the Notes at the request of the Depositor at the time of the initial issuance of the Notes. If a particular Rating Agency is no longer in existence, "Rating Agency" will means a statistical credit rating agency, or other comparable person, designated by the Depositor and the Credit Enhancer. The Indenture Trustee will be notified of any such designation. References to the highest short-term unsecured rating category of a Rating Agency mean A-1+ or better in the case of Standard & Poor's and P-1 or better in the case of Moody's and in the case of any other Rating Agency mean the ratings it deems equivalent to these. References to the highest long-term rating category of a Rating Agency mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of Moody's and in the case of any other Rating Agency, the rating it deems equivalent to these. "Rating Agency Condition" for any action means that each Rating Agency has been given 10 days (or any shorter period acceptable to each Rating Agency) notice of the action and that each of the Rating Agencies has notified the Issuer in writing that the action, with and without taking the Policy into account, will not result in a reduction or withdrawal of its then current rating of the Notes and the Credit Enhancer has consented to the action. "Record Date" for a Payment Date or redemption date means the close of business on the day before the Payment Date or redemption date or, if definitive Notes have been issued, the last day of the preceding month. "Reference Bank Rate" for an Interest Period means the arithmetic mean (rounded upwards to the nearest one sixteenth of a percent) of the offered rates for United States dollar deposits offered by three major banks engaged in transactions in the London interbank market, selected by the Depositor after consultation with the Indenture Trustee and obtaining the consent of the Credit Enhancer, as of 11:00 A.M., London time, on the Adjustment Date immediately preceding the Interest Period, to prime banks in the London interbank market for a period of one month in amounts approximately equal to the outstanding Note Principal Balance Ann-1-18 if at least two of the banks provide an offered rate. If fewer than two offered rates are quoted, the Reference Bank Rate will be the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by the Depositor after consultation with the Indenture Trustee and obtaining the consent of the Credit Enhancer, as of 11:00 A.M., New York City time, on the Adjustment Date immediately preceding the Interest Period, for loans in U.S. dollars to leading European banks for a period of one month in amounts approximately equal to the outstanding Note Principal Balance. If no such quotations can be obtained, the Reference Bank Rate shall be LIBOR for the preceding Interest Period. "Registered Holder" means the person in whose name a Note is registered on the Note Register on the applicable Record Date. "Required Amount" for any Class of Notes and Payment Date means the amount by which the sum of the amounts distributable pursuant to Sections 8.03(a)(i) through 8.03(a)(iv) on the Payment Date exceed Investor Interest Collections for the Class of Notes for the Payment Date. "Responsible Officer" any officer of the Indenture Trustee with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer to whom a matter is referred because of the officer's knowledge of and familiarity with the particular subject. "Sale and Servicing Agreement" means the Sale and Servicing Agreement specified in the Adoption Annex. "Scheduled Maturity Date" means the date specified in the Adoption Agreement. "Scheduled Principal Collections Payment Amount" for any Payment Date during the Managed Amortization Period and a Class of Notes means an amount equal to the lesser of (i) the related Maximum Principal Payment and (ii) the related Alternative Principal Payment. For any Payment Date in the Rapid Amortization Period the Scheduled Principal Collections Payment Amount means the related Maximum Principal Payment. "Securities Act" means the Securities Act of 1933. "Servicing Certificate" means the certificate delivered each month pursuant to the Sale and Servicing Agreement to the Indenture Trustee completed and executed by any officer of the Master Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee (with a copy to the Credit Enhancer) by the Master Servicer on the Closing Date, as it may be amended from time to time. "Servicing Fee" for a Loan Group and any Payment Date means the product of (i) the Servicing Fee Rate specified in the Adoption Annex divided by 12 and (ii) the Loan Group Balance of that Loan Group as of the first day of the Collection Period preceding the Payment Date (or as of the close of business on the Cut-off Date for the first Payment Date). Ann-1-19 "Sponsor" means Countrywide Home Loans, Inc., a New York corporation and any successor. "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or its successor in interest. "State" means any one of the 50 states of the United States or the District of Columbia. "Subordinated Transferor Collections" for a Loan Group and Payment Date means interest collections and principal collections from the Mortgage Loans in that Loan Group allocable to the portion of the related Allocated Transferor Interest not in excess of the Available Transferor Subordinated Amount for that Loan Group and Payment Date. "Transaction Documents" means this Indenture, the Notes, the Sale and Servicing Agreement, the Purchase Agreement, the Custodial Agreement, the Administration Agreement, the Trust Agreement, the Policy, and the Insurance Agreement. "Transferor" means the Holders of the Transferor Certificates. "Transferor Certificates" means the certificates executed and authenticated by the Owner Trustee under the Trust Agreement. "Transferor Interest" for any Payment Date means the aggregate undivided beneficial interest represented by the Transferor Certificate in the Trust (other than the right to distributions resulting from Section 8.03(a)(xiii)), calculated as the sum of the Allocated Transferor Interest for each Loan Group. "Transferor Principal Collections" for any Payment Date means Principal Collections received on a Loan Group during the related Collection Period minus the amount of those Principal Collections required to be distributed to Holders of the related Class of Notes pursuant to Section 8.03(b). "Trust" means the trust specified in the Adoption Annex. "Trust Agreement" means the Trust Agreement between Countrywide Home Loans, Inc., the Depositor and the Owner Trustee. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force on the date of this Indenture, unless otherwise specifically provided. "UCC" means the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, unless the context otherwise requires. "Unpaid Investor Interest Shortfall" for any Payment Date and Class of Notes means the aggregate amount of Note Interest on that Class of Notes that was accrued for a prior Payment Date and has not been distributed to Holders of the Notes. "Weighted Average Net Loan Rate" for a Loan Group and any Collection Period means the average of the daily Net Loan Rate (specified in the Adoption Annex) for each Ann-1-20 Mortgage Loan in that Loan Group (assuming that each Mortgage Loan is fully indexed) for each day during the related Billing Cycle, weighted on the basis of the daily average of the Asset Balances outstanding for each day in the Billing Cycle for each Mortgage Loan as determined by the Master Servicer in accordance with the Master Servicer's normal servicing procedures. Ann-1-21 ANNEX 2 ADOPTION ANNEX The Indenture Trustee shall issue under Section 2.02(b): o Class 1-A Notes in an aggregate principal amount of $570,164,000, and o Class 2-A Notes in an aggregate principal amount of $929,836,000. The "Administration Agreement" is the Administration Agreement of even date with this Indenture among the Issuer, the Master Servicer, and the Indenture Trustee. The "Class 1-A Note Rate" is a per annum rate equal to 2.320% for the first Interest Period, and for any subsequent Interest Period, a per annum rate equal to the least of: (i) the sum of (a) LIBOR as of the second LIBOR Business Day before the first day of the Interest Period and (b) 0.32%, (ii) the Maximum Rate for the Class 1-A Notes for the Interest Period, and (iii) 16.00%. The "Class 2-A Note Rate" is a per annum rate equal to 2.320% for the first Interest Period, and for any subsequent Interest Period, a per annum rate equal to the least of: (i) the sum of (a) LIBOR as of the second LIBOR Business Day before the day of the Interest Period and (b) 0.32%, (ii) the Maximum Rate for the Class 2-A Notes for the Interest Period, and (iii) 16.00%. The "Closing Date" is October 29, 2004. The last day of the first "Collection Period" is the last day of November 2004. The "Corporate Trust Office" of the Indenture Trustee at the date of execution of this Indenture is located at 4 New York Plaza, 6th Floor, New York, New York 10004, Attention: Institutional Trust Services, Countrywide HEL CWABS 2004-P. The "Credit Enhancer" is MBIA Insurance Corporation and any successor or replacement for the Credit Enhancer in accordance with Section 8.06. "Custodial Agreement" is the Custodial Agreement of even date with this Indenture between the Indenture Trustee, the Issuer, the Depositor, the Master Servicer, and Treasury Bank, National Association, as custodian. The "Cut-off Date" is October 22, 2004. The "Indenture Trustee" is JPMorgan Chase Bank, a New York corporation. The "Insurance Agreement" is the insurance agreement of even date with this Indenture among the Sponsor, the Master Servicer, the Depositor, the Issuer, the Indenture Trustee, and the Credit Enhancer. Ann-2-1 The "Investor Fixed Allocation Percentage" for any Class of Notes and Payment Date is (i) on any date on which the related Allocated Transferor Interest is less than the related Required Transferor Subordinated Amount, 100%; and (ii) on any date on which the related Allocated Transferor Interest equals or exceeds the related Required Transferor Subordinated Amount, 98.75%. The "Maximum Rate" for any Class of Notes and Interest Period is the Weighted Average Net Loan Rate for the Mortgage Loans in the related Loan Group for the Collection Period during which the Interest Period begins (adjusted to an effective rate reflecting accrued interest calculated on the basis of the actual number of days in the Collection Period commencing in the month in which the Interest Period commences and a year assumed to consist of 360 days). The "Minimum Transferor Interest" for a Loan Group is an amount equal to the lesser of (a) 2.50% of the related Loan Group Balance at the beginning of the immediately preceding Collection Period and (b) 1.25% of the Loan Group Balance as of the Cut-off Date of the related Loan Group. The "Mortgage Loan Schedule" shall specify for each Mortgage Loan its (i) account number, (ii) Credit Limit, (iii) Gross Margin, (iv) lifetime rate cap, (v) Cut-off Date Asset Balance, (vi) current Loan Rate, (vii) combined loan-to-value ratio, (viii) code specifying the property type, (ix) code specifying documentation type, (x) code specifying lien position, (xi) code specifying whether the Mortgage Loan is a MOM Loan, and (xii) indication of the Loan Group. The "Net Loan Rate" for any Mortgage Loan on any day is the Loan Rate less (i) the Servicing Fee Rate, (ii) the Premium Percentage defined in the Insurance Agreement, and (iii) commencing with the Payment Date in November 2005, 0.50% per annum. The "Note Rate" refers to either the Class 1-A Note Rate or Class 2-A Note Rate, as applicable. The "Original Note Principal Balance" of the Class 1-A Notes is $570,164,000 and of the Class 2-A Notes is $929,836,000. The "Owner Trustee" is Wilmington Trust Company, or any successor owner trustee under the Trust Agreement. The "Payment Date" is the fifteenth day of each calendar month, or, if that day is not a Business Day, the next Business Day commencing in December 2004. The "Policy" is the note guaranty insurance policy number 45177, issued by the Credit Enhancer. The Payment Date referred to in the definition of "Rapid Amortization Commencement Date" is the Payment Date in December 2009. Ann-2-2 The "Required Transferor Subordinated Amount" has the meaning in the Insurance Agreement. The "Sale and Servicing Agreement" is the Sale and Servicing Agreement of even date with this Indenture among the Sponsor, the Depositor, the Trust, and the Indenture Trustee. The "Scheduled Maturity Date" is the Payment Date in March 2034. The "Servicing Fee Rate" is 0.50% per annum. The "Trust" is the CWABS Revolving Home Equity Loan Trust, Series 2004-P, a Delaware statutory trust established pursuant to the Trust Agreement, dated as of October 25, 2004, between Countrywide Home Loans, Inc., the Depositor, and Wilmington Trust Company. The date in each year by which the Issuer will furnish an Opinion of Counsel pursuant to Section 3.06(b) is September 30 beginning in 2005. The first year after which an annual compliance statement pursuant to Section 3.09 is due is 2004. The date in each year by which the Indenture Trustee will furnish reports pursuant to Section 7.04 is March 15 beginning in 2005. The title of the Payment Account is "JPMorgan Chase Bank, as Indenture Trustee, Payment Account for the registered holders of Revolving Home Equity Loan Asset Backed Notes, Series 2004-P and MBIA Insurance Corporation." The Payment Date referred to in Section 8.03(b) is the Payment Date in March 2034. The date of the Prospectus Supplement is October 27, 2004. Addresses for notices under Section 11.04 are: For the Issuer at: CWABS Revolving Home Equity Loan Trust, Series 2004-P Wilmington Trust Company, as Owner Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration; For the Credit Enhancer at: MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Attention: Insured Portfolio Management-Structured Finance ("IPM-SF") (CWABS Revolving Home Equity Loan Trust, Series 2004-P) Ann-2-3 For the Rating Agencies at: in the case of Standard & Poor's: Standard & Poor's, a division of The McGraw Hill Companies, Inc. 55 Water Street New York, NY 10041 and in the case of Moody's, Moody's Investors Service, Inc. 99 Church Street, 4th Floor New York, NY 10007 Ann-2-4 EXHIBIT B FORM OF CUSTODIAL AGREEMENT ============================================================================== CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P Issuer Countrywide Home Loans, Inc. Master Servicer JPMORGAN CHASE BANK Indenture Trustee TREASURY BANK, NATIONAL ASSOCIATION Custodian ------------------------------ CUSTODIAL AGREEMENT Dated as of [___________], 20[__] 20[__]-[_] ------------------------------ ============================================================================== B-1 CUSTODIAL AGREEMENT This Custodial Agreement, dated as of [______________], 20[__] (this "Agreement"), among CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc., as master servicer (the "Master Servicer"), CWABS Revolving Home Equity Loan Trust, Series 2004-P (the "Issuer"), and Treasury Bank, National Association, as agent, custodian, and bailee for the Owner Trustee as owner and the Indenture Trustee as secured party (when acting for the Issuer, the "Trust Custodian," and when acting for the Indenture Trustee, the "Indenture Custodian," and when referring to both capacities, the "Custodian"), and JPMorgan Chase Bank, as indenture trustee (in that capacity the "Indenture Trustee"), WITNESSETH: WHEREAS, the Depositor will sell all of its interest in the Mortgage Loans to the Issuer pursuant to the Sale and Servicing Agreement; and WHEREAS, the Issuer will Grant a Security Interest to the Indenture Trustee for the benefit of the Noteholders and the Credit Enhancer in all of the Issuer's interest in the Collateral; and WHEREAS, the Issuer wants to hold its assets through a custodian acting as its agent and bailee under a custodial agreement, and authorize the custodian to deliver the Collateral to the Indenture Trustee; and WHEREAS, the Indenture Trustee wants to hold the Collateral through a custodian acting as its agent and bailee under a custodial agreement in connection with the Issuer's delivery of the Collateral to the Indenture Trustee; NOW, THEREFORE, the parties agree as follows. Section 1. Defined Terms and Rules of Construction. Capitalized terms used but not otherwise defined in this Agreement have the meanings given to them in the Indenture, dated as of [______________], 20[__] (the "Indenture"), between CWABS Revolving Home Equity Loan Trust, Series 2004-P and the Indenture Trustee, and if not defined there, in the Sale and Servicing Agreement. In addition, Section 1.04 (Rules of Construction) of the Indenture is incorporated by reference with appropriate substitution of this Agreement for references in that Section to the Indenture so that the language of that Section will read appropriately as applying to this Agreement. Section 2. Acknowledgment of Receipt and Certification; Appointment as Custodian. (a) Appointment as Custodian; Acknowledgment of Receipt. The Issuer appoints the Trust Custodian to act as its agent, custodian, and bailee to accept delivery of the items transferred to it under the Sale and Servicing Agreement and to B-2 hold them for the Issuer, and deliver any of them to the Indenture Trustee as called for under the Indenture. The Indenture Trustee appoints the Indenture Custodian to act as its agent, custodian, and bailee to maintain custody of the Mortgage Files for the Indenture Trustee for the benefit of the Noteholders and the Credit Enhancer. Treasury Bank, National Association accepts both of these appointments. The Trust Custodian will maintain custody of the items transferred to it under the Sale and Servicing Agreement that are not delivered to the Indenture Trustee subject to instructions from the Issuer. The Indenture Custodian will maintain continuous custody of the Mortgage Files at its office identified in Section 3 until (i) the Indenture Trustee delivers to the Indenture Custodian an Officer's Certificate to the effect that the conditions for the release of Collateral have been satisfied or (ii) the conditions specified in Section 4(b) for the release of the Mortgage Files to the Master Servicer have been met. In performing its duties under this Agreement, the Custodian agrees to act with the degree of care and skill consistent with the degree of care and skill that the Custodian exercises with respect to the loan files relating to similar loans owned, serviced, or held as custodian by the Custodian, and the Custodian agrees to follow its customary policies and procedures. (b) Review and Certification. In connection with the transfers under Sections 2.01(a) and 2.01(b) of the Sale and Servicing Agreement by the Depositor, the Depositor is required to effect certain deliveries to the Issuer and the Indenture Trustee under Section 2.01(e) of the Sale and Servicing Agreement. The Trust Custodian shall accept those deliveries for the Issuer, and shall make the deliveries to the Indenture Trustee required of the Issuer. The Indenture Custodian acting as custodian for the Indenture Trustee shall accept those deliveries. On the Closing Date, the Custodian will execute and deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Issuer, the Indenture Trustee, and the Credit Enhancer) an Initial Certification in the form of Exhibit A. Based on its review and examination, the Custodian will acknowledge that the documents identified in the Initial Certification appear regular on their face and relate to each Mortgage Loan. No later than thirty-two days after the Closing Date, if Mortgage Loans have been delivered after the Closing Date pursuant to Section 2.01(e) of the Sale and Servicing Agreement, the Custodian will execute and deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Issuer, the Indenture Trustee, and the Credit Enhancer) a Delay Delivery Certification in the form of Exhibit B. Based on its review and examination, the Custodian will acknowledge that the documents identified in the Delay Delivery Certification appear regular on their face and relate to each Mortgage Loan. Not later than 180 days after the Closing Date, the Custodian will deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Issuer, the Indenture Trustee, and the Credit Enhancer) a Final Certification in the form of Exhibit C, noting any applicable exceptions. For the purpose of the Final Certification, the title policy required for the Mortgage File is any of the final original title policy, a signed binder or commitment for a title B-3 policy, or a preliminary title report (in those states in which preliminary title reports are the customary form of title policy commitment). For any Mortgage File whose Final Certification is based on a signed binder or commitment for a title policy or a preliminary title report (in those states in which preliminary title reports are the customary form of title policy commitment), the Custodian will deliver to the Depositor, the Master Servicer, and the Sponsor (with a copy to the Issuer, the Indenture Trustee, and the Credit Enhancer), not later than the one year anniversary of the Closing Date, a further Final Certification in the form of Exhibit D, noting any applicable exceptions. For the purpose of this further Final Certification, the title policy required for the Mortgage File must be the final original title policy. If, in the course of its review in connection with the Final Certification, the Custodian finds any document constituting a part of a Mortgage File that does not meet the requirements of Section 2.02 of the Sale and Servicing Agreement, the Custodian shall list the defect as an exception in the Final Certification. The Custodian is not obligated to examine the documents delivered to it to determine that they 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. In reviewing any Mortgage File pursuant to this Section, the Custodian is not responsible for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form (except, if applicable, to determine if the Issuer or the Indenture Trustee is the assignee or endorsee), whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction, whether any person executing any document is authorized to do so or whether any signature on any document is genuine, but shall only be required to determine whether a document has been executed, that it appears to be what it purports to be, and, where applicable, that it purports to be recorded. The Sponsor will deliver and the Indenture Custodian will maintain continuous custody at its office identified in Section 3 of the documents required to be held by the Indenture Trustee in accordance with Section 2.01 of the Sale and Servicing Agreement with respect to any Eligible Substitute Mortgage Loans. The Master Servicer shall promptly deliver to the Indenture Custodian, and the Indenture Custodian will maintain continuous custody at its office identified in Section 3 of the originals of any other documents constituting the Mortgage File that come into the possession of the Master Servicer from time to time. Section 3. Maintenance of Office. The Custodian agrees to maintain the items for which it acts as Trust Custodian or Indenture Custodian at the office of the Indenture Custodian located in California. B-4 Section 4. Duties of Custodian. (a) Safekeeping. The Indenture Custodian shall (i) segregate the Mortgage Files from all other documents in the Indenture Custodian's possession; (ii) identify the Mortgage Files as being held, and hold the Mortgage Files, for the Indenture Trustee as secured party for the benefit of all present and future Noteholders and the Credit Enhancer; (iii) maintain at all times a current inventory of the Mortgage Files; and (iv) secure the Mortgage Files in fire resistant facilities and conduct periodic physical inspections of them in accordance with customary standards for custody of this type. The Indenture Custodian will promptly report to the Issuer and the Indenture Trustee any failure on its part to hold the Mortgage Files as provided in this Agreement and promptly take appropriate action to remedy the failure. (b) Release of Documents. On receipt by the Indenture Custodian of the certification of the Master Servicer, substantially in the form of Exhibit D to the Sale and Servicing Agreement, the Indenture Custodian shall release to the Master Servicer the related Mortgage Files for the Mortgage Loan covered by the certification. The certification may be delivered to the Indenture Custodian in a mutually agreed electronic format, and to the extent the request originates on its face from a servicing officer, need not be manually signed. Section 5. Access to Records. The Custodian shall permit the Indenture Trustee, the Issuer, the Master Servicer, the Credit Enhancer, or their respective duly authorized officers, attorneys, or auditors, and the supervisory agents and examiners of each of them, to inspect the items delivered to it under this Agreement and the books and records maintained by the Custodian pursuant to this Agreement, without charge but only after not less than two Business Days' prior notice and during normal business hours at the offices of the Custodian. Section 6. Instructions; Authority to Act. The Indenture Custodian may follow any instructions with respect to the Collateral received in the form of an Officer's Certificate of the Indenture Trustee. The instructions may be general or specific in terms. An executed incumbency certificate of the Indenture Trustee certifying the authority of certain officers to take specified actions may be accepted by the Indenture Custodian as conclusive evidence of the authority of the officers to act and may be considered in full force until receipt of written notice to the contrary by the Indenture Custodian from the Indenture Trustee. The Trust Custodian may follow any instructions with respect to any items held exclusively for the Issuer received in the form of an Officer's Certificate of the Issuer. The instructions may be general or specific in terms. An executed incumbency certificate of the Issuer certifying the authority of certain officers to take specified actions may be accepted by the Trust Custodian as conclusive evidence of the authority of the officers to act and may be B-5 considered in full force until receipt of written notice to the contrary by the Trust Custodian from the Issuer. Section 7. Advice of Counsel. The Custodian may rely and act on the advice of counsel, including in-house counsel, with respect to its performance under this Agreement as Custodian and shall not be liable for any action reasonably taken pursuant to advice of counsel. Section 8. Representations and Warranties. The Custodian represents and warrants that on the Closing Date: (a) it is a corporation duly organized, validly existing, and in good standing under the laws of its place of incorporation; (b) it has full power and authority to execute, deliver, and perform this Agreement, and has taken all necessary action to authorize the execution, delivery, and performance by it of this Agreement; (c) the consummation of the transactions contemplated by this Indenture and the fulfillment of its terms do not conflict with, result in any breach of, or constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or bylaws of the Custodian or any agreement or other instrument to which it is a party or by which it is bound; (d) to the Custodian's best knowledge, no proceedings or investigations concerning the Custodian are pending or threatened before any court, regulatory body, administrative agency, or other governmental instrumentality having jurisdiction over it or its properties: (1) asserting the invalidity of this Agreement, (2) seeking to prevent the consummation of any of the transactions contemplated by this Agreement, or (3) seeking any determination that might affect its performance of its obligations under this Agreement or the validity or enforceability of this Agreement; and (e) it is acting solely as the agent for the Indenture Trustee. Section 9. Effective Period, Termination, and Amendment, and Interpretive and Additional Provisions. This Agreement shall become effective as of its date and shall continue in full force until terminated in accordance with its terms. This Agreement may be terminated by either the Indenture Trustee with the consent of the Issuer and the Credit Enhancer or by the Custodian in a writing delivered or mailed, postage prepaid, to the other parties and the Credit Enhancer. The termination shall take effect no sooner than sixty days after the date of delivery or mailing. Concurrently with, or as soon as practicable after, the termination of this Agreement, the B-6 Indenture Custodian shall deliver the Collateral to the Indenture Trustee (or to a person designated by the Indenture Trustee) anywhere the Indenture Trustee reasonably designates with the consent of the Credit Enhancer, and the Trust Custodian shall deliver any items held exclusively for the Issuer to the Issuer (or to a person designated by the Issuer) anywhere the Issuer reasonably designates with the consent of the Credit Enhancer. Section 10. Limitation of Liability. (a) The Custodian undertakes to perform only the obligations specified in this Agreement. The Issuer, the Owner Trustee, Master Servicer, and Indenture Trustee acknowledge that no implied obligations exist under this Agreement. Neither the Custodian nor any of its affiliates, officers, directors, employees, or agents shall be liable, directly or indirectly, for any damages or expenses arising out of the services performed under this Agreement other than damages that result from their gross negligence, willful misconduct, or bad faith. The Custodian and its officers, directors, employees, and agents will not be liable for any consequential, indirect, punitive, or special damages. (b) Except as provided in Section 2, the Custodian makes no warranty or representation and has no responsibility for the completeness, validity, sufficiency, value, genuineness, ownership, or transferability of the Mortgage Loans or any of the documents in the Mortgage Files. (c) The Custodian need not expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under this Agreement, or in the exercise of its rights, if the Custodian believes that repayment of the funds or adequate indemnity against the risk or liability is not reasonably assured to it. (d) Without limiting the generality of the foregoing, the Custodian may rely on and shall be protected in acting in good faith on any notice or other communication received by it that it reasonably believes to be genuine and duly authorized with respect to all matters pertaining to this Agreement and its duties under this Agreement. (e) The Custodian shall not be responsible or liable for, and makes no representation or warranty with respect to, the validity, adequacy, or perfection of any lien on or security interest in any Mortgage Loan. (f) Any other provision of this Agreement to the contrary notwithstanding, the Custodian shall have no notice of, and shall not be bound by, any other document or agreement executed or delivered in connection with, or intended to control any part of, the transactions anticipated by or referred to in this Agreement unless the Custodian is a signatory party to that document or agreement. Notwithstanding the foregoing sentence, the Custodian shall be deemed to have notice of the terms (including definitions not otherwise set forth in full in this Agreement) of other documents and agreements executed or delivered in connection with, or intended to control any part of, the transactions anticipated by or referred to in this Agreement, B-7 to the extent the terms are referenced, or are incorporated by reference, into this Agreement only as long as the Indenture Trustee has provided a copy of the document or agreement to the Custodian. (g) The Custodian shall have only the obligations expressly set forth in this Agreement or in a written amendment to this Agreement executed by the parties to this Agreement or their successors and assigns. If any provision of this Agreement implies or requires that action or forbearance be taken by a party, but is silent as to which party has the duty to act or refrain from acting, the parties agree that the Custodian shall not be the party required to take the action or refrain from acting. In no event shall the Custodian have any responsibility to ascertain or take action except as expressly provided in this Agreement. (h) Nothing in this Agreement shall impose on the Custodian any duty to qualify to do business in any jurisdiction, other than (i) any jurisdiction where any Mortgage File is or may be held by the Custodian from time to time under this Agreement, and (ii) any jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to qualify could have a material adverse effect on the Custodian or its property or business or on the ability of the Custodian to perform its duties under this Agreement. (i) The Custodian may execute any of its duties under this Agreement through any of its agents, attorneys-in-fact, or affiliates. Any agent, attorney-in-fact, or affiliate of the Custodian (and any affiliate's directors, officers, agents, and employees) that performs duties in connection with this Agreement shall be entitled to the same benefits of the indemnification, waiver, and other protective provisions to which the Custodian is entitled under this Agreement, but the Custodian shall remain responsible for the performance of those duties. (j) The Custodian shall not be responsible for delays or failures in performance resulting from acts beyond its control. Acts beyond its control include acts of God, strikes, lockouts, riots, acts of war or terrorism, epidemics, nationalization, expropriation, currency restrictions, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes, or other disasters. Section 11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE. Section 12. Amendment. This agreement may not be amended without the written consent of all the parties and the Credit Enhancer. B-8 Section 13. Notices. All notices, demands, instructions, consents, and other communications required or permitted under this Agreement shall be in writing and shall be personally delivered or sent by first class or express mail (postage prepaid), national overnight courier service, or by facsimile transmission or other electronic communication device capable of transmitting or creating a written record (confirmed by first class mail) and shall be considered to be given for purposes of this Agreement on the day that the writing is delivered when personally delivered or sent by facsimile or overnight courier or three Business Days after it was sent to its intended recipient if sent by first class mail. Unless otherwise specified in a notice sent or delivered in accordance with the provisions of this Section, notices, demands, instructions, consents, and other communications in writing shall be given to or made on the respective parties at their respective addresses indicated below: if to the Issuer at: CWABS Revolving Home Equity Loan Trust, Series 2004-P Wilmington Trust Company, as Owner Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration if to the Depositor at: CWABS, Inc. 4500 Park Granada Calabasas, California 91302 Attention: Legal Department if to the Master Servicer at Countrywide Home Loans, Inc. 4500 Park Granada Calabasas, California 91302 Attention: Legal Department if to the Indenture Trustee at the Corporate Trust Office if to the Custodian at Treasury Bank, National Association 4100 East Los Angeles Avenue Simi Valley, California 93063 Attention: Document Custodian B-9 if to the Credit Enhancer at MBIA Insurance Corporation 113 King Street Armonk, New York 10504 Attention: Insured Portfolio Management-Structured Finance ("IPM-SF") (CWABS Revolving Home Equity Loan Trust, Series 2004-P) Section 14. Binding Effect. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Except as contemplated in this Agreement, none of the parties may assign any of its rights and obligations under this Agreement or any interest in this Agreement without the consent of the other parties and the Credit Enhancer. The Custodian may assign its rights and obligations under this Agreement, in whole or in part, to any affiliate with the consent of the Credit Enhancer. The Custodian agrees to notify the other parties and the Credit Enhancer of any assignment. An affiliate is any entity that directly or indirectly is under common control with the Custodian, or is under contract to be under common control with the Custodian, and includes a subsidiary or parent company of the Custodian. Section 15. Counterparts. This Agreement may be executed in one or more counterparts and by the different parties to this Agreement on separate counterparts, each of which, when so executed, shall be an original and all of which shall constitute one agreement. Section 16. Severability of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of the provision in any other jurisdiction. Section 17. Third Party Beneficiary. The Credit Enhancer is a third party beneficiary of this Agreement. Section 18. Merger of Custodian. Any entity into which the Custodian may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, conversion, or consolidation to which the Custodian is a party, or any entity succeeding to the business of the Custodian, shall be the successor of the Custodian under this Agreement, without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement, anything in this Agreement to the contrary notwithstanding. Section 19. Indemnification. B-10 The Issuer agrees to indemnify the Custodian and its affiliates, directors, officers, agents, and employees, against any losses, claims, damages, or liabilities of any kind, including reasonable attorneys' fees, that may arise against Custodian or its affiliates, directors, officers, agents, or employees, in any way arising out of this Agreement or any action taken or not taken by Custodian or its permitted successors and assigns under this Agreement unless they arise because of the breach by the Custodian of its obligations under this Agreement, which breach was caused by the gross negligence, lack of good faith, or willful misconduct on the part of Custodian or any of its affiliates, directors, officers, agents, or employees. The Custodian agrees to indemnify the Issuer against any losses, claims, damages, or liabilities of any kind, including reasonable attorneys' fees, it suffers arising out of the gross negligence, lack of good faith, or willful misconduct on the part of Custodian or any of its affiliates, directors, officers, agents, or employees. The foregoing indemnifications shall survive any termination or expiration of this Agreement or the resignation or removal of the Custodian. Section 20. Dispute Resolution, Arbitration. This Agreement evidences a transaction involving interstate commerce. Any disputes arising from this Agreement shall be decided by binding arbitration which shall be conducted, at the request of any party, in New York, New York, before one arbitrator designated by the American Arbitration Association (the "AAA"), in accordance with the Commercial Arbitration Rules of the AAA, and to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). Notwithstanding anything in this Agreement to the contrary, any party may proceed to a court of competent jurisdiction to obtain equitable relief at any time. An arbitrator shall have no authority to award punitive damages or other damages not measured by the prevailing party's actual damages. To the maximum extent practicable, an arbitration proceeding under this Agreement shall be concluded within 180 days of the filing of the dispute with the AAA. This arbitration clause shall survive any termination, amendment, or expiration of the Agreement and if any provision of this arbitration clause is found to be unenforceable, the remaining parts of the arbitration clause shall not be affected and shall remain fully enforceable. Section 21. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wilmington Trust Company, not individually or personally but solely as trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose of binding only the Issuer and (c) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or B-11 be liable for the breach or failure of any obligations, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or the other related documents. B-12 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed by a duly authorized officer as of the day and year first above written. CWABS, INC. By: _______________________________ Name: Title: CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P By: Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee By: _______________________________ Name: Title: JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee By: _______________________________ Name: Title: TREASURY BANK, NATIONAL ASSOCIATION, as Custodian for the Indenture Trustee By: _______________________________ Name: Title: TREASURY BANK, NATIONAL ASSOCIATION, as Custodian for the Issuer By: _______________________________ Name: Title: B-13 EXHIBIT C FORM OF INITIAL CERTIFICATION [date] [Depositor] [Master Servicer] [Sponsor] [Credit Enhancer] - --------------------- - --------------------- Re: Sale and Servicing Agreement among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Sponsor and Master Servicer, CWABS Revolving Home Equity Loan Trust, Series 2004-P, as the Trust, and JPMorgan Chase Bank, as Indenture Trustee, Revolving Home Equity Loan Asset Backed Notes, Series 2004-P --------------------------------------------------------------- Gentlemen: In accordance with Section 2.02 of the above-captioned Sale and Servicing Agreement (the "Sale and Servicing Agreement"), the undersigned, as Indenture Custodian for the Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule delivered pursuant to Section 2.01(e) of the Sale and Servicing Agreement (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the attached Document Exception Report) it has received, among other things: (i) the original Mortgage Note endorsed in blank or, if the original Mortgage Note has been lost or destroyed and not replaced, an original lost note affidavit from the Sponsor stating that the original Mortgage Note was lost, misplaced or destroyed, together with a copy of the related Mortgage Note; and (ii) unless the Mortgage Loan is registered on the MERS(R) System, an original Assignment of Mortgage in blank in recordable form. 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. C-1 The Indenture Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Sale and Servicing Agreement. The Indenture Custodian makes no representations as to: (i) the validity, legality, sufficiency, enforceability, or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness, or suitability of any Mortgage Loan. Capitalized words and phrases used in this Certification have the meanings assigned to them in the Sale and Servicing Agreement. Treasury Bank, National Association, as Custodian for the Indenture Trustee By:________________________________ Name: Title: C-2 EXHIBIT D FORM OF DELAY DELIVERY CERTIFICATION [date] [Depositor] [Master Servicer] [Sponsor] [Credit Enhancer] - --------------------- - --------------------- Re: Sale and Servicing Agreement among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Sponsor and Master Servicer, CWABS Revolving Home Equity Loan Trust, Series 2004-P, as the Trust, and JPMorgan Chase Bank, as Indenture Trustee, Revolving Home Equity Loan Asset Backed Notes, Series 2004-P --------------------------------------------------------------- Gentlemen: In accordance with Section 2.02 of the above-captioned Sale and Servicing Agreement (the "Sale and Servicing Agreement"), the undersigned, as Indenture Custodian for the Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule delivered pursuant to Section 2.01(e) of the Sale and Servicing Agreement (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the attached Document Exception Report) it has received, among other things: (i) the original Mortgage Note endorsed in blank or, if the original Mortgage Note has been lost or destroyed and not replaced, an original lost note affidavit from the Sponsor stating that the original Mortgage Note was lost, misplaced or destroyed, together with a copy of the related Mortgage Note; and (ii) unless the Mortgage Loan is registered on the MERS(R) System, an original Assignment of Mortgage in blank in recordable form. 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. D-1 The Indenture Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Sale and Servicing Agreement. The Indenture Custodian makes no representations as to: (i) the validity, legality, sufficiency, enforceability, or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness, or suitability of any Mortgage Loan. Capitalized words and phrases used in this Certification have the meanings assigned to them in the Sale and Servicing Agreement. Treasury Bank, National Association, as Custodian for the Indenture Trustee By:____________________________ Name: Title: D-2 EXHIBIT E FORM OF FINAL CERTIFICATION [date] [Depositor] [Master Servicer] [Sponsor] [Credit Enhancer] - --------------------- - --------------------- Re: Sale and Servicing Agreement among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Sponsor and Master Servicer, CWABS Revolving Home Equity Loan Trust, Series 2004-P, as the Trust, and JPMorgan Chase Bank, as Indenture Trustee, Revolving Home Equity Loan Asset Backed Notes, Series 2004-P --------------------------------------------------------------- Gentlemen: In accordance with Section 2.02 of the above-captioned Sale and Servicing Agreement (the "Sale and Servicing Agreement"), the undersigned, as Indenture Custodian for the Indenture 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 on the attached Document Exception Report) it has received: (i) the original Mortgage Note endorsed in blank or, if the original Mortgage Note has been lost or destroyed and not replaced, an original lost note affidavit from the Sponsor stating that the original Mortgage Note was lost, misplaced or destroyed, together with a copy of the related Mortgage Note; (ii) unless the Mortgage Loan is registered on the MERS(R) System, an original Assignment of Mortgage in blank in recordable form; (iii) the original recorded 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, or, if, in connection with any Mortgage Loan, the original recorded Mortgage with evidence of recording thereon cannot be delivered on E-1 or before the Closing Date because of a delay caused by the public recording office where such original Mortgage has been delivered for recordation or because such original Mortgage has been lost, an accurate copy of such Mortgage, together with (i) in the case of a delay caused by the public recording office, an Officer's Certificate of the Sponsor which may be in the form of a blanket certificate of the Sponsor covering more than one Mortgage stating that such original Mortgage has been dispatched to the appropriate public recording official or (ii) in the case of an original Mortgage that has been lost, a copy certified by the appropriate county recording office where such Mortgage is recorded; (iv) if applicable, the original of each intervening assignment needed for a complete chain of title for the mortgage from its original mortgagee or beneficiary to the Trust (or if the Mortgage Loan is registered on the MERS(R) System to MERS and noting the presence of a MIN) with evidence of recording thereon, or, if any such original intervening assignment has not been returned from the applicable recording office or has been lost, a true and correct copy thereof, together with (i) in the case of a delay caused by the public recording office, an Officer's Certificate of the Sponsor or the Depositor, which may be a blanket certificate covering more than one intervening assignment, stating that such original intervening assignment has been dispatched to the appropriate public recording official for recordation or (ii) in the case of an original intervening assignment that has been lost, a copy certified by the appropriate county recording office where such Mortgage is recorded; (v) a title policy, a signed binder or commitment for a title policy, or a preliminary title report (in those states in which preliminary title reports are the customary form of title policy commitment) for each Mortgage Loan with a Credit Limit in excess of $100,000; (vi) the original of any guaranty executed in connection with the Mortgage Note; (vii) the original of each assumption, modification, consolidation or substitution agreement, if any, relating to the Mortgage Loan; and (viii) any security agreement, chattel mortgage or equivalent instrument executed in connection with the Mortgage. Based on its review and examination and only as to the foregoing documents, (a) such documents appear regular on their face and related to such Mortgage Loan, and (b) the information set forth in items (ii), (iii), and (iv), of the itemization of contents of the "Mortgage Loan Schedule" in the Adoption Annex to the Indenture accurately reflects information set forth in the Mortgage File, and (c) the information set forth in item (v) of the itemization of contents of the "Mortgage Loan Schedule" in the Adoption Annex to the Indenture was delivered to the Custodian. E-2 The Indenture Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Sale and Servicing Agreement. The Indenture Custodian makes no representations as to: (i) the validity, legality, sufficiency, enforceability, or genuineness of any of the documents contained in each Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness, or suitability of any Mortgage Loan. Capitalized words and phrases used in this Certification have the meanings assigned to them in the Sale and Servicing Agreement. Treasury Bank, National Association, as Custodian for the Indenture Trustee By:____________________________ Name: Title: E-3 EXHIBIT F FORM OF FURTHER FINAL CERTIFICATION [date] [Depositor] [Master Servicer] [Sponsor] [Credit Enhancer] - --------------------- - --------------------- Re Sale and Servicing Agreement among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Sponsor and Master Servicer, CWABS Revolving Home Equity Loan Trust, Series 2004-P, as the Trust, and JPMorgan Chase Bank, as Indenture Trustee, Revolving Home Equity Loan Asset Backed Notes, Series 2004-P -------------------------------------------------- Gentlemen: In accordance with Section 2.02 of the above-captioned Sale and Servicing Agreement (the "Sale and Servicing Agreement"), the undersigned, as Indenture Custodian for the Indenture 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 on the attached Document Exception Report) it has received: (i) for each Mortgage Loan with a Credit Limit in excess of $100,000, a final original title policy. 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 Indenture Custodian has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Sale and Servicing Agreement. The Indenture Custodian makes no representations as to: (i) the validity, legality, sufficiency, enforceability, or genuineness of any of the documents contained in each F-1 Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness, or suitability of any Mortgage Loan. Capitalized words and phrases used in this Certification have the meanings assigned to them in the Sale and Servicing Agreement. Treasury Bank, National Association, as Custodian for the Indenture Trustee By: ________________________ Name: Title: EX-99.4 5 efc4-1981_5618531exh994.txt EXHIBIT 99.4 NOTE GUARANTY INSURANCE POLICY OBLIGATIONS: $1,500,000,000 POLICY NUMBER: 45177 CWABS Revolving Home Equity Loan Trust, Series 2004-P Revolving Home Equity Loan Asset Backed Notes Series 2004-P Class 1-A Notes and Class 2-A Notes (the "Obligations") MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of the premium and subject to the terms of this Note Guaranty Insurance Policy (this "Policy"), hereby unconditionally and irrevocably guarantees to any Owner that an amount equal to each full and complete Credit Enhancement Draw Amount will be received from the Insurer by JPMorgan Chase Bank, or its successors, as indenture trustee for the Owners (the "Indenture Trustee"), on behalf of the Owners, for distribution by the Indenture Trustee to each Owner of each Owner's proportionate share of the Credit Enhancement Draw Amount, except as otherwise provided below with respect to Preference Amounts. The Insurer's obligations hereunder with respect to a particular Credit Enhancement Draw Amount shall be discharged to the extent funds equal to the applicable Credit Enhancement Draw Amount are received by the Indenture Trustee, whether or not such funds are properly applied by the Indenture Trustee. Credit Enhancement Draw Amounts shall be made only at the time set forth in this Policy, and no accelerated Credit Enhancement Draw Amounts shall be made regardless of any acceleration of the Obligations, unless such acceleration is at the sole option of the Insurer. Notwithstanding the foregoing paragraph, this Policy does not cover shortfalls, if any, attributable to the liability of the Issuer, or the Indenture Trustee for withholding taxes, if any (including interest and penalties in respect of any such liability). The Insurer will pay any Credit Enhancement Draw Amount that is a Preference Amount on the Business Day following receipt on a Business Day by the Fiscal Agent (as described below) of (a) a certified copy of the order requiring the return of a preference payment, (b) an opinion of counsel satisfactory to the Insurer that such order is final and not subject to appeal, (c) an assignment in such form as is reasonably required by the Insurer, irrevocably assigning to the Insurer all rights and claims of the Owner relating to or arising under the Obligations against the debtor which made such preference payment or otherwise with respect to such preference payment and (d) appropriate instruments to effect the appointment of the Insurer as agent for such Owner in any legal proceeding related to such preference payment, such instruments being in a form satisfactory to the Insurer, provided that if such documents are received after 12:00 noon, New York City time, on such Business Day, they will be deemed to be received on the following Business Day. Any Credit Enhancement Draw Amount that is a Preference Amount shall be distributed by the Indenture Trustee to the receiver or trustee in bankruptcy named in the final order of the court exercising jurisdiction on behalf of the Owner and not to any Owner directly unless such Owner has returned principal or interest paid on the Obligations to such receiver or trustee in bankruptcy, in which case such payment shall be distributed by the Indenture Trustee to such Owner. The Insurer will pay any other amount payable hereunder no later than 12:00 noon, New York City time, on the later of the Payment Date on which the related Guaranteed Payment is due or the second Business Day following receipt in New York, New York on a Business Day by U.S. Bank Trust National Association, as Fiscal Agent for the Insurer, or any successor fiscal agent appointed by the Insurer (the "Fiscal Agent"), of a Notice (as described below), provided that if such Notice is received after 12:00 noon, New York City time, on such Business Day, it will be deemed to be received on the following Business Day. If any such Notice received by the Fiscal Agent is not in proper form or is otherwise insufficient for the purpose of making claim hereunder, it shall be deemed not to have been received by the Fiscal Agent for purposes of this paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall promptly so advise the Indenture Trustee and the Indenture Trustee may submit an amended Notice. Credit Enhancement Draw Amounts due hereunder, unless otherwise stated herein, will be disbursed by the Fiscal Agent to the Indenture Trustee on behalf of the Owners by wire transfer of immediately available funds in the amount of the Credit Enhancement Draw Amounts less, in respect of Credit Enhancement Draw Amounts related to Preference Amounts, any amount held by the Indenture Trustee for the payment of such Credit Enhancement Draw Amount and legally available therefor. The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent shall in no event be liable to Owners for any acts of the Fiscal Agent or any failure of the Insurer to deposit, or cause to be deposited, sufficient funds to make payments due under this Policy. Subject to the terms of the Agreement, the Insurer shall be subrogated to the rights of each Owner to receive payments under the Obligations to the extent of any payment by the Insurer hereunder. As used herein, the following terms shall have the following meanings: "Aggregate Investor Interest" for each Payment Date and each Class of Notes means the related Note Interest for the Payment Date and the related Unpaid Investor Interest Shortfall Amount (other than any Basis Risk Carryforward Amount) for the Payment Date (after giving effect to the distribution of all amounts actually distributed on the related Class of Notes as interest on that date). "Agreement" means the Indenture dated as of October 29, 2004 among CWABS Revolving Home Equity Loan Trust, Series 2004-P, as Issuer, and the Indenture Trustee, as indenture trustee, without regard to any amendment or supplement thereto, unless such amendment or supplement has been approved in writing by the Insurer. "Business Day" means any day other than (a) a Saturday or a Sunday or (b) a day on which banking institutions in New York, California, or Illinois or the state in which the Note Insurer has its principal place of business or in the city in which the corporate trust office of the Indenture Trustee under the Agreement is located are authorized or obligated by law or executive order to close. 2 "Credit Enhancement Draw Amount" means for each Class of Notes, (a) for each Payment Date, an amount equal to the excess of the related Guaranteed Payment over the related Available Investor Interest and (b) for each applicable date in accordance with the third paragraph of this Policy, any Preference Amount. "Guaranteed Payment" for each Class of Notes and Payment Date means the sum of the related Guaranteed Principal Payment Amount and the related Aggregate Investor Interest for the Payment Date. "Guaranteed Principal Payment Amount" means, for each Class of Notes, (a) on the Payment Date in March 2034, the amount needed to pay the related outstanding Note Principal Balance (after giving effect to all allocations and payments on that Payment Date), (b) for any other Payment Date on or before the related Allocated Transferor Interest first increases to zero, if the related Allocated Transferor Interest for that Payment Date is less than the highest related Allocated Transferor Interest for any preceding Payment Date, the amount of the excess of the highest related Allocated Transferor Interest for any preceding Payment Date over the related Allocated Transferor Interest for the current Payment Date, (c) for any Payment Date after the Transferor Interest has first increased to zero, if the related Transferor Interest has been reduced to zero or below, the amount of the excess of the related Note Principal Balance (after giving effect to all allocations and payments of principal to be made on such Class of Notes on the Payment Date) over the Related Loan Group Balance (at the end of the related Collection Period), and (d) for any other Payment Date, zero. All calculations under this Policy are made after giving effect to all other amounts distributable and allocable to principal on such Class of Notes for the Payment Date. "Notice" means the telephonic or telegraphic notice, promptly confirmed in writing by facsimile substantially in the form of Exhibit A attached hereto, the original of which is subsequently delivered by registered or certified mail, from the Indenture Trustee specifying the Credit Enhancement Draw Amount which shall be due and owing on the applicable Payment Date. "Owner" means each Noteholder (as defined in the Agreement) (other than the Indenture Trustee, the Sponsor or the Master Servicer) who, on the applicable Payment Date, is entitled under the terms of the applicable Obligations to payment thereunder. "Preference Amount" means any amount previously paid to an Owner on the Obligations 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. "Unpaid Investor Interest Shortfall" for any Payment Date and Class of Notes means the aggregate amount of Note Interest on that Class of Notes that was accrued for a prior Payment Date and has not been distributed to Holders of the Notes. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Agreement as of the date of execution of this Policy, without giving 3 effect to any subsequent amendment to or modification of the Agreement unless such amendment or modification has been approved in writing by the Insurer. Any notice hereunder or service of process on the Fiscal Agent may be made at the address listed below for the Fiscal Agent or such other address as the Insurer shall specify in writing to the Indenture Trustee. The notice address of the Fiscal Agent is 15th Floor, 61 Broadway, New York, New York 10006, Attention: Municipal Registrar and Paying Agency, or such other address as the Fiscal Agent shall specify to the Indenture Trustee in writing. THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. The insurance provided by this Policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law. This Policy is not cancelable for any reason except by delivery to the Indenture Trustee of a replacement policy in accordance with the Agreement and provided that the Policy shall remain in effect with respect to any claims for a Credit Enhancement Draw Amount relating to Preference Amounts resulting from distributions made on the Obligations prior to the effective date of the cancellation of this Policy. The premium on this Policy is not refundable for any reason, including payment, or provision being made for payment, prior to maturity of the Obligations. 4 IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed and attested this 29th day of October, 2004. MBIA INSURANCE CORPORATION By /s/ Neil Budnick ------------------------------------ Title: President Attest: By /s/ Adam Carta ------------------------------------ Assistant Secretary 5 EXHIBIT A TO NOTE GUARANTY INSURANCE POLICY NUMBER: 45177 NOTICE UNDER NOTE GUARANTY INSURANCE POLICY NUMBER: 45177 U.S. Bank Trust National Association, as Fiscal Agent for MBIA Insurance Corporation 15th Floor 61 Broadway New York, NY 10006 Attention: Municipal Registrar and Paying Agency MBIA Insurance Corporation 113 King Street Armonk, NY 10504 The undersigned, a duly authorized officer of [NAME OF INDENTURE TRUSTEE], as indenture trustee (the "Indenture Trustee"), hereby certifies to U.S. Bank Trust National Association (the "Fiscal Agent") and MBIA Insurance Corporation (the "Insurer"), with reference to Note Guaranty Insurance Policy Number 45177 (the "Policy") issued by the Insurer in respect of the $1,500,000,000 CWABS Revolving Home Equity Loan Trust, Series 2004-P Revolving Home Equity Loan Asset Backed Notes, Series 2004-P (the "Obligations"), that, with respect to the Class ____-A Notes: (a) the Indenture Trustee is the indenture trustee under the Indenture dated as of October 29, 2004, among CWABS Revolving Home Equity Loan Trust, Series 2004-P, as Issuer, and the Indenture Trustee, as indenture trustee for the Owners; (b) the Guaranteed Principal Payment Amount for the Payment Date occurring on _________ (the "Applicable Payment Date") is $ ____________ (the "Guaranteed Principal Payment Amount"); (c) the Aggregate Investor Amount for the Applicable Payment Date is $ _________ (the "Aggregate Investor Interest"); (d) the sum of the Guaranteed Principal Payment Amount in (b) and the Aggregate Investor Amount in (c) is $__________ (the "Guaranteed Payment"); (e) the Available Investor Interest for the Applicable Payment Date is $_____________ (the "Available Investor Interest"); (f) the excess, if any, between the Guaranteed Payment in (d) and the Available Investor Interest in (e) is $[ ] (the "Clause (a) Credit Enhancement Draw Amount"); (g) the amount of previously distributed payments on the Obligations that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a final nonappealable order of a court having competent jurisdiction is $____________, (the "Preference Amount" and hereinafter sometimes referred to as the "Clause (b) Credit Enhancement Draw Amount" ); (h) the total Credit Enhancement Draw Amount due is $ ___ , which amount equals the sum of the Clause (a) Credit Enhancement Draw Amount in (f), if any, and the Clause (b) Credit Enhancement Draw Amount in clause (g), if any (the "Credit Enhancement Draw Amount"); (i) the Indenture Trustee is making a claim under and pursuant to the terms of the Policy for the dollar amount of the Credit Enhancment Draw Amount set forth in (h) above to be applied to the payment of the Clause (a) Credit Enhancement Draw Amount for the Applicable Payment Date in accordance with the Agreement and for the dollar amount of the Clause (b) Credit Enhancement Amount set forth in (g) above to be applied to the payment of any Preference Amount; and (j) the Indenture Trustee directs that payment of the Credit Enhancement Draw Amount be made to the following account by bank wire transfer of federal or other immediately available funds in accordance with the terms of the Policy: [INDENTURE TRUSTEE'S ACCOUNT NUMBER]. Any capitalized term used in this Notice and not otherwise defined herein shall have the meaning assigned thereto in the Policy. Any Person Who Knowingly And With Intent To Defraud Any Insurance Company Or Other Person Files An Application For Insurance Or Statement Of Claim Containing Any Materially False Information, Or Conceals For The Purpose Of Misleading, Information Concerning Any Fact Material Thereto, Commits A Fraudulent Insurance Act, Which Is A Crime, And Shall Also Be Subject To A Civil Penalty Not To Exceed Five Thousand Dollars And The Stated Value Of The Claim For Each Such Violation. IN WITNESS WHEREOF, the Indenture Trustee has executed and delivered this Notice under the Policy as of the__________ day of ___________,___. [NAME OF INDENTURE TRUSTEE], as Indenture Trustee By ____________________________________ Title__________________________________ A-2 EX-99.5 6 efc4-1981_5613455exh995.txt EXHIBIT 99.5 EXECUTION COPY ============================================================================== CWABS, INC. Depositor WILMINGTON TRUST COMPANY Owner Trustee ------------------------------------ TRUST AGREEMENT Dated as of October 25, 2004 ------------------------------------ CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P ==============================================================================
Table of Contents Page ---- ARTICLE I DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions..........................................................1 Section 1.02. Rules of Construction................................................3 ARTICLE II ORGANIZATION Section 2.01. Name.................................................................5 Section 2.02. Office...............................................................5 Section 2.03. Purposes and Powers..................................................5 Section 2.04. Appointment of Owner Trustee.........................................6 Section 2.05. Initial Capital Contribution of Assets...............................6 Section 2.06. Declaration of Trust.................................................6 Section 2.07. Liability of the Transferor..........................................6 Section 2.08. Title to Trust Property..............................................6 Section 2.09. Location of Trust....................................................6 Section 2.10. Representations and Warranties of Depositor..........................7 ARTICLE III THE TRANSFEROR CERTIFICATES Section 3.01. Initial Beneficiary of Trust.........................................8 Section 3.02. Issuance of the Transferor Certificates..............................8 Section 3.03. Authentication of Transferor Certificates............................9 Section 3.04. Registration of and Transfer and Exchange of Transferor Certificates.........................................................9 Section 3.05. Mutilated, Destroyed, Lost, or Stolen Transferor Certificate........10 Section 3.06. Maintenance of Office or Agency.....................................10 Section 3.07. Persons Considered Certificateholders...............................10 Section 3.08. Access to List of Certificateholders' Names and Addresses...........11 Section 3.09. Appointment of Certificate Paying Agent.............................11 Section 3.10. Restrictions on Transfer; Legends...................................11 ARTICLE IV ACTIONS BY OWNER TRUSTEE14 Section 4.01. Prior Notice to Certificateholders Regarding Certain Matters........14 Section 4.02. Action by Certificateholders Regarding Certain Matters..............15 Section 4.03. Action by Certificateholders Regarding Bankruptcy...................15 Section 4.04. Restrictions on Certificateholder's Power...........................15 Section 4.05. Majority Interest...................................................16 i ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES Section 5.01. Application of Trust Funds..........................................16 Section 5.02. Method of Payment...................................................16 ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE Section 6.01. General Authority...................................................17 Section 6.02. General Duties......................................................17 Section 6.03. Action on Instruction...............................................17 Section 6.04. No Duties Except as Specified in the Agreement or in Instructions...18 Section 6.05. No Action Except Under Specified Documents or Instructions..........19 Section 6.06. Restrictions........................................................19 ARTICLE VII CONCERNING OWNER TRUSTEE Section 7.01. Acceptance of Trusts and Duties.....................................19 Section 7.02. Furnishing Documents................................................20 Section 7.03. Representations and Warranties......................................20 Section 7.04. Reliance; Advice of Counsel.........................................21 Section 7.05. Not Acting in Individual Capacity...................................21 Section 7.06. Owner Trustee Not Liable for Transferor Certificates or Payment Obligations.........................................................21 Section 7.07. Owner Trustee May Own Notes.........................................22 ARTICLE VIII COMPENSATION OF OWNER TRUSTEE Section 8.01. Owner Trustee's Fees................................................22 Section 8.02. Reimbursement and Indemnification...................................22 Section 8.03. Payments to Owner Trustee...........................................23 ARTICLE IX TERMINATION OF AGREEMENT Section 9.01. Termination of Agreement............................................24 Section 9.02. Credit Enhancer's Rights Regarding Actions, Proceedings, or Investigations......................................................24 Section 9.03. Rights of the Credit Enhancer.......................................26 ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES Section 10.01. Resignation or Removal of Owner Trustee.............................26 Section 10.02. Successor Owner Trustee.............................................27 ii Section 10.03. Merger or Consolidation of Owner Trustee............................27 Section 10.04. Appointment of Co-Trustee or Separate Trustee.......................28 ARTICLE XI MISCELLANEOUS Section 11.01. Supplements and Amendments..........................................29 Section 11.02. Limitations on Rights of Others.....................................29 Section 11.03. Notices.............................................................30 Section 11.04. Severability........................................................30 Section 11.05. Separate Counterparts...............................................31 Section 11.06. Successors and Assigns..............................................31 Section 11.07. Nonpetition Covenant................................................31 Section 11.08. No Recourse.........................................................31 Section 11.09. Headings............................................................31 Section 11.10. Governing Law.......................................................31 Section 11.11. Rule 144A Information...............................................32 Section 11.12. Third-Party Beneficiary.............................................32 EXHIBITS EXHIBIT A Form of Certificate of Trust of Revolving Home Equity Loan Trust, Series 2004-P.......................................A-1 EXHIBIT B Form of Series 2004-P Transferor Certificates...............................B-1 EXHIBIT C Form of Representation Letter...............................................C-1
iii This TRUST AGREEMENT, dated as of October 25, 2004, between CWABS, INC., a Delaware corporation, as Depositor, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Owner Trustee, WITNESSETH: WHEREAS, the parties to this Trust Agreement will create the CWABS Revolving Home Equity Loan Trust, Series 2004-P and provide for, among other things, the issuance of the Transferor Certificates; NOW, THEREFORE, the parties to this Trust Agreement agree as follows. ARTICLE I DEFINITIONS AND CONSTRUCTION Section 1.01. Definitions. Unless the context requires a different meaning, capitalized terms are used in this Agreement as defined below. "Administration Agreement" means the Administration Agreement, dated as of October 29, 2004, between the Administrator, the Indenture Trustee, and the Trust. "Administrator" means Countrywide Home Loans, Inc. and its permitted successors and assigns. "Agreement" means this trust agreement. "Assets" means all assets and property of the Trust pursuant to the Sale And Servicing Agreement. "Certificate of Trust" means the Certificate of Trust in the form of Exhibit A to be filed for the Trust pursuant to Section 3810(a) of the Statutory Trust Statute. "Certificateholder" means the registered holder of a Transferor Certificate issued in connection with the creation of the Trust. "Code" means the Internal Revenue Code of 1986. "Closing Date" means October 29, 2004. "Credit Enhancer" means MBIA Insurance Corporation and its permitted successors and assigns. 1 "ERISA" means the Employee Retirement Income Security Act of 1974. "Expenses" has the meaning given to it in Section 8.02. "Indemnified Parties" has the meaning given to it in Section 8.02. "Indenture" means the indenture, dated as of October 29, 2004 entered into between the Trust, and the Indenture Trustee, specifying the principal terms pursuant to which the Notes are issued. "Indenture Trustee" means JPMorgan Chase Bank and its permitted successors and assigns. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), preference, participation interest, priority, or other security agreement or preferential arrangement of any kind or nature whatsoever resulting in an encumbrance against real or personal property of a person, including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and any evidence of any of the foregoing. "Mortgage Loan" has the meaning given to it in the Sale and Servicing Agreement. "Noteholder" means a holder of one or more Notes. "Notes" means the notes issued by the Trust pursuant to the Indenture. "Opinion of Counsel" means a written opinion of counsel acceptable to the Owner Trustee and the counsel may be in-house counsel for the Depositor, its Affiliates, or the Transferor, which opinion shall be addressed, in addition to any other party specified in this Agreement, to the Credit Enhancer. "Rating Agency Condition" has the meaning given to it in the Indenture. "Responsible Officer" means any officer in the corporate trust department of the Owner Trustee, including any vice president, assistant vice president, managing director, treasurer, assistant treasurer, trust officer, or any other officer of the Owner Trustee who customarily performs functions similar to those performed by the persons who at the time are those officers, or to whom any corporate trust matter is referred because of the officer's knowledge of and familiarity with the particular subject and who has direct responsibility for the administration of this Agreement or the Indenture. "Sale and Servicing Agreement" means the sale and servicing agreement, dated as of October 29, 2004, entered into between the Depositor, Countrywide Home Loans, Inc., as sponsor and master servicer, the Trust and the Indenture Trustee, pursuant to which, among other things, the Depositor transfers all its interests in the Mortgage Loans to the Trust. 2 "Statutory Trust Statute" means the Delaware Statutory Trust Act (12 Del. Code, ss. 3801 et seq.). "Transaction Documents" means collectively the Indenture and any other document designated in the Indenture as a "Transaction Document" for the purposes of this Agreement. "Transferor" means the holder of a Transferor Certificate of the Trust. "Transferor Certificate" means the certificate representing the interest in the Trust that is the right to receive any amounts available for distribution that are not allocable to the Notes and that is executed and authenticated in accordance with this Agreement substantially in the form attached to this Agreement as Exhibit B. "Transferor Certificate Register" means the register maintained by the Indenture Trustee pursuant to Section 3.04. "Trust" means the trust formed pursuant to this Agreement. Section 1.02.Rules of Construction. Except as otherwise expressly provided in this Agreement or unless the context clearly requires otherwise: (a) Defined terms include, as appropriate, all genders and the plural as well as the singular. (b) References to designated articles, sections, subsections, exhibits, and other subdivisions of this Agreement, such as "Section 6.12 (a)," refer to the designated article, section, subsection, exhibit, or other subdivision of this Agreement as a whole and to all subdivisions of the designated article, section, subsection, exhibit, or other subdivision. The exhibits and other attachments to this Agreement are a part of this Agreement. The words "herein," "hereof," "hereto," "hereunder," and other words of similar import refer to this Agreement as a whole and not to any particular article, section, exhibit, or other subdivision of this Agreement. (c) The recitals located before Article I are not a part of the agreement of the parties. Whether or not they are correct shall not affect the agreement of the parties or the interpretation of this Agreement, and they shall not be interpreted as representations, warranties, covenants, or any other matter of substance. The headings of the various Articles and Sections in this Agreement are for convenience of reference only and shall not define or limit any of the provisions of this Agreement. (d) Any term that relates to a document or a statute, rule, or regulation includes any amendments, modifications, supplements, or any other changes that may have occurred since the document, statute, rule, or regulation came into being, including changes that occur after the date of this Agreement. References to law are not limited to statutes. References to statutes 3 include any rules or regulations promulgated under them by a governmental authority charged with the administration of the statute. Any reference to any person includes references to its successors and assigns. (e) Any party may execute any of the requirements under this Agreement either directly or through others, and the right to cause something to be done rather than doing it directly shall be implicit in every requirement under this Agreement. Unless a provision is restricted as to time or limited as to frequency, all provisions under this Agreement are implicitly available from time to time. (f) The term "including" and all its variations mean "including but not limited to." Except when used in conjunction with the word "either," the word "or" is always used inclusively (for example, the phrase "A or B" means "A or B or both," not "either A or B but not both"). (g) A reference to "a [thing]" or "any [of a thing]" does not imply the existence or occurrence of the thing referred to even though not followed by "if any," and "any [of a thing]" is any and all of it. A reference to the plural of anything as to which there could be either one or more than one does not imply the existence of more than one (for instance, the phrase "the obligors on a note" means "the obligor or obligors on a note"). "Until [something occurs]" does not imply that it must occur, and will not be modified by the word "unless." The word "due" and the word "payable" are each used in the sense that the stated time for payment has passed. The word "accrued" is used in its accounting sense, i.e., an amount paid is no longer accrued. In the calculation of amounts of things, differences and sums may generally result in negative numbers, but when the calculation of the excess of one thing over another results in zero or a negative number, the calculation is disregarded and an "excess" does not exist. Portions of things may be expressed as fractions or percentages interchangeably. The word "shall" is used in its imperative sense, as for instance meaning a party agrees to something or something must occur or exist. (h) All accounting terms used in an accounting context and not otherwise defined, and accounting terms partly defined in this Agreement, to the extent not completely defined, shall be construed in accordance with generally accepted accounting principles in the United States. To the extent that the definitions of accounting terms in this Agreement are inconsistent with their meanings under generally accepted accounting principles, the definitions in this Agreement shall control. Capitalized terms used in this Agreement without definition that are defined in the Uniform Commercial Code of the relevant jurisdiction are used in this Agreement as defined in that Uniform Commercial Code. (i) In the computation of a period of time from a specified date to a later specified date or an open-ended period, the words "from" and "beginning" mean "from and including," the word "after" means "from but excluding," the words "to" and "until" mean "to but excluding," and the word "through" means "to and including." Likewise, in setting deadlines or other periods, "by" means "on or before." The words "preceding," "following," and words of 4 similar import, mean immediately preceding or following. References to a month or a year refer to calendar months and calendar years. (j) Any reference to the enforceability of any agreement against a party means that it is enforceable against the party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (k) Generally only the registered holder of a Security is recognized, such as in Section 3.07. Persons Considered Owner and payment provisions. However, for the purposes of the transfer restrictions and related provisions, such as agreements, representations, and warranties by holders of Securities, references to Securityholders, holders, and the like refer equally to beneficial owners who have an interest in a Security but are not reflected in the applicable register as the owner and references to transfers of Securities include transfers of interests in a Security. ARTICLE II ORGANIZATION Section 2.01. Name. This Trust shall be known as "CWABS Revolving Home Equity Loan Trust, Series 2004-P," in which name the Owner Trustee may issue Notes and otherwise conduct the business of the Trust. Section 2.02. Office. The office of the Trust shall be in care of the Owner Trustee at "Rodney Square North, 1100 North Market Street, Wilmington, DE 19890, Attention: Corporate Trust Administration" or at any other address in the State of Delaware that the Owner Trustee may designate by notice to the Depositor. Section 2.03. Purposes and Powers. (a) The Trust is authorized to engage in the following activities: (i) to issue the Notes pursuant to the Indenture; (ii) to issue the Transferor Certificates pursuant to this Agreement; (iii) to Grant the Assets to the Indenture Trustee pursuant to the Indenture; (iv) to distribute to the Transferor pursuant to this Agreement the Transaction Documents, any portion of the Assets released from the Lien of the Indenture and any other amounts provided for in the Sale and Servicing Agreement; (v) to enter into and perform its obligations under the Transaction Documents to which it becomes a party; 5 (vi) to engage in those activities, including entering into agreements, that are appropriate to accomplish any of the foregoing or are incidental to them; and (vii) subject to compliance with the Transaction Documents, to engage in any other activities appropriate to conserve the Assets and make distributions to any Transferor and the holders of Notes. The Trust shall not engage in any activity other than in connection with the foregoing activities or other than as required or authorized by this Agreement or the other Transaction Documents. Section 2.04. Appointment of Owner Trustee. The Depositor appoints the Owner Trustee as trustee of the Trust effective as of the date of this Agreement to have all the rights and obligations in this Agreement. Section 2.05. Initial Capital Contribution of Assets. The Depositor hereby remits to the Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges receipt in trust from the Depositor of the foregoing contribution. The Depositor shall pay organizational expenses of the Trust as they may arise or shall promptly reimburse the Owner Trustee on request for any such expenses paid by the Owner Trustee. Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that it will hold the Assets on the terms of this Agreement, for the benefit of the Transferor, subject to the obligations of the Trust under the Transaction Documents. The Trust is a statutory trust under the Statutory Trust Statute and this Agreement is the governing instrument of the statutory trust. The Owner Trustee shall have all rights and obligations in this Agreement and in the Statutory Trust Statute for accomplishing the purposes of the Trust. The Owner Trustee shall file with the Secretary of State of the State of Delaware a Certificate of Trust of the Trust. Section 2.07. Liability of the Transferor. Except to the extent otherwise provided in this Agreement or in the other Transaction Documents, the Transferor shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of the State of Delaware. Section 2.08. Title to Trust Property. Legal title to all the Assets shall be vested in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Assets to be vested in a trustee, in which case title shall be vested in the Owner Trustee or any co-trustee or separate trustee, as the case may be. Section 2.09. Location of Trust. The Trust will be located in Delaware and administered in Delaware. Any bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in Delaware 6 or Illinois. The Trust shall not have any employees in any State other than Delaware. Nothing in this Agreement shall restrict the Owner Trustee from having employees within or without Delaware. Payments will be received by the Trust only in Delaware, Illinois, or California, and payments will be made by the Trust only from Delaware or Illinois. Section 2.10. Representations and Warranties of Depositor. The Depositor represents and warrants to the Owner Trustee as of the date of this Agreement, and as to any Transaction Document, as of its date that: (a) Organization and Good Standing. The Depositor is a corporation duly organized and validly existing under the laws of Delaware, with full power and authority to own its properties and to conduct its business as presently owned or conducted and to execute, deliver, and perform this Agreement and any other document related to this Agreement to which it is a party and to perform its obligations as contemplated by them. (b) Due Qualification. The Depositor is duly qualified to do business as a Delaware corporation in good standing and has obtained all necessary licenses and approvals in each jurisdiction in which failure to so qualify or to obtain required licenses or approvals would have a material adverse effect on its ability to perform its obligations under this Agreement and the Transaction Documents to which the Depositor is a party. (c) Due Authorization; Enforceability. The Depositor has full power and authority to execute, deliver, and perform this Agreement and the Transaction Documents to which it is a party and to carry out their respective terms. The Depositor has full power and authority to sell and assign the Assets. The execution, delivery, and performance by the Depositor of this Agreement and the Transaction Documents to which the Depositor is a party have been duly authorized by the Depositor by all necessary action. This Agreement and the Transaction Documents executed by the Depositor have been duly executed and delivered and constitute the valid and legally binding obligations of the Depositor enforceable against the Depositor in accordance with their terms. (d) No Conflict. The Depositor's execution and delivery of this Agreement and the Transaction Documents to which the Depositor is a party, performance of the transactions contemplated by them, and fulfillment of their terms applicable to the Depositor do not conflict with any requirements of law applicable to the Depositor or conflict with, result in any breach of any of the provisions of, or with or without notice or lapse of time constitute a default under, any indenture, contract, or other instrument to which the Depositor is a party or by which it or its properties are bound. (e) Consents. No authorization, consent, license, order, or approval of or registration or declaration with, any governmental authority is required to be obtained, effected, or given by the Depositor in connection with the execution and delivery of this Agreement or the Transaction Documents by the Depositor or its performance of its obligations under any of them or the transactions contemplated by any of them, or the transfer of the Assets to the Trust. 7 (f) Litigation. No actions, proceedings, or investigations are pending or, to the best of the Depositor's knowledge, threatened against the Depositor before any governmental authority having jurisdiction over the Depositor (i) asserting the invalidity of this Agreement or any other Transaction Documents to which the Depositor is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Documents to which the Depositor is a party, (iii) seeking any determination that might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Documents to which the Depositor is a party, or (iv) seeking to affect adversely the income tax attributes of the Trust under the United States federal or New York State or Delaware income tax law. ARTICLE III THE TRANSFEROR CERTIFICATES Section 3.01. Initial Beneficiary of Trust. Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.05 and until the issuance of the Transferor Certificates, the Depositor shall be the sole beneficiary of the Trust. Section 3.02. Issuance of the Transferor Certificates. (a) On the Closing Date, the Trust will issue one class of Certificates designated as the "Revolving Home Equity Loan Asset Backed Transferor Certificates, Series 2004-P" (the "Transferor Certificates") pursuant to the provisions of this Agreement and deliver them to the order of the Depositor when authenticated. (b) The Transferor Certificates will be issued in definitive, fully registered form and will be substantially in the form of Exhibit B. The Transferor Certificates will, on the Closing Date, be executed, authenticated, and delivered by the Owner Trustee to the order of the Depositor concurrently with the transfer of the Mortgage Loans to the Trust. (c) The Transferor Certificates will be executed by manual or facsimile signature on behalf of the Owner Trustee by an authorized officer. Transferor Certificates bearing the manual or facsimile signatures of individuals who were, at the time their signatures were affixed, authorized to sign on behalf of the Owner Trustee shall bind the Trust, notwithstanding that any of them have ceased to be so authorized before the authentication and delivery of the Transferor Certificates or did not hold such offices at the date of the Transferor Certificate. The Transferor Certificates will not be book-entry certificates. 8 Section 3.03. Authentication of Transferor Certificates. No Transferor Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless the Transferor Certificate is manually authenticated by the Owner Trustee substantially in the form provided in this Agreement, and the authentication on any Transferor Certificate will be conclusive evidence, and the only evidence, that the Transferor Certificate has been duly authenticated and delivered. All Transferor Certificates shall be dated the date of their authentication. The Trust initially appoints the Indenture Trustee to act as the authentication agent of the Owner Trustee. All references to the authentication of the Transferor Certificates shall be considered to include the authentication agent. Section 3.04. Registration of and Transfer and Exchange of Transferor Certificates. The Trust shall keep a Transferor certificate register (the "Certificate Register") in which, subject to any reasonable regulations it may prescribe, the Trust shall provide for the registration of the Transferor Certificates and, to the extent permitted by this Agreement, of transfers and exchanges of the Transferor Certificates. The certificate registrar (the "Certificate Registrar") is initially the Indenture Trustee. Whenever any Transferor Certificate is surrendered for registration of transfer at the office or agency of the Certificate Registrar maintained for that purpose and the conditions of this Section have been satisfied, the Owner Trustee, on behalf of the Trust, shall execute, authenticate, and deliver in the name of the designated transferees, one or more new Transferor Certificates in authorized denominations of a like aggregate amount dated the date of authentication by the Owner Trustee or any authenticating agent. At the option of its Holder, each Transferor Certificate may be exchanged for other Transferor Certificates, in authorized denominations of a like aggregate amount, by surrendering the Transferor Certificate to be exchanged at the office or agency of the Certificate Registrar maintained for that purpose. Every Transferor Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a fully completed representation letter, substantially in the form of Exhibit C, delivered at the expense of the Certificateholder, and duly executed by the Certificateholder or an attorney-in-fact for the Certificateholder duly authorized in writing. Each Holder of a Transferor Certificate must satisfy the transfer restrictions in the representation letter. Each Transferor Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Owner Trustee in accordance with its customary practice. No service charge shall be made for the registration of transfer or exchange of any Transferor Certificate, but the Owner Trustee or the Certificate Registrar may require payment 9 of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of the Transferor Certificate. The preceding provisions of this Section notwithstanding, the Owner Trustee need not transfer or exchange, and the Certificate Registrar need not register transfers or exchanges, of Transferor Certificates during the fifteen days preceding the due date for any payment on the Transferor Certificates. The Certificate Registrar shall at all times maintain an office or agency where Transferor Certificates may be surrendered for registration of transfer or exchange. Section 3.05. Mutilated, Destroyed, Lost, or Stolen Transferor Certificate. If (a) the Owner Trustee receives evidence to its satisfaction of the destruction, loss, or theft of a Transferor Certificate and the Owner Trustee receives the security or indemnity it requires to hold it harmless or (b) any mutilated Transferor Certificate is surrendered to the Owner Trustee, then in the absence of notice that the Transferor Certificate has been acquired by a Protected Purchaser, the Owner Trustee shall execute, authenticate, and deliver, in exchange for or in lieu of the mutilated, destroyed, lost, or stolen Transferor Certificate, a new Transferor Certificate of like tenor and denomination. The Owner Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed on the issuance of the new Transferor Certificate under this Section. Any duplicate Transferor Certificate issued pursuant to this Section shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen, or destroyed Transferor Certificate is found. Section 3.06. Maintenance of Office or Agency. The Trust shall maintain an office or agency where notices and demands on the Trust regarding the Transferor Certificates and the Transaction Documents may be served. The Trust initially designates Indenture Trustee as its office for those purposes. The Owner Trustee shall give prompt written notice to the Certificateholders of the location, and any change in the location, of this office or agency. If the Trust ever fails to maintain this office or agency, then presentations, surrenders, notices, and demands may be made or served at the Corporate Trust Office of the Owner Trustee. Section 3.07. Persons Considered Certificateholders. Before due presentation of a Transferor Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar, and any paying agent for the Transferor Certificates shall treat the person in whose name any Transferor Certificate is registered in the Certificate Register as the owner of the Transferor Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, and any paying agent for the Transferor Certificates shall be bound by any notice to the contrary. 10 Section 3.08. Access to List of Certificateholders' Names and Addresses. The Certificate Registrar shall furnish to the Depositor or the Owner Trustee a list of the names and addresses of the Transferor Certificateholders as of the most recent Record Date within fifteen days after receipt by the Certificate Registrar of a written request for it from the Depositor or the Owner Trustee. Section 3.09. Appointment of Certificate Paying Agent. The paying agent for the Transferor Certificates shall make distributions to the holder of each Transferor Certificate pursuant to this Agreement and shall report the amounts of those distributions to the Owner Trustee. The Administrator, on behalf of the Trust, may remove the Certificate Paying Agent if the Administrator determines in its sole discretion that the Certificate Paying Agent has failed to perform its obligations under this Agreement in any material respect. The Certificate Paying Agent initially shall be the Indenture Trustee. The Certificate Paying Agent shall be permitted to resign as Certificate Paying Agent on thirty days' written notice to the Owner Trustee. If the Indenture Trustee is no longer the Certificate Paying Agent, the Administrator shall appoint a bank or trust company as successor to act as Certificate Paying Agent. The Administrator shall cause the successor Certificate Paying Agent or any additional Certificate Paying Agent appointed by the Administrator to execute and deliver to the Trust an instrument in which the successor Certificate Paying Agent or additional Certificate Paying Agent agrees with the Trust that, as Certificate Paying Agent, the successor Certificate Paying Agent or additional Certificate Paying Agent will hold any sums held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled to them until those sums are paid to the appropriate Certificateholders. The Certificate Paying Agent shall return all unclaimed funds to the Trust, and upon removal of a Certificate Paying Agent, the Certificate Paying Agent shall also return all funds in its possession to the Trust. Any reference in this Agreement to the Certificate Paying Agent shall include any co-Certificate Paying Agent unless the context requires otherwise. Section 3.10. Restrictions on Transfer; Legends. (a) The Transferor Certificates shall be assigned, transferred, exchanged, pledged, financed, hypothecated, or otherwise conveyed (collectively, for purposes of this Section and any other Section referring to the Transferor Certificates, "transferred" or a "transfer") only in accordance with this Section. (b) No transfer of a Transferor Certificate will be made unless the transfer is exempt from the registration requirements of the Securities Act of 1933 (the "Act") and any applicable state securities laws or is made in accordance with the Act and those laws. Except for the initial issuance of a Transferor Certificate to the Transferor (and any subsequent transfer by that Transferor to one of its Affiliates), the Owner Trustee will require either: (i) the transferee to execute an investment letter acceptable to and in form and substance satisfactory to the Owner Trustee certifying to the Owner Trustee the facts surrounding the transfer, which investment letter shall not be an expense of the Owner Trustee or 11 (ii) an Opinion of Counsel acceptable to and in form and substance satisfactory to the Owner Trustee and the Depositor that the transfer may be made pursuant to an exemption from the Act, describing the applicable exemption and its basis, or is being made pursuant to the Act, which Opinion of Counsel shall not be an expense of the Owner Trustee or the Depositor. The holder of a Transferor Certificate desiring to effect a transfer shall indemnify the Trust against any liability that may result if the transfer is not so exempt or is not made in accordance with any federal and state laws. (c) No transfer of an interest in a Transferor Certificate will be made unless the Owner Trustee has received either: (i) a representation letter from the proposed Transferor, acceptable to and in form and substance satisfactory to the Owner Trustee, to the effect that the proposed Transferor is not an employee benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a person acting on behalf of, or investing plan assets of, any such plan, which representation letter shall not be an expense of the Owner Trustee; or (ii) an Opinion of Counsel acceptable to the Owner Trustee to the effect that the purchase or holding of the Transferor Certificate will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Owner Trustee to any obligation in addition to those undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Owner Trustee or the Depositor; except that, in the case of the initial issuance of a Transferor Certificate to the Transferor (and any subsequent transfer by the Transferor to one of its Affiliates), the representation in clause (i) shall be deemed to have been made. (d) No transfer of an interest in a Transferor Certificate after its initial issuance will be made unless: (i) the proposed Transferor is organized and existing under the laws of the United States or any State and expressly assumes the performance of every obligation of the existing Transferor under this Agreement and the other Transaction Documents pursuant to an agreement acceptable to the Owner Trustee, (ii) the existing Transferor delivers to the Owner Trustee an Officer's Certificate stating that the transfer complies with this Section 3.10 and that all the conditions in this Section 3.10 have been complied with, and an Opinion of Counsel stating that all the conditions in this Section 3.10 have been complied with; (iii) the Rating Agency Condition is satisfied with respect to the transfer; 12 (iv) the proposed Transferor delivers to the Owner Trustee an Opinion of Counsel to the effect that (A) the transfer will not adversely affect the characterization of the Notes after the transfer as debt for federal and applicable State income tax purposes, (B) the transfer will not result in the Trust being subject to tax at the entity level for federal or applicable State tax purposes, (C) the transfer will not have any material adverse effect on the federal or applicable State income taxation of any Holder of the Notes or any person who is the beneficial owner of a book-entry Note, and (D) the transfer will not result in the Trust being characterized as a taxable mortgage pool as defined in Section 7701(i) of the Code; and (v) all filings and other actions necessary to continue the perfection of the interest of the Trust in the Mortgage Loans and the other Assets has been taken or made. The requirement that the proposed Transferor be organized and existing under the laws of the United States or any State shall not apply if the Rating Agency Condition (without regard to the Policy, as defined in the Indenture) has been satisfied taking that into account. (e) Each Transferor Certificate shall bear a legend substantially in the following form: This certificate has not been and will not be registered under the Securities Act of 1933, as amended, or the securities laws of any state and may not be resold or transferred unless it is registered pursuant to the Securities Act of 1933 and the securities laws of any state or is sold or transferred in transactions that are exempt from registration under the Securities Act of 1933 and under applicable state law and is transferred in accordance with Section 3.10 of the Trust Agreement related to CWABS Revolving Home Equity Loan Trust, Series 2004-P. Neither this certificate nor any interest in it may be transferred unless the transferee delivers to the trustee either a representation letter to the effect that the transferee is not an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended, a plan subject to Section 4975 of the Code, as amended, or a person acting on behalf of or using the assets of any such plan; or an opinion of counsel in accordance with Section 3.10(c) of the Trust Agreement related to CWABS Revolving Home Equity Loan Trust, Series 2004-P. Notwithstanding anything else to the contrary herein, any purported transfer of this certificate to or on behalf of an employee benefit plan subject to ERISA or to the Code without the opinion of counsel satisfactory to the trustee as described above shall be void. (f) No Transferor Certificate shall be transferred except to (i) the Master Servicer, the Transferor, the Depositor, or the Trust (or an affiliate of any of them) or (ii) a qualified 13 institutional buyer (as defined in Rule 144A under the Securities Act). Each person (other than the Master Servicer, the Transferor, or the Trust (or an affiliate of them)) to whom a Transferor Certificate is proposed to be transferred will be required to certify to the Transferor, the Trust, and the Certificate Registrar that it is a qualified institutional buyer. (g) Notwithstanding anything in this Agreement to the contrary, the Depositor, without the consent of any Noteholder or Certificateholder, may amend this Section 3.10 with the consent of the Credit Enhancer if it receives an Opinion of Counsel to the effect that the amendment will not adversely affect in any material respect (i) the tax characterization of the outstanding Notes and Transferor Certificates for federal or applicable state income tax purposes, (ii) the characterization of the Trust as an entity that is not a publicly traded partnership or other business entity taxable as a corporation for United States federal income tax purposes and will not result in a United States federal withholding tax being imposed on the Trust, or (iii) the Trust's exemptions from any registration requirement of the federal securities laws. ARTICLE IV ACTIONS BY OWNER TRUSTEE Section 4.01. Prior Notice to Certificateholders Regarding Certain Matters. (a) The Owner Trustee shall give the Certificateholders thirty days' written notice before taking any of the following actions on behalf of the Trust. Within thirty days of the date of the notice the Certificateholders may instruct the Owner Trustee in writing not to take the proposed action or may provide alternative direction. Thirty days after giving the notice, if the Owner Trustee has not been instructed otherwise by the holder of the Transferor Certificate, then the Owner Trustee may: (i) initiate any claim or lawsuit by the Trust, or compromise any action, claim, or lawsuit brought by or against the Trust; (ii) file an amendment to the Certificate of Trust; (iii) amend the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required; (iv) amend the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required, but the amendment materially adversely affects the interests of the Certificateholders; (v) amend the Administration Agreement; and 14 (vi) appoint a successor Certificate Paying Agent, Certificate Registrar, Administrator, or Indenture Trustee under the Indenture, or consent to the assignment by the Transfer Agent and Registrar, Administrator, or Indenture Trustee of its obligations under the Indenture. If the Trust has more than one holder of its Transferor Certificates, then the Holders may only give instructions that are agreed to by the majority of the Holders (based on the holders' percentage ownership of the entire Transferor Certificate Interest). (b) Notwithstanding Section 4.01(a), without prior notice to the Certificateholders the Owner Trustee may, on behalf of the Trust: (i) initiate a claim or lawsuit by the Trust for collection of Assets; (ii) file an amendment to the Certificate of Trust whenever the amendment is required by the Statutory Trust Statute; or (iii) amend the Administration Agreement to cure any ambiguity or mistake or effect any other amendment that would not materially adversely affect the interests of the Certificateholders. The foregoing provisions of this Section 4.01 do not create a duty on the part of the Owner Trustee to take any of the actions described above. Section 4.02. Action by Certificateholders Regarding Certain Matters. Except when directed by the Certificateholders and with the prior written consent of the Credit Enhancer in the case of (a), (b), or (c) below, the Owner Trustee may not (a) remove the Administrator pursuant to Section 7(c) of the Administration Agreement, (b) appoint a successor Administrator pursuant to Section 7(e) of the Administration Agreement, (c) remove the Master Servicer under the Sale and Servicing Agreement, or (d) except as expressly provided in the Indenture, sell Assets after the termination of the Indenture. Section 4.03. Action by Certificateholders Regarding Bankruptcy. Except upon delivery to the Owner Trustee by each Certificateholder of a certificate certifying that the Certificateholder reasonably believes that the Trust is insolvent, the Owner Trustee may not commence a voluntary proceeding in bankruptcy relating to the Trust. Section 4.04. Restrictions on Certificateholder's Power. A Certificateholder shall not direct the Owner Trustee to take or to refrain from taking any action if that action or inaction would be contrary to any obligation of the Trust, or the Owner Trustee under this Agreement or any of the other Transaction Documents or would be contrary to Section 2.03. The Owner Trustee shall not be obligated to follow that direction if given. 15 Section 4.05. Majority Interest. Except as expressly provided in this Agreement, any action that may be taken by the Certificateholders under this Agreement shall be taken by Certificateholders by a majority of the holders voting per capita. ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES Section 5.01. Application of Trust Funds. (a) On each Distribution Date, the Certificate Paying Agent shall distribute to the Transferor Certificateholders pro rata (based on each holder's percentage ownership of the entire Transferor Certificate interest) any funds made available to it under Section 8.03 of the Indenture. Distributions to each Transferor Certificateholder shall be made by wire transfer of immediately available funds to the Transferor Certificateholder's account at a bank or other entity having appropriate facilities. If appropriate notice of wiring instructions is not given by any Transferor Certificateholder, then distribution to that Transferor Certificateholder shall be by check mailed to the Transferor Certificateholder at its address as it appears on the Certificate Register. (b) If any withholding tax is imposed on the Trust's payment (or allocations of income) to the Certificateholders, the withholding tax shall reduce the amount otherwise distributable to the Certificateholders in accordance with this Section. The Certificate Paying Agent is authorized and directed to retain from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Trust. This authorization shall not prevent the Certificate Paying Agent from contesting any tax in appropriate proceedings and withholding payment of the tax pending the outcome of the proceedings if permitted by law. The amount of any withholding tax imposed on any distributions shall be treated as cash distributed to the Certificateholder at the time it is withheld by the Trust and remitted to the appropriate taxing authority. If withholding tax might be payable on a distribution to a non-U.S. Certificateholder, the Certificate Paying Agent may in its sole discretion withhold an appropriate amount to cover that possibility. Section 5.02. Method of Payment. Distributions required to be made to a Certificateholder on any Payment Date shall be made by wire transfer of immediately available funds to the account of the Certificateholder at a bank or other entity having appropriate facilities if the Certificateholder so notifies the Certificate Registrar in writing at least five Business Days before the Payment Date. If appropriate notice is not given by a Certificateholder, then distributions to that Certificateholder shall be by check mailed to it at its address in the Certificate Register. 16 ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE Section 6.01. General Authority. The Owner Trustee is authorized and directed to execute and deliver the Transaction Documents to which the Trust is to be a party and each other document contemplated by the Transaction Documents in such form as the Depositor shall approve, as evidenced conclusively by the Owner Trustee's execution of it. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions permitted or required of the Trust pursuant to the Transaction Documents. The Owner Trustee is further authorized to take any action the Administrator recommends regarding the Transaction Documents. Section 6.02. General Duties. The Owner Trustee shall discharge all of its responsibilities pursuant to this Agreement and the other Transaction Documents to which the Trust is a party and administer the Trust in the interest of the Certificateholders, subject to this Agreement and the other Transaction Documents. The Owner Trustee shall be considered to have discharged its obligations under this Agreement and the other Transaction Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Owner Trustee or the Trust under this Agreement or any other Transaction Document. The Owner Trustee shall not be liable for the failure of the Administrator to carry out its obligations under the Administration Agreement or the other Transaction Documents. The Administrator shall prepare and file any federal, state, or local income and franchise tax return for the Trust as well as any other applicable return and apply for a taxpayer identification number on behalf of the Trust. If the Trust is required pursuant to an audit or administrative proceeding or change in applicable regulations to file federal, state, or local tax returns, the Administrator shall prepare and file any tax returns required to be filed by the Trust. The Owner Trustee shall promptly sign the returns and deliver the returns after signature to the Administrator and the returns shall be filed by the Administrator. Section 6.03. Action on Instruction. (a) Subject to Article IV and in accordance with the Transaction Documents, the Certificateholders may by written instruction direct the Owner Trustee in the management of the Trust. Such direction may be exercised at any time by written instruction of the Certificateholders pursuant to Article IV. (b) The Owner Trustee is not required to take any action under this Agreement or any other Transaction Document if the Owner Trustee reasonably determines, or is advised by counsel, that the action (i) is likely to result in liability on the part of the Owner Trustee, (ii) is contrary to the terms of this Agreement or of any other Transaction Document, or (iii) is contrary to law. 17 (c) Whenever the Owner Trustee is (i) unable to decide between alternative courses of action under this Agreement or any other Transaction Document, (ii) unsure about the application of any provision of this Agreement or any other Transaction Document or it appears to be in conflict with any other applicable provision, or (iii) if this Agreement permits any determination by the Owner Trustee or is silent or is incomplete about the course of action that the Owner Trustee is required to take regarding a particular set of facts, the Owner Trustee may give appropriate notice to the Certificateholders requesting instruction and, if the Owner Trustee in good faith follows any instructions it receives, the Owner Trustee shall not be liable to the Certificateholders on account of its action or inaction. If the Owner Trustee has not received appropriate instruction within ten days of the notice (or within any shorter period necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking any action not inconsistent with this Agreement or the other Transaction Documents that it deems to be in the best interests of the Certificateholders, and shall have no liability to the Certificateholders for its action or inaction. (d) The Owner Trustee may enter into any amendment of any Transaction Document as to which the Rating Agency Condition is satisfied (without regard to the Policy, as defined in the Indenture), and when so requested by the Certificateholders, the Owner Trustee shall enter into any amendment of any Transaction Documents: (i) that does not impose further obligations or liabilities on the Owner Trustee, (ii) that the Credit Enhancer has consented to, and (iii) as to which either the Rating Agency Condition is satisfied or Holders of not less than 662/3% of the aggregate Outstanding Amount of the Notes have consented. Section 6.04. No Duties Except as Specified in the Agreement or in Instructions. The Owner Trustee shall not have any duty to manage, make any payment on, register, record, sell, dispose of, or otherwise deal with any Assets, or to otherwise take or refrain from taking any action under any document contemplated by this Agreement or any other Transaction Document to which the Trust is a party, except as expressly provided by this Agreement or in any written instruction received by the Owner Trustee under Section 6.03. No implied duties or obligations shall be read into this Agreement or any other Transaction Document against the Owner Trustee. The Owner Trustee shall have no responsibility for filing any Financing or Continuation Statement in any public office at any time or otherwise to perfect or maintain the perfection of any security interest or lien granted to it under the Sale and Servicing Agreement or to prepare or file any filing with the Securities and Exchange Commission for the Trust or to record this Agreement or any other Transaction Document. Wilmington Trust Company, in its individual capacity, shall, at its own cost and expense, promptly take all action necessary to discharge any liens on any part of any Assets resulting from actions by, or claims against, Wilmington Trust Company, in its individual capacity, that are not related to the ownership or the administration of the Assets. 18 Section 6.05. No Action Except Under Specified Documents or Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of, or otherwise deal with any part of any Assets, except as provided in this Agreement, pursuant to the other relevant Transaction Documents, and in accordance with any instruction delivered to the Owner Trustee pursuant to Section 6.03. Section 6.06. Restrictions. The Owner Trustee shall not take any action that is inconsistent with the stated purposes of the Trust in Section 2.03. The Certificateholders, by their acceptance of their Transferor Certificates, agree not to direct the Owner Trustee to take action that would violate the Agreement or any other Transaction Document. ARTICLE VII CONCERNING OWNER TRUSTEE Section 7.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts created by this Agreement and agrees to perform its duties under it. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of any Assets on the terms of the Transaction Documents. The Owner Trustee shall not be accountable under this Agreement or any other Transaction Document under any circumstances except (i) for its own willful misconduct or gross negligence or (ii) for the inaccuracy of any representation or warranty contained in Section 7.03. In particular, but not in limitation (and subject to the exceptions in the preceding sentence): (a) The Owner Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Owner Trustee. (b) The Owner Trustee shall not be liable regarding any action taken or omitted to be taken by it in accordance with instructions from the Administrator or the Certificateholders. (c) No provision of this Agreement or any other Transaction Document shall require the Owner Trustee to expend or risk its funds or otherwise incur any financial liability in the performance of any of its rights under this Agreement or any other Transaction Document if the Owner Trustee has reasonable grounds for believing that repayment of those funds or adequate indemnity against the risk or liability is not reasonably assured to it. (d) Under no circumstances shall the Owner Trustee be liable for indebtedness under any of the Transaction Documents, including the principal and interest on any of Notes. (e) The Owner Trustee shall not be responsible for the validity or sufficiency of this Agreement or for its due execution by the Depositor or for the form, character, genuineness, sufficiency, value, or validity of any of the Assets, or for the validity or sufficiency of the 19 Transaction Documents, other than the certificate of authentication on the Transferor Certificates. (f) The Owner Trustee shall not be liable to any Noteholder or Certificateholder, other than as expressly provided for in this Agreement or expressly agreed to in the other Transaction Documents. (g) The Owner Trustee shall not be liable for the default or misconduct of the Depositor, the Indenture Trustee, the Administrator, or the Master Servicer under any of the Transaction Documents or otherwise. The Owner Trustee shall have no duty to perform the obligations of the Trust or the Owner Trustee or any other person under this Agreement or the other Transaction Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture, the Master Servicer under the Sale and Servicing Agreement, or the Depositor under the Sale and Servicing Agreement, or any other person under any other Transaction Document. (h) The Owner Trustee need not exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct, or defend any litigation under this Agreement or any other Transaction Document or otherwise, at the request, order, or direction of the Certificateholders, unless one or more Certificateholders have offered to the Owner Trustee security or indemnity satisfactory to it against the costs and liabilities that may be incurred by the Owner Trustee thereby. (i) The right of the Owner Trustee to perform any discretionary act in this Agreement or in any other Transaction Document shall not be construed as a duty, and the Owner Trustee shall not be answerable other than for its gross negligence or willful misconduct in the performance of any discretionary act. Section 7.02. Furnishing Documents. The Owner Trustee shall furnish to the Certificateholders, promptly on written request, copies of all reports, notices, requests, demands, certificates, financial statements, and any other instruments furnished to the Owner Trustee under the Transaction Documents. Section 7.03. Representations and Warranties. Wilmington Trust Company hereby represents and warrants to the Depositor that: (a) It is a banking corporation duly organized and validly existing in good standing under the laws of the State of Delaware. It has all requisite corporate power and authority to execute, deliver, and perform its obligations under this Agreement. (b) It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf. 20 (c) Neither the execution and delivery by it of this Agreement, nor the consummation by it of the transactions contemplated by this Agreement, nor compliance by it with any of the provisions of this Agreement will contravene any federal or Delaware law, governmental rule, or regulation governing the banking or trust powers of the Owner Trustee, or any judgment or order binding on it, or constitute a default under its charter documents or bylaws. Section 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall not be liable to anyone in acting under this Agreement on any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond, or other document or paper believed by it to be genuine or believed by it to be signed by the proper parties. The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that the resolution has been duly adopted and that it is in full force and effect. As to any fact or matter the method of determination of which is not specifically prescribed in this Agreement, the Owner Trustee may for all purposes of this Agreement conclusively rely on a certificate, signed by a Responsible Officer of the relevant party, as to the fact or matter, and that certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance on it. (b) In the exercise or administration of the trusts under this Agreement and in the performance of its obligations under this Agreement or the other Transaction Documents, the Owner Trustee (i) may act directly or through its agents or attorneys under agreements entered into with any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of those agents or attorneys if they were selected by the Owner Trustee with reasonable care and (ii) may consult with counsel, accountants, and other skilled persons it selects with reasonable care. The Owner Trustee shall not be liable for anything done, suffered, or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants, or other persons. Section 7.05. Not Acting in Individual Capacity. Except as provided in this Article, (i) in acting in the capacity of Owner Trustee pursuant to the trusts created by this Agreement, Wilmington Trust Company acts solely as Owner Trustee under this Agreement and not in its individual capacity, and (ii) all persons having any claim against the Owner Trustee under this Agreement or any other Transaction Document shall look only to the Assets for payment or satisfaction of that claim. Section 7.06. Owner Trustee Not Liable for Transferor Certificates or Payment Obligations. The recitals contained in this Agreement and in the Transferor Certificates (other than the signature and authentication of the Owner Trustee on the Transferor Certificates) shall be taken as the statements of the Depositor, and the Owner Trustee assumes no responsibility for their correctness. The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, of any other Transaction Document, of the Transferor Certificates (other 21 than the signature and authentication of the Owner Trustee on the Transferor Certificates), of any Mortgage Loan or related documents. The Owner Trustee shall not have any responsibility for (i) the legality, validity, and enforceability of any Mortgage Loan, or (ii) the perfection and priority of any security interest created in any Mortgage Loan or the maintenance of that perfection and priority, or (iii) the sufficiency of the Assets or their ability to generate the payments to be distributed under this Agreement or the Noteholders under the Indenture, or (iv) the performance or enforcement of any Mortgage Loan, or (v) the compliance by the Depositor or the Master Servicer with any warranty or representation made under any Transaction Document or in any related document, or (vi) any action of the Administrator, the Indenture Trustee, or the Master Servicer or any subservicer taken in the name of the Owner Trustee. Section 7.07. Owner Trustee May Own Notes. Wilmington Trust Company in its individual or any other capacity may become the owner or pledgee of the Notes and may deal with the Depositor, the Administrator, the Indenture Trustee, and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee. ARTICLE VIII COMPENSATION OF OWNER TRUSTEE Section 8.01. Owner Trustee's Fees. The Owner Trustee shall receive, as compensation from the Sponsor for its services under this Agreement, fees that have been separately agreed on in a fee agreement between the Sponsor and the Owner Trustee. Section 8.02. Reimbursement and Indemnification. (a) The Owner Trustee shall be entitled to be reimbursed for its reasonable expenses (including reasonable attorneys' fees) incurred in the performance of its duties as Owner Trustee hereunder, first, out of amounts on deposit in the Collection Account prior to payments on the Transferor Certificates, second, to the extent not paid pursuant to clause first within 60 days of first being incurred, by the Transferor and third, to the extent not paid pursuant to clause first and second within 60 days of first being incurred, by Countrywide Home Loans, Inc., except, in both cases, to the extent that such expenses arise out of or result from (i) the Owner Trustee's own willful misconduct, bad faith or gross negligence, (ii) the inaccuracy of any of the Owner Trustee's representations or warranties contained in Section 7.03 of this Agreement, (iii) taxes based on or measured by any fees, commissions or compensation 22 received by the Owner Trustee for acting as such in connection with any of the transactions contemplated by this Agreement or any other Transaction Document, or (iv) the Owner Trustee's failure to use reasonable care to receive, manage and disburse moneys actually received by it in accordance with the terms hereof. (b) The Owner Trustee is hereby indemnified and held harmless from and against any and all liabilities, obligations, indemnity obligations, losses (excluding loss of anticipated profits), damages, claims, actions, suits, judgments, out-of-pocket costs, expenses and disbursements (including legal and consultants' fees and expenses) and taxes of any kind and nature whatsoever (collectively, the "Liabilities") which may be imposed on, incurred by or asserted at any time against it in any way relating to or arising out of the Trust Estate, any of the properties included therein, the administration of the Trust Estate or any action or inaction of the Owner Trustee hereunder or under the Transaction Documents, except to the extent that such Liabilities arise out of or result from (i) the Owner Trustee's own willful misconduct, bad faith or gross negligence, (ii) the inaccuracy of any of the Owner Trustee's representations or warranties contained in Section 7.03 of this Agreement, (iii) taxes based on or measured by any fees, commissions or compensation received by the Owner Trustee for acting as such in connection with any of the transactions contemplated by this Agreement or any other Transaction Document, or (iv) the Owner Trustee's failure to use reasonable care to receive, manage and disburse moneys actually received by it in accordance with the terms hereof. Any amounts payable to the Owner Trustee on account of the indemnities set forth in this Section 8.02 shall be payable, first, out of amounts on deposit in the Collection Account prior to payments on the Transferor Certificates, second, to the extent not paid pursuant to clause first within 60 days of first being incurred, by the Transferor and third, to the extent not paid pursuant to clause first and second within 60 days of first being incurred, by Countrywide Home Loans, Inc. The indemnities contained in this Section 8.02 shall survive the termination of this Agreement and the removal or resignation of the Owner Trustee hereunder. Losses, claims, damages, liabilities, and expenses in any way attributable to defaults on the Mortgage Loans are excluded from the coverage of the provisions of this Section. Section 8.03. Payments to Owner Trustee. Any amounts paid to the Owner Trustee pursuant to this Article shall not be a part of the Assets immediately after their payment. All amounts then due to the Owner Trustee from the Trust, the Depositor, or the Master Servicer under any Transaction Document shall be paid in full before any payments to the Depositor or any holder of a Transferor Certificate. 23 ARTICLE IX TERMINATION OF AGREEMENT Section 9.01. Termination of Agreement. (a) The Trust shall dissolve when the Trust has made the final distribution of all moneys or other property or proceeds of all Assets in accordance with the terms of the Transaction Documents, and Article V. The bankruptcy, liquidation, or dissolution of any Certificateholder shall not (x) terminate this Agreement or the Trust, (y) entitle that Certificateholder's legal representatives to obtain an accounting or to take any action in any court for a partition or winding up of any part of the Trust or the Assets, or (z) otherwise affect the rights and obligations of the parties to this Agreement. (b) Except as provided in Section 9.01(a), neither the Depositor nor the Certificateholders may dissolve, revoke, or terminate the Trust. (c) On the winding up of the Trust and payment of all liabilities of the Trust in accordance with Section 3808 of the Statutory Trust Statute, the Owner Trustee shall cancel the Certificate of Trust by filing a certificate of cancellation with the Secretary of State of the State of Delaware in accordance with the provisions of the Statutory Trust Statute. The Owner Trustee may rely on the directions of the Administrator with respect to winding up the Trust. Thereupon, this Agreement (other than Article VIII) and the Trust shall terminate. Section 9.02. Credit Enhancer's Rights Regarding Actions, Proceedings, or Investigations. Until the Notes have been paid in full, all amounts owed to the Credit Enhancer have been paid in full, the Insurance Agreement has terminated and the Policy has been returned to the Credit Enhancer for cancellation, the following provisions shall apply: (a) Notwithstanding anything in this Agreement or in the other Transaction Documents to the contrary, the Credit Enhancer shall have the right to participate in, to direct the enforcement or defense of, and, at the Credit Enhancer's sole option, to institute or assume the defense of, any action, proceeding, or investigation (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that could adversely affect the Trust or the rights or obligations of the Credit Enhancer under this Agreement or under the Policy, including any insolvency or bankruptcy proceeding in respect of the Trust. Following notice to the Owner Trustee and the Indenture Trustee, the Credit Enhancer shall have exclusive right to determine, in its sole discretion, the actions necessary to preserve and protect the Collateral, the Issuer, and the Trust. All costs and expenses of the Credit Enhancer in connection with such action, proceeding, or investigation, including any judgment or settlement entered into affecting the Credit Enhancer or the Credit Enhancer's interests, shall be included in reimbursement amount owed to the Credit Enhancer under Section 8.03(a)(ix) and Section 8.03(a)(xi) of the Indenture. 24 (b) In connection with any action, proceeding, or investigation (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that could reasonably be expected to adversely affect the Collateral, the Issuer, the Trust, or the rights or obligations of the Credit Enhancer under this Agreement or under the Policy or the Transaction Documents, including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, the Trust, or any affiliate of any of them, the Owner Trustee agrees to cooperate with, and to take any action directed by, the Credit Enhancer, including entering into agreements and settlements as directed the Credit Enhancer, in its sole discretion, without the consent of any Transferor Certificateholder or any Noteholder. (c) The Owner Trustee agrees to provide to the Credit Enhancer prompt written notice of any action, proceeding, or investigation (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities) that names the Issuer, the Trust, or the Owner Trustee as a party or that could adversely affect the Collateral, the Issuer, the Trust, or the rights or obligations of the Credit Enhancer under this Agreement or under the Policy or the Transaction Documents, including any insolvency or bankruptcy proceeding in respect of the Master Servicer, the Sponsor, the Depositor, the Issuer, the Trust, or any affiliate of any of them. (d) Notwithstanding anything in this Agreement or in any of the other Transaction Documents to the contrary, the Owner Trustee shall not, without the Credit Enhancer's prior consent or unless directed by the Credit Enhancer, undertake or join any litigation or agree to any settlement of any action, proceeding, or investigation affecting the Collateral, the Issuer, the Trust, or the rights or obligations of the Credit Enhancer under this Agreement or under the Policy or the Transaction Documents (other than foreclosure proceedings involving the Mortgage Loans and other actions constituting ordinary servicing activities). (e) Each Transferor Certificateholder, by acceptance of its Transferor Certificate, and the Owner Trustee agree that Credit Enhancer shall have the rights provided in this Section, which are in addition to any rights of the Credit Enhancer pursuant to the other provisions of the Transaction Documents, that the rights provided in this Section may be exercised by the Credit Enhancer, in its sole discretion, without the need for the consent or approval of any Transferor Certificateholder or the Owner Trustee, notwithstanding any other provision in this Agreement or in any of the other Transaction Documents, and that nothing in this Section shall be deemed to be an obligation of the Credit Enhancer to exercise any of the rights provided for in this Agreement. (f) The Owner Trustee undertakes to perform or observe only such of the covenants and obligations of the Owner Trustee as are expressly set forth in this Agreement, and no implied covenants or obligations with respect to the Credit Enhancer shall be read into this Agreement or the other Transaction Documents against the Owner Trustee. The Owner Trustee shall not be deemed to owe any fiduciary duty to the Credit Enhancer, and shall not be liable in any event to the Credit Enhancer as a result of the performance of its express 25 obligations under this Agreement. The Owner Trustee shall not be obligated to take any action at the request or direction of the Credit Enhancer unless the Owner Trustee is furnished with security or indemnification satisfactory to it against any loss, liability, or expense in connection with the action. Section 9.03. Rights of the Credit Enhancer. (a) Before taking any of the actions specified in Section 4.01(a), the Owner Trustee shall give the Credit Enhancer written notice at the same time that notice is given to the Certificateholders. (b) Before taking any of the actions specified in Section 4.01(b), the Owner Trustee shall give the Credit Enhancer written notice of the proposed action. (c) Upon the occurrence of an event described in Section 6.03(c), the Owner Trustee shall give the Credit Enhancer written notice at the same time that notice is given to the Certificateholders. (d) Any successor Owner Trustee appointed by the Administrator pursuant to Section 10.01 shall be appointed only with the prior written consent of the Credit Enhancer. (e) The Owner Trustee shall mail notice of any merger or consolidation or other action described in Section 10.03 to the Credit Enhancer. (f) Any co-trustee or separate trustee appointed pursuant to Section 10.04 shall be appointed only with the prior written consent of the Credit Enhancer. (g) Promptly after the execution of any amendment or consent, the Owner Trustee shall furnish a copy of the amendment or consent to the Credit Enhancer. ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES Section 10.01. Resignation or Removal of Owner Trustee. The Owner Trustee may at any time resign and be discharged from the trusts created by this Agreement by giving written notice of resignation to the Administrator, and the Depositor. When it receives a notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee in writing delivered to the resigning Owner Trustee and to the successor Owner Trustee. If no successor Owner Trustee has been so appointed and assumed trusteeship within thirty days after the notice of resignation, the resigning Owner Trustee may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee. The Administrator may remove the Owner Trustee if at any time the Owner Trustee is legally unable to act, or an Insolvency Event occurs with respect to the Owner Trustee. If the 26 Administrator removes the Owner Trustee under the authority of the preceding sentence, the Administrator shall promptly appoint a successor Owner Trustee in writing delivered to the outgoing Owner Trustee and to the successor Owner Trustee, and shall pay all fees and expenses owed to the outgoing Owner Trustee. Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.02 and payment of all fees and expenses of the outgoing Owner Trustee. The Administrator shall provide notice of any resignation or removal of the Owner Trustee to each of the Rating Agencies, the Depositor, and the Credit Enhancer. Section 10.02. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to Section 10.01 shall execute and deliver to the Administrator, the Depositor, and to the predecessor Owner Trustee an instrument accepting appointment as trustee under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective. The successor Owner Trustee shall become fully vested with all the rights and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee without any further act, deed, or conveyance. The predecessor Owner Trustee shall promptly deliver to the successor Owner Trustee all documents, statements, and monies held by it under this Agreement. The Administrator and the predecessor Owner Trustee shall execute and deliver any instruments and do anything else for fully and certainly vesting and confirming in the successor Owner Trustee all rights and obligations under this Agreement. When a successor Owner Trustee accepts its appointment pursuant to this Section, the Administrator shall mail notice of the change in trustee to the Certificateholders, the Depositor, the Indenture Trustee, the Noteholders, the Credit Enhancer, and the Rating Agencies. If the Administrator fails to mail that notice within ten days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall mail that notice at the expense of the Administrator. The successor Owner Trustee shall file an amendment to the Certificate of Trust with the Secretary of State of the State of Delaware identifying the name and principal place of business in the State of Delaware of the successor Owner Trustee. Section 10.03. Merger or Consolidation of Owner Trustee. Any person into which the Owner Trustee may be merged or converted or with which it may be consolidated, or any person resulting from any merger, conversion, or consolidation to which the Owner Trustee is a party, or any person succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee under this Agreement without the execution or filing of any instrument or any further act on the part of any of the parties to this Agreement, anything to the contrary notwithstanding. The Owner Trustee shall mail notice of the merger or consolidation or other action to each Rating Agency and the Credit Enhancer. 27 Section 10.04. 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 Assets may at any time be located, the Administrator and the Owner Trustee acting jointly shall execute and deliver all instruments to appoint persons approved by the Administrator, and Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as separate trustee, of all or any part of the Assets, and to vest in that person, in that capacity, such title to the Assets or any part thereof and, subject to the other provisions of this Section, such rights and obligations as the Administrator and the Owner Trustee consider appropriate. If the Administrator has not joined in the appointment within fifteen days after the receipt by it of a request so to do, the Owner Trustee alone may make the appointment. No notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.02. Each separate trustee and co-trustee shall be appointed and act subject to the following provisions and conditions: (a) All rights and obligations conferred or imposed on the Owner Trustee shall be conferred on and exercised or performed by the Owner Trustee and the separate trustee or co-trustee jointly (the separate trustee or co-trustee is not authorized to act separately without the Owner Trustee joining in the act), except to the extent that under applicable law the Owner Trustee is incompetent or unqualified to perform the acts, in which case those rights and obligations (including the holding of title to the Assets or any portion of them in that jurisdiction) shall be exercised and performed singly by the separate trustee or co-trustee, but solely at the direction of the Owner Trustee; (b) No trustee under this Agreement shall be personally liable for any act or omission of any other trustee under this Agreement; and (c) The Administrator and the Owner Trustee acting jointly 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 Owner Trustee shall be considered 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 the conditions of this Article. 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 Owner Trustee or separately, as may be provided in the instrument of appointment. Each instrument of appointment shall be filed with the Owner Trustee and a copy of it given to the Administrator. Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act with respect to 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 28 estates, properties, rights, and obligations shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee or separate trustee. ARTICLE XI MISCELLANEOUS Section 11.01. Supplements and Amendments. (a) This Agreement may be amended in any way by the Depositor and the Owner Trustee, with the consent of any affected Certificateholder and the Credit Enhancer, but only if the Rating Agency Condition is satisfied and the amendment would not cause any adverse tax event for any Noteholder. Promptly after the execution of any amendment or consent, the Owner Trustee shall furnish a copy of the amendment or consent to the Certificateholders, the Credit Enhancer, the Indenture Trustee, and each Rating Agency. Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause its filing with the Secretary of State of the State of Delaware. The Owner Trustee may, but shall not be obligated to, enter into any amendment that affects the Owner Trustee's own rights or obligations under this Agreement or otherwise. In connection with the execution of any amendment to this Agreement, the Certificate of Trust, or any amendment of any other agreement to which the Trust is a party, the Owner Trustee shall be entitled to receive and conclusively rely upon an Opinion of Counsel to the effect that the amendment is authorized or permitted by this Agreement and the Transaction Documents. (b) Notwithstanding anything to the contrary in this Agreement, before the issuance of the Notes the Certificateholders may amend this Agreement without the consent of any other party. Promptly after the execution of any amendment pursuant to this paragraph, the Certificateholders shall furnish a copy of the amendment to the Owner Trustee and the Credit Enhancer. Section 11.02. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Depositor, the Certificateholders, the Administrator, and, to the extent expressly provided in this Agreement, the Indenture Trustee, the Credit Enhancer and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other person any legal or equitable interest in the Assets or under this Agreement. 29 Section 11.03. Notices. (a) Except where telephonic instructions or notices are specifically authorized, all notices, demands, instructions, consents, and other communications required or permitted under this Agreement shall be in writing and shall be personally delivered or sent by first class or express mail (postage prepaid), national overnight courier service, or by facsimile transmission or other electronic communication device capable of transmitting or creating a written record (confirmed by first class mail) and shall be considered to be given for purposes of this Agreement on the day that the writing is delivered to its intended recipient. Unless otherwise specified in a notice sent or delivered in accordance with this Section, notices, demands, instructions, and other communications in writing shall be given to or made on the respective parties at their respective addresses indicated below, and, in the case of telephonic instructions or notices, by calling the telephone number indicated for the party below: if to the Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor, addressed to CWABS, Inc., c/o Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, DE 19890 Attention: Corporate Trust Administration Telephone: (302) 651-1000 Facsimile: (302) 651-8882 if to the Credit Enhancer, addressed to MBIA Insurance Corporation, 113 King Street Armonk, New York 10504 Attention: Insured Portfolio Management-Structured Finance ("IPM-SF") (CWABS Revolving Home Equity Loan Trust, Series 2004-P) telephone number (914) 273-4545 facsimile number (914) 765-3810 (b) Any notice required or permitted to be given to the Certificateholders shall be given by first-class mail, postage prepaid, at the addresses of the Certificateholders. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives the notice. Section 11.04. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions hereof, and that prohibition or unenforceability in 30 any jurisdiction shall not invalidate or render unenforceable the provision in any other jurisdiction. Section 11.05. Separate Counterparts. This Agreement may be executed by the parties to this Agreement in separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute but one instrument. Section 11.06. Successors and Assigns. All covenants and agreements contained in this Agreement shall be binding on, and inure to the benefit of, each of the Depositor and its permitted assignees, the Owner Trustee and its successors, and each Certificateholder and any of its successors, all as provided in this Agreement. Any request, notice, direction, consent, waiver or other instrument or action by any Certificateholder shall bind its successors. Section 11.07. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, the Depositor and the Owner Trustee, by entering into this Agreement, and each Certificateholder, by accepting a Transferor Certificate, agree that they shall not, before the date that is one year and one day after the termination of the Agreement, file or participate in the filing of any petition against the Trust that could cause the Trust to incur an Insolvency Event. Nothing in this Agreement shall prohibit the Owner Trustee from participating in or filing proofs of claim in any such proceeding instituted by any other person. Section 11.08. No Recourse. Each Certificateholder by accepting a Transferor Certificate acknowledges that the Transferor Certificate represents the beneficial interest in the Trust only and does not represent interests in or obligations of the Depositor, the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee, or any Affiliate of any of them and no recourse may be had against those parties or their assets, except as may be expressly stated or contemplated in this Agreement, the other Transaction Documents, or the Transferor Certificates. Section 11.09. Headings. The headings of the various Articles and Sections in this Agreement are for convenience of reference only and shall not define or limit any of the provisions of this Agreement. Section 11.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 31 Section 11.11. Rule 144A Information. As long as any of the securities of this Trust are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Administrator on behalf of the Trust shall provide to any Noteholder or Certificateholder and to any prospective purchaser from any of them designated by any of them on the request of the Noteholder, Certificateholder, or prospective purchaser, any information required to be provided the holder or prospective purchaser to satisfy the conditions of Rule 144A(d)(4) under the Securities Act. Section 11.12. Third-Party Beneficiary. The Credit Enhancer is a third-party beneficiary of this Agreement and is entitled to the rights and benefits given to it under this Agreement as if it were a party to this Agreement. 32 IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. CWABS, INC. Depositor By: /s/ Leon Daniels, Jr. ------------------------------ Name: Leon Daniels, Jr. Title: Vice President WILMINGTON TRUST COMPANY By: /s/ Patricia A. Evans ------------------------------- Name: Patricia A. Evans Title: Assistant Vice President COUNTRYWIDE HOME LOANS, INC. Master Servicer With respect to Article VIII only By: /s/ Leon Daniels, Jr. ------------------------------- Name: Leon Daniels, Jr. Title: Senior Vice President 33 Exhibit A FORM OF CERTIFICATE OF TRUST OF CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P This Certificate of Trust of CWABS Revolving Home Equity Loan Trust, Series 2004-P (the "Trust"), dated October 25, 2004, is being duly executed and filed by Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, ss. 3801 et seq.) (the "Act"). 1. Name. The name of the statutory trust is CWABS Revolving Home Equity Loan Trust, Series 2004-P. 2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware is Wilmington Trust Company, [________________], [_________], Delaware _____, Attention: [________________]. 3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, Address: not in its individual capacity, Rodney Square North but solely as owner trustee 1100 North Market Street Wilmington, DE 19890 Attention: Corporate Trust Administration By: ____________________________ Name: Title:
A-1 EXHIBIT B FORM OF TRANSFEROR CERTIFICATE This certificate has not been and will not be registered under the Securities Act of 1933, as amended, or the securities laws of any state and may not be resold or transferred unless it is registered pursuant to the Securities Act of 1933 and the securities laws of any state or is sold or transferred in transactions that are exempt from registration under the Securities Act of 1933 and under applicable state law and is transferred in accordance with Section 3.10 of the Trust Agreement related to CWABS Revolving Home Equity Loan Trust, Series 2004-P. Neither this certificate nor any interest in it may be transferred unless the transferee delivers to the trustee either a representation letter to the effect that the transferee is not an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended, a plan subject to Section 4975 of the Code, as amended, or a person acting on behalf of or using the assets of any such plan; or an opinion of counsel in accordance with Section 3.10(c) of the Trust Agreement related to CWABS Revolving Home Equity Loan Trust, Series 2004-P. Notwithstanding anything else to the contrary herein, any purported transfer of this certificate to or on behalf of an employee benefit plan subject to ERISA or to the Code without the opinion of counsel satisfactory to the trustee as described above shall be void. A-2 Date of Trust Agreement : [______], 2004 Cut-off Date : [______], 2004 Percentage Interest : 100% Certificate No. : [_______] First Distribution Date : REVOLVING HOME EQUITY LOAN ASSET BACKED TRANSFEROR CERTIFICATE CWABS REVOLVING HOME EQUITY LOAN TRUST, SERIES 2004-P Transferor Certificate evidencing a percentage interest in the distributions allocable to the Transferor Certificates evidencing an undivided interest in a trust consisting primarily of a pool of adjustable rate home equity revolving credit line mortgage loans sold by CWABS, INC. This Certificate does not represent an obligation of or interest in CWABS, Inc. (the "Depositor"), Countrywide Home Loans, Inc., or the Owner Trustee or any of their affiliates. Neither this Certificate nor the underlying Assets are guaranteed or insured by any governmental agency or instrumentality. This certifies that [____________________________] is the registered owner of the Percentage Interest evidenced by this Certificate in the entire interest in the CWABS Revolving Home Equity Loan Trust, Series 2004-P (the "Trust"), consisting primarily of a pool of mortgage loans (the "Mortgage Loans") transferred by the Depositor and serviced by Countrywide Home Loans, Inc. (in that capacity, the "Master Servicer"). The Trust was formed pursuant to the Trust Agreement, dated as of October 25, 2004 (the "Agreement"), between the Depositor and Wilmington Trust Company, as trustee (the "Owner Trustee"), a summary of some of the pertinent provisions of which follows. Capitalized terms used in this Certificate without definition have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the Agreement. The Holder of this Certificate by virtue of the acceptance of it agrees to be bound by the Agreement. This Certificate is one of the Transferor Certificates from a duly authorized issue of Certificates designated as Revolving Home Equity Loan Asset Backed Transferor Certificates, Series 2004-P, representing, to the extent specified in the Agreement, an undivided interest in: (i) each Mortgage Loan, including its Asset Balance (including all Additional Balances) and all collections received on it after the Cut-off Date (excluding payments due by the Cut-off Date); (ii) property that secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure; A-3 (iii) the Depositor's rights under the Purchase Agreement; (iv) the Depositor's rights under the hazard insurance policies covering Mortgaged Properties; and (v) certain other property described in the Agreement (collectively, the "Assets"). A first priority security interest in all the Assets has been granted to the Indenture Trustee under the Indenture. The Certificateholder, by its acceptance of this Certificate, agrees that it will look solely to the funds available under the Agreement for payment of this Certificate and that the Owner Trustee in its individual capacity is not personally liable to the Certificateholders for any amount payable under this Certificate or the Agreement or, except as expressly provided in the Agreement, subject to any liability under the Agreement. This Certificate does not purport to summarize the Agreement and reference is made to the Agreement for the interests, rights, and limitations of rights and obligations evidenced by this Certificate, and the rights and obligations of the Owner Trustee. The Agreement may be amended in any way by the Depositor and the Owner Trustee, with the consent of any affected Certificateholder if the Rating Agency Condition is satisfied and the amendment would not cause any adverse tax event for any Noteholder. No transfer of this Certificate shall be made unless the transfer is exempt from the registration requirements of the Securities Act of 1933 (the "Act") and any applicable state securities laws or is made in accordance with the Act and those laws. In connection with any transfer of this Certificate, the Owner Trustee will require either: (i) the transferee to execute an investment letter acceptable to and in form and substance satisfactory to the Owner Trustee certifying to the Owner Trustee the facts surrounding the transfer, which investment letter shall not be an expense of the Owner Trustee or (ii) an Opinion of Counsel acceptable to and in form and substance satisfactory to the Owner Trustee and the Depositor that the transfer may be made pursuant to an exemption from the Act, describing the applicable exemption and its basis, or is being made pursuant to the Act, which Opinion of Counsel shall not be an expense of the Owner Trustee or the Depositor. In connection with any transfer of this Certificate, the holder transferring this Certificate shall indemnify the Trust against any liability that may result if the transfer is not so exempt or is not made in accordance with any federal and state laws. Neither this Certificate nor any legal or beneficial interest in it may be, directly or indirectly, purchased, transferred, sold, pledged, assigned, or otherwise disposed of, and any proposed transferee of this Certificate shall not become its registered Holder, unless the conditions in Section 4.05 of the Agreement are satisfied. A-4 No service charge shall be made for the registration of transfer or exchange of this Certificate, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of this Certificate. The Owner Trustee, the Certificate Registrar, and any Certificate Paying Agent will treat the person in whose name this Certificate is registered in the Certificate Register as its owner for the purpose of receiving distributions pursuant to Section 5.02 of the Trust Agreement and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, and any Certificate Paying Agent shall be bound by any notice to the contrary. The obligations created by the Agreement will terminate and this Certificate will be retired and the Trust will be dissolved when the final distribution from the Assets is made resulting in the Trust having no further Assets. The Transferor may effect the transfer of all the Mortgage Loans at their termination purchase price on any Distribution Date from the Distribution Date immediately before which the aggregate Note Principal Balance is less than or equal to 10% of the Original Note Principal Balance. This transfer will result in the termination of the Agreement and the dissolution of the Trust. A-5 Unless the certificate of authentication on this Certificate has been executed by the Indenture Trustee by manual signature, this Certificate shall not be entitled to any benefit under the Agreement, or be valid for any purpose. Dated: [______], 2004 WILMINGTON TRUST COMPANY not in its individual capacity but solely as Owner Trustee on behalf of the Trust By: ---------------------------- Certificate of Authentication: This is one of the Transferor Certificates referenced in the within-mentioned Agreement. JPMORGAN CHASE BANK By: ------------------------ Authorized Officer A-6 EXHIBIT C FORM OF TRANSFEROR INVESTMENT LETTER FOR TRANSFEROR CERTIFICATES Date: CWABS, Inc. as Depositor 4500 Park Granada Calabasas, California 91302 Attention: ________________ Wilmington Trust Company, as Owner Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration Re: CWABS Revolving Home Equity Loan Trust, Series 2004-P Revolving Home Equity Loan Asset Backed Securities, Series 2004-P Transferor Certificates ------------------------------------------------- Ladies and Gentlemen: This letter is delivered to you in connection with the sale by _____________ (the "Transferor") to ______________________ (the "Transferee") of the Certificates representing a ____% Percentage Interest (the "Transferred Certificates"). All capitalized terms used in this certificate without definition have the meanings given to them in the Trust Agreement, dated as of October 25, 2004, between CWABS, Inc., as depositor, and Wilmington Trust Company, as owner trustee. The Transferor hereby certifies, represents, and warrants to you that: 1. The Transferor is the lawful owner of the Transferred Certificates with the full right to transfer them free from any claims and encumbrances whatsoever. 2. Neither the Transferor nor anyone acting on its behalf has (a) offered, transferred, pledged, sold, or otherwise disposed of any Certificate, any interest in any Certificate, or any other similar security to any person in any manner, (b) solicited any offer to buy or accept a transfer, pledge, or other disposition of any Certificate, any interest in any Certificate, or any other similar security from any person in any manner, (c) otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with any person in any manner, (d) made any general solicitation by general advertising or in any other manner, or (e) taken any other action that (in the case of any B-1 of the acts described in clauses (a) through (e) of this paragraph) would constitute a distribution of any Certificate under the Securities Act of 1933, as amended (the "Securities Act"), or would render the disposition of any Certificate a violation of Section 5 of the Securities Act or any state securities laws, or would require registration or qualification of any Certificate pursuant to the Securities Act or any state securities laws. 3. The Transferor and any person acting on behalf of the Transferor in this matter reasonably believe that the Transferee is a "qualified institutional buyer" as that term is defined in Rule 144A ("Rule 144A") under the Securities Act (a "Qualified Institutional Buyer") purchasing for its own account or for the account of a Qualified Institutional Buyer. In determining whether the Transferee is a Qualified Institutional Buyer, the Transferor and any person acting on behalf of the Transferor in this matter have relied on the following to establish the Transferee's ownership and discretionary investments of securities (check one or more): / / The Transferee's most recent publicly available financial statements, which statements present the information as of a date within 16 months preceding the date of sale of the Transferred Certificate in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser; or / / The most recent publicly available information appearing in documents filed by the Transferee with the Securities and Exchange Commission or another United States federal, state, or local governmental agency or self-regulatory organization, or with a foreign governmental agency or self-regulatory organization, which information is as of a date within 16 months preceding the date of sale of the Transferred Certificate in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser; or / / The most recent publicly available information appearing in a recognized securities manual, which information is as of a date within 16 months preceding the date of sale of the Transferred Certificate in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser; or / / A certification by the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the Transferee, specifying the amount of securities owned and invested on a discretionary basis by the Transferee as of a specific date on or since the close of the Transferee's most recent fiscal year, or, in the case of a Transferee that is a member of a "family of investment companies," as that term is defined in Rule 144A, a certification by an executive officer of the investment adviser specifying the amount of securities owned by the "family of investment companies" as of a specific date on or since the close of the Transferee's most recent fiscal year. 4. The Transferor and any person acting on behalf of the Transferor understand that in determining the aggregate amount of securities owned and invested on a discretionary B-2 basis by an entity for purposes of establishing whether such entity is a Qualified Institutional Buyer: o the following instruments and interests shall be excluded: securities of issuers that are affiliated with the Transferee; securities that are part of an unsold allotment to or subscription by the Transferee, if the Transferee is a dealer; securities of issuers that are part of the Transferee's "family of investment companies," if the Transferee is a registered investment company; bank deposit notes and certificates of deposit; loan participations; repurchase agreements; securities owned but subject to a repurchase agreement; and currency, interest rate, and commodity swaps; o the aggregate value of the securities shall be the cost of such securities, except where the entity reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities may be valued at market; o securities owned by subsidiaries of the entity that are consolidated with the entity in its financial statements prepared in accordance with generally accepted accounting principles may be included if the investments of such subsidiaries are managed under the direction of the entity, except that, unless the entity is a reporting company under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, securities owned by such subsidiaries may not be included if the entity itself is a majority-owned subsidiary that would be included in the consolidated financial statements of another enterprise. 5. The Transferor or a person acting on its behalf has taken reasonable steps to ensure that the Transferee is aware that the Transferor is relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. 6. The Transferor or a person acting on its behalf has furnished, or caused to be furnished, to the Transferee all information regarding (a) the Transferred Certificates and payments on them, (b) the nature and performance of the Mortgage Loans, and (c) the Indenture, the Agreement, and the Trust Estate, that the Transferee has requested. Very truly yours, ---------------------------------- (Transferor) By: ---------------------------------- Name: ---------------------------------- Title: ---------------------------------- B-3 FORM OF TRANSFEREE INVESTMENT LETTER FOR TRANSFEROR CERTIFICATES Date: CWABS, Inc. as Depositor 4500 Park Granada Calabasas, California 91302 Attention: ________________ Wilmington Trust Company, as Owner Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890-0001 Attention: Corporate Trust Administration Re: CWABS Revolving Home Equity Loan Trust, Series 2004-P, Revolving Home Equity Loan Asset Backed Securities, Series 2004-P Transferor Certificates ------------------------------------------------- Ladies and Gentlemen: _______________________ (the "Transferee") intends to purchase from ______________________ (the "Transferor") Certificates representing a ___% percentage interest in the entire interest in the Certificates (the "Transferred Certificates"). The Certificates, including the Transferred Certificates, were issued pursuant to the Agreement. All capitalized terms used in this certificate without definition have the meanings given to them in the Trust Agreement, dated as of October 25, 2004, between CWABS, Inc., as depositor, and Wilmington Trust Company, as owner trustee. The Transferee hereby certifies, represents, and warrants that: 1. The Transferee is a "qualified institutional buyer" (a "Qualified Institutional Buyer") as that term is defined in Rule 144A ("Rule 144A") under the Securities Act of 1933, as amended (the "Securities Act"), and has completed one of the forms of certification to that effect attached as Annex 1 and Annex 2. The Transferee is aware that the sale to it of the Transferred Certificates is being made in reliance on Rule 144A. The Transferee is acquiring the Transferred Certificates for its own account or for the account of a Qualified Institutional Buyer, and understands that the Transferred Certificates may be resold, pledged, or transferred only B-2-1 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. 2. The Transferee has been furnished with all information regarding (a) the Transferred Certificates and payments on them, (b) the nature and performance of the Mortgage Loans, (c) the Indenture, (d) the Agreement, and (e) any credit enhancement mechanism associated with the Transferred Certificates, that it has requested. 3. The Transferee represents that it is not an employee benefit plan that is subject to the Employee Retirement Income Security Act of 1974, as amended, nor a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended, nor is it acting on behalf of or investing plan assets of any such employee benefit plan. 4. The Transferee agrees to be bound by the Agreement. Very truly yours, ---------------------------------- (Transferor) By: ---------------------------------- Name: ---------------------------------- Title: ---------------------------------- B-2-2 ANNEX 1 TO EXHIBIT C QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A [for Transferees other than Registered Investment Companies] The undersigned hereby certifies as follows to [name of Transferor] (the "Transferor") and [name of Certificate Registrar], as Certificate Registrar, with respect to the Certificates being transferred (the "Transferred Certificates") as described in the Transferee Certificate to which this certification relates and to which this certification is an Annex: 1. As indicated below, the undersigned is the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the entity purchasing the Transferred Certificates (the "Transferee"). 2. The Transferee 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 Transferee owned or invested on a discretionary basis $________________________ in securities (other than the excluded securities referred to below and otherwise calculated in accordance with Rule 144A) as of the end of the Transferee's most recent fiscal year and (ii) the Transferee satisfies the criteria in the category marked below. / / Corporation, etc. The Transferee is a corporation (other than a bank, savings and loan association, or similar institution), Massachusetts or similar statutory trust, partnership, or any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. / / Bank. The Transferee (a) is a national bank or a banking institution organized under the laws of any state, U.S. 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, as of a date not more than 16 months preceding the date of sale of the Certificates in the case of a U.S. bank, and not more than 18 months preceding such date of sale for a foreign bank or equivalent institution. / / Savings and Loan. The Transferee (a) is a savings and loan association, building and loan association, cooperative bank, homestead association, or similar institution that is supervised and examined by a state or federal authority having supervision over those 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, as of a date not more than 16 months preceding the date of sale of the Certificates in the case of a U.S. savings and loan association, and not more than 18 months preceding such date of sale for a foreign savings and loan association or equivalent institution. / / Broker-dealer. The Transferee is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended. / / Insurance Company. The Transferee is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and that is subject to supervision by the insurance commissioner or a similar official or agency of a state, U.S. territory, or the District of Columbia. / / Investment Advisor. The Transferee is an investment advisor registered under the Investment Advisers Act of 1940, as amended. 3. / / Other. (Please supply a brief description of the entity and a cross-reference to the paragraph and subparagraph under subsection (a)(1) of Rule 144A pursuant to which it qualifies. Note that registered investment companies should complete Annex 2 rather than this Annex 1.) __________________________ _______________________________________________________________ _______________________________________________________________ _______________________________________________________________The term "securities" does not include (i) securities of issuers that are affiliated with the Transferee, (ii) securities that are part of an unsold allotment to or subscription by the Transferee, if the Transferee is a dealer, (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. For purposes of determining the aggregate amount of securities owned or invested on a discretionary basis by the Transferee, the Transferee did not include any of the securities referred to in this paragraph. 4. For purposes of determining the aggregate amount of securities owned or invested on a discretionary basis by the Transferee, the Transferee used the cost of the securities to the Transferee, unless the Transferee reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities were valued at market. Further, in determining the aggregate amount, the Transferee may have included securities owned by subsidiaries of the Transferee, but only if the subsidiaries are consolidated with the Transferee in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of the subsidiaries are managed under the Transferee's direction. However, such securities were not included if the Transferee is a majority-owned, consolidated subsidiary of another enterprise and the Transferee is not itself a reporting company under the Securities Exchange Act of 1934, as amended. 5. The Transferee acknowledges that it is familiar with Rule 144A and understands that the Transferor and other parties related to the Transferred Certificates are relying and will continue to rely on the statements made herein because one or more sales to the Transferee may be in reliance on Rule 144A. / / / / Will the Transferee be purchasing the Transferred Owner Yes No Trust Certificates only for the Transferee's own account? 6. If the answer to the foregoing question is "no," then in each case where the Transferee is purchasing for an account other than its own, the account belongs to a third party that is itself a "qualified institutional buyer" within the meaning of Rule 144A, and the "qualified institutional buyer" status of the third party has been established by the Transferee through one or more of the appropriate methods contemplated by Rule 144A. 7. The Transferee will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until that notice is given, the Transferee's purchase of the Transferred Certificates will constitute a reaffirmation of this certification as of the date of the purchase. In addition, if the Transferee is a bank or savings and loan as provided above, the Transferee agrees that it will furnish to such parties any updated annual financial statements that become available on or before the date of the purchase, promptly after they become available. ------------------------------------ Print Name of Transferee By: -------------------------------- Name: ------------------------------ Title: ----------------------------------Date: ANNEX 2 TO EXHIBIT C QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A [for Transferees that are Registered Investment Companies] The undersigned hereby certifies as follows to [name of Transferor] (the "Transferor") and [name of Certificate Registrar], as Certificate Registrar, with respect to the Certificates being transferred (the "Transferred Certificates") as described in the Transferee Certificate to which this certification relates and to which this certification is an Annex: 1. As indicated below, the undersigned is the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the entity purchasing the Transferred Certificates (the "Transferee") or, if the Transferee is a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A"), because the Transferee is part of a Family of Investment Companies, is an executive officer of the investment adviser (the "Adviser"). 2. The Transferee is a "qualified institutional buyer" as defined in Rule 144A because (i) the Transferee is an investment company registered under the Investment Company Act of 1940, as amended, and (ii) as marked below, the Transferee alone owned or invested on a discretionary basis, or the Transferee'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 Transferee's most recent fiscal year. For purposes of determining the amount of securities owned by the Transferee or the Transferee's Family of Investment Companies, the cost of the securities was used, unless the Transferee or any member of the Transferee's Family of Investment Companies, as the case may be, reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published, in which case the securities of the entity were valued at market. / / The Transferee owned or invested on a discretionary basis $_____________________ in securities (other than the excluded securities referred to below and otherwise calculated in accordance with Rule 144A) as of the end of the Transferee's most recent fiscal year. / / The Transferee is part of a "Family of Investment Companies" that owned in the aggregate $________________ in securities (other than the excluded securities referred to below and otherwise calculated in accordance with Rule 144A) as of the end of the Transferee's most recent fiscal year. B-1 3. 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). 4. The term "securities" as used herein does not include (i) securities of issuers that are affiliated with the Transferee or are part of the Transferee's Family of Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities owned but subject to a repurchase agreement and (vi) 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 Transferee, or owned by the Transferee's Family of Investment Companies, the securities referred to in this paragraph were excluded. 5. The Transferee is familiar with Rule 144A and understands that the parties to which this certification is being made are relying and will continue to rely on the statements made herein because one or more sales to the Transferee will be in reliance on Rule 144A. / / / / Will the Transferee be purchasing the Transferred Yes No Certificates only for the Transferee's own account? 6. If the answer to the foregoing question is "no," then in each case where the Transferee is purchasing for an account other than its own, the account belongs to a third party that is itself a "qualified institutional buyer" within the meaning of Rule 144A, and the "qualified institutional buyer" status of the third party has been established by the Transferee through one or more of the appropriate methods contemplated by Rule 144A. 7. The undersigned will notify the parties to which this certification is made of any changes in the information and conclusions herein. Until that notice, the Transferee's purchase of the Transferred Certificates will constitute a reaffirmation of this certification by the undersigned as of the date of the purchase. ------------------------------ Print Name of Transferee or Adviser B-2 By: ------------------------- Name: ------------------------- Title: IF AN ------------------------- ADVISER: ------------------------- Print Name of Transferee Date: ------------------------- B-3 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- (Please print or typewrite name and address including postal zip code of assignee) the Percentage Interest evidenced by the within Certificate and hereby authorizes the transfer of registration of the Percentage Interest to assignee on the Certificate Register of the Trust. I (We) further direct the Issuer to issue a new Certificate of a like denomination and Class, to the above named assignee and deliver the Certificate to the following address: - -------------------------------------------. Dated: _______________ ------------------------------------- Signature by or on behalf of assignor DISTRIBUTION INSTRUCTIONS The assignee should include the following for purposes of distribution: Distributions shall be made, by wire transfer or otherwise, in immediately available funds to: - ------------------------------------ - ------------------------------------, - ------------------------------------, for the account of , account number , ---------------------------- ------------- or, if mailed by check, to . Applicable statements ------------------------- should be mailed to , ----------------------------- -------------------------- information is provided by , the assignee ------------------------------------ named above, or , as its agent. ------------------------------------ B-4 -----END PRIVACY-ENHANCED MESSAGE-----