EXHIBIT 99.2
================================================================================
COUNTRYWIDE HOME LOANS, INC.
a Seller
COUNTRYWIDE LFT LLC
a Seller
PARK MONACO INC.
a Seller
CWHEQ, INC.
Purchaser
----------------------------------
PURCHASE AGREEMENT
Dated as of August 30, 2005
----------------------------------
REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES
Series 2005-E
================================================================================
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions......................................................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans.......................................................2
Section 2.02. Obligations of Sellers Upon Sale.................................................3
Section 2.03. Payment of Purchase Price for the Mortgage Loans.................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties............................................6
Section 3.02. Seller Representations and Warranties Relating to the Mortgage Loans.............9
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers........................................................22
ARTICLE V
SERVICING
Section 5.01. Servicing.......................................................................22
ARTICLE VI
TERMINATION
Section 6.01. Termination.....................................................................22
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.......................................................................22
Section 7.02. Governing Law...................................................................23
Section 7.03. Notices.........................................................................23
Section 7.04. Severability of Provisions......................................................24
Section 7.05. Counterparts; Electronic Delivery...............................................24
i
Section 7.06. Further Agreements..............................................................24
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement........................24
Section 7.08. Survival........................................................................25
SCHEDULES AND ANNEXES
Schedule I MORTGAGE LOAN SCHEDULE.....................................................Sch-I-1
Schedule II STANDARD & POOR'S GLOSSARY................................................Sch-II-1
Annex 1 ADOPTION ANNEX.............................................................Xxx-1-1
ii
This PURCHASE AGREEMENT, dated as of August 30, 2005 (the "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a seller
("CHL" or a "Seller"), COUNTRYWIDE LFT LLC, a Delaware limited liability
company, as a seller ("CLFT" or a "Seller"), PARK MONACO INC., a Delaware
corporation, as a seller ("Park Monaco" or a "Seller," and together with CHL
and CLFT, the "Sellers"), and CWHEQ, INC., a Delaware corporation (the
"Purchaser"),
WITNESSETH:
WHEREAS, each Seller is the owner of the applicable notes or other
evidence of indebtedness indicated on Schedule I as owned by that Seller, 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, each Seller will own the
mortgages on the properties securing the Mortgage Loans indicated on Schedule
I as owned by that Seller, 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, each Seller wants to sell its 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, CHL, 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.
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, CHL, with respect to each Mortgage Loan it owns as indicated
on Schedule I, hereby transfers to the Purchaser, without recourse, all of its
right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that
secures that Mortgage Loan, and all collections received on it after the
Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
(5) all other assets included or to be included in the Trust for
the benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
CLFT, with respect to each Mortgage Loan it owns as indicated on
Schedule I, hereby transfers to the Purchaser, without recourse, all of its
right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that
secures that Mortgage Loan, and all collections received on it after the
Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
2
(5) all other assets included or to be included in the Trust for
the benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
Park Monaco, with respect to each Mortgage Loan it owns as indicated on
Schedule I, hereby transfers to the Purchaser, without recourse, all of its
right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that
secures that Mortgage Loan, and all collections received on it after the
Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
(5) all other assets included or to be included in the Trust for
the benefit of the Noteholders and the Credit Enhancer; and
(6) all proceeds of the foregoing.
(b) By the sale of a Mortgage Loan and its Additional Balances, each
Seller has sold to the Purchaser, and the Purchaser has purchased from each
Seller, each future draw of new borrowing under the related Credit Line
Agreement. The Purchaser shall pay the applicable 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 applicable 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 Sellers Upon Sale.
In connection with the transfers pursuant to Section 2.01(a), each
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 sold by it,
specifying for each Mortgage Loan, among other things, its account number and
its Cut-off Date Asset Balance; and
3
(b) to indicate in its books and records that the applicable 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.
The Mortgage Loan Schedule containing the Mortgage Loans sold by both
Sellers is Exhibit A to the Sale and Servicing Agreement and shall also be
attached as Schedule I to this Agreement and is hereby incorporated into this
Agreement.
Each Seller agrees to perfect and protect the Purchaser's interest in
each Mortgage Loan transferred by it pursuant to Section 2.01(a) and its
proceeds by preparing, executing, and filing a UCC1 Financing Statement with
the Secretary of State in the State of New York describing the Mortgage Loans
and naming the applicable 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 UCC1 Financing Statements
due to a change in the name or the state of incorporation of that 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 UCC1
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 UCC1 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 each Seller, it shall deliver to the
order of the Purchaser the following documents for each Mortgage Loan
transferred by that Seller (the "Related Documentation"):
(1) 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;
(2) unless the Mortgage Loan is registered on the MERS(R) System,
an original assignment of mortgage in blank in recordable form;
4
(3) 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 Sponsor 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
Sponsor 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;
(4) 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 Sponsor 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;
(5) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(6) the original of any guaranty executed in connection with the
Mortgage Note;
(7) the original of each assumption, modification, consolidation,
or substitution agreement relating to the Mortgage Loan; and
(8) any security agreement, chattel mortgage, or equivalent
instrument executed in connection with the Mortgage.
The Related Documentation will be delivered:
(1) no later than the Closing Date, with respect to no less than
50% of the Mortgage Loans in each Loan Group,
(2) 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
(3) within thirty days following the Closing Date, with respect to
the remaining Mortgage Loans.
5
Each 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 that 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 that Seller or the Purchaser
will violate the rights of the Trust, as secured party with respect to those
Mortgage Loans. By the applicable date of substitution, CHL 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 CHL 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 each of the
Sellers 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 each Seller to the Purchaser of all its interest
in the applicable Mortgage Loans and other property described above. However,
to provide for the possibility that either transfer might be characterized as
a transfer for security and not as a sale, each Seller hereby Grants to the
Purchaser a Security Interest in all of its right, title, and interest in the
applicable Mortgage Loans and other property described above, whether existing
now or in the future, to secure all of that its 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 each of the
Sellers to the Purchaser on the Closing Date, the Purchaser agrees to transfer
to the applicable Seller on the Closing Date the purchase price for the
applicable Mortgage Loans provided in the Adoption Annex attached as Annex 1
to this Agreement (the "Adoption Annex").
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties.
(a) CHL represents and warrants to the Purchaser as of the Closing Date:
6
(1) CHL 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. CHL 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 CHL;
(2) CHL 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 CHL enforceable in accordance with its terms;
(3) CHL 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;
(4) 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 CHL,
or constitute a material breach of any mortgage, indenture, contract, or
other agreement to which CHL is a party or by which CHL may be bound;
and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of CHL threatened, against CHL or any of its properties or
with respect to this Agreement or the Notes that in the opinion of CHL
has a reasonable likelihood of resulting in a material adverse effect on
the transactions contemplated by this Agreement.
(b) CLFT represents and warrants to the Purchaser as of the Closing
Date:
(1) CLFT is a Delaware limited liability company, validly existing
and in good standing under the laws of the State of Delaware, and has
the limited liability company power to own its assets and to transact
the business in which it is currently engaged. CLFT is duly qualified to
do business as a foreign limited liability company and is in good
standing in each jurisdiction in which the character of the business
7
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 CLFT.
(2) CLFT 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 limited liability company
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 CLFT enforceable in
accordance with its terms;
(3) CLFT 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;
(4) The execution, delivery, and performance of this Agreement by
CLFT will not violate any provision of any existing law or regulation or
any order or decree of any court applicable to CLFT or any provision of
its limited liability company agreement, or constitute a material breach
of any mortgage, indenture, contract, or other agreement to which CLFT
is a party or by which CLFT may be bound; and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of CLFT threatened, against CLFT or any of its properties or
with respect to this Agreement or the Notes that in the opinion of CLFT
has a reasonable likelihood of resulting in a material adverse effect on
the transactions contemplated by this Agreement.
(c) Park Monaco represents and warrants to the Purchaser as of the
Closing Date:
(1) Park Monaco is a Delaware corporation, validly existing and in
good standing under the laws of the State of Delaware, and has the
corporate power to own its assets and to transact the business in which
it is currently engaged. Park Monaco 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 Park
Monaco.
(2) Park Monaco has the power and authority to make, execute,
deliver, and perform this Agreement and all of the transactions
contemplated by this Agreement,
8
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 Park Monaco enforceable in accordance with its terms;
(3) Park Monaco 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;
(4) The execution, delivery, and performance of this Agreement by
Park Monaco will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to Park Monaco
or any provision of the certificate of incorporation or bylaws of Park
Monaco, or constitute a material breach of any mortgage, indenture,
contract, or other agreement to which Park Monaco is a party or by which
Park Monaco may be bound; and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of Park Monaco threatened, against Park Monaco or any of its
properties or with respect to this Agreement or the Notes that in the
opinion of Park Monaco has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this
Agreement.
(d) The representations and warranties in this Section 3.01 shall
survive the transfer of the Mortgage Loans to the Purchaser. CHL shall cure a
breach of any of the representations and warranties of CHL, CLFT, and Park
Monaco in accordance with the Sale and Servicing Agreement. The remedy
specified in the Sale and Servicing Agreement shall constitute the sole remedy
against a Seller with respect to any breach.
Section 3.02. Seller Representations and Warranties Relating to the
Mortgage Loans.
(a) CHL represents and warrants to the Purchaser as of the Cut-off Date,
unless specifically stated otherwise:
(1) 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 CHL,
enforceable against CHL in accordance with its terms.
9
(2) 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 each of the Sellers
in the Mortgage Loans, and all collections received in respect of
the Mortgage Loans 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), 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 each of the Sellers
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 each of the Sellers.
10
(3) CHL has not authorized the filing of and is not aware of any
financing statements against any 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 under this Agreement, 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.
(4) 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.
(5) The Mortgage Loans have not been assigned or pledged, and the
related 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.
(6) 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 related 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.
(7) 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;
11
(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.
(8) 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.
(9) To the best knowledge of CHL, 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 or governmental charge
against it, other than those that have been or will be paid by the
Seller.
(10) 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 CHL, 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.
(11) To the best knowledge of CHL, 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 (16).
(12) 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).
(13) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution), the
Mortgage File for each Mortgage Loan contains each of the documents
specified to be included in it.
(14) At origination, each Mortgage Loan and the related Mortgage
Note complied in all material respects with applicable local, state, and
federal laws, including
12
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.
(15) 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 Schedule II (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 or jurisdiction specified
in such table.
(16) 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.
(17) 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.
(18) 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.
(19) 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
13
for each Mortgage Loan in each Loan Group was not in excess of the
percentage specified in the Adoption Annex.
(20) 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 CHL to be adverse to the
interests of the Transferor, the Noteholders, or the Credit Enhancer was
used in selecting the Mortgage Loans.
(21) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution), no Seller
has transferred the Mortgage Loans to the Trust with any intent to
hinder, delay, or defraud any of its creditors.
(22) 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.
(23) The Mortgage Notes constitute either "instruments" or "general
intangibles" as defined in the UCC.
(24) 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 UCC1 financing statements in the proper
filing office in the appropriate jurisdiction to perfect the Security
Interest in the Collateral Granted under the Indenture.
(25) 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 each 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 covered by this financing statement will
violate the rights of the Purchaser, the Trust, or the Indenture
Trustee."
(26) As of the Closing Date, CHL, CLFT, and Park Monaco will have
received a written acknowledgement from the Custodian that is acting
solely as agent of the Indenture Trustee.
(27) 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.
14
(28) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution). No Seller
has 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.
(29) 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 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 for the applicable interest
rate adjustment date."
(30) 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.
(31) 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.
(32) 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
15
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.
(33) 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.
(34) 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.
(35) 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.
(36) 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.
(37) 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.
(38) To the best knowledge of CHL 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.
(39) 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.
16
(40) 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; and percentage of the Mortgage Loans that have
their respective Mortgaged Properties located in the top five states,
measured by aggregate drawn balances.
(41) 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.
(42) 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.
(43) At the time each Mortgage Loan was originated, each Seller was,
and each Seller is an approved seller of conventional mortgage loans for
Xxxxxx Xxx and Xxxxxxx Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act.
(44) 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
Xxxxxx Mae and Xxxxxxx Mac and is in a form acceptable to Xxxxxx Mae and
Xxxxxxx 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 (7) above.
(45) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution) 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
17
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 (46) 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, and 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.
(46) 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 National Flood Insurance Act of
1968.
(47) 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 CHL's knowledge, all
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(48) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(49) To the best of CHL's knowledge, all of the improvements that
were included for the purpose of determining the appraised value of the
Mortgaged Property
18
lie wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach
on the Mortgaged Property.
(50) To the best of CHL's knowledge, all inspections, licenses, and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including 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.
(51) 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.
(52) 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.
(53) 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.
(54) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution) no
foreclosure proceedings are pending against any Mortgaged Property and no
Mortgage Loan is subject to any pending bankruptcy or insolvency
proceeding.
(55) As of the Closing Date (or, with respect to any Eligible
Substitute Mortgage Loan, the applicable date of substitution), there is
no homestead exemption available and enforceable that materially
interferes with the right to sell any Mortgaged Property at a trustee's
sale or the right to foreclose the related Mortgage.
(56) No borrower was required to purchase any single premium credit
insurance policy (e.g., life, disability, accident, unemployment, or
health insurance product) or
19
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 debt
cancellation agreements as part of the origination of, or as a condition
to closing, the Mortgage Loan.
(57) The Mortgage Loans, individually and in the aggregate, conform
in all material respects to their descriptions in the Prospectus
Supplement.
(58) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994.
(59) 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.
(60) 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).
(61) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, the Mortgage Loan.
(62) 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.
(63) 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.
(64) All of the Mortgage Loans in the Loan Group specified in the
Adoption Annex conform to Xxxxxx Mae or Xxxxxxx Mac maximum principal
balance (by credit limit) guidelines.
(b) If the substance of any representation or warranty under the Sale and
Servicing Agreement or in this Section made to the best of CHL's knowledge or
as to which a Seller has
20
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 CHL shall cure the breach, repurchase the
Mortgage Loan, or substitute for the Mortgage Loan in accordance with the Sale
and Servicing Agreement.
(c) 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 a Seller for the breach of a
representation or warranty is CHL'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.
(d) The Purchaser acknowledges that CHL, 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.
(e) A breach of any one of the representations in Sections 3.02(a)(58) to
(64) will be considered to materially adversely affect the interests of the
Noteholders and the Credit Enhancer.
21
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers.
Except for the transfer under this Agreement, none of the Sellers will
transfer to any other person, or create or suffer to exist any Lien on any
Mortgage Loan, or any interest in one; each Seller will notify the Indenture
Trustee of the existence of any Lien on any Mortgage Loan immediately on its
discovery; and CHL 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 a Seller. Nothing in this Section shall prohibit a
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 applicable 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.
CHL 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 each of the Sellers 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 CHL, CLFT, Park
Monaco, and the Purchaser, with the written consent of the Credit Enhancer, by
written agreement signed by CHL, CLFT, Park Monaco, and the Purchaser.
22
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 CHL at:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2005-D
(ii) if to CLFT
Countyrwide LFT LLC
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Ref: CWHEQ 2005-D
(iii) if to Park Monaco
Park Monaco Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Ref: CWHEQ 2005-D
and
23
(iv) if to the Purchaser at:
CWHEQ, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2005-D
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.
Section 7.05. Counterparts; Electronic Delivery.
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. Any signature page to this Agreement
containing a manual signature may be delivered by facsimile transmission or
other electronic communication device capable of transmitting or creating a
printable written record, and when so delivered shall have the effect of
delivery of an original manually signed signature page.
Section 7.06. Further Agreements.
The Purchaser and each Seller 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 each Seller, the Purchaser, the Trust, the Indenture Trustee, and the
Credit Enhancer. The obligations of each 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 either Seller may assign its obligations
under this Agreement to any person into which that Seller is merged or any
corporation resulting from any merger, conversion, or consolidation to which
that Seller is a party or any person succeeding to the business of that
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, each 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 it under this Agreement
insofar as they relate to the Mortgage Loans transferred to the Trust
applicable
24
to that Seller and to the enforcement or exercise of any right against that
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.
25
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CWHEQ, INC.
as Purchaser
By: /s/ Xxxx Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
COUNTRYWIDE LFT LLC
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
PARK MONACO INC.
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
26
STATE OF CALIFORNIA)
) ss.:
COUNTY OF LOS ANGELES)
On the 30th day of August, 2005 before me, a Notary Public in and for
said State, personally appeared Xxxx Xxxxxxx, Xx., known to me to be a Vice
President of CWHEQ, 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/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2005.
27
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2005 before me, Xxxx Xxxxxxx, Xx. 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/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2005.
28
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2005 before me, Xxxx Xxxxxxx, Xx. of
COUNTRYWIDE LFT LLC, 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/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2005.
29
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 30th day of August, 2005 before me, Xxxx Xxxxxxx, Xx. of PARK
MONACO 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/ Xxxxxx X. Xxxxxx
--------------------------------------
Notary Public
Xxxxxx X. Xxxxxx
Commission # 1325392
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2005.
30
Sch-I-1
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 each of the Sellers on the Closing Date of the Transferor
Certificates and the proceeds from the sale of the Notes, each by its
respective portion.
The items referred to in the representations and warranties in Section
3.02 are:
(12) 0.00% and 0.00% 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).
(18) 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.
(19) The Combined Loan-to-Value Ratio for each Mortgage Loan was not in
excess of 100.00%.
(30) 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
6.000% and 21.000% and 11.949% 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 17.829% and 17.860%, with respect to the Mortgage
Loans in Loan Group 1 and Loan Group 2, respectively. The Gross Margins for
the Mortgage Loans range between -0.625% and 8.625% and -0.999% and 9.550%
with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, and the weighted average Gross Margin is approximately 2.310%
and 2.090% 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
2.990% and 14.875% and 3.990% and 15.800% 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 7.913% and 8.015% with respect to
the Mortgage Loans in Loan Group1 and Loan Group 2, respectively. As of the
Cut-off Date, 100.00% and 5.62% 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 Xxxxxx Xxx or Xxxxxxx Mac
guidelines.
(32) No more than 34.08% and 37.11% (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 65.92% and 62.89% (by Cut-off
Xxx-1-1
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.
(33) The Credit Limits on the Mortgage Loans range between approximately
$6,000 and $250,000 and $7,500 and $2,000,000 with an average of approximately
$39,517 and $109,553 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 $242,000 and $2,000,000 and the
average principal balance of the Mortgage Loans is equal to approximately
$34,633 and $94,119 with respect to the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively.
(34) Approximately 0.00% and 100.00% of the Mortgage Loans of each Loan
Group, by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are secured by first and second liens, respectively.
(35) As of the Closing Date, no more than 28.67% and 12.33% of the
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, by aggregate
principal balance, were appraised electronically.
(40) As of the Cut-off Date (based on the drawn balances), the Mortgage
Loans had a weighted average Combined Loan-to-Value Ratio of 89.32% and
87.89%; a range of Combined Loan-to-Value Ratios between 9.21% and 100.00% and
12.32% and 100.00%; a percentage of primary residences of 91.53% and 90.44%; a
weighted average FICO score of 705 and 710; a range of FICO scores between 436
and 842 and 526 and 842; a Weighted Average Net Loan Rate of 7.413% and
7.515%; a range of net Loan Rates between 2.490% and 14.375% and 3.490% and
15.300%; a weighted average original stated term to maturity of 302 and 301
months; a range of original term to maturity between 156 and 360 months and
180 and 360 months; a range of remaining term to maturity between 73 and 360
months and 174 and 360 months; an average drawn balance of $34,633 and
$94,119; an average utilization ratio of 89.26% and 89.21%; and 43.58% and
75.54% 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.
Xxx-1-2
