EXHIBIT 99.2
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COUNTRYWIDE HOME LOANS, INC.
a Seller
PARK MONACO INC.
a Seller
CWHEQ, INC.
Purchaser
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PURCHASE AGREEMENT
Dated as of December 28, 2005
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REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES
Series 2005-I
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Table of Contents
Page
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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.............................7
Section 3.02. Seller Representations and Warranties Relating to the
Mortgage Loans....................................................9
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers.........................................23
ARTICLE V
SERVICING
Section 5.01. Servicing........................................................24
ARTICLE VI
TERMINATION
Section 6.01. Termination......................................................24
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment........................................................24
Section 7.02. Governing Law....................................................24
Section 7.03. Notices..........................................................24
Section 7.04. Severability of Provisions.......................................25
Section 7.05. Counterparts; Electronic Delivery................................25
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Section 7.06. Further Agreements...............................................26
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement.........26
Section 7.08. Survival.........................................................26
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
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This PURCHASE AGREEMENT, dated as of December 28, 2005 (the
"Agreement"), between COUNTRYWIDE HOME LOANS, INC., a New York corporation, as
a seller ("CHL" or a "Seller"), PARK MONACO INC., a Delaware corporation, as a
seller ("Park Monaco" or a "Seller," and together with CHL, the "Sellers"),
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 Initial Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, CHL, with respect to each Initial 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.
Park Monaco, with respect to each Initial 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;
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(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.
The Additional Home Equity Loans. The Purchaser may use the funds in
each Additional Loan Account to purchase Additional Home Equity Loans on any
Subsequent Closing Date designated by the Purchaser by the Latest Subsequent
Closing Date. On each Subsequent Closing Date, each Seller shall deliver a
Transfer Document (properly completed and executed by the Seller) to the
Purchaser. When each Seller delivers a Transfer Document, that Seller hereby
transfers to the Purchaser without recourse, and the Purchaser purchases and
shall effect payment for, all of its right, title, and interest in each
Additional Home Equity Loan identified in the Transfer Document, including its
Asset Balance (including all Additional Balances) and all collections received
on it after the relevant Subsequent Cut-off Date (excluding payments due by
the Subsequent Cut-off Date) and 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 Initial Mortgage Loans sold by it,
specifying for each Initial 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 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 Initial Mortgage Loans,
and by each Subsequent Closing Date for the related Additional Home Equity
Loans;
(c) to deliver to the Purchaser, or at the Purchaser's direction to
the Indenture Trustee, the Owner Trustee, and the Credit Enhancer, an
Officer's Certificate confirming the satisfaction of each of the conditions
precedent in Section 2.01(b) of the Sale and Servicing Agreement by each
Subsequent Closing Date; and
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(d) to deliver to the Purchaser, or at the Purchaser's direction to
the Indenture Trustee, a revised Mortgage Loan Schedule reflecting the
addition of the Additional Home Equity Loans within 15 days following each
Subsequent Closing Date.
The Initial 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 a Seller, it shall deliver to the
order of the Purchaser the following documents for each Mortgage Loan
transferred by it (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;
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(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 for the Initial Mortgage Loans
will be delivered:
(1) no later than the Closing Date, with respect to no less
than 50% of the Initial 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 Initial 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 Initial Mortgage Loans.
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The Related Documentation for the Additional Home Equity
Loans will be delivered:
(1) no later than relevant Subsequent Closing Date, with
respect to no less than 10% of the relevant Additional Home Equity
Loans in each Loan Group; and
(2) within twenty days following the relevant Subsequent
Closing Date, with respect to the remaining relevant Additional Home
Equity Loans in each Loan Group.
Each Seller confirms to the Purchaser that, as of the Closing Date,
it has caused the portions of the Electronic Ledger relating to the Initial
Mortgage Loans maintained by that Seller to be clearly and unambiguously
marked to indicate that the Initial 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 relevant Subsequent Closing Date
or the applicable date of substitution, as applicable, CHL shall cause the
portions of the Electronic Ledgers relating to the relevant Additional Home
Equity Loans or 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.
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.
(a) In consideration of the sale of the Initial 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 Initial Mortgage Loans provided in the Adoption Annex
attached as Annex 1 to this Agreement (the "Adoption Annex").
(b) In consideration of the sale of the Additional Home Equity Loans
from the Seller to the Purchaser on each Subsequent Closing Date, the
Purchaser agrees to cause the
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Trust to pay to the Seller, when the conditions to the release of the purchase
price for the Additional Home Equity Loans under the Sale and Servicing
Agreement have been met, an amount equal to their Cut-off Date Asset Balance.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Sellers Representations and Warranties.
(a) CHL represents and warrants to the Purchaser as of the Closing
Date:
(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
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(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) 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, 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
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of resulting in a material adverse effect on the transactions contemplated by
this Agreement.
(c) 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 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
this Agreement constitutes a valid and legally binding obligation of
CHL, enforceable against CHL in accordance with its terms.
(2) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
either
(A) this Agreement constitutes a valid transfer to
the Purchaser of all right, title, and interest of each of
the Sellers in the applicable Mortgage Loans, and all
collections received in respect of the applicable Mortgage
Loans after the Cut-off Date or Subsequent Cut-off Date, as
applicable (excluding payments due by the Cut-off Date or
Subsequent Cut-off Date, as applicable), all proceeds of the
applicable 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
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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.
(3) CHL has not authorized the filing of and is not aware of
any financing statements against either 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 Initial Mortgage Loans is correct in all
material respects. As of the relevant Subsequent Closing Date with
respect to any Additional Home Equity Loans, the information in the
Mortgage Loan Schedule for the relevant Additional Home Equity 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.
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(5) The applicable 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 applicable Mortgage
Loans, to transfer them pursuant to this Agreement.
(6) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 applicable Mortgage Loans, to transfer it pursuant
to this Agreement.
(7) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to each related Mortgage Loan, and as of the
Cut-off Date, relevant Subsequent Closing 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.
(8) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage
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Loan, 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
with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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
with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, 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 an Initial 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 no more than the applicable percentage specified in
the Adoption Annex of the Initial Mortgage Loans in each Loan Group
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 all applicable predatory
and abusive lending laws, usury, truth-in-lending, real estate
12
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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.
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(18) No more than the percentage specified in the Adoption
Annex of the Initial 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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.
(20) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
neither 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, 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
14
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 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
each Credit Line Agreement and each Mortgage Loan is an enforceable
obligation of the related mortgagor.
(28) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
neither 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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
Initial 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 Initial
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 Initial 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 Initial 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
15
percentage specified in the Adoption Annex for that Loan Group as of
the Cut-off Date for the Initial Mortgage Loans. The Loan Rates on
the Initial 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 Initial Mortgage Loans is
approximately the percentage specified in the Adoption Annex for that
Loan Group.
(31) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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
Initial 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.
(33) The Credit Limits on the Initial 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 for the Initial Mortgage
Loans, 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 Initial 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 Initial Mortgage Loans, by aggregate principal balance
as of the Cut-off Date, are secured by first and second liens.
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(35) As of the Closing Date, no more than the percentage
specified in the Adoption Annex for each Loan Group of the Initial
Mortgage Loans in the related Loan Group, by aggregate principal
balance, were appraised electronically.
(36) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
no default exists under any applicable Mortgage Note or applicable
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 applicable Mortgage Note or applicable
Mortgage Loan has occurred and been waived. As of the Closing Date
with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no modifications to the applicable Mortgage
Notes and applicable Mortgage Loans have been made and not disclosed.
(37) As of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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.
(40) Based on the drawn balances of the Initial Mortgage
Loans, the Initial 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
17
term to maturity; range of remaining term to maturity; average drawn
balance; weighted average utilization ratio; and percentage of the
Initial Mortgage Loans that have their respective Mortgaged
Properties located in the top five states, measured by aggregate
drawn balances.
(41) Any Initial 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 Initial 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 Initial 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 the relevant
Subsequent Cut-off Date, as applicable, 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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
18
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 outstanding
principal balance of the Mortgage Loan and any mortgage loan senior
to that 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 lie wholly within the boundaries and
building restriction lines of the Mortgaged
19
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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.
20
(56) 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 debt
cancellation agreements as part of the origination of, or as a
condition to closing, the Mortgage Loan.
(57) The Initial 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 with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to
any Additional Home Equity Loans, or the applicable date of
substitution with respect to any Eligible Substitute Mortgage Loan,
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.
21
(64) All of the Mortgage Loans in the Loan Group specified
in the Adoption Annex conform to Xxxxxx Xxx or Xxxxxxx Mac maximum
principal balance (by credit limit) guidelines.
(65) With respect to any Mortgage Loan in Loan Group 1
originated from August 1, 2004 through April 30, 2005, if the related
mortgage or the related Mortgage Note, or any document relating to
the loan transaction, contains a mandatory arbitration clause (that
is, a clause that requires the borrower to submit to arbitration to
resolve any dispute arising out of or relating in any way to the
mortgage loan transaction), CHL (i) will notify the related borrower
in writing within 60 days after the issuance of the Notes (or, with
respect to mortgage loans transferred to the Trust after the date of
the issuance of the Notes, 60 days after the date of transfer), that
none of the related Seller, the Servicer, or any subsequent party
that acquires an interest in the loan or services it will enforce the
arbitration clause against the borrower, but that the borrower will
continue to have the right to submit a dispute to arbitration and
(ii) will place a copy of the notice in the Mortgage File; with
respect to any Mortgage Loan in Loan Group 1 originated on or after
May 1, 2005, neither the related mortgage nor the related Mortgage
Note requires the borrower to submit to arbitration to resolve any
dispute arising out of or relating in any way to the mortgage loan
transaction.
(66) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without
regard to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that
treats a defective obligation as a qualified mortgage, or any
substantially similar successor provision).
(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 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.
22
(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.
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.
23
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, Park Monaco,
and the Purchaser, with the written consent of the Credit Enhancer, by written
agreement signed by CHL, Park Monaco, and the Purchaser.
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
24
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-I
(ii) if to Park Monaco
Park Monaco Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2005-I
and
(iii) if to the Purchaser at:
CWHEQ, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 2005-I
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.
25
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 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.
26
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
PARK MONACO INC.
as a Seller
By: /s/ Xxxx Xxxxxxx, Xx.
-----------------------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Vice President
27
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of December, 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 # 1609853
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
28
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of December, 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 # 1609853
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
29
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 28th day of December, 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 # 1609853
Notary Public - California
Los Angeles County
My Comm. Expires October 15, 2009.
30
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 - High Cost Home Loan
current)
---------------------------------------------------------------------------------------------------
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 297 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
12.000% and 18.000% and 16.000% and 18.000% with respect to the Mortgage Loans
in Loan Group 1 and Loan Group 2, respectively, and the weighted average Loan
Rate Cap is approximately 17.787% and 17.829%, with respect to the Mortgage
Loans in Loan Group 1 and Loan Group 2, respectively. The Gross Margins for
the Mortgage Loans range between -1.750% and 16.000% and -0.999% and 18.000%
with respect to the Mortgage Loans in Loan Group 1 and Loan Group 2,
respectively, and the weighted average Gross Margin is approximately 1.993%
and 1.909% 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
3.990% and 14.000% and 2.990% and 18.000% 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 8.194% and 8.643% with respect to
the Mortgage Loans in Loan Group1 and Loan Group 2, respectively. As of the
Cut-off Date, 100.00% and 0.52% 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 35.49% and 40.22% (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 64.51% and 59.78% (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 $7,455 and $266,000 and $6,900 and $2,500,000 with an average of
approximately $41,870 and $105,559 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 $250,000 and
$2,500,000 and the average principal balance of the Mortgage Loans is equal to
approximately $35,908 and $90,537 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 37.73% and 14.60% 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 87.27%
and 86.12%; a range of Combined Loan-to-Value Ratios between 13.48% and
100.00% and 15.53% and 100.00%; a percentage of primary residences of 100.00%
and 78.74%; a weighted average FICO score of 702 and 708; a range of FICO
scores between 546 and 831 and 552 and 821; a Weighted Average Net Loan Rate
of 7.694% and 8.143%; a range of net Loan Rates between 3.490% and 13.500 and
2.490% and 17.500%; 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 180 and 360 months; a range of remaining term to maturity between
57 and 360 months and 156 and 360 months; an average drawn balance of $35,908
and $90,537; an average utilization ratio of 87.02% and 90.13%; and 44.15% and
73.46% 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
