Exhibit 99.4
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CWHEQ, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK GRANADA LLC,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
and
THE BANK OF NEW YORK,
Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2007
---------------------------------
HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 2007-S2
Table of Contents
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Page
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ARTICLE I. DEFINITIONS 5
Section 1.01 Defined Terms...................................................................................5
Section 1.02 Certain Interpretive Provisions................................................................46
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES 46
Section 2.01 Conveyance of Mortgage Loans...................................................................46
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................................................54
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the
Sellers........................................................................................60
Section 2.04 Representations and Warranties of the Depositor................................................77
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and
Repurchases....................................................................................78
Section 2.06 Authentication and Delivery of Certificates....................................................79
Section 2.07 Covenants of the Master Servicer...............................................................79
Section 2.08 Sponsor Loss Coverage Obligation...............................................................80
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 80
Section 3.01 Master Servicer to Service Mortgage Loans......................................................80
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer................................82
Section 3.03 Rights of the Depositor, the Sellers, the Certificateholders, the NIM Insurer,
the Certificate Insurer and the Trustee in Respect of the Master Servicer......................83
Section 3.04 Trustee to Act as Master Servicer..............................................................83
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account; Pre-Funding Account; Capitalized Interest Account; Premium Account....................84
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts............................88
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans...................89
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account,
Carryover Reserve Fund and the Principal Reserve Fund..........................................89
Section 3.09 [Reserved].....................................................................................92
Section 3.10 Maintenance of Hazard Insurance................................................................92
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................93
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds
and Realized Losses; Repurchase of Certain Mortgage Loans; Auction of
Charged-off Mortgage Loans.....................................................................94
Section 3.13 Trustee to Cooperate; Release of Mortgage Files................................................98
i
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for
the Trustee....................................................................................99
Section 3.15 Servicing Compensation........................................................................100
Section 3.16 Access to Certain Documentation...............................................................100
Section 3.17 Annual Statement as to Compliance.............................................................100
Section 3.18 The Corridor Contract.........................................................................101
Section 3.19 [Reserved]....................................................................................102
Section 3.20 Prepayment Charges............................................................................102
Section 3.21 Swap Contract.................................................................................103
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER 105
Section 4.01 Advances; Remittance Reports..................................................................105
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest
Shortfalls....................................................................................107
Section 4.03 [Reserved]....................................................................................107
Section 4.04 Distributions.................................................................................107
Section 4.05 Monthly Statements to Certificateholders......................................................114
Section 4.06 Certificate Insurance Policy; Rights of the Certificate Insurer...............................115
Section 4.07 Termination of the Credit Insurance Policy....................................................118
Section 4.08 Carryover Reserve Fund........................................................................119
Section 4.09 Swap Trust and Swap Account...................................................................120
Section 4.10 Swap Reserve Fund.............................................................................120
ARTICLE V. THE CERTIFICATES 121
Section 5.01 The Certificates..............................................................................121
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...................122
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................................126
Section 5.04 Persons Deemed Owners.........................................................................126
Section 5.05 Access to List of Certificateholders' Names and Addresses.....................................126
Section 5.06 Book-Entry Certificates.......................................................................127
Section 5.07 Notices to Depository.........................................................................128
Section 5.08 Definitive Certificates.......................................................................128
Section 5.09 Maintenance of Office or Agency...............................................................128
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS 129
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Sellers..................129
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Sellers..................129
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the Master Servicer,
the NIM Insurer and Others....................................................................130
Section 6.04 Limitation on Resignation of Master Servicer..................................................130
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds................................................131
ii
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 131
Section 7.01 Events of Default.............................................................................131
Section 7.02 Trustee to Act; Appointment of Successor......................................................134
Section 7.03 Notification to Certificateholders............................................................135
ARTICLE VIII. CONCERNING THE TRUSTEE 136
Section 8.01 Duties of Trustee.............................................................................136
Section 8.02 Certain Matters Affecting the Trustee.........................................................137
Section 8.03 Trustee Not Liable for Mortgage Loans.........................................................138
Section 8.04 Trustee May Own Certificates..................................................................138
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............................................138
Section 8.06 Eligibility Requirements for Trustee..........................................................138
Section 8.07 Resignation and Removal of Trustee............................................................140
Section 8.08 Successor Trustee.............................................................................141
Section 8.09 Merger or Consolidation of Trustee............................................................142
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................142
Section 8.11 Tax Matters...................................................................................143
Section 8.12 Access to Records of the Trustee..............................................................146
Section 8.13 Suits for Enforcement.........................................................................146
Section 8.14 Monitoring of Significance Percentage.........................................................147
ARTICLE IX. TERMINATION 147
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..............................147
Section 9.02 Final Distribution on the Certificates........................................................148
Section 9.03 Additional Termination Requirements...........................................................150
Section 9.04 Auction of the Mortgage Loans and REO Properties..............................................151
ARTICLE X. MISCELLANEOUS PROVISIONS 154
Section 10.01 Amendment.....................................................................................154
Section 10.02 Recordation of Agreement; Counterparts........................................................156
Section 10.03 Governing Law.................................................................................157
Section 10.04 Intention of Parties..........................................................................157
Section 10.05 Notices.......................................................................................159
Section 10.06 Severability of Provisions....................................................................160
Section 10.07 Assignment....................................................................................160
Section 10.08 Limitation on Rights of Certificateholders....................................................160
Section 10.09 Inspection and Audit Rights...................................................................161
Section 10.10 Certificates Nonassessable and Fully Paid.....................................................162
Section 10.11 Rights of NIM Insurer.........................................................................162
ARTICLE XI. EXCHANGE ACT REPORTING 163
Section 11.01 Filing Obligations............................................................................163
Section 11.02 Form 10-D Filings.............................................................................163
iii
Section 11.03 Form 8-K Filings..............................................................................164
Section 11.04 Form 10-K Filings.............................................................................164
Section 11.05 Xxxxxxxx-Xxxxx Certification..................................................................165
Section 11.06 Form 15 Filing................................................................................166
Section 11.07 Report on Assessment of Compliance and Attestation............................................166
Section 11.08 Use of Subservicers and Subcontractors........................................................167
Section 11.09 Amendments....................................................................................168
Section 11.10 Reconciliation of Accounts....................................................................169
Exhibits
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EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4-F Form of Class A-4-F Certificate
EXHIBIT A-4-V Form of Class A-4-V Certificate
EXHIBIT A-5-F Form of Class A-5-F Certificate
EXHIBIT A-5-V Form of Class A-5-V Certificate
EXHIBIT A-6 Form of Class A-6 Certificate
EXHIBIT B Form of Class P Certificate
EXHIBIT C Form of Class C Certificate
EXHIBIT D-1 Form of Class A-R Certificate
EXHIBIT D-2 Form of Class E-P Certificate
EXHIBIT E Form of Tax Matters Person Certificate
EXHIBIT F Mortgage Loan Schedule
EXHIBIT F-1 List of Mortgage Loans
EXHIBIT F-2 Mortgage Loans for which All or a
Portion of a Related Mortgage File is
not Delivered to the Trustee on or
prior to the Closing Date
EXHIBIT G Forms of Certification of Trustee
EXHIBIT G-1 Form of Initial Certification of Trustee
(Initial Mortgage Loans)
EXHIBIT G-2 Form of Interim Certification of Trustee
EXHIBIT G-3 Form of Delay Delivery Certification
EXHIBIT G-4 Form of Initial Certification of Trustee (Subsequent
Mortgage Loans)
EXHIBIT H Form of Final Certification of Trustee
EXHIBIT I Transfer Affidavit for Class A-R Certificates
EXHIBIT J-1 Form of Transferor Certificate for Class A-R
Certificates
EXHIBIT J-2 Form of Transferor Certificate for Private Certificates
EXHIBIT K Form of Investment Letter (Non-Rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Form of Request for Document Release
EXHIBIT N Form of Request for File Release
EXHIBIT O Copy of Depository Agreement
EXHIBIT P Form of Subsequent Transfer Agreement
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EXHIBIT Q [Reserved]
EXHIBIT R [Reserved]
EXHIBIT S-1 [Reserved]
EXHIBIT S-2 [Reserved]
EXHIBIT T Officer's Certificate with respect to Prepayments
EXHIBIT U [Reserved]
EXHIBIT V-1 [Reserved]
EXHIBIT V-2 [Reserved]
EXHIBIT V-3 [Reserved]
EXHIBIT W Form of Monthly Statement
EXHIBIT X-1 Form of Performance Certification (Subservicer)
EXHIBIT X-2 Form of Performance Certification (Trustee)
EXHIBIT Y Form of Servicing Criteria to be Addressed in Assessment
of Compliance
Statement
EXHIBIT Z List of Item 1119 Parties
EXHIBIT AA Form of Xxxxxxxx-Xxxxx Certification (Replacement
Master Servicer)
SCHEDULE I Prepayment Charge Schedule and Prepayment Charge Summary
SCHEDULE II Collateral Schedule
v
POOLING AND SERVICING AGREEMENT, dated as of March 1, 2007, by and
among CWHEQ, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller ("CHL" or a
"Seller"), PARK GRANADA LLC, a Delaware corporation, as a seller ("Park
Granada" or a "Seller"), PARK MONACO INC., a Delaware corporation, as a seller
("Park Monaco" or a "Seller"), PARK SIENNA LLC, a Delaware limited liability
company, as a seller ("Park Sienna" or a "Seller", and together with CHL, Park
Granada and Park Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP,
a Texas limited partnership, as master servicer (the "Master Servicer"), and
THE BANK OF NEW YORK, a New York banking corporation, as trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. As provided herein, the Trustee
will elect that the Trust Fund (excluding the Carryover Reserve Fund, the
assets held in the Pre-Funding Account and the Capitalized Interest Account and
the Trust Fund's rights with respect to payments received under the Corridor
Contract) for federal income tax purposes will consist of three REMICs (the
"Swap-IO REMIC," the "Strip REMIC" and the "Master REMIC"). Each Certificate,
other than the Class A-R Certificate, will represent ownership of one or more
regular interests in the Master REMIC for purposes of the REMIC Provisions. The
Class A-R Certificate will represent ownership of the sole class of residual
interest in the Swap-IO REMIC, the Strip REMIC and the Master REMIC. The Master
REMIC will hold as assets the several classes of uncertificated Strip REMIC
Interests (other than the STR-A-R Interest). Each Strip REMIC Interest (other
than the STR-A-R Interest) is hereby designated as a regular interest in the
Strip REMIC. The Strip REMIC will hold as assets the several classes of
uncertificated Swap-IO REMIC Interests (other than the SWR-A-R Interest). Each
Swap-IO REMIC Interest (other than the SWR-A-R Interest) is hereby designated
as a regular interest in the Swap-IO REMIC. The Swap-IO REMIC will hold as
assets all property of the Trust Fund (excluding the Carryover Reserve Fund,
the assets held in the Pre-Funding Account and the Capitalized Interest Account
and the Trust Fund's rights with respect to payments received under the
Corridor Contract) The latest possible maturity date, for federal income tax
purposes, of all REMIC regular interests created herein shall be the Latest
Possible Maturity Date.
The Swap Trust, the Swap Contract, the Swap Account and the Swap Reserve
Fund will not constitute any part of any REMIC created hereunder.
SWAP-IO REMIC:
The Swap-IO REMIC Interests will have the principal balances and
pass-through rates as set forth below.
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-51A 0 (2)
SWR-51B 0 (3)
SWR-52A 106.5 (2)
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-52B 106.5 (3)
SWR-53A 1483596 (2)
SWR-53B 1483596 (3)
SWR-54A 1437908.5 (2)
SWR-54B 1437908.5 (3)
SWR-55A 1393537.5 (2)
SWR-55B 1393537.5 (3)
SWR-56A 1350447.5 (2)
SWR-56B 1350447.5 (3)
SWR-57A 1308601.5 (2)
SWR-57B 1308601.5 (3)
SWR-58A 1267969 (2)
SWR-58B 1267969 (3)
SWR-59A 1228513.5 (2)
SWR-59B 1228513.5 (3)
SWR-60A 1190196 (2)
SWR-60B 1190196 (3)
SWR-61A 965399.5 (2)
SWR-61B 965399.5 (3)
SWR-62A 935872 (2)
SWR-62B 935872 (3)
SWR-63A 907217 (2)
SWR-63B 907217 (3)
SWR-64A 879412 (2)
SWR-64B 879412 (3)
SWR-65A 852431 (2)
SWR-65B 852431 (3)
SWR-66A 826249.5 (2)
SWR-66B 826249.5 (3)
SWR-67A 800846.5 (2)
SWR-67B 800846.5 (3)
SWR-68A 776197 (2)
SWR-68B 776197 (3)
SWR-69A 752281 (2)
SWR-69B 752281 (3)
SWR-70A 692197.5 (2)
SWR-70B 692197.5 (3)
SWR-71A 573180.5 (2)
SWR-71B 573180.5 (3)
SWR-72A 555460.5 (2)
SWR-72B 555460.5 (3)
SWR-73A 472002 (2)
SWR-73B 472002 (3)
Swap-IO REMIC Interest Initial Principal Balance(1) Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-74A 458709.5 (2)
SWR-74B 458709.5 (3)
SWR-75A 445787 (2)
SWR-75B 445787 (3)
SWR-76A 433224.5 (2)
SWR-76B 433224.5 (3)
SWR-77A 437575 (2)
SWR-77B 437575 (3)
SWR-78A 426186 (2)
SWR-78B 426186 (3)
SWR-79A 414163.5 (2)
SWR-79B 414163.5 (3)
SWR-80A 402475.5 (2)
SWR-80B 402475.5 (3)
SWR-81A 391113.5 (2)
SWR-81B 391113.5 (3)
SWR-82A 380068.5 (2)
SWR-82B 380068.5 (3)
SWR-83A 369325.5 (2)
SWR-83B 369325.5 (3)
SWR-84A 11,846,750 (2)
SWR-84B 11,846,750 (3)
SWR-Support (4) (5)
SWR-P $ 100.00 (6)
SW-A-R (7) (7)
------------------
(1) Scheduled principal, prepayments and Realized Losses will be allocated
first, to the SWR-Support Interest and second, to the numbered classes
sequentially (from lowest to highest). Amounts so allocated to a numbered
class shall be further allocated between the "A" and "B" components of
such numbered class pro-rata until the entire class is reduced to zero.
(2) Prior to the 85th Distribution Date, a rate equal to twice the Pool Tax
Cap less 10.26% per annum. On and after the 85th Distribution Date a rate
equal to the Pool Tax Cap. The "Pool Tax Cap" means the weighted average
of the Adjusted Net Mortgage Rates of all the Mortgage Loans.
(3) Prior to the 85th Distribution Date, a rate equal to the lesser of (i)
10.26% per annum and (ii) twice the Pool Tax Cap. On and after the 85th
Distribution Date, a rate equal to the Pool Tax Cap.
(4) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses, the principal
balance in respect of the SWR-Support Interest will equal the excess of
(a) the sum of (i) the principal balance of the Mortgage Loans (as of the
end of the related Due Period, reduced by principal prepayments received
after such Due Period that are to be distributed on such Distribution
Date) and (ii) the amount, if any, on deposit in the Pre-Funding Account
in respect of the Mortgage Loans over (b) the principal balance in
respect of the remaining Swap-IO REMIC Interests other than the SWR-P and
the SWR-A-R Interests.
(5) A rate equal to the Pool Tax Cap.
(6) On each Distribution Date the SWR-P Interest is entitled to all
Prepayment Charges collected with respect to the Mortgage Loans. It pays
no interest.
(7) The SW-A-R Interest is the sole class of residual interest in the Swap-IO
REMIC. It has no principal and pays no principal or interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Mortgage Loans shall be payable
with respect to the Swap-IO REMIC Interests in the following manner:
(1) Interest. Interest is to be distributed with respect to each Swap-IO
REMIC Interest at the rate, or according to the formulas, described above.
(2) Principal. Principal Distribution Amounts shall be allocated among
the Swap-IO REMIC Interests as described above.
(3) Prepayment Penalties. All Prepayment Charges are allocated to the
SWR-P Interest.
The Strip REMIC
The Strip REMIC Regular Interests will have the principal balances,
pass-through rates and corresponding Classes of Certificates as set forth in
the following table:
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Subsidiary REMIC Initial Principal Pass-Through Corresponding
Regular Interests Balance Rate Class of Certificates
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STR-A-1................. (1) (2) A-1
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STR-A-2................. (1) (2) A-2
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STR-A-3................. (1) (2) A-3
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STR-A-4-F............... (1) (2) A-4-F
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STR-A-4-V............... (1) (2) A-4-V
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STR-A-5-F............... (1) (2) A-5-F
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STR-A-5-V............... (1) (2) A-5-V
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STR-A-6................. (1) (2) A-6
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STR-Accrual............. (3) (2) N/A
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STR-C-Swap-IO (4) (4) N/A
----------------------------------------------------------------------------------------------------
STR-$100................ $100.00 (5) N/A
----------------------------------------------------------------------------------------------------
STR-P................... $100.00 (5) P
----------------------------------------------------------------------------------------------------
STR-A-R................. (6) (6) N/A
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(1) The Class STR-A-1 Interest, Class STR-A-2 Interest, Class STR-A-3
Interest, Class STR-A-4-F Interest, Class STR-A-4-V Interest, Class
STR-A-5-F Interest, Class STR-A-5-V Interest and Class STR-A-6 (the
"Accretion Directed Classes") will each have a principal balance that is
equal to 50% of its Corresponding Class of Certificates and on each
Distribution Date, interest, principal payments and Realized Losses shall
be allocated so as to cause each of the Accretion Directed Classes to
continue to equal 50% of its Corresponding Class of Certificates.
(2) On each Distribution Date, the pass-through rate for this Strip REMIC
Interest will be the "Strip REMIC Cap," which will equal the weighted
average of the pass-through rates of the Swap-IO REMIC Interests (other
than the SWR-P, and the SWR-A-R Interests) treating each "B" Interest the
cardinal number of which (for example, XX-0X, XX-0X, XX-0X, etc.) is not
less than the ordinal number of the Distribution Date (first Distribution
Date, second Distribution Date, third Distribution Date, etc.) as capped
at a rate equal to the product of (i) 2 and (ii) LIBOR (3) The
STR-Accrual Interest shall have an initial principal balance equal to the
sum of (a) 50% of the Cut-off Date Principal Balance of the Mortgage
Loans and (b) 50% of the Overcollateralized Amount. On each Distribution
Date, interest, principal and Realized Losses shall be allocated so as to
cause the STR-Accrual Interest to equal the excess of the Stated
Principal Balance of the Mortgage Loans as of the end of the related Due
Period (appropriately adjusted for prepayments) over the aggregate
Certificate Principal Balance of the Accretion Directed Classes (after
taking into account distributions for such Distribution Date).
(4) For each Distribution Date, the STR-C-Swap-IO Interest is entitled to
receive from each Swap REMIC "B" Interest the cardinal number of which
(for example, XX-0X, XX-0X, XX-0X, etc.) is not less than the ordinal
number of the Distribution Date (first Distribution Date, second
Distribution Date, third Distribution Date, etc. ) the interest accruing
on such interest in excess of a per annum rate equal to the product of
(i) 2 and (ii) LIBOR.
(5) The STR-$100 Interest and the Class STR-P Interest do not pay any
interest. All Prepayment Charges are allocated to the Class STR-P
Interest.
(6) The Class STR-A-R Interest is the sole class of residual interest in the
Strip REMIC. It has no principal balance and pays no principal or
interest.
On each Distribution Date, the Interest Funds, the Principal Distribution
Amount and the Prepayment Charges payable with respect to the Swap-IO Interests
will be payable with respect to the Strip REMIC Regular Interests in the
following manner:
(1) Interest. Interest is to be distributed with respect to each Strip
REMIC Interest at the rate or according to the formulas described above.
(2) Prepayment Charges. All Prepayment Charges are allocated to the Class
STR-P Interest.
(3) Principal. Principal shall be allocated among the Strip REMIC
Interests according to the formulas described above.
The Master REMIC
The following table specifies the class designation, pass through
rate, and principal amount for each class of Master REMIC Interest:
--------------------------------------------------------------------------------
Original Certificate Pass-Through
Class Principal Balance Rate
--------------------------------------------------------------------------------
A-1........................ $ 440,909,000 (1)
--------------------------------------------------------------------------------
A-2........................ $ 106,813,000 (2)
--------------------------------------------------------------------------------
A-3........................ $ 191,968,000 (2)
--------------------------------------------------------------------------------
A-4-F...................... $ 36,000,000 (2)
--------------------------------------------------------------------------------
A-4-V...................... $ 37,781,000 (1)
--------------------------------------------------------------------------------
A-5-F...................... $ 50,000,000 (2)
--------------------------------------------------------------------------------
A-5-V...................... $ 35,529,000 (1)
--------------------------------------------------------------------------------
A-6........................ $ 100,000,000 (2)
--------------------------------------------------------------------------------
C.......................... (3) (4)
--------------------------------------------------------------------------------
A-R........................ $ 100 (5)
--------------------------------------------------------------------------------
P.......................... $ 100 (6)
--------------------------------------------------------------------------------
(1) The Pass-Through Rates for the Class A-1, Class A-4-V and Class A-5-V
Certificates for the Accrual Period for any Distribution Date will be equal to
the lesser of (a) One-Month LIBOR plus the applicable Pass-Through Margin, and
(b) the Net Rate Cap. For federal income tax purposes, including the
computation of the Class C Distributable Amount and entitlement to Net Rate
Carryover the pass-through rate in respect of each Class A-1, Class A-4-V and
Class A-5-V Certificate will be subject to a cap equal to the Strip REMIC Cap
rather than its applicable Net Rate Cap.
(2) The Pass-Through Rates for the Class A-2, Class A-3, Class A-4-F,
Class A-5-F and Class A-6 Certificates for the Accrual Period for any
Distribution Date will be equal to the lesser of (a) the per annum fixed rate
for the Class set forth in the table below and (b) the Net Rate Cap. For
federal income tax purposes, including the computation of the Class C
Distributable Amount and entitlement to Net Rate Carryover the pass-through
rate in respect of each Class X-0, Xxxxx X-0, Class A-4-F, Class A-5-F and
Class A-6 Certificate will be subject to a cap equal to the Strip REMIC Cap
rather than its applicable Net Rate Cap.
Class of Certificates Pass-Through Rate
Class A-2......................... 5.649%
Class A-3......................... 5.813%
Class A-4-F....................... 5.934%
Class A-5-F....................... 6.000%
Class A-6......................... 5.779%
(3) For federal income tax purposes, the Class C Certificates shall have
a Certificate Principal Balance equal to the Overcollateralized Amount.
(4) For each Interest Accrual Period the Class C Certificates are
entitled to an amount (the "Class C Distributable Amount") equal to the sum of
(a) the interest payable on the STR-C-
Swap-IO Interest and (b) a specified portion of the interest payable on the
Strip REMIC Regular Interests (other than the STR-$100, STR-C-Swap-IO and STR-P
Interests) equal to the excess of the Strip REMIC Cap over the weighted average
interest rate of the Strip REMIC Regular Interests (other than the STR-$100,
STR-C-Swap-IO and STR-P Interests) with each such Class subject to a cap equal
to the Pass-Through Rate of the Corresponding Master REMIC Class. The
Pass-Through Rate of the Class C Certificates shall be a rate sufficient to
entitle it to an amount equal to all interest accrued on the Mortgage Loans
less the interest accrued on the other interests issued by the Master REMIC.
The Class C Distributable Amount for any Distribution Date is payable from
current interest on the Mortgage Loans and any related Overcollateralization
Reduction Amount for that Distribution Date.
(5) The Class A-R Certificates represent the sole class of residual
interest in each REMIC created hereunder. The Class A-R Certificates are not
entitled to distributions of interest. On the first Distribution Date, the
Class A-R Certificates are entitled to receive $100.00 from the Principal
Reserve Fund.
(6) For any Distribution Date, the Class P Certificates are entitled to
all Prepayment Charges collected during the related Prepayment Period and the
Master Servicer Prepayment Charge Amount. On the Class P Principal Distribution
Date, the Class P Certificates are entitled to receive $100.00 from the
Principal Reserve Fund.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Master REMIC as cash flow on a REMIC
regular interest, without creating any shortfall--actual or potential (other
than for credit losses) to any REMIC regular interest.
For any purpose for which the interest rate in respect of any Strip REMIC
regular interest created hereunder is calculated, the interest rate on the
Mortgage Loans shall be appropriately adjusted to account for the difference
between the monthly day count convention of the Mortgage Loans and the monthly
day count convention of the regular interests issued by each of the REMICs. For
purposes of calculating the interest rates for each of the interests issued by
REMIC, such rates shall be adjusted to equal a monthly day count convention
based on a 30 day month for each Interest Period and a 360-day year so that the
Mortgage Loans and all regular interests will be using the same monthly day
count convention.
ARTICLE I.
DEFINITIONS
Section 1.01 Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Acceptable Bid Amount: Either (i) a bid equal to or greater than the
Minimum Auction Amount or (ii) the highest bid submitted by a Qualified Bidder
in an auction if the Directing Certificateholder agrees to pay the related
Auction Supplement Amount.
Account: Any Escrow Account, the Certificate Account, the
Distribution Account, the Pre-Funding Account, the Capitalized Interest
Account, the Swap Account, the Swap Reserve Fund or any other account related
to the Trust Fund or the Mortgage Loans.
Accrual Period: With respect to any Distribution Date and each Class
of Adjustable Rate Certificates, the period commencing on the immediately
preceding Distribution Date (or, in the case of the first Distribution Date,
the Closing Date) and ending on the day immediately preceding such
Distribution Date. With respect to any Distribution Date and each Class of
Fixed Rate Certificates and the Class C Certificates, the calendar month
preceding the month in which such Distribution Date occurs. All calculations
of interest on the Adjustable Rate Certificates will be made on the basis of
the actual number of days elapsed in the related Accrual Period and on a
360-day year. All calculations of interest on each Class of Fixed Rate
Certificates and the Class C Certificates will be made on the basis of a
360-day year consisting of twelve 30-day months.
Adjustable Rate Certificates: The Class A-1, Class A-4-V and Class
A-5-V Certificates.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the related Expense Fee Rate.
Advance: The aggregate of the advances required to be made by the
Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the aggregate of payments
of principal of, and interest on the Stated Principal Balance of, the Mortgage
Loans (net of the Servicing Fees) that were due on the related Due Date and
not received by the Master Servicer as of the close of business on the related
Determination Date including an amount equivalent to interest on the Stated
Principal Balance of each Mortgage Loan as to which the related Mortgaged
Property is an REO Property or as to which the related Mortgaged Property has
been liquidated but such Mortgage Loan has not yet become a Liquidated
Mortgage Loan; provided, however, that the net monthly rental income (if any)
from such REO Property deposited in the Certificate Account for such
Distribution Date
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pursuant to Section 3.12 may be used to offset such Advance for the related
REO Property; provided, further, that for the avoidance of doubt, no Advances
shall be required to be made in respect of any Liquidated Mortgage Loan and no
Advances shall be made in respect of a Charged-off Mortgage Loan after the
related Charge-off Date.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Amount Held for Future Distribution: As to any Distribution Date,
the aggregate amount held in the Certificate Account at the close of business
on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage
Loans due after the related Due Date, (ii) Principal Prepayments received in
respect of such Mortgage Loans after the last day of the related Prepayment
Period and (iii) Liquidation Proceeds and Subsequent Recoveries received in
respect of such Mortgage Loans after the last day of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which, the aggregate Certificate Principal Balance of
the Certificates (after all distributions of principal on such Distribution
Date) exceeds the sum of (x) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (y) the amount on deposit in the
Pre-Funding Account.
Appraised Value: The appraised value of the Mortgaged Property based
upon the appraisal made for the originator of the related Mortgage Loan by an
independent fee appraiser at the time of the origination of the related
Mortgage Loan, or the sales price of the Mortgaged Property at the time of
such origination, whichever is less, or with respect to any Mortgage Loan
originated in connection with a refinancing, the appraised value of the
Mortgaged Property based upon the appraisal made at the time of such
refinancing.
Auction Supplement Amount: As defined in Section 9.04(c).
Auction Period: With respect to a Charged-off Mortgage Loan, the
period commencing on the related Charge-off Date and ending one year after
such date.
Bankruptcy Code: Title 11 of the United States Code.
Bid Determination Date: As defined in Section 9.04(b).
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Interest-Bearing Certificates constitutes a Class of
Book-Entry Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which either the Certificate Insurer or banking institutions in the
State of New York or California
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or the city in which the Corporate Trust Office of the Trustee is located are
authorized or obligated by law or executive order to be closed.
Capitalized Interest Account: The separate Eligible Account
designated as such and created and maintained by the Trustee pursuant to
Section 3.05(e). The Capitalized Interest Account shall be treated as an
"outside reserve fund" under applicable Treasury regulations and shall not be
part of any REMIC. Except as provided in Section 3.05(e), any investment
earnings on the amounts on deposit in the Capitalized Interest Account shall
be treated as owned by the Depositor and shall be taxable to the Depositor.
Capitalized Interest Deposit: $19,352.55.
Capitalized Interest Requirement: With respect to each Funding
Period Distribution Date, 1/12 of the product of (1) the sum of (a) the
Trustee Fee Rate and (b) the weighted average Adjusted Net Mortgage Rate of
the Mortgage Loans (excluding any Subsequent Mortgage Loans conveyed to the
Trust Fund during the calendar month preceding such Distribution Date) as of
the first day of the related Due Period (after giving effect to Principal
Prepayments received during the Prepayment Period, if any, that ends during
such Due Period) and (2) the amount on deposit in the Pre-Funding Account as
of the last day of the calendar month preceding such Funding Period
Distribution Date (or, if the Funding Period ended during such calendar month,
as of the last day of the Funding Period).
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWHEQ, Inc., Home Equity Loan
Asset Backed Certificates, Series 2007-S2". Funds in the Carryover Reserve
Fund shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-6, Exhibit B, Exhibit C and Exhibit D.
Certificate Account: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of the Certificateholders and the Certificate Insurer
and designated "Countrywide Home Loans Servicing LP in trust for registered
Holders of CWHEQ, Inc., Home Equity Loan Asset Backed Certificates, Series
2007-S2". Funds in the Certificate Account shall be held in trust for the
Certificateholders and the Certificate Insurer for the uses and purposes set
forth in this Agreement.
Certificate Insurance Policy: The irrevocable Financial Guaranty
Insurance Policy, No. 493800, including any endorsements thereto, issued by
MBIA with respect to the Class A Certificates.
Certificate Insurance Policy Premium Rate: 0.170% per annum.
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Certificate Insurance Premium: For any Distribution Date, an amount
equal to the product of (x) the Certificate Insurance Policy Premium Rate and
(y) the aggregate Certificate Principal Balance of the Class A Certificates
immediately prior to such Distribution Date. The Certificate Insurance Premium
shall be computed on the basis of a 360-day year and the actual number of days
elapsed during the related accrual period.
Certificate Insurance Reimbursement Amount: As to any Distribution
Date, (i) all Insured Payments paid by the Certificate Insurer for which the
Certificate Insurer has not been reimbursed prior to such Distribution Date
pursuant to Section 4.04 hereof, plus (ii) interest accrued on such Insured
Payments not previously repaid, calculated at the Late Payment Rate from the
date the Insured Payments were made, plus (iii) any other amounts then due and
owing to the Certificate Insurer pursuant to the Insurance and Indemnity
Agreement plus interest accrued on such amount not previously paid calculated
at the Late Payment Rate, plus (iv) any payment made by the Certificate
Insurer in its sole discretion to cure any payment default under the Swap
Contract after the Swap Contract Administrator has failed to do so, plus
interest thereon calculated at the Late Payment Rate.
Certificate Insurer: MBIA in its capacity as insurer under the
Certificate Insurance Policy, and any permitted successor or assign.
Certificate Insurer Contact Person: The officer designated by the
Master Servicer to provide information to the Certificate Insurer pursuant to
Section 4.06(i).
Certificate Insurer Default: As defined in Section 4.06(l).
Certificate Owner: With respect to a Book-Entry Certificate, the
person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than the
Class C and Class E-P Certificates) and as of any Distribution Date, the
Initial Certificate Principal Balance of such Certificate (A) less the sum of
(i) all amounts distributed with respect to such Certificate in reduction of
the Certificate Principal Balance thereof on previous Distribution Dates
pursuant to Section 4.04, (ii) with respect to the Class A Certificates only,
payments under the Certificate Insurance Policy relating to principal (except
that any payment under the Certificate Insurance Policy with respect to an
Applied Realized Loss Amount allocated to the Class A Certificates shall not
result in a further reduction of the Certificate Principal Balance of the
Class A Certificates) and (iii) any Applied Realized Loss Amounts allocated to
such Certificate on previous Distribution Dates pursuant to Section 4.04(i),
and (B) increased by any Subsequent Recoveries allocated to such Certificate
pursuant to Section 4.04(j) on such Distribution Date subject to the proviso
set forth in Section 4.04(j). References herein to the Certificate Principal
Balance of a Class of Certificates shall mean the Certificate Principal
Balances of all Certificates in such Class. The Class C Certificates shall
have a Certificate Principal Balance equal to the Overcollateralized Amount.
The Class E-P Certificates do not have a Certificate Principal Balance. With
respect to any Certificate (other than the Class C and Class E-P Certificates)
of a Class and any Distribution Date, the portion of the Certificate Principal
Balance of such Class represented by such Certificate is equal to the product
of the Percentage Interest evidenced by such Certificate and the Certificate
Principal Balance of such Class. Exclusively for the purpose
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of determining any subrogation rights of the Certificate Insurer arising under
Section 4.06 hereof, the "Certificate Principal Balance" of the Class A
Certificates shall not be reduced by the amount of any payments made by the
Certificate Insurer in respect of principal on such Certificates under the
Certificate Insurance Policy, except to the extent such payment shall have
been reimbursed to the Certificate Insurer pursuant to the provisions of this
Agreement.
Certificate Register: The register maintained pursuant to Section
5.02 hereof.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register (initially, Cede & Co., as nominee
for the Depository, in the case of any Class of Book-Entry Certificates),
except that solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
affiliate of the Depositor shall be deemed not to be Outstanding and the
Voting Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Voting Interests necessary to
effect such consent has been obtained; provided that if any such Person
(including the Depositor) owns 100% of the Voting Interests evidenced by a
Class of Certificates, such Certificates shall be deemed to be Outstanding for
purposes of any provision hereof (other than the second sentence of Section
10.01 hereof) that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Trustee is entitled to rely conclusively on a certification of the Depositor
or any affiliate of the Depositor in determining which Certificates are
registered in the name of an affiliate of the Depositor.
Certification Party: As defined in Section 11.05.
Certifying Person: As defined in Section 11.05.
Charge-off Date: With respect to a Mortgage Loan, the close of
business on the last day of the calendar month in which such Mortgage Loan
became a Charged-off Mortgage Loan.
Charged-off Loan Proceeds: With respect to a Charged-off Mortgage
Loan, any Insurance Proceeds and all other net proceeds received with respect
to such Charged-off Mortgage Loan after the related Charge-off Date in
connection with the partial or complete liquidation of such Charged-off
Mortgage Loan, whether through trustee's sale, foreclosure sale, auction or
otherwise, or in connection with any condemnation or partial release of the
related Mortgaged Property, together with the net proceeds received after the
related Charge-off Date with respect to any Mortgaged Property acquired by the
Master Servicer by foreclosure or deed in lieu of foreclosure in connection
with such Charged-off Mortgage Loan, less the sum of related unreimbursed
Servicing Advances and the related Charged-off Mortgage Loan Disposition Fee,
if any.
Charged-off Mortgage Loan: A Mortgage Loan that is 180 days
delinquent; provided, however, that a Covered Loan shall not be a Charged-off
Mortgage Loan unless (i) the Credit Insurer has rejected the claim under the
Credit Insurance Policy and (ii) no Loss Coverage Payment is payable with
respect to such Mortgage Loan as a result of the Sponsor Loss Coverage Amount
being reduced to zero or otherwise.
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Charged-off Mortgage Loan Disposition Fee: The fee payable to the
Master Servicer in connection with any Charged-off Mortgage Loan, which shall
be an amount equal to 10% of the gross proceeds from the Charged-off Mortgage
Loan, regardless of whether those proceeds arise as a result of a sale, an
auction, foreclosure or otherwise.
CHL: Countrywide Home Loans, Inc., a New York corporation, and its
successors and assigns.
CHL Mortgage Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule for which CHL is the applicable Seller.
Class: All Certificates bearing the same Class designation as set
forth in Section 5.01 hereof.
Class A Certificates: Collectively, the Class A-1, Class X-0, Xxxxx
X-0, Class A-4-F, Class A-4-V, Class A-5-F, Class A-5-V and Class A-6
Certificates.
Class A Available Funds: With respect to any Distribution Date,
funds allocated from amounts available pursuant to this Agreement to make
distributions on the Class A Certificates on such Distribution Date, including
without limitation amounts on deposit in the Distribution Account and the
Premium Account.
Class A Insurance Payments Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.06(c) in the name
of the Trustee for the benefit of the Class A Certificateholders and
designated "The Bank of New York in trust for registered holders of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S2, Class A
Certificates." Funds in the Class A Insurance Payments Account shall be held
in trust for the Class A Certificateholders for the uses and purposes set
forth in this Agreement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (x) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to that Distribution
Date, over (y) the aggregate Stated Principal Balance of the Mortgage Loans
for that Distribution Date minus the Overcollateralization Target Amount for
such Distribution Date.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class A-2 Certificate: Any Certificate designated as a "Class A-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class A-3 Certificate: Any Certificate designated as a "Class A-3
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
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Class A-4-F Certificate: Any Certificate designated as a "Class
A-4-F Certificate" on the face thereof, in the form of Exhibit A-4-F hereto,
representing the right to distributions as set forth herein.
Class A-4-V Certificate: Any Certificate designated as a "Class
A-4-V Certificate" on the face thereof, in the form of Exhibit A-4-V hereto,
representing the right to distributions as set forth herein.
Class A-5-F Certificate: Any Certificate designated as a "Class
A-5-F Certificate" on the face thereof, in the form of Exhibit A-5-F hereto,
representing the right to distributions as set forth herein.
Class A-5-V Certificate: Any Certificate designated as a "Class
A-5-V Certificate" on the face thereof, in the form of Exhibit A-5-V hereto,
representing the right to distributions as set forth herein.
Class A-6 Certificate: Any Certificate designated as a "Class A-6
Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class A-6 Portion: With respect to any Distribution Date, a
percentage, expressed as a fraction, the numerator of which is the Certificate
Principal Balance of the Class A-6 Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of all Classes of the Class A Certificates immediately prior
to such Distribution Date.
Class A-R Certificate: Any Certificate designated as a "Class A-R
Certificate" on the face thereof, in the form of Exhibit D-1 hereto or, in the
case of the Tax Matters Person Certificate, Exhibit E hereto, in either case
representing the right to distributions as set forth herein.
Class C Certificate: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit C hereto,
representing the right to distributions as set forth herein.
Class C Distributable Amount: As defined in the Preliminary
Statement.
Class E-P Certificate: Any Certificate designated as a "Class E-P
Certificate" on the face thereof, in the form of Exhibit D-2 hereto,
representing the right to distributions as set forth herein.
Class P Certificate: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit B hereto,
representing the right to distributions as set forth herein.
Class P Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans that have a Prepayment Charge Period.
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Closing Date: March 30, 2007.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collateral Schedule: Schedule II hereto.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) original principal
balance of the related Mortgage Loan and (y) the outstanding principal balance
of any senior mortgage loans at the date of origination of the related
Mortgage Loan and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: With respect to the Mortgage Loans and any
Distribution Date, an amount equal to the lesser of (x) one-half of the
Servicing Fee for the related Due Period and (y) the aggregate Prepayment
Interest Shortfall for such Distribution Date.
Confirmation: The confirmation, reference number FXNEC9347, with a
trade date of March 23, 2007 evidencing a transaction between the Corridor
Contract Counterparty and CHL relating to the Corridor Contract.
Corporate Trust Office: The designated office of the Trustee in the
State of New York where at any particular time its corporate trust business
with respect to this Agreement shall be administered, which office at the date
of the execution of this Agreement is located at 000 Xxxxxxx Xxxxxx, 0X, Xxx
Xxxx, Xxx Xxxx 00000 (Attention: Corporate Trust MBS Administration),
telephone: (000) 000-0000, facsimile: (000) 000-0000.
Corridor Contract: With respect to the Class A-1 Certificates, the
transaction evidenced by the Confirmation (as assigned to the Corridor
Contract Administrator pursuant to the Corridor Contract Assignment
Agreement).
Corridor Contract Administration Agreement: The corridor contract
administration agreement dated as of the Closing Date among CHL, the Trustee
and the Corridor Contract Administrator.
Corridor Contract Administrator: The Bank of New York, in its
capacity as corridor contract administrator under the Corridor Contract
Administration Agreement.
Corridor Contract Assignment Agreement: The Assignment Agreement
dated as of the Closing Date among CHL, the Corridor Contract Administrator
and the Corridor Contract Counterparty.
Corridor Contract Counterparty: Bear Xxxxxxx Financial Products Inc.
Corridor Contract Termination Date: The Distribution Date in
February 2009.
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Covered Certificates: The Class A-1 Certificates.
Covered Loan: A Mortgage Loan covered by the Credit Insurance Policy
as of the Cut-off Date.
Credit Bureau Risk Score: A statistical credit score obtained by CHL
in connection with the origination of a Mortgage Loan.
Credit Insurance Policy: The Credit Insurance Policy issued by the
Credit Insurer with respect to certain Mortgage Loans identified in the
Mortgage Loan Schedule.
Credit Insurance Premium: For any Distribution Date, the aggregate
fee payable to the Credit Insurer equal to the product of (x) the Credit
Insurance Premium Rate and (y) the unpaid principal balance of each Covered
Loan as of the first day of the related calendar month, computed on the basis
of a 360-day year consisting of twelve 30-day months.
Credit Insurance Premium Rate: The rate at which the Credit
Insurance Premium accrues on each Mortgage Loan, as set forth on the Mortgage
Loan Schedule.
Credit Insurer: Old Republic Insurance Company, or any replacement
Credit Insurer, as applicable.
Cumulative Loss Trigger Event: With respect to any Distribution Date
on or after the Stepdown Date, (x) the aggregate amount of Realized Losses
(calculated without taking into account payments made under the Credit
Insurance Policy or any Loss Coverage Payments) on the Mortgage Loans from the
Cut-off Date for each such Mortgage Loan to (and including) the last day of
the related Due Period (reduced by the aggregate amount of any Subsequent
Recoveries and Charged-off Loan Proceeds received through the last day of that
Due Period) exceeds (y) the applicable percentage, for such Distribution Date,
of the sum of the Initial Cut-off Date Pool Principal Balance and the
Pre-Funded Amount, as set forth below:
Distribution Date Percentage
----------------- ----------
October 2009 --March 2010.......... 2.000% with respect to October 2009, plus
an additional 1/6th of 0.650% for each
month thereafter through March 2010
April 2010 -- March 2011........... 2.650% with respect to April 2010, plus an
additional 1/12th of 1.075% for each month
thereafter through March 2011
April 2011 -- March 2012........... 3.725% with respect to April 2011, plus an
additional 1/12th of 1.075% for each month
thereafter through March 2012
April 2012 -- March 2013........... 4.800% with respect to April 2012,
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Distribution Date Percentage
----------------- ----------
plus an additional 1/12th of 0.500% for
each month thereafter until March 2013
April 2013 and thereafter.......... 5.300%
Current Interest: With respect to each Class of Interest-Bearing
Certificates and each Distribution Date, interest accrued at the applicable
Pass-Through Rate for the applicable Accrual Period on the Certificate
Principal Balance of such Class immediately prior to such Distribution Date.
Cut-off Date: With respect to any Mortgage Loan, the Initial Cut-off
Date or the related Subsequent Cut-off Date, as the case may be.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date
after application of all payments of principal due on or prior to the Cut-off
Date, whether or not received, and all Principal Prepayments received on or
prior to the Cut-off Date, but without giving effect to any installments of
principal received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.
Deficiency Amount: As defined in the Certificate Insurance Policy.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount
less than the then outstanding indebtedness under such Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 5.06.
Delay Delivery Mortgage Loans: (i) The Initial Mortgage Loans
identified on the schedule of Mortgage Loans hereto set forth on Exhibit F-2
hereof for which all or a portion of a related Mortgage File is not delivered
to the Trustee on or prior to the Closing Date, and (ii) the Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage Loans set
forth in Annex I to each related Subsequent Transfer Agreement for which all
or a portion of the related Mortgage File is not delivered to the Trustee on
or prior to the related Subsequent Transfer Date. The Depositor shall deliver
(or cause delivery of) the Mortgage Files to the Trustee: (A) with respect to
at least 50% of the Initial Mortgage Loans, not later than the
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Closing Date and with respect to at least 10% of the Subsequent Mortgage Loans
conveyed on a Subsequent Transfer Date, not later than such Subsequent
Transfer Date, (B) with respect to at least an additional 40% of the Initial
Mortgage Loans, not later than 20 days after the Closing Date, and not later
than 20 days after the relevant Subsequent Transfer Date with respect to the
remaining Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date,
and (C) with respect to the remaining Initial Mortgage Loans, not later than
thirty days after the Closing Date. To the extent that Countrywide Home Loans,
Inc. shall be in possession of any Mortgage Files with respect to any Delay
Delivery Mortgage Loan, until delivery of such Mortgage File to the Trustee as
provided in Section 2.01, Countrywide Home Loans, Inc. shall hold such files
as agent and in trust for the Trustee.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date on
or after the Stepdown Date, the Rolling Sixty-Day Delinquency Rate for that
Distribution Date for the outstanding Mortgage Loans exceeds 4.50%.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate"
or, if not the foregoing, the Percentage Interest appearing on the face
thereof, as applicable.
Depositor: CWHEQ, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
Depository Agreement: With respect to the Book-Entry Certificates,
the agreement among the Depositor and the initial Depository, dated as of the
Closing Date, substantially in the form of Exhibit O.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the 22nd
day of the month of such Distribution Date or, if such 22nd day is not a
Business Day, the immediately preceding Business Day; provided that the
Determination Date in each month will be at least two Business Days before the
Distribution Date.
Directing Certificateholder: As defined in Section 9.04(a).
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05(c) in the name of the
Trustee for the benefit of the
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Certificateholders and the Certificate Insurer and designated "The Bank of New
York, in trust for registered Holders of CWHEQ, Inc., Home Equity Loan Asset
Backed Certificates, Series 2007-S2". Funds in the Distribution Account shall
be held in trust for the Certificateholders and the Certificate Insurer for
the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 1:00
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each month, or if such day is not
a Business Day, on the first Business Day thereafter, commencing in April
2007.
Due Date: With respect to any Mortgage Loan and Due Period, the due
date for Scheduled Payments of interest and/or principal on that Mortgage Loan
occurring in such Due Period as provided in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the
month in which such Distribution Date occurs.
XXXXX: The Commission's Electronic Data Gathering, Analysis, and
Retrieval system.
Eligible Account: Any of (i) an account or accounts maintained with
a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Xxxxx'x is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein,
or (ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee, the
Certificate Insurer and to each Rating Agency, the Certificateholders have a
claim with respect to the funds in such account or a perfected first priority
security interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with the corporate trust department of a federal or state chartered
depository institution or trust company having capital and surplus of not less
than $50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies without reduction or withdrawal of their
then-current ratings of the Certificates (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates) as evidenced by a
letter from each Rating Agency to the Trustee and the Certificate Insurer.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
Eligible Repurchase Month: As defined in Section 3.12(d) hereof.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
16
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the applicable requirements of
the Underwriter's Exemption.
ERISA-Restricted Certificates: The Class A-R Certificates, Class P
Certificates, Class E-P Certificates, Class C Certificates and Certificates of
any Class that does not have or no longer has a rating of at least AA- or its
equivalent from at least one Rating Agency.
Escrow Account: As defined in Section 3.06 hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Cashflow: With respect to any Distribution Date the sum of
(i) the amount remaining after the distribution of interest to
Certificateholders and payments to the Certificate Insurer for such
Distribution Date, pursuant to Section 4.04(a)(vi), (ii) the amount remaining
after the distribution of principal to Certificateholders and payments to the
Certificate Insurer for such Distribution Date, pursuant to Section
4.04(b)(iv) and (iii) the Overcollateralization Reduction Amount for such
Distribution Date.
Excess Overcollateralization Amount: With respect to any
Distribution Date, the excess, if any, of the Overcollateralized Amount for
such Distribution Date over the Overcollateralization Target Amount for such
Distribution Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, other
than a Charged-off Mortgage Loan, the amount, if any, by which the sum of any
Liquidation Proceeds and Subsequent Recoveries are in excess of the sum of (i)
the unpaid principal balance of such Liquidated Mortgage Loan as of the date
of liquidation of such Liquidated Mortgage Loan plus (ii) interest at the
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders (and not reimbursed to the Master Servicer) up to the
Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
outstanding during each Due Period as to which such interest was not paid or
advanced.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: With respect to any Mortgage Loan, the sum of (i)
the Servicing Fee Rate, (ii) the Trustee Fee Rate and (iii) with respect to
any Covered Loan, the Credit Insurance Premium Rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date, the lesser of (1) the Overcollateralization Deficiency
Amount for such Distribution Date and (2) the Excess Cashflow available for
payment thereof for such Distribution Date.
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Xxxxxx Xxx: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Scheduled Distribution Date: With respect to the Class A
Certificates and the Certificate Insurance Policy, the Distribution Date
occurring in the month following the month of the scheduled maturity date of
the Mortgage Loan having the latest scheduled maturity date including any
Subsequent Mortgage Loan, if any.
Fixed Rate Certificates: The Class A-2, Class A-3, Class A-4-F,
Class A-5-F and Class A-6 Certificates.
Form 10-D Disclosure Item: With respect to any Person, any material
litigation or governmental proceedings pending against such Person, or against
any of the Trust Fund, the Depositor, the Trustee, any co-trustee, the Master
Servicer or any Subservicer, if such Person has actual knowledge thereof.
Form 10-K Disclosure Item: With respect to any Person, (a) Form 10-D
Disclosure Item, and (b) any affiliations or relationships between such Person
and any Item 1119 Party.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Funding Period: The period from the Closing Date to and including
the earlier to occur of (x) the date the amount in the Pre-Funding Account is
less than $40,000 and (y) May 24, 2007.
Funding Period Distribution Date: Each Distribution Date on or prior
to the Distribution Date occurring in the calendar month following the month
in which the Funding Period ends.
Initial Certificate Account Deposit: An amount equal to the
aggregate of all amounts in respect of (i) principal of the Initial Mortgage
Loans due after the Initial Cut-off Date and received by the Master Servicer
before the Closing Date and not applied in computing the Cut-off Date
Principal Balance thereof and (ii) interest on the Initial Mortgage Loans due
after the Initial Cut-off Date and received by the Master Servicer before the
Closing Date.
Initial Certificate Principal Balance: With respect to any
Certificate (other than the Class C and Class E-P Certificates) the
Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Initial Cut-off Date: In the case of any Initial Mortgage Loan, the
later of (x) March 1, 2007 and (y) the date of origination of such Mortgage
Loan.
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Initial Cut-off Date Pool Principal Balance: The aggregate Cut-off
Date Principal Balance of the Initial Mortgage Loans.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trustee on
the Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Insolvency Proceeding: As defined in Section 4.06(h).
Insurance and Indemnity Agreement: The Insurance Agreement, dated as
of the Closing Date, by and among the Certificate Insurer, as insurer, the
Depositor, as depositor, CHL, as sponsor and a seller, the Master Servicer, as
master servicer, and the Trustee, as trustee.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including the Credit Insurance Policy but
excluding the Certificate Insurance Policy, including all riders and
endorsements thereto in effect with respect to such Mortgage Loan, including
any replacement policy or policies for any Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
(other than by the Certificate Insurer under the Certificate Insurance Policy)
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Master Servicer or the trustee under the deed of trust and
are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account, in
each case other than any amount included in such Insurance Proceeds in respect
of Insured Expenses and received either prior to or in connection with such
Mortgage Loan becoming a Liquidated Mortgage Loan.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Insured Payments: As defined in the Certificate Insurance Policy.
Interest-Bearing Certificates: The Class A Certificates.
Interest Carry Forward Amount: With respect to each Class of
Interest-Bearing Certificates and each Distribution Date, the excess of (i)
the Current Interest for such Class with respect to prior Distribution Dates
over (ii) the amount actually distributed to such Class with respect to
interest on such prior Distribution Dates.
Interest Determination Date: With respect to the Adjustable Rate
Certificates, the second LIBOR Business Day preceding the commencement of each
Accrual Period.
Interest Funds: With respect to any Distribution Date, (x) an amount
equal to the sum of (i) the Interest Remittance Amount for such Distribution
Date, (ii) the Capitalized Interest Requirement, if any, for such Distribution
Date, (iii) solely for the purpose of calculating the Deficiency Amount, the
amount on deposit in the Premium Account after taking into account any
deposits to the Premium Account on such Distribution Date plus (iv) the
Adjusted
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Replacement Upfront Amount, if any, less (y) the sum of (i) the Trustee Fee
for such Distribution Date and (ii) the Credit Insurance Premium for such
Distribution Date.
Interest Remittance Amount: With respect to any Distribution Date,
(x) the sum, without duplication, of (i) all scheduled interest collected
during the related Due Period with respect to the Mortgage Loans less the
Servicing Fee, (ii) all interest on Principal Prepayments received during the
related Prepayment Period with respect to the Mortgage Loans, other than
Prepayment Interest Excess, (iii) all Advances relating to interest with
respect to the Mortgage Loans, (iv) all Compensating Interest with respect to
the Mortgage Loans, (v) Liquidation Proceeds with respect to the Mortgage
Loans collected during the related Due Period (to the extent such Liquidation
Proceeds relate to interest), (vi) any payments received under the Credit
Insurance Policy attributable to interest for the related Due Period, (vii)
any Loss Coverage Payment attributable to interest for the related Due Period
and (viii) the Seller Interest Shortfall Payment, if any, less (y) all
reimbursements to the Master Servicer during the related Due Period for
Advances of interest previously made.
Investment Letter: As defined in Section 5.02(b).
Item 1119 Party: The Depositor, any Seller, the Master Servicer, the
Trustee, any Subservicer, any originator identified in the Prospectus
Supplement, the Certificate Insurer, the Credit Insurer, the Corridor Contract
Counterparty, the Swap Counterparty and any other material transaction party,
as identified in Exhibit Z hereto, as updated pursuant to Section 11.04.
Late Payment Rate: With respect to any Distribution Date, the lesser
of (i) the greater of (a) the rate of interest, as it is publicly announced by
Citibank, N.A. at its principal office in New York, New York as its prime rate
(any change in the prime rate of interest to be effective on the date the
change is announced by Citibank, N.A.) plus 2% and (b) the then applicable
highest rate of interest on any of the Class A Certificates and (ii) the
maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the
actual number of days elapsed over a year of 360 days.
Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having
the latest scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Any day on which banks in the City of London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Limited Exchange Act Reporting Obligations: The obligations of the
Master Servicer under Section 3.17(b), Section 6.02 and Section 6.04 with
respect to notice and information to be provided to the Depositor and Article
XI (except Section 11.07(a)(1) and (2)).
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer
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has certified in the related Prepayment Period that it has received all
amounts it expects to receive in connection with such liquidation.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property received in connection with or prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan (other than the amount of such net proceeds
representing any profit realized by the Master Servicer in connection with the
disposition of any such properties and other than amounts paid under the
Certificate Insurance Policy), less the sum of related unreimbursed Advances,
Servicing Fees and Servicing Advances. For the avoidance of doubt, Liquidation
Proceeds shall not include Charged-off Loan Proceeds.
Loan Number and Borrower Identification Mortgage Loan Schedule: With
respect to any Subsequent Transfer Date, the Loan Number and Borrower
Identification Mortgage Loan Schedule delivered in connection with such
Subsequent Transfer Date pursuant to Section 2.01(f). Each Loan Number and
Borrower Identification Mortgage Loan Schedule shall contain the information
specified in the definition of "Mortgage Loan Schedule" with respect to the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, and each
Loan Number and Borrower Identification Mortgage Loan Schedule shall be deemed
to be included in the Mortgage Loan Schedule.
Loss Coverage Payment: With respect to any Distribution Date on or
prior to the Distribution Date on which the Sponsor Loss Coverage Amount is
reduced to zero, the amount of Realized Losses on the Covered Loans with
respect to which a claim for payment was denied by the Credit Insurer due to
an exclusion in the Credit Insurance Policy but for which there are no
breaches of the representations and warranties set forth in Section 2.03 with
respect to such Covered Loans. Notwithstanding the preceding sentence, with
respect to the Distribution Date on which the amount described in the
preceding sentence exceeds the Sponsor Loss Coverage Amount, the Loss Coverage
Payment for such Distribution Date shall be the Sponsor Loss Coverage Amount.
Majority Holder: The Holders of Certificates evidencing at least 51%
of the Voting Rights allocated to such Class of Certificates.
Master Servicer: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.
Master Servicer Prepayment Charge Payment Amount: The amounts (i)
payable by the Master Servicer in respect of any Prepayment Charges waived
other than in accordance with the standard set forth in the first sentence of
Section 3.20(a), or (ii) collected from the Master Servicer in respect of a
remedy for the breach of the representation made by CHL set forth in Section
3.20(c).
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MBIA: MBIA Insurance Corporation, organized and created under the
laws of the State of New York, or any successor thereto.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS(R) System.
MERS(R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Auction Amount: With respect to any auction of the Mortgage
Loans and any REO Properties pursuant to Section 9.04, the sum of (i) the
Termination Price that would be payable by the NIM Insurer if the Optional
Termination were exercised in the following calendar month pursuant to Section
9.01 and (ii) all reasonable fees and expenses incurred by the Trustee in
connection with any auction conducted pursuant to Section 9.04. For the
avoidance of doubt, the Minimum Auction Amount shall result in a final
distribution on the Class A Certificates and to the Certificate Insurer that
is sufficient (x) to pay such Class A Certificates in full (without the need
of any payment by the Certificate Insurer of any Insured Payment) and (y) to
pay any amounts due and payable to the Certificate Insurer pursuant to the
terms hereof and pursuant to the Insurance and Indemnity Agreement.
Modified Mortgage Loan: As defined in Section 3.12(a).
MOM Loan: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.05.
Moody's: Xxxxx'x Investors Service, Inc. and its successors.
Mortgage: The mortgage, deed of trust or other instrument creating a
second lien on or second priority ownership interest in an estate in fee
simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the deletion of Liquidated
Mortgage Loans and Deleted Mortgage Loans and the addition of (x) Replacement
Mortgage Loans pursuant to the provisions of this Agreement and (y) Subsequent
Mortgage Loans pursuant to the provisions of this Agreement and any Subsequent
Transfer Agreement) transferred to the Trustee as part of the
22
Trust Fund and from time to time subject to this Agreement, attached hereto as
Exhibit F-1, setting forth in the following information with respect to each
Mortgage Loan:
(i) the loan number;
(ii) [Reserved];
(iii) the Appraised Value;
(iv) the Mortgage Rate;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the first payment date of the Mortgage Loan;
(ix) the Scheduled Payment in effect as of the Cut-off Date;
(x) the Combined Loan-to-Value Ratio at origination;
(xi) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(xii) a code indicating whether the residential dwelling is
either (a) a detached single-family dwelling, (b) a two-family
residential property, (c) a three-family residential property, (d) a
four-family residential property, (e) planned unit development, (f)
a low-rise condominium unit, (g) a high-rise condominium unit or (h)
manufactured housing;
(xiii) the purpose of the Mortgage Loan;
(xiv) a code indicating if such Mortgage Loan is a Covered
Loan and the related Credit Insurance Premium Rate; and
(xv) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Granada Mortgage Loan, a Park
Monaco Mortgage Loan or a Park Sienna Mortgage Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans. The Mortgage Loan Schedule shall be
deemed to include each Loan Number and Borrower Identification Mortgage Loan
Schedule delivered pursuant to Section 2.01(f) and all the related Subsequent
Mortgage Loans and Subsequent Mortgage Loan information included therein.
Mortgage Loans: Such of the mortgage loans transferred and assigned
to the Trustee pursuant to the provisions hereof and any Subsequent Transfer
Agreement as from time
23
to time are held as part of the Trust Fund (including any REO Property), the
mortgage loans so held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure or other acquisition of title of the related
Mortgaged Property. Any mortgage loan that was intended by the parties hereto
to be transferred to the Trust Fund as indicated by such Mortgage Loan
Schedule which is in fact not so transferred for any reason, including a
breach of the representation contained in Section 2.02 hereof, shall continue
to be a Mortgage Loan hereunder until the Purchase Price with respect thereto
has been paid to the Trust Fund.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: The aggregate of the Mortgage Loans identified in the
Mortgage Loan Schedule.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
as set forth in the Mortgage Loan Schedule.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: The obligors on a Mortgage Note.
NAS Factor: For any Distribution Date set forth below, the
percentage set forth in the following table:
Distribution Date Percentage
---------------------------------------- ----------------
April 2007 -- March 2010 0%
April 2010 -- March 2012 45%
April 2012 -- March 2013 80%
April 2013 -- March 2014 100%
April 2014 and thereafter 300%
NAS Principal Distribution Amount: For any Distribution Date, an
amount equal to the product of (i) the Class A-6 Portion for such Distribution
Date, (ii) any amounts distributed to the Class A Certificates pursuant to
Section 4.04(b)(ii) for such Distribution Date and (iii) the NAS Factor for
such Distribution Date.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.
Net Rate Cap: For each Distribution Date,
(i) with respect to the Class X-0, Xxxxx X-0, Class A-3, Class
A-4-F, Class A-5-F and Class A-6 Certificates, (1) the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans as of the
first day of the related Due Period (after giving effect to
Principal Prepayments received during the Prepayment Period that
ends during such Due Period), less (2) the Certificate Insurance
Policy Premium Rate, multiplied by a fraction, the numerator of
which is (a) the aggregate Certificate
24
Principal Balance of the Class A Certificates and the denominator of
which is (b) the aggregate Stated Principal Balance of the Mortgage
Loans as of the first day of the related Due Period (after giving
effect to Principal Prepayments received during the Prepayment
Period that ends during such Due Period) plus any amounts on deposit
in the Pre-Funding Account as of the first day of that Due Period.
The Net Rate Cap shall be adjusted in the case of the Class A-1
Certificates only to an effective rate reflecting the calculation of
interest on the basis of the actual number of days elapsed during
the related Accrual Period and a 360 day year, and
(ii) with respect to the Class A-4-V and Class A-5-V
Certificates, the related Net Rate Cap for the Class A-1, Class A-2,
Class A-3, Class A-4-F, Class A-5-F and Class A-6 Certificates
(adjusted to an effective rate reflecting the calculation of
interest on the basis of the actual number of days elapsed during
the related Accrual Period and a 360-day year), minus a fraction,
expressed as a percentage, the numerator of which is (x) the sum of
(1) the Net Swap Payment payable to the Swap Counterparty with
respect to such Distribution Date times a fraction, the numerator of
which is 360 and the denominator of which is the actual number of
days in the related Accrual Period and (2) any Swap Termination
Payment payable to the Swap Counterparty for such Distribution Date
(other than a Swap Termination Payment due to a Swap Counterparty
Trigger Event), and the denominator of which is (y) the aggregate
Certificate Principal Balance of the Class A-4-V and Class A-5-V
Certificates immediately prior to such Distribution Date.
Net Rate Carryover: With respect to any Class of Class A
Certificates and any Distribution Date, the sum of (A) the excess of (i) the
amount of interest that such Class would otherwise have accrued for such
Distribution Date had the Pass-Through Rate for such Class and the related
Accrual Period not been determined based on the related Net Rate Cap, over
(ii) the amount of interest accrued on such Class at the applicable Net Rate
Cap for such Distribution Date and (B) the Net Rate Carryover for such Class
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the then-applicable Pass-Through Rate
for such Class, without giving effect to the applicable Net Rate Cap.
Net Swap Payment: With respect to any Distribution Date and payment
by the Swap Contract Administrator to the Swap Counterparty, the excess, if
any, of the "Fixed Amount" (as defined in the Swap Contract) with respect to
such Distribution Date over the "Floating Amount" (as defined in the Swap
Contract) with respect to such Distribution Date. With respect to any
Distribution Date and payment by the Swap Counterparty to the Swap Contract
Administrator, the excess, if any, of the "Floating Amount" (as defined in the
Swap Contract) with respect to such Distribution Date over the "Fixed Amount"
(as defined in the Swap Contract) with respect to such Distribution Date.
NIM Insurer: Any insurer guarantying at the request of CHL certain
payments under notes backed or secured by the Class C and/or Class P
Certificates.
25
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not or, in the case of a current delinquency, would
not, be ultimately recoverable by the Master Servicer from the related
Mortgagor, related Liquidation Proceeds or otherwise. Any unreimbursed
Advances made prior to the related Charge-off Date in connection with a
Charged-off Mortgage Loan shall be considered Nonrecoverable Advances as of
the related Charge-off Date.
Non-United States Person: A Person that is not a citizen or resident
of the United States, a corporation, partnership, or other entity (treated as
a corporation or a partnership for federal income tax purposes) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, an estate whose income from sources without the United
States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business
within the United States, or a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have authority to control all substantial
decisions of the trustor.
OC Floor: An amount equal to 0.50% of the sum of the Initial Cut-off
Date Pool Principal Balance and the Pre-Funded Amount.
Officer's Certificate: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Managing Director, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the Depositor,
(ii) in the case of the Master Servicer, signed by the President, an Executive
Vice President, a Vice President, an Assistant Vice President, the Treasurer,
or one of the Assistant Treasurers or Assistant Secretaries of Countrywide GP,
Inc., its general partner, (iii) if provided for in this Agreement, signed by
a Servicing Officer, as the case may be, and delivered to the Depositor and
the Trustee, as the case may be, as required by this Agreement, or (iv) in the
case of any other Person, signed by an authorized officer of such Person.
One-Month LIBOR: With respect to any Accrual Period for the
Adjustable Rate Certificates, the rate determined by the Trustee on the
related Interest Determination Date on the basis of the rate for U.S. dollar
deposits for one month as quoted on the Bloomberg Terminal on such Interest
Determination Date. If such rate is not quoted on the Bloomberg Terminal (or
if such service is no longer offered, such other service for displaying
One-Month LIBOR or comparable rates as may be reasonably selected by the
Trustee), One-Month LIBOR for the applicable Accrual Period for the Adjustable
Rate Certificates will be the Reference Bank Rate. If no such quotations can
be obtained by the Trustee and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period for
the Adjustable Rate Certificates.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or
10.01, or the interpretation or application of the REMIC Provisions, such
counsel must (i) in fact be independent of the Depositor and the Master
26
Servicer, (ii) not have any direct financial interest in the Depositor or the
Master Servicer or in any affiliate of either and (iii) not be connected with
the Depositor or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
Optional Termination: The termination of the Trust Fund provided
hereunder pursuant to the purchase of the Mortgage Loans pursuant to clause
(a) of the first sentence of Section 9.01 hereof.
Optional Termination Date: The first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans is less than or equal
to 10% of the sum of the Initial Cut-off Date Pool Principal Balance and the
Pre-Funded Amount.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on
the lower of an appraisal satisfactory to the Master Servicer or the sales
price of such property or, in the case of a refinancing, on an appraisal
satisfactory to the Master Servicer.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
To effectuate the Certificate Insurer's rights of subrogation under
Section 4.06 hereof, all Class A Certificates that have been paid with funds
provided under the Certificate Insurance Policy shall be Outstanding until the
Certificate Insurer has been paid all amounts due to it pursuant to this
Agreement and the Insurance and Indemnity Agreement.
Outstanding Mortgage Loan: As of any Distribution Date, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a
Liquidated Mortgage Loan, prior to the end of the related Prepayment Period.
Overcollateralization Deficiency Amount: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization
Target Amount exceeds the Overcollateralized Amount on such Distribution Date
(after giving effect to the distribution of the Principal Distribution Amount
(other than the portion thereof consisting of the Extra Principal Distribution
Amount) on such Distribution Date).
27
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for such Distribution Date and (ii) the Principal
Remittance Amount for such Distribution Date.
Overcollateralization Target Amount: With respect to any
Distribution Date: (a) prior to the Stepdown Date, an amount equal to 2.05% of
the sum of the Initial Cut-off Date Pool Principal Balance and the Pre-Funded
Amount and (b) on or after the Stepdown Date, the greater of (i) an amount
equal to 4.10% of the aggregate Stated Principal Balance of the Mortgage Loans
for that Distribution Date and (ii) the OC Floor; provided, however, that if a
Trigger Event is in effect on any Distribution Date, the Overcollateralization
Target Amount will be the Overcollateralization Target Amount as in effect for
the prior Distribution Date.
Overcollateralized Amount: With respect to any Distribution Date,
the amount, if any, by which (x) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and any amount on
deposit in the Pre-Funding Account exceeds (y) the aggregate Certificate
Principal Balance of the Class A Certificates as of such Distribution Date
(after giving effect to the distribution of the Principal Remittance Amount on
such Distribution Date and, in the case of the Distribution Date immediately
following the end of the Funding Period, any amounts to be released from the
Pre-Funding Account).
Ownership Interest: As to any Certificate, any ownership interest in
such Certificate including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
Park Granada: Park Granada LLC, a Delaware limited liability
company, and its successors and assigns.
Park Granada Mortgage Loans: The Mortgage Loans identified as such
on the Mortgage Loan Schedule for which Park Granada is the applicable Seller.
Park Monaco: Park Monaco Inc., a Delaware corporation, and its
successors and assigns.
Park Monaco Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Monaco is the applicable Seller.
Park Sienna: Park Sienna LLC, a Delaware limited liability company,
and its successors and assigns.
Park Sienna Mortgage Loans: The Mortgage Loans identified as such on
the Mortgage Loan Schedule for which Park Sienna is the applicable Seller.
Pass-Through Margin: With respect to any Distribution Date and (1)
the Class A-1 Certificates, 0.140% per annum, (2) the Class A-4-V
Certificates, 0.360% per annum and (3) the Class A-5-V Certificates, 0.380%
per annum.
28
Pass-Through Rate: With respect to any Accrual Period and each Class
of Interest-Bearing Certificates, the per annum rate set forth or calculated
in the manner described in the Preliminary Statement.
Percentage Interest: With respect to any Interest-Bearing
Certificate, a fraction, expressed as a percentage, the numerator of which is
the Certificate Principal Balance represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance of the
related Class. With respect to the Class C, Class E-P, Class P and Class A-R
Certificates, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Performance Certification: As defined in Section 11.05.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as each Rating Agency has confirmed in writing is sufficient
for the ratings originally assigned to the Certificates by such
Rating Agency (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates);
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as each Rating Agency has
confirmed in writing is sufficient for the ratings originally
assigned to the Certificates by such Rating Agency (without regard
to the Certificate Insurance Policy, in the case of the Class A
Certificates);
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding
company, but only if Xxxxx'x is not a Rating Agency) are then rated
one of the two highest long-term and the highest short-term ratings
of each such Rating Agency for such securities, or such lower
ratings as each Rating Agency has confirmed in writing is sufficient
for the ratings originally assigned to the Certificates by such
Rating Agency (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates);
29
(v) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(vi) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency (except (x) if
the Rating Agency is Moody's, such rating shall be the highest
commercial paper rating of S&P for any such securities) and (y), or
such lower rating as each Rating Agency has confirmed in writing is
sufficient for the ratings originally assigned to the Certificates
by such Rating Agency (without regard to the Certificate Insurance
Policy, in the case of the Class A Certificates);
(vii) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time
such interests are held in such fund has the highest applicable long
term rating by each Rating Agency or such lower rating as each
Rating Agency has confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating Agency
(without regard to the Certificate Insurance Policy, in the case of
the Class A Certificates);
(viii) short term investment funds sponsored by any trust
company or national banking association incorporated under the laws
of the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in their respective
highest applicable rating category or such lower rating as each
Rating Agency has confirmed in writing is sufficient for the ratings
originally assigned to the Certificates by such Rating Agency
(without regard to the Certificate Insurance Policy, in the case of
the Class A Certificates); and
(ix) such other relatively risk free investments having a
specified stated maturity and bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates), as
evidenced by a signed writing delivered by each Rating Agency, and
reasonably acceptable to the NIM Insurer and the Certificate
Insurer, as evidenced by a signed writing delivered by the NIM
Insurer and the Certificate Insurer;
provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no
such instrument shall be a Permitted Investment (A) if such instrument
evidences principal and interest payments derived from obligations underlying
such instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to maturity at
par of such underlying obligations, or (B) if it may be redeemed at a price
below the purchase price (the foregoing clause (B) not to apply to investments
in units
30
of money market funds pursuant to clause (vii) above); provided further that
no amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of
a tax on any such REMIC. Permitted Investments that are subject to prepayment
or call may not be purchased at a price in excess of par.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
Persons have authority to control all substantial decisions of the trustor
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8ECI, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Plan: An "employee benefit plan" as defined in section 3(3) of ERISA
that is subject to Title I of ERISA, a "plan" as defined in section 4975 of
the Code that is subject to section 4975 of the Code, or any Person investing
on behalf of or with plan assets (as defined in 29 CFR ss.2510.3-101 or
otherwise under ERISA) of such an employee benefit plan or plan.
31
Pool Stated Principal Balance: The aggregate of the Stated Principal
Balances of the Mortgage Loans which were Outstanding Mortgage Loans.
Pre-Funded Amount: The amount deposited in the Pre-Funding Account
on the Closing Date, which shall equal $1,420,801.
Pre-Funding Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and the Certificate Insurer and
designated "The Bank of New York, in trust for registered holders of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S2." Funds in
the Pre-Funding Account shall be held in trust for the Certificateholders and
the Certificate Insurer for the uses and purposes set forth in this Agreement
and shall not be a part of any REMIC created hereunder, provided, however that
any investment income earned from Permitted Investments made with funds in the
Pre-Funding Account will be for the account of CHL.
Preference Amount: As defined in the Certificate Insurance Policy.
Preference Claim: As defined in Section 4.06(h).
Premium Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and the Certificate Insurer and
designated "The Bank of New York, in trust for registered holders of CWHEQ,
Inc., Home Equity Loan Asset Backed Certificates, Series 2007-S2." Funds in
the Premium Account shall be held in trust for the Certificateholders and the
Certificate Insurer for the uses and purposes set forth in this Agreement.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Certificates.
Prepayment Charge: With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan within the related Prepayment Charge Period in accordance with
the terms thereof (other than any Master Servicer Prepayment Charge Payment
Amount).
Prepayment Charge Period: With respect to any Mortgage Loan, the
period of time during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of the Initial Cut-off Date with
respect to each Initial Mortgage Loan and as of the Subsequent Cut-off Date
with respect to each Subsequent Mortgage Loan, a list attached hereto as
Schedule I (including the Prepayment Charge Summary attached thereto), setting
forth the following information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
32
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first monthly payment was due on the
related Mortgage Loan;
(v) the term of the related Prepayment Charge; and
(vi) the principal balance of the related Mortgage Loan as of
the Cut-off Date.
As of the Closing Date, the Prepayment Charge Schedule shall contain
the necessary information for each Initial Mortgage Loan. The Prepayment
Charge Schedule shall be amended by the Master Servicer upon the sale of any
Subsequent Mortgage Loans to the Trust Fund. In addition, the Prepayment
Charge Schedule shall be amended from time to time by the Master Servicer in
accordance with the provisions of this Agreement and a copy of each related
amendment shall be furnished by the Master Servicer to the Class P and Class C
Certificateholders and the NIM Insurer.
Prepayment Interest Excess: With respect to any Distribution Date,
for each Mortgage Loan that was the subject of a Principal Prepayment during
the period from the related Due Date to the end of the related Prepayment
Period, any payment of interest received in connection therewith (net of any
applicable Servicing Fee) representing interest accrued for any portion of
such month of receipt.
Prepayment Interest Shortfall: With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a partial Principal
Prepayment or a Principal Prepayment in full during the period from the
beginning of the related Prepayment Period to the Due Date in such Prepayment
Period (other than a Principal Prepayment in full resulting from the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof)
and for each Mortgage Loan that became a Liquidated Mortgage Loan during the
related Due Period, the amount, if any, by which (i) one month's interest at
the applicable Net Mortgage Rate on the Stated Principal Balance of such
Mortgage Loan immediately prior to such prepayment (or liquidation) or in the
case of a partial Principal Prepayment on the amount of such prepayment (or
Liquidation Proceeds) exceeds (ii) the amount of interest paid or collected in
connection with such Principal Prepayment or such Liquidation Proceeds.
Prepayment Period: As to any Distribution Date and related Due Date,
the period beginning with the opening of business on the sixteenth day of the
calendar month preceding the month in which such Distribution Date occurs (or,
with respect to the first Distribution Date, the period beginning with the
opening of business on March 2, 2007) and ending on the close of business on
the fifteenth day of the month in which such Distribution Date occurs.
Prime Rate: The prime commercial lending rate of The Bank of New
York, as publicly announced to be in effect from time to time. The Prime Rate
shall be adjusted automatically, without notice, on the effective date of any
change in such prime commercial lending rate. The Prime Rate is not
necessarily The Bank of New York's lowest rate of interest.
33
Principal Distribution Amount: With respect to each Distribution
Date, the sum of (i) the Principal Remittance Amount for such Distribution
Date, less any portion of such amount used to cover any payment due to the
Swap Counterparty with respect to such Distribution Date, (ii) the Extra
Principal Distribution Amount for such Distribution Date, and (iii) with
respect to the Distribution Date immediately following the end of the Funding
Period, the amount, if any, remaining in the Pre-Funding Account at the end of
the Funding Period (net of any investment income therefrom), minus (iv) the
Overcollateralization Reduction Amount for such Distribution Date.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 2.07, 3.12 and 9.01
hereof) that is received in advance of its scheduled Due Date to the extent it
is not accompanied by an amount as to interest representing scheduled interest
due on any date or dates in any month or months subsequent to the month of
prepayment. Partial Principal Prepayments shall be applied by the Master
Servicer in accordance with the terms of the related Mortgage Note.
Principal Remittance Amount: With respect to any Distribution Date,
(a) the sum, without duplication, of: (i) the scheduled principal collected
with respect to the Mortgage Loans during the related Due Period or advanced
with respect to such Distribution Date, (ii) Principal Prepayments collected
in the related Prepayment Period with respect to the Mortgage Loans, (iii) the
Stated Principal Balance of each Mortgage Loan that was repurchased by a
Seller or purchased by the Master Servicer with respect to such Distribution
Date, (iv) the amount, if any, by which the aggregate unpaid principal balance
of any Replacement Mortgage Loans delivered by the Sellers in connection with
a substitution of a Mortgage Loan is less than the aggregate unpaid principal
balance of any Deleted Mortgage Loans, (v) any payments received under the
Credit Insurance Policy attributable to principal for the related Due Period,
(vi) any Loss Coverage Payment attributable to principal for the related Due
Period, and (vii) all Liquidation Proceeds (to the extent such Liquidation
Proceeds related to principal) and Subsequent Recoveries collected during the
related Due Period; less (b) all Advances relating to principal and certain
expenses reimbursable pursuant to Section 6.03 and reimbursed during the
related Due Period.
Principal Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 3.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWHEQ, Inc., Home Equity Loan
Asset Backed Certificates, Series 2007-S2". Funds in the Principal Reserve
Fund shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Private Certificates: The Class C, Class E-P and Class P
Certificates.
Prospectus: The prospectus dated November 15, 2006, relating to
asset backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated March 29,
2007, relating to the public offering of the certain Classes of Certificates
offered thereby.
00
XXXX 00-00: As defined in Section 5.02(b).
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required to be
(1) repurchased by a Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03, 2.07 or 3.12 hereof or (2)
repurchased by the Depositor pursuant to Section 2.04 hereof, or (y) that the
Master Servicer has a right to purchase pursuant to Section 3.12 hereof, an
amount equal to the sum of (i) 100% of the unpaid principal balance (or, if
such purchase or repurchase, as the case may be, is effected by the Master
Servicer, the Stated Principal Balance (without giving effect to the second
sentence of the definition of Stated Principal Balance)) of the Mortgage Loan
as of the date of such purchase, (ii) accrued interest thereon at the
applicable Mortgage Rate (or, if such purchase or repurchase, as the case may
be, is effected by the Master Servicer, at the Net Mortgage Rate) from (a) the
date through which interest was last paid by the Mortgagor (or, if such
purchase or repurchase, as the case may be, is effected by the Master
Servicer, the date through which interest was last advanced by and not
reimbursed to the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders and (iii) any
costs, expenses and damages incurred by the Trust Fund resulting from any
violation of any predatory or abusive lending law in connection with such
Mortgage Loan.
Qualified Bidder: With respect to any auction pursuant to Section
9.04, any institution that is a regular purchaser and/or seller in the
secondary market of residential mortgage loans as determined by the Trustee
(or any advisor on its behalf), in its sole discretion, and any holder of an
interest in the Class C Certificates; provided, however, that neither CHL nor
any of its affiliates shall constitute a Qualified Bidder.
Rating Agency: Each of Xxxxx'x and S&P. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person
identified as a "Rating Agency" in the Underwriter's Exemption, designated by
the Depositor with the prior written consent of the Certificate Insurer,
notice of which designation shall be given to the Trustee. References herein
to a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of such Liquidated Mortgage Loan as of the date of such
liquidation, minus (ii) the Liquidation Proceeds, if any, received in
connection with such liquidation during the month in which such liquidation
occurs, to the extent applied as recoveries of principal of the Liquidated
Mortgage Loan. With respect to each Mortgage Loan that has become the subject
of a Deficient Valuation, (i) if the value of the related Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, the
amount by which the value of the Mortgaged Property was reduced below the
principal balance of the related Mortgage Note and (ii) if the principal
amount due under the related Mortgage Note has been reduced, the difference
between the principal balance of the Mortgage Loan outstanding immediately
prior to such Deficient Valuation and the principal balance of the Mortgage
Loan as
35
reduced by the Deficient Valuation. With respect to each Charged-off Mortgage
Loan, the Stated Principal Balance thereof at the time it became a Charged-off
Mortgage Loan.
Record Date: With respect to any Distribution Date and the
Adjustable-Rate Certificates, the Business Day immediately preceding such
Distribution Date, or if such Certificates are no longer Book-Entry
Certificates, the last Business Day of the month preceding the month of such
Distribution Date. With respect to the Fixed-Rate Certificates and the Class
A-R, Class C, Class E-P and Class P Certificates, the last Business Day of the
month preceding the month of a Distribution Date.
Reference Bank Rate: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple
of 0.03125%) of the offered rates for United States dollar deposits for one
month that are quoted by the Reference Banks as of 11:00 a.m., New York City
time, on the related Interest Determination Date to prime banks in the London
interbank market for a period of one month in amounts approximately equal to
the outstanding aggregate Certificate Principal Balance of the Adjustable-Rate
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates
appear, the Reference Bank Rate will be the arithmetic mean (rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%) of the rates quoted
by one or more major banks in New York City, selected by the Trustee, as of
11:00 a.m., New York City time, on such date for loans in U.S. dollars to
leading European banks for a period of one month in amounts approximately
equal to the aggregate Certificate Principal Balance of the Adjustable-Rate
Certificates on such Interest Determination Date.
Reference Banks: Barclays Bank PLC, Deutsche Bank and NatWest, N.A.,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) not controlling, under the control of or under common control
with the Depositor, CHL or the Master Servicer and (iii) which have been
designated as such by the Trustee.
Refinancing Mortgage Loan: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.
Regular Certificate: Any Certificate other than the Class A-R
Certificates.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time and publicly available.
Relief Act: The Servicemembers Civil Relief Act.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at section 860A
through 860G of Subchapter
36
M of Chapter 1 of the Code, and related provisions, and regulations and
rulings promulgated thereunder, as the foregoing may be in effect from time to
time.
Remittance Report: A report prepared by the Master Servicer and
delivered to the Trustee and the NIM Insurer in accordance with Section 4.01.
REO Property: A Mortgaged Property acquired by the Master Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by a Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for File Release, (i) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not less than 90% of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have the same or higher
credit quality characteristics than that of the Deleted Mortgage Loan; (iii)
be accruing interest at a rate not more than 1% per annum higher or lower than
that of the Deleted Mortgage Loan; (iv) have a Combined Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (v) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vi) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate; (vii) provide for a Prepayment Charge on terms
substantially similar to those of the Prepayment Charge, if any, of the
Deleted Mortgage Loan; (viii) have the same occupancy type and lien priority
as the Deleted Mortgage Loan; and (ix) comply with each representation and
warranty set forth in Section 2.03 as of the date of substitution; provided,
however, that notwithstanding the foregoing, to the extent that compliance
with clause (ix) of this definition would cause a proposed Replacement
Mortgage Loan to fail to comply with one or more of clauses (i), (iii), (vii)
and/or (viii) of this definition, then such proposed Replacement Mortgage Loan
must comply with clause (ix) and need not comply with one or more of clauses
(i), (iii), (vii) and/or (viii), to the extent, and only to the extent,
necessary to assure that the Replacement Mortgage Loan otherwise complies with
clause (ix).
Reportable Event: Any event required to be reported on Form 8-K, and
in any event, the following:
(a) entry into a definitive agreement related to the Trust Fund, the
Certificates or the Mortgage Loans, or an amendment to a Transaction Document,
even if the Depositor is not a party to such agreement (e.g., a servicing
agreement with a servicer contemplated by Item 1108(a)(3) of Regulation AB);
(b) termination of a Transaction Document (other than by expiration
of the agreement on its stated termination date or as a result of all parties
completing their obligations under such agreement), even if the Depositor is
not a party to such agreement (e.g., a servicing agreement with a servicer
contemplated by Item 1108(a)(3) of Regulation AB);
(c) with respect to the Master Servicer only, if the Master Servicer
becomes aware of any bankruptcy or receivership with respect to CHL, the
Depositor, the Master Servicer, any Subservicer, the Trustee, the Corridor
Contract Counterparty, the Swap
37
Counterparty, any enhancement or support provider contemplated by Items
1114(b) or 1115 of Regulation AB, or any other material party contemplated by
Item 1101(d)(1) of Regulation AB;
(d) with respect to the Trustee, the Master Servicer and the
Depositor only, the occurrence of an early amortization, performance trigger
or other event, including an Event of Default under this Agreement;
(e) any amendment to this Agreement;
(f) the resignation, removal, replacement, substitution of the
Master Servicer, any Subservicer, the Trustee or any co-trustee;
(g) with respect to the Master Servicer only, if the Master Servicer
becomes aware that (i) any material enhancement or support specified in Item
1114(a)(1) through (3) of Regulation AB or Item 1115 of Regulation AB that was
previously applicable regarding one or more classes of the Certificates has
terminated other than by expiration of the contract on its stated termination
date or as a result of all parties completing their obligations under such
agreement; (ii) any material enhancement specified in Item 1114(a)(1) through
(3) of Regulation AB or Item 1115 of Regulation AB has been added with respect
to one or more classes of the Certificates; or (iii) any existing material
enhancement or support specified in Item 1114(a)(1) through (3) of Regulation
AB or Item 1115 of Regulation AB with respect to one or more classes of the
Certificates has been materially amended or modified; and
(h) with respect to the Trustee, the Master Servicer and the
Depositor only, a required distribution to Holders of the Certificates is not
made as of the required Distribution Date under this Agreement.
Reporting Subcontractor: With respect to the Master Servicer or the
Trustee, any Subcontractor determined by such Person pursuant to Section
11.08(b) to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB. References to a Reporting Subcontractor shall
refer only to the Subcontractor of such Person and shall not refer to
Subcontractors generally.
Representing Party: As defined in Section 2.03(f).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Trustee, substantially in the form of
Exhibit M.
Request for File Release: A Request for File Release submitted by
the Master Servicer to the Trustee, substantially in the form of Exhibit N.
Required Carryover Reserve Fund Deposit: With respect to any
Distribution Date, an amount equal to the excess of (i) $1,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement, including with respect to the Covered Loans, the Credit
Insurance Policy.
38
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Rolling Sixty-Day Delinquency Rate: With respect to any Distribution
Date on or after the Stepdown Date, the average of the Sixty-Day Delinquency
Rates for that Distribution Date and the two immediately preceding
Distribution Dates.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
S&P: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and its successors.
Xxxxxxxx-Xxxxx Certification: As defined in Section 11.05.
Scheduled Payment: With respect to any Mortgage Loan, the scheduled
monthly payment of principal and/or interest due on any Due Date on such
Mortgage Loan which is payable by the related Mortgagor from time to time
under the related Mortgage Note, determined: (a) after giving effect to (i)
any Deficient Valuation and/or Debt Service Reduction with respect to such
Mortgage Loan and (ii) any reduction in the amount of interest collectible
from the related Mortgagor pursuant to the Relief Act or any similar state or
local law; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.05(a); and (c) on the assumption
that all other amounts, if any, due under such Mortgage Loan are paid when
due.
Securities Act: The Securities Act of 1933, as amended.
Seller Interest Shortfall Payment: With respect to any Initial
Mortgage Loan that does not have a Scheduled Payment of interest due on or
before the Due Date in the month of the first Distribution Date or any
Subsequent Mortgage Loan that does not have a Scheduled Payment of interest
due date on or before the Due Date in the month immediately following the
related Subsequent Transfer Date, an amount equal to one month's interest at
the related Net Mortgage Rate on the Cut-off Date Principal Balance of that
Mortgage Loan.
Sellers: CHL, in its capacity as seller of the CHL Mortgage Loans to
the Depositor, Park Granada, in its capacity as seller of the Park Granada
Mortgage Loans to the Depositor, Park Monaco, in its capacity as seller of the
Park Monaco Mortgage Loans to the Depositor and Park Sienna, in its capacity
as seller of the Park Sienna Mortgage Loans to the Depositor.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations hereunder, including, but not limited to, the
cost of (i) the preservation, restoration
39
and protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures, (iii) the management and liquidation of
any REO Property, (iv) auction costs and expenses in connection with
Charged-off Mortgage Loans and (v) compliance with the obligations under
Section 3.10.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB.
Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the preceding Distribution
Date or, in the event of any payment of interest that accompanies a Principal
Prepayment in full made by the Mortgagor, interest at the Servicing Fee Rate
on the Stated Principal Balance of such Mortgage Loan for the period covered
by such payment of interest. The Servicing Fee will not accrue on any
Charged-off Mortgage Loan after the related Charge-off Date.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing Officer: Any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant
to this Agreement, as such list may from time to time be amended.
Sixty-Day Delinquency Rate: With respect to any Distribution Date on
or after the Stepdown Date, a fraction, expressed as a percentage, the
numerator of which is the aggregate Stated Principal Balance for such
Distribution Date of all Mortgage Loans 60 or more days delinquent as of the
close of business on the last day of the calendar month preceding such
Distribution Date (including Mortgage Loans in foreclosure, bankruptcy and REO
Properties) and the denominator of which is the aggregate Stated Principal
Balance for such Distribution Date of all Mortgage Loans.
Sponsor Loss Coverage Amount: With respect to any Distribution Date,
the amount by which 1.00% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans and the Pre-Funded Amount exceeds the
aggregate amount of Loss Coverage Payments, if any, made prior to such
Distribution Date.
Sponsor Loss Coverage Obligation: The obligation of CHL described in
Section 2.08 with respect to Loss Coverage Payments.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance
of the Mortgage Loan as of such date (before any adjustment to the
amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to any partial prepayments or Liquidation Proceeds
received prior to such date and to the payment of principal due on or prior to
such date and irrespective of any delinquency in payment by the related
Mortgagor, and (ii) as of any other Distribution Date, the Stated Principal
Balance of the Mortgage Loan as of its Cut-off Date, minus the sum of (a) the
principal portion of the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date
and (y) that were received by the
40
Master Servicer as of the close of business on the Determination Date related
to such Distribution Date or with respect to which Advances were made as of
the Master Servicer Advance Date related to such Distribution Date, (b) all
Principal Prepayments with respect to such Mortgage Loan received by the
Master Servicer during each Prepayment Period ending prior to such
Distribution Date, (c) all Liquidation Proceeds collected with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date,
to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.12 and (d) any Realized Loss previously incurred in
connection with a Deficient Valuation. The Stated Principal Balance of any
Mortgage Loan that becomes a Liquidated Mortgage Loan will be zero on each
date following the Due Period in which such Mortgage Loan becomes a Liquidated
Mortgage Loan, and the Stated Principal Balance of a Charged-off Mortgage Loan
will be zero on the date following the date on which it became a Charged-off
Mortgage Loan. References herein to the Stated Principal Balance of the
Mortgage Loans at any time shall mean the aggregate Stated Principal Balance
of all Mortgage Loans in the Trust Fund as of such time.
Stepdown Date: The later to occur of (i) the Distribution Date in
October 2009 and (ii) the first Distribution Date on which the aggregate
Stated Principal Balance of the Mortgage Loans for that Distribution Date is
less than or equal to 50.00% of the sum of the Initial Cut-off Date Pool
Principal Balance and the Pre-Funded Amount.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to the Mortgage Loans under the direction or
authority of the Master Servicer or a Subservicer or the Trustee, as the case
may be.
Subsequent Certificate Account Deposit: With respect to any
Subsequent Transfer Date, an amount equal to the aggregate of all amounts in
respect of (i) principal of the related Subsequent Mortgage Loans due after
the related Subsequent Cut-off Date and received by the Master Servicer on or
before such Subsequent Transfer Date and not applied in computing the Cut-off
Date Principal Balance thereof and (ii) interest on the such Subsequent
Mortgage Loans due after such Subsequent Cut-off Date and received by the
Master Servicer on or before the Subsequent Transfer Date.
Subsequent Cut-off Date: In the case of any Subsequent Mortgage
Loan, the later of (x) the first day of the month of the related Subsequent
Transfer Date and (y) the date of origination of such Subsequent Mortgage
Loan.
Subsequent Mortgage Loan: Any Mortgage Loan conveyed to the Trustee
on a Subsequent Transfer Date, and listed on the related Loan Number and
Borrower Identification Mortgage Loan Schedule delivered pursuant to Section
2.01(f). When used with respect to a single Subsequent Transfer Date,
"Subsequent Mortgage Loan" shall mean a Subsequent Mortgage Loan conveyed to
the Trustee on such Subsequent Transfer Date.
Subsequent Recoveries: As to any Distribution Date, with respect to
a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior
calendar month, unexpected amounts received by the Master Servicer (net of any
related expenses permitted to be reimbursed pursuant
41
to Section 3.08 and 3.12) specifically related to such Liquidated Mortgage
Loan after the classification of such Mortgage Loan as a Liquidated Mortgage
Loan. Subsequent Recoveries shall not include Charged-off Loan Proceeds.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit P hereto, executed and delivered by the
Sellers, the Depositor and the Trustee as provided in Section 2.01(d).
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the
"Subsequent Transfer Date" identified in such Subsequent Transfer Agreement;
provided, however, the Subsequent Transfer Date for any Subsequent Transfer
Agreement must be a Business Day and may not be a date earlier than the date
on which the Subsequent Transfer Agreement is executed and delivered by the
parties thereto pursuant to Section 2.01(d).
Subsequent Transfer Date Purchase Amount: With respect to any
Subsequent Transfer Date, the "Subsequent Transfer Date Purchase Amount"
identified in the related Subsequent Transfer Agreement which shall be an
estimate of the aggregate Stated Principal Balances of the Subsequent Mortgage
Loans identified in such Subsequent Transfer Agreement.
Subsequent Transfer Date Transfer Amount: With respect to any
Subsequent Transfer Date, an amount equal to the lesser of (i) the aggregate
Stated Principal Balances as of the related Subsequent Cut-off Dates of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date, as listed
on the related Loan Number and Borrower Identification Mortgage Loan Schedule
delivered pursuant to Section 2.01(f) and (ii) the amount on deposit in the
Pre-Funding Account.
Subservicer: As defined in Section 3.02(a).
Subservicing Agreement: As defined in Section 3.02(a).
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(f).
Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(f), the excess of (x) the principal balance of the
Mortgage Loan that is substituted for, over (y) the principal balance of the
related substitute Mortgage Loan, each balance being determined as of the date
of substitution.
Successful Auction: An auction held pursuant to Section 9.04 at
which at least three Qualified Bidders submitted bids and at least one of
those bids was an Acceptable Bid Amount.
Swap Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.
Swap Confirmation: The confirmation, reference number CXCWL07S2,
with a trade date of March 23, 2007 evidencing a transaction between the Swap
Counterparty and CHL relating to the Swap Contract.
42
Swap Contract: The transaction evidenced by the Swap Confirmation
(as assigned to the Swap Contract Administrator pursuant to the Swap Contract
Assignment Agreement).
Swap Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among CHL, the Trustee
and the Swap Contract Administrator.
Swap Contract Administrator: The Bank of New York, in its capacity
as swap contract administrator under the Swap Contract Administration
Agreement and its successors and assigns.
Swap Contract Assignment Agreement: The Assignment Agreement dated
as of the Closing Date among CHL, the Swap Contract Administrator and the Swap
Counterparty.
Swap Contract Termination Date: The Distribution Date in March 2014.
Swap Counterparty: Bear Xxxxxxx Capital Markets Inc. and its
successors.
Swap Counterparty Trigger Event: Either (i) an "Event of Default"
under the Swap Contract with respect to which the Swap Counterparty is the
sole "Defaulting Party" (as defined in the Swap Contract) or (ii) a
"Termination Event" (other than an Illegality or a Tax Event (as such terms
are defined in the Swap Contract)) or "Additional Termination Event" under the
Swap Contract with respect to which the Swap Counterparty is the sole
"Affected Party" (as defined in the Swap Contract).
Swap Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.09 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered Holders of CWHEQ, Inc., Asset-Backed
Certificates, Series 2007-S2". Funds in the Swap Reserve Fund shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Swap Reserve Fund O/C Deficiency Amount: For any Distribution Date,
an amount equal to the Overcollateralization Deficiency Amount for such
Distribution Date after giving effect to the distribution of the Principal
Distribution Amount, Excess Cashflow and the Net Swap Payment, if any, on such
Distribution Date.
Swap Termination Payment: The payment payable to either party under
the Swap Contract due to an early termination of the Swap Contract.
Swap Trust: The trust fund established by Section 4.09.
Swap Trustee: The Bank of New York, a New York banking corporation,
not in its individual capacity, but solely in its capacity as trustee of the
Swap Trust for the benefit of the Holders of the Class A Certificates under
this Agreement, and any successor thereto, and any corporation or national
banking association resulting from or surviving any consolidation or
43
merger to which it or its successors may be a party and any successor trustee
as may from time to time be serving as successor trustee hereunder.
Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation ss. 1.860F-4(d) and Treasury
regulation ss. 301.6231(a)(7)-1. Initially, this person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with a
Denomination of $0.05 and in the form of Exhibit E hereto.
Terminator: As defined in Section 9.01.
Termination Price: As defined in Section 9.01.
Transaction Documents: This Agreement, the Corridor Contract, the
Corridor Contract Administration Agreement, the Credit Insurance Policy, the
Swap Contract, the Swap Contract Administration Agreement, the Certificate
Insurance Policy, the Insurance and Indemnity Agreement and any other document
or agreement entered into in connection with the Trust Fund, the Certificates
or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date on or after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event is in effect with respect to that Distribution Date.
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the Cut-off Date to the extent not applied in computing
the Cut-off Date Principal Balance thereof, exclusive of interest not required
to be deposited in the Certificate Account pursuant to Section 3.05(b)(2);
(ii) the Certificate Account, the Distribution Account, the Principal Reserve
Fund, the Carryover Reserve Fund, the Pre-Funding Account, the Capitalized
Interest Account, the Premium Account and all amounts deposited therein
pursuant to the applicable provisions of this Agreement; (iii) the rights to
receive certain proceeds of the Corridor Contract as provided in the Corridor
Contract Administration Agreement; (iv) property that secured a Mortgage Loan
and has been acquired by foreclosure, deed in lieu of foreclosure or
otherwise; (v) the mortgagee's rights under the Insurance Policies with
respect to the Mortgage Loan; (vi) rights under the Credit Insurance Policy;
(vii) the rights of the Trustee for the benefit of the Class A
Certificateholders under the Certificate Insurance Policy; and (viii) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid property.
Trustee: The Bank of New York, a New York banking corporation, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders
44
and the Certificate Insurer under this Agreement, and any successor thereto,
and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as
successor trustee hereunder.
Trustee Advance Notice: As defined in Section 4.01(d).
Trustee Advance Rate: With respect to any Advance made by the
Trustee pursuant to Section 4.01(d), a per annum rate of interest determined
as of the date of such Advance equal to the Prime Rate in effect on such date
plus 5.00%.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the sum of (i) the Pool
Stated Principal Balance and (ii) any amounts remaining in the Pre-Funding
Account (excluding any investment earnings thereon) with respect to such
Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum
rate agreed upon in writing on or prior to the Closing Date by the Trustee and
the Depositor, which is 0.009% per annum.
Underwriter's Exemption: Prohibited Transaction Exemption 2002-41,
67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Underwriters: Countrywide Securities Corporation and Greenwich
Capital Markets, Inc.
Unpaid Realized Loss Amount: For any Class of Certificates and any
Distribution Date, (x) the portion of the aggregate Applied Realized Loss
Amount allocated to that Class and remaining unpaid (in the case of any Class
of Class A Certificates, without regard to any payment made by the Certificate
Insurer in respect of that Class under the Certificate Insurance Policy) minus
(y) the sum of (1) the Charged-off Loan Proceeds distributed in respect of
such Class of Certificates on any prior Distribution Date pursuant to Section
4.04(c), (2) amounts on deposit in the Premium Account distributed in respect
of such Class of Certificates on any prior Distribution Date pursuant to
Section 4.04(k)(iv), (3) Excess Cashflow distributed in respect of such Class
of Certificates on any prior Distribution Date pursuant to Section 4.04(d)(2)
and (4) either (a) any increase in the Certificate Principal Balance of that
Class due to the allocation of Subsequent Recoveries to the Certificate
Principal Balance of that Class pursuant to Section 4.04(j) or (b) in the case
of any Class of Class A Certificates, the amount of any Subsequent Recovery
paid to the Certificate Insurer in respect of that Class.
Voting Rights: The voting rights of all the Certificates that are
allocated to any Certificates for purposes of the voting provisions hereunder.
Voting Rights allocated to each Class of Certificates shall be allocated 96%
to the Certificates other than the Class A-R, Class C, Class E-P and Class P
Certificates (with the allocation among the Certificates to be in proportion
to the Certificate Principal Balance of each Class relative to the Certificate
Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class C, Class E-P and Class P Certificates. Voting Rights will be allocated
among the Certificates of each such Class in
45
accordance with their respective Percentage Interests. Notwithstanding any of
the foregoing, on any date on which any Class A Certificates are outstanding
or any amounts are owed the Certificate Insurer under this Agreement, unless a
Certificate Insurer Default shall have occurred and be continuing, the
Certificate Insurer will be entitled to exercise the Voting Rights of the
Class A Certificateholders, without the consent of the Class A
Certificateholders, and the Class A Certificateholders may exercise such
rights only with the prior written consent of the Certificate Insurer.
Winning Bidder: With respect to a Successful Auction, the Qualified
Bidder that bids the highest price.
Section 1.02 Certain Interpretive Provisions.
All terms defined in this Agreement shall have the defined meanings
when used in any certificate, agreement or other document delivered pursuant
hereto unless otherwise defined therein. For purposes of this Agreement and
all such certificates and other documents, unless the context otherwise
requires: (a) accounting terms not otherwise defined in this Agreement, and
accounting terms partly defined in this Agreement to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles; (b) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement (or the certificate, agreement
or other document in which they are used) as a whole and not to any particular
provision of this Agreement (or such certificate, agreement or document); (c)
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement, and references to any
paragraph, subsection, clause or other subdivision within any Section or
definition refer to such paragraph, subsection, clause or other subdivision of
such Section or definition; (d) the term "including" means "including without
limitation"; (e) references to any law or regulation refer to that law or
regulation as amended from time to time and include any successor law or
regulation; (f) references to any agreement refer to that agreement as amended
from time to time; (g) references to any Person include that Person's
permitted successors and assigns; and (h) a Mortgage Loan is "30 days
delinquent" if a Scheduled Payment has not been received by the close of
business on the Due Date on which the next Scheduled Payment is due. Similarly
for "60 days delinquent," "90 days delinquent" and so on.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.
(a) Each Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of such Seller in and to the applicable Initial Mortgage Loans,
including all interest and principal received and receivable by such Seller on
or with respect to applicable Initial Mortgage Loans after the Initial Cut-off
Date (to the extent not applied in computing the Cut-off Date Principal
Balance thereof) or
46
deposited into the Certificate Account by the Master Servicer on behalf of
such Seller as part of the Initial Certificate Account Deposit as provided in
this Agreement, other than principal due on the applicable Initial Mortgage
Loans on or prior to the Initial Cut-off Date and interest accruing prior to
the Initial Cut-off Date. The Master Servicer confirms that, on behalf of the
Sellers, concurrently with the transfer and assignment, it has deposited into
the Certificate Account the Initial Certificate Account Deposit.
Immediately upon the conveyance of the Initial Mortgage Loans
referred to in the preceding paragraph, the Depositor (i) sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders and the Certificate Insurer, without recourse, all right
title and interest in the Initial Mortgage Loans, (ii) causes the Certificate
Insurer to deliver the Certificate Insurance Policy to the Trustee and (iii)
causes the Credit Insurer to deliver the Credit Insurance Policy to the
Trustee.
CHL further agrees (x) to cause The Bank of New York to enter into
the Corridor Contract Administration Agreement as Corridor Contract
Administrator and (y) to assign all of its right, title and interest in and to
the interest rate corridor transaction evidenced by each Confirmation, and to
cause all of its obligations in respect of such transaction to be assumed by,
the Corridor Contract Administrator, on the terms and conditions set forth in
the Corridor Contract Assignment Agreement.
In addition, CHL further agrees (x) to cause The Bank of New York to
enter into the Swap Contract Administration Agreement as Swap Contract
Administrator and (y) to assign all of its right, title and interest in and to
the interest rate swap transaction evidenced by the Swap Confirmation, and to
cause all of its obligations in respect of such transaction to be assumed by,
the Swap Contract Administrator, on the terms and conditions set forth in the
Swap Contract Assignment Agreement.
(b) Subject to the execution and delivery of the related Subsequent
Transfer Agreement as provided by Section 2.01(d) and the terms and conditions
of this Agreement, each Seller sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, on each Subsequent
Transfer Date, all the right, title and interest of such Seller in and to the
related Subsequent Mortgage Loans, including all interest and principal
received and receivable by such Seller on or with respect to such Subsequent
Mortgage Loans after the related Subsequent Cut-off Date (to the extent not
applied in computing the Cut-off Date Principal Balance thereof) or deposited
into the Certificate Account by the Master Servicer on behalf of such Seller
as part of any related Subsequent Certificate Account Deposit as provided in
this Agreement, other than principal due on such Subsequent Mortgage Loans on
or prior to the related Subsequent Cut-off Date and interest accruing prior to
the related Subsequent Cut-off Date.
Immediately upon the conveyance of the Subsequent Mortgage Loans
referred to in the preceding paragraph, the Depositor sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for benefit of the
Certificateholders and the Certificate Insurer, without recourse, all right
title and interest in the Subsequent Mortgage Loans.
47
(c) Each Seller has entered into this Agreement in consideration for
the purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein. The Depositor, concurrently with the execution and
delivery of this Agreement, hereby sells, transfers, assigns and otherwise
conveys to the Trustee for the use and benefit of the Certificateholders and
the Certificate Insurer, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Section 2.01(a) or (b).
(d) On any Business Day during the Funding Period designated by CHL
to the Trustee, the Sellers, the Depositor and the Trustee shall complete,
execute and deliver a Subsequent Transfer Agreement. After the execution and
delivery of such Subsequent Transfer Agreement, on the Subsequent Transfer
Date, the Trustee shall set aside in the Pre-Funding Account an amount equal
to the related Subsequent Transfer Date Purchase Amount.
(e) The transfer of Subsequent Mortgage Loans on the Subsequent
Transfer Date is subject to the satisfaction of each of the following
conditions:
(1) the Trustee, the Underwriters and the Certificate Insurer
will be provided Opinions of Counsel addressed to the Rating Agencies and
the Certificate Insurer as with respect to the sale of the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date (such opinions
being substantially similar to the opinions delivered on the Closing Date
to the Rating Agencies and the Certificate Insurer with respect to the
sale of the Initial Mortgage Loans on the Closing Date), to be delivered
as provided in Section 2.01(f);
(2) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does not
result in a reduction or withdrawal of any ratings assigned to the
Certificates by the Rating Agencies (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates);
(3) the Depositor shall deliver to the Trustee an Officer's
Certificate confirming the satisfaction of each of the conditions set
forth in this Section 2.01(e) required to be satisfied by such Subsequent
Transfer Date;
(4) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable to
it under this Agreement, provided, however, that with respect to a breach
of a representation and warranty with respect to a Subsequent Mortgage
Loan set forth in this clause (4), the obligation under Section 2.03(f)
of this Agreement of the applicable Seller, to cure, repurchase or
replace such Subsequent Mortgage Loan shall constitute the sole remedy
against such Seller respecting such breach available to
Certificateholders, the Depositor, the Certificate Insurer or the
Trustee;
(5) the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date were selected in a manner reasonably believed not to be
adverse to the interests of the Certificateholders or the Certificate
Insurer;
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(6) no Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date was 30 or more days delinquent as of the related Cut-off
Date;
(7) following the conveyance of the Subsequent Mortgage Loans
on such Subsequent Transfer Date, the characteristics of the Mortgage
Loans will not vary by more than the amount specified below from the
characteristics listed below; provided that for the purpose of making
such calculations, the characteristics for any Initial Mortgage Loan made
will be taken as of the Initial Cut-off Date and the characteristics for
any Subsequent Mortgage Loans will be taken as of the Subsequent Cut-off
Date;
Permitted Variance
Characteristic Value or Range
------------------------------- ---------------------- -----------------------
Average Stated Principal Balance................................ $48,046 +/- 5.00%
Weighted Average Mortgage Rate.................................. 8.678% +/- 0.10%
Weighted Average Original Combined Loan-to-Value Ratio.......... 90.35% +/- 3.00%
Weighted Average Remaining Term to Maturity..................... 230 months +/- 3 months
Weighted Average FICO Score..................................... 721 points +/- 5 points
(8) none of the Sellers or the Depositor is insolvent and
neither of the Sellers nor the Depositor will be rendered insolvent by
the conveyance of Subsequent Mortgage Loans on such Subsequent Transfer
Date; and
(9) the Trustee, the Underwriters and the Certificate Insurer
will be provided with an Opinion of Counsel, which Opinion of Counsel
shall not be at the expense of either the Trustee or the Trust Fund,
addressed to the Trustee and the Certificate Insurer, to the effect that
such purchase of Subsequent Mortgage Loans will not (i) result in the
imposition of the tax on "prohibited transactions" on the Trust Fund or
contributions after the Startup Date, as defined in Sections 860F(a)(2)
and 860G(d) of the Code, respectively or (ii) cause any REMIC formed
hereunder to fail to qualify as a REMIC, such opinion to be delivered as
provided in Section 2.01(f).
The Trustee shall not be required to investigate or otherwise verify
compliance with these conditions, except for its own receipt of documents
specified above, and shall be entitled to rely on the required Officer's
Certificate.
(f) Within six Business Days after each Subsequent Transfer Date,
upon (1) delivery to the Trustee and the Certificate Insurer by the Depositor
of the Opinions of Counsel referred to in Section 2.01(e)(1) and (e)(9), (2)
delivery to the Trustee by CHL (on behalf of each Seller) of a Loan Number and
Borrower Identification Mortgage Loan Schedule reflecting the Subsequent
Mortgage Loans conveyed on such Subsequent Transfer Date, (3) deposit in the
Certificate Account by the Master Servicer on behalf of the Sellers of the
applicable Subsequent Certificate Account Deposit, and (4) delivery to the
Trustee by the Depositor of an Officer's Certificate confirming the
satisfaction of each of the conditions precedent set forth in this Section
2.01(f), the Trustee shall pay the applicable Seller the Subsequent Transfer
Date Transfer Amount from such funds that were set aside in the Pre-Funding
Account pursuant to Section
49
2.01(d). The positive difference, if any, between the Subsequent Transfer Date
Transfer Amount and the Subsequent Transfer Date Purchase Amount shall be
re-invested by the Trustee in the Pre-Funding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except
for its own receipt of documents specified above, and shall be entitled to
rely on the required Officer's Certificate.
Within thirty days after each Subsequent Transfer Date, the
Depositor shall deliver to the Trustee and the Certificate Insurer a letter of
a nationally recognized firm of independent public accountants stating whether
or not the Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date
conform to the characteristics described in Section 2.01(e)(6) and (7).
Promptly after the end of the Funding Period, the Master Servicer shall
deliver to the Certificate Insurer a final data tape which includes all
Mortgage Loans as of the end of the Funding Period. Such data tape shall be in
a format and contain the information provided to the Certificate Insurer with
respect to the Initial Mortgage Loans.
(g) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered to, and deposited with, the Trustee (or, in
the case of the Delay Delivery Mortgage Loans, will deliver to, and deposit
with, the Trustee within the time periods specified in the definition of Delay
Delivery Mortgage Loans) (except as provided in clause (vi) below) for the
benefit of the Certificateholders and the Certificate Insurer, the following
documents or instruments with respect to each such Mortgage Loan so assigned
(with respect to each Mortgage Loan, clause (i) through (vi) below, together,
the "Mortgage File" for each such Mortgage Loan):
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original Mortgage
Note has been lost or destroyed and not replaced, an original lost
note affidavit, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note and all
such intervening endorsements;
(ii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each MERS
Mortgage Loan, the original Mortgage or a copy of such Mortgage,
with recording information, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a
MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by
the public recording office in which such Mortgage has been
recorded;
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(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to "Home
Equity Loan Asset Backed Certificates, Series 2007-S2, CWHEQ, Inc.,
by The Bank of New York, a New York banking corporation, as trustee
under the Pooling and Servicing Agreement dated as of March 1, 2007,
without recourse" or a copy of such assignment, with recording
information, (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of
and transfer to the assignee thereof, under the Mortgage to which
such assignment relates);
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto or, in the event such original
title policy has not been received from the insurer, such original
or duplicate original lender's title policy and all riders thereto
shall be delivered within one year of the Closing Date.
In addition, in connection with the assignment of any MERS Mortgage
Loan, each Seller agrees that it will cause, at such Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has
done so) that such Mortgage Loans have been assigned by such Seller to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders and the Certificate Insurer by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code "[IDENTIFY TRUSTEE SPECIFIC
CODE]" in the field "[IDENTIFY THE FIELD NAME FOR TRUSTEE]" which identifies
the Trustee and (b) the code "[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the
field "Pool Field" which identifies the series of the Certificates issued in
connection with such Mortgage Loans. The Sellers further agree that they will
not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and
until such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan a Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements
of clause (ii), (iii) or (iv) concurrently with the execution and delivery
hereof, such Seller shall deliver or cause to be delivered to the Trustee a
true copy of such Mortgage and of each such undelivered interim assignment of
the Mortgage each certified by such Seller, the applicable title company,
escrow agent or attorney, or the originator of such Mortgage, as the case may
be, to be a true and complete copy of the
51
original Mortgage or assignment of Mortgage submitted for recording. For any
such Mortgage Loan that is not a MERS Mortgage Loan each Seller shall promptly
deliver or cause to be delivered to the Trustee such original Mortgage and
such assignment or assignments with evidence of recording indicated thereon
upon receipt thereof from the public recording official, or a copy thereof,
certified, if appropriate, by the relevant recording office, but in no event
shall any such delivery be made later than 270 days following the Closing
Date; provided that in the event that by such date such Seller is unable to
deliver or cause to be delivered each such Mortgage and each interim
assignment by reason of the fact that any such documents have not been
returned by the appropriate recording office, or, in the case of each interim
assignment, because the related Mortgage has not been returned by the
appropriate recording office, such Seller shall deliver or cause to be
delivered such documents to the Trustee as promptly as possible upon receipt
thereof. If the public recording office in which a Mortgage or interim
assignment thereof is recorded retains the original of such Mortgage or
assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall satisfy a Seller's obligations in Section 2.01. If any
document submitted for recording pursuant to this Agreement is (x) lost prior
to recording or rejected by the applicable recording office, the applicable
Seller shall immediately prepare or cause to be prepared a substitute and
submit it for recording, and shall deliver copies and originals thereof in
accordance with the foregoing or (y) lost after recording, the applicable
Seller shall deliver to the Trustee a copy of such document certified by the
applicable public recording office to be a true and complete copy of the
original recorded document. Each Seller shall promptly forward or cause to be
forwarded to the Trustee (x) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (y) any other
documents required to be delivered by the Depositor or the Master Servicer to
the Trustee within the time periods specified in this Section 2.01.
With respect to each Mortgage Loan other than a MERS Mortgage Loan
as to which the related Mortgaged Property and Mortgage File are located in
any jurisdiction under the laws of which the recordation of the assignment
specified in clause (iii) above is not necessary to protect the Trustee's, the
Certificate Insurer's and the Certificateholders' interest in the related
Mortgage Loan, as evidenced by an Opinion of Counsel delivered by CHL to the
Trustee and the Certificate Insurer within 90 days of the Closing Date (which
opinion may be in the form of a "survey" opinion and is not required to be
delivered by counsel admitted to practice law in the jurisdiction as to which
such opinion applies), in lieu of recording the assignment specified in clause
(iii) above, the applicable Seller may deliver an unrecorded assignment in
blank, in form otherwise suitable for recording to the Trustee; provided that
if the related Mortgage has not been returned from the applicable public
recording office, such assignment, or any copy thereof, of the Mortgage may
exclude the information to be provided by the recording office. As to any
Mortgage Loan other than a MERS Mortgage Loan, the procedures of the preceding
sentence shall be applicable only so long as the related Mortgage File is
maintained in the possession of the Trustee in the State or jurisdiction
described in such sentence. In the event that with respect to Mortgage Loans
other than MERS Mortgage Loans (I) any Seller, the Depositor, the Master
Servicer, the Certificate Insurer or the NIM Insurer gives written notice to
the Trustee that recording is required to protect the right, title and
interest of the Trustee on behalf of the Certificateholders in and to any
Mortgage Loan, (II) a court recharacterizes any sale of the Mortgage Loans as
a financing, or (III) as a result of any change in or amendment to the laws of
the State or jurisdiction described in the first sentence of this paragraph or
any applicable
52
political subdivision thereof, or any change in official position regarding
application or interpretation of such laws, including a holding by a court of
competent jurisdiction, such recording is so required, the Trustee shall
complete the assignment in the manner specified in clause (iii) above and CHL
shall submit or cause to be submitted for recording as specified above or,
should CHL fail to perform such obligations, the Trustee shall cause the
Master Servicer, at the Master Servicer's expense, to cause each such
previously unrecorded assignment to be submitted for recording as specified
above. In the event a Mortgage File is released to the Master Servicer as a
result of the Master Servicer's having completed a Request for Document
Release, the Trustee shall complete the assignment of the related Mortgage in
the manner specified in clause (iii) above.
The Trustee or its agent shall maintain possession of the Mortgage
Files in the State of California and shall not remove the Mortgage Files from
the State of California. In the event that a Seller fails to record an
assignment of a Mortgage Loan as herein provided within 90 days of notice of
an event set forth in clause (I), (II) or (III) of the preceding paragraph,
the Master Servicer shall prepare and, if required hereunder, file such
assignments for recordation in the appropriate real property or other records
office. Each Seller hereby appoints the Master Servicer (and any successor
servicer hereunder) as its attorney-in-fact with full power and authority
acting in its stead for the purpose of such preparation, execution and filing.
In the case of Mortgage Loans that become the subject of a Principal
Prepayment between the Closing Date (in the case of Initial Mortgage Loans) or
related Subsequent Transfer Date (in the case of Subsequent Mortgage Loans)
and the Cut-off Date, CHL shall deposit or cause to be deposited in the
Certificate Account the amount required to be deposited therein with respect
to such payment pursuant to Section 3.05 hereof.
Notwithstanding anything to the contrary in this Agreement, within
thirty days after the Closing Date (in the case of Initial Mortgage Loans) or
within twenty days after the related Subsequent Transfer Date (in the case of
Subsequent Mortgage Loans), CHL (on behalf of each Seller) shall either (i)
deliver to the Trustee the Mortgage File as required pursuant to this Section
2.01 for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay
Delivery Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for
a Replacement Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, provided that if CHL fails to deliver a Mortgage File for any Delay
Delivery Mortgage Loan within the period provided in the prior sentence, the
cure period provided for in Section 2.02 or in Section 2.03 shall not apply to
the initial delivery of the Mortgage File for such Delay Delivery Mortgage
Loan, but rather CHL shall have five (5) Business Days to cure such failure to
deliver. CHL shall promptly provide each Rating Agency and the Certificate
Insurer with written notice of any cure, repurchase or substitution made
pursuant to the proviso of the preceding sentence. On or before the thirtieth
(30th) day (or if such thirtieth day is not a Business Day, the succeeding
Business Day) after the Closing Date (in the case of Initial Mortgage Loans)
or within twenty days after the related Subsequent Transfer Date (in the case
of Subsequent Mortgage Loans), the Trustee shall, in accordance with the
provisions of Section 2.02, send a Delay Delivery Certification substantially
in the form annexed hereto as Exhibit G-3 (with any applicable exceptions
noted thereon) for all Delay Delivery Mortgage Loans delivered within thirty
(30) days after such date. The Trustee will promptly send a copy of such Delay
Delivery Certification to each Rating Agency and the Certificate Insurer.
53
Each Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans sold by such Seller to the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders and the Certificate Insurer, without recourse, all right
title and interest in the portion of the Trust Fund not otherwise conveyed to
the Trust Fund pursuant to Sections 2.01(a) or (b).
Section 2.02 Acceptance by Trustee of the Mortgage Loans.
(a) The Trustee acknowledges receipt, subject to the limitations
contained in and any exceptions noted in the Initial Certification in the form
annexed hereto as Exhibit G-1 and in the list of exceptions attached thereto,
of the documents referred to in clauses (i) and (iii) of Section 2.01(g) above
with respect to the Initial Mortgage Loans and all other assets included in
the Trust Fund and declares that it holds and will hold such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders and
the Certificate Insurer.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer, CHL (on behalf of each Seller) and the
Certificate Insurer, an Initial Certification substantially in the form
annexed hereto as Exhibit G-1 to the effect that, as to each Initial Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Initial Mortgage
Loan paid in full or any Initial Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described
in Section 2.01(g)(i) and, in the case of each Initial Mortgage Loan that is
not a MERS Mortgage Loan, the documents described in Section 2.01(g)(iii) with
respect to such Initial Mortgage Loans as are in the Trustee's possession and
based on its review and examination and only as to the foregoing documents,
such documents appear regular on their face and relate to such Initial
Mortgage Loan. The Trustee agrees to execute and deliver within 30 days after
the Closing Date to the Depositor, the Master Servicer, CHL (on behalf of each
Seller) and the Certificate Insurer, an Interim Certification substantially in
the form annexed hereto as Exhibit G-2 to the effect that, as to each Initial
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Initial
Mortgage Loan paid in full or any Initial Mortgage Loan specifically
identified in such certification as not covered by such certification) all
documents required to be delivered to the Trustee pursuant to the Agreement
with respect to such Initial Mortgage Loans are in its possession (except
those documents described in Section 2.01(g)(vi)) and based on its review and
examination and only as to the foregoing documents, (i) such documents appear
regular on their face and relate to such Initial Mortgage Loan, and (ii) the
information set forth in items (i), (iv), (v), (vi), (viii) and (ix) of the
definition of the "Mortgage Loan Schedule" accurately reflects information set
forth in the Mortgage File. On or before the thirtieth (30th) day after the
Closing Date (or if such thirtieth day is not a Business Day, the succeeding
Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer, CHL (on behalf of each Seller) and the Certificate Insurer a Delay
Delivery Certification with respect to the Initial Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any applicable
exceptions noted thereon. The Trustee shall be under no duty or obligation to
inspect, review or examine such documents, instruments, certificates or other
papers to determine that the same are genuine, enforceable or appropriate for
54
the represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
Not later than 180 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer, CHL (on behalf of each Seller),
the Certificate Insurer and any Certificateholder that so requests, a Final
Certification with respect to the Initial Mortgage Loans substantially in the
form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
In connection with the Trustee's completion and delivery of such
Final Certification, the Trustee shall review each Mortgage File with respect
to the Initial Mortgage Loans to determine that such Mortgage File contains
the following documents:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (each such
endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note), or, if the original Mortgage
Note has been lost or destroyed and not replaced, an original lost
note affidavit, stating that the original Mortgage Note was lost or
destroyed, together with a copy of the related Mortgage Note and all
such intervening endorsements;
(ii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each
Initial Mortgage Loan that is a MERS Mortgage Loan, the original
Mortgage or a copy of such Mortgage, with recording information,
noting the presence of the MIN of the Initial Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the
Initial Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which Mortgage has been recorded;
(iii) in the case of each Initial Mortgage Loan that is not a
MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
copy thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a
copy of such assignments, with recording information (in each case
noting the presence of a MIN in the case of each MERS Mortgage
Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
55
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include
such exceptions in such Final Certification (and the Trustee shall state in
such Final Certification whether any Mortgage File does not then include the
original or duplicate original lender's title policy or a printout of the
electronic equivalent and all riders thereto). If the public recording office
in which a Mortgage or assignment thereof is recorded retains the original of
such Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and
complete by such recording office, shall be deemed to satisfy the requirements
of clause (ii), (iii) or (iv) above, as applicable. CHL shall promptly correct
or cure such defect referred to above within 90 days from the date it was so
notified of such defect and, if CHL does not correct or cure such defect
within such period, CHL shall either (A) if the time to cure such defect
expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Initial Mortgage Loan a Replacement Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03, or (B) purchase such Initial Mortgage
Loan from the Trust Fund within 90 days from the date CHL was notified of such
defect in writing at the Purchase Price of such Initial Mortgage Loan;
provided that any such substitution pursuant to (A) above or repurchase
pursuant to (B) above shall not be effected prior to the delivery to the
Trustee of the Opinion of Counsel required by Section 2.05 hereof and any
substitution pursuant to (A) above shall not be effected prior to the
additional delivery to the Trustee of a Request for File Release. No
substitution will be made in any calendar month after the Determination Date
for such month. The Purchase Price for any such Initial Mortgage Loan shall be
deposited by CHL in the Certificate Account and, upon receipt of such deposit
and Request for File Release with respect thereto, the Trustee shall release
the related Mortgage File to CHL and shall execute and deliver at CHL's
request such instruments of transfer or assignment as CHL has prepared, in
each case without recourse, as shall be necessary to vest in CHL, or a
designee, the Trustee's interest in any Initial Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions CHL repurchases an
Initial Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to CHL and shall cause such Mortgage
to be removed from registration on the MERS(R) System in accordance with MERS'
rules and regulations.
The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. Each Seller shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File that come into the possession of such Seller
from time to time.
It is understood and agreed that the obligation of CHL to substitute
for or to purchase any Mortgage Loan that does not meet the requirements of
Section 2.02(a) above shall constitute the sole remedy respecting such defect
available to the Trustee, the Depositor and any Certificateholder against any
Seller.
56
It is understood and agreed that the obligation of CHL to substitute
for or to purchase, pursuant to Section 2.02(a), any Initial Mortgage Loan
whose Mortgage File contains any document or documents that does not meet the
requirements of clauses (i)-(iv) and (vi) above and which defect is not
corrected or cured by CHL within 90 days from the date it was notified of such
defect, shall constitute the sole remedy respecting such defect available to
the Trustee, the Depositor and any Certificateholder against any Seller.
(b) The Trustee agrees to execute and deliver on the Subsequent
Transfer Date to the Depositor, the Master Servicer, CHL (on behalf of each
Seller) and the Certificate Insurer an Initial Certification substantially in
the form annexed hereto as Exhibit G-4 to the effect that, as to each
Subsequent Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Subsequent Mortgage Loan paid in full or any Subsequent Mortgage Loan
specifically identified in such certification as not covered by such
certification), the documents described in Section 2.01(g)(i) and, in the case
of each Subsequent Mortgage Loan that is not a MERS Mortgage Loan, the
documents described in Section 2.01(g)(iii), with respect to such Subsequent
Mortgage Loan are in its possession, and based on its review and examination
and only as to the foregoing documents, such documents appear regular on their
face and relate to such Subsequent Mortgage Loan.
The Trustee agrees to execute and deliver within 30 days after the
Subsequent Transfer Date to the Depositor, the Master Servicer, CHL (on behalf
of each Seller) and the Certificate Insurer an Interim Certification
substantially in the form annexed hereto as Exhibit G-2 to the effect that, as
to each Subsequent Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Subsequent Mortgage Loan paid in full or any Subsequent Mortgage Loan
specifically identified in such certification as not covered by such
certification), all documents required to be delivered to it pursuant to this
Agreement with respect to such Subsequent Mortgage Loan are in its possession
(except those described in Section 2.01(g)(vi)) and based on its review and
examination and only as to the foregoing documents, (i) such documents appear
regular on their face and relate to such Subsequent Mortgage Loan, and (ii)
the information set forth in items (i), (iv), (v), (vi), (viii) and (ix) of
the definition of the "Mortgage Loan Schedule" accurately reflects information
set forth in the Mortgage File. On or before the thirtieth (30th) day after
the Subsequent Transfer Date (or if such thirtieth day is not a Business Day,
the succeeding Business Day), the Trustee shall deliver to the Depositor, the
Master Servicer, CHL (on behalf of each Seller) and the Certificate Insurer a
Delay Delivery Certification with respect to the Subsequent Mortgage Loans
substantially in the form annexed hereto as Exhibit G-3, with any applicable
exceptions noted thereon, together with a Subsequent Certification
substantially in the form annexed hereto as Exhibit G-4. The Trustee shall be
under no duty or obligation to inspect, review or examine such documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 180 days after the Subsequent Transfer Date, the
Trustee shall deliver to the Depositor, the Master Servicer, CHL (on behalf of
each Seller), the Certificate Insurer and to any Certificateholder that so
requests a Final Certification with respect to the Subsequent Mortgage Loans
substantially in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
57
In connection with the Trustee's completion and delivery of such
Final Certification, the Trustee shall review each Mortgage File with respect
to the Subsequent Mortgage Loans to determine that such Mortgage File contains
the following documents:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
________________ without recourse", with all intervening endorsements
that show a complete chain of endorsement from the originator to the
Person endorsing the Mortgage Note (each such endorsement being
sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note), or, if the original Mortgage Note has been lost or destroyed and
not replaced, an original lost note affidavit, stating that the original
Mortgage Note was lost or destroyed, together with a copy of the related
Mortgage Note and all such intervening endorsements;
(ii) in the case of each Subsequent Mortgage Loan that is not a
MERS Mortgage Loan, the original recorded Mortgage or a copy of such
Mortgage, with recording information, and in the case of each Subsequent
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage or a
copy of such Mortgage, with recording information, noting the presence of
the MIN of the Subsequent Mortgage Loan and language indicating that the
Subsequent Mortgage Loan is a MOM Loan if the Subsequent Mortgage Loan is
a MOM Loan, with evidence of recording indicated thereon, or a copy of
the Mortgage certified by the public recording office in which Mortgage
has been recorded;
(iii) in the case of each Subsequent Mortgage Loan that is not
a MERS Mortgage Loan, a duly executed assignment of the Mortgage or a
copy thereof with recording information, in either case in the form
permitted by Section 2.01;
(iv) the original recorded assignment or assignments of the
Mortgage or a copy of such assignments, with recording information,
together with all interim recorded assignments of such Mortgage or a copy
of such assignments, with recording information (in each case noting the
presence of a MIN in the case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy
or a copy of lender's title policy or a printout of the electronic
equivalent and all riders thereto.
If, in the course of such review, the Trustee finds any document or
documents constituting a part of such Mortgage File that do not meet the
requirements of clauses (i)-(iv) and (vi) above, the Trustee shall include
such exceptions in such Final Certification (and the Trustee shall state in
such Final Certification whether any Mortgage File does not then include the
original or duplicate original lender's title policy or a printout of the
electronic equivalent and all riders thereto). If the public recording office
in which a Mortgage or assignment thereof is recorded retains the original of
such Mortgage or assignment, a copy of the original Mortgage or
58
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office, shall be deemed to satisfy the
requirements of clause (ii), (iii) or (iv) above, as applicable. CHL shall
promptly correct or cure such defect referred to above within 90 days from the
date it was so notified of such defect and, if CHL does not correct or cure
such defect within such period, CHL shall either (A) if the time to cure such
defect expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Subsequent Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to
the conditions set forth in Section 2.03, or (B) purchase such Subsequent
Mortgage Loan from the Trust Fund within 90 days from the date CHL was
notified of such defect in writing at the Purchase Price of such Subsequent
Mortgage Loan; provided that any such substitution pursuant to (A) above or
repurchase pursuant to (B) above shall not be effected prior to the delivery
to the Trustee of the Opinion of Counsel required by Section 2.05 hereof and
any substitution pursuant to (A) above shall not be effected prior to the
additional delivery to the Trustee of a Request for File Release. No
substitution will be made in any calendar month after the Determination Date
for such month. The Purchase Price for any such Subsequent Mortgage Loan shall
be deposited by CHL in the Certificate Account and, upon receipt of such
deposit and Request for File Release with respect thereto, the Trustee shall
release the related Mortgage File to CHL and shall execute and deliver at
CHL's request such instruments of transfer or assignment as CHL has prepared,
in each case without recourse, as shall be necessary to vest in CHL, or a
designee, the Trustee's interest in any Subsequent Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions CHL repurchases a
Subsequent Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer
shall cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to CHL and shall cause such
Mortgage to be removed from registration on the MERS(R) System in accordance
with MERS' rules and regulations.
The Trustee shall retain possession and custody of each Mortgage
File in accordance with and subject to the terms and conditions set forth
herein. Each Seller shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File that come into the possession of such Seller
from time to time.
It is understood and agreed that the obligation of the Sellers to
substitute for or to purchase, pursuant to Section 2.02(b), any Subsequent
Mortgage Loan whose Mortgage File contains any document or documents that does
not meet the requirements of clauses (i)-(iv) and (vi) above and which defect
is not corrected or cured by such Seller within 90 days from the date it was
notified of such defect, shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder
against the Sellers.
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Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Sellers.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Certificate Insurer and the Trustee as follows, as of the date
hereof with respect to the Initial Mortgage Loans, and the related Subsequent
Transfer Date with respect to the Subsequent Mortgage Loans:
(1) The Master Servicer is duly organized as a Texas limited
partnership and is validly existing and in good standing under the laws
of the State of Texas and is duly authorized and qualified to transact
any and all business contemplated by this Agreement to be conducted by
the Master Servicer in any state in which a Mortgaged Property is located
or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to
enforce each Mortgage Loan, to service the Mortgage Loans in accordance
with the terms of this Agreement and to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(2) The Master Servicer has the full partnership power and
authority to sell and service each Mortgage Loan, and to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
partnership action on the part of the Master Servicer the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement by the Master
Servicer, the servicing of the Mortgage Loans by the Master Servicer
under this Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance with
the terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a material breach of any term or
provision of the certificate of limited partnership, partnership
agreement or other organizational document of the Master Servicer or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Master Servicer is a
party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer is
not in breach or violation of any material indenture or other material
agreement or instrument, or in violation of any statute, order or
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regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair the Master Servicer's ability to perform or meet
any of its obligations under this Agreement.
(4) The Master Servicer is an approved servicer of conventional
mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac and is a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections
203 and 211 of the National Housing Act.
(5) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened, against the Master Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Master Servicer to service the
Mortgage Loans or to perform any of its other obligations under this
Agreement or any Subsequent Transfer Agreement in accordance with the
terms hereof or thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Master Servicer has obtained the same.
(7) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures of
MERS in connection with the servicing of the Mortgage Loans for as long
as such Mortgage Loans are registered with MERS.
(b) CHL hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Initial Cut-off Date
in the case of the Initial Mortgage Loans and as of the related Subsequent
Cut-off Date in the case of the Subsequent Mortgage Loans (unless otherwise
indicated or the context otherwise requires, percentages with respect to the
Initial Mortgage Loans in the Trust Fund are measured by the Cut-off Date
Principal Balance of the Initial Mortgage Loans in the Trust Fund):
(1) CHL is duly organized as a New York corporation and is
validly existing and in good standing under the laws of the State of New
York and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by CHL in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to ensure
its ability to enforce each Mortgage Loan, to sell the CHL Mortgage Loans
in accordance with the terms of this Agreement and each Subsequent
Transfer Agreement and to perform any of its other obligations under this
Agreement and each Subsequent Transfer Agreement in accordance with the
terms hereof and thereof.
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(2) CHL has the full corporate power and authority to sell each
CHL Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and each
Subsequent Transfer Agreement and has duly authorized by all necessary
corporate action on the part of CHL the execution, delivery and
performance of this Agreement and each Subsequent Transfer Agreement; and
this Agreement and each Subsequent Transfer Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of CHL, enforceable
against CHL in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by CHL, the sale of the CHL Mortgage Loans
by CHL under this Agreement and each Subsequent Transfer Agreement, the
consummation of any other of the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement, and the fulfillment of
or compliance with the terms hereof and thereof are in the ordinary
course of business of CHL and will not (A) result in a material breach of
any term or provision of the charter or by-laws of CHL or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which CHL is a party or by which it may be
bound, or (C) constitute a material violation of any statute, order or
regulation applicable to CHL of any court, regulatory body,
administrative agency or governmental body having jurisdiction over CHL;
and CHL is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order
or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair CHL's ability to perform or meet any of its
obligations under this Agreement and each Subsequent Transfer Agreement.
(4) CHL is an approved seller of conventional mortgage loans
for Xxxxxx Mae and Xxxxxxx Mac and is a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act.
(5) No litigation is pending or, to the best of CHL's
knowledge, threatened, against CHL that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or any
Subsequent Transfer Agreement or the ability of CHL to sell the CHL
Mortgage Loans or to perform any of its other obligations under this
Agreement or any Subsequent Transfer Agreement in accordance with the
terms hereof or thereof.
(6) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by CHL of, or compliance by CHL with, this Agreement or
any Subsequent Transfer
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Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, CHL
has obtained the same.
(7) The information set forth on the Mortgage Loan Schedule
with respect to each Initial Mortgage Loan is true and correct in all
material respects as of the Closing Date and is true and correct in all
material respects as of the Subsequent Transfer Date with respect to the
related Subsequent Mortgage Loans.
(8) CHL will treat the transfer of the CHL Mortgage Loans to
the Depositor as a sale of the CHL Mortgage Loans for all tax, accounting
and regulatory purposes.
(9) None of the Mortgage Loans is 30 days or more delinquent.
(10) No Mortgage Loan had a Combined Loan-to-Value Ratio at
origination in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and enforceable
second lien on the related Mortgaged Property subject only to (1) the
lien of non-delinquent current real property taxes and assessments, (2)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally or specifically reflected in the
appraisal made in connection with the origination of the related Mortgage
Loan, (3) other matters to which like properties are commonly subject
that do not materially interfere with the benefits of the security
intended to be provided by such Mortgage (4) any senior mortgage loan
secured by such Mortgaged Property and identified in the Mortgage File
related to such Mortgage Loan.
(12) Immediately prior to the assignment of each CHL Mortgage
Loan to the Depositor, CHL had good title to, and was the sole owner of,
such CHL Mortgage Loan free and clear of any pledge, lien, encumbrance or
security interest and had full right and authority, subject to no
interest or participation of, or agreement with, any other party, to sell
and assign the same pursuant to this Agreement.
(13) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(14) There is no valid offset, claim, defense or counterclaim
to any Mortgage Note or Mortgage, including the obligation of the
Mortgagor to pay the unpaid principal of or interest on such Mortgage
Note.
(15) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior
to, or equal with, the lien of such Mortgage, except those that are
insured against by the title insurance policy referred to in item (18)
below.
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(16) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, to the best of CHL's knowledge, each Mortgaged
Property is free of material damage and is in good repair.
(17) As of the Closing Date in the case of the Initial Mortgage
Loans and as of the related Subsequent Transfer Date in the case of the
Subsequent Mortgage Loans, neither CHL nor any prior holder of any
Mortgage has modified the Mortgage in any material respect (except that a
Mortgage Loan may have been modified by a written instrument that has
been recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the Certificate Insurer and the
original or a copy of which has been delivered to the Trustee);
satisfied, cancelled or subordinated such Mortgage in whole or in part;
released the related Mortgaged Property in whole or in part from the lien
of such Mortgage; or executed any instrument of release, cancellation,
modification (except as expressly permitted above) or satisfaction with
respect thereto.
(18) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable,
in an amount at least equal to the Cut-off Date Principal Balance of each
such Mortgage Loan or a commitment (binder) to issue the same was
effective on the date of the origination of each Mortgage Loan, each such
policy is valid and remains in full force and effect, and each such
policy was issued by a title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located and acceptable to
Xxxxxx Mae and Xxxxxxx Mac and is in a form acceptable to Xxxxxx Mae and
Xxxxxxx Mac, which policy insures the Sellers and successor owners of
indebtedness secured by the insured Mortgage, as to the second priority
lien, of the Mortgage subject to the exceptions set forth in paragraph
(11) above; to the best of CHL's knowledge, no claims have been made
under such mortgage title insurance policy and no prior holder of the
related Mortgage, including any Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage title insurance
policy.
(19) No Initial Mortgage Loan was the subject of a Principal
Prepayment in full between the Initial Cut-off Date and the Closing Date.
No Subsequent Mortgage Loan was the subject of a Principal Prepayment in
full between the Subsequent Cut-off Date and the Subsequent Transfer
Date.
(20) To the best of CHL's knowledge, all of the improvements
that were included for the purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(21) To the best of CHL's knowledge, no improvement located on
or being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of CHL's knowledge, all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have
been made or
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obtained from the appropriate authorities, unless the lack thereof would
not have a material adverse effect on the value of such Mortgaged
Property, and the Mortgaged Property is lawfully occupied under
applicable law.
(22) The Mortgage Note and the related Mortgage are genuine,
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law, except
that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. To the best of CHL's knowledge, all
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(23) The proceeds of the Mortgage Loan have been fully
disbursed, there is no requirement for future advances thereunder, and
any and all requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making, or
closing or recording the Mortgage Loan were paid.
(24) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(25) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders or the Trust Fund to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor.
(26) [Reserved].
(27) There exist no deficiencies with respect to escrow
deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made, and no escrow
deposits or payments of other charges or payments due the Sellers have
been capitalized under the Mortgage or the related Mortgage Note.
(28) The origination, underwriting, servicing and collection
practices with respect to each Mortgage Loan have been in all respects
legal, proper, prudent and customary in the mortgage lending and
servicing business, as conducted by prudent lending institutions which
service mortgage loans of the same type in the jurisdiction in which the
Mortgaged Property is located.
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(29) There is no pledged account or other security other than
real estate securing the Mortgagor's obligations.
(30) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(31) Each Mortgage Loan contains a customary "due on sale"
clause.
(32) No less than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans are secured by single
family detached dwellings. No more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans are
secured by two- to four-family dwellings. No more than approximately the
percentage specified in the Collateral Schedule of the Initial Mortgage
Loans are secured by low-rise condominium units. No more than
approximately the percentage specified in the Collateral Schedule of the
Initial Mortgage Loans are secured by high-rise condominium units. No
more than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans are secured by manufactured
housing. No more than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans are secured by PUDs.
(33) Each Initial Mortgage Loan was originated on or after the
date specified in the Collateral Schedule.
(34) [Reserved];
(35) Approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans provide for a Prepayment Charge.
(36) On the basis of representations made by the Mortgagors in
their loan applications, no more than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans,
respectively, are secured by investor properties, and no less than
approximately the percentage specified in the Collateral Schedule of the
Initial Mortgage Loans respectively, are secured by owner-occupied
Mortgaged Properties that are primary residences.
(37) At the Cut-off Date, the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with
a generally acceptable carrier that provides for fire and extended
coverage and coverage for such other hazards as are customary in the area
where the Mortgaged Property is located in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such
that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All such
individual insurance policies and all flood policies referred to in item
(38) below contain a standard mortgagee clause naming the applicable
Seller or the original mortgagee, and its successors in interest, as
mortgagee, and the applicable Seller has received no notice that
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any premiums due and payable thereon have not been paid; the Mortgage
obligates the Mortgagor thereunder to maintain all such insurance,
including flood insurance, at the Mortgagor's cost and expense, and upon
the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense
and to seek reimbursement therefor from the Mortgagor.
(38) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property with
a generally acceptable carrier in an amount representing coverage not
less than the least of (A) the original outstanding principal balance of
the Mortgage Loan, (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis, or (C) the maximum amount of
insurance that is available under the Flood Disaster Protection Act of
1973, as amended.
(39) To the best of CHL's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation of
the Mortgaged Property.
(40) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of CHL's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under
the Mortgage or the related Mortgage Note; and no Seller has waived any
default, breach, violation or event of acceleration or received notice of
default of any senior mortgage loan related to a Mortgaged Property that
has not been cured by a party other than the Sellers or the Master
Servicer.
(41) Each Mortgaged Property is improved by a one- to
four-family residential dwelling, including condominium units and
dwelling units in PUDs. To the best of CHL's knowledge, no improvement to
a Mortgaged Property includes a cooperative or a mobile home or
constitutes other than real property under state law.
(42) Each Mortgage Loan is being serviced by the Master
Servicer.
(43) Any future advances made prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan. The Mortgage Note does
not permit or obligate the Master Servicer to make future advances to the
Mortgagor at the option of the Mortgagor.
(44) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents
that previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for every such
item that remains unpaid and that has been assessed, but
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is not yet due and payable. Except for (A) payments in the nature of
escrow payments, and (B) interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage proceeds, whichever is
later, to the day that precedes by one month the Due Date of the first
installment of principal and interest, including without limitation,
taxes and insurance payments, the Master Servicer has not advanced funds,
or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment
of any amount required by the Mortgage.
(45) The Mortgage Loans originated by CHL were underwritten in
all material respects in accordance with CHL's underwriting guidelines
for closed-end second lien mortgage loans or, with respect to Mortgage
Loans purchased by CHL were underwritten in all material respects in
accordance with customary and prudent underwriting guidelines generally
used by originators of closed-end second lien mortgage loans.
(46) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on the
security thereof, and whose compensation is not affected by the approval
or disapproval of the Mortgage Loan; such appraisal is in a form
acceptable to Xxxxxx Xxx and Xxxxxxx Mac.
(47) None of the Mortgage Loans is a graduated payment mortgage
loan or a growing equity mortgage loan, and no Mortgage Loan is subject
to a buydown or similar arrangement.
(48) The Mortgage Rates borne by the Initial Mortgage Loans as
of the Cut-off Date ranged between the approximate per annum percentages
specified on the Collateral Schedule and the weighted average Mortgage
Rate of the Initial Mortgage Loans as of the Cut-off Date was
approximately the per annum rate specified on the Collateral Schedule.
(49) The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the applicable Seller's
portfolio at the Closing Date as to which the representations and
warranties made as to the Mortgage Loans set forth in this Section
2.03(b) and Sections 2.03(c), 2.03(d) and 2.03(e) can be made. No
selection was made in a manner that would adversely affect the interests
of Certificateholders or the Certificate Insurer.
(50) [Reserved].
(51) Each of the Initial Mortgage Loans in the Mortgage Pool
has a Due Date on or before the date specified in the Collateral
Schedule.
(52) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
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(53) There is no obligation on the part of any Seller under the
terms of the Mortgage or related Mortgage Note to make payments in
addition to those made by the Mortgagor.
(54) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related Mortgage
Loan.
(55) Each Mortgage Loan represents a "qualified mortgage"
within the meaning of Section 860(a)(3) of the Code (but without regard
to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially
similar successor provision) and applicable Treasury regulations
promulgated thereunder.
(56) No Mortgage Loan was either a "consumer credit contract"
or a "purchase money loan" as such terms are defined in 16 C.F.R. ss. 433
nor is any Mortgage Loan a "mortgage" as defined in 15 U.S.C. ss.
1602(aa).
(57) Each Mortgage Loan, at the time it was originated and as
of the Closing Date or the related Subsequent Transfer Date, as
applicable, complied in all material respects with applicable local,
state and federal laws, including, but not limited to, all predatory and
abusive lending laws.
(58) None of the Mortgage Loans is a "high cost" mortgage loan
as defined by applicable federal, state and local predatory and abusive
lending laws.
(59) Each Prepayment Charge is enforceable and was originated
in compliance with all applicable federal, state and local laws.
(60) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions of
the Illinois Interest Act; 815 Ill. Comp. Stat. 205/0.01 (2004).
(61) There is no Mortgage Loan in the Trust Fund that was
originated on or after March 7, 2003, which is a "high cost home loan" as
defined under the Georgia Fair Lending Act.
(62) No Mortgage Loan in the Trust Fund is a High Cost Loan or
Covered Loan, as applicable (as such terms are defined in the
then-current Standard & Poor's LEVELS(R) Glossary which is now Version
5.7, Appendix E) and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.
(63) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Internal
Revenue Code of 1986 (as amended) (the "Code"). The fair market value of
the manufactured home securing each Mortgage Loan was at least equal to
80% of the adjusted issue price of the contract at either (i) the time
the contract was originated (determined pursuant to the REMIC
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Provisions) or (ii) the time the contract is transferred to the
purchaser. Each Mortgage Loan is a "qualified mortgage" under Section
860G(a)(3) of the Code.
(64) No Mortgage Loan in the Trust Fund is a "high cost home,"
"covered" (excluding home loans defined as "covered home loans" in the
New Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), "high risk home" or
"predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or
fees).
(65) There is no Mortgage Loan in the Trust Fund that was
originated on or after October 1, 2002 and before March 7, 2003, which is
secured by property located in the State of Georgia.
(66) The representations in Section 2.03(c)(1)-(6),
2.03(d)(1)-(6) and 2.03(e)(1)-(6) are true and correct.
(c) Park Granada hereby represents and warrants to the Depositor,
the Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Granada is duly organized as a Delaware corporation
and is validly existing and in good standing under the laws of the State
of Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by Park Granada in any state in which a
Mortgaged Property securing a Park Granada Mortgage Loan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Park Granada Mortgage Loan, to sell the Park Granada Mortgage Loans in
accordance with the terms of this Agreement and each Subsequent Transfer
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(2) Park Granada has the full company power and authority to
sell each Park Granada Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and each Subsequent Transfer Agreement and has duly
authorized by all necessary corporate action on the part of Park Granada
the execution, delivery and performance of this Agreement and each
Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of Park Granada, enforceable against Park Granada
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
70
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Granada, the sale of the Park
Granada Mortgage Loans by Park Granada under this Agreement and each
Subsequent Transfer Agreement, the consummation of any other of the
transactions contemplated by this Agreement and each Subsequent Transfer
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of Park Granada and will not (A)
result in a material breach of any term or provision of the certificate
of incorporation or by-laws of Park Granada or (B) materially conflict
with, result in a material breach, violation or acceleration of, or
result in a material default under, the terms of any other material
agreement or instrument to which Park Granada is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to Park Granada of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
Park Granada; and Park Granada is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair Park Granada's ability
to perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Granada's
knowledge, threatened, against Park Granada that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Granada to sell the Park Granada Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Granada of, or compliance by Park Granada with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Granada has obtained
the same.
(6) Park Granada will treat the transfer of the Park Granada
Mortgage Loans to the Depositor as a sale of the Park Granada Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Granada
Mortgage Loan to the Depositor, Park Granada had good title to, and was
the sole owner of, such Park Granada Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement with,
any other party, to sell and assign the same pursuant to this Agreement.
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(d) Park Monaco hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Monaco is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the State of
Delaware and is duly authorized and qualified to transact any and all
business contemplated by this Agreement and each Subsequent Transfer
Agreement to be conducted by Park Monaco in any state in which a
Mortgaged Property securing a Park Monaco Mortgage Loan is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Park Monaco Mortgage Loan, to sell the Park Monaco Mortgage Loans in
accordance with the terms of this Agreement and each Subsequent Transfer
Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(2) Park Monaco has the full company power and authority to
sell each Park Monaco Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly authorized
by all necessary corporate action on the part of Park Monaco the
execution, delivery and performance of this Agreement and each Subsequent
Transfer Agreement; and this Agreement and each Subsequent Transfer
Agreement, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes a legal, valid and binding
obligation of Park Monaco, enforceable against Park Monaco in accordance
with its terms, except that (a) the enforceability hereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Monaco, the sale of the Park Monaco
Mortgage Loans by Park Monaco under this Agreement and each Subsequent
Transfer Agreement, the consummation of any other of the transactions
contemplated by this Agreement and each Subsequent Transfer Agreement,
and the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of Park Monaco and will not (A) result in a
material breach of any term or provision of the certificate of
incorporation or by-laws of Park Monaco or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which Park Monaco is a party or by which it may be bound,
or (C) constitute a material violation of any statute, order or
regulation applicable to Park Monaco of any court, regulatory body,
administrative agency or governmental body having jurisdiction over Park
Monaco; and Park Monaco is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially
72
impair Park Monaco's ability to perform or meet any of its obligations
under this Agreement.
(4) No litigation is pending or, to the best of Park Monaco's
knowledge, threatened, against Park Monaco that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Monaco to sell the Park Monaco Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Monaco of, or compliance by Park Monaco with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Monaco has obtained
the same.
(6) Park Monaco will treat the transfer of the Park Monaco
Mortgage Loans to the Depositor as a sale of the Park Monaco Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Monaco
Mortgage Loan to the Depositor, Park Monaco had good title to, and was
the sole owner of, such Park Monaco Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement with,
any other party, to sell and assign the same pursuant to this Agreement.
(e) Park Sienna hereby represents and warrants to the Depositor, the
Certificate Insurer and the Trustee as follows, as of the Cut-off Date:
(1) Park Sienna is duly organized as a Delaware limited
liability company and is validly existing and in good standing under the
laws of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by this Agreement and each
Subsequent Transfer Agreement to be conducted by Park Sienna in any state
in which a Mortgaged Property securing a Park Sienna Mortgage Loan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such state, to the extent necessary to ensure its ability to
enforce each Park Sienna Mortgage Loan, to sell the Park Sienna Mortgage
Loans in accordance with the terms of this Agreement and each Subsequent
Transfer Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(2) Park Sienna has the full company power and authority to
sell each Park Sienna Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate the transactions contemplated by this
Agreement and each Subsequent Transfer Agreement and has duly authorized
by all necessary company action on the part of Park Sienna the execution,
delivery and performance of this Agreement and each
73
Subsequent Transfer Agreement; and this Agreement and each Subsequent
Transfer Agreement, assuming the due authorization, execution and
delivery hereof by the other parties hereto, constitutes a legal, valid
and binding obligation of Park Sienna, enforceable against Park Sienna
in accordance with its terms, except that (a) the enforceability hereof
may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by Park Sienna, the sale of the Park Sienna
Mortgage Loans by Park Sienna under this Agreement and each Subsequent
Transfer Agreement, the consummation of any other of the transactions
contemplated by this Agreement and each Subsequent Transfer Agreement and
the fulfillment of or compliance with the terms hereof are in the
ordinary course of business of Park Sienna and will not (A) result in a
material breach of any term or provision of the certificate of formation
or limited liability company agreement of Park Sienna or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which Park Sienna is a party or by which it
may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to Park Sienna of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
Park Sienna; and Park Sienna is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair Park Sienna's ability
to perform or meet any of its obligations under this Agreement.
(4) No litigation is pending or, to the best of Park Sienna's
knowledge, threatened, against Park Sienna that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or any Subsequent Transfer Agreement or the ability of Park
Sienna to sell the Park Sienna Mortgage Loans or to perform any of its
other obligations under this Agreement or any Subsequent Transfer
Agreement in accordance with the terms hereof or thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Park Sienna of, or compliance by Park Sienna with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Park Sienna has obtained
the same.
(6) Park Sienna will treat the transfer of the Park Sienna
Mortgage Loans to the Depositor as a sale of the Park Sienna Mortgage
Loans for all tax, accounting and regulatory purposes.
(7) Immediately prior to the assignment of each Park Sienna
Mortgage Loan to the Depositor, Park Sienna had good title to, and was
the sole owner of, such the
74
Park Sienna Mortgage Loan free and clear of any pledge, lien,
encumbrance or security interest and had full right and authority,
subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (e) that
materially and adversely affects the interests of the Certificateholders or
the Certificate Insurer in any Mortgage Loan, the party discovering such
breach shall give prompt notice thereof to the other parties, the NIM Insurer
and the Certificate Insurer. Each of the Master Servicer and the Sellers
(each, a "Representing Party") hereby covenants with respect to the
representations and warranties set forth in Sections 2.03(a) through (e) that
within 90 days of the earlier of the discovery by such Representing Party or
receipt of written notice by such Representing Party from any party of a
breach of any representation or warranty set forth herein made that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan or the Certificate Insurer, it shall cure such breach in all material
respects and, if such breach is not so cured, shall, (i) if such 90-day period
expires prior to the second anniversary of the Closing Date, remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and substitute
in its place a Replacement Mortgage Loan, in the manner and subject to the
conditions set forth in this Section; or (ii) repurchase the affected Mortgage
Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner
set forth below; provided that (a) any such substitution pursuant to (i) above
or repurchase pursuant to (ii) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, (b) any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for File Release
and (c) any such substitution pursuant to (i) above shall include a payment by
the applicable Representing Party of any amount as calculated under item (iii)
of the definition of "Purchase Price". Any Representing Party liable for a
breach under this Section 2.03 shall promptly reimburse the Master Servicer or
the Trustee for any expenses reasonably incurred by the Master Servicer or the
Trustee in respect of enforcing the remedies for such breach. To enable the
Master Servicer to amend the Mortgage Loan Schedule, any Representing Party
liable for a breach under this Section 2.03 shall, unless it cures such breach
in a timely fashion pursuant to this Section 2.03, promptly notify the Master
Servicer whether such Representing Party intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties described in this Section that are made to the
best of the Representing Party's knowledge, if it is discovered by any of the
Depositor, the Master Servicer, the Sellers, the Certificate Insurer or the
Trustee that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.
With respect to any Replacement Mortgage Loan or Loans, the
applicable Seller delivering such Replacement Mortgage Loan shall deliver to
the Trustee for the benefit of the Certificateholders and the Certificate
Insurer the related Mortgage Note, Mortgage and assignment of the Mortgage,
and such other documents and agreements as are required by Section 2.01, with
the Mortgage Note endorsed and the Mortgage assigned as required by Section
2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Replacement Mortgage Loans in the
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Due Period related to the Distribution Date on which such proceeds are to be
distributed shall not be part of the Trust Fund and will be retained by the
applicable Seller delivering such Replacement Mortgage Loan on such
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the applicable Seller
shall be entitled to retain all amounts received in respect of such Deleted
Mortgage Loan. The Master Servicer shall amend the Mortgage Loan Schedule for
the benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
applicable Seller delivering such Replacement Mortgage Loan shall be deemed to
have made with respect to such Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties set forth in Section
2.03(b), (c), (d) or (e) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Certificate Account of the amount required
to be deposited therein in connection with such substitution as described in
the following paragraph, the Trustee shall release to the Representing Party
the Mortgage File relating to such Deleted Mortgage Loan and held for the
benefit of the Certificateholders and shall execute and deliver at the Master
Servicer's direction such instruments of transfer or assignment as have been
prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in the applicable Seller, or its respective designee, title
to the Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
For any month in which any Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution
is less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due in the month of substitution) of all such
Deleted Mortgage Loans. An amount equal to the aggregate of the deficiencies
described in the preceding sentence (such amount, the "Substitution Adjustment
Amount") shall be forwarded by the applicable Seller to the Master Servicer
and deposited by the Master Servicer into the Certificate Account not later
than the Determination Date for the Distribution Date relating to the
Prepayment Period during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
In the event that a Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on the Determination Date for the Distribution Date
in the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if
any, and the receipt of a Request for File Release, the Trustee shall release
the related Mortgage File held for the benefit of the Certificateholders to
such Seller, and the Trustee shall execute and deliver at such Person's
direction the related instruments of transfer or assignment prepared by such
Seller, in each case without recourse, as shall be necessary to transfer title
from the Trustee for the benefit of the Certificateholders and transfer the
Trustee's interest to such Seller to any Mortgage Loan purchased pursuant to
this Section 2.03. It is understood and agreed that the obligation under this
Agreement of the Sellers to cure, repurchase or replace any Mortgage Loan
76
as to which a breach has occurred and is continuing shall constitute the sole
remedy against the Sellers respecting such breach available to
Certificateholders, the Depositor or the Trustee.
(g) The representations and warranties set forth in this Section
2.03 shall survive delivery of the respective Mortgage Files to the Trustee
for the benefit of the Certificateholders and the Certificate Insurer with
respect to each Mortgage Loan.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer,
the Certificate Insurer and the Trustee as follows, as of the date hereof and
as of each Subsequent Transfer Date:
(1) The Depositor is duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware
and has full power and authority (corporate and other) necessary to own
or hold its properties and to conduct its business as now conducted by it
and to enter into and perform its obligations under this Agreement and
each Subsequent Transfer Agreement.
(2) The Depositor has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and each Subsequent Transfer
Agreement and has duly authorized, by all necessary corporate action on
its part, the execution, delivery and performance of this Agreement and
each Subsequent Transfer Agreement; and this Agreement and each
Subsequent Transfer Agreement, assuming the due authorization, execution
and delivery hereof by the other parties hereto, constitutes a legal,
valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, subject, as to enforceability, to
(i) bankruptcy, insolvency, reorganization, moratorium and other similar
laws affecting creditors' rights generally and (ii) general principles of
equity, regardless of whether enforcement is sought in a proceeding in
equity or at law.
(3) The execution and delivery of this Agreement and each
Subsequent Transfer Agreement by the Depositor, the consummation of the
transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business
of the Depositor and will not (A) result in a material breach of any term
or provision of the charter or by-laws of the Depositor or (B) materially
conflict with, result in a material breach, violation or acceleration of,
or result in a material default under, the terms of any other material
agreement or instrument to which the Depositor is a party or by which it
may be bound or (C) constitute a material violation of any statute, order
or regulation applicable to the Depositor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Depositor; and the Depositor is not in breach or violation of any
material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it which breach or violation may materially impair the Depositor's
ability to perform or meet any of its obligations under this Agreement.
77
(4) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or any Subsequent Transfer Agreement or the ability of
the Depositor to perform its obligations under this Agreement or any
Subsequent Transfer Agreement in accordance with the terms hereof or
thereof.
(5) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor with,
this Agreement or any Subsequent Transfer Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, the Depositor has obtained
the same.
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan, as of the Closing Date or the related
Subsequent Transfer Date, as applicable, following the transfer of such
Mortgage Loan to it by the Sellers, the Depositor had good title to the
Initial Mortgage Loans or related Subsequent Mortgage Loans, as applicable,
and the related Mortgage Notes were subject to no offsets, claims, defenses or
counterclaims.
It is understood and agreed that the representations and warranties
set forth in the two immediately preceding paragraphs shall survive delivery
of the Mortgage Files to the Trustee. Upon discovery by the Depositor, the
Certificate Insurer or the Trustee, of a breach of any of the foregoing
representations and warranties set forth in the immediately preceding
paragraph or any representations in Section 10.04(b) hereof (referred to
herein as a "breach"), which breach materially and adversely affects the
interest of the Certificateholders or the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the others and to
each Rating Agency and the NIM Insurer. The Depositor hereby covenants with
respect to the representations and warranties made by it in this Section 2.04
or any representations in Section 10.04(b) hereof that within 90 days of the
earlier of the discovery by it or receipt of written notice by it from any
party of a breach of any representation or warranty set forth herein made that
materially and adversely affects the interests of the Certificateholders in
any Mortgage Loan or the Certificate Insurer, it shall cure such breach in all
material respects and, if such breach is not so cured, shall repurchase or
replace the affected Mortgage Loan or Loans in accordance with the procedure
set forth in Section 2.03(f).
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which default is
not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03 or
2.04 shall be made unless the Representing Party making such repurchase or
substitution delivers to the Trustee and the Certificate Insurer an Opinion of
Counsel (which such Representing Party shall use reasonable efforts to
obtain), addressed to the Trustee to the effect that such repurchase or
substitution would not (i) result in the imposition of the tax on "prohibited
transactions" of the Trust Fund or contributions after the Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the any REMIC formed hereunder to fail to qualify as a REMIC at any time
that any
78
Certificates are outstanding. Any Mortgage Loan as to which repurchase or
substitution was delayed pursuant to this paragraph shall be repurchased or
the substitution therefor shall occur (subject to compliance with Sections
2.02, 2.03 or 2.04) upon the earlier of (a) the occurrence of a default or
imminent default with respect to such loan and (b) receipt by the Trustee and
the Certificate Insurer of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, any Seller, the Master Servicer
or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five Business
Days of discovery) give written notice thereof to the other parties and the
NIM Insurer and the Certificate Insurer. In connection therewith, the Trustee
shall require CHL, at CHL's option, to either (i) substitute, if the
conditions in Section 2.03(f) with respect to substitutions are satisfied, a
Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase
the affected Mortgage Loan within 90 days of such discovery in the same manner
as it would a Mortgage Loan for a breach of representation or warranty
contained in Section 2.03. The Trustee shall reconvey to CHL the Mortgage Loan
to be released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06 Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and the Certificate Insurer and to perform the duties set
forth in this Agreement.
Section 2.07 Covenants of the Master Servicer.
The Master Servicer hereby covenants to the Depositor, the
Certificate Insurer and the Trustee as follows:
(a) the Master Servicer shall comply in the performance of its
obligations under this Agreement with all reasonable rules and requirements of
the insurer under each Required Insurance Policy;
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor, the Certificate Insurer or the Trustee and
prepared by the Master Servicer pursuant to this Agreement will contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the information, certificate, statement or report not misleading; and
(c) the Master Servicer shall ensure that the Covered Loans are
serviced in accordance with the requirements of the Credit Insurance Policy so
as not to cause any of the Covered Loans to be excluded from coverage or have
the related coverage reduced under the
79
Credit Insurance Policy, otherwise the Master Servicer shall be required to
repurchase the Mortgage Loan at the related Purchase Price, which shall be the
sole remedy in respect of such breach.
Section 2.08 Sponsor Loss Coverage Obligation.
CHL hereby agrees that, for the benefit of the Certificateholders
and the Certificate Insurer, on the Business Day immediately preceding each
Distribution Date it will remit to the Trustee for deposit into the
Distribution Account the amount of any Loss Coverage Payment due for such
Distribution Date as specified in the remittance report delivered by the
Master Servicer. The obligation of CHL to remit Loss Coverage Payments will
terminate when the Sponsor Loss Coverage Amount has been reduced to zero.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer
shall service and administer the Mortgage Loans in accordance with customary
and usual standards of practice of prudent mortgage loan lenders in the
respective states in which the Mortgaged Properties are located, including
taking all required and appropriate actions under each Required Insurance
Policy and taking all required and appropriate actions under the Credit
Insurance Policy on behalf of the Trustee, other than the payment of the
Credit Insurance Premium. In connection with such servicing and
administration, the Master Servicer shall have full power and authority,
acting alone and/or through subservicers as provided in Section 3.02 hereof,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds, other Liquidation Proceeds and Subsequent Recoveries, and (iv)
subject to Section 3.12(b), to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan; provided
that the Master Servicer shall take no action that is inconsistent with or
prejudices the interests of the Trustee, the Certificate Insurer or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Certificate Insurer and the Trustee under this Agreement. The
Master Servicer shall represent and protect the interest of the Trustee in the
same manner as it currently protects its own interest in mortgage loans in its
own portfolio in any claim, proceeding or litigation regarding a Mortgage Loan
and shall not make or permit any modification, waiver or amendment of any term
of any Mortgage Loan which would (i) cause any REMIC formed hereunder to fail
to qualify as a REMIC, (ii) result in the imposition of any tax under section
860(a) or 860(d) of the Code or (iii) cause any Covered Loan to not be covered
by the Credit Insurance Policy, but in any case the Master Servicer shall not
act in any manner that is a lesser standard than that provided in the first
sentence of this Section 3.01. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the
Depositor and the Trustee, is hereby authorized and empowered by the Depositor
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and the Trustee, when the Master Servicer believes it appropriate in its
reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and
all other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by any or all of them as are necessary or appropriate to enable the Master
Servicer to service and administer the Mortgage Loans. Upon receipt of such
documents, the Depositor and/or the Trustee shall execute such documents and
deliver them to the Master Servicer. The Master Servicer further is authorized
and empowered by the Trustee, on behalf of the Certificateholders and the
Trustee, in its own name or in the name of the Subservicer, when the Master
Servicer or the Subservicer, as the case may be, believes it appropriate in
its best judgment to register any Mortgage Loan on the MERS(R) System, or
cause the removal from the registration of any Mortgage Loan on the MERS(R)
System, to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns.
In accordance with the standards of the preceding paragraph, the
Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further
as provided in Section 3.08. All costs incurred by the Master Servicer, if
any, in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to
the Stated Principal Balance under the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
The Master Servicer shall deliver a list of Servicing Officers to
the Trustee by the Closing Date.
In addition, the Master Servicer shall administer the Credit
Insurance Policy on behalf of itself, the Sellers, the Depositor, and the
Trustee for the benefit of the Certificateholders and the Certificate Insurer,
when it is necessary to make claims and receive payments under the Credit
Insurance Policy. In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself,
the Trustee and the Certificateholders, claims to the insurer under any
primary insurance policies and, in this regard, to take any reasonable action
necessary to permit recovery under any primary insurance policies respecting
defaulted Mortgage Loans. Any amounts collected by the Master Servicer under
any primary insurance policies shall be deposited in the Certificate Account.
The Master Servicer shall take whatever action is appropriate to
maximize the amounts payable under the Credit Insurance Policy and to service
the Covered Loans in the manner required by the Credit Insurance Policy. The
Master Servicer shall prepare and submit all claims eligible for submission
under the Credit Insurance Policy and shall, except as otherwise specified in
this Agreement, perform all of the obligations of the insured under the Credit
Insurance Policy.
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In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Scheduled Payments or Stated Principal Balances that were made
by the Master Servicer in a manner not consistent with the terms of the
related Mortgage Note and this Agreement, the Master Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Trustee for
deposit in the Distribution Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee,
the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.01 shall not limit
the ability of the Master Servicer to seek recovery of any such amounts from
the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law and shall not be an expense of the Trust.
Section 3.02 Subservicing; Enforcement of the Obligations of Master
Servicer.
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that (i)
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder, (ii) that
such subservicing agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the ratings on any Class of Certificates (without
regard to the Certificate Insurance Policy in the case of the Class A
Certificates), as evidenced by a letter to that effect delivered by each
Rating Agency to the Depositor, the Certificate Insurer and the NIM Insurer
and (iii) the NIM Insurer shall have consented to such subservicing agreements
(which consent shall not be unreasonably withheld) with Subservicers, for the
servicing and administration of the Mortgage Loans. The Master Servicer shall
deliver to the Trustee copies of all Sub-Servicing Agreements, and any
amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments. The Master Servicer, with the
written consent of the NIM Insurer (which consent shall not be unreasonably
withheld), shall be entitled to terminate any Subservicing Agreement and the
rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. Notwithstanding the provisions of any subservicing agreement, any
of the provisions of this Agreement relating to agreements or arrangements
between the Master Servicer or a subservicer or reference to actions taken
through a subservicer or otherwise, the Master Servicer shall remain obligated
and liable to the Depositor, the Trustee, the Certificate Insurer and the
Certificateholders for the servicing and administration of the Mortgage Loans
in accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Master Servicer shall contain a provision giving
the successor Master Servicer the option to terminate such agreement without
cost in the event a successor Master Servicer is appointed. All actions of
each subservicer performed pursuant to the related subservicing agreement
shall be performed as an agent of the Master Servicer with the same force and
effect as if performed directly by the Master Servicer.
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(b) For purposes of this Agreement, the Master Servicer shall be
deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the Master Servicer.
Section 3.03 Rights of the Depositor, the Sellers, the
Certificateholders, the NIM Insurer, the
Certificate Insurer and the Trustee in
Respect of the Master Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer, the Certificate Insurer or the Depositor shall have any
responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise. The Master Servicer shall afford (and
any Subservicing Agreement shall provide that each Subservicer shall afford)
the Depositor, the NIM Insurer, the Certificate Insurer and the Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Subservicer) in respect of the
Master Servicer's rights and obligations hereunder and access to officers of
the Master Servicer (and those of any such Subservicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor,
the NIM Insurer, the Certificate Insurer and the Trustee its (and any such
Subservicer's) most recent financial statements and such other information
relating to the Master Servicer's capacity to perform its obligations under
this Agreement that it possesses. To the extent such information is not
otherwise available to the public, the Depositor, the NIM Insurer, the
Certificate Insurer and the Trustee shall not disseminate any information
obtained pursuant to the preceding two sentences without the Masters
Servicer's (or any such Subservicer's) written consent, except as required
pursuant to this Agreement or to the extent that it is necessary to do so (i)
in working with legal counsel, auditors, taxing authorities or other
governmental agencies, rating agencies or reinsurers or (ii) pursuant to any
law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor, the
Trustee, the NIM Insurer, the Certificate Insurer or the Trust Fund, and in
either case, the Depositor, the NIM Insurer, the Certificate Insurer or the
Trustee, as the case may be, shall use its reasonable best efforts to assure
the confidentiality of any such disseminated non-public information. The
Depositor may, but is not obligated to, enforce the obligations of the Master
Servicer under this Agreement and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
under this Agreement or exercise the rights of the Master Servicer under this
Agreement; provided by virtue of such performance by the Depositor of its
designee. The Depositor shall not have any responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
Section 3.04 Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer
be the Master Servicer hereunder (including by reason of an Event of Default
or termination by the Depositor), the Trustee or its designee shall thereupon
assume all of the rights and obligations of the Master Servicer hereunder
arising thereafter (except that the Trustee shall not be (i) liable for losses
of the Master Servicer pursuant to Section 3.10 hereof or any acts or
omissions of the predecessor
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Master Servicer hereunder, (ii) obligated to make Advances if it is prohibited
from doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02
or 2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant
to Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of
Section 6.02 hereof). If the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of any Event of Default or
termination by the Depositor), the Trustee (or any other successor servicer)
may, at its option, succeed to any rights and obligations of the Master
Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as servicer under
a subservicing agreement arising prior to the date of such succession unless
it expressly elects to succeed to the rights and obligations of the Master
Servicer thereunder; and the Master Servicer shall not thereby be relieved of
any liability or obligations under the subservicing agreement arising prior to
the date of such succession.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement and the Mortgage Loans
then being serviced thereunder and an accounting of amounts collected held by
it and otherwise use its best efforts to effect the orderly and efficient
transfer of the subservicing agreement to the assuming party.
Section 3.05 Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account; Pre-Funding Account;
Capitalized Interest Account; Premium Account.
(a) The Master Servicer shall make reasonable efforts in accordance
with customary and usual standards of practice of prudent mortgage lenders in
the respective states in which the Mortgaged Properties are located to collect
all payments called for under the terms and provisions of the Mortgage Loans
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Required Insurance Policy. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, subject to Section 3.20, any Prepayment Charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater
than 270 days; provided that the Master Servicer will not extend the due date
of any such Mortgage Loan past the maturity date for the latest maturing
Mortgage Loan as of the Cut-off Date. In the event of any such arrangement,
the Master Servicer shall make Advances on the related Mortgage Loan during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements. In
addition, the NIM Insurer's prior written consent shall be required for any
waiver of Prepayment Charges or for the extension of the due dates for the
payments due on a Mortgage Note, if the aggregate number of Mortgage Loans
that have been granted such waivers or extensions exceeds 5% of the aggregate
number of the Mortgage Loans. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
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(b) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited
on a daily basis within two Business Days of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted
by Subservicers or received by it in respect of Mortgage Loans subsequent to
the Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts
required to be deposited hereunder:
(1) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(2) all payments on account of interest on the Mortgage Loans
(net of the related Servicing Fee and Prepayment Interest Excess
permitted under Section 3.15 hereof to the extent not previously paid to
or withheld by the Master Servicer);
(3) all Insurance Proceeds (including proceeds from the Credit
Insurance Policy) and Charged-off Loan Proceeds;
(4) all Liquidation Proceeds and Subsequent Recoveries, other
than proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures;
(5) all Compensating Interest;
(6) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments;
(7) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.10 hereof;
(8) the Purchase Price and any Substitution Adjustment Amount;
(9) all Advances made by the Master Servicer or the Trustee
pursuant to Section 4.01 hereof;
(10) all Prepayment Charges and Master Servicer Prepayment
Charge Payment Amounts; and
(11) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer
into the Certificate Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. In the event that the Master Servicer shall
remit any amount not required to be remitted and not otherwise subject to
withdrawal pursuant to Section 3.08 hereof, it may at any time withdraw or
direct the institution maintaining the Certificate Account, to withdraw such
amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by
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delivering written notice thereof to the institution maintaining the
Certificate Account, that describes the amounts deposited in error in the
Certificate Account. The Master Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Certificate Account shall be held in trust for the Certificateholders
and the Certificate Insurer until withdrawn in accordance with Section 3.08.
No later than 1:00 p.m. Pacific time on the Business Day prior to
the Master Servicer Advance Date, CHL shall remit to the Master Servicer, and
the Master Servicer shall deposit in the Certificate Account, the Seller
Interest Shortfall Payments (if any) for such Master Servicer Advance Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the Certificate Insurer, the Distribution Account. The
Trustee shall, promptly upon receipt, deposit in the Distribution Account and
retain therein the following:
(1) the aggregate amount remitted by the Master Servicer
pursuant to the second paragraph of Section 3.08(a);
(2) any Loss Coverage Payment made by CHL pursuant to Section
2.08;
(3) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(f) in connection with any losses on Permitted
Investments; and
(4) any amount to be deposited by the Trustee in the
Distribution Account pursuant to Section 3.05(d) and 3.05(e).
The foregoing requirements for remittance by the Master Servicer and
deposit by the Trustee into the Distribution Account shall be exclusive. In
the event that the Master Servicer shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 3.08
hereof, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding.
Such direction may be accomplished by delivering a written notice to the
Trustee that describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders and the Certificate Insurer until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.08. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Master Servicer.
(d) If the Pre-Funded Amount is greater than zero, the Trustee shall
establish and maintain, on behalf of the Certificateholders and the
Certificate Insurer, the Pre-Funding Account, and on the Closing Date, CHL
shall remit the Pre-Funded Amount to the Trustee for deposit in the
Pre-Funding Account.
On the Business Day before the Distribution Date following the end
of the Funding Period, the Trustee shall (i) withdraw the amount on deposit in
the Pre-Funding Account (net of investment income), (ii) promptly deposit such
amount in the Distribution
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Account, and (iii) distribute each amount to the Certificates on the
Distribution Date pursuant to Section 4.04.
(e) If the Capitalized Interest Deposit is greater than zero, the
Trustee shall establish and maintain, on behalf of the Certificateholders and
the Certificate Insurer, the Capitalized Interest Account. On the Closing
Date, CHL shall remit the Capitalized Interest Deposit to the Trustee for
deposit in the Capitalized Interest Account. On each Distribution Account
Deposit Date related to a Funding Period Distribution Date, the Trustee shall
transfer from the Capitalized Interest Account to the Distribution Account an
amount equal to the Capitalized Interest Requirement (which, to the extent
required, may include investment earnings on amounts on deposit therein) for
the related Distribution Date.
If any funds remain in the Capitalized Interest Account at the end
of the Distribution Account Deposit Date for the last Funding Period
Distribution Date, the Trustee shall distribute any such remaining funds to
the order of CHL on the last Funding Period Distribution Date.
(f) Each institution that maintains the Certificate Account, the
Distribution Account, the Premium Account, the Pre-Funding Account or the
Capitalized Interest Account shall invest the funds in each such account, as
directed by the Master Servicer, in Permitted Investments, which shall mature
not later than (x) in the case of the Certificate Account, the second Business
Day next preceding the related Distribution Account Deposit Date (except that
if such Permitted Investment is an obligation of the institution that
maintains such Certificate Account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Distribution
Account Deposit Date) and (y) in the case of the Distribution Account, the
Premium Account, the Pre-Funding Account and the Capitalized Interest Account,
the Business Day immediately preceding the first Distribution Date that
follows the date of such investment (except that if such Permitted Investment
is an obligation of the institution that maintains such Distribution Account,
the Premium Account or Pre-Funding Account, then such Permitted Investment
shall mature not later than such Distribution Date), in each case, shall not
be sold or disposed of prior to its maturity. All such Permitted Investments
shall be made in the name of the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer. In the case of (i) the
Certificate Account and the Distribution Account, all income and gain net of
any losses realized from any such investment shall be for the benefit of the
Master Servicer as servicing compensation and shall be remitted to it monthly
as provided herein, (ii) the Pre-Funding Account, all income and gain net of
any losses realized from any such investment shall be for the benefit of the
Depositor and shall be remitted to the Depositor as provided herein, (iii) the
Capitalized Interest Account, all income and gain net of any losses realized
from any such investment on deposit therein shall be credited thereto and (iv)
the Premium Account, all income and gain net of any losses realized from any
such investment shall be for the benefit of the Certificateholders and the
Certificate Insurer and shall be remitted to the Premium Account. The amount
of any losses incurred in the Certificate Account or the Distribution Account
in respect of any such investments shall be deposited by the Master Servicer
in the Certificate Account or paid to the Trustee for deposit into the
Distribution Account out of the Master Servicer's own funds immediately as
realized. The amount of any losses incurred in the Pre-Funding Account or the
Capitalized Interest Account in respect of any such investments shall be paid
by the Master Servicer to the Trustee for deposit into the Pre-Funding Account
or the Capitalized Interest
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Account, as applicable, out of the Master Servicer's own funds immediately as
realized. The Trustee shall not be liable for the amount of any loss incurred
in respect of any investment or lack of investment of funds held in the
Certificate Account, the Distribution Account, the Premium Account, the
Pre-Funding Account or the Capitalized Interest Account and made in accordance
with this Section 3.05 (other than as obligor on any such investment). The
Master Servicer shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Premium
Account and made in accordance with this Section 3.05.
(g) The Master Servicer shall give at least 30 days advance notice
to the Trustee, each Seller, the Certificate Insurer, each Rating Agency and
the Depositor of any proposed change of location of the Certificate Account
prior to any change thereof. The Trustee shall give at least 30 days advance
notice to the Master Servicer, each Seller, the Certificate Insurer, each
Rating Agency and the Depositor of any proposed change of the location of the
Distribution Account, the Pre-Funding Account, the Premium Account, the
Carryover Reserve Fund or the Capitalized Interest Account prior to any change
thereof.
(h) Except as otherwise expressly provided in this Agreement, if any
default occurs under any Permitted Investment, the Trustee may and, subject to
Sections 8.01 and 8.02(a)(4), at the request of the Holders of Certificates
representing more than 50% of the Voting Rights), or the NIM Insurer, shall
take any action appropriate to enforce payment or performance, including the
institution and prosecution of appropriate proceedings.
(i) Upon its initial receipt of written instructions from the Master
Servicer pursuant to Section 3.08(b)(vi) directing the Trustee to deposit an
amount in the Premium Account, the Trustee shall establish and maintain, on
behalf of the Certificateholders and the Certificate Insurer, the Premium
Account.
Section 3.06 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
To the extent required by the related Mortgage Note, the Master
Servicer shall establish and maintain one or more accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors
(or advances by the Master Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the
Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination
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of this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts
shall not be a part of the Trust Fund.
Section 3.07 Access to Certain Documentation and Information
Regarding the Mortgage Loans.
The Master Servicer shall afford the Depositor, the NIM Insurer, the
Trustee and the Certificate Insurer reasonable access to all records and
documentation regarding the Mortgage Loans and all accounts, insurance
policies and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable request and during normal
business hours at the offices of the Master Servicer designated by it. Upon
request, the Master Servicer shall furnish to the Trustee and the NIM Insurer
its most recent publicly available financial statements and any other
information relating to its capacity to perform its obligations under this
Agreement reasonably requested by the NIM Insurer.
Upon reasonable advance notice in writing if required by federal
regulation, the Master Servicer will provide to each Certificateholder or
Certificate Owner that is a savings and loan association, bank or insurance
company certain reports and reasonable access to information and documentation
regarding the Mortgage Loans sufficient to permit such Certificateholder or
Certificate Owner to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates;
provided that the Master Servicer shall be entitled to be reimbursed by each
such Certificateholder or Certificate Owner for actual expenses incurred by
the Master Servicer in providing such reports and access.
Section 3.08 Permitted Withdrawals from the Certificate Account,
Distribution Account, Carryover Reserve Fund and
the Principal Reserve Fund.
(a) The Master Servicer may from time to time make withdrawals from
the Certificate Account for the following purposes:
(i) to pay to the Master Servicer (to the extent not previously
paid to or withheld by the Master Servicer), as servicing
compensation in accordance with Section 3.15, that portion of any
payment of interest that equals the Servicing Fee for the period
with respect to which such interest payment was made, and, as
additional servicing compensation to the Master Servicer, those
other amounts set forth in Section 3.15;
(ii) to reimburse each of the Master Servicer and the Trustee
for Advances made by it with respect to the Mortgage Loans, such
right of reimbursement pursuant to this subclause (ii) being limited
to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds, Insurance Proceeds and
Subsequent Recoveries (other than proceeds of the Credit Insurance
Policy) but not Charged-off Loan Proceeds) that represent late
recoveries of payments of principal and/or interest on such
particular Mortgage Loan(s) in respect of which any such Advance was
made;
(iii) [Reserved];
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(iv) to reimburse each of the Master Servicer and the Trustee
for any Nonrecoverable Advance previously made;
(v) to reimburse the Master Servicer from Insurance Proceeds
(other than proceeds of the Credit Insurance Policy) for Insured
Expenses covered by the related Insurance Policy;
(vi) to pay the Master Servicer any unpaid Servicing Fees and
to reimburse it for any unreimbursed Servicing Advances, the Master
Servicer's right to reimbursement of Servicing Advances pursuant to
this subclause (vi) with respect to any Mortgage Loan being limited
to amounts received on particular Mortgage Loan(s) (including, for
this purpose, Liquidation Proceeds, Insurance Proceeds and
Subsequent Recoveries, Charged-off Loan Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments
for which such advances were made pursuant to Section 3.01 or
Section 3.06;
(vii) to pay to the applicable Seller, the Depositor or the
Master Servicer, as applicable, with respect to each Mortgage Loan
or property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03, 2.04 or 3.12, all amounts received
thereon and not taken into account in determining the related
Purchase Price of such repurchased Mortgage Loan;
(viii) to reimburse the applicable Seller, the Master Servicer,
the NIM Insurer or the Depositor for expenses incurred by any of
them in connection with the Mortgage Loans or Certificates and
reimbursable pursuant to Section 6.03 hereof; provided that such
amount shall only be withdrawn following the withdrawal from the
Certificate Account for deposit into the Distribution Account
pursuant to the following paragraph;
(ix) to pay any lender-paid primary mortgage insurance premiums
(other than the Credit Insurance Premium);
(x) to withdraw any amount deposited in the Certificate Account
and not required to be deposited therein; and
(xi) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount,
the Principal Remittance Amount, Prepayment Charges collected and the Master
Servicer Prepayment Charge Payment Amount, and the Trustee shall deposit such
amount in the Distribution Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On
the Closing Date, CHL shall deposit into the Principal Reserve Fund $200.00.
Funds on deposit in the Principal Reserve Fund shall not be invested. The
Principal Reserve Fund shall be treated as an "outside reserve fund" under
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applicable Treasury regulations and shall not be part of any REMIC created
under this Agreement.
On the Business Day before the first Distribution Date, the Trustee
shall transfer $100.00 from the Principal Reserve Fund to the Distribution
Account, and on the first Distribution Date, the Trustee shall withdraw $100
and distribute such amount to the Class A-R Certificates in reduction of the
Certificate Principal Balance thereof.
On the Business Day before the Class P Principal Distribution Date,
the Trustee shall transfer from the Principal Reserve Fund to the Distribution
Account $100.00 and shall distribute such amount to the Class P Certificates
on the Class P Principal Distribution Date. Following the distribution to be
made in accordance with the preceding sentence, the Trustee shall then
terminate the Principal Reserve Fund.
The Master Servicer shall keep and maintain separate accounting, on
a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to subclauses (i), (ii),
(iv), (v), (vi), (vii), (viii), (ix) and (x) above. Prior to making any
withdrawal from the Certificate Account pursuant to subclause (iv), the Master
Servicer shall deliver to the Trustee and the Certificate Insurer an Officer's
Certificate of a Servicing Officer indicating the amount of any previous
Advance determined by the Master Servicer to be a Nonrecoverable Advance and
identifying the related Mortgage Loan(s), and their respective portions of
such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account
for distribution to the Certificateholders, the Certificate Insurer and the
Swap Account in the manner specified in this Agreement (and to withhold from
the amounts so withdrawn, the amount of any taxes that it is authorized to
retain pursuant to the third paragraph of Section 8.11). On each Distribution
Date, the Trustee shall pay (or cause to be paid) the applicable Credit
Insurance Premium to the Credit Insurer from funds on deposit in the
Distribution Account. To the extent the Trustee receives any payments under
the Credit Insurance Policy, it shall notify the Master Servicer and promptly
deposit such amounts into the Certificate Account. Payments to the Credit
Insurer shall be made by the Trustee by wire transfer of immediately available
funds to the following account, unless the Credit Insurer notifies the Trustee
in writing: ABA#000000000, DDA#198002383687, Bank Name: US Bank, Re: Policy
No. V28, [include reporting month here]. In addition, the Trustee may from
time to time make withdrawals from the Distribution Account for the following
purposes:
(i) to pay the Trustee the Trustee Fee on each Distribution
Date;
(ii) to pay to the Master Servicer, as additional servicing
compensation, earnings on or investment income with respect to funds
in or credited to the Distribution Account;
(iii) to withdraw pursuant to Section 3.05 any amount deposited
in the Distribution Account and not required to be deposited
therein;
(iv) to reimburse the Trustee for any unreimbursed Advances
made by it pursuant to Section 4.01(d) hereof, such right of
reimbursement pursuant to this
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subclause (iv) being limited to (x) amounts received on the related
Mortgage Loan(s) in respect of which any such Advance was made and
(y) amounts not otherwise reimbursed to the Trustee pursuant to
Section 3.08(a)(ii) hereof;
(v) to reimburse the Trustee (other than from amounts
representing Charged-off Loan Proceeds) for any Nonrecoverable
Advance previously made by the Trustee pursuant to Section 4.01(d)
hereof, such right of reimbursement pursuant to this subclause (v)
being limited to amounts not otherwise reimbursed to the Trustee
pursuant to Section 3.08(a)(iv) hereof;
(vi) upon receipt with written instructions by the Master
Servicer, deposit all or a portion of the Credit Insurance Premium
into the Premium Account; and
(vii) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
(c) The Trustee shall withdraw funds from the Carryover Reserve Fund
for distribution to the Certificateholders in the manner specified in this
Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the third paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:
(1) to withdraw any amount deposited in the Carryover Reserve
Fund and not required to be deposited therein; and
(2) to clear and terminate the Carryover Reserve Fund upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.09 [Reserved].
Section 3.10 Maintenance of Hazard Insurance.
The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the
proceeds of such policy shall be sufficient to prevent the related Mortgagor
and/or mortgagee from becoming a co-insurer. Each such policy of standard
hazard insurance shall contain, or have an accompanying endorsement that
contains, a standard mortgagee clause. The Master Servicer shall also cause
flood insurance to be maintained on property acquired upon foreclosure or deed
in lieu of foreclosure of any Mortgage Loan, to the extent described below.
Pursuant to Section 3.05 hereof, any amounts collected by the Master Servicer
under any such policies (other than the amounts to be applied to the
restoration or repair of the related Mortgaged Property or property thus
acquired or amounts released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures) shall be deposited in the Certificate
Account. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating monthly distributions to
the Certificateholders or remittances to the Trustee for their
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benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds or Subsequent Recoveries to
the extent permitted by Section 3.08 hereof. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
or maintained on property acquired in respect of a Mortgage other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. If the Mortgaged
Property is located at the time of origination of the Mortgage Loan in a
federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value of
the improvements that are part of such Mortgaged Property, or (iii) the
maximum amount of such insurance available for the related Mortgaged Property
under the Flood Disaster Protection Act of 1973, as amended. If the hazard
policy contains a deductible clause, the Master Servicer will be required to
deposit from its own funds into the Certificate Account the amounts that would
have been deposited therein but for the deductible clause.
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section 3.11(a), when any
property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of
such conveyance, enforce any due-on-sale clause contained in any Mortgage Note
or Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
the terms and conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under such Mortgage Note or Mortgage
is not otherwise so required under such Mortgage Note or Mortgage as a
condition to such transfer. In the event that the Master Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption
and modification agreement from or with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by the applicable Required Insurance Policies. The Master Servicer,
subject to Section 3.11(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. The Master Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added
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to the related Mortgage File and shall, for all purposes, be considered a part
of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.11(a) hereof, in any case in which
a Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master
Servicer shall prepare and deliver or cause to be prepared and delivered to
the Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage Note
or Mortgage or other instruments as are reasonable or necessary to carry out
the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note (including, but not limited to, the Mortgage Rate,
the amount of the Scheduled Payment and any other term affecting the amount or
timing of payment on the Mortgage Loan) may be changed. In addition, the
substitute Mortgagor and the Mortgaged Property must be acceptable to the
Master Servicer in accordance with its underwriting standards as then in
effect. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part
thereof. Any fee collected by the Master Servicer for entering into an
assumption or substitution of liability agreement will be retained by the
Master Servicer as additional servicing compensation.
Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans;
Auction of Charged-off Mortgage Loans.
(a) Notwithstanding the first sentence of Section 3.01, the Master
Servicer may agree to any modification of any Mortgage Loan (the "Modified
Mortgage Loan") if (i) CHL purchases the Modified Mortgage Loan from the Trust
Fund immediately following the modification as described below and (ii) the
Stated Principal Balance of such Mortgage Loan, when taken together with the
aggregate of the Stated Principal Balances of all other Mortgage Loans that
have been so modified since the Closing Date at the time of those
modifications, does not exceed an amount equal to 5% of the aggregate
Certificate Principal Balance of the related Certificates. Effective
immediately after the modification, and, in any event, on the same Business
Day on which the modification occurs, all interest of the Trustee in the
Modified Mortgage Loan shall automatically be deemed transferred and assigned
to CHL and all benefits and burdens of ownership thereof, including the right
to accrued interest thereon from the date of modification and the risk of
default thereon, shall pass to CHL. The Master Servicer shall promptly deliver
to the Trustee a certification of a Servicing Officer to the effect that all
requirements of this paragraph have been satisfied with respect to the
Modified Mortgage Loan. For federal income tax purposes, the Trustee shall
account for such purchase as a prepayment in
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full of the Modified Mortgage Loan. CHL shall remit the Purchase Price to the
Master Servicer for deposit into the Certificate Account pursuant to Section
3.05 within one Business Day after the purchase of the Modified Mortgage Loan.
Upon receipt by the Trustee of written notification of any such deposit signed
by a Servicing Officer, the Trustee shall release to CHL or its designee the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to vest in CHL any Modified Mortgage Loan previously transferred and assigned
pursuant hereto. CHL covenants and agrees to indemnify the Trust Fund against
any liability for any "prohibited transaction" taxes and any related interest,
additions, and penalties imposed on the Trust Fund established hereunder as a
result of any modification of a Mortgage Loan effected pursuant to this
subsection (a), any holding of a Modified Mortgage Loan by the Trust Fund or
any purchase of a Modified Mortgage Loan by CHL (but such obligation shall not
prevent CHL or any other appropriate Person from in good faith contesting any
such tax in appropriate proceedings and shall not prevent CHL from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). CHL shall have no right of reimbursement for any amount paid
pursuant to the foregoing indemnification, except to the extent that the
amount of any tax, interest, and penalties, together with interest thereon, is
refunded to the Trust Fund or CHL. If the Master Servicer agrees to a
modification of any Mortgage Loan pursuant to this Section 3.12(a), and if
such Mortgage Loan carries a Prepayment Charge provision, CHL shall deliver to
the Trustee the amount of the Prepayment Charge, if any, that would have been
due had such Mortgage Loan been prepaid at the time of such modification, for
deposit into the Certificate Account (not later than 1:00 p.m. Pacific time on
the Master Servicer Advance Date immediately succeeding the date of such
modification) for distribution in accordance with the terms of this Agreement.
(b) The Master Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, the Master Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan
after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Certificate Account
pursuant to Section 3.08 hereof). The Master Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided
that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property and any related Subsequent
Recoveries, as contemplated in Section 3.08 hereof. If the Master Servicer has
knowledge that a Mortgaged Property that the Master Servicer is contemplating
acquiring in foreclosure or by deed-in-lieu of foreclosure is located within a
one-mile radius of any site with environmental or hazardous waste risks known
to the Master Servicer, the Master Servicer will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance
with its established environmental review procedures.
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With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such
REO Property solely as the Trustee hereunder and not in its individual
capacity. The Master Servicer shall ensure that the title to such REO Property
references this Agreement and the Trustee's capacity thereunder. Pursuant to
its efforts to sell such REO Property, the Master Servicer shall either itself
or through an agent selected by the Master Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent
the same, or any part thereof, as the Master Servicer deems to be in the best
interest of the Master Servicer and the Certificateholders for the period
prior to the sale of such REO Property. The Master Servicer shall prepare for
and deliver to the Trustee a statement with respect to each REO Property that
has been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO
Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding related to
foreclosures, abandonments and cancellation of indebtedness income as
specified by Sections 1445, 6050J and 6050P of the Code by preparing and
filing such tax and information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property as
soon as practicable in a manner that maximizes the Liquidation Proceeds, but
in no event later than three years after its acquisition by the Trust Fund or,
at the expense of the Trust Fund, the Master Servicer shall request, more than
60 days prior to the day on which such three-year period would otherwise
expire, an extension of the three-year grace period. In the event the Trustee
shall have been supplied with an Opinion of Counsel (such opinion not to be an
expense of the Trustee) to the effect that the holding by the Trust Fund of
such Mortgaged Property subsequent to such three-year period will not result
in the imposition of taxes on "prohibited transactions" of the Trust Fund as
defined in section 860F of the Code or cause any REMIC formed hereunder to
fail to qualify as a REMIC at any time that any Certificates are outstanding,
and the Trust Fund may continue to hold such Mortgaged Property (subject to
any conditions contained in such Opinion of Counsel) after the expiration of
such three-year period. Notwithstanding any other provision of this Agreement,
no Mortgaged Property acquired by the Trust Fund shall be rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the Trust Fund in such a manner or pursuant to any terms that
would (i) cause such Mortgaged Property to fail to qualify as "foreclosure
property" within the meaning of section 860G(a)(8) of the Code or (ii) subject
the Trust Fund to the imposition of any federal, state or local income taxes
on the income earned from such Mortgaged Property under section 860G(c) of the
Code or otherwise, unless the Master Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure
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would exceed the costs and expenses of bringing such a proceeding. The income
earned from the management of any Mortgaged Properties acquired through
foreclosure or other judicial proceeding, net of reimbursement to the Master
Servicer for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes
and shall be deposited into the Certificate Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial
Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan and
any Subsequent Recoveries, net of any payment to the Master Servicer as
provided above, shall be deposited in the Certificate Account as provided in
Section 3.05 for distribution on the related Distribution Date, except that
any Excess Proceeds shall be retained by the Master Servicer as additional
servicing compensation.
The proceeds of any Liquidated Mortgage Loan, as well as any
recovery resulting from a partial collection of Liquidation Proceeds or any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer for any related unreimbursed
Servicing Advances and Servicing Fees, pursuant to Section 3.08(a)(vi) or this
Section 3.12; second, to reimburse the Master Servicer for any unreimbursed
Advances, pursuant to Section 3.08(a)(ii) or this Section 3.12; third, to
accrued and unpaid interest (to the extent no Advance has been made for such
amount) on the Mortgage Loan or related REO Property, at the Net Mortgage Rate
to the Due Date occurring in the month in which such amounts are required to
be distributed; and fourth, as a recovery of principal of the Mortgage Loan.
(c) [Reserved].
(d) The Master Servicer, in its sole discretion, shall have the
right to elect (by written notice sent to the Trustee) to purchase for its own
account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be deposited in the Certificate Account. Any purchase of a
Mortgage Loan pursuant to this Section 3.12(d) shall be accomplished by
remittance to the Master Servicer for deposit in the Certificate Account of
the Purchase Price. The Trustee, upon receipt of certification from the Master
Servicer of such deposit and a Request for File Release from the Master
Servicer, shall release or cause to be released to the purchaser of such
Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such
Mortgage Loan, in each case without
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recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan
any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage
Loan shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The purchaser
of such Mortgage Loan shall thereupon own such Mortgage Loan, and all security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.
(e) The Master Servicer shall use reasonable efforts to solicit bids
on a quarterly basis from at least two unaffiliated third parties for the
purchase of a Charged-off Mortgage Loan during the related Auction Period. If
more than one Charged-off Mortgage Loan exists, the Master Servicer may
solicit bids for a single Charged-off Mortgage Loan, a portion of the
outstanding Charged-off Mortgage Loans or all of the outstanding Charged-off
Mortgage Loans. If fewer than two bids with respect to a Charged-off Mortgage
Loan are received during the related Auction Period, the Master Servicer
shall, in accordance with Section 3.12(b), use reasonable efforts to foreclose
the Mortgaged Property securing the related Charged-off Mortgage Loan to the
extent that the Master Servicer determines that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
If two or more bids with respect to a Charged-off Mortgage Loan are received
during the related Auction Period, the Master Servicer shall arrange for the
sale of the Charged-off Mortgage Loan to the highest bidder. The Master
Servicer shall prepare any necessary documentation required to transfer title
to the Charged-off Mortgage Loans to the related purchaser. The Master
Servicer shall deduct from the proceeds of the sale or foreclosure of such
Charged-off Mortgage Loan the related Charged-off Mortgage Loan Disposition
Fee and any unreimbursed Servicing Advances with respect to such Charged-off
Mortgage Loan in accordance with Section 3.08. The Master Servicer and its
affiliates shall not purchase Charged-off Mortgage Loans in any auction
described in this subsection.
Section 3.13 Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will promptly notify
the Trustee by delivering a Request for File Release. Upon receipt of such
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer, and the Trustee shall at the Master Servicer's direction
execute and deliver to the Master Servicer the request for reconveyance, deed
of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. The Master Servicer is authorized to cause the removal
from the registration on the MERS(R) System of such Mortgage and to execute
and deliver, on behalf of the Trust Fund and the Certificateholders or any of
them, any and all instruments of satisfaction or cancellation or of partial or
full release. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account, the Distribution Account, the Carryover Reserve Fund or the related
subservicing account. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged
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Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request
for Document Release or a Request for File Release, as applicable, release the
documents specified in such request or the Mortgage File, as the case may be,
to the Master Servicer. Subject to the further limitations set forth below,
the Master Servicer shall cause the Mortgage File or documents so released to
be returned to the Trustee when the need therefor by the Master Servicer no
longer exists, unless the Mortgage Loan is liquidated and the proceeds thereof
are deposited in the Certificate Account, in which case the Master Servicer
shall deliver to the Trustee a Request for File Release for any remaining
documents in the Mortgage File not in the possession of the Master Servicer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the
documents therein that shall have been released by the Trustee to be returned
to the Trustee within 21 calendar days after possession thereof shall have
been released by the Trustee unless (i) the Mortgage Loan has been liquidated
and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Certificate Account, and the Master Servicer shall have delivered to
the Trustee a Request for File Release or (ii) the Mortgage File or document
shall have been delivered to an attorney or to a public trustee or other
public official as required by law for purposes of initiating or pursuing
legal action or other proceedings for the foreclosure of the Mortgaged
Property and the Master Servicer shall have delivered to the Trustee an
Officer's Certificate of a Servicing Officer certifying as to the name and
address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.
Section 3.14 Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise
are collected by the Master Servicer as Liquidation Proceeds, Insurance
Proceeds or Subsequent Recoveries in respect of any Mortgage Loan. All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Subsequent
Recoveries including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trust Fund and shall be and remain the sole and exclusive property of the
Trust Fund, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, the
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Distribution Account, the Pre-Funding Account, the Premium Account, the
Carryover Reserve Fund or in any Escrow Account (as defined in Section 3.06),
or any funds that otherwise are or may become due or payable to the Trustee
for the benefit of the Certificateholders and the Certificate Insurer, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection
with, a Mortgage Loan, except, however, that the Master Servicer shall be
entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Master Servicer under this Agreement.
Section 3.15 Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer
shall be entitled to retain or withdraw from the Certificate Account out of
each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.
Additional servicing compensation in the form of any Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess,
and all income and gain net of any losses realized from Permitted Investments
shall be retained by the Master Servicer to the extent not required to be
deposited in the Certificate Account pursuant to Section 3.05 or 3.12(b)
hereof. The Master Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
any premiums for hazard insurance, as required by Section 3.10 hereof and
maintenance of the other forms of insurance coverage required by Section 3.10
hereof) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.08 and 3.12 hereof.
Section 3.16 Access to Certain Documentation.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of the Certificates and
Certificate Owners and the examiners and supervisory agents of the OTS, the
FDIC and such other authorities, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the OTS and the FDIC.
Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices of the
Master Servicer designated by it. Nothing in this Section shall limit the
obligation of the Master Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Master Servicer to provide access as provided in this Section as a result of
such obligation shall not constitute a breach of this Section.
Section 3.17 Annual Statement as to Compliance.
(a) The Master Servicer shall deliver to the Depositor, the
Certificate Insurer and the Trustee on or before March 15 of each year,
commencing with its 2008 fiscal year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding calendar year (or applicable portion thereof) and of the
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performance of the Master Servicer under this Agreement, has been made under
such officer's supervision and (ii) to the best of such officer's knowledge,
based on such review, the Master Servicer has fulfilled all its obligations
under this Agreement, in all material respects throughout such year (or
applicable portion thereof), or, if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure known to
such officer and the nature and status thereof and (iii) to the best of such
officer's knowledge, each Subservicer has fulfilled all its obligations under
its Subservicing Agreement in all material respects throughout such year, or,
if there has been a failure to fulfill any such obligation in any material
respect specifying each such failure known to such officer and the nature and
status thereof.
(b) The Master Servicer shall cause each Subservicer to deliver to
the Depositor, the Certificate Insurer and the Trustee on or before March 15
of each year, commencing with its 2008 fiscal year, an Officer's Certificate
stating, as to the signer thereof, that (i) a review of the activities of such
Subservicer during the preceding calendar year (or applicable portion thereof)
and of the performance of the Subservicer under the applicable Subservicing
Agreement or primary servicing agreement, has been made under such officer's
supervision and (ii) to the best of such officer's knowledge, based on such
review, such Subservicer has fulfilled all its obligations under the
applicable Subservicing Agreement or primary servicing agreement, in all
material respects throughout such year (or applicable portion thereof), or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status thereof.
(c) The Trustee shall forward a copy of each such statement to each
Rating Agency. Copies of such statement shall be provided by the Trustee to
any Certificateholder or Certificate Owner upon request at the Master
Servicer's expense, provided such statement is delivered by the Master
Servicer to the Trustee.
Section 3.18 The Corridor Contract.
CHL shall cause The Bank of New York to enter into the Corridor
Contract Administration Agreement and shall assign all of its right, title and
interest in and to the interest rate corridor transaction evidenced by the
Corridor Contract to, and shall cause all of its obligations in respect of
such transaction to be assumed by, the Corridor Contract Administrator, on the
terms and conditions set forth in the Corridor Contract Assignment Agreement.
The Trustee's rights to receive certain proceeds of the Corridor Contract as
provided in the Corridor Contract Administration Agreement will be an asset of
the Trust Fund but will not be an asset of any REMIC. The Trustee shall
deposit any amounts received from time to time with respect to the Corridor
Contract into the Carryover Reserve Fund. The Master Servicer shall deposit
any amounts received on behalf of the Trustee from time to time with respect
to the Corridor Contract into the Carryover Reserve Fund.
No later than two Business Days following each Distribution Date,
the Trustee shall provide the Corridor Contract Administrator with information
regarding the Certificate Principal Balance of the Class A-1 Certificates
after all distributions on such Distribution Date.
The Trustee shall direct the Corridor Contract Administrator to
terminate the Corridor Contract upon the occurrence of certain events of
default or termination events to the
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extent specified thereunder. Upon any such termination, the Corridor Contract
Counterparty will be obligated to pay the Corridor Contract Administrator an
amount in respect of such termination, and the portion of such amount that is
distributable to the Trust Fund pursuant to the Corridor Contract
Administration Agreement and received by the Trustee or the Master Servicer
for the benefit of the Trust Fund, as the case may be, in respect of such
termination shall be deposited and held in the Carryover Reserve Fund to pay
Net Rate Carryover for the Class A-1 Certificates as provided in Section
4.04(f) on the Distribution Dates following such termination to and including
the Corridor Contract Termination Date, and shall not be available for
distribution to the Class C Certificates pursuant to Section 4.08(c) until
such Corridor Contract Termination Date. On the Corridor Contract Termination
Date, after all other distributions on such date, if any such amount in
respect of early termination of the Corridor Contract remains in the Carryover
Reserve Fund, such amounts shall be distributed by the Trustee to the Class C
Certificates.
Section 3.19 [Reserved].
Section 3.20 Prepayment Charges.
(a) Notwithstanding anything in this Agreement to the contrary, in
the event of a Principal Prepayment in full or in part of a Mortgage Loan, the
Master Servicer may not waive any Prepayment Charge or portion thereof
required by the terms of the related Mortgage Note unless (i) such Mortgage
Loan is in default or the Master Servicer believes that such a default is
imminent, and the Master Servicer determines that such waiver would maximize
recovery of Liquidation Proceeds for such Mortgage Loan, taking into account
the value of such Prepayment Charge, or (ii) (A) the enforceability thereof is
limited (1) by bankruptcy, insolvency, moratorium, receivership, or other
similar law relating to creditors' rights generally or (2) due to acceleration
in connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law. In the
event of a Principal Prepayment in full or in part with respect to any
Mortgage Loan, the Master Servicer shall deliver to the Trustee an Officer's
Certificate substantially in the form of Exhibit T no later than the third
Business Day following the immediately succeeding Determination Date with a
copy to the Class P Certificateholders. If the Master Servicer has waived or
does not collect all or a portion of a Prepayment Charge relating to a
Principal Prepayment in full or in part due to any action or omission of the
Master Servicer, other than as provided above, the Master Servicer shall
deliver to the Trustee, together with the Principal Prepayment in full or in
part, the amount of such Prepayment Charge (or such portion thereof as had
been waived) for deposit into the Certificate Account (not later than 1:00
p.m. Pacific time on the immediately succeeding Master Servicer Advance Date,
in the case of such Prepayment Charge) for distribution in accordance with the
terms of this Agreement.
(b) Upon discovery by the Master Servicer or a Responsible Officer
of the Trustee of a breach of the foregoing subsection (a), the party
discovering the breach shall give prompt written notice to the other parties.
(c) CHL represents and warrants to the Depositor and the Trustee, as
of the Closing Date and each Subsequent Transfer Date, that the information in
the Prepayment Charge Schedule (including the attached prepayment charge
summary) is complete and accurate in all
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material respects at the dates as of which the information is furnished and
each Prepayment Charge is permissible and enforceable in accordance with its
terms under applicable state law, except as the enforceability thereof is
limited due to acceleration in connection with a foreclosure or other
involuntary payment.
(d) Upon discovery by the Master Servicer or a Responsible Officer
of the Trustee of a breach of the foregoing clause (c) that materially and
adversely affects right of the Holders of the Class P Certificates to any
Prepayment Charge, the party discovering the breach shall give prompt written
notice to the other parties hereto. Within 60 days of the earlier of discovery
by the Master Servicer or receipt of notice by the Master Servicer of breach,
the Master Servicer shall cure the breach in all material respects or shall
pay into the Certificate Account the amount of the Prepayment Charge that
would otherwise be due from the Mortgagor, less any amount representing such
Prepayment Charge previously collected and paid by the Master Servicer into
the Certificate Account.
Section 3.21 Swap Contract.
The Trustee's rights to receive certain proceeds of the Swap
Contract as provided in the Swap Contract Administration Agreement shall be
rights of the Trustee as Swap Trustee hereunder, shall be an asset of the Swap
Trust and shall not be an asset of the Trust Fund or of any REMIC. The Swap
Trustee shall deposit any amounts received from time to time from the Swap
Contract Administrator with respect to the Swap Contract into the Swap
Account. The Master Servicer shall deposit any amounts received on behalf of
the Swap Trustee from time to time with respect to the Swap Contract into the
Swap Account.
On the Business Day preceding each Distribution Date, the Swap
Trustee shall notify the Swap Contract Administrator of any amounts
distributable to the Class A Certificates pursuant to Section 4.04(e)(3)
through (7) that will remain unpaid following all distributions to be made on
such Distribution Date pursuant to Section 4.04(a) through (d).
No later than two Business Days following each Distribution Date,
the Trustee shall provide the Swap Contract Administrator with information
regarding the aggregate Certificate Principal Balance of the Class A-4-V and
Class A-5-V Certificates after all distributions on such Distribution Date.
Upon the Swap Contract Administrator obtaining actual knowledge of a
Xxxxx'x First Level Downgrade or a S&P First Level Downgrade with respect to
the Swap Counterparty (each as defined in the Swap Contract) or upon the Swap
Contract Administrator obtaining actual knowledge of a Xxxxx'x Second Level
Downgrade or a S&P Second Level Downgrade with respect to the Swap
Counterparty (each as defined in the Swap Contract), the Swap Trustee shall
promptly provide written notice thereof to the Certificate Insurer and direct
the Swap Contract Administrator to (i) demand payment of the Delivery Amount
(as defined in the Swap Contract) from the Swap Counterparty on each Valuation
Date (as defined in the Swap Contract) and to perform its other obligations in
accordance with the Swap Contract and (ii) take such other action required
under the Swap Contract. If a Delivery Amount is demanded, the Swap Contract
Administrator, in accordance with the Swap Contract Administration Agreement,
shall establish an account to hold cash and other eligible investments pledged
under the Swap Contract. Any cash or other Eligible Collateral (as defined in
the Swap Contract) pledged under the Swap Contract shall not be part of the
Distribution Account or the Swap Account unless remitted to
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such accounts by the Swap Contract Administrator in accordance with the Swap
Contract Administration Agreement. If Eligible Collateral with a value equal
to the Delivery Amount is not delivered to the Swap Contract Administrator by
the Swap Counterparty, the Swap Trustee shall promptly provide written notice
thereof to the Certificate Insurer and direct the Swap Contract Administrator
to notify the Swap Counterparty of such failure.
Upon the Swap Trustee obtaining actual knowledge of an Event of
Default (as defined in the Swap Contract) or Termination Event (as defined in
the Swap Contract) for which the Swap Contract Administrator has the right to
designate an Early Termination Date (as defined in the Swap Contract), the
Swap Trustee shall act at the written direction of the Depositor as to whether
to direct the Swap Contract Administrator to designate an Early Termination
Date; provided, however, that the Swap Trustee shall provide written notice to
each Rating Agency and the Certificate Insurer following the Event of Default
or Termination Event. Upon the termination of the Swap Contract under the
circumstances contemplated by this Section 3.21, the Swap Trustee shall use
its reasonable best efforts to enforce the rights of the Swap Contract
Administrator as may be permitted by the terms of the Swap Contract and
consistent with the terms hereof and CHL shall assist the Swap Contract
Administrator in procuring a replacement swap contract with terms
approximating those of the original Swap Contract in form and substance
acceptable to the Certificate Insurer and with a replacement Swap Counterparty
acceptable to the Certificate Insurer.
Any Swap Termination Payment received from the Swap Counterparty
shall be used to pay any upfront amount required under any replacement swap
contract and any excess shall be distributed to CHL and will not be available
to make distributions in respect of any Class of Certificates. In the event
that a replacement swap contract cannot be procured, any Swap Termination
Payment received from the Swap Counterparty in respect of the termination of
the original Swap Contract shall, in accordance with the Swap Contract
Administration Agreement, be retained by the Swap Contract Administrator and
remitted to the Swap Trustee on subsequent Distribution Dates up to and
including the Swap Contract Termination Date to pay any amounts distributable
to the Class A Certificates pursuant to Section 4.04(e)(3) through (7) that
will remain unpaid following all distributions to be made on such Distribution
Date pursuant to Section 4.04(a) through (d). Any portion of such upfront
amount remaining after the Swap Contract Termination Date shall be distributed
to CHL and will not be available to make distributions in respect of any Class
of Certificates.
In the event that the swap counterparty in respect of a replacement
swap contract pays any upfront amount to the Swap Contract Administrator in
connection with entering into the replacement swap contract and such upfront
amount is received by the Swap Contract Administrator prior to the
Distribution Date on which any Swap Termination Payment will be payable to the
Swap Counterparty in respect of the original Swap Contract, a portion of that
upfront amount equal to the lesser of (x) that upfront amount and (y) the
amount of the Swap Termination Payment due to the Swap Counterparty in respect
of the original Swap Contract (the "Adjusted Replacement Upfront Amount")
shall be included in Interest Funds for that Distribution Date and any upfront
amount in excess of the Adjusted Replacement Upfront Amount shall be
distributed to CHL and will not be available to make distributions in respect
of any Class of Certificates. Any upfront amount paid to the Swap Contract
Administrator by the Swap Counterparty in respect of a replacement swap
contract after the Distribution Date on which any Swap Termination Payment
will be payable to the Swap Counterparty in respect of
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the original Swap Contract, such upfront amount shall, in accordance with the
Swap Contract Administration Agreement, be retained by the Swap Contract
Administrator and remitted to the Swap Trustee on subsequent Distribution
Dates up to and including the Swap Contract Termination Date to pay any
amounts distributable to the Class A Certificates pursuant to Section
4.04(e)(3) through (7) that will remain unpaid following all distributions to
be made on such Distribution Date pursuant to Section 4.04(a) through (d).
The Swap Counterparty shall be an express third party beneficiary of
this Agreement for the purpose of enforcing the provisions hereof to the
extent of the Swap Counterparty's rights explicitly specified herein as if a
party hereto.
The Swap Contract Administrator and the Swap Trustee (i) shall not
consent to any amendments or modifications of the Swap Contract without the
prior written consent of the Certificate Insurer, (ii) shall promptly forward
to the Certificate Insurer all notices and other communications received by it
or delivered by it relating to the Swap Contract and (iii) shall obtain the
Certificate Insurer's consent prior to agreeing to any Replacement Transaction
or Permitted Transfer under the Swap Contract as such terms are defined in the
Swap Contract.
The Certificate Insurer shall have the right in its sole discretion
to cure any payment default under the Swap Contract if the Swap Contract
Administrator fails to do so, and the Certificate Insurer shall be entitled to
reimbursement for such payment, plus interest thereon calculated at the Late
Payment Rate.
ARTICLE IV.
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01 Advances; Remittance Reports.
(a) Within two Business Days after each Determination Date, the
Master Servicer shall deliver to the Trustee by facsimile or electronic mail
(or by such other means as the Master Servicer and the Trustee, as the case
may be, may agree from time to time) a Remittance Report with respect to the
related Distribution Date. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the
Certificate Account no later than 1:00 p.m. Pacific time on the Master
Servicer Advance Date in immediately available funds. The Trustee will provide
notice to the Master Servicer by facsimile by the close of business on any
Master Servicer Advance Date in the event that the amount remitted by the
Master Servicer to the Trustee on the Distribution Account Deposit Date is
less than the Advances required to be made by the Master Servicer for such
Distribution Date. The Master Servicer shall be obligated to make any such
Advance only to the extent that such advance would not be a Nonrecoverable
Advance; provided however, that the Master Servicer shall not have the
obligation (and shall not) make an Advance with respect to any Charged-off
Mortgage Loan after the related Charge-off Date. If the Master Servicer shall
have determined that it has made a Nonrecoverable
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Advance or that a proposed Advance or a lesser portion of such Advance would
constitute a Nonrecoverable Advance, the Master Servicer shall deliver (i) to
the Trustee for the benefit of the Certificateholders funds constituting the
remaining portion of such Advance, if applicable, and (ii) to the Depositor,
each Rating Agency, the Certificate Insurer and the Trustee an Officer's
Certificate setting forth the basis for such determination.
(c) In lieu of making all or a portion of such Advance from its own
funds, the Master Servicer may (i) cause to be made an appropriate entry in
its records relating to the Certificate Account that any Amount Held for
Future Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required
to be distributed pursuant to this Agreement. The Master Servicer shall be
entitled to be reimbursed from the Certificate Account for all Advances of its
own funds made pursuant to this Section as provided in Section 3.08. The
obligation to make Advances with respect to any Mortgage Loan shall continue
until such Mortgage Loan is paid in full or becomes a Liquidated Mortgage Loan
or a Charged-off Mortgage Loan or until the purchase or repurchase thereof (or
substitution therefor) from the Trustee pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 4.01.
(d) If the Master Servicer determines that it will be unable to
comply with its obligation to make the Advances as and when described in
paragraphs (b) and (c) immediately above, it shall use its best efforts to
give written notice thereof to the Trustee (each such notice a "Trustee
Advance Notice"; and such notice may be given by facsimile), not later than
3:00 p.m., New York time, on the Business Day immediately preceding the
related Master Servicer Advance Date, specifying the amount that it will be
unable to deposit (each such amount an "Advance Deficiency") and certifying
that such Advance Deficiency constitutes an Advance hereunder and is not a
Nonrecoverable Advance. If the Trustee receives a Trustee Advance Notice on or
before 3:30 p.m., (New York time) on a Master Servicer Advance Date, the
Trustee shall, not later than 3:00 p.m., (New York time), on the related
Distribution Date, deposit in the Distribution Account an amount equal to the
Advance Deficiency identified in such Trustee Advance Notice unless it is
prohibited from so doing by applicable law. Notwithstanding the foregoing, the
Trustee shall not be required to make such deposit if the Trustee shall have
received written notification from the Master Servicer that the Master
Servicer has deposited or caused to be deposited in the Certificate Account an
amount equal to such Advance Deficiency. All Advances made by the Trustee
pursuant to this Section 4.01(d) shall accrue interest on behalf of the
Trustee at the Trustee Advance Rate from and including the date such Advances
are made to but excluding the date of repayment, with such interest being an
obligation of the Master Servicer and not the Trust Fund. The Master Servicer
shall reimburse the Trustee for the amount of any Advance made by the Trustee
pursuant to this Section 4.01(d) together with accrued interest, not later
than 6:00 p.m. (New York time) on the Business Day following the related
Distribution Date. In the event that the Master Servicer does not reimburse
the Trustee in accordance with the requirements of the preceding sentence, the
Trustee shall immediately (i) terminate all of the rights and obligations of
the Master Servicer under this Agreement in accordance with Section 7.01 and
(ii) subject to the limitations set forth in Section 3.04, assume all of the
rights and obligations of the Master Servicer hereunder.
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(e) The Master Servicer shall, not later than the close of business
on the second Business Day immediately preceding each Distribution Date,
deliver to the Trustee a report (in form and substance reasonably satisfactory
to the Trustee) that indicates (i) the Mortgage Loans with respect to which
the Master Servicer has determined that the related Scheduled Payments should
be advanced and (ii) the amount of the related Scheduled Payments. The Master
Servicer shall deliver to the Trustee and the Certificate Insurer on the
related Master Servicer Advance Date an Officer's Certificate of a Servicing
Officer indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02 Reduction of Servicing Compensation in Connection with
Prepayment Interest Shortfalls.
In the event that any Mortgage Loan is the subject of a Prepayment
Interest Shortfall, the Master Servicer shall remit any related Compensating
Interest as part of the related Interest Remittance Amount as provided in this
Agreement. The Master Servicer shall not be entitled to any recovery or
reimbursement for Compensating Interest from the Depositor, the Trustee, any
Seller, the Trust Fund, the Certificate Insurer or the Certificateholders.
Section 4.03 [Reserved].
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be distributed by the Trustee from the Distribution
Account in the following order of priority:
(i) to the Swap Account, the amount of any Net Swap Payment and
any Swap Termination Payment (other than a Swap Termination Payment
due to a Swap Counterparty Trigger Event) payable to the Swap
Counterparty with respect to such Distribution Date,
(ii) to the Certificate Insurer, the Certificate Insurance
Policy Premium for such Distribution Date;
(iii) concurrently to each Class of Class A Certificates, the
Current Interest for each such Class and such Distribution Date, pro
rata, based on their respective entitlements;
(iv) to the Certificate Insurer, the Certificate Insurance
Reimbursement Amount for such Distribution Date;
(v) concurrently to each Class of Class A Certificates, the
Interest Carry Forward Amount for each such Class and such
Distribution Date, pro rata, based on their respective entitlements;
and
(vi) any remainder as part of the Excess Cashflow.
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(b) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date shall be distributed by the Trustee from the
Distribution Account in the following order of priority (with the Principal
Distribution Amount exclusive of the portion thereof consisting of the Extra
Principal Distribution Amount being applied first and the Extra Principal
Distribution Amount being applied thereafter):
(i) to the Certificate Insurer, any Certificate Insurance
Policy Premium for such Distribution Date remaining unpaid after
application of Interest Funds on such Distribution Date;
(ii) to the Class A Certificates, in an amount up to the Class
A Principal Distribution Amount, sequentially:
(a) the NAS Principal Distribution Amount to the Class A-6
Certificates, until the Certificate Principal Balance thereof
is reduced to zero,
(b) sequentially, to the Class A-1, Class A-2 and Class
A-3 Certificates, in that order, until their respective
Certificate Principal Balances are reduced to zero,
(c) concurrently, to the Class A-4-F and Class A-4-V
Certificates, pro rata, until their respective Certificate
Principal Balances are reduced to zero,
(d) concurrently, to the Class A-5-F and Class A-5-V
Certificates, pro rata, until their respective Certificate
Principal Balances are reduced to zero, and
(e) to the Class A-6 Certificates, until its Certificate
Principal Balance is reduced to zero,
(iii) to the Certificate Insurer, any Certificate Insurance
Reimbursement Amount for such Distribution Date remaining unpaid
after application of Interest Funds on such Distribution Date; and
(iv) any remainder as part of the Excess Cashflow.
(c) On each Distribution Date, the Charged-off Loan Proceeds
received during the related Due Period, if any, will be distributed
sequentially in the following order (after application of Excess Cashflow on
such Distribution Date):
(i) to the Certificate Insurer, any Certificate Insurance
Reimbursement Amount for such Distribution Date remaining unpaid
after application of Interest Funds, Excess Cashflow and the
Principal Distribution Amount on such Distribution Date;
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(ii) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Overcollateralization Deficiency
Amount remaining unpaid after taking into account all distributions
on that Distribution Date other than the distribution of Charged-off
Loan Proceeds and the payments under the Certificate Insurance
Policy, payable in the order set forth in Section 4.04(b) above;
(iii) concurrently, to each Class of Class A Certificates, pro
rata based on the Unpaid Realized Loss Amounts for those Classes, in
an amount equal to the Unpaid Realized Loss Amount for each such
Class (after taking into account all distributions on that
Distribution Date other than distribution of Charged-off Loan
Proceeds and payments under the Certificate Insurance Policy),
provided, however, that to the extent an Applied Realized Loss
Amount was covered under the Certificate Insurance Policy and not
previously paid as part of the Certificate Insurance Reimbursement
Amount, then any related amounts otherwise payable to the Class A
Certificates pursuant to this clause (iii) will instead be paid to
the Certificate Insurer; and
(iv) to the Class E-P Certificates, any remaining Charged-off
Loan Proceeds.
(d) With respect to any Distribution Date, any Excess Cashflow shall
be distributed to the Classes of Certificates in the following order of
priority:
(1) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount equal to the Extra Principal Distribution Amount,
payable as part of the Principal Distribution Amount pursuant to Section
4.04(b) above;
(2) concurrently, to each Class of Class A Certificates, pro
rata based on the Unpaid Realized Loss Amounts for each such Classes, in
each case in an amount equal to the Unpaid Realized Loss Amount for such
Class; provided, however that to the extent an Applied Realized Loss
Amount was covered under the Certificate Insurance Policy and not
previously paid as part of the Certificate Insurance Reimbursement
Amount, then any related amounts otherwise payable to the Class A
Certificates pursuant to this clause (2) shall instead be paid to the
Certificate Insurer;
(3) to each Class of Class A Certificates (in the case of the
Class A-1 Certificates, after application of amounts received by the
Trust Fund in respect of the Corridor Contract to cover Net Rate
Carryover), pro rata based on the Certificate Principal Balances thereof,
to the extent needed to pay any Net Rate Carryover for each such Class;
provided that any Excess Cashflow remaining after such allocation to pay
Net Rate Carryover based on the Certificate Principal Balances of those
Certificates shall be distributed to each Class of Class A Certificates
with respect to which there remains any unpaid Net Rate Carryover (after
the distribution based on Certificate Principal Balances), pro rata,
based on the amount of such unpaid Net Rate Carryover;
(4) to the Carryover Reserve Fund, in an amount equal to the
Required Carryover Reserve Fund Deposit (after giving effect to other
deposits and withdrawals
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therefrom on such Distribution Date without regard to any amounts
allocated to the Trust Fund in respect of the Corridor Contract not
required to cover Net Rate Carryover on the Class A-1 Certificates on
such Distribution Date);
(5) to the Swap Account, in an amount equal to any Swap
Termination Payment due to the Swap Counterparty as a result of a Swap
Counterparty Trigger Event;
(6) to the Class C Certificateholders, the Class C
Distributable Amount for such Distribution Date; and
(7) to the Class A-R Certificates, any remaining amount.
(e) On each Distribution Date on or prior to the Swap Contract
Termination Date, following the deposits to the Swap Account pursuant to
Section 4.04(a)(i) and Section 4.09, the Swap Trustee shall distribute amounts
on deposit in the Swap Account and the Swap Reserve Fund in the following
amounts and order of priority:
(1) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Net Swap Payment payable to the Swap Counterparty with
respect to such Distribution Date;
(2) to the Swap Contract Administrator for payment to the Swap
Counterparty, any Swap Termination Payment (other than a Swap Termination
Payment due to a Swap Counterparty Trigger Event) payable to the Swap
Counterparty with respect to such Distribution Date;
(3) concurrently, to the Class A-4-V and Class A-5-V
Certificates, any remaining Current Interest and Interest Carry Forward
Amount, pro rata based on their respective entitlements;
(4) concurrently, to the Class A-4-V and Class A-5-V
Certificates, to the extent needed to pay any remaining Net Rate
Carryover for each such Class, pro rata, based on the amount of such
remaining Net Rate Carryover;
(5) to the Class or Classes of Class A Certificates then
entitled to receive distributions in respect of principal, in an
aggregate amount up to the Overcollateralization Deficiency Amount
remaining unpaid following the distribution of Excess Cashflow pursuant
to Section 4.04(d) above, but not exceeding the aggregate amount of
Realized Losses on the Mortgage Loans from the Cut-off Date for each
Mortgage Loan to (and including) the last day of the related Due Period
(reduced by the aggregate amount of any Subsequent Recoveries and
Charged-off Loan Proceeds received through the last day of that Due
Period) payable in the order set forth in Section 4.04(b)(ii) above;
(6) concurrently, to the Class A-4-V and Class A-5-V
Certificates, pro rata based on the remaining Unpaid Realized Loss
Amounts for those Classes, in an amount equal to the remaining Unpaid
Realized Loss Amount for each such Class;
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(7) to the Swap Reserve Fund, the Swap Reserve Fund O/C
Deficiency Amount; and
(8) to the Swap Contract Administrator for payment to the Swap
Counterparty, only to the extent necessary to cover any Swap Termination
Payment due to a Swap Counterparty Trigger Event payable to the Swap
Counterparty with respect to such Distribution Date;
provided that, with respect to each of the foregoing clauses of this
Section 4.04(e), amounts otherwise distributable to the Class A-4-V and
Class A-5-V Certificates that were covered by the Certificate Insurance
Policy and were not repaid as Certificate Insurance Reimbursement Amounts
shall instead be payable to the Certificate Insurer.
(f) On each Distribution Date on or prior to the Corridor Contract
Termination Date and prior to the distribution of Excess Cashflow on such
Distribution Date, amounts received by the Trustee in respect of the Corridor
Contract for such Distribution Date shall be withdrawn from the Carryover
Reserve Fund and distributed to the Class A-1 Certificates to the extent
needed to pay any Net Rate Carryover with respect to such Class. Any amounts
remaining in the Carryover Reserve Fund in respect of the Corridor Contract
shall be distributed to the Holders of the Class C Certificates as provided in
Section 4.08(c).
(g) To the extent that a Class of Interest-Bearing Certificates
receives interest in excess of the applicable Net Rate Cap, if such interest
is paid pursuant to Section 4.04(d), then it shall be deemed to have been paid
to the Carryover Reserve Fund and then paid by the Carryover Reserve Fund to
those Certificateholders, and if such interest is paid pursuant to Section
4.04(e), then such interest shall be deemed to have been paid to the Swap
Account and then paid by the Swap Account to those Certificateholders. For
purposes of the Code, amounts deemed deposited in the Carryover Reserve Fund
shall be deemed to have first been distributed, in the case of any such
amounts relating to the Corridor Contract, to the Class C Certificates.
(h) On each Distribution Date, all Prepayment Charges (including
amounts deposited in connection with the full or partial waiver of such
Prepayment Charges pursuant to Section 3.20) shall be allocated to the Class P
Certificates.
(i) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount to reduce the Certificate Principal Balances of
the Class A Certificates, pro rata, based on their respective Certificate
Principal Balances, until the Certificate Principal Balances of such Classes
have been reduced to zero. On each Distribution Date, the Certificate Insurer
is obligated to pay to the Class A Certificates an amount equal to the Applied
Realized Loss Amount allocated to the Class A Certificates on such
Distribution Date; provided, however, if the Premium Account is funded
pursuant to Section 3.08(b)(vi), the Certificate Insurer shall only be
obligated to pay any Applied Realized Loss Amount to the extent that funds on
deposit in the Premium Account (after giving effect to all deposits to be made
to the Premium Account on such Distribution Date) are insufficient to cover
the Applied Realized Loss Amount for such Distribution Date.
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(j) On each Distribution Date, the Trustee shall allocate the amount
of the Subsequent Recoveries with respect to the Mortgage Loans, if any, to
increase the Certificate Principal Balances of the Class A Certificates to
which Applied Realized Loss Amounts have been previously allocated, on a pro
rata basis according to their respective Certificate Principal Balances and in
each case by not more than the amount of the Unpaid Realized Loss Amount of
such Class; provided, however, that to the extent an Applied Realized Loss
Amount was covered under the Certificate Insurance Policy and not subsequently
reimbursed, then any related Subsequent Recovery otherwise payable to the
Class A Certificateholders will instead be paid to the Certificate Insurer and
will not increase the Certificate Principal Balances of any Class A
Certificates by the amount of any such Subsequent Recoveries.
Holders of Certificates to which any Subsequent Recoveries have been
allocated shall not be entitled to any payment in respect of Current Interest
on the amount of such increases for any Accrual Period preceding the
Distribution Date on which such increase occurs.
(k) On any Distribution Date on which there are any amounts on
deposit in the Premium Account (after taking into account any deposit to the
Premium Account on such Distribution Date pursuant to Section 3.08(b)(vi)) and
(i) any amounts payable to the Class A Certificates pursuant to Sections
4.04(a)(iii) or 4.04(a)(v) remain unpaid, (ii) Applied Realized Loss Amounts
are allocable to the Class A Certificates on such Distribution Date, (iii)
Unpaid Realized Loss Amounts are outstanding and/or (iv) on the Final
Scheduled Distribution Date, the aggregate Certificate Principal Balance of
the Class A Certificates has not been reduced to zero after making all
distributions on such Distribution Date but prior to any draw on the
Certificate Insurance Policy, the Trustee shall apply the amounts on deposit
in the Premium Account in the following amounts and order of priority:
(i) first, concurrently to each Class of Class A Certificates,
the unpaid Current Interest for each such Class and such
Distribution Date, pro rata, based on their respective entitlements;
(ii) second, concurrently to each Class of Class A
Certificates, the unpaid Interest Carry Forward Amount for each such
Class and such Distribution Date, pro rata, based on their
respective entitlements;
(iii) third, concurrently, to each Class of Class A
Certificates, in an amount up to the Applied Realized Loss Amount
allocable to such Class pursuant to Section 4.04(i) on such
Distribution Date, pro rata, based on the amount of Applied Realized
Loss Amounts allocable to each such Class on such Distribution Date;
(iv) fourth, concurrently, to each Class of Class A
Certificates, pro rata based on the Unpaid Realized Loss Amounts for
such Classes, in each case in an amount up to the Unpaid Realized
Loss Amount for such Class; provided, however that to the extent an
Applied Realized Loss Amount was covered under the Certificate
Insurance Policy and not previously paid as part of the Certificate
Insurance Reimbursement Amount, then any related amounts otherwise
payable
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to the Class A Certificates pursuant to this paragraph shall instead
be paid to the Certificate Insurer;
(v) fifth, on the Final Scheduled Distribution Date, to each
Class of Class A Certificates with an outstanding Certificate
Principal Balance, pro rata, until the Certificate Principal
Balances thereof are reduced to zero; and
(vi) sixth, to the Certificate Insurer, the amount of any
Certificate Insurance Reimbursement Amount remaining unpaid.
(l) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either by
wire transfer in immediately available funds to the account of such Holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold Regular Certificates with
an aggregate initial Certificate Principal Balance of not less than $1,000,000
or evidencing a Percentage Interest aggregating 10% or more with respect to
such Class or, if not, by check mailed by first class mail to such
Certificateholder at the address of such Holder appearing in the Certificate
Register. Notwithstanding the foregoing, but subject to Section 9.02 hereof
respecting the final distribution, distributions with respect to Certificates
registered in the name of a Depository shall be made to such Depository in
immediately available funds. Payments to the Certificate Insurer shall be made
by wire transfer of immediately available funds to the following account,
unless the Certificate Insurer notifies the Trustee in writing: Account Name:
MBIA Insurance Corporation, Account Number 000-0-000000, Bank - JPMorgan Chase
Bank, ABA Number 000-000-000, Re: CWHEQ 2007-S2, Policy No. 493800 Class A
Certificates.
On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m.
Pacific time on the third Business Day before the related Distribution Date),
the Master Servicer shall deliver a report to the Trustee (in the form of a
computer readable magnetic tape or by such other means as the Master Servicer
and the Trustee may agree from time to time) containing such data and
information as agreed to by the Master Servicer and the Trustee such as to
permit the Trustee to prepare the Monthly Statement and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall not be responsible to recompute, recalculate or verify
information provided to it by the Master Servicer and shall be permitted to
conclusively rely on any information provided to it by the Master Servicer.
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Section 4.05 Monthly Statements to Certificateholders.
(a) Concurrently with each distribution on a Distribution Date, the
Trustee will forward by mail to each Rating Agency, the Certificate Insurer
and the NIM Insurer and make available to Certificateholders and the
Certificate Insurer on the Trustee's website
(xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx) a statement generally setting forth the
information contained in Exhibit W.
(b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificateholder, a statement
containing the information regarding (i) the amount of distributions to that
Certificateholder allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein and (B) the
aggregate of all scheduled payments of principal included therein, (ii) the
amount of distributions to that Certificateholder allocable to interest and
(iii) the related amount of the Servicing Fees paid to or retained by the
Master Servicer, in each case aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Trustee shall
furnish to the Holders of the Class A-R Certificates the Form 1066 and each
Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:
(1) The original projected principal and interest cash flows on
the Closing Date on each related Class of regular and residual interests
created hereunder and on the Mortgage Loans, based on the Prepayment
Assumption;
(2) The projected remaining principal and interest cash flows
as of the end of any calendar quarter with respect to each related Class
of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(3) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(4) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized through
the end of such calendar quarter with respect to each related Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
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(5) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including the
timing and amount of any cancellation of indebtedness income of the
related REMIC with respect to such regular interests or bad debt
deductions claimed with respect to the Mortgage Loans;
(6) The amount and timing of any non-interest expenses of the
related REMIC; and
(7) Any taxes (including penalties and interest) imposed on the
related REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure property"
or state or local income or franchise taxes.
The information pursuant to clauses (1), (2), (3) and (4) above
shall be provided by the Depositor pursuant to Section 8.11.
Section 4.06 Certificate Insurance Policy; Rights of the Certificate
Insurer.
(a) If, on the third Business Day before any Distribution Date, the
Trustee determines that a there will be a Deficiency Amount for such
Distribution Date, the Trustee shall determine the amount of any such
deficiency and shall give notice to the Certificate Insurer by telephone or
telecopy of the amount of such deficiency, confirmed in writing by notice
substantially in the form of Exhibit A to the Certificate Insurance Policy, by
12:00 p.m., New York time on such third Business Day. The Trustee's
responsibility for delivering the notice to the Certificate Insurer as
provided in the preceding sentence is limited to the availability, timeliness
and accuracy of the information provided by the Master Servicer.
(b) In the event the Trustee receives a certified copy of an order
of the appropriate court that any scheduled payment of principal or interest
on a Class A Certificate has been voided in whole or in part as a preference
payment under applicable bankruptcy law, the Trustee shall (i) promptly notify
the Certificate Insurer and (ii) comply with the provisions of the Certificate
Insurance Policy, to obtain payment by the Certificate Insurer of such voided
scheduled payment. In addition, the Trustee shall mail notice to all Holders
of the Class A Certificates so affected that, in the event that any such
Holder's scheduled payment is so recovered, such Holder will be entitled to
payment pursuant to the terms of the Certificate Insurance Policy, a copy of
which shall be made available to such Holders by the Trustee. The Trustee
shall furnish to the Certificate Insurer its records listing the payments on
the affected Class A Certificates, if any, that have been made by the Trustee
and subsequently recovered from the affected Holders, and the dates on which
such payments were made by the Trustee.
(c) At the time of the execution hereof, and for the purposes
hereof, the Trustee shall establish a special purpose trust account in the
name of the Trustee for the benefit of Holders of the Class A Certificates
(the "Class A Insurance Payments Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Class A Insurance Payments
Account shall be an Eligible Account. The Trustee shall deposit any amount
paid under the Certificate Insurance Policy into the Class A Insurance
Payments Account and distribute such amount only for the purposes of making
the payments to Holders of the Class A Certificates, in respect of the related
Deficiency Amount for which the related claim was made
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under the Certificate Insurance Policy. Such amounts shall be allocated by the
Trustee to Holders of Class A Certificates affected by such shortfalls in the
same manner as principal and interest payments are to be allocated with
respect to such Certificates pursuant to Section 4.04. It shall not be
necessary for such payments to be made by checks or wire transfers separated
from the checks or wire transfers used to make regular payments hereunder with
funds withdrawn from the Distribution Account. However, any payments made on
the Class A Certificates from funds in the Class A Insurance Payments Account
shall be noted as provided in subsection (e) below. Funds held in the Class A
Insurance Payments Account shall not be invested by the Trustee.
(d) Any funds received from the Certificate Insurer for deposit into
the Class A Insurance Payments Account pursuant to the Certificate Insurance
Policy in respect of a Distribution Date or otherwise as a result of any claim
under the Certificate Insurance Policy shall be applied by the Trustee
directly to the payment in full (i) of the related Deficiency Amount on such
Distribution Date or (ii) of other amounts payable under the Certificate
Insurance Policy. Funds received by the Trustee as a result of any claim under
the Certificate Insurance Policy shall be used solely for payment to the
Holders of the Class A Certificates and may not be applied for any other
purpose, including, without limitation, satisfaction of any costs, expenses or
liabilities of the Trustee, the Master Servicer, the Depositor, the NIM
Insurer or the Trust Fund. Any funds remaining in the Class A Insurance
Payments Account on the first Business Day after each Distribution Date shall
be remitted promptly to the Certificate Insurer in accordance with the
instructions set forth in Section 4.04(l).
(e) The Trustee shall keep complete and accurate records in respect
of (i) all funds remitted to it by the Certificate Insurer and deposited into
the Class A Insurance Payments Account and (ii) the allocation of such funds
to (A) payments of interest on and principal in respect of any Class A
Certificates and (B) the amount of funds available to make distributions on
the Class A Certificates pursuant to Sections 4.04(a), (b), (c), (d), (e),
(h), (i), (j) and (k). The Certificate Insurer shall have the right to inspect
such records at reasonable times during normal business hours upon three
Business Days' prior notice to the Trustee.
(f) The Trustee acknowledges, and each Holder of a Class A
Certificate by its acceptance of the Class A Certificate agrees, that, without
the need for any further action on the part of the Certificate Insurer or the
Trustee, to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on any Class A
Certificates, the Certificate Insurer will be fully subrogated to the rights
of the Holders of such Class A Certificates to receive such principal and
interest from the Trust Fund. The Holders of the Class A Certificates, by
acceptance of the Class A Certificates, assign their rights as Holders of the
Class A Certificates to the extent of the Certificate Insurer's interest with
respect to amounts paid under the Certificate Insurance Policy. Anything
herein to the contrary notwithstanding, solely for purposes of determining the
Certificate Insurer's rights, as applicable, as subrogee for payments
distributable pursuant to Section 4.04, any payment with respect to
distributions to the Class A Certificates which is made with funds received
pursuant to the terms of the Certificate Insurance Policy shall not be
considered payment of the Class A Certificates from the Trust Fund and shall
not result in the distribution or the provision for the distribution in
reduction of the Certificate Principal Balance of the Class A Certificates
within the meaning of Article IV.
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(g) Upon its becoming aware of the occurrence of an Event of
Default, the Trustee shall promptly notify the Certificate Insurer of such
Event of Default.
(h) The Trustee shall promptly notify the Certificate Insurer of
either of the following as to which it has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and
(B) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference Claim") of any
distribution made with respect to the Class A Certificates as to which it has
actual knowledge. Each Holder of a Class A Certificate, by its purchase of
Class A Certificates, and the Trustee hereby agrees that the Certificate
Insurer (so long as no Certificate Insurer Default exists) may at any time
during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to any
Preference Claim and (ii) the posting of any surety, supersedes or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Certificate Insurer shall be subrogated to the rights of the
Trustee and each Holder of a Class A Certificate in the conduct of any
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in
connection with any such Preference Claim.
(i) The Master Servicer shall designate a Certificate Insurer
Contact Person who shall be available to the Certificate Insurer to provide
reasonable access to information regarding the Mortgage Loans. The initial
Certificate Insurer Contact Person is to the attention of Secondary Marketing.
(j) The Trustee shall surrender the Certificate Insurance Policy to
the Certificate Insurer for cancellation upon the reduction of the Certificate
Principal Balance of the Class A Certificates to zero.
(k) The Trustee shall send to the Certificate Insurer the reports
prepared pursuant to Section 3.17 and the statements prepared pursuant to
Section 4.05, as well as any other statements or communications sent to
Holders of the Class A Certificates, in each case at the same time such
reports, statements and communications are otherwise sent.
(l) For so long as there is no continuing default by the Certificate
Insurer under its obligations under the Certificate Insurance Policy (a
"Certificate Insurer Default"), each Holder of a Class A Certificate agrees
that the Certificate Insurer shall be treated by the Depositor, the Master
Servicer and the Trustee as if the Certificate Insurer were the Holder of all
of the Class A Certificates, for the purpose (and solely for the purpose) of
the giving of any consent, the making of any direction or the exercise of any
voting or other control rights otherwise given to the Holders of the Class A
Certificates hereunder.
(m) With respect to this Section 4.06, the terms "Receipt" and
"Received" shall mean actual delivery to the Certificate Insurer, if any,
prior to 12:00 p.m., New York time, on a Business Day; delivery either on a
day that is not a Business Day or after 12:00 p.m., New York time, shall be
deemed to be Receipt on the next succeeding Business Day. If any notice or
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certificate given under the Certificate Insurance Policy by the Trustee is not
in proper form or is not properly completed, executed or delivered, it shall
be deemed not to have been Received. The Certificate Insurer shall promptly so
advise the Trustee and the Trustee may submit an amended notice.
(n) All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to the Rating Agencies or the Class A
Certificateholders shall also be sent at such time to the Certificate Insurer
at the notice address set forth in Section 10.05.
(o) The Certificate Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions
hereof to the extent of the Certificate Insurer's rights explicitly specified
herein as if a party hereto.
(p) All references herein to the ratings assigned to the
Certificates and to the interests of any Certificateholders shall be without
regard to the Certificate Insurance Policy, in the case of the Class A
Certificates.
Section 4.07 Termination of the Credit Insurance Policy.
If the Credit Insurance Policy is terminated for any reason other
than the exhaustion of its coverage, or if the claims-paying ability rating of
Credit Insurer is reduced to "A+" or below by S&P or "A1" or below by Xxxxx'x
or if the Credit Insurer fails to make any payment due under the Credit
Insurance Policy, the Master Servicer shall use its best efforts to obtain a
comparable policy in form and substance acceptable to the Certificate Insurer
from an insurer that is acceptable to the Rating Agencies and to the
Certificate Insurer. The replacement policy shall provide coverage equal to
the then remaining coverage of the Credit Insurance Policy if available.
However, if the premium cost of a replacement policy exceeds the premium cost
of the Credit Insurance Policy, the Master Servicer, at the written direction
of the Certificate Insurer, will either (i) obtain a replacement credit
insurance policy with reduced coverage so that its premium cost will not
exceed the premium cost of the Credit Insurance Policy or (ii) from interest
collections on the Mortgage Loans for each Due Period, deposit into the
Premium Account the amounts that would have been paid as premium on the Credit
Insurance Policy had it not been terminated, which amounts will be available
to make payments as provided in Section 4.04(k) prior to making any draws on
the Certificate Insurance Policy. The amount remaining in the Premium Account
after the payment in full of the Class A Certificates and amounts owing to the
Certificate Insurer will be paid to the Class C Certificates.
In addition, if during the period which the Depositor is required to
file Exchange Act Reports with respect to the Trust Fund, the Credit Insurer
shall fail to provide to the Depositor with any information required to comply
with the Depositor's reporting obligations under the related Exchange Act
Reports, within 5 days of the Depositor's request therefor, then the Trustee
shall act at the written direction of the Depositor as to whether to terminate
the Credit Insurance Policy (either by not paying the renewal premium or by
terminating the Credit Insurance Policy in accordance with its terms);
provided, however, that the Depositor shall not direct the Trustee to
terminate the Credit Insurance Policy until it has procured one or more
replacement credit insurance policies in form and substance acceptable to the
Certificate Insurer covering the then-outstanding Covered Loans from an
insurer under a policy or policies
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acceptable to the Certificate Insurer and the Rating Agencies and such credit
insurance policy must cover the Covered Loans outstanding as of such date, if
available. The Credit Insurance Policy will not be amended in any manner that
materially and adversely affects the coverage provided thereby without the
prior written consent of the Certificate Insurer.
Section 4.08 Carryover Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the Certificates, the
Carryover Reserve Fund and shall deposit $1,000 therein. The Carryover Reserve
Fund shall be an Eligible Account, and funds on deposit therein shall be held
separate and apart from, and shall not be commingled with, any other moneys,
including without limitation, other moneys held by the Trustee pursuant to
this Agreement.
(b) On each Distribution Date, the Trustee shall deposit all amounts
received in respect of the Corridor Contract in the Carryover Reserve Fund.
The Trustee shall make withdrawals from the Carryover Reserve Fund to make
distributions in respect of Net Rate Carryover as to the extent required by
Section 4.04.
(c) Any amounts received in respect of the Corridor Contract with
respect to a Distribution Date and remaining after the distributions required
pursuant to Section 4.04(f) shall be distributed to the Class C Certificates;
provided, however, that if the Corridor Contract is subject to early
termination, early termination payments received in respect of the Corridor
Contract shall be deposited by the Trustee in the Carryover Reserve Fund and
withdrawn from the Carryover Reserve Fund to pay any Net Rate Carryover for
the applicable Classes of Certificates as provided in Section 4.04(f) on the
Distribution Dates following such termination to and including the Corridor
Contract Termination Date, but such early termination payments shall not be
available for distribution to the Class C Certificates on future Distribution
Dates until the Corridor Contract Termination Date.
(d) (1) Funds in the Carryover Reserve Fund in respect of amounts
received under the Corridor Contract may be invested in Permitted Investments
at the written direction of the Majority Holder of the Class C Certificates,
which Permitted Investments shall mature not later than the Business Day
immediately preceding the first Distribution Date that follows the date of
such investment (except that if such Permitted Investment is an obligation of
the institution that maintains the Carryover Reserve Fund, then such Permitted
Investment shall mature not later than such Distribution Date) and shall not
be sold or disposed of prior to maturity. All such Permitted Investments shall
be made in the name of the Trustee, for the benefit of the Certificateholders.
In the absence of such written direction, all funds in the Carryover Reserve
Fund in respect of amounts received under the Corridor Contract shall be
invested by the Trustee in The Bank of New York cash reserves. Any net
investment earnings on such amounts shall be payable pro rata to the Holders
of the Class C Certificates in accordance with their Percentage Interests. Any
losses incurred in the Carryover Reserve Fund in respect of any such
investments shall be charged against amounts on deposit in the Carryover
Reserve Fund (or such investments) immediately as realized.
(2) The Trustee shall not be liable for the amount of any loss
incurred in respect of any investment or lack of investment of funds held in
the Carryover Reserve Fund and
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made in accordance with this Section 4.08. The Carryover Reserve Fund shall
not constitute an asset of any REMIC created hereunder. The Class C
Certificates shall evidence ownership of the Carryover Reserve Fund for
federal tax purposes.
Section 4.09 Swap Trust and Swap Account.
On the Closing Date, there is hereby established a separate trust
(the "Swap Trust"), the assets of which shall consist of the Trustee's rights
and obligations under the Swap Contract Administration Agreement, the Swap
Account and the Swap Reserve Fund. The Swap Trust shall be maintained by the
Swap Trustee, who initially, shall be the Trustee. The Swap Trustee shall hold
the assets of the Swap Trust in trust for the benefit of the Holders of the
Interest-Bearing Certificates and the Swap Counterparty. No later than the
Closing Date, the Swap Trustee shall establish and maintain a separate,
segregated trust account to be held in the Swap Trust, titled, "Swap Account,
The Bank of New York, as Swap Trustee, in trust for the Swap Counterparty and
the registered holders of CWHEQ, Inc., Asset-Backed Certificates, Series
2007-S2." Such account shall be an Eligible Account and funds on deposit
therein shall be held separate and apart from, and shall not be commingled
with, any other moneys, including, without limitation, other moneys of the
Trustee held pursuant to this Agreement. Amounts therein shall be held
uninvested. Funds on deposit in the Swap Account shall be distributed in the
amounts and in the order described under Section 4.04(e). For federal income
tax purposes, the Swap Trust, including the Swap Account and Swap Reserve
Fund, shall be owned by the Class C Certificates.
On each Distribution Date, the Trustee shall make a deposit to the
Swap Account pursuant to Section 4.04(a)(i), and to the extent that the amount
of such deposit is insufficient to pay any Net Swap Payment and/or Swap
Termination Payment (other than a Swap Termination Payment due to a Swap
Counterparty Trigger Event) due to the Swap Counterparty with respect to such
Distribution Date, the Trustee shall withdraw, out of amounts on deposit in
the Distribution Account in respect of the Principal Remittance Amount, such
additional amount as is necessary to cover the remaining portion of any such
Net Swap Payment and/or Swap Termination Payment (other than a Swap
Termination Payment due to a Swap Counterparty Trigger Event) due to the Swap
Counterparty with respect to such Distribution Date.
Section 4.10 Swap Reserve Fund.
On the Closing Date, the Swap Trustee shall establish and maintain
in its name, in trust for the benefit of the Holders of the Class A
Certificates and the Certificate Insurer, the Swap Reserve Fund and shall
deposit $1,000 therein upon receipt from or on behalf of the Depositor of such
amount. The Swap Reserve Fund shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement. Amounts therein shall be held
uninvested. Funds on deposit in the Swap Account shall be distributed in the
amounts and in the order described under Section 4.04(e). The Swap Reserve
Fund shall not constitute an asset of the Trust Fund or any REMIC created
hereunder.
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ARTICLE V.
THE CERTIFICATES
Section 5.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto
as Exhibits A-1 through X-0, Xxxxxxx X, Xxxxxxx X, Xxxxxxx X-0, Exhibit D-2
and Exhibit E. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof and
aggregate dollar denominations as set forth in the following table:
Original Certificate
Integral Multiples in Principal Balance/
Class Minimum Denomination Excess of Minimum Original Notional Amount
------------------------------- ---------------------------- ---------------------------- ----------------------------
A-1 $25,000 $1 $440,909,000
A-2 $25,000 $1 $106,813,000
A-3 $25,000 $1 $191,968,000
A-4-F $25,000 $1 $36,000,000
A-4-V $25,000 $1 $37,781,000
A-5-F $25,000 $1 $50,000,000
A-5-V $25,000 $1 $35,529,000
A-6 $25,000 $1 $100,000,000
E-P (2) (2) N/A
A-R $99.95(1) N/A $100
C N/A N/A N/A
P (2) (2) $100
(1) The Tax Matters Person Certificate may be issued in a denomination of
$0.05.
(2) The minimum denomination for the Class P Certificates is a 20% Percentage
Interest. Any Percentage Interest in excess of 20% is an authorized
denomination.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication
and delivery. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form set
forth as attached hereto executed by the Trustee by manual signature, and such
certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication. On the Closing Date, the Trustee shall
authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
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Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and
to such reasonable regulations as it may prescribe, the Trustee shall provide
for the registration of Certificates and of Transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of Transfer
of any Certificate, the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of the
same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by a
written instrument of Transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such
Certificateholder's prospective transferee shall (except in connection with
any transfer of a Private Certificate to an affiliate of the Depositor (either
directly or through a nominee) in connection with the initial issuance of the
Certificates) each certify to the Trustee in writing the facts surrounding the
Transfer in substantially the forms set forth in Exhibit J-2 and, in the case
of a Class A-R Certificate, Exhibit J-1 (the "Transferor Certificate") and (i)
deliver a letter in substantially the form of either Exhibit K (in the case of
the Class P, Class E-P and Class C Certificates only) (the "Investment
Letter") or Exhibit L (in the case of any Private Certificate) (the "Rule 144A
Letter") or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act;
provided, however, that in the case of the delivery of an Investment Letter in
connection with the transfer of any Class C, Class E-P or Class P Certificate
to a transferee that is formed with the purpose of issuing notes backed by
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such Class C, Class E-P or Class P Certificate, as the case may be, clause (b)
and (c) of the form of Investment Letter shall not be applicable and shall be
deleted by such transferee. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such Transfer shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Trust Fund, each Seller,
the Master Servicer, the Certificate Insurer and the NIM Insurer against any
liability that may result if the Transfer is not so exempt or is not made in
accordance with such federal and state laws.
No Transfer of an ERISA-Restricted Certificate (other than a
transfer of an ERISA-Restricted Certificate to an affiliate of the Depositor
(either directly or through a nominee) in connection with the initial issuance
of the Certificates) shall be made unless the Trustee shall have received
either (i) a representation from the transferee of such Certificate acceptable
to and in form and substance satisfactory to the Trustee (in the event such
Certificate is a Private Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L, or in the event such
Certificate is a Residual Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that (x) such
transferee is not a Plan, or (y) in the case of an ERISA-Restricted
Certificate that has been the subject of an ERISA-Qualifying Underwriting, a
representation that the transferee is an insurance company which is purchasing
such Certificate with funds contained in an "insurance company general
account" (as such term is defined in section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificate satisfy the requirements for exemptive relief under Sections
I and III of PTCE 95-60 or (ii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
or arrangement subject to ERISA, or a plan or arrangement subject to Section
4975 of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or arrangement or any other person acting on behalf
of any such plan or arrangement, an Opinion of Counsel satisfactory to the
Trustee, addressed to the Trustee and the Master Servicer, to the effect that
the purchase or holding of such ERISA-Restricted Certificate will not result
in a non-exempt prohibited transaction under ERISA or the Code and will not
subject the Trustee or the Master Servicer to any obligation in addition to
those expressly undertaken in this Agreement, which Opinion of Counsel shall
not be an expense of the Trustee, the Certificate Insurer, the Master
Servicer, or the Trust Fund. For purposes of the preceding sentence, one of
such representations, as appropriate, shall be deemed to have been made to the
Trustee by the transferee's acceptance of an ERISA-Restricted Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA-Restricted Certificates) unless the Trustee shall have received
from the transferee an Opinion of Counsel as described in clause (ii) or a
representation letter acceptable in form and substance to the Trustee.
Notwithstanding anything else to the contrary herein, any purported transfer
of an ERISA-
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Restricted Certificate to or on behalf of an employee benefit plan subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee
meeting the requirements of clause (i) of the first sentence of this paragraph
as described above shall be void and of no effect. The Trustee shall be under
no liability to any Person for any registration of transfer of any
ERISA-Restricted Certificate that is in fact not permitted by this Section
5.02(b) or for making any payments due on such Certificate to the Holder
thereof or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee, with respect to the
transfer of such Classes of Certificates, required delivery of such
certificates and other documentation or evidence as are expressly required by
the terms of this Agreement and examined such certificates and other
documentation or evidence to determine compliance as to form with the express
requirements hereof. The Trustee shall be entitled, but not obligated, to
recover from any Holder of any ERISA-Restricted Certificate that was in fact
an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code or a Person acting on
behalf of any such plan or arrangement at the time it became a Holder or, at
such subsequent time as it became such a plan or arrangement or Person acting
on behalf of such a plan or arrangement, all payments made on such
ERISA-Restricted Certificate at and after either such time. Any such payments
so recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Holder of such Certificate that is not such a plan or
arrangement or Person acting on behalf of a plan or arrangement.
Until the Swap Trust terminates, no transfer of an Interest-Bearing
Certificate (other than a transfer of an Interest-Bearing Certificate to an
affiliate of the Depositor (either directly or through a nominee) in
connection with the initial issuance of the Certificates) shall be made unless
the Trustee shall have received either (i) a written representation from the
transferee of such Interest-Bearing Certificate acceptable to and in form and
substance satisfactory to the Trustee to the effect that such transferee is
not a Plan, or (ii) a written representation that the purchase and holding of
the Interest-Bearing Certificate satisfy the requirements for exemptive relief
under XXXX 00-00, XXXX 00-0, XXXX 00-00, XXXX 00-00, XXXX 96-23, the service
provider exemption provided under Section 408 (b)(17) of ERISA and Section
4975 (d)(20) of the Code or a similar exemption. In the event that such
representation is not delivered, one of the foregoing representations, as
appropriate, shall be deemed to have been made by the transferee's (including
an initial acquiror's) acceptance of the Interest-Bearing Certificate. In the
event that such representation is violated, such transfer or acquisition shall
be void and of no effect.
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(2) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or
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transfer of a Class A-R Certificate to, an affiliate of the Depositor
(either directly or through a nominee) in connection with the initial
issuance of the Certificates, no Ownership Interest in a Class A-R
Certificate may be registered or transferred, and the Trustee shall not
register the Transfer of any Class A-R Certificate, unless the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto
as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in
a Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Class A-R Certificate, (B) to obtain a Transfer
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any Transfer of a Class A-R
Certificate and (C) not to Transfer its Ownership Interest in a Class A-R
Certificate, or to cause the Transfer of an Ownership Interest in a Class
A-R Certificate to any other Person, if it has actual knowledge that such
Person is not a Permitted Transferee or that such Transfer Affidavit is
false.
(4) Any attempted or purported Transfer of any Ownership
Interest in a Class A-R Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall vest no
rights in the purported Transferee. If any purported transferee shall
become a Holder of a Class A-R Certificate in violation of the provisions
of this Section 5.02(c), then the last preceding Permitted Transferee
shall be restored to all rights as Holder thereof retroactive to the date
of registration of Transfer of such Class A-R Certificate. The Trustee
shall be under no liability to any Person for any registration of
Transfer of a Class A-R Certificate that is in fact not permitted by
Section 5.02(b) and this Section 5.02(c) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Transfer was registered after receipt of the related Transfer
Affidavit and Transferor Certificate. The Trustee shall be entitled but
not obligated to recover from any Holder of a Class A-R Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Class
A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, any Seller or
the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC
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formed hereunder to fail to qualify as a REMIC at any time that the
Certificates are outstanding or result in the imposition of any tax on the
Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Class A-R Certificate, by acceptance of
its Ownership Interest, shall be deemed to consent to any amendment of this
Agreement that, based on an Opinion of Counsel furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Class A-R Certificate is not transferred, directly
or indirectly, to a Person that is not a Permitted Transferee and (b) to
provide for a means to compel the Transfer of a Class A-R Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all affidavits, certifications
and opinions referred to above in this Section 5.02 shall not be an expense of
the Trust Fund, the Trustee, the Depositor, any Seller or the Master Servicer.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and of the ownership thereof and (b) there is
delivered to the Master Servicer and the Trustee (and with respect to the
Class A Certificates, the Certificate Insurer) such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Class, tenor and Percentage Interest. In connection
with the issuance of any new Certificate under this Section 5.03, the Trustee
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 5.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time. All Certificates surrendered to the
Trustee under the terms of this Section 5.03 shall be canceled and destroyed
by the Trustee in accordance with its standard procedures without liability on
its part.
Section 5.04 Persons Deemed Owners.
The Master Servicer, the Trustee, the NIM Insurer, the Certificate
Insurer and any agent of the Master Servicer, the Trustee, the NIM Insurer or
the Certificate Insurer may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Master Servicer, the Trustee, the NIM Insurer, the
Certificate Insurer or any agent of the Master Servicer, the Trustee, the NIM
Insurer or the Certificate Insurer shall be affected by any notice to the
contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders or Certificate Owners (a)
request such information in writing from the Trustee, (b) state that such
Certificateholders or Certificate
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Owners desire to communicate with other Certificateholders or Certificate
Owners with respect to their rights under this Agreement or under the
Certificates and (c) provide a copy of the communication that such
Certificateholders or Certificate Owners propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the
receipt of such request, provide the Depositor, the Master Servicer or such
Certificateholders or Certificate Owners at such recipients' expense the most
recent list of the Certificateholders of the Trust Fund held by the Trustee,
if any. The Depositor and every Certificateholder or Certificate Owner, by
receiving and holding a Certificate, agree that the Trustee shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Book-Entry Certificates.
The Book-Entry Certificates, upon original issuance, shall be issued
in the form of one typewritten Certificate (or more than one, if required by
the Depository) for each Class of such Certificates, to be delivered to the
Depository by or on behalf of the Depositor. Such Certificates shall initially
be registered on the Certificate Register in the name of the Depository or its
nominee, and no Certificate Owner of such Certificates will receive a
definitive certificate representing such Certificate Owner's interest in such
Certificates, except as provided in Section 5.08. Unless and until definitive,
fully registered Certificates ("Definitive Certificates") have been issued to
the Certificate Owners of such Certificates pursuant to Section 5.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Sellers, the Master Servicer and the Trustee
may deal with the Depository and the Depository Participants for all purposes
(including the making of distributions) as the authorized representative of
the respective Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 5.08, the
Depository will make book-entry transfers among the Depository Participants
and receive and transmit distributions of principal and interest on the
related Certificates to such Depository Participants;
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants; and
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(g) to the extent the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may
be given by Certificate Owners (acting through the Depository and the
Depository Participants) owning Book-Entry Certificates evidencing the
requisite percentage of principal amount of such Class of Certificates.
Section 5.07 Notices to Depository.
Whenever any notice or other communication is required to be given
to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.
Section 5.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to
any Certificates, (a) the Depositor advises the Trustee that the Depository is
no longer willing or able to discharge properly its responsibilities under the
Depository Agreement with respect to such Certificates and the Trustee or the
Depositor is unable to locate a qualified successor or (b) after the
occurrence and continuation of an Event of Default, Certificate Owners of such
Book-Entry Certificates having not less than 51% of the Voting Rights
evidenced by any Class of Book-Entry Certificates advise the Trustee and the
Depository in writing through the Depository Participants that the
continuation of a book-entry system with respect to Certificates of such Class
through the Depository (or its successor) is no longer in the best interests
of the Certificate Owners of such Class, then the Trustee shall notify all
Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Class requesting the same. The
Depositor shall provide the Trustee with an adequate inventory of Certificates
to facilitate the issuance and transfer of Definitive Certificates. Upon
surrender to the Trustee of any such Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall authenticate and deliver such Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in
delivery of such instructions and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates, all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Certificateholders hereunder.
Section 5.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its offices at 000 Xxxxxxx
000
Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust MBS
Administration, as offices for such purposes. The Trustee will give prompt
written notice to the Certificateholders and the Certificate Insurer of any
change in such location of any such office or agency.
ARTICLE VI.
THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS
Section 6.01 Respective Liabilities of the Depositor, the Master
Servicer and the Sellers.
The Depositor, the Master Servicer and each Seller shall each be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor, the Master
Servicer or the Sellers.
The Depositor will keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof and will each obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the United States or under the laws of one of the states thereof and will
obtain and preserve its qualification or registration to do business as a
foreign partnership in each jurisdiction in which such qualification or
registration is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or any
Seller may be merged or consolidated, or any Person resulting from any merger
or consolidation to which the Depositor, the Master Servicer or any Seller
shall be a party, or any person succeeding to the business of the Depositor,
the Master Servicer or any Seller, shall be the successor of the Depositor,
the Master Servicer or such Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified to
service mortgage loans on behalf of Xxxxxx Mae and Xxxxxxx Mac.
As a condition to the effectiveness of any merger or consolidation,
at least 15 calendar days prior to the effective date of any merger or
consolidation of the Master Servicer, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Master Servicer.
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Section 6.03 Limitation on Liability of the Depositor, the Sellers,
the Master Servicer, the NIM Insurer and Others.
None of the Depositor, the Sellers, the NIM Insurer or the Master
Servicer or any of the directors, officers, employees or agents of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer shall be under
any liability to the Trustee (except as provided in Section 8.05), the Trust
Fund or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided that this provision shall not protect the Depositor, the
Sellers, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Sellers, the Master Servicer or any such Person from any liability that would
otherwise be imposed by reasons of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Sellers, the NIM Insurer,
the Master Servicer and any director, officer, employee or agent of the
Depositor, the Sellers, the NIM Insurer or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The
Depositor, the Sellers, the NIM Insurer, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Sellers, the NIM Insurer or
the Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any audit,
controversy or judicial proceeding relating to a governmental taxing authority
or any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the
Sellers, the NIM Insurer or the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal action that is not incidental to
its respective duties hereunder and that in its opinion may involve it in any
expense or liability; provided that any of the Depositor, the Sellers, the NIM
Insurer or the Master Servicer may, in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be, expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Sellers, the
NIM Insurer and the Master Servicer shall be entitled to be reimbursed
therefor out of the Certificate Account as provided by Section 3.08 hereof.
Section 6.04 Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that its duties hereunder
are no longer permissible under applicable law or (ii) upon appointment of a
successor servicer that is reasonably acceptable to the Trustee, the
Certificate Insurer and the NIM Insurer and the written confirmation from each
Rating Agency (which confirmation shall be furnished to the Depositor, the
Trustee, the Certificate Insurer and the NIM Insurer) that such resignation
will not cause such Rating Agency to reduce the then-current rating of the
Certificates (such determination to be made without regard to the Certificate
Insurance Policy). Any such determination pursuant to
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clause (i) of the preceding sentence permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee and the Certificate Insurer. No resignation of the Master
Servicer shall become effective until the Trustee shall have assumed the
Master Servicer's responsibilities, duties, liabilities (other than those
liabilities arising prior to the appointment of such successor) and
obligations under this Agreement and the Depositor shall have received the
information described in the following sentence. As a condition to the
effectiveness of any such resignation, at least 15 calendar days prior to the
effective date of such resignation, the Master Servicer shall provide (x)
written notice to the Depositor of any successor pursuant to this Section and
(y) in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to the resignation of the Master Servicer.
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as servicer under
this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations
as servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Xxxxxx Xxx and Xxxxxxx Mac
for persons performing servicing for mortgage loans purchased by Xxxxxx Mae
and Xxxxxxx Mac. In the event that any such policy or bond ceases to be in
effect, the Master Servicer shall use its reasonable best efforts to obtain a
comparable replacement policy or bond from an insurer or issuer, meeting the
requirements set forth above as of the date of such replacement.
The Master Servicer shall provide the Trustee, the Certificate
Insurer and the NIM Insurer (upon such party's reasonable request) with copies
of any such insurance policies and fidelity bond. The Master Servicer shall be
deemed to have complied with this provision if an Affiliate of the Master
Servicer has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Master Servicer.
ARTICLE VII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 7.01 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(1) any failure by the Master Servicer to deposit in the
Certificate Account or the Distribution Account or remit to the Trustee
any payment (excluding a payment required to be made under Section 4.01
hereof) required to be made under the terms of this Agreement, which
failure shall continue unremedied for the earlier of the related
Distribution Date or five calendar days and, with respect to a payment
required to be made under Section 4.01(b) or (c) hereof, for one Business
Day, in each case, after the date on which written notice of such failure
shall have been given to the Master Servicer by the Trustee, the NIM
Insurer, the Certificate Insurer or the Depositor, or to the
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Trustee, the NIM Insurer, the Certificate Insurer and the Master Servicer
by the Holders of Certificates evidencing not less than 25% of the Voting
Rights; or
(2) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements on the part
of the Master Servicer contained in this Agreement (except with respect
to a failure related to a Limited Exchange Act Reporting Obligation) or
any representation or warranty shall prove to be untrue, which failure or
breach shall continue unremedied for a period of 60 days after the date
on which written notice of such failure shall have been given to the
Master Servicer by the Trustee, the NIM Insurer, the Certificate Insurer
or the Depositor, or to the Trustee by the Holders of Certificates
evidencing not less than 25% of the Voting Rights; provided, that the
sixty-day cure period shall not apply to the initial delivery of the
Mortgage File for Delay Delivery Mortgage Loans or the failure to
repurchase or substitute in lieu thereof; or
(3) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(4) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(5) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its obligations; or
(6) the Master Servicer shall fail to reimburse in full the
Trustee not later than 6:00 p.m. (New York time) on the Business Day
following the related Distribution Date for any Advance made by the
Trustee pursuant to Section 4.01(d) together with accrued and unpaid
interest.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the
Trustee shall, but only at the direction of either the NIM Insurer, or the
Holders of Certificates evidencing not less than 25% of the Voting Rights
(subject to the consent of the Certificate Insurer, which consent shall not be
unreasonably withheld) or at the direction of the Certificate Insurer (so long
as no Certificate Insurer Default is continuing), by notice in writing to the
Master Servicer (with a copy to each Rating Agency and the Depositor),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other
than its rights as a Certificateholder hereunder. In addition, if during the
period that the
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Depositor is required to file Exchange Act Reports with respect to the Trust
Fund, the Master Servicer shall fail to observe or perform any of the
obligations that constitute a Limited Exchange Act Reporting Obligation or the
obligations set forth in Section 3.17(a) or Section 11.07(a)(1) and (2), and
such failure continues for the lesser of 10 calendar days or such period in
which the applicable Exchange Act Report can be filed timely (without taking
into account any extensions), so long as such failure shall not have been
remedied, the Trustee shall, but only at the direction of the Depositor,
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other
than its rights as a Certificateholder hereunder. The Depositor shall not be
entitled to terminate the rights and obligations of the Master Servicer if a
failure of the Master Servicer to identify a Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with
respect to mortgage loans other than the Mortgage Loans.
On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee shall thereupon make any Advance described in Section
4.01 hereof subject to Section 3.04 hereof. The Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise. Unless expressly provided in such written notice, no
such termination shall affect any obligation of the Master Servicer to pay
amounts owed pursuant to Article VIII. The Master Servicer agrees to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be
credited to the Certificate Account, or thereafter be received with respect to
the Mortgage Loans. The Trustee shall promptly notify the Rating Agencies, the
Certificate Insurer and the Depositor of the occurrence of an Event of
Default.
Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating such Master Servicer's rights and obligations
as Master Servicer hereunder and received after such notice, that portion
thereof to which such Master Servicer would have been entitled pursuant to
Sections 3.08(a)(i) through (viii), and any other amounts payable to such
Master Servicer hereunder the entitlement to which arose prior to the
termination of its activities hereunder.
If the Master Servicer is terminated, the Trustee shall provide the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein.
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Section 7.02 Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms
and provisions hereof and applicable law including the obligation to make
advances pursuant to Section 4.01. As compensation therefor, the Trustee shall
be entitled to all fees, costs and expenses relating to the Mortgage Loans
that the Master Servicer would have been entitled to if the Master Servicer
had continued to act hereunder. Notwithstanding the foregoing, if the Trustee
has become the successor to the Master Servicer in accordance with Section
7.01 hereof, the Trustee may, if it shall be unwilling to so act, or shall, if
it is prohibited by applicable law from making Advances pursuant to Section
4.01 hereof or if it is otherwise unable to so act, (i) appoint any
established mortgage loan servicing institution acceptable to the NIM Insurer
and the Certificate Insurer (as evidenced by the prior written consent of the
NIM Insurer and the Certificate Insurer (which consent shall not be
unreasonably withheld by the Certificate Insurer)), or (ii) if it is unable
for 60 days to appoint a successor servicer acceptable to the NIM Insurer,
petition a court of competent jurisdiction to appoint any established mortgage
loan servicing institution, the appointment of which does not adversely affect
the then-current rating of the Certificates (without regard to the Certificate
Insurance Policy, in the case of the Class A Certificates) and the NIM Insurer
guaranteed notes (without giving any effect to any policy or guaranty provided
by the NIM Insurer) by each Rating Agency as the successor to the Master
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder. Any
successor Master Servicer shall be an institution that is a Xxxxxx Xxx and
Xxxxxxx Mac approved seller/servicer in good standing, that has a net worth of
at least $15,000,000 and that is willing to service the Mortgage Loans and
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, that contains an assumption by such Person of
the rights, powers, duties, responsibilities, obligations and liabilities of
the Master Servicer (other than liabilities and indemnities of the Master
Servicer under Section 6.03 hereof incurred prior to termination of the Master
Servicer under Section 7.01), with like effect as if originally named as a
party to this Agreement; and provided further that each Rating Agency
acknowledges in writing delivered to the Trustee and the Certificate Insurer
that its rating of the Certificates in effect immediately prior to such
assignment and delegation will not be qualified or reduced as a result of such
assignment and delegation (without regard to the Certificate Insurance Policy,
in the case of the Class A Certificates). No appointment of a successor to the
Master Servicer hereunder shall be effective until (i) the Trustee and the
Certificate Insurer shall have consented thereto (which consent shall not be
unreasonably withheld by the Certificate Insurer), (ii) written notice of such
proposed appointment shall have been provided by the Trustee to each
Certificateholder and the Certificate Insurer and (iii) at least 15 calendar
days prior to the effective date of such appointment, (x) the Trustee shall
provide written notice to the Depositor of such successor pursuant to this
Section 7.02 and (y) such successor Master Servicer shall provide to the
Depositor in writing and in form and substance reasonably satisfactory to the
Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement master servicer. The Trustee shall not resign as servicer
until a successor servicer has been appointed and has accepted such
appointment. Pending appointment
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of a successor to the Master Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as herein above provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided that no such compensation shall be in
excess of that permitted the Master Servicer hereunder. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
successor servicer shall be deemed to be in default hereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as servicer shall give notice
to the NIM Insurer and the Mortgagors of such change of servicer and shall,
during the term of its service as servicer maintain in force the policy or
policies that the Master Servicer is required to maintain pursuant to Section
6.05.
In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to execute and deliver an assignment
of Mortgage in recordable form to transfer the Mortgage from MERS to the
Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee promptly upon receipt of the original with evidence of recording
thereon or a copy certified by the public recording office in which such
assignment was recorded.
Section 7.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, to the Certificate Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII.
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that are specifically required to be furnished
pursuant to any provision of this Agreement shall examine them to determine
whether they conform to the requirements of this Agreement, to the extent
provided in this Agreement. If any such instrument is found not to conform to
the requirements of this Agreement in a material manner, the Trustee shall
take action as it deems appropriate to have the instrument corrected.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability that would be imposed by
reason of its willful misfeasance or bad faith; provided that:
(1) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable,
individually or as Trustee, except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement that it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(2) the Trustee shall not be liable, individually or as
Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless the Trustee was
negligent or acted in bad faith or with willful misfeasance;
(3) the Trustee shall not be liable, individually or as
Trustee, with respect to any action taken, suffered or omitted to be
taken by it in good faith in accordance with the direction of the Holders
of each Class of Certificates evidencing not less than 25% of the Voting
Rights of such Class relating to the time, method and place
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of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement; and
(4) without in any way limiting the provisions of this Section
8.01 or Section 8.02 hereof, the Trustee shall be entitled to rely
conclusively on the information delivered to it by the Master Servicer in
a Trustee Advance Notice in determining whether or not it is required to
make an Advance under Section 4.01(d), shall have no responsibility to
ascertain or confirm any information contained in any Trustee Advance
Notice, and shall have no obligation to make any Advance under Section
4.01(d) in the absence of a Trustee Advance Notice or actual knowledge by
a Responsible Officer that (A) a required Advance was not made and (B)
such required Advance was not a Nonrecoverable Advance.
The Trustee hereby represents, warrants, covenants and agrees that,
except as permitted by Article IX hereof, it shall not cause the Trust Fund to
consolidate or amalgamate with, or merge with or into, or transfer all or
substantially all of the Trust Fund to, another Person.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(1) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(3) the Trustee shall not be liable, individually or as
Trustee, for any action taken, suffered or omitted by it in good faith
and believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(4) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by the NIM
Insurer, the Certificate Insurer or the Holders of each Class of
Certificates evidencing not less than 25% of the Voting Rights of such
Class; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee not reasonably assured to the Trustee by the NIM Insurer or such
Certificateholders, the Trustee may
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require reasonable indemnity against such expense, or liability from the
NIM Insurer or such Certificateholders as a condition to taking any
such action;
(5) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(6) the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such liability
is not assured to it;
(7) the Trustee shall not be liable, individually or as
Trustee, for any loss on any investment of funds pursuant to this
Agreement (other than as issuer of the investment security);
(8) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof; and
(9) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to make any
investigation of matters arising hereunder or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of the NIM Insurer or any of the Certificateholders,
pursuant to the provisions of this Agreement, unless the NIM Insurer or
such Certificateholders, as applicable, shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof
at the trial or other proceeding relating thereto, and any such suit, action
or proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.
The Depositor hereby directs the Trustee to execute, deliver and
perform its obligations under the Swap Contract Administration Agreement (in
its capacity as Swap Trustee). The Sellers, the Depositor, the Master Servicer
and the Holders of the Interest-Bearing Certificates by their acceptance of
such Certificates acknowledge and agree that the Trustee shall execute,
deliver and perform its obligations under the Swap Contract Administration
Agreement and shall do so solely in its capacity as Swap Trustee and not in
its individual capacity. Every provision of this Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall apply to the Trustee's execution of the Swap Contract Administration
Agreement in its capacity as Swap Trustee, and the performance of its duties
and satisfaction of its obligations thereunder.
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Section 8.03 Trustee Not Liable for Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses.
The Master Servicer covenants and agrees to pay or reimburse the
Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in their
capacities as trustees hereunder and (B) to the extent that the Trustee must
engage persons not regularly in its employ to perform acts or services on
behalf of the Trust Fund, which acts or services are not in the ordinary
course of the duties of a trustee, paying agent or certificate registrar, in
the absence of a breach or default by any party hereto, the reasonable
compensation, expenses and disbursements of such persons, except any such
expense, disbursement or advance as may arise from its negligence, bad faith
or willful misconduct). The Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by the Master Servicer and held
harmless against any loss, liability or expense (i) incurred in connection
with any legal action relating to this Agreement or the Certificates, or in
connection with the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or by reason of reckless disregard of the Trustee's
obligations and duties hereunder or (ii) resulting from any error in any tax
or information return prepared by the Master Servicer. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of the
Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and with a
credit rating that would not cause any of the Rating Agencies to reduce their
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respective ratings of any Class of Certificates (without regard to the
Certificate Insurance Policy, in the case of the Class A Certificates) below
the ratings issued on the Closing Date (or having provided such security from
time to time as is sufficient to avoid such reduction). If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.06 the combined capital and surplus of
such corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation
or national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Sellers and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as
successor to the Master Servicer.
Section 8.07 Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (1) giving written notice of resignation to the Depositor
and the Master Servicer and by mailing notice of resignation by first class
mail, postage prepaid, to the Certificateholders at their addresses appearing
on the Certificate Register, the Certificate Insurer and each Rating Agency,
not less than 60 days before the date specified in such notice when, subject
to Section 8.08, such resignation is to take effect, and (2) acceptance of
appointment by a successor trustee in accordance with Section 8.08 and meeting
the qualifications set forth in Section 8.06. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
As a condition to the effectiveness of any such resignation, at
least 15 calendar days prior to the effective date of such resignation, the
Trustee shall provide (x) written notice to the Depositor of any successor
pursuant to this Section and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to the resignation of the Trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the NIM Insurer, the Certificate Insurer or
the Depositor, (ii) the Trustee shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Trust Fund
is located, (B) the imposition of such tax would be avoided by the appointment
of a different trustee and (C) the Trustee fails to indemnify the Trust Fund
against such tax, or (iv) during the period which the Depositor is required to
file Exchange Act Reports with respect to the Trust Fund, the Trustee fails to
comply with its obligations under the last sentence of Section 7.01, the
preceding paragraph, Section 8.09 or Article XI and such failure is not
remedied within the lesser of 10
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calendar days or such period in which the applicable Exchange Act Report can
be filed timely (without taking into account any extensions), then, in the
case of clauses (i) through (iii), the Depositor, the NIM Insurer or the
Master Servicer, or in the case of clause (iv), the Depositor, may remove the
Trustee and appoint a successor trustee, reasonably acceptable to the
Certificate Insurer, the Certificate Insurer and the NIM Insurer, by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy of which shall be delivered to the Master Servicer and
one copy of which shall be delivered to the successor trustee.
The Certificate Insurer (so long as no Certificate Insurer Default
is continuing) or Holders evidencing at least 51% of the Voting Rights of each
Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed
by such Holders or their attorneys-in-fact duly authorized, one complete set
of which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed, one complete set to the
successor so appointed and one complete set to the Depositor, together with a
written description of the basis for such removal. Notice of any removal of
the Trustee shall be given to each Rating Agency and the Certificate Insurer
by the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof which successor trustee shall be reasonably
acceptable to the Certificate Insurer.
Section 8.08 Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. In addition, if the Corridor Contract
is still outstanding, the Person appointed as successor trustee shall execute,
acknowledge and deliver to the predecessor trustee, CHL and the Master
Servicer an instrument accepting the appointment as successor Corridor
Contract Administrator under the Corridor Contract Administration Agreement.
Similarly, if the Swap Contract is still outstanding, the Person appointed as
successor trustee shall execute, acknowledge and deliver to the predecessor
trustee, CHL and the Master Servicer an instrument accepting the appointment
as successor Swap Trustee and as Swap Contract Administrator under the Swap
Contract Administration Agreement.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof, is reasonably
acceptable to the Certificate Insurer and the NIM Insurer, its appointment
shall not adversely affect the then-current ratings of the Certificates
(without regard to the Certificate Insurance Policy, in the case of the Class
A Certificates) and has provided to the Depositor in writing and in form and
substance reasonably satisfactory to the
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Depositor, all information reasonably requested by the Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with respect
to a replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to the Certificate Insurer, the NIM Insurer and all Holders
of Certificates. If the Depositor fails to mail such notice within ten days
after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09 Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of
Section 8.06 hereof without the execution or filing of any paper or further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
As a condition to the effectiveness of any merger or consolidation,
at least 15 calendar days prior to the effective date of any merger or
consolidation of the Trustee, the Trustee shall provide (x) written notice to
the Depositor of any successor pursuant to this Section and (y) in writing and
in form and substance reasonably satisfactory to the Depositor, all
information reasonably requested by the Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a replacement
Trustee.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee and reasonably acceptable to the NIM Insurer
and the Certificate Insurer to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of
the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders and the Certificate Insurer, such
title to the Trust Fund or any part thereof, whichever is applicable, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Trustee may
consider necessary or desirable. If the Master Servicer shall not have joined
in such appointment, or the NIM Insurer shall not have approved such
appointment, within 15 days after receipt by it of a request to do so, or in
the case an Event of Default shall have occurred and be continuing, the
Trustee shall have the power to make such appointment. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.06 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.08.
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Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(1) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee under
this Agreement to advance funds on behalf of the Master Servicer, shall
be conferred or imposed upon and exercised or performed by the Trustee
and such separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(2) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(3) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the
affairs of the Trust Fund shall be conducted so that each REMIC created
pursuant to the Preliminary Statement qualifies as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of the Trust
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Fund and that in such capacity it shall: (a) prepare and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Returns (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each REMIC created hereunder containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and
in such manner as may be required thereby; (b) within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code for the
Trust Fund; (c) make or cause to be made elections, on behalf of each REMIC
created hereunder to be treated as a REMIC on the federal tax return of each
such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) prepare and forward, or cause to be prepared and forwarded, to
the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when
required to be provided to them in accordance with the REMIC Provisions,
including without limitation, the calculation of any original issue discount
using the Prepayment Assumption; (e) provide information necessary for the
computation of tax imposed on the transfer of a Class A-R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be
charged to the Person liable for such tax); (f) to the extent that they are
under its control conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC
created hereunder as a REMIC under the REMIC Provisions; (g) not knowingly or
intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of any REMIC created hereunder; (h) pay, from
the sources specified in the third paragraph of this Section 8.11, the amount
of any federal, state and local taxes, including prohibited transaction taxes
as described below, imposed on any REMIC created hereunder prior to the
termination of the Trust Fund when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) sign or cause to be signed
federal, state or local income tax or information returns; (j) maintain
records relating to each REMIC created hereunder, including but not limited to
the income, expenses, assets and liabilities of each such REMIC, and the fair
market value and adjusted basis of the Trust Fund property determined at such
intervals as may be required by the Code, as may be necessary to prepare the
foregoing returns, schedules, statements or information; and (k) as and when
necessary and appropriate, represent the Trust Fund in any administrative or
judicial proceedings relating to an examination or audit by any governmental
taxing authority, request an administrative adjustment as to any taxable year
of any REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations
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relating to any tax item of the Trust Fund, and otherwise act on behalf of any
REMIC created hereunder in relation to any tax matter involving any such
REMIC.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans (and, to the extent not part of the
aforementioned, the information referred to in paragraphs (1), (2), (3) and
(4) of Section 4.05(d)). Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order
to enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of
the Trust Fund as defined in section 860F(a)(2) of the Code, on the "net
income from foreclosure property" of the Trust Fund as defined in section
860G(c) of the Code, on any contribution to the Trust Fund after the startup
day pursuant to section 860G(d) of the Code, or any other tax is imposed,
including, without limitation, any federal, state or local tax or minimum tax
imposed upon the Trust Fund pursuant to sections 23153 and 24872 of the
California Revenue and Taxation Code if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax
arises out of or results from a breach by the Trustee of any of its
obligations under this Agreement, (ii) (x) the Master Servicer, in the case of
any such minimum tax, and (y) any party hereto (other than the Trustee) to the
extent any such other tax arises out of or results from a breach by such other
party of any of its obligations under this Agreement or (iii) in all other
cases, or in the event that any liable party here fails to honor its
obligations under the preceding clauses (i) or (ii), any such tax will be paid
first with amounts otherwise to be distributed to the Class A-R
Certificateholders, and second with amounts otherwise to be distributed to all
other Certificateholders in the same manner as if such tax were a Realized
Loss. Notwithstanding anything to the contrary contained herein, to the extent
that such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class
A-R Certificates (and, if necessary, second, from the Holders of the other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such
tax. The Trustee agrees to promptly notify in writing the party liable for any
such tax of the amount thereof and the due date for the payment thereof.
The Trustee shall treat the Carryover Reserve Fund and the Swap
Trust, including the Swap Account and the Swap Reserve Fund, as outside
reserve funds within the meaning of Treasury Regulation 1.860G-2(h), neither
of which is an asset of any REMIC created hereunder. The Carryover Reserve
Fund shall be treated as owned by the Class C Certificateholders and the Swap
Trust, including the Swap Account and Swap Reserve Fund, shall be treated as
owned by the Class C Certificateholders. The rights of the Holders of each
Class of Certificates (other than the Class P and Class A-R Certificates) to
receive payments from, and the deemed obligations of
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such Holders to make payments to, the Carryover Reserve Fund shall be treated
as rights and obligations with respect to notional principal contracts written
by (i) the Corridor Contract Counterparty in respect of any Net Rate Carryover
funded by the Corridor Contract and in respect of any residual payments from
such Corridor Contract received by the Class C Certificates, (ii) the Swap
Counterparty in respect of any Net Rate Carryover funded by the Swap Contract
and in respect of any residual payments from such Swap Contract received by
the Class C Certficiates and (iii) the Holders of the Class C Certificates in
respect of any Net Rate Carryover distributed pursuant to Sections 4.04(d)(4).
Thus, the Certificates (other than the Class P and Class A-R Certificates),
shall be treated as representing ownership of Master REMIC regular interests
coupled with contractual rights and obligations within the meaning of Treasury
Regulation 1.860G-2(i). For purposes of determining the issue price of the
various Master REMIC regular interests, the Trustee shall assume that the
Corridor Contract has a value of $8,000. For purposes of determining the issue
price of the various Master REMIC regular interests, the Trustee shall treat
the $490,000 upfront amount received by CHL from the Swap Counterparty in
connection with the execution of the Swap Confirmation as an additional amount
paid by the Certificateholders for the Master REMIC regular interests.
Section 8.12 Access to Records of the Trustee.
The Trustee shall afford the Sellers, the Depositor, the Master
Servicer, the NIM Insurer, the Certificate Insurer and each Certificate Owner
upon reasonable notice during normal business hours access to all records
maintained by the Trustee in respect of its duties under this Agreement and
access to officers of such entity responsible for performing its duties. Upon
request, the Trustee shall furnish the Depositor, the Master Servicer, the NIM
Insurer, the Certificate Insurer and any requesting Certificate Owner with its
most recent financial statements. The Trustee shall cooperate fully with the
Sellers, the Master Servicer, the Depositor, the NIM Insurer, the Certificate
Insurer and the Certificate Owner for review and copying any books, documents,
or records requested with respect to the Trustee's duties under this
Agreement. The Sellers, the Depositor, the Master Servicer, the Certificate
Insurer and the Certificate Owner shall not have any responsibility or
liability for any action for failure to act by the Trustee and are not
obligated to supervise the performance of the Trustee under this Agreement or
otherwise.
Section 8.13 Suits for Enforcement.
If an Event of Default or other material default by the Master
Servicer or the Depositor under this Agreement occurs and is continuing, at
the direction of the Certificateholders holding not less than 51% of the
Voting Rights, the Certificate Insurer (so long as no Certificate Insurer
Default is continuing) or the NIM Insurer, the Trustee shall proceed to
protect and enforce its rights and the rights of the Certificateholders, the
Certificate Insurer or the NIM Insurer under this Agreement by a suit, action,
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable, or other remedy, as the Trustee, being advised
by counsel, and subject to the foregoing, shall deem most effectual to protect
and enforce any of the rights of the Trustee, the NIM Insurer, the Certificate
Insurer and the Certificateholders.
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Section 8.14 Monitoring of Significance Percentage.
With respect to each Distribution Date, the Trustee shall calculate
the "significance percentage" (as defined in Item 1115 of Regulation AB) of
each derivative instrument, if any, based on the aggregate Class Principal
Balance of the related Class(es) of Covered Certificates for such derivative
instrument and Distribution Date (after all distributions to be made thereon
on such Distribution Date) and based on the methodology provided in writing by
or on behalf of CHL no later than the fifth Business Day preceding such
Distribution Date. On each Distribution Date, the Trustee shall provide to CHL
a written report (which written report may include similar information with
respect to other derivative instruments relating to securitization
transactions sponsored by CHL) specifying the "significance percentage" of
each derivative instrument, if any, for that Distribution Date. If the
"significance percentage" of any derivative instrument exceeds 7.0% with
respect to any Distribution Date, the Trustee shall make a separate notation
thereof in the written report described in the preceding sentence. Such
written report may contain such assumptions and disclaimers as are deemed
necessary and appropriate by the Trustee.
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03 and Section 9.04, the Trust Fund shall
terminate and the obligations and responsibilities of the Depositor, the
Master Servicer, the Sellers and the Trustee created hereby shall terminate
upon the earlier of (a) the purchase by the Master Servicer or the NIM Insurer
(the party exercising such purchase option, the "Terminator") of all of the
Mortgage Loans (and REO Properties) remaining in the Trust Fund at the price
(the "Termination Price") equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan in the Trust Fund (other than in respect of an
REO Property), (ii) accrued interest thereon at the applicable Mortgage Rate
(or, if such repurchase is effected by the Master Servicer, at the applicable
Net Mortgage Rate), (iii) the appraised value of any REO Property in the Trust
Fund (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the
Terminator and the Trustee, (iv) any remaining unpaid costs and damages
incurred by the Trust Fund that arises out of an actual violation of any
predatory or abusive lending law or regulation and (v) if the Terminator is
the NIM Insurer, any unreimbursed Servicing Advances, and the principal
portion of any unreimbursed Advances, made on the Mortgage Loans prior to the
exercise of such repurchase, (b) the purchase by the Winning Bidder of all of
the Mortgage Loans (and REO Properties) remaining in the Trust Fund after a
Successful Action is conducted pursuant to Section 9.04 and the related
auction proceeds are distributed pursuant to Section 9.02(c) and (c) the later
of (i) the maturity or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and the disposition of
all REO Property and (ii) the distribution to related Certificateholders of
all amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United
States to the Court of St. James's, living on the date hereof and (ii) the
Latest
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Possible Maturity Date. If any such termination will result in a Deficiency
Amount on the Certificate Insurance Policy, the consent of the Certificate
Insurer will also be required prior to exercising the option specified in
clause (a) of this paragraph.
The right to purchase all Mortgage Loans and REO Properties by the
Terminator pursuant to clause (a) of the immediately preceding paragraph shall
be conditioned upon (1) the Stated Principal Balance of the Mortgage Loans, at
the time of any such repurchase, aggregating ten percent (10%) or less of the
sum of the aggregate Cut-off Date Principal Balance of the Initial Mortgage
Loans and the Pre-Funded Amount and (2) unless the NIM Insurer otherwise
consents, the purchase price for such Mortgage Loans and REO Properties shall
result in a final distribution on any NIM Insurer guaranteed notes that is
sufficient (x) to pay such notes in full and (y) to pay any amounts due and
payable to the NIM Insurer pursuant to the indenture related to such notes and
(3) unless the Certificate Insurer otherwise consents, the purchase price for
such Mortgage Loans and REO Properties shall result in a final distribution on
the Class A Certificates and the Certificate Insurer that is sufficient (x) to
pay such Class A Certificates in full (without the need of any Insured
Payment) and (y) to pay any amounts due and payable to the Certificate Insurer
pursuant to the terms hereof and pursuant to the Insurance and Indemnity
Agreement.
The NIM Insurer's right to purchase all Mortgage Loans and REO
Properties shall be further conditioned upon the written consent of the Master
Servicer.
The Swap Trust shall terminate on the earliest of (i) the Swap
Contract Termination Date, (ii) the reduction of the aggregate Certificate
Principal Balance of the Class A-4-V and Class A-5-V Certificates to zero and
(iii) the termination of this Agreement.
Section 9.02 Final Distribution on the Certificates.
(a) Timing of Notice of Final Distribution, Auction or Optional
Termination
(i) If on any Determination Date, (1) the Master Servicer determines
that there are no Outstanding Mortgage Loans and no other funds or assets in
the Trust Fund other than the funds in the Certificate Account, then the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each Certificateholder and the Certificate Insurer in accordance
with Section 9.02(b) or (2) the Trustee determines that a Class of
Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the related Certificateholders and the Certificate
Insurer within five (5) Business Days after such Determination Date that the
final distribution in retirement of such Class of Certificates is scheduled to
be made on the immediately following Distribution Date. Any final distribution
made pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the related Certificates at the Corporate Trust
Office of the Trustee. In the event such notice is given pursuant to clause
(1), the Master Servicer shall cause all funds in the Certificate Account to
be remitted to the Trustee for deposit in the Distribution Account on or
before the Business Day prior to the applicable Distribution Date , net of any
amounts permitted to be withdrawn pursuant to Section 3.08(a). Upon such final
deposit with respect to the Trust Fund and the receipt by the Trustee of a
Request for Release therefor, the Trustee shall promptly release to the Master
Servicer the Mortgage Files for the Mortgage Loans.
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(ii) If the Directing Certificateholder chooses to exercise its
right to cause an auction pursuant to Section 9.04, then the Directing
Certificateholder shall provide written notice to the Master Servicer no later
than the 1st day of the calendar month in which such auction is to be
conducted. If a Successful Auction is held pursuant to the requirements of
Section 9.04, then the Trustee shall distribute the proceeds of the Successful
Auction that have been remitted to the Distribution Account to the
Certificateholders pursuant to Sections 4.04 and 9.04 hereof on the
Distribution Date in the calendar month immediately following the calendar
month in which the Successful Auction occurs.
(iii) If the Directing Certificateholder does not exercise its right
to cause an auction pursuant to Section 9.04 and the Terminator (after prior
written notice to the Master Servicer if the Terminator is the NIM Insurer)
elects to terminate the Trust Fund pursuant to Section 9.01, then at least 20
days prior to the date notice is to be mailed to Certificateholders in
accordance with Section 9.02(b), the Terminator shall notify in writing the
Depositor, the Certificate Insurer and the Trustee of (a) its election to
terminate the Trust Fund, (b) the Distribution Date on which it intends to
terminate the Trust Fund pursuant to Section 9.01 and (c) the applicable
purchase price of the Mortgage Loans and REO Properties. In the event such
notice is given, the Terminator shall remit to the Master Servicer, on or
before the Business Day prior to the final Distribution Date, for deposit into
the Certificate Account, the Termination Price. The Master Servicer shall
cause all funds in the Certificate Account, including the Termination Price,
net of any amounts permitted to be withdrawn pursuant to Section 3.08(a), to
be remitted to the Trustee for deposit in the Distribution Account on or
before the Business Day prior to the applicable Distribution Date. Upon such
final deposit with respect to the Trust Fund and the receipt by the Trustee of
a Request for Release therefor, the Trustee shall promptly release to the
Master Servicer the Mortgage Files for the Mortgage Loans.
(b) Timing of Notice to Certificateholders of Termination. Notice of
any termination of the Trust Fund (whether because of a Successful Auction,
Optional Termination or otherwise), specifying the Distribution Date on which
related Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to related Certificateholders mailed not earlier than the 10th day and
no later than the 15th day of the month immediately preceding the month of
such final distribution. Any such notice shall specify (i) the Distribution
Date upon which final distribution on related Certificates will be made upon
presentation and surrender of such Certificates at the office therein
designated, (ii) the amount of such final distribution, (iii) the location of
the office or agency at which such presentation and surrender must be made,
and (iv) that the Record Date otherwise applicable to such Distribution Date
is not applicable, distributions being made only upon presentation and
surrender of such Certificates at the office therein specified. The Master
Servicer will give such notice to each Rating Agency and the Swap Counterparty
at the time such notice is given to the Certificateholders.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class and
the Certificate Insurer the amounts allocable to such Certificates and the
Certificate Insurer held in the Distribution Account (and, if applicable, the
Carryover Reserve Fund) in the order and priority set forth in Section 4.04
hereof (and with respect to the Class C Certificates after a Successful
Auction as set forth in Section 9.04(g) and (k)) on the final Distribution
Date and in proportion to their
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respective Percentage Interests. Notwithstanding the reduction of the
Certificate Principal Balance of any Class of Certificates to zero, such Class
will be outstanding hereunder (solely for the purpose of receiving
distributions (if any) to which it may be entitled pursuant to the terms of
this Agreement and not for any other purpose) until the termination of the
respective obligations and responsibilities of the Depositor, each Seller, the
Master Servicer and the Trustee hereunder in accordance with Article IX.
(d) In the event that any affected Certificateholders shall not
surrender their respective Certificates for cancellation within six months
after the date specified in the above mentioned written notice, the Trustee
shall give a second written notice to the remaining Certificateholders to
surrender their related Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second
notice all the applicable Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within one year after the second notice all related Certificates shall not
have been surrendered for cancellation, the Certificate Insurer, with respect
to any unpaid Certificate Insurance Reimbursement Amounts, and then the Class
A-R Certificates shall be entitled to all unclaimed funds and other assets
that remain subject hereto.
Section 9.03 Additional Termination Requirements.
(a) In the event the Terminator exercises its purchase option, as
provided in Section 9.01 or if there is a Successful Auction pursuant to
Section 9.04, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Terminator (or the Directing
Certificateholder, in the case of a Successful Auction), to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) The Master Servicer shall establish a 90-day liquidation
period and notify the Trustee thereof, which shall in turn specify the first
day of such period in a statement attached to the Trust Fund's final Tax
Return pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer
shall prepare a plan of complete liquidation and shall otherwise satisfy all
the requirements of a qualified liquidation under Section 860F of the Code and
any regulations thereunder, as evidenced by an Opinion of Counsel delivered to
the Trustee and the Depositor obtained at the expense of the Terminator (or
the Directing Certificateholder, in the case of a Successful Auction);
(2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, the Master Servicer
as agent of the Trustee shall sell all of the assets of the Trust Fund to the
Terminator (or the Winning Bidder in the case of a Successful Auction) for
cash in accordance with Section 9.01 and, if applicable, Section 9.04; and
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(3) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of
Certificates, and the Trust Fund shall terminate at that time.
(b) By their acceptance of the Certificates, the Holders thereof
hereby authorize the Master Servicer to specify the 90-day liquidation period
for the Trust Fund, which authorization shall be binding upon all successor
Certificateholders. The Trustee shall attach a statement to the final federal
income tax return for each of any REMIC created hereunder stating that
pursuant to Treasury Regulation Section 1.860F-1, the first day of the 90-day
liquidation period for each the REMIC was the date on which the Trustee sold
the assets of the Trust Fund to the Terminator or the Winning Bidder, as
applicable.
(c) The Trustee as agent for each REMIC created hereunder hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the Master Servicer, and the receipt of the Opinion of Counsel
referred to in Section 9.03(a)(1), and together with the Holders of the Class
A-R Certificates agree to take such other action in connection therewith as
may be reasonably requested by the Terminator or the Directing
Certificateholder, as applicable.
Section 9.04 Auction of the Mortgage Loans and REO Properties.
(a) On or after the Optional Termination Date, the Holder of the
largest Percentage Interest of Class C Certificates (the "Directing
Certificateholder"), at its option, may by written instruction direct the
Trustee to solicit bids in a commercially reasonable manner from Qualified
Bidders for the purchase of the Mortgage Loans and any REO Properties owned by
the Trust Fund. The Directing Certificateholder shall provide written notice
to the Master Servicer, as provided in Section 9.02(a)(ii), of any such
direction to the Trustee. Any such direction by the Directing
Certificateholder shall (i) be made in writing and (ii) include contact
information for the Directing Certificateholder. Upon receipt of any direction
from the Directing Certificateholder meeting the requirements of the
immediately preceding sentence, the Trustee shall commence the auction process
described in this Section 9.04. The Trustee may engage a financial advisor,
which financial advisor may be CHL or one of its affiliates, in order to
perform any of the duties of the Trustee specified in Section 9.04. To
effectuate such sale, the Trustee (or such financial advisor) shall follow the
procedures specified in Section 9.04(b) below. The Trustee shall facilitate
the sale of the assets in the Trust Fund to the Winning Bidder so long as the
Trustee (or any financial advisor on its behalf) has received at least three
bids from Qualified Bidders and at least one such bid is at least equal to the
Acceptable Bid Amount. In the event the auction is not a Successful Auction,
the Trustee shall repeat this process at such frequency as directed by the
Directing Certificateholder until a Successful Auction is conducted or the
Terminator purchases all of the Mortgage Loans and REO Properties pursuant to
Section 9.01. The Trustee shall be reimbursed for its reasonable costs,
including expenses associated with engaging any financial advisor, from the
Directing Certificateholder if the auction is not a Successful Auction, and,
if the auction is a Successful Auction, from the proceeds of the auction
before the proceeds are distributed to Certificateholders.
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The Trustee, upon inquiry from the Master Servicer, agrees to provide the
Master Servicer with the Percentage Interest of Class C Certificates held by
the Directing Certificateholder.
If CHL or any of its affiliates is the Directing Certificateholder, such
Directing Certificateholder shall not have the right to direct the Trustee to
solicit bids for the purchase of the Mortgage Loans and any REO Properties
owned by the Trust Fund.
(b) The Trustee (or any financial advisor on its behalf) shall
solicit bids for the purchase of assets owned by the Trust Fund as provided in
Section 9.04(a) not later than two Business Days following receipt of the
Directing Certificateholder's written instruction by contacting by telephone
or in writing at least three Qualified Bidders and requesting that each
Qualified Bidder bid on the Mortgage Loans and REO Properties owned by the
Trust Fund (on a non-recourse basis with no representations or warranties of
any nature whatsoever made by the Trustee (or such financial advisor)) and
providing to the Qualified Bidder any information relating to the Mortgage
Loans and REO Properties owned by the Trust Fund reasonably requested by such
Qualified Bidder, subject to the Qualified Bidder's written agreement not to
use such information in the purchase or sale of Certificates (it being
understood no Qualified Bidder shall be obligated to submit a bid or take any
other action in connection with any auction). The Master Servicer shall
cooperate with the Trustee (and any financial advisor on its behalf) during
the auction process. At 1:00 p.m. New York time on the second Business Day
after the date on which bids are last solicited (such second day, the "Bid
Determination Date"), the Trustee (or any financial advisor on its behalf)
shall determine the highest bid based on the bids received by the Trustee (or
any financial advisor on its behalf) on or before such time.
(c) If the highest of the bids that are submitted by Qualified
Bidders is less than the Minimum Auction Amount, then the Trustee shall
promptly inform the Directing Certificateholder of the amount of the shortfall
and indicate that the Directing Certificateholder must notify the Trustee
within 24 hours whether it will contribute the amount of such difference (such
difference being the "Auction Supplement Amount") so that the auction will be
a Successful Auction. If the highest of the bids that are submitted by
Qualified Bidders is equal to or greater than the Minimum Auction Amount, or
if the Directing Certificateholder notifies the Trustee within 24 hours of its
receipt of notice as described in the previous sentence that it will
contribute the Auction Supplement Amount, then the Trustee (or any financial
advisor on its behalf) shall notify promptly (but in any event no later than
3:00 p.m. New York time on the Business Day following the Bid Determination
Date) the Winning Bidder that its bid was the highest bid and shall provide
wiring instructions for payment of the bid amount into the Certificate Account
by 12:00 p.m. New York time on the second Business Day following the Bid
Determination Date and, if applicable, provide the Directing Certificateholder
with wiring instructions for payment of the Auction Supplement Amount into the
Certificate Account by such time.
(d) If such Winning Bidder does not wire the bid amount so that it
is received in the Certificate Account in immediately available funds by 12:00
p.m. New York time on the second Business Day following the Bid Determination
Date, the Trustee shall repeat the process specified in the preceding
paragraph with respect to the second highest bid, but only if such bid is at
least the Minimum Auction Amount or the Directing Certificateholder agrees to
pay the new Auction Supplement Amount. If no other bids are available to be
accepted pursuant to the
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preceding sentence, or if the amount remitted by the Winning Bidder plus any
Auction Supplement Amount remitted by the Directing Certificateholder is less
than the Minimum Auction Amount, then the auction shall be considered to have
failed for all purposes.
(e) The Trustee shall not be liable with regard to the selection or
engagement of, or for any act or omission of, a financial advisor pursuant to
this Section 9.04 if the Trustee engages CHL to be such financial advisor.
(f) In the event of a Successful Auction and so long as the Winning
Bidder has wired its bid amount (and the Directing Certificateholder has wired
any Auction Supplement Amount, if applicable) to the Certificate Account as
provided above, then the Trustee shall promptly convey to the Winning Bidder
the Mortgage Loans and REO Properties owned by the Trust Fund. The Master
Servicer shall take all reasonable actions requested by the Trustee to effect
such conveyance, including remitting to the Distribution Account from the
Certificate Account, on the Business Day prior to the Distribution Date on
which final distribution on the Certificates is required to be paid under this
Agreement, all amounts on deposit in the Certificate Account, net of any
amounts permitted to be withdrawn pursuant to Section 3.08(a) and amounts
owing to the Trustee in reimbursement of its reasonable costs, including
expenses associated with engaging any financial advisor, incurred in
connection with the auction process. Such amounts owed to the Trustee shall be
withdrawn from the Certificate Account by the Master Servicer and paid to the
Trustee.
(g) Any amount paid by the Winning Bidder in excess of the Minimum
Auction Amount shall be distributed by the Trustee pro rata to the Class C
Certificates on the Distribution Date on which the final distribution on the
Certificates is made.
(h) In the event of a Successful Auction and to the extent the Swap
Contract is still outstanding, the Directing Certificateholder shall either:
(1) if any Swap Termination Payment would be payable by the
Swap Contract Administrator to the Swap Counterparty were the Swap
Contract to be terminated following final distribution on the
Certificates, either:
(A) pay to the Swap Contract Administrator any such Swap
Termination Payment; or
(B) accept assignment of the Swap Contract to the extent
that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty;
(2) if any Swap Termination Payment would be payable by the
Swap Counterparty to the Swap Contract Administrator were the Swap
Contract to be terminated following final distribution on the
Certificates, either
(A) (i) if the Directing Certificateholder does not own
100% of the Class C Certificates, accept assignment of the Swap
Contract to the extent that the Directing Certificateholder is
an acceptable counterparty for the Swap Counterparty and pay to
the Swap Contract Administrator
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the Swap Termination Payment that would be owed to the Swap
Contact Administrator by the Swap Counterparty if the Swap
Contract were terminated by the Swap Contract Administrator
following distribution on the Certificates or (ii) if the
Directing Certificateholder owns 100% of the Class C
Certificates, accept assignment of the Swap Contract to the
extent that the Directing Certificateholder is an acceptable
counterparty for the Swap Counterparty; or
(B) instruct the Swap Contract Administrator to accept
from the Swap Counterparty any Swap Termination Payment that
would be owed to the Swap Contract Administrator.
(i) Any amounts paid to the Swap Contract Administrator pursuant to
subsection (h)(2) above shall be distributed to the Class C Certificates, pro
rata, based on entitlement (determined by reference to Section 9.04(k)), by
the Swap Contract Administrator.
(j) The Master Servicer may purchase the Mortgage Loans and REO
Properties owned by the Trust Fund for its own account pursuant to Section
9.01 or consent to the NIM Insurer's purchase of the Mortgage Loans and REO
Properties owned by the Trust Fund pursuant to Section 9.01 only if (1) the
Directing Certificateholder chooses not to request an auction as described
above or if the immediately preceding auction is unsuccessful or (2) the
Master Servicer notifies the Directing Certificateholder no later than 30 days
prior to the date on which the Master Servicer or the NIM Insurer, as
applicable, intends to effect the purchase of the Mortgage Loans and REO
Properties owned by the Trust Fund and the Directing Certificateholder does
not direct the Trustee to conduct an auction prior to the end of that 30-day
period.
(k) If the Directing Certificateholder pays any Auction Supplement
Amount pursuant to Section 9.04(c) or any Swap Termination Payment pursuant to
Section 9.04(h)(1)(A) on the final Distribution Date any amounts to be
distributed to the Class C Certificates pursuant to Section 4.01 will be
distributed as follows, first to the Directing Certificateholder, in an amount
up to the sum of such Auction Supplement Amount and such Swap Termination
Payment and second to the Class C Certificates, pro rata. For federal income
tax purposes, such Auction Supplement Amount and such Swap Termination Payment
so distributed shall be deemed paid pro rata to the Class C Certificates, and
the portion of such amounts deemed distributed to holders of the Class C
Certificates other than the Directing Certificateholder shall be deemed paid
from such other holders to the Directing Certificateholder.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.
This Agreement may be amended from time to time by the Depositor,
the Master Servicer, the Sellers and the Trustee with the consent of the
Certificate Insurer (such consent not to be unreasonably withheld) and the NIM
Insurer, without the consent of any of the
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Certificateholders (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein, (iii) to conform this Agreement to the Prospectus
Supplement or the Prospectus, (iv) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement to comply with any
rules or regulations promulgated by the Securities and Exchange Commission
from time to time, or (v) to make such other provisions with respect to
matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel delivered and addressed to the Trustee,
adversely affect in any material respect the interests of any
Certificateholder; provided that any such amendment shall be deemed not to
adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of the respective ratings then assigned to the Certificates (without regard to
the Certificate Insurance Policy, in the case of the Class A Certificates), it
being understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. Any amendment described above made solely to conform this Agreement to
the Prospectus or the Prospectus Supplement shall be deemed not to adversely
affect in any material respect the interests of the Certificateholders.
Notwithstanding the foregoing, no amendment that significantly changes the
permitted activities of the trust created by this Agreement may be made
without the consent of Certificateholders representing not less than 51% of
the Voting Rights of each Class of Certificates affected by such amendment.
Each party to this Agreement hereby agrees that it will cooperate with each
other party in amending this Agreement pursuant to clause (iv) above.
The Trustee, the Depositor, the Master Servicer and the Sellers with
the consent of the NIM Insurer and the Certificate Insurer may also at any
time and from time to time amend this Agreement, without the consent of the
Certificateholders, to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the Trust Fund as a REMIC under the Code or to avoid or minimize the risk
of the imposition of any tax on the Trust Fund pursuant to the Code that would
be a claim against the Trust Fund at any time prior to the final redemption of
the Certificates, provided that the Trustee has been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such
opinion but in any case shall not be an expense of the Trustee, to the effect
that such action is necessary or appropriate to maintain such qualification or
to avoid or minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Sellers and the Trustee with the consent
of the NIM Insurer and the Holders of each Class of Certificates affected
thereby evidencing not less than 51% of the Voting Rights of such Class, with
the consent of the Certificate Insurer (such consent not to be unreasonably
withheld), for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Holders of Certificates; provided that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing 66% or more of the Voting
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Rights of such Class, or (iii) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any such
amendment without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, no
amendment shall adversely affect in any material respect the Swap Counterparty
without at least ten Business Days' prior notice to the Swap Counterparty and
without the prior written consent of the Swap Counterparty, which consent
shall not be unreasonably withheld. CHL shall provide the Swap Counterparty
with prior written notice of any proposed material amendment of this
Agreement.
Notwithstanding any contrary provisions of this Agreement, the
Trustee and the NIM Insurer shall not consent to any amendment to this
Agreement unless each shall have first received an Opinion of Counsel
satisfactory to the Trustee and the NIM Insurer, which opinion shall be an
expense of the party requesting such amendment but in any case shall not be an
expense of the Trustee or the NIM Insurer, to the effect that such amendment
will not cause the imposition of any tax on the Trust Fund or the
Certificateholders or cause any REMIC formed hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance of such amendment
to the Certificate Insurer, the Swap Counterparty and, if the amendment
required the consent of Certificateholders, to each Certificateholder and each
Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, reasonably satisfactory to
the Trustee and the NIM Insurer that (i) such amendment is permitted and is
not prohibited by this Agreement and that all requirements for amending this
Agreement have been complied with; and (ii) either (A) the amendment does not
adversely affect in any material respect the interests of any
Certificateholder or (B) the conclusion set forth in the immediately preceding
clause (A) is not required to be reached pursuant to this Section 10.01. The
Trustee and the Master Servicer shall not amend the Credit Insurance Policy in
any manner that materially and adversely affects the coverage provided thereby
without the prior written consent of the Certificate Insurer and prior written
notice to S&P.
Section 10.02 Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Master Servicer at its
expense.
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For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 10.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties.
(a) It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute
sale thereof to the Trustee. It is, further, not the intention of the parties
that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, or if for
any other reason this Agreement or any Subsequent Transfer Agreement is held
or deemed to create a security interest in such assets, then (i) this
Agreement shall be deemed to be a security agreement (within the meaning of
the Uniform Commercial Code of the State of New York) with respect to all such
assets and security interests and (ii) the conveyance provided for in this
Agreement and any Subsequent Transfer Agreement shall be deemed to be an
assignment and a grant pursuant to the terms of this Agreement by the
Depositor to the Trustee, for the benefit of the Certificateholders, the
Certificate Insurer and the Swap Counterparty, of a security interest in all
of the assets that constitute the Trust Fund, whether now owned or hereafter
acquired.
The Depositor for the benefit of the Certificateholders, the
Certificate Insurer, the NIM Insurer and the Swap Counterparty shall, to the
extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for
the benefit of the Certificateholders and the Swap Counterparty.
(b) The Depositor hereby represents that:
(i) This Agreement creates a valid and continuing security
interest (as defined in the Uniform Commercial Code as enacted in
the State of New York (the "NY UCC")) in the Mortgage Notes in favor
of the Trustee, which security
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interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Depositor.
(ii) The Mortgage Notes constitute "instruments" within the
meaning of the NY UCC.
(iii) Immediately prior to the assignment of each Mortgage Loan
to the Trustee, the Depositor owns and has good and marketable title
to such Mortgage Loan free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Depositor has received all consents and approvals
required by the terms of the Mortgage Loans to the sale of the
Mortgage Loans hereunder to the Trustee.
(v) All original executed copies of each Mortgage Note that are
required to be delivered to the Trustee pursuant to Section 2.01
have been delivered to the Trustee.
(vi) Other than the security interest granted to the Trustee
pursuant to this Agreement, the Depositor has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of
the Mortgage Loans. The Depositor has not authorized the filing of
and is not aware of any financing statements against the Depositor
that include a description of collateral covering the Mortgage Loans
other than any financing statement relating to the security interest
granted to the Trustee hereunder or that has been terminated. The
Depositor is not aware of any judgment or tax lien filings against
the Depositor.
The parties to this Agreement shall not waive any of the
representations set forth in this Section 10.04(b) without obtaining a
confirmation of the then-current ratings of the Certificates ( determined
without regard to the Certificate Insurance Policy).
(c) The Master Servicer shall take such action as is reasonably
necessary to maintain the perfection and priority of the security interest of
the Trustee in the Mortgage Loans; provided, however, that the obligation to
deliver the Mortgage File to the Trustee pursuant to Section 2.01 shall be
solely the Depositor's obligation and the Master Servicer shall not be
responsible for the safekeeping of the Mortgage Files by the Trustee.
(d) It is understood and agreed that the representations and
warranties set forth in subsection (b) above shall survive delivery of the
Mortgage Files to the Trustee. Upon discovery by the Depositor or the Trustee
of a breach of any of the foregoing representations and warranties set forth
in subsection (b) above, which breach materially and adversely affects the
interest of the Certificateholders or the Certificate Insurer, the party
discovering such breach shall give prompt written notice to the others, to the
Certificate Insurer and to each Rating Agency.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency and the Certificate Insurer and the Swap
Counterparty with respect to each of the following of which it has actual
knowledge:
(1) Any material change or amendment to this Agreement;
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(2) The occurrence of any Event of Default that has not been
cured;
(3) The resignation or termination of the Master Servicer or
the Trustee and the appointment of any successor;
(4) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 2.04, 2.07 and 3.12; and
(5) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency and the Certificate Insurer copies of the following:
(1) Each report to Certificateholders described in Section
4.05;
(2) Each annual statement as to compliance described in Section
3.17; and
(3) Each annual independent public accountants' servicing
report described in Section 11.07.
(c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the
Depositor, CWHEQ, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
facsimile number: (000) 000-0000, Attention: Xxxx Xxxxx, or such other address
as may be hereafter furnished to the Sellers, the Master Servicer, the
Certificate Insurer and the Trustee by the Depositor in writing; (ii) in the
case of CHL, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxx Xxxxx, or
such other address as may be hereafter furnished to the Depositor, the Master
Servicer, the Certificate Insurer and the Trustee by the Sellers in writing;
(iii) in the case of Park Monaco, Park Monaco Inc., 0000 Xxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxx
Xxx, or such other address as may be hereafter furnished to the Depositor, the
Master Servicer, the Certificate Insurer and the Trustee by the Sellers in
writing; (iv) in the case of Park Granada, Park Granada LLC., 0000 Xxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000,
Attention: Xxxx Xxx, or such other address as may be hereafter furnished to
the Depositor, the Master Servicer, the Certificate Insurer and the Trustee by
the Sellers in writing; (v) in the case of Park Sienna, Park Sienna LLC, 0000
Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000,
Attention: Xxxx Xxx, or such other address as may be hereafter furnished to
the Depositor, the Master Servicer, the Certificate Insurer and the Trustee by
the Sellers in writing; (vi) in the case of the Master Servicer, Countrywide
Home Loans Servicing LP, 0000 Xxxxxxxxx Xxxxx, Xxxxx, Xxxxx 00000, facsimile
number (000) 000-0000, Attention: Xxxx Xxxx or such other address as may be
hereafter furnished to the Depositor, the Sellers, the Certificate Insurer and
the Trustee by the Master Servicer in writing; (vii) in the case of the
Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, 0X, Xxx Xxxx, Xxx Xxxx
00000, Attention: Corporate Trust MBS Administration, CWHEQ, Series 2007-S2,
or such other address as the Trustee may hereafter furnish to the parties
hereto and the Certificate Insurer; (viii) in the case of the Rating Agencies,
(1) Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring Department, 00
Xxxxxx Xxxxxx, Xxxxx Xxxxx,
000
Xxx Xxxx, Xxx Xxxx 00000, and (2) Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Attention: Mortgage Surveillance Group,
00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ix) in the case of the
Corridor Contract Counterparty, Bear Xxxxxxx Financial Products Inc.,
Attention: DPC Manager, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Facsimile: (000) 000-0000, with a copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxx, Xxx Xxxx 00000, Attention: Derivative Operations--7th Floor,
Facsimile (000) 000-0000, or such other address as may be hereafter furnished
by the Corridor Contract Counterparty; (x) in the case of the Swap
Counterparty, Bear Xxxxxxx Capital Markets Inc., Attention: DPC Manager, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile: (000) 000-0000, with a
copy to Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
Derivative Operations--7th Floor, Facsimile (000) 000-0000, or such other
address as may be hereafter furnished by the Swap Counterparty; and (xi) in
the case of the Certificate Insurer, MBIA Insurance Corporation, 000 Xxxx
Xxxxxx, Xxxxxx, XX 00000, facsimile number (000) 000-0000 , Attention: Insured
Portfolio Management - Structured Finance (CWHEQ 2007-S2) or such other
address as may be hereafter furnished by the Certificate Insurer. Notices to
Certificateholders shall be deemed given when mailed, first postage prepaid,
to their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 6.02, this Agreement may not be assigned by the
Master Servicer without the prior written consent of the Trustee and the
Depositor.
Section 10.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
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No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than
25% of the Voting Rights shall also have made written request to the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses, and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding and the Certificate Insurer has
given its prior written consent; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Agreement, except in the manner herein provided
and for the common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 10.08, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 10.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor, any Seller, the NIM Insurer or the
Trustee during the Master Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Master Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to
cause such books to be audited by independent certified public accountants
selected by the Depositor, a Seller, the NIM Insurer or the Trustee and to
discuss its affairs, finances and accounts relating to the Mortgage Loans with
its officers, employees and independent public accountants (and by this
provision the Master Servicer hereby authorizes such accountants to discuss
with such representative such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor, any Seller,
the NIM Insurer or the Trustee of any right under this Section 10.09 shall be
borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Trustee pursuant to this Agreement, are and shall be deemed
fully paid.
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Section 10.11 Rights of NIM Insurer.
(a) The rights of the NIM Insurer under this Agreement shall exist
only so long as either:
(1) the notes certain payments on which are guaranteed by the
NIM Insurer remain outstanding or
(2) the NIM Insurer is owed amounts paid by it with respect to
that guaranty.
(b) The rights of the NIM Insurer under this Agreement are
exercisable by the NIM Insurer only so long as no default by the NIM Insurer
under its guaranty of certain payments under notes backed or secured by the
Class C, Class E-P or Class P Certificates has occurred and is continuing. If
the NIM Insurer is the subject of any insolvency proceeding, the rights of the
NIM Insurer under this Agreement will be exercisable by the NIM Insurer only
so long as:
(1) the obligations of the NIM Insurer under its guaranty of
notes backed or secured by the Class C, Class E-P or Class P
Certificates have not been disavowed and
(2) CHL and the Trustee have received reasonable assurances
that the NIM Insurer will be able to satisfy its obligations under its
guaranty of notes backed or secured by the Class C, Class E-P or
Class P Certificates.
(c) The NIM Insurer is a third party beneficiary of this Agreement
to the same extent as if it were a party to this Agreement and may enforce any
of those rights under this Agreement.
(d) A copy of any documents of any nature required by this Agreement
to be delivered by the Trustee, or to the Trustee or the Rating Agencies,
shall in each case at the same time also be delivered to the NIM Insurer. Any
notices required to be given by the Trustee, or to the Trustee or the Rating
Agencies, shall in each case at the same time also be given to the NIM
Insurer. If the Trustee receives a notice or document that is required
hereunder to be delivered to the NIM Insurer, and if such notice or document
does not indicate that a copy thereof has been previously sent to the NIM
Insurer, the Trustee shall send the NIM Insurer a copy of such notice or
document. If such document is an Opinion of Counsel, the NIM Insurer shall be
an addressee thereof or such Opinion of Counsel shall contain language
permitting the NIM Insurer to rely thereon as if the NIM Insurer were an
addressee thereof.
(e) Anything in this Agreement that is conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies shall also be conditioned on not resulting
in the downgrading or withdrawal of the ratings then assigned by the Rating
Agencies to the notes backed or secured by the Class C, Class E-P or Class P
Certificates (without giving effect to any policy or guaranty provided by the
NIM Insurer).
Section 10.12 Protection of Assets.
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this Agreement, the Trust Fund
created by this Agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
(iii) engage in any business or activities.
(b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until the date that is one
year and one day after the Certificates have been paid.
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ARTICLE XI.
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations.
The Master Servicer, the Trustee and each Seller shall reasonably
cooperate with the Depositor in connection with the satisfaction of the
Depositor's reporting requirements under the Exchange Act with respect to the
Trust Fund. In addition to the information specified below, if so requested by
the Depositor for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee and each Seller shall (and the
Master Servicer shall cause each Subservicer to) provide the Depositor with
(a) such information which is available to such Person without unreasonable
effort or expense and within such timeframe as may be reasonably requested by
the Depositor to comply with the Depositor's reporting obligations under the
Exchange Act and (b) to the extent such Person is a party (and the Depositor
is not a party) to any agreement or amendment required to be filed, copies of
such agreement or amendment in XXXXX-compatible form.
Section 11.02 Form 10-D Filings.
(a) In accordance with the Exchange Act, the Trustee shall prepare
for filing and file within 15 days after each Distribution Date (subject to
permitted extensions under the Exchange Act) with the Commission with respect
to the Trust Fund, a Form 10-D with copies of the Monthly Statement and, to
the extent delivered to the Trustee, no later than 10 days following the
Distribution Date, such other information identified by the Depositor or the
Master Servicer, in writing, to be filed with the Commission (such other
information, the "Additional Designated Information"). If the Depositor or
Master Servicer directs that any Additional Designated Information is to be
filed with any Form 10-D, the Depositor or Master Servicer, as the case may
be, shall specify the Item on Form 10-D to which such information is
responsive and, with respect to any Exhibit to be filed on Form 10-D, the
Exhibit number. Any information to be filed on Form 10-D shall be delivered to
the Trustee in XXXXX-compatible form or as otherwise agreed upon by the
Trustee and the Depositor or the Master Servicer, as the case may be, at the
Depositor's expense, and any necessary conversion to XXXXX-compatible format
will be at the Depositor's expense. At the reasonable request of, and in
accordance with the reasonable directions of, the Depositor or the Master
Servicer, subject to the two preceding sentences, the Trustee shall prepare
for filing and file an amendment to any Form 10-D previously filed with the
Commission with respect to the Trust Fund. The Master Servicer shall sign the
Form 10-D filed on behalf of the Trust Fund.
(b) No later than each Distribution Date, each of the Master
Servicer and the Trustee shall notify (and the Master Servicer shall cause any
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-D
Disclosure Item, together with a description of any such Form 10-D Disclosure
Item in form and substance reasonably acceptable to the Depositor. In addition
to such information as the Master Servicer and the Trustee are obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Depositor, each of the Master Servicer and the Trustee shall provide such
information which is available to the Master Servicer and the Trustee, as
applicable, without unreasonable effort or expense regarding the performance
or servicing of the Mortgage Loans (in the case of the Trustee, based on the
163
information provided by the Master Servicer) as is reasonably required to
facilitate preparation of distribution reports in accordance with Item 1121 of
Regulation AB. Such information shall be provided concurrently with the
Remittance Reports in the case of the Master Servicer and the Monthly
Statement in the case of the Trustee, commencing with the first such report
due not less than five Business Days following such request.
(c) The Trustee shall not have any responsibility to file any items
(other than those generated by it) that have not been received in a format
suitable (or readily convertible into a format suitable) for electronic filing
via the XXXXX system and shall not have any responsibility to convert any such
items to such format (other than those items generated by it or that are
readily convertible to such format). The Trustee shall have no liability to
the Certificateholders, the Trust Fund, the Master Servicer, the Depositor or
the NIM Insurer with respect to any failure to properly prepare or file any of
Form 10-D to the extent that such failure is not the result of any negligence,
bad faith or willful misconduct on its part.
Section 11.03 Form 8-K Filings.
The Master Servicer shall prepare and file on behalf of the Trust
Fund any Form 8-K required by the Exchange Act. Each Form 8-K must be signed
by the Master Servicer. Each of the Master Servicer (and the Master Servicer
shall cause any Subservicer to promptly notify) and the Trustee shall promptly
notify the Depositor and the Master Servicer (if the notifying party is not
the Master Servicer), but in no event later than one (1) Business Day after
its occurrence, of any Reportable Event of which it has actual knowledge. Each
Person shall be deemed to have actual knowledge of any such event to the
extent that it relates to such Person or any action or failure to act by such
Person. Concurrently with any Subsequent Transfer, CHL shall notify the
Depositor and the Master Servicer, if any material pool characteristic of the
actual asset pool at the time of issuance of the Certificates differs by 5% or
more (other than as a result of the pool assets converting into cash in
accordance with their terms) from the description of the asset pool in the
Prospectus Supplement.
Section 11.04 Form 10-K Filings.
Prior to March 30th of each year, commencing in 2008 (or such
earlier date as may be required by the Exchange Act), the Depositor shall
prepare and file on behalf of the Trust Fund a Form 10-K, in form and
substance as required by the Exchange Act. A senior officer in charge of the
servicing function of the Master Servicer shall sign each Form 10-K filed on
behalf of the Trust Fund. Such Form 10-K shall include as exhibits each (i)
annual compliance statement described under Section 3.17, (ii) annual report
on assessments of compliance with servicing criteria described under Section
11.07 and (iii) accountant's report described under Section 11.07. Each Form
10-K shall also include any Xxxxxxxx-Xxxxx Certification required to be
included therewith, as described in Section 11.05.
If the Item 1119 Parties listed on Exhibit Z have changed since the
Closing Date, no later than March 1 of each year, the Master Servicer shall
provide each of the Master Servicer (and the Master Servicer shall provide any
Subservicer) and the Trustee with an updated Exhibit Z setting forth the Item
1119 Parties. No later than March 15 of each year, commencing in 2008, the
Master Servicer and the Trustee shall notify (and the Master Servicer shall
cause any
164
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-K
Disclosure Item, together with a description of any such Form 10-K Disclosure
Item in form and substance reasonably acceptable to the Depositor.
Additionally, each of the Master Servicer and the Trustee shall provide, and
shall cause each Reporting Subcontractor retained by the Master Servicer or
the Trustee, as applicable, and in the case of the Master Servicer shall cause
each Subservicer, to provide, the following information no later than March 15
of each year in which a Form 10-K is required to be filed on behalf of the
Trust Fund: (i) if such Person's report on assessment of compliance with
servicing criteria described under Section 11.07 or related registered public
accounting firm attestation report described under Section 11.07 identifies
any material instance of noncompliance, notification of such instance of
noncompliance and (ii) if any such Person's report on assessment of compliance
with servicing criteria or related registered public accounting firm
attestation report is not provided to be filed as an exhibit to such Form
10-K, information detailing the explanation why such report is not included.
Section 11.05 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification (the "Xxxxxxxx-Xxxxx
Certification") required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations of the Commission promulgated thereunder (including any
interpretations thereof by the Commission's staff)). No later than March 15 of
each year, beginning in 2008, the Master Servicer and the Trustee shall
(unless such person is the Certifying Person), and the Master Servicer shall
cause each Subservicer and each Reporting Subcontractor and the Trustee shall
cause each Reporting Subcontractor to, provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the "Certifying Person") a certification (each,
a "Performance Certification"), in the form attached hereto as Exhibit X-1 (in
the case of a Subservicer or any Reporting Subcontractor of the Master
Servicer or a Subservicer) and Exhibit X-2 (in the case of the Trustee or any
Reporting Subcontractor of the Trustee), on which the Certifying Person, the
entity for which the Certifying Person acts as an officer, and such entity's
officers, directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The senior officer in charge of
the servicing function of the Master Servicer shall serve as the Certifying
Person on behalf of the Trust Fund. Neither the Master Servicer nor the
Depositor will request delivery of a certification under this clause unless
the Depositor is required under the Exchange Act to file an annual report on
Form 10-K with respect to the Trust Fund. In the event that prior to the
filing date of the Form 10-K in March of each year, the Trustee or the
Depositor has actual knowledge of information material to the Xxxxxxxx-Xxxxx
Certification, the Trustee or the Depositor, as the case may be, shall
promptly notify the Master Servicer and the Depositor. The respective parties
hereto agree to cooperate with all reasonable requests made by any Certifying
Person or Certification Party in connection with such Person's attempt to
conduct any due diligence that such Person reasonably believes to be
appropriate in order to allow it to deliver any Xxxxxxxx-Xxxxx Certification
or portion thereof with respect to the Trust Fund.
165
Section 11.06 Form 15 Filing.
Prior to January 30 of the first year in which the Depositor is able
to do so under applicable law, the Depositor shall file a Form 15 relating to
the automatic suspension of reporting in respect of the Trust Fund under the
Exchange Act.
Section 11.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2008:
(1) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report (in form and substance
reasonably satisfactory to the Depositor) regarding the Master Servicer's
or the Trustee's, as applicable, assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122
of Regulation AB. Such report shall be signed by an authorized officer of
such Person and shall address each of the Servicing Criteria specified on
a certification substantially in the form of Exhibit Y hereto delivered
to the Depositor concurrently with the execution of this Agreement. To
the extent any of the Servicing Criteria are not applicable to such
Person, with respect to Asset Backed securities transactions taken as a
whole involving such Person and that are backed by the same asset type
backing the Certificates, such report shall include such a statement to
that effect. The Depositor and the Master Servicer, and each of their
respective officers and directors shall be entitled to rely on upon each
such servicing criteria assessment.
(2) Each of the Master Servicer and the Trustee shall deliver
to the Depositor and the Master Servicer a report of a registered public
accounting firm reasonably acceptable to the Depositor that attests to,
and reports on, the assessment of compliance made by Master Servicer or
the Trustee, as applicable, and delivered pursuant to the preceding
paragraphs. Such attestation shall be in accordance with Rules 1-02(a)(3)
and 2-02(g) of Regulation S-X under the Securities Act and the Exchange
Act, including, without limitation that in the event that an overall
opinion cannot be expressed, such registered public accounting firm shall
state in such report why it was unable to express such an opinion. Such
report must be available for general use and not contain restricted use
language. To the extent any of the Servicing Criteria are not applicable
to such Person, with respect to Asset Backed securities transactions
taken as a whole involving such Person and that are backed by the same
asset type backing the Certificates, such report shall include such a
statement that that effect.
(3) The Master Servicer shall cause each Subservicer and each
Reporting Subcontractor to deliver to the Depositor an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section 11.07.
(4) The Trustee shall cause each Reporting Subcontractor to
deliver to the Depositor and the Master Servicer an assessment of
compliance and accountant's attestation as and when provided in
paragraphs (a) and (b) of this Section.
166
(5) The Master Servicer and the Trustee shall execute (and the
Master Servicer shall cause each Subservicer to execute, and the Master
Servicer and the Trustee shall cause each Reporting Subcontractor to
execute) a reliance certificate to enable the Certification Parties to
rely upon each (i) annual compliance statement provided pursuant to
Section 3.17, (ii) annual report on assessments of compliance with
servicing criteria provided pursuant to this Section 11.07 and (iii)
accountant's report provided pursuant to this Section 11.07 and shall
include a certification that each such annual compliance statement or
report discloses any deficiencies or defaults described to the registered
public accountants of such Person to enable such accountants to render
the certificates provided for in this Section 11.07.
(b) In the event the Master Servicer, any Subservicer, the Trustee
or Reporting Subcontractor is terminated or resigns during the term of this
Agreement, such Person shall provide documents and information required by
this Section 11.07 with respect to the period of time it was subject to this
Agreement or provided services with respect to the Trust Fund, the
Certificates or the Mortgage Loans.
(c) Each assessment of compliance provided by a Subservicer pursuant
to Section 11.07(a)(3) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit Y hereto delivered to
the Depositor concurrently with the execution of this Agreement or, in the
case of a Subservicer subsequently appointed as such, on or prior to the date
of such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 11.07(a)(3) or (4) need not address any elements of the
Servicing Criteria other than those specified by the Master Servicer or the
Trustee, as applicable, pursuant to Section 11.07(a)(1).
Section 11.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any Subservicer used by the
Master Servicer (or by any Subservicer) for the benefit of the Depositor to
comply with the provisions of Section 3.17 and this Article XI to the same
extent as if such Subservicer were the Master Servicer (except with respect to
the Master Servicer's duties with respect to preparing and filing any Exchange
Act Reports or as the Certifying Person). The Master Servicer shall be
responsible for obtaining from each Subservicer and delivering to the
Depositor any servicer compliance statement required to be delivered by such
Subservicer under Section 3.17, any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 11.07 and any
certification required to be delivered to the Certifying Person under Section
11.05 as and when required to be delivered. As a condition to the succession
to any Subservicer as subservicer under this Agreement by any Person (i) into
which such Subservicer may be merged or consolidated, or (ii) which may be
appointed as a successor to any Subservicer, the Master Servicer shall provide
to the Depositor, at least 15 calendar days prior to the effective date of
such succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K.
167
(b) It shall not be necessary for the Master Servicer, any
Subservicer or the Trustee to seek the consent of the Depositor or any other
party hereto to the utilization of any Subcontractor. The Master Servicer or
the Trustee, as applicable, shall promptly upon request provide to the
Depositor (or any designee of the Depositor, such as the Master Servicer or
administrator) a written description (in form and substance satisfactory to
the Depositor) of the role and function of each Subcontractor utilized by such
Person (or in the case of the Master Servicer, any Subservicer), specifying
(i) the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be a Reporting Subcontractor, the Master Servicer or the Trustee, as
applicable, shall cause any such Subcontractor used by such Person (or in the
case of the Master Servicer, any Subservicer) for the benefit of the Depositor
to comply with the provisions of Sections 11.07 and 11.09 of this Agreement to
the same extent as if such Subcontractor were the Master Servicer (except with
respect to the Master Servicer's duties with respect to preparing and filing
any Exchange Act Reports or as the Certifying Person) or the Trustee, as
applicable. The Master Servicer or the Trustee, as applicable, shall be
responsible for obtaining from each Subcontractor and delivering to the
Depositor and the Master Servicer, any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 11.05
and Section 11.07, in each case as and when required to be delivered.
Section 11.09 Amendments.
In the event the parties to this Agreement desire to further clarify
or amend any provision of this Article XI, this Agreement shall be amended to
reflect the new agreement between the parties covering matters in this Article
XI pursuant to Section 10.01, which amendment shall not require any Opinion of
Counsel or Rating Agency confirmations or the consent of any
Certificateholder, the Certificate Insurer or the NIM Insurer provided that
written notice of such amendment shall promptly be delivered by the Master
Servicer to the Certificate Insurer.
If, during the period that the Depositor is required to file
Exchange Act Reports with respect to the Trust Fund, the Master Servicer is no
longer an Affiliate of the Depositor, the Depositor shall assume the
obligations and responsibilities of the Master Servicer in this Article XI
with respect to the preparation and filing of the Exchange Act Reports and/or
acting as the Certifying Person, if the Depositor has received indemnity from
such successor Master Servicer satisfactory to the Depositor, and such Master
Servicer has agreed to provide a Xxxxxxxx-Xxxxx Certification to the Depositor
substantially in the form of Exhibit AA and the certifications referred to in
Section 11.07.
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Section 11.10 Reconciliation of Accounts.
Any reconciliation of Account performed by any party hereto, or any
Subservicer or Subcontractor, shall be prepared no later than 45 calendar days
after the bank statement cutoff date.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
CWHEQ, INC.,
as Depositor
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK GRANADA LLC,
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK MONACO INC.,
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
PARK SIENNA LLC,
as a Seller
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Executive Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
(solely with respect to its
obligations under Section 4.01(d))
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Exhibits A-1
through A-6
[Exhibits A-1 through A-6 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
Exhibit B
Exhibit B is a photocopy
of the Class P Certificates
as delivered.
[See appropriate document delivered at closing.]
Exhibit C
Exhibit C is a photocopy
of the Class C Certificates
as delivered.
[See appropriate document delivered at closing.]
Exhibit D-1
Exhibit D-1 is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit D-2
Exhibit D-2 is a photocopy
of the Class E-P Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.
[See appropriate documents delivered at closing.]
Exhibit F-1 and F-2
[Exhibits F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2007 (the "Pooling and Servicing Agreement")
among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC,
as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and the
undersigned, as Trustee, hereby certifies that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed in the attached list of exceptions) the Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of ______________,
without recourse", or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note; and
(ii) a duly executed assignment of the Mortgage or a copy of such
assignment, in either case in the form permitted by Section 2.01 of the
Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of
G-1-1
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
G-1-2
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
------------------------------------
Name:
Title:
G-1-3
EXHIBIT G-2
FORM OF INTERIM CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2007 (the "Pooling and Servicing Agreement")
among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Granada LLC, as a Seller , Park Monaco Inc., as a Seller, Park Sienna
LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and
the undersigned, as Trustee, hereby certifies that [, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement, dated as of __________ (the "Subsequent Transfer Agreement") among
CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller and The Bank of New York, as Trustee], except as listed in the
following paragraph, as to each [Initial Mortgage Loan][Subsequent Mortgage
Loan] listed in the [Mortgage Loan Schedule][Loan Number and Borrower
Identification Mortgage Loan Schedule] (other than any [Mortgage Loan][Loan
Number and Borrower Identification Mortgage Loan Schedule] paid in full or
listed on the attached list of exceptions) the Trustee has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(ii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage, with recording information, and in the case of each
[Initial Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage
Loan, the original Mortgage or a copy of such Mortgage, with
G-2-1
recording information, noting thereon the presence of the MIN of the [Initial
Mortgage Loan][Subsequent Mortgage Loan] and language indicating that the
[Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the
[Initial Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence
of recording indicated thereon, or a copy of the Mortgage certified by the
public recording office in which such Mortgage has been recorded;
(iii) the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S2,
CWHEQ, Inc., by The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement dated as of March 1, 2007,
without recourse" or a copy of such assignment, with recording information,
or, in the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with
respect to property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
or a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a
copy of lender's title policy or a printout of the electronic equivalent and
all riders thereto or, in the event such original title policy has not been
received from the insurer, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company, with the original policy of title insurance to
be delivered within one year of the Closing Date.
In the event that in connection with any [Initial Mortgage
Loan][Subsequent Mortgage Loan] that is not a MERS Mortgage Loan the
applicable Seller cannot deliver the original recorded Mortgage or all interim
recorded assignments of the Mortgage satisfying the requirements of clause
(ii), (iii) or (iv), as applicable, the Trustee has received, in lieu thereof,
a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the applicable
Seller, the applicable title company, escrow agent or attorney, or the
originator of such [Initial Mortgage Loan][Subsequent Mortgage Loan], as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
[Initial Mortgage Loan][Subsequent Mortgage Loan], and (ii) the information
set forth in items (i), (iv), (v), (vi), (viii) and (ix) of the definition of
the "Mortgage Loan Schedule" in Section 1.01 of the Pooling and Servicing
Agreement accurately reflects information set forth in the Mortgage File.
G-2-2
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the [Initial
Mortgage Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any
such Mortgage Loan.
G-2-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
------------------------------------
Name:
Title:
G-2-4
EXHIBIT G-3
FORM OF DELAY DELIVERY CERTIFICATION
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Gentlemen:
Reference is made to the Initial Certification of Trustee relating
to the above-referenced series, with the schedule of exceptions attached
thereto, delivered by the undersigned, as Trustee, on the Closing Date in
accordance with Section 2.02 of the Pooling and Servicing Agreement dated as
of March 1, 2007 (the "Pooling and Servicing Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the undersigned,
as Trustee. The undersigned hereby certifies that [, with respect to the
Subsequent Mortgage Loans delivered in connection with the Subsequent Transfer
Agreement, dated as of __________ (the "Subsequent Transfer Agreement") among
CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller and The Bank of New York, as Trustee,] as to each Delay Delivery
Mortgage Loan listed on the Schedule A attached hereto (other than any
[Initial Mortgage Loan][Subsequent Mortgage Loan] paid in full or listed on
Schedule B attached hereto) the Trustee has received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements;
(2) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S2,
CWHEQ, Inc., by The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement
G-3-1
dated as of March 1, 2007, without recourse" or a copy of such assignment,
with recording information, or, in the case of each [Initial Mortgage
Loan][Subsequent Mortgage Loan] with respect to property located in the State
of California that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage in blank (each such assignment, when duly and validly completed,
to be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which such assignment
relates).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the [Initial
Mortgage Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the collectibility, insurability, effectiveness or suitability of any
such [Initial Mortgage Loan][Subsequent Mortgage Loan].
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
------------------------------------
Name:
Title:
G-3-2
EXHIBIT G-4
FORM OF INITIAL CERTIFICATION OF TRUSTEE
(SUBSEQUENT MORTGAGE LOANS)
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2007 (the "Pooling and Servicing Agreement")
among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC,
as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and the
undersigned, as Trustee, the undersigned hereby certifies that, as to each
Subsequent Mortgage Loan listed in the Loan Number and Borrower Identification
Mortgage Loan Schedule (other than any Subsequent Mortgage Loan paid in full
or listed in the attached list of exceptions) the Trustee has received:
(1) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of _______________
without recourse", with all intervening endorsements that show a complete
chain of endorsement from the originator to the Person endorsing the Mortgage
Note (each such endorsement being sufficient to transfer all right, title and
interest of the party so endorsing, as noteholder or assignee thereof, in and
to that Mortgage Note), or, if the original Mortgage Note has been lost or
destroyed and not replaced, an original lost note affidavit, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note and all such intervening endorsements; and
(2) a duly executed assignment of the Mortgage or a copy of such
assignment with recording information, in either case in the form permitted by
Section 2.01 of the Pooling and Servicing Agreement.
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
G-4-1
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the Subsequent
Mortgage Loans identified on the Loan Number and Borrower Identification
Mortgage Loan Schedule or (ii) the collectibility, insurability, effectiveness
or suitability of any such Subsequent Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
------------------------------------
Name:
Title:
G-4-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Master Servicer]
[Sellers]
[Certificate Insurer]
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of March 1, 2007 (the "Pooling and Servicing Agreement")
among CWHEQ, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller,
Park Granada LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC,
as a Seller, Countrywide Home Loans Servicing LP, as Master Servicer, and the
undersigned, as Trustee, the undersigned, as Trustee, hereby certifies that[,
with respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________ (the "Subsequent
Transfer Agreement") among CWHEQ, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller and The Bank of New York, as Trustee,] as
to each [Initial Mortgage Loan][Subsequent Mortgage Loan] listed in the
[Mortgage Loan Schedule][Loan Number and Borrower Identification Mortgage Loan
Schedule] (other than any [Initial Mortgage Loan][Subsequent Mortgage Loan]
paid in full or listed on the attached Document Exception Report) the Trustee
has received:
(i) the original Mortgage Note, endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
_________________ without recourse", with all intervening endorsements that
show a complete chain of endorsement from the originator to the Person
endorsing the Mortgage Note (each such endorsement being sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note), or, if the
original Mortgage Note has been lost or destroyed and not replaced, an
original lost note affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage Note and all such
intervening endorsements;
(ii) in the case of each [Initial Mortgage Loan][Subsequent Mortgage
Loan] that is not a MERS Mortgage Loan, the original recorded Mortgage or a
copy of such Mortgage, with recording information, and in the case of each
[Initial Mortgage Loan][Subsequent Mortgage Loan] that is a MERS Mortgage
Loan, the original Mortgage or a copy of such Mortgage, with recording
information, noting the presence of the MIN of the [Initial Mortgage
H-1
Loan][Subsequent Mortgage Loan] and language indicating that the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan if the [Initial
Mortgage Loan][Subsequent Mortgage Loan] is a MOM Loan, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded];
(iii) in the case of each [Initial Mortgage Loan][Subsequent
Mortgage Loan] that is not a MERS Mortgage Loan, a duly executed assignment of
the Mortgage to "Home Equity Loan Asset Backed Certificates, Series 2007-S2,
CWHEQ, Inc., by The Bank of New York, a New York banking corporation, as
trustee under the Pooling and Servicing Agreement dated as of March 1, 2007,
without recourse" or a copy of such assignment, with recording information,
or, in the case of each [Initial Mortgage Loan][Subsequent Mortgage Loan] with
respect to property located in the State of California that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage in blank (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which such assignment relates);
(iv) the original recorded assignment or assignments of the Mortgage
or a copy of such assignments, with recording information, together with all
interim recorded assignments of such Mortgage or a copy of such assignments,
with recording information (in each case noting the presence of a MIN in the
case of each MERS Mortgage Loan);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original or duplicate original lender's title policy or a
copy of lender's title policy or a printout of the electronic equivalent and
all riders thereto or any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy thereof
certified by the title company.
If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be
true and complete by such recording office.
Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v),
(vi), (viii) and (ix) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any
of the documents contained in each Mortgage File of any of the [Initial
Mortgage Loans][Subsequent Mortgage Loans] identified on the [Mortgage Loan
Schedule][Loan Number and Borrower Identification Mortgage Loan Schedule] or
(ii) the
H-2
collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].
H-3
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
The Bank of New York,
as Trustee
By:
------------------------------------
Name:
Title:
H-4
EXHIBIT I
TRANSFER AFFIDAVIT FOR THE CLASS A-R CERTIFICATES
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class A-R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, dated
as of March 1, 2007 (the "Agreement"), by and among CWHEQ, Inc., as depositor
(the "Depositor"), Countrywide Home Loans, Inc., as a Seller, Park Granada
LLC, as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee. Capitalized terms used, but not defined herein or in Exhibit
1 hereto, shall have the meanings ascribed to such terms in the Agreement. The
Transferee has authorized the undersigned to make this affidavit on behalf of
the Transferee.
2. The Transferee is not an employee benefit plan that is subject to
Title I of ERISA or to section 4975 of the Internal Revenue Code of 1986, nor
is it acting on behalf of or with plan assets of any such plan. The Transferee
is, as of the date hereof, and will be, as of the date of the Transfer, a
Permitted Transferee. The Transferee will endeavor to remain a Permitted
Transferee for so long as it retains its Ownership Interest in the
Certificate. The Transferee is acquiring its Ownership Interest in the
Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
I-1
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J-1 to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Class A-R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code section
7701(a)(30).
10. The Transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax. In
addition, as the holder of a noneconomic residual interest, the Transferee may
incur tax liabilities in excess of any cash flows generated by the interest
and the Transferee hereby represents that it intends to pay taxes associated
with holding the residual interest as they become due.
11. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class A-R Certificates to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.
* * *
I-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer and its corporate seal to be hereunto affixed,
duly attested, this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:
----------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known
or proved to me to be the same person who executed the foregoing instrument
and to be the ____________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
____________________________________
NOTARY PUBLIC
My Commission expires the ___ day of
, 20__.
I-3
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest
in such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) that is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trustor
unless such Person has furnished the transferor and the Trustee with a duly
completed Internal Revenue Service Form W-8ECI, and (vii) any other Person so
designated by the Trustee based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Class A-R Certificate to such Person may cause
any REMIC formed hereunder to fail to qualify as a REMIC at any time that any
Certificates are Outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Federal Home Loan Mortgage Corporation, a majority
of its board of directors is not selected by such government unit.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, bank, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency
or political subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
I-4
Section 5.02(c) of the Agreement
(c) Each Person who has or who acquires any Ownership Interest in a
Class A-R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:
(1) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(2) Except in connection with (i) the registration of the Tax
Matters Person Certificate in the name of the Trustee or (ii) any
registration in the name of, or transfer of a Class A-R Certificate to,
an affiliate of the Depositor (either directly or through a nominee) in
connection with the initial issuance of the Certificates, no Ownership
Interest in a Class A-R Certificate may be registered on the Closing Date
or thereafter transferred, and the Trustee shall not register the
Transfer of any Class A-R Certificate, unless the Trustee shall have been
furnished with an affidavit (a "Transfer Affidavit") of the initial owner
or the proposed transferee in the form attached hereto as Exhibit I.
(3) Each Person holding or acquiring any Ownership Interest in a
Class A-R Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Class A-R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Class A-R Certificate and (C)
not to Transfer its Ownership Interest in a Class A-R Certificate, or to
cause the Transfer of an Ownership Interest in a Class A-R Certificate to
any other Person, if it has actual knowledge that such Person is not a
Permitted Transferee.
(4) Any attempted or purported Transfer of any Ownership Interest in
a Class A-R Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Class A-R Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Class A-R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Class A-R
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and Transferor
Certificate. The Trustee shall be entitled but not obligated to recover
from any Holder of a Class A-R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such
subsequent time as it became other than a Permitted Transferee, all
payments made on such Class A-R Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.
I-5
(5) The Master Servicer shall use its best efforts to make
available, upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Class
A-R Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Class A-R Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trustee, the Sellers
or the Master Servicer to the effect that the elimination of such restrictions
will not cause any constituent REMIC of any REMIC formed hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any ownership Interest in a Class A-R
Certificate hereby consents to any amendment of this Agreement that, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Class
A-R Certificate is not transferred, directly or indirectly, to a Person that
is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Class A-R Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
I-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWHEQ, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2
--------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class A-R Certificates, we
certify that we have no knowledge that the Transferee is not a Permitted
Transferee. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement
dated as of March 1, 2007, among CWHEQ, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as
a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP,
as Master Servicer, and The Bank of New York, as Trustee.
Very truly yours,
_____________________________________
Name of Transferor
By: _________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2, Class [ ]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above-captioned
Certificates we certify that (a) we understand that the Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act. All capitalized terms used herein but not
defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of March 1, 2007, among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee.
Very truly yours,
_____________________________________
Name of Transferor
By: _________________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xx., 0X
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2, Class [ ]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction
that is exempt from the registration requirements of the Act and any such
laws, (b) we are an "accredited investor," as defined in Regulation D under
the Act, and have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of investments
in the Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the Depositor concerning the purchase of the Certificates
and all matters relating thereto or any additional information deemed
necessary to our decision to purchase the Certificates, (d) either (i) we are
not an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended, or a plan or arrangement that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of any such plan or arrangement, or using the assets of any
such plan or arrangement to effect such acquisition or (ii) if the
Certificates have been the subject of an ERISA-Qualifying Underwriting, we are
an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, (e) we are acquiring the Certificates for
investment for our own account and not with a view to any distribution of such
Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (g) below),
(f) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, or taken any other action which would
result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale,
transfer or other disposition is made pursuant to an effective registration
statement under the Act or is exempt from such registration requirements, and
if
K-1
requested, we will at our expense provide an opinion of counsel satisfactory
to the addressees of this Certificate that such sale, transfer or other
disposition may be made pursuant to an exemption from the Act, (2) the
purchaser or transferee of such Certificate has executed and delivered to you
a certificate to substantially the same effect as this certificate, and (3)
the purchaser or transferee has otherwise complied with any conditions for
transfer set forth in the Pooling and Servicing Agreement.
All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as
of March 1, 2007, among CWHEQ, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee.
Very truly yours,
__________________________________
Name of Transferee
By: _______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWHEQ, Inc.,
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CWHEQ Home Equity Loan Trust, Series 2007-S2, Class [ ]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates we certify that (a) we understand that the Certificates are not
being registered under the Securities Act of 1933, as amended (the "Act"), or
any state securities laws and are being transferred to us in a transaction
that is exempt from the registration requirements of the Act and any such
laws, (b) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of investments
in the Certificates, (c) we have had the opportunity to ask questions of and
receive answers from the Depositor concerning the purchase of the Certificates
and all matters relating thereto or any additional information deemed
necessary to our decision to purchase the Certificates, (d) either (i) we are
not an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended, or a plan or arrangement that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of any such plan or arrangement, or using the assets of any
such plan or arrangement to effect such acquisition or (ii) if the
Certificates have been the subject of an ERISA-Qualifying Underwriting, we are
an insurance company which is purchasing such Certificates with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting on
our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security
to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to
the Certificates, any interest in the Certificates or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other
action, that would constitute a distribution of the Certificates under the
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto,
L-1
nor will act, nor has authorized or will authorize any person to act, in such
manner with respect to the Certificates, (f) we are a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act and have
completed either of the forms of certification to that effect attached hereto
as Annex 1 or Annex 2. We are aware that the sale to us is being made in
reliance on Rule 144A. We are acquiring the Certificates for our own account
or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (ii) pursuant to another exemption from registration under
the Securities Act.
All capitalized terms used herein but not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as
of March 1, 2007, among CWHEQ, Inc., as Depositor, Countrywide Home Loans,
Inc., as a Seller, Park Granada LLC, as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee.
Very truly yours,
__________________________________
Name of Transferee
By: _______________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the
Buyer.
In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the
Buyer owned and/or invested on a discretionary basis either at least
$100,000,000 in securities or, if Buyer is a dealer, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in
securities (except for the excluded securities referred to below) as
of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies
the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of
L-3
risks underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are
part of an unsold allotment to or subscription by the Buyer, if the
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S.
or any instrumentality thereof, (iv) bank deposit notes and
certificates of deposit, (v) loan participations, (vi) repurchase
agreements, (vii) securities owned but subject to a repurchase
agreement and (viii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer
used the cost of such securities to the Buyer and did not include
any of the securities referred to in the preceding paragraph, except
(i) where the Buyer reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been
published. If clause (ii) in the preceding sentence applies, the
securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's
direction. However, such securities were not included if the Buyer
is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities
Exchange Act of 1934, as amended.
The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer may be in
reliance on Rule 144A.
L-4
Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of
such purchase. In addition, if the Buyer is a bank or savings and
loan is provided above, the Buyer agrees that it will furnish to
such parties updated annual financial statements promptly after they
become available.
____________________________________
Print Name of Buyer
By:_________________________________
Name:
Title:
Date: ______________________________
L-5
ANNEX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933, as amended ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment
Company Act of 1940, as amended and (ii) as marked below, the
Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the
amount of securities owned by the Buyer or the Buyer's Family of
Investment Companies, the cost of such securities was used,
except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no
current information with respect to the cost of those securities
has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market.
___ The Buyer owned $______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the
same parent or because one investment adviser is a majority owned
subsidiary of the other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
L-6
agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
The Buyer is familiar with Rule 144A and under-stands that the parties
listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be
in reliance on Rule 144A. In addition, the Buyer will only purchase
for the Buyer's own account.
Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to
which this certification relates of any changes in the information
and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
_____________________________________________
Print Name of Buyer or Adviser
By: _________________________________________
Name:
Title:
IF AN ADVISER:
_____________________________________________
Print Name of Buyer
Date:________________________________________
L-7
EXHIBIT M
FORM OF REQUEST FOR DOCUMENT RELEASE
Loan Information
Name of Mortgagor:
-------------------------------------
Master Servicer
Loan No.:
-------------------------------------
Trustee
Name:
-------------------------------------
Address:
-------------------------------------
-------------------------------------
Trustee
Mortgage File No.:
-------------------------------------
The undersigned Master Servicer hereby acknowledges that it has received
from _______________________________________, as Trustee for the Holders of
Home Equity Loan Asset Backed Certificates, Series 2007-S2, the documents
referred to below (the "Documents"). All capitalized terms not otherwise
defined in this Request for Document Release shall have the meanings given
them in the Pooling and Servicing Agreement dated as of March 1, 2007 (the
"Pooling and Servicing Agreement") among CWHEQ, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, and The Bank of New York, as Trustee.
( ) Mortgage Note dated ___________, ____, in the original principal sum of
$________, made by __________________, payable to, or endorsed to the
order of, the Trustee.
( ) Mortgage recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Deed of Trust recorded on _________________ as instrument no.
________________ in the County Recorder's Office of the County of
________________, State of _______________ in book/reel/docket
_______________ of official records at page/image _____________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder's
Office of
M-1
the County of __________, State of _______________ in
book/reel/docket _______________ of official records at page/image
_____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _______________________________________________
( ) _______________________________________________
( ) _______________________________________________
( ) _______________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trust Fund, solely for the
purposes provided in the Pooling and Servicing Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens,
security interest, charges, writs of attachment or other impositions nor
shall the Master Servicer assert or seek to assert any claims or rights
of setoff to or against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the
Documents has been liquidated and the proceeds thereof have been remitted
to the Certificate Account and except as expressly provided in the
Pooling and Servicing Agreement.
(4) The Documents and any proceeds thereof, including any proceeds
of proceeds, coming into the possession or control of the Master Servicer
shall at all times be earmarked for the account of the Trust Fund, and
the Master Servicer shall keep the Documents and any proceeds separate
and distinct from all other property in the Master Servicer's possession,
custody or control.
[Master Servicer]
By
_______________________________________
Its ______________________________________
Date: _________________, ____
M-2
EXHIBIT N
FORM OF REQUEST FOR FILE RELEASE
OFFICER'S CERTIFICATE AND TRUST RECEIPT
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
Series 2007-S2
__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE PURCHASE PRICE
FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE MORTGAGE LOANS HAVE BEEN
LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS] [LIQUIDATION PROCEEDS] HAVE
BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE POOLING AND SERVICING
AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN DELIVERED TO THE TRUSTEE IN
THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE CONDITIONS SET FORTH IN
SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING AGREEMENT.]
LOAN NUMBER:_______________ BORROWER'S NAME:_____________
COUNTY:____________________
[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]
I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO
SECTION 3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE
CREDITED.
____________ _____________________
DATED:____________
// VICE PRESIDENT
// ASSISTANT VICE PRESIDENT
N-1
Exhibit O
Exhibit O is a photocopy
of the Depository Agreement
as delivered.
[See appropriate documents delivered at closing.]
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_] (this
"Subsequent Transfer Agreement"), among CWHEQ, INC., a Delaware corporation, as
depositor (the "Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York
corporation, in its capacity as a seller under the Pooling and Servicing
Agreement referred to below ("CHL"), PARK GRANADA LLC, a Delaware corporation,
in its capacity as a seller under the Pooling and Servicing Agreement ("Park
Granada"), PARK MONACO INC., a Delaware corporation, in its capacity as a
seller under the Pooling and Servicing Agreement ("Park Monaco"), PARK SIENNA
LLC, a Delaware limited liability company, in its capacity as a seller under
the Pooling and Servicing Agreement ("Park Sienna" and, together with CHL, Park
Granada and Park Monaco, the "Sellers") and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee");
WHEREAS, the Depositor, CHL, Park Granada, Park Monaco, Park Sienna,
the Trustee, Countrywide Home Loans Servicing LP, as Master Servicer, and The
Bank of New York, as Trustee, have entered in the Pooling and Servicing
Agreement, dated as of March 1, 2007 (the "Pooling and Servicing Agreement"),
relating to the CWHEQ, Inc. Home Equity Loan Asset Backed Certificates, Series
2007-S2 (capitalized terms not otherwise defined herein are used as defined in
the Pooling and Servicing Agreement);
WHEREAS, Section 2.01(b) of the Pooling and Servicing Agreement
provides for the parties hereto to enter into this Subsequent Transfer
Agreement in accordance with the terms and conditions of the Pooling and
Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt and adequacy of which are hereby
acknowledged the parties hereto agree as follows:
(a) The "Subsequent Transfer Date" with respect to this Subsequent
Transfer Agreement shall be ________ __, 200[_].
(b) The "Subsequent Transfer Date Purchase Amount" with respect to
this Subsequent Transfer Agreement shall be $_______________.
(c) The Subsequent Mortgage Loans conveyed on the Subsequent Transfer
Date shall be subject to the terms and conditions of the Pooling and Servicing
Agreement.
(d) Annex I hereto sets forth a list of the Mortgage Loans which are
Delay Delivery Mortgage Loans.
(e) In case any provision of this Subsequent Transfer Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions or obligations shall not in any way be affected or
impaired thereby.
P-1
(f) In the event of any conflict between the provisions of this
Subsequent Transfer Agreement and the Pooling and Servicing Agreement, the
provisions of the Pooling and Servicing Agreement shall prevail.
(g) This Subsequent Transfer Agreement shall be governed by, and
shall be construed and enforced in accordance with the laws of the State of New
York.
(h) The Subsequent Transfer Agreement may be executed in one or more
counterparts, each of which so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
P-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer
Agreement have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
P-3
CWHEQ, INC.,
as Depositor
By: _____________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: _____________________________
Name:
Title:
PARK GRANADA LLC,
as a Seller
By: _____________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By: _____________________________
Name:
Title:
PARK SIENNA LLC,
as a Seller
P-4
By: _____________________________
Name:
Title:
X-0
XXX XXXX XX XXX XXXX,
not in its individual capacity,
but solely as Trustee
By:______________________________
Name:
Title:
P-6
Annex I
Mortgage Loans for which All or a Portion of a Related Mortgage File is not
Delivered to the Trustee on or prior to the Subsequent Transfer Date
P-7
EXHIBIT Q
[Reserved]
EXHIBIT R
[Reserved]
EXHIBIT S-1
[Reserved]
EXHIBIT S-2
[Reserved]
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
Series 2007-S2
[Date]
Via Facsimile
The Bank of New York,
as Trustee
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
Reference is made to the Pooling and Servicing Agreement, dated as of
March 1, 2007, (the "Pooling and Servicing Agreement") among CWHEQ, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York, as Trustee. Capitalized terms used herein shall have the meanings
ascribed to such terms in the Pooling and Servicing Agreement.
__________________ hereby certifies that he/she is a Servicing
Officer, holding the office set forth beneath his/her name and hereby further
certifies as follows:
With respect to the Distribution Date in _________ 20[ ] and each
Mortgage Loan set forth in the attached schedule:
1. A Principal Prepayment in full or in part was received during the
related Prepayment Period;
2. Any Prepayment Charge due under the terms of the Mortgage Note
with respect to such Principal Prepayment was or was not, as indicated on the
attached schedule using "Yes" or "No", received from the Mortgagor and
deposited in the Certificate Account;
3. As to each Mortgage Loan set forth on the attached schedule for
which all or part of the Prepayment Charge required in connection with the
Principal Prepayment was waived by the Master Servicer, such waiver was, as
indicated on the attached schedule, based upon:
(i) the Master Servicer's determination that such waiver would
maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking
into account the value of such Prepayment Charge, or
T-1
(ii)(A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with
a foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law; and
4. We certify that all amounts due in connection with the waiver of a
Prepayment Charge inconsistent with clause 3 above which are required to be
deposited by the Master Servicer pursuant to Section 3.20 of the Pooling and
Servicing Agreement, have been or will be so deposited.
COUNTRYWIDE HOME LOANS, INC.,
as Master Servicer
By:___________________________________
Name:
Title:
T-2
SCHEDULE OF MORTGAGE LOANS FOR WHICH A PREPAYMENT WAS RECEIVED
DURING THE RELATED PREPAYMENT PERIOD
----------------------------------------------------------------------------------------------------------------------
Loan Number Clause 2: Yes/No Clause 3: (i) or (ii)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
T-3
EXHIBIT U
[Reserved]
EXHIBIT V-1
[Reserved]
EXHIBIT V-2
[Reserved]
EXHIBIT V-3
[Reserved]
EXHIBIT W
MONTHLY STATEMENT
[On file with Trustee]
EXHIBIT X-1
FORM OF PERFORMANCE CERTIFICATION
(Subservicer)
Re: The Pooling and Servicing Agreement dated as of March 1, 2007 (the
"Pooling and Servicing Agreement") among CWHEQ, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
and the undersigned, as Trustee, and [Subservicing Agreement] dated
as of [ ] (the "Agreement")
I, ________________________________, the _______________________ of [NAME
OF COMPANY] (the "Company"), certify to the Depositor and the Master Servicer,
and their officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report"), all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Company during 200[ ] that
were delivered by the Company to the Depositor, the Master Servicer and
the Trustee pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer];
(4) I am responsible for reviewing the activities performed by the
Company as a servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations
under the Agreement; and
X-1-1
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the Master Servicer. Any material instances of noncompliance
described in such reports have been disclosed to the Master Servicer. Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.
Date: ____________________________________
By: _________________________________
Name:
Title:
X-1-2
EXHIBIT X-2
FORM OF PERFORMANCE CERTIFICATION
(Trustee)
Re: The Pooling and Servicing Agreement dated as of March 1, 2007 (the
"Pooling and Servicing Agreement") among CWHEQ, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Granada LLC, as a
Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer,
and the undersigned, as Trustee.
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor and the Master
Servicer, and their officers, with the knowledge and intent that they will
rely upon this certification, that:
(1) I have reviewed the report on assessment of the
Company's compliance with the servicing criteria set forth in Item
1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation
AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation
AB (the "Attestation Report"), [all reports on Form 10-D containing
statements to certificateholders filed in respect of the period
included in the year covered by the annual report of the Trust Fund]
(collectively, the "Distribution Date Statements");
(2) Assuming the accuracy and completeness of the
information delivered to the Company by the Master Servicer as
provided in the Pooling and Servicing Agreement and subject to
paragraph (4) below, the distribution information determined by the
Company and set forth in the Distribution Date Statements contained
in all Form 10-D's included in the year covered by the annual report
of such Trust on Form 10-K for the calendar year 200[ ], is complete
and does not contain any material misstatement of fact as of the last
day of the period covered by such annual report;
(3) Based solely on the information delivered to the Company
by the Master Servicer as provided in the Pooling and Servicing
Agreement, (i) the distribution information required under the
Pooling and Servicing Agreement to be contained in the Trust Fund's
Distribution Date Statements and (ii) the servicing information
required to be provided by the Master Servicer to the trustee for
inclusion in the Trust Fund's Distribution Date Statements, to the
extent received by the Trustee from the Master Servicer in accordance
with the Pooling and Servicing Agreement, is included in such
Distribution Date Statements;
(4) The Company is not certifying as to the accuracy,
completeness or correctness of the information which it received from
the Master Servicer and did not
X-2-1
independently verify or confirm the accuracy, completeness or
correctness of the information provided by the Master Servicer;
(5) I am responsible for reviewing the activities performed
by the Company as a person "performing a servicing function" under
the Pooling and Servicing Agreement, and based on my knowledge and
the compliance review conducted in preparing the Servicing Assessment
and except as disclosed in the Servicing Assessment or the
Attestation Report, the Company has fulfilled its obligations under
the Pooling and Servicing Agreement; and
(6) The Servicing Assessment and Attestation Report required
to be provided by the Company and by Subcontractor pursuant to the
Pooling and Servicing Agreement, have been provided to the Master
Servicer and the Depositor. Any material instances of noncompliance
described in such reports have been disclosed to the Master Servicer
and the Depositor. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
Date: ________________________________
By: _______________________________
Name:
Title:
X-2-2
EXHIBIT Y
FORM OF
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE STATEMENT
The assessment of compliance to be delivered by [the Master
Servicer] [Trustee] [Name of Subservicer] shall address, at a minimum, the
criteria identified as below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable Servicing
Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-------------------- --------------------------------------------------------------------------------------------
General Servicing Considerations
-------------------- ----------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
-------------------- ----------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
such servicing activities.
-------------------- ----------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
-------------------- ----------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount of
coverage required by and otherwise in accordance with the
terms of the transaction agreements.
-------------------- ----------------------
Cash Collection and Administration
-------------------- ----------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days specified
in the transaction agreements.
-------------------- ----------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
-------------------- ----------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
-------------------- ----------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
-------------------- ----------------------
1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect
to a foreign financial institution means a foreign
financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
-------------------- ----------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
-----------------------------------------------------------------------------------------------------------------
Y-1
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable Servicing
Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
Asset Backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate;
(B) prepared within 30 calendar days after the bank
statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and
approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
-------------------- ----------------------
Investor Remittances and Reporting
-------------------- ----------------------
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth
in the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
serviced by the Servicer.
-------------------- ----------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
-------------------- ----------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction
1122(d)(3)(iii) agreements.
-------------------- ----------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
-------------------- ----------------------
Pool Asset Administration
-------------------- ----------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related
mortgage loan documents.
-------------------- ----------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
-------------------- ----------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance with
any conditions or requirements in the transaction
agreements.
-------------------- ----------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made
in accordance with the related mortgage loan documents
are posted to the Servicer's obligor records maintained
no more than two business days after receipt, or such
other number of days specified in the transaction
agreements, and allocated to principal, interest or other
items (e.g., escrow) in accordance with the related
mortgage loan documents.
-------------------- ----------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
-------------------- ----------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
and related pool asset documents.
-------------------- ----------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------
Y-2
-----------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable Servicing
Criteria
-----------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
-------------------- ----------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on
the related mortgage loan documents.
-------------------- ----------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified
in the transaction agreements; (B) interest on such funds
is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and
(C) such funds are returned to the obligor within 30
calendar days of full repayment of the related mortgage
loans, or such other number of days specified in the
transaction agreements.
-------------------- ----------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such
other number of days specified in the transaction
agreements.
-------------------- ----------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless
the late payment was due to the obligor's error or
omission.
-------------------- ----------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
-------------------- ----------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the
transaction agreements.
-------------------- ----------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation
122(d)(4)(xv) AB, is maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
[NAME OF MASTER SERVICER] [NAME OF
TRUSTEE] [NAME OF SUBSERVICER]
Date: _________________________
By: ________________________________
Name:
Title:
Y-3
EXHIBIT Z
[FORM OF] LIST OF ITEM 1119 PARTIES
ASSET BACKED CERTIFICATES,
Series 200_-__
[Date]
------------------------------------------------------------------------------
Party Contact Information
------------------------------------------------------------------------------
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Z-1
EXHIBIT AA
FORM OF
XXXXXXXX-XXXXX CERTIFICATION
(Replacement Master Servicer)
(On file with Trustee)
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
SCHEDULE II
COLLATERAL SCHEDULE
-------------------------------------------------------------------------------
Characteristic Applicable Mortgage
Section Loans
-------------------------------------------------------------------------------
Single-Family Detached Dwellings 2.03(b)(32) 65.55%
-------------------------------------------------------------------------------
Two- to Four-Family Dwellings 2.03(b)(32) 2.09%
-------------------------------------------------------------------------------
Low-Rise Condominium Units 2.03(b)(32) 8.03%
-------------------------------------------------------------------------------
High-Rise Condominium Units 2.03(b)(32) 0.68%
-------------------------------------------------------------------------------
Manufactured Housing 2.03(b)(32) 0.00%
-------------------------------------------------------------------------------
PUDs 2.03(b)(32) 23.66%
-------------------------------------------------------------------------------
Earliest Origination Date 2.03(b)(33) 2/12/2002
-------------------------------------------------------------------------------
Prepayment Penalty 2.03(b)(35) 27.09%
-------------------------------------------------------------------------------
Investor Properties 2.03(b)(36) 3.10%
-------------------------------------------------------------------------------
Primary Residences 2.03(b)(36) 94.83%
-------------------------------------------------------------------------------
Lowest Current Mortgage Rate 2.03(b)(48) 4.625%
-------------------------------------------------------------------------------
Highest Current Mortgage Rate 2.03(b)(48) 19.000%
-------------------------------------------------------------------------------
Weighted Average Current Mortgage Rate 2.03(b)(48) 8.768%
-------------------------------------------------------------------------------
Date on or before which each Initial Mortgage
Loan has a Due Date 2.03(b)(51) 5/1/2007
-------------------------------------------------------------------------------
