EXHIBIT 10.3
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COUNTRYWIDE HOME LOANS, INC.
a Seller
__________________________________
a Seller
CWHEQ, INC.
Purchaser
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PURCHASE AGREEMENT
Dated as of _______, 200_
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REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES,
Series 200_-_
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................................1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans.............................2
Section 2.02. Obligations of Sellers Upon Sale.......................3
Section 2.03. Payment of Purchase Price for the Mortgage Loans.......6
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Seller Representations and Warranties..................7
Section 3.02. Seller Representations and Warranties Relating
to the Mortgage Loans..................................9
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers..............................22
ARTICLE V
SERVICING
Section 5.01. Servicing.............................................22
ARTICLE VI
TERMINATION
Section 6.01. Termination...........................................22
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.............................................22
Section 7.02. Governing Law.........................................23
Section 7.03. Notices...............................................23
Section 7.04. Severability of Provisions............................24
Section 7.05. Counterparts; Electronic Delivery.....................24
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Section 7.06. Further Agreements....................................24
Section 7.07. Successors and Assigns: Assignment of Purchase
Agreement.............................................24
Section 7.08. Survival..............................................25
SCHEDULES AND ANNEXES
Schedule I MORTGAGE LOAN SCHEDULE...........................Sch-I-1
Schedule II STANDARD & POOR'S GLOSSARY......................Sch-II-1
Annex 1 ADOPTION ANNEX...................................Xxx-1-1
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EXHIBIT 10.3
This PURCHASE AGREEMENT, dated as of _______, 200_ (the "Agreement"),
between COUNTRYWIDE HOME LOANS, INC., a New York corporation, as a seller
("CHL" or a "Seller"), ________________, a ________________ corporation, as a
seller ("[SELLER NAME]" or a "Seller," and together with CHL, the "Sellers"),
and CWHEQ, INC., a Delaware corporation (the "Purchaser"),
WITNESSETH:
WHEREAS, each Seller is the owner of the applicable notes or other
evidence of indebtedness indicated on Schedule I as owned by that Seller, and
certain other notes or other evidence of indebtedness made or to be made in
the future, and Related Documentation; and
WHEREAS, by the date of their transfer, each Seller will own the
mortgages on the properties securing the Mortgage Loans indicated on Schedule
I as owned by that Seller, including rights to (a) any property acquired by
foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds
of any hazard insurance policies on the Mortgaged Properties; and
WHEREAS, each Seller wants to sell its Mortgage Loans to the Purchaser
pursuant to this Agreement; and
WHEREAS, pursuant to the Sale and Servicing Agreement, of even date with
this Agreement (the "Sale and Servicing Agreement"), among the Purchaser, as
depositor, CHL, as sponsor and master servicer, the Trust, and the Indenture
Trustee, the Purchaser will transfer the Mortgage Loans to the Trust;
NOW, THEREFORE, the parties agree as follows.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Capitalized terms used in this Agreement that are not otherwise defined
have the meanings given to them in the Indenture, and if not defined there, in
the Sale and Servicing Agreement. In addition, Section 1.04 (Rules of
Construction) of the Indenture is incorporated by reference with appropriate
substitution of this Agreement for references in that Section to the Indenture
so that the language of that Section will read appropriately as applying to
this Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans.
(a) The Initial Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, CHL, with respect to each Initial Mortgage Loan it
owns as indicated on Schedule I, hereby transfers to the Purchaser, without
recourse, all of its right, title, and interest existing now or in the future
in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that
secures that Mortgage Loan, and all collections received on it after the
Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan; (5) all other assets included or to be included in the
Trust for the benefit of the Noteholders; and
(6) all proceeds of the foregoing.
____________ , with respect to each Initial Mortgage Loan it owns as
indicated on Schedule I, hereby transfers to the Purchaser, without recourse,
all of its right, title, and interest existing now or in the future in
(1) that Mortgage Loan, including its Asset Balance (including all
Additional Balances), the related Mortgage File, all property that
secures that Mortgage Loan, and all collections received on it after the
Cut-off Date (excluding payments due by the Cut-off Date);
(2) property that secured that Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure;
(3) its rights under the hazard insurance policies related to the
mortgages that secure the Mortgage Loans;
(4) all rights under any guaranty executed in connection with that
Mortgage Loan;
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(5) all other assets included or to be included in the Trust for the
benefit of the Noteholders; and
(6) all proceeds of the foregoing.
The Additional Home Equity Loans. The Purchaser may use the funds in each
Additional Loan Account to purchase Additional Home Equity Loans on any
Subsequent Closing Date designated by the Purchaser by the Latest Subsequent
Closing Date. On each Subsequent Closing Date, each Seller shall deliver a
Transfer Document (properly completed and executed by the Seller) to the
Purchaser. When each Seller delivers a Transfer Document, that Seller hereby
transfers to the Purchaser without recourse, and the Purchaser purchases and
shall effect payment for, all of its right, title, and interest in each
Additional Home Equity Loan identified in the Transfer Document, including its
Asset Balance (including all Additional Balances) and all collections received
on it after the relevant Subsequent Cut-off Date (excluding payments due by
the Subsequent Cut-off Date) and all proceeds of the foregoing.
(b) By the sale of a Mortgage Loan and its Additional Balances, each
Seller has sold to the Purchaser, and the Purchaser has purchased from each
Seller, each future draw of new borrowing under the related Credit Line
Agreement. The Purchaser shall pay the applicable Seller for each Additional
Balance in cash in an amount equal to the principal amount of the Additional
Balance as it arises. The Trust, the applicable Seller, and the Purchaser may
agree to a netting arrangement in connection with this transaction, when
appropriate, rather than actually moving cash.
Section 2.02. Obligations of Sellers Upon Sale.
In connection with the transfers pursuant to Section 2.01(a), each Seller
further agrees, at its own expense:
(a) to deliver to the Purchaser by the Closing Date a Mortgage Loan
Schedule containing an accurate list of all Initial Mortgage Loans sold by it,
specifying for each Initial Mortgage Loan, among other things, its account
number and its Cut-off Date Asset Balance;
(b) to indicate in its books and records that the applicable Mortgage
Loans have been sold to the Indenture Trustee, as assignee of the Purchaser,
pursuant to this Agreement by the Closing Date for the Initial Mortgage Loans,
and by each Subsequent Closing Date for the related Additional Home Equity
Loans;
(c) to deliver to the Purchaser, or at the Purchaser's direction to the
Indenture Trustee and the Owner Trustee an Officer's Certificate confirming
the satisfaction of each of the conditions precedent in Section 2.01(b) of the
Sale and Servicing Agreement by each Subsequent Closing Date; and
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(d) to deliver to the Purchaser, or at the Purchaser's direction to the
Indenture Trustee, a revised Mortgage Loan Schedule reflecting the addition of
the Additional Home Equity Loans within 15 days following each Subsequent
Closing Date.
The Initial Mortgage Loan Schedule containing the Mortgage Loans sold by
both Sellers is Exhibit A to the Sale and Servicing Agreement and shall also
be attached as Schedule I to this Agreement and is hereby incorporated into
this Agreement.
Each Seller agrees to perfect and protect the Purchaser's interest in
each Mortgage Loan transferred by it pursuant to Section 2.01(a) and its
proceeds by preparing, executing, and filing a UCC1 Financing Statement with
the Secretary of State in the State of New York or the Secretary of State in
the State of Delaware, as applicable, describing the Mortgage Loans and naming
the applicable Seller as debtor and the Purchaser as secured party and
indicating that the Mortgage Loans have been assigned to the Trust and all
necessary Continuation Statements and any additional UCC1 Financing Statements
due to a change in the name or the state of incorporation of that Seller. The
Financing Statement shall be filed by the Closing Date. This Financing
Statement will state in bold-faced type that a purchase of the Mortgage Loans
included in the collateral covered by the Financing Statement from the debtor
will violate the rights of the secured party and its assignee.
The Purchaser agrees to perfect and protect the Trust's interest in each
Mortgage Loan and its proceeds by preparing, executing, and filing a UCC1
Financing Statement with the Secretary of State in the State of Delaware
describing the Mortgage Loans and naming the Purchaser as debtor and the Trust
as secured party (and indicating that the Mortgage Loans have been pledged to
the Indenture Trustee) and all necessary Continuation Statements and any
additional UCC1 Financing Statements due to a change in the name or the state
of incorporation of the Purchaser. The Financing Statement shall be filed by
the Closing Date. This Financing Statement will state in bold-faced type that
a purchase of the Mortgage Loans included in the collateral covered by the
Financing Statement from the debtor will violate the rights of the secured
party and its assignee.
In connection with any transfer by a Seller, it shall deliver to the
order of the Purchaser the following documents for each Mortgage Loan
transferred by that Seller (the "Related Documentation"):
(1) the original Mortgage Note endorsed in blank or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original
lost note affidavit from the Sponsor stating that the original Mortgage
Note was lost, misplaced, or destroyed, together with a copy of the
related Mortgage Note;
(2) unless the Mortgage Loan is registered on the MERS(R) System, an
original assignment of mortgage in blank in recordable form;
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(3) the original recorded mortgage with evidence of recording on it
(noting the presence of the MIN of the Mortgage Loan and language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan) or, if the original recorded mortgage with evidence of
recording on it cannot be delivered by the Closing Date because of a
delay caused by the public recording office where the original Mortgage
has been delivered for recordation or because the original Mortgage has
been lost, the Sponsor shall deliver to the Indenture Trustee an accurate
copy of the mortgage, together with (i) when the delay is caused by the
public recording office, an Officer's Certificate of the Sponsor or the
Purchaser stating that the original mortgage has been dispatched to the
appropriate public recording official or (ii) when the original mortgage
has been lost, a certificate by the appropriate county recording office
where the mortgage is recorded;
(4) any original intervening assignments needed for a complete chain
of title to the Trust with evidence of recording on them, or, if any
original intervening assignment has not been returned from the applicable
recording office or has been lost, an accurate copy of it, together with
(i) when the delay is caused by the public recording office, an Officer's
Certificate of the Sponsor or the Purchaser stating that the original
intervening assignment has been dispatched to the appropriate public
recording official for recordation or (ii) when the original intervening
assignment has been lost, a certificate by the appropriate county
recording office where the mortgage is recorded;
(5) a title policy for each Mortgage Loan with a Credit Limit in
excess of $100,000;
(6) the original of any guaranty executed in connection with the
Mortgage Note;
(7) the original of each assumption, modification, consolidation, or
substitution agreement relating to the Mortgage Loan; and
(8) any security agreement, chattel mortgage, or equivalent
instrument executed in connection with the Mortgage.
The Related Documentation for the Initial Mortgage Loans will be
delivered:
(1) no later than the Closing Date, with respect to no less than 50%
of the Initial Mortgage Loans,
(2) no later than the twentieth day after the Closing Date, with
respect to no less than 40% of the Initial Mortgage Loans in addition to
those delivered on the Closing Date, and
(3) within thirty days following the Closing Date, with respect to
the remaining Initial Mortgage Loans.
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The Related Documentation for the Additional Home Equity Loans will be
delivered:
(1) no later than relevant Subsequent Closing Date, with respect to no
less than 10% of the relevant Additional Home Equity Loans; and
(2) within twenty days following the relevant Subsequent Closing Date,
with respect to the remaining relevant Additional Home Equity Loans.
Each Seller confirms to the Purchaser that, as of the Closing Date, it
has caused the portions of the Electronic Ledger relating to the Initial
Mortgage Loans maintained by that Seller to be clearly and unambiguously
marked to indicate that the Initial Mortgage Loans have been sold to the
Purchaser, and sold by the Purchaser to the Trust, and Granted by the Trust to
the Indenture Trustee, and that a purchase of those Mortgage Loans from that
Seller or the Purchaser will violate the rights of the Trust, as secured party
with respect to those Mortgage Loans. By the relevant Subsequent Closing Date
or the applicable date of substitution, as applicable, CHL shall cause the
portions of the Electronic Ledgers relating to the relevant Additional Home
Equity Loans or Eligible Substitute Mortgage Loans, as the case may be, to be
clearly and unambiguously marked, and shall make appropriate entries in its
general accounting records, to indicate that those Mortgage Loans have been
transferred to the Trust at the direction of the Purchaser and that they have
been Granted by the Trust to the Indenture Trustee, and that a purchase of the
Mortgage Loans from CHL or the Purchaser will violate the rights of the Trust,
as secured party with respect to those Mortgage Loans.
The Purchaser accepts all right, title, and interest of each of the
Sellers existing now or in the future in the Mortgage Loans and other property
transferred to it pursuant to this Section.
Notwithstanding the characterization of the Notes as debt for federal,
state, and local income and franchise tax purposes, the transfer of the
Mortgage Loans is a sale by each Seller to the Purchaser of all its interest
in the applicable Mortgage Loans and other property described above. However,
to provide for the possibility that either transfer might be characterized as
a transfer for security and not as a sale, each Seller hereby grants to the
Purchaser a Security Interest in all of its right, title, and interest in the
applicable Mortgage Loans and other property described above, whether existing
now or in the future, to secure all of that its obligations under this
Agreement; and this Agreement shall constitute a Security Agreement under
applicable law.
Section 2.03. Payment of Purchase Price for the Mortgage Loans.
(a) In consideration of the sale of the Initial Mortgage Loans from each
of the Sellers to the Purchaser on the Closing Date, the Purchaser agrees to
transfer to the applicable Seller on the Closing Date the purchase price for
the applicable Initial Mortgage Loans provided in the Adoption Annex attached
as Annex 1 to this Agreement (the "Adoption Annex").
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(b) In consideration of the sale of the Additional Home Equity Loans from
the Seller to the Purchaser on each Subsequent Closing Date, the Purchaser
agrees to cause the Trust to pay to the Seller, when the conditions to the
release of the purchase price for the Additional Home Equity Loans under the
Sale and Servicing Agreement have been met, an amount equal to their Cut-off
Date Asset Balance.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Sellers Representations and Warranties.
(a) CHL represents and warrants to the Purchaser as of the Closing Date:
(1) CHL is a New York corporation, validly existing and in good
standing under the laws of the State of New York, and has the corporate
power to own its assets and to transact the business in which it is
currently engaged. CHL is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or any properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of CHL;
(2) CHL has the power and authority to make, execute, deliver, and
perform this Agreement and all of the transactions contemplated by this
Agreement, and has taken all necessary corporate action to authorize the
execution, delivery, and performance of this Agreement. When executed and
delivered, this Agreement will constitute the valid and legally binding
obligation of CHL enforceable in accordance with its terms;
(3) CHL is not required to obtain the consent of any other party or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau, or agency in
connection with the execution, delivery, performance, validity, or
enforceability of this Agreement, except for any consents, licenses,
approvals or authorizations, or registrations or declarations, that have
been obtained or filed, as the case may be, before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the Seller
or any provision of the certificate of incorporation or bylaws of CHL, or
constitute a material breach of any mortgage,
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indenture, contract, or other agreement to which CHL is a party or by
which CHL may be bound; and
(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of CHL threatened, against CHL or any of its properties or with
respect to this Agreement or the Notes that in the opinion of CHL has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.
(6) The representations in Section 3.01(b) are true.
(b) ____________ represents and warrants to the Purchaser as of the
Closing Date:
(1) ____________ is a Delaware corporation, validly existing and in
good standing under the laws of the State of Delaware, and has the
corporate power to own its assets and to transact the business in which
it is currently engaged. ____________ is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or any properties
owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the
business, properties, assets, or condition (financial or other) of
____________.
(2) ____________ has the power and authority to make, execute,
deliver, and perform this Agreement and all of the transactions
contemplated by this Agreement, and has taken all necessary corporate
action to authorize the execution, delivery, and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the valid and legally binding obligation of ____________ enforceable in
accordance with its terms;
(3) ____________ is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau, or
agency in connection with the execution, delivery, performance, validity,
or enforceability of this Agreement, except for any consents, licenses,
approvals or authorizations, or registrations or declarations, that have
been obtained or filed, as the case may be, before the Closing Date;
(4) The execution, delivery, and performance of this Agreement by
____________ will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to ____________
or any provision of the certificate of incorporation or bylaws of
____________ , or constitute a material breach of any mortgage,
indenture, contract, or other agreement to which ____________ is a party
or by which ____________ may be bound; and
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(5) No litigation or administrative proceeding of or before any
court, tribunal, or governmental body is currently pending, or to the
knowledge of ____________ threatened, against ____________ or any of its
properties or with respect to this Agreement or the Notes that in the
opinion of ____________ has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this
Agreement.
(c) The representations and warranties in this Section 3.01 shall survive
the transfer of the Mortgage Loans to the Purchaser. CHL shall cure a breach
of any of the representations and warranties of CHL and ____________ in
accordance with the Sale and Servicing Agreement. The remedy specified in the
Sale and Servicing Agreement shall constitute the sole remedy against a Seller
with respect to any breach.
Section 3.02. Seller Representations and Warranties Relating to the
Mortgage Loans.
(a) CHL represents and warrants to the Purchaser as of the Cut-off Date,
unless specifically stated otherwise:
(1) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, this Agreement
constitutes a valid and legally binding obligation of CHL, enforceable
against CHL in accordance with its terms.
(2) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, either
(A) this Agreement constitutes a valid transfer to the
Purchaser of all right, title, and interest of each of the Sellers
in the applicable Mortgage Loans, and all collections received in
respect of the applicable Mortgage Loans after the Cut-off Date or
Subsequent Cut-off Date, as applicable (excluding payments due by
the Cut-off Date or Subsequent Cut-off Date, as applicable), all
proceeds of the applicable Mortgage Loans, and all other property
specified in Section 2.01(a) or (b), and the Sale and Servicing
Agreement constitutes a valid transfer to the Trust of the foregoing
property and all other property specified in Section 2.01(a) or (b)
of the Sale and Servicing Agreement such that, on execution of the
Sale and Servicing Agreement, it is owned by the Trust free of all
liens and other encumbrances, and is part of the corpus of the Trust
transferred to the Trust by the Purchaser, and upon payment for the
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Additional Balances, this Agreement and the Sale and Servicing
Agreement will constitute a valid transfer to the Trust of all
interest of each of the Sellers in the Additional Balances, all
proceeds of the Additional Balances, and all other property
specified in Section 2.01(a) of the Sale and Servicing Agreement
relating to the Additional Balances free of all liens and other
encumbrances, and the Indenture constitutes a valid Grant of a
Security Interest to the Indenture Trustee in that property, and the
Indenture Trustee has a first priority perfected Security Interest
in the property, subject to the effect of Section 9-315 of the UCC
with respect to collections on the Mortgage Loans that are deposited
in the Collection Account in accordance with the next to last
paragraph of Section 3.02(b) of the Sale and Servicing Agreement, or
(B) this Agreement or the Sale and Servicing Agreement, as
appropriate, constitutes a Grant of a Security Interest to the Owner
Trustee on behalf of the Trust and the Indenture constitutes a Grant
of a Security Interest to the Indenture Trustee in the property
described in clause (A) above. If this Agreement and the Sale and
Servicing Agreement constitute the Grant of a Security Interest to
the Trust and the Indenture constitutes a Grant of a Security
Interest to the Indenture Trustee in such property, the Indenture
Trustee will have a first priority perfected Security Interest in
the property, subject to the effect of Section 9-315 of the UCC with
respect to collections on the Mortgage Loans that are deposited in
the Collection Account in accordance with the next to last paragraph
of Section 3.02(b) of the Sale and Servicing Agreement. This
Security Interest is enforceable as such against creditors of and
purchasers from the Trust, the Purchaser, and each of the Sellers.
(3) CHL has not authorized the filing of and is not aware of any
financing statements against either Seller that include a description of
collateral covering the Collateral other than any financing statement (A)
relating to the Security Interests granted to the Depositor, the Trust,
or the Indenture Trustee under this Agreement, pursuant to the Sale and
Servicing Agreement, or pursuant to the Indenture, (B) that has been
terminated, or (C) that names the Depositor, the Trust, or the Indenture
Trustee as secured party.
(4) As of the Closing Date, the information in the Mortgage Loan
Schedule for the Initial Mortgage Loans is correct in all material
respects. As of the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, the information in the Mortgage Loan
Schedule for the relevant Additional Home Equity is correct in all
material respects. As of the applicable date of substitution for an
Eligible Substitute Mortgage Loan, the information with respect to the
Eligible Substitute
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Mortgage Loan in the Mortgage Loan Schedule is correct in all material
respects. As of the date any Additional Balance is created, the
information as to the Mortgage Loan identification number and the
Additional Balance of that Mortgage Loan reported for inclusion in the
Mortgage Loan Schedule is correct in all material respects.
(5) The applicable Mortgage Loans have not been assigned or pledged,
and the related Seller is their sole owner and holder free of any liens,
claims, encumbrances, participation interests, equities, pledges,
charges, or Security Interests of any nature, and has full authority,
under all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to transfer them pursuant to
this Agreement.
(6) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the related Mortgage
Note and the mortgage for each Mortgage Loan have not been assigned or
pledged, and immediately before the sale of the Mortgage Loans to the
Purchaser, the related Seller was the sole owner and holder of the
Mortgage Loan free of any liens, claims, encumbrances, participation
interests, equities, pledges, charges, or Security Interests of any
nature, and has full authority, under all governmental and regulatory
bodies having jurisdiction over the ownership of the applicable Mortgage
Loans, to transfer it pursuant to this Agreement.
(7) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the related mortgage is
a valid and subsisting first lien on the property described in it, as
shown on the Mortgage Loan Schedule with respect to each related Mortgage
Loan, and as of the Cut-off Date, relevant Subsequent Closing Date, or
date of substitution, as applicable, the related Mortgaged Property is
free of all encumbrances and liens having priority over the first lien of
the mortgage except for liens for
(A) real estate taxes and special assessments not yet
delinquent;
(B) covenants, conditions and restrictions, rights of way,
easements, and other matters of public record as of the date of
recording that are acceptable to mortgage lending institutions
generally; and
(C) other matters to which like properties are commonly subject
that do not materially interfere with the benefits of the security
intended to be provided by the mortgage.
(8) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans,
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or the applicable date of substitution with respect to any Eligible
Substitute Mortgage Loan, no obligor has a valid offset, defense, or
counterclaim under any Credit Line Agreement or mortgage.
(9) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent Closing
Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage
Loan, no related Mortgaged Property has any delinquent recording or other
tax or fee or assessment lien or governmental charge against it, other
than those that have been or will be paid by the Seller.
(10) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no proceeding is
pending or, to the best knowledge of CHL, threatened for the total or
partial condemnation of the related Mortgaged Property, and the property
is free of material damage and is in good repair.
(11) To the best knowledge of CHL, as of the Closing Date with
respect to the Initial Mortgage Loans, the relevant Subsequent Closing
Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage
Loan, no mechanics' or similar liens or claims have been filed for work,
labor, or material affecting the related Mortgaged Property that are, or
may be, liens prior or equal to the lien of the related mortgage, except
liens that are fully insured against by the title insurance policy
referred to in clause (16).
(12) No Minimum Monthly Payment on an Initial Mortgage Loan being
transferred on the Closing Date is more than 59 days delinquent (measured
on a contractual basis) and no Minimum Monthly Payment on any other
Mortgage Loan subsequently being transferred is more than 30 days
delinquent (measured on a contractual basis) on the relevant transfer
date and no more than the applicable percentage specified in the Adoption
Annex of the Initial Mortgage Loans being transferred on the Closing Date
(by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a
contractual basis).
(13) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the Mortgage File for
each Mortgage Loan contains each of the documents specified to be
included in it.
(14) At origination, each Mortgage Loan and the related Mortgage
Note complied in all material respects with applicable local, state, and
federal laws, including
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all applicable predatory and abusive lending laws, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, or disclosure laws applicable to
the Mortgage Loan, and the servicing practices used by the Master
Servicer with respect to each Mortgage Loan have been consistent with the
practices and the degree of skill and care the Master Servicer exercises
in servicing for itself loans that it owns that are comparable to the
Mortgage Loans.
(15) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no Mortgage Loan is a
High Cost Loan or Covered Loan, as applicable, and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed
by the Georgia Fair Lending Act; and "High Cost Loan" and "Covered Loan"
have the meaning assigned to them in the Standard & Poor's LEVELS(R)
Glossary attached as Schedule II (the "Glossary") where
(x) a "High Cost Loan" is each loan identified in the column
"Category under applicable anti-predatory lending law" of the table
entitled "Standard & Poor's High Cost Loan Categorization" in the
Glossary as each such loan is defined in the applicable
anti-predatory lending law of the state or jurisdiction specified in
such table and
(y) "Covered Loan" is each loan identified in the column
"Category under applicable anti-predatory lending law" of the table
entitled "Standard & Poor's Covered Loan Categorization" in the
Glossary as each such loan is defined in the applicable
anti-predatory lending law of the state or jurisdiction specified in
such table.
(16) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, either a lender's title
insurance policy or binder was issued or a guaranty of title customary in
the relevant jurisdiction was obtained, on the date of origination of the
Mortgage Loan being transferred on the relevant date and each policy is
valid and remains in full force.
(17) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, none of the Mortgaged
Properties is a mobile home or a manufactured housing unit that is not
considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.
13
(18) No more than the percentage specified in the Adoption Annex of
the Initial Mortgage Loans, by aggregate principal balance of the related
Mortgage Loans, are secured by Mortgaged Properties located in one United
States postal zip code.
(19) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the Loan-to-Value Ratio
for each Mortgage Loan was not in excess of the percentage specified in
the Adoption Annex.
(20) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no selection procedure
reasonably believed by CHL to be adverse to the interests of the
Transferor or the Noteholders was used in selecting the Mortgage Loans.
(21) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, neither Seller has
transferred the Mortgage Loans to the Trust with any intent to hinder,
delay, or defraud any of its creditors.
(22) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the Minimum Monthly
Payment with respect to any Mortgage Loan is not less than the interest
accrued at the applicable Loan Rate on the average daily Asset Balance
during the interest period relating to the date on which the Minimum
Monthly Payment is due.
(23) The Mortgage Notes constitute either "instruments" or "general
intangibles" as defined in the UCC.
(24) By the Closing Date with respect to the Initial Mortgage Loans,
the relevant Subsequent Closing Date with respect to any Additional Home
Equity Loans, or within 30 days of the applicable date of substitution
with respect to any Eligible Substitute Mortgage Loan, the Sponsor will
file UCC1 financing statements in the proper filing office in the
appropriate jurisdiction to perfect the Security Interest in the
Collateral Granted under the Indenture.
(25) The Mortgage Notes that constitute or evidence the Collateral
do not have any marks or notations indicating that they have been
pledged, assigned, or otherwise transferred to any person other than the
Purchaser, the Trust, or the Indenture Trustee. All financing statements
filed or to be filed against each Seller in favor of the
14
Purchaser, the Trust, or the Indenture Trustee in connection with this
Agreement, the Sale and Servicing Agreement, or the Indenture describing
the Collateral contain a statement to the following effect: "A purchase
of the Mortgage Loans included in the collateral covered by this
financing statement will violate the rights of the Purchaser, the Trust,
or the Indenture Trustee."
(26) As of the Closing Date, CHL and ____________ will have received
a written acknowledgement from the Custodian that is acting solely as
agent of the Indenture Trustee.
(27) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, each Credit Line
Agreement and each Mortgage Loan is an enforceable obligation of the
related mortgagor.
(28) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, neither Seller has
received a notice of default of any senior mortgage loan related to a
Mortgaged Property that has not been cured by a party other than the
Master Servicer.
(29) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the definition of
"prime rate" in each Credit Line Agreement relating to a Mortgage Loan
does not differ materially from "the highest `prime rate' as published in
the `Money Rates' table of The Wall Street Journal as of the first
business day of the calendar month for the applicable interest rate
adjustment date."
(30) The weighted average remaining term to maturity of the Initial
Mortgage Loans on a contractual basis as of the Cut-off Date is
approximately the number of months specified in the Adoption Annex. On
each date that the Loan Rates have been adjusted, interest rate
adjustments on the Initial Mortgage Loans were made in compliance with
the related mortgage and Mortgage Note and applicable law. Over the term
of each Mortgage Loan, the Loan Rate may not exceed the related Loan Rate
Cap. The Loan Rate Cap for the Initial Mortgage Loans ranges between the
percentages specified in the Adoption Annex and the weighted average Loan
Rate Cap is approximately the percentage specified in the Adoption Annex.
The Gross Margins for the Initial Mortgage Loans range between the
percentages specified in the Adoption Annex and the weighted average
Gross Margin is approximately the percentage
15
specified in the Adoption Annex as of the Cut-off Date for the Initial
Mortgage Loans. The Loan Rates on the Initial Mortgage Loans range
between the percentages specified in the Adoption Annex and the weighted
average Loan Rate on the Initial Mortgage Loans is approximately the
percentage specified in the Adoption Annex.
(31) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, each Mortgaged Property
consists of a single parcel of real property with a one-to-four unit
single family residence erected on it, or an individual condominium unit,
planned unit development unit, or townhouse.
(32) No more than the percentage specified in the Adoption Annex (by
Cut-off Date Loan Balance) of the Initial Mortgage Loans are secured by
real property improved by individual condominium units, units in planned
unit developments, townhouses, or two-to-four family residences erected
on them, and at least the percentage specified in the Adoption Annex (by
Cut-off Date Loan Balance) of the Mortgage Loans are secured by real
property with a detached one-family residence erected on them.
(33) The Credit Limits on the Initial Mortgage Loans range between
approximately the dollar amounts specified in the Adoption Annex with an
average of approximately the dollar amount specified in the Adoption
Annex. As of the Cut-off Date for the Initial Mortgage Loans, no Mortgage
Loan had a principal balance in excess of approximately the dollar amount
specified in the Adoption Annex and the average principal balance of the
Initial Mortgage Loans is equal to approximately the dollar amounts
specified in the Adoption Annex.
(34) Approximately the percentages specified in the Adoption Annex
of the Initial Mortgage Loans, by aggregate principal balance as of the
Cut-off Date, are secured by first and second liens.
(35) As of the Closing Date, no more than the percentage specified
in the Adoption Annex of the Initial Mortgage Loans, by aggregate
principal balance, were appraised electronically.
(36) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no default exists under
any applicable Mortgage Note or applicable Mortgage Loan and no event
that, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default under any applicable
Mortgage Note or applicable Mortgage Loan has occurred and been waived.
As of the Closing
16
Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the
applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, no modifications to the applicable Mortgage Notes and
applicable Mortgage Loans have been made and not disclosed.
(37) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, each Mortgage Loan was
originated in accordance with the Sponsor's underwriting guidelines and
the Sponsor had no knowledge of any fact that would have caused a
reasonable originator of mortgage loans to conclude on the date of
origination of each Mortgage Loan that each such Mortgage Loan would not
be paid in full when due.
(38) To the best knowledge of CHL at the time of origination of each
Mortgage Loan, no improvement located on or being part of the Mortgaged
Property was in violation of any applicable zoning and subdivision laws
or ordinances.
(39) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, any leasehold estate
securing a Mortgage Loan has a term of not less than five years in excess
of the term of the related Mortgage Loan.
(40) Based on the drawn balances of the Initial Mortgage Loans, the
Initial Mortgage Loans had the characteristics set out in the Adoption
Annex in respect of the following: weighted average Combined
Loan-to-Value Ratio; range of Combined Loan-to-Value Ratios; percentage
of primary residences; weighted average FICO score; range of FICO scores;
Weighted Average Net Loan Rate; range of net Loan Rates; weighted average
original stated term to maturity; range of original term to maturity;
range of remaining term to maturity; average drawn balance; weighted
average utilization ratio; and percentage of the Initial Mortgage Loans
that have their respective Mortgaged Properties located in the top five
states, measured by aggregate drawn balances.
(41) Any Initial Mortgage Loan that has been modified in any manner
has been so modified in accordance with the policies and procedures of
the Master Servicer and in a manner that was permitted by the Sale and
Servicing Agreement, the Indenture, and any other Transaction Document.
(42) Each Initial Mortgage Loan was originated (within the meaning
of Section 3(a)(41) of the Securities Exchange Act of 1934) by an entity
that satisfied at
17
the time of origination the requirements of Section 3(a)(41) of the
Securities Exchange Act of 1934.
(43) At the time each Initial Mortgage Loan was originated, each
Seller was, and each Seller is an approved seller of conventional
mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac and is a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act.
(44) A lender's policy of title insurance together with a
condominium endorsement and extended coverage endorsement, if applicable,
in an amount at least equal to the principal balance of the related
Mortgage Loan as of the Cut-off Date or the relevant Subsequent Cut-off
Date, as applicable, or a commitment (binder) to issue the same was
effective on the date of the origination of each Mortgage Loan, each such
policy is valid and remains in full force, and each such policy was
issued by a title insurer qualified to do business in the jurisdiction
where the Mortgaged Property is located and acceptable to Xxxxxx Mae and
Xxxxxxx Mac and is in a form acceptable to Xxxxxx Mae and Xxxxxxx Mac,
which policy insures the Sponsor and successor owners of indebtedness
secured by the insured Mortgage, as to the first priority lien, of the
Mortgage subject to the exceptions in paragraph (7) above.
(45) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, the improvements on
each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides for
fire and extended coverage and coverage for such other hazards as are
customary in the area where the Mortgaged Property is located in an
amount that is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing the Mortgage Loan or (ii) the greater
of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds of the policy will be sufficient to prevent
the Mortgagor or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the condominium unit. All such
individual insurance policies and all flood policies referred to in item
(46) below contain a standard mortgagee clause naming the Sponsor or the
original mortgagee, and its successors in interest, as mortgagee, and the
Sponsor has received no notice that any premiums due and payable thereon
have not been paid, and the Mortgage obligates the Mortgagor thereunder
to maintain all such insurance, including flood insurance, at the
Mortgagor's expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
18
insurance at the Mortgagor's expense and to seek reimbursement therefor
from the Mortgagor.
(46) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Flood Insurance
Administration is in effect with respect to the Mortgaged Property with a
generally acceptable carrier in an amount representing coverage not less
than the least of (A) the outstanding principal balance of the Mortgage
Loan and any mortgage loan senior to that Mortgage Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement cost
basis, or (C) the maximum amount of insurance that is available under the
National Flood Insurance Act of 1968.
(47) Each Mortgage Note and the related Mortgage are genuine, and
each is the valid and legally binding obligation of its maker,
enforceable in accordance with its terms and under applicable law, except
that (a) its enforceability may be limited by bankruptcy, insolvency,
moratorium, receivership, and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. To the best of CHL's knowledge, all
parties to the Mortgage Note and the Mortgage had legal capacity to
execute the Mortgage Note and the Mortgage and each Mortgage Note and
Mortgage have been duly and properly executed by such parties.
(48) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(49) To the best of CHL's knowledge, all of the improvements that
were included for the purpose of determining the appraised value of the
Mortgaged Property lie wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach on the Mortgaged Property.
(50) To the best of CHL's knowledge, all inspections, licenses, and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities, unless their lack would not have a material
adverse effect on the value of the Mortgaged Property, and the Mortgaged
Property is lawfully occupied under applicable law.
19
(51) Each Mortgage contains customary and enforceable provisions
that render the rights and remedies of its holder adequate for the
realization against the Mortgaged Property of the benefits of the
security intended to be provided by it, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure.
(52) Before the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the Sponsor, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan secured by the
Mortgaged Property, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan.
(53) Except for (A) payments in the nature of escrow payments, and
(B) interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is later, to the day
that precedes by one month the Due Period of the first installment of
principal and interest and taxes and insurance payments, the Sponsor has
not advanced funds, or induced, solicited, or knowingly received any
advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage.
(54) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no foreclosure
proceedings are pending against any Mortgaged Property and no Mortgage
Loan is subject to any pending bankruptcy or insolvency proceeding.
(55) As of the Closing Date with respect to the Initial Mortgage
Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, there is no homestead
exemption available and enforceable that materially interferes with the
right to sell any Mortgaged Property at a trustee's sale or the right to
foreclose the related Mortgage.
(56) No borrower was required to purchase any single premium credit
insurance policy (e.g., life, disability, accident, unemployment, or
health insurance product) or debt cancellation agreement as a condition
of obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit insurance policy (e.g., life, disability, accident,
unemployment, mortgage, or health insurance) in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were
used to purchase debt cancellation agreements as part of the origination
of, or as a condition to closing, the Mortgage Loan.
20
(57) The Initial Mortgage Loans, individually and in the aggregate,
conform in all material respects to their descriptions in the Prospectus
Supplement.
(58) Each Mortgage Loan represents a "qualified mortgage" within the
meaning of Section 860(a)(3) of the Code (but without regard to the rule
in Treasury Regulation ss. 1.860G-2(f)(2) that treats a defective
obligation as a qualified mortgage, or any substantially similar
successor provision).
(b) If the substance of any representation or warranty under the Sale and
Servicing Agreement or in this Section made to the best of CHL's knowledge or
as to which a Seller has no knowledge is inaccurate and the inaccuracy
materially and adversely affects the interest of the Purchaser or its assignee
in the related Mortgage Loan, then, notwithstanding that the Seller did not
know the substance of the representation and warranty was inaccurate at the
time the representation or warranty was made, the inaccuracy shall be a breach
of the applicable representation or warranty and CHL shall cure the breach,
repurchase the Mortgage Loan, or substitute for the Mortgage Loan in
accordance with the Sale and Servicing Agreement.
(c) The representations and warranties in this Section shall survive the
transfer and assignment of the Mortgage Loans to the Purchaser. The sole
remedy of the Purchaser, the Noteholders, the Indenture Trustee on behalf of
Noteholders against a Seller for the breach of a representation or warranty is
CHL's obligation to accept a transfer of a Mortgage Loan as to which a breach
has occurred and is continuing and to make any required deposit in the
Collection Account or to substitute an Eligible Substitute Mortgage Loan.
(d) The Purchaser acknowledges that CHL, as Master Servicer, in its sole
discretion, may purchase for its own account from the Trust any Mortgage Loan
that is 151 days or more delinquent. The price for any Mortgage Loan purchased
shall be calculated in the same manner as in Section 3.06 of the Sale and
Servicing Agreement and shall be deposited in the Collection Account. When it
receives a certificate from the Master Servicer in the form of Exhibit D to
the Sale and Servicing Agreement, the Trust shall release to the purchaser of
the Mortgage Loan the related Mortgage File and shall execute and deliver any
instruments of transfer prepared by the purchaser of the Mortgage Loan,
without recourse, necessary to vest in the purchaser of the Mortgage Loan any
Mortgage Loan released pursuant to this Agreement, and the purchaser of the
Mortgage Loan shall succeed to all the Trust's interest in the Mortgage Loan
and all security and documents. This assignment shall be an assignment
outright and not for security. The purchaser of the Mortgage Loan shall then
own the Mortgage Loan, and all security and documents, free of any further
obligation to the Trust, the Owner Trustee, the Indenture Trustee, the
Transferor, or the Noteholders with respect to it.
21
ARTICLE IV
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers.
Except for the transfer under this Agreement, none of the Sellers will
transfer to any other person, or create or suffer to exist any Lien on any
Mortgage Loan, or any interest in one; each Seller will notify the Indenture
Trustee of the existence of any Lien on any Mortgage Loan immediately on its
discovery; and CHL will defend the right, title, and interest of the Trust and
the Indenture Trustee in the Mortgage Loans against all claims of third
parties claiming through a Seller. Nothing in this Section shall prohibit a
Seller from suffering to exist on any of the Mortgage Loans any Liens for
municipal or other local taxes and other governmental charges if they are not
due at the time or if the applicable Seller is contesting their validity in
good faith by appropriate proceedings and set aside on its books adequate
reserves with respect to them.
ARTICLE V
SERVICING
Section 5.01. Servicing.
CHL will be the Master Servicer of the Mortgage Loans pursuant to the
Sale and Servicing Agreement.
ARTICLE VI
TERMINATION
Section 6.01. Termination.
The respective obligations of each of the Sellers and the Purchaser
created by this Agreement shall terminate when the Indenture terminates in
accordance with its terms.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.
This Agreement may be amended from time to time by CHL, ____________ ,
and the Purchaser by written agreement signed by CHL, ____________ , and the
Purchaser.
22
Section 7.02. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER STATE.
Section 7.03. Notices.
All notices, demands, instructions, consents, and other communications
required or permitted under this Agreement shall be in writing and signed by
the party giving the same and shall be personally delivered or sent by first
class or express mail (postage prepaid), national overnight courier service,
or by facsimile transmission or other electronic communication device capable
of transmitting or creating a written record (confirmed by first class mail)
and shall be considered to be given for purposes of this Agreement on the day
that the writing is delivered when personally delivered or sent by facsimile
or overnight courier or three Business Days after it was sent to its intended
recipient if sent by first class mail. A facsimile has been delivered when the
sending machine issues an electronic confirmation of transmission. Unless
otherwise specified in a notice sent or delivered in accordance with the
provisions of this Section, notices, demands, instructions, consents, and
other communications in writing shall be given to or made on the respective
parties at their respective addresses indicated below:
(i) if to CHL at:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 200_-_
(ii) if to ____________ at:
__________________
__________________
__________________
Ref: CWHEQ 200_-_
and
(iii) if to the Purchaser at:
CWHEQ, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Ref: CWHEQ 200_-_
23
Section 7.04. Severability of Provisions.
Any provisions of this Agreement that are held invalid for any reason or
unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of the invalidity or unenforceability without
invalidating the remaining provisions of this Agreement, and the prohibition
or unenforceability in a jurisdiction shall not invalidate or render
unenforceable that provision in any other jurisdiction.
Section 7.05. Counterparts; Electronic Delivery.
This Agreement may be executed in any number of copies, and by the
different parties on the same or separate counterparts, each of which shall be
considered to be an original instrument. Any signature page to this Agreement
containing a manual signature may be delivered by facsimile transmission or
other electronic communication device capable of transmitting or creating a
printable written record, and when so delivered shall have the effect of
delivery of an original manually signed signature page.
Section 7.06. Further Agreements.
The Purchaser and each Seller agree to execute and deliver to the other
any additional documents appropriate to effectuate the purposes of this
Agreement or in connection with the issuance of the Notes.
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by each Seller, the Purchaser, the Trust, and the Indenture Trustee. The
obligations of each Seller under this Agreement cannot be assigned or
delegated to a third party without the consent of the Purchaser, except that
either Seller may assign its obligations under this Agreement to any person
into which that Seller is merged or any corporation resulting from any merger,
conversion, or consolidation to which that Seller is a party or any person
succeeding to the business of that Seller. The Purchaser is acquiring the
Mortgage Loans to further transfer them to the Trust, and the Trust will Grant
a Security Interest in them to the Indenture Trustee under the Indenture
pursuant to which the Trust will issue a series of Notes secured by the
Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, each Seller consents to the assignment by the Purchaser to the Trust,
and by the Trust to the Indenture Trustee of all of the Purchaser's rights
against it under this Agreement insofar as they relate to the Mortgage Loans
transferred to the Trust applicable to that Seller and to the enforcement or
exercise of any right against that Seller pursuant to this Agreement by the
Indenture Trustee under the Sale and Servicing Agreement and the Indenture.
Enforcement of a right by the Indenture Trustee shall have the same effect as
if the right had been exercised by the Purchaser directly.
24
Section 7.08. Survival.
The representations and warranties in Article III shall survive the
purchase of the Mortgage Loans.
25
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CWHEQ, INC.
as Purchaser
By: _______________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
as a Seller
By: _______________________________
Name:
Title:
____________ INC.
as a Seller
By: _______________________________
Name:
Title:
26
STATE OF ________________ )
) ss.:
COUNTY OF _______________ )
On the ____ day of _______, 200_ before me, a Notary Public in and for
said State, personally appeared ________________, known to me to be a
________________ of CWHEQ, Inc., the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________
Notary Public
________________
Commission # ________________
Notary Public - ________________
________________ County
My Comm. Expires _______, 200_.
27
STATE OF ________________ )
) ss.:
COUNTY OF _______________ )
On the ____ day of _______, 200_ before me, ________________ of
Countrywide Home Loans, Inc., personally appeared, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity on behalf of which the person acted,
executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________
Notary Public
________________
Commission # ________________
Notary Public - ________________
________________ County
My Comm. Expires _______, 200_.
28
STATE OF ________________ )
) ss.:
COUNTY OF _______________ )
On the ____ day of _______, 200_ before me, ________________ of
____________ , personally appeared, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in
his authorized capacity, and that by his signature on the instrument the
person, or the entity on behalf of which the person acted, executed the
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________
Notary Public
________________
Commission # ________________
Notary Public - ________________
________________ County
My Comm. Expires _______, 200_.
29
SCHEDULE I
SCHEDULE OF
MORTGAGE LOANS
[Delivered to the Indenture Trustee only]
Sch-I-1
SCHEDULE II
STANDARD & POOR'S GLOSSARY
Standard & Poor's Predatory Lending Categorization
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the jurisdictions listed below into three categories based on a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
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Standard & Poor's High-Cost Loan Categorization
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State/jurisdiction Category under applicable anti-predatory lending law
---------------------------------------------------------------------------------------------------------------
Arkansas High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Cleveland Heights, Ohio Covered Loan
------------------------------------------------ -------------------------------------------------------------
Colorado Covered Loan
------------------------------------------------ -------------------------------------------------------------
Connecticut High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
District of Columbia Covered Loan
------------------------------------------------ -------------------------------------------------------------
Florida High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003) High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Georgia as amended (March 7, 2003 - current) High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
HOEPA Section 32 High Cost Loan
------------------------------------------------ -------------------------------------------------------------
Illinois High Risk Home Loan
------------------------------------------------ -------------------------------------------------------------
Kansas High Loan-to-Value Consumer Loans and High APR Consumer Loans
------------------------------------------------ -------------------------------------------------------------
Kentucky High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Los Angeles, Calif. High Cost Refinance Home Loan
------------------------------------------------ -------------------------------------------------------------
Maine High Rate High Fee mortgage
------------------------------------------------ -------------------------------------------------------------
Massachusetts High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Nevada Home Loan
------------------------------------------------ -------------------------------------------------------------
New Jersey High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
New York High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
New Mexico High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
North Carolina High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Oakland, Calif. High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
Ohio Covered Loan
------------------------------------------------ -------------------------------------------------------------
Oklahoma Subsection 10 Mortgage
------------------------------------------------ -------------------------------------------------------------
South Carolina High Cost Home Loan
------------------------------------------------ -------------------------------------------------------------
West Virginia West Virginia Mortgage Loan Act Loan
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Standard & Poor's Covered Loan Categorization
---------------------------------------------------------------------------------------------------------------
State/jurisdiction Category under applicable anti-predatory lending law
---------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 - March 6, 2003) Covered Loan
------------------------------------------------ -------------------------------------------------------------
New Jersey Covered Home Loan
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Sch-II-1
---------------------------------------------------------------------------------------------------------------
Standard & Poor's Home Loan Categorization
---------------------------------------------------------------------------------------------------------------
State/jurisdiction Category under applicable anti-predatory lending law
---------------------------------------------------------------------------------------------------------------
Georgia (Oct. 1, 2002- March 6, 2003) Home Loan
------------------------------------------------ -------------------------------------------------------------
New Jersey Home Loan
------------------------------------------------ -------------------------------------------------------------
New Mexico Home Loan
------------------------------------------------ -------------------------------------------------------------
North Carolina Consumer Home Loan
------------------------------------------------ -------------------------------------------------------------
Oakland, Calif. Home Loan
------------------------------------------------ -------------------------------------------------------------
South Carolina Consumer Home Loan
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Sch-II-2
ANNEX 1
ADOPTION ANNEX
The purchase price for the Mortgage Loans pursuant to Section 2.03 is the
transfer to each of the Sellers on the Closing Date of the Transferor
Certificates and the proceeds from the sale of the Notes, each by its
respective portion.
The items referred to in the representations and warranties in Section
3.02 are:
(12) _.__% of the Mortgage Loans being transferred on the relevant date
(by Cut-off Date Loan Balance) were 30-59 days delinquent (measured on a
contractual basis).
(18) As of the Cut-off Date no more than _.__% of the Mortgage Loans, by
aggregate principal balance, are secured by Mortgaged Properties located in
one United States postal zip code.
(19) The Combined Loan-to-Value Ratio for each Mortgage Loan was not in
excess of 100.00%.
(30) The weighted average remaining term to maturity of the Mortgage
Loans on a contractual basis as of the Cut-off Date is approximately ___. The
Loan Rate Caps for the Mortgage Loans range between _.__% and _.__%, and the
weighted average Loan Rate Cap is approximately _.__%. The Gross Margins for
the Mortgage Loans range between _.__% and _.__%, and the weighted average
Gross Margin is approximately _.__% as of the Cut-off Date. The Loan Rates on
the Mortgage Loans range between _.__% and _.__%, and the weighted average
Loan Rate on the Mortgage Loans is approximately _.__%.
(32) No more than _.__% (by Cut-off Date Loan Balance) of the Mortgage
Loans are secured by real property improved by individual condominium units,
units in planned unit developments, townhouses, or two-to-four family
residences erected on them, and at least 61.36% (by Cut-off Date Loan Balance)
of the Mortgage Loans are secured by real property with a detached one-family
residence erected on them.
(33) The Credit Limits on the Mortgage Loans range between approximately
$6,590 and $___________ with an average of approximately $_______. As of the
Cut-off Date, no Mortgage Loan had a principal balance in excess of
approximately $____________ and the average principal balance of the Mortgage
Loans is equal to approximately $________.
(34) Approximately _.__% of the Mortgage Loans, by aggregate principal
balance as of the Cut-off Date for the Mortgage Loans, are secured by second
liens.
(35) As of the Closing Date, no more than _.__% of the Mortgage Loans, by
aggregate principal balance, were appraised electronically.
Xxx-1-1
(40) As of the Cut-off Date (based on the drawn balances), the Mortgage
Loans had a weighted average Combined Loan-to-Value Ratio of _.__%; a range of
Loan-to-Value Ratios between _.__% and _.__%; a percentage of primary
residences of _.__%; a weighted average FICO score of ___; a range of FICO
scores between ___ and ___; a Weighted Average Net Loan Rate of _.__%; a range
of net Loan Rates between _.__% and _.__%; a weighted average original stated
term to maturity of ___ months; a range of original term to maturity between
___ and ___ months; a range of remaining term to maturity between ___ and ___
months; an average drawn balance of $________; an average utilization ratio of
_.__%; and _.__%of the Mortgage Loans have their respective Mortgaged
Properties located in the top five states, measured by aggregate drawn
balances.
Xxx-1-2
