EXECUTION COPY
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CWABS, INC.,
Depositor
COUNTRYWIDE HOME LOANS, INC.,
Seller
PARK MONACO INC.,
Seller
PARK SIENNA LLC,
Seller
COUNTRYWIDE HOME LOANS SERVICING LP,
Master Servicer
THE BANK OF NEW YORK,
Trustee
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Co-Trustee
_______________________________
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 2006
_______________________________
ASSET-BACKED CERTIFICATES, SERIES 2006-13
Table of Contents
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Page
ARTICLE I. DEFINITIONS...........................................................................................13
Section 1.01 Defined Terms..................................................................................13
Section 1.02 Certain Interpretive Provisions................................................................66
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.........................................66
Section 2.01 Conveyance of Mortgage Loans...................................................................66
Section 2.02 Acceptance by Trustee of the Mortgage Loans....................................................74
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Sellers...............80
Section 2.04 Representations and Warranties of the Depositor...............................................100
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases...............102
Section 2.06 Authentication and Delivery of Certificates...................................................102
Section 2.07 Covenants of the Master Servicer..............................................................103
ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.....................................................103
Section 3.01 Master Servicer to Service Mortgage Loans.....................................................103
Section 3.02 Subservicing; Enforcement of the Obligations of Master Servicer...............................105
Section 3.03 Rights of the Depositor, the Sellers, the Certificateholders, the NIM Insurer, the
Class 1-AF Insurer and the Trustee in Respect of the Master Servicer..........................106
Section 3.04 Trustee to Act as Master Servicer.............................................................107
Section 3.05 Collection of Mortgage Loan Payments; Certificate Account; Distribution Account;
Pre-Funding Account; Seller Shortfall Interest Requirement....................................107
Section 3.06 Collection of Taxes, Assessments and Similar Items; Escrow Accounts...........................111
Section 3.07 Access to Certain Documentation and Information Regarding the Mortgage Loans..................111
Section 3.08 Permitted Withdrawals from the Certificate Account, Distribution Account, Carryover
Reserve Fund and the Principal Reserve Fund...................................................112
Section 3.09 [Reserved]....................................................................................114
Section 3.10 Maintenance of Hazard Insurance...............................................................114
Section 3.11 Enforcement of Due-On-Sale Clauses; Assumption Agreements.....................................115
Section 3.12 Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and Realized
Losses; Repurchase of Certain Mortgage Loans..................................................117
Section 3.13 Co-Trustee to Cooperate; Release of Mortgage Files............................................120
Section 3.14 Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee......121
Section 3.15 Servicing Compensation........................................................................122
Section 3.16 Access to Certain Documentation...............................................................122
i
Section 3.17 Annual Statement as to Compliance.............................................................122
Section 3.18 [Reserved]....................................................................................123
Section 3.19 The Corridor Contract.........................................................................123
Section 3.20 Prepayment Charges............................................................................124
Section 3.21 Swap Contract.................................................................................125
ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER...................................................127
Section 4.01 Advances; Remittance Reports..................................................................127
Section 4.02 Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls.........128
Section 4.03 [Reserved]....................................................................................129
Section 4.04 Distributions.................................................................................129
Section 4.05 Monthly Statements to Certificateholders......................................................140
Section 4.06 Class 1-AF Policy; Rights of the Class 1-AF Insurer...........................................141
Section 4.07 Carryover Reserve Fund........................................................................145
Section 4.08 Credit Comeback Excess Account................................................................146
Section 4.09 Swap Trust and Swap Account...................................................................147
Section 4.10 Final Maturity Reserve Trust and Final Maturity Reserve Fund..................................147
ARTICLE V. THE CERTIFICATES.....................................................................................148
Section 5.01 The Certificates..............................................................................148
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates...................150
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.............................................154
Section 5.04 Persons Deemed Owners.........................................................................154
Section 5.05 Access to List of Certificateholders' Names and Addresses.....................................154
Section 5.06 Book-Entry Certificates.......................................................................155
Section 5.07 Notices to Depository.........................................................................156
Section 5.08 Definitive Certificates.......................................................................156
Section 5.09 Maintenance of Office or Agency...............................................................156
ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLERS..................................................157
Section 6.01 Respective Liabilities of the Depositor, the Master Servicer and the Sellers..................157
Section 6.02 Merger or Consolidation of the Depositor, the Master Servicer or the Sellers..................157
Section 6.03 Limitation on Liability of the Depositor, the Sellers, the Master Servicer, the NIM
Insurer and Others............................................................................158
Section 6.04 Limitation on Resignation of Master Servicer..................................................158
Section 6.05 Errors and Omissions Insurance; Fidelity Bonds................................................159
ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER............................................................159
Section 7.01 Events of Default.............................................................................159
Section 7.02 Trustee to Act; Appointment of Successor......................................................162
ii
Section 7.03 Notification to Certificateholders............................................................163
ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE.........................................................164
Section 8.01 Duties of Trustee.............................................................................164
Section 8.02 Certain Matters Affecting the Trustee.........................................................165
Section 8.03 Trustee Not Liable for Mortgage Loans.........................................................166
Section 8.04 Trustee May Own Certificates..................................................................167
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses............................................167
Section 8.06 Eligibility Requirements for Trustee..........................................................167
Section 8.07 Resignation and Removal of Trustee............................................................168
Section 8.08 Successor Trustee.............................................................................169
Section 8.09 Merger or Consolidation of Trustee............................................................170
Section 8.10 Appointment of Co-Trustee or Separate Trustee.................................................170
Section 8.11 Tax Matters...................................................................................171
Section 8.12 Co-Trustee....................................................................................175
Section 8.13 Access to Records of the Trustee..............................................................178
Section 8.14 Suits for Enforcement.........................................................................178
ARTICLE IX. TERMINATION.........................................................................................178
Section 9.01 Termination upon Liquidation or Repurchase of all Mortgage Loans..............................178
Section 9.02 Final Distribution on the Certificates........................................................179
Section 9.03 Additional Termination Requirements...........................................................181
ARTICLE X. MISCELLANEOUS PROVISIONS.............................................................................182
Section 10.01 Amendment.....................................................................................182
Section 10.02 Recordation of Agreement; Counterparts........................................................184
Section 10.03 Governing Law.................................................................................184
Section 10.04 Intention of Parties..........................................................................184
Section 10.05 Notices.......................................................................................186
Section 10.06 Severability of Provisions....................................................................187
Section 10.07 Assignment....................................................................................187
Section 10.08 Limitation on Rights of Certificateholders....................................................187
Section 10.09 Inspection and Audit Rights...................................................................188
Section 10.10 Certificates Nonassessable and Fully Paid.....................................................189
Section 10.11 Rights of NIM Insurer.........................................................................189
ARTICLE XI. EXCHANGE ACT REPORTING..............................................................................190
Section 11.01 Filing Obligations............................................................................190
Section 11.02 Form 10-D Filings.............................................................................190
Section 11.03 Form 8-K Filings..............................................................................191
Section 11.04 Form 10-K Filings.............................................................................191
Section 11.05 Xxxxxxxx-Xxxxx Certification..................................................................192
Section 11.06 Form 15 Filing................................................................................193
Section 11.07 Report on Assessment of Compliance and Attestation............................................193
iii
Section 11.08 Use of Subservicers and Subcontractors........................................................194
Section 11.09 Amendments....................................................................................195
Section 11.10 Reconciliation of Accounts....................................................................196
Exhibits
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EXHIBIT A Forms of Certificates
EXHIBIT A-1 Form of Class 1-AF-1 Certificate
EXHIBIT A-2 Form of Class 1-AF-2 Certificate
EXHIBIT A-3 Form of Class 1-AF-3 Certificate
EXHIBIT A-4 Form of Class 1-AF-4 Certificate
EXHIBIT A-5 Form of Class 1-AF-5 Certificate
EXHIBIT A-6 Form of Class 1-AF-6 Certificate
EXHIBIT A-7 Form of Class 2-AV Certificate
EXHIBIT A-8 Form of Class 3-AV-1 Certificate
EXHIBIT A-9 Form of Class 3-AV-2 Certificate
EXHIBIT A-10 Form of Class 3-AV-3 Certificate
EXHIBIT A-11 Form of Class MV-1 Certificate
EXHIBIT A-12 Form of Class MV-2 Certificate
EXHIBIT A-13 Form of Class MV-3 Certificate
EXHIBIT A-14 Form of Class MV-4 Certificate
EXHIBIT A-15 Form of Class MV-5 Certificate
EXHIBIT A-16 Form of Class MV-6 Certificate
EXHIBIT A-17 Form of Class MV-7 Certificate
EXHIBIT A-18 Form of Class MV-8 Certificate
EXHIBIT A-19 Form of Class BV Certificate
EXHIBIT B Forms of Class P Certificates
EXHIBIT B-1 Form of Class PF Certificate
EXHIBIT B-2 Form of Class PV Certificate
EXHIBIT C Forms of Class C Certificates
EXHIBIT C-1 Form of Class CF Certificate
EXHIBIT C-2 Form of Class CV Certificate
EXHIBIT D Form of Class A-R 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
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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
EXHIBIT Q Form of Class 1-AF-1 Corridor Contract
EXHIBIT R Form of Class 1-AF Policy
EXHIBIT S-1 Form of Corridor Contract Assignment Agreement
EXHIBIT S-2 Form of Corridor Contract Administration Agreement
EXHIBIT T Officer's Certificate with respect to Prepayments
EXHIBIT U Form of Swap Contract
EXHIBIT V-1 Form of Swap Contract Assignment Agreement
EXHIBIT V-2 Form of Swap Contract Administration Agreement
EXHIBIT V-3 Form of Swap Guarantee
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
SCHEDULE III Fixed Rate 40-Year Target Schedule
SCHEDULE IV Adjustable Rate 40-Year Target Schedule
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POOLING AND SERVICING AGREEMENT, dated as of July 1, 2006, by and
among CWABS, INC., a Delaware corporation, as depositor (the "Depositor"),
COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller ("CHL" 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 and Park
Monaco, the "Sellers"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as master servicer (the "Master Servicer"), THE BANK OF NEW YORK,
a New York banking corporation, as trustee (the "Trustee"), and THE BANK OF
NEW YORK TRUST COMPANY, N.A., a national banking association, as co-trustee
(the "Co-Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to the Trustee in return for the Certificates. The Trust Fund
(excluding the Credit Comeback Excess Account, the Carryover Reserve Fund and
the assets held in the Pre-Funding Account) 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 represents
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 Credit Comeback Excess Account, the Carryover
Reserve Fund and the assets held in the Pre-Funding Account). The latest
possible maturity date of all REMIC regular interests created in this
Agreement shall be the Latest Possible Maturity Date.
None of the REMICs described herein shall hold any interest in the
Final Maturity Reserve Trust, the Fixed Rate Final Maturity Reserve Fund, the
Adjustable Rate Final Maturity Reserve Fund, the Swap Trust, the Swap Contract
or the Swap Account.
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 Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-1F (1) (2)
SWR-PF $ 100.00 (3)
SWR-F-40 Year Reserve (4) (4)
SWR-1A $ 3,403,117.50 (5)
SWR-1B $ 3,403,117.50 (6)
SWR-2A $ 3,984,686.50 (5)
1
Swap-IO REMIC Interest Initial Principal Balance Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-2B $ 3,984,686.50 (6)
SWR-3A $ 4,562,438.00 (5)
SWR-3B $ 4,562,438.00 (6)
SWR-4A $ 5,134,210.50 (5)
SWR-4B $ 5,134,210.50 (6)
SWR-5A $ 5,697,818.50 (5)
SWR-5B $ 5,697,818.50 (6)
SWR-6A $ 6,109,041.00 (5)
SWR-6B $ 6,109,041.00 (6)
SWR-7A $ 6,191,709.00 (5)
SWR-7B $ 6,191,709.00 (6)
SWR-8A $ 6,737,630.00 (5)
SWR-8B $ 6,737,630.00 (6)
SWR-9A $ 7,267,107.00 (5)
SWR-9B $ 7,267,107.00 (6)
SWR-10A $ 7,777,963.00 (5)
SWR-10B $ 7,777,963.00 (6)
SWR-11A $ 8,268,083.00 (5)
SWR-11B $ 8,268,083.00 (6)
SWR-12A $ 8,735,420.00 (5)
SWR-12B $ 8,735,420.00 (6)
SWR-13A $ 9,127,585.00 (5)
SWR-13B $ 9,127,585.00 (6)
SWR-14A $ 9,522,198.50 (5)
SWR-14B $ 9,522,198.50 (6)
SWR-15A $ 9,888,331.00 (5)
SWR-15B $ 9,888,331.00 (6)
SWR-16A $ 10,224,438.50 (5)
SWR-16B $ 10,224,438.50 (6)
SWR-17A $ 10,529,122.00 (5)
SWR-17B $ 10,529,122.00 (6)
SWR-18A $ 10,801,131.50 (5)
SWR-18B $ 10,801,131.50 (6)
SWR-19A $ 10,885,586.00 (5)
SWR-19B $ 10,885,586.00 (6)
SWR-20A $ 10,513,705.50 (5)
SWR-20B $ 10,513,705.50 (6)
SWR-21A $ 10,153,282.50 (5)
SWR-21B $ 10,153,282.50 (6)
SWR-22A $ 9,804,298.50 (5)
SWR-22B $ 9,804,298.50 (6)
SWR-23A $ 9,466,377.00 (5)
SWR-23B $ 9,466,377.00 (6)
SWR-24A $ 9,139,155.00 (5)
SWR-24B $ 9,139,155.00 (6)
2
Swap-IO REMIC Interest Initial Principal Balance Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-25A $ 14,562,977.50 (5)
SWR-25B $ 14,562,977.50 (6)
SWR-26A $ 13,681,098.00 (5)
SWR-26B $ 13,681,098.00 (6)
SWR-27A $ 12,851,751.00 (5)
SWR-27B $ 12,851,751.00 (6)
SWR-28A $ 12,071,681.00 (5)
SWR-28B $ 12,071,681.00 (6)
SWR-29A $ 11,338,892.00 (5)
SWR-29B $ 11,338,892.00 (6)
SWR-30A $ 11,124,348.00 (5)
SWR-30B $ 11,124,348.00 (6)
SWR-31A $ 6,902,206.50 (5)
SWR-31B $ 6,902,206.50 (6)
SWR-32A $ 6,675,047.50 (5)
SWR-32B $ 6,675,047.50 (6)
SWR-33A $ 6,455,397.50 (5)
SWR-33B $ 6,455,397.50 (6)
SWR-34A $ 6,243,006.00 (5)
SWR-34B $ 6,243,006.00 (6)
SWR-35A $ 6,037,633.00 (5)
SWR-35B $ 6,037,633.00 (6)
SWR-36A $ 5,839,044.00 (5)
SWR-36B $ 5,839,044.00 (6)
SWR-37A $ 5,782,393.00 (5)
SWR-37B $ 5,782,393.00 (6)
SWR-38A $ 5,583,328.50 (5)
SWR-38B $ 5,583,328.50 (6)
SWR-39A $ 5,391,410.50 (5)
SWR-39B $ 5,391,410.50 (6)
SWR-40A $ 5,206,365.00 (5)
SWR-40B $ 5,206,365.00 (6)
SWR-41A $ 5,027,931.00 (5)
SWR-41B $ 5,027,931.00 (6)
SWR-42A $ 4,855,856.00 (5)
SWR-42B $ 4,855,856.00 (6)
SWR-43A $ 4,592,968.00 (5)
SWR-43B $ 4,592,968.00 (6)
SWR-44A $ 4,442,238.00 (5)
SWR-44B $ 4,442,238.00 (6)
SWR-45A $ 4,296,477.00 (5)
SWR-45B $ 4,296,477.00 (6)
SWR-46A $ 4,155,520.00 (5)
SWR-46B $ 4,155,520.00 (6)
SWR-47A $ 4,019,209.50 (5)
3
Swap-IO REMIC Interest Initial Principal Balance Pass-Through Rate
---------------------- ------------------------- -----------------
SWR-47B $ 4,019,209.50 (6)
SWR-48A $ 43,369,561.50 (5)
SWR-48B $ 43,369,561.50 (6)
SWR-49A $ 1,465,505.50 (5)
SWR-49B $ 1,465,505.50 (6)
SWR-50A $ 1,437,604.50 (5)
SWR-50B $ 1,437,604.50 (6)
SWR-51A $ 1,410,227.50 (5)
SWR-51B $ 1,410,227.50 (6)
SWR-52A $ 1,383,367.00 (5)
SWR-52B $ 1,383,367.00 (6)
SWR-53A $ 1,357,011.50 (5)
SWR-53B $ 1,357,011.50 (6)
SWR-54A $ 1,331,153.00 (5)
SWR-54B $ 1,331,153.00 (6)
SWR-55A $ 1,305,780.50 (5)
SWR-55B $ 1,305,780.50 (6)
SWR-56A $ 1,280,886.50 (5)
SWR-56B $ 1,280,886.50 (6)
SWR-57A $ 1,256,461.00 (5)
SWR-57B $ 1,256,461.00 (6)
SWR-58A $ 1,232,723.00 (5)
SWR-58B $ 1,232,723.00 (6)
SWR-59A $ 1,210,595.00 (5)
SWR-59B $ 1,210,595.00 (6)
SWR-60A $ 60,897,910.00 (5)
SWR-60B $ 60,897,910.00 (6)
SWR-Support (7) (8)
SWR-PV $ 100.00 (9)
SWR-V-40 Year Reserve (10) (10)
SW-A-R (11) (11)
--------
(1) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses in respect of the
Group 1 Mortgage Loans, the principal balance in respect of the Class
SWR-F1 Interest will equal the sum of (a) the principal balance of the
Group 1 Mortgage Loans (as of the end of the related Due Period, reduced
by principal prepayments received after the Due Period that are to be
distributed on the Distribution Date related to the Due Period) and (b)
the amount, if any, on deposit in the Pre-Funding Account in respect of
Loan Group 1.
(2) A rate equal to the Loan Group 1 Net Rate Cap. The "Loan Group 1 Net
Rate Cap" means the weighted average of the Adjusted Net Mortgage Rates
of all the Mortgage Loans in Loan Group 1. For purposes of this
definition, beginning on the Distribution Date in August 2016 and ending
on the Distribution Date in January 2037, the Adjusted Net
4
Mortgage Rate shall be determined by first reducing the interest payable
on each Group 1 Mortgage Loan by the 40-Year Fixed Reserve Rate (as
defined below).
(3) On each Distribution Date the Class SWR-PF Interest is entitled to all
Prepayment Charges collected with respect to the Fixed Rate Mortgage
Loans. It pays no interest.
(4) Beginning on the Distribution Date in August 2016 and ending on the
Distribution Date in January 2037, the SWR-F-40 Year Reserve Interest
shall be entitled to a specified portion of the interest payable on each
Group 1 Mortgage Loan. Specifically, the SWR-F-40 Year Reserve Interest
shall be entitled to a specified portion of the interest payable on the
Stated Principal Balance of each Group 1 Mortgage Loan with a 40-year
original term to maturity as of the Due Date in the month preceding the
month of that Distribution Date (after giving effect to principal
prepayments in the Prepayment Period related to that prior Due Date) at
a per annum rate equal to 0.80% (the "40-Year Fixed Reserve Rate").
(5) Prior to the 61st Distribution Date, a rate equal to twice the
Adjustable Rate Loan Group Tax Cap less 11.30% per annum. On and after
the 61st Distribution Date a rate equal to the Adjustable Rate Loan
Group Tax Cap. The "Adjustable Rate Loan Group Tax Cap" means the
weighted average of the Adjusted Net Mortgage Rates of all the Mortgage
Loans in Loan Group 2 and Loan Group 3. For purposes of this definition,
beginning on the Distribution Date in August 2016 and ending on the
Distribution Date in January 2037, the Adjusted Net Mortgage Rate shall
be determined by first reducing the interest payable on each Group 2 and
Group 3 Mortgage Loan by the 40-Year Adjustable Reserve Rate (as defined
below).
(6) Prior to the 61st Distribution Date, a rate equal to the lesser of (i)
11.30% per annum and (ii) twice the Adjustable Rate Loan Group Tax Cap.
On and after the 61st Distribution Date, a rate equal to the Adjustable
Rate Loan Group Tax Cap.
(7) On the Closing Date and on each Distribution Date, following the
allocation of Principal Amounts and Realized Losses in respect of the
Group 2 and Group 3 Mortgage Loans, the principal balance in respect of
the SWR-Support Interest will equal the excess of (a) (i) the principal
balance of the Group 2 and Group 3 Mortgage Loans (as of the end of the
related Due Period, reduced by principal prepayments received after the
Due Period that are to be distributed on the Distribution Date related
to the Due Period) and (ii) the amount, if any, on deposit in the
Pre-Funding Account in respect of Loan Group 2 and Loan Group 3 over (b)
the principal balance in respect of the remaining Swap-IO REMIC
Interests (other than the SWR-1F, SWR-PF, SWR-PV and the SWR-A-R
Interests).
(8) A rate equal to the Adjustable Rate Loan Group Tax Cap.
(9) On each Distribution Date the Class SWR-PV Interest is entitled to all
Prepayment Charges collected with respect to the Adjustable Rate
Mortgage Loans. It pays no interest.
(10) Beginning on the Distribution Date in August 2016 and ending on the
Distribution Date in January 2037, the SWR-V-40 Year Reserve Interest
shall be entitled to a specified portion of the interest payable on each
Group 2 and Group 3 Mortgage Loan. Specifically, the SWR-V-40 Year
Reserve Interest shall be entitled to a specified portion of the
interest
5
payable on the Stated Principal Balance of each Group 2 and Group 3
Mortgage Loan with a 40-year original term to maturity as of the Due
Date in the month preceding the month of that Distribution Date (after
giving effect to principal prepayments in the Prepayment Period related
to that prior Due Date) at a per annum rate equal to 0.80% (the "40
Adjustable Year Reserve Rate").
(11) The Class 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 Group 1 Mortgage Loans shall
be payable in the following manner:
(1) Interest. Interest is to be distributed with respect to the SWR-1F
Interest at the rate described above.
(2) Principal. Scheduled principal, prepayments and Realized Losses will
be allocated between the SWR-PF Interest and the SWR-1F in the same way
that scheduled principal, prepayments and Realized Losses Interest are
allocated between the Class PF Certificate and all other certificates
relating to Loan Group 1.
(3) Prepayment Penalties. All Prepayment Charges related to the Fixed
Rate Mortgage Loans will be allocated to the SWR-PF Interest.
On each Distribution Date, the Interest Funds and the Principal
Distribution Amount payable with respect to the Group 2 and Group 3 Mortgage
Loans shall be payable in the following manner:
(1) Interest. Interest is to be distributed with respect to the Class
SWR-1A through Class SWR-60B Interests and the Class SWR-Support
Interests at the rate, or according to the formulas, described above.
(2) Principal. Scheduled principal, prepayments and Realized Losses will
be allocated first, to the SWR-Support Interest and second, to the
numbered classes (Class SWR-1A through Class SWR-60B ) sequentially
(from lowest to highest). Amounts so allocated to a numbered class
(Class SWR-1A through Class SWR-60B ) shall be further allocated among
the "A" and "B" components of such numbered class pro-rata until the
entire class is reduced to zero.
(3) Prepayment Penalties. All Prepayment Charges related to the
Adjustable Rate Mortgage Loans shall be allocated to the SWR-PV
Interest.
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:
6
------------------------------- ---------------------------- ---------------------------- ----------------------------
Pass-Through Corresponding Class of
Strip REMIC Interest Initial Principal Balance Rate Certificates
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-1.................... (1) (2) 1-AF-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-2.................... (1) (2) 1-AF-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-3.................... (1) (2) 1-AF-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-4.................... (1) (2) 1-AF-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-5.................... (1) (2) 1-AF-5
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-1-AF-6.................... (1) (2) 1-AF-6
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-PF........................ $100 (3) PF
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-F-Accrual................. (1) (2) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-F-40 Year IO.............. (4) (4) NA
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-2-AV...................... (5) (6) 2-AV
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-3-AV-1.................... (5) (6) 3-AV-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-3-AV-2.................... (5) (6) 3-AV-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-3-AV-3.................... (5) (6) 3-AV-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-1...................... (5) (6) MV-1
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-2...................... (5) (6) MV-2
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-3...................... (5) (6) MV-3
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-4...................... (5) (6) MV-4
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-5...................... (5) (6) MV-5
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-6...................... (5) (6) MV-6
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-7...................... (5) (6) MV-7
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-MV-8...................... (5) (6) MV-8
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-BV........................ (5) (6) BV
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-$100...................... $100 (7) A-R
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-CV-OC..................... (8) (6) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-CV-Swap-IO................ (9) (9) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-CV-40 Year IO............. (10) (10) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-PV........................ $100 (11) PV
------------------------------- ---------------------------- ---------------------------- ----------------------------
STR-A-R....................... (12) (12) N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------
(1) This Strip REMIC Interest has a principal balance that is initially
equal to 50% of its Corresponding Certificate Class issued by the Master
REMIC. Principal payments, both scheduled and prepaid, Realized Losses
and Subsequent Recoveries with respect to the Class SWR-1F Interest and,
if necessary, interest accruing on the STR-F-Accrual Interest, will be
allocated to this class to maintain its size relative to its
Corresponding Certificate Class (that is, 50%) with any excess payments
of principal, Realized Losses and Subsequent Recoveries being allocated
to the STR-F-Accrual Interest in such manner as to cause the principal
balance of the STR-F-Accrual Interest to have a principal balance equal
to the sum of (a) 50% of the Loan Group 1 principal balance, (b) 50% of
the amount, if any, on deposit in the Pre-Funding Account in respect of
Loan Group 1 and (c) 50% of the Fixed Rate Overcollateralized Amount for
such Distribution Date.
7
(2) The pass-through rate with respect to any Distribution Date (and the
related Accrual Period) for this Strip REMIC Interest is a per annum
rate equal to the Loan Group 1 Net Rate Cap.
(3) The STR-PF Interest is entitled to all amounts collected with respect to
the SWR-PF Interest. It pays no interest.
(4) The STR-F-40 Year IO Interest is entitled to all amounts payable with
respect to the SWR-F-40 Year Reserve Interest.
(5) This Strip REMIC Interest has a principal balance that is initially
equal to 100% of its Corresponding Certificate Class issued by the
Master REMIC. Principal payments, both scheduled and prepaid, Realized
Losses and Subsequent Recoveries attributable to the Swap-IO REMIC
Interests held by the Strip REMIC (other than the Class SWR-1F, Class
SWR-PF and SWR-PV Interests) will be allocated to this class to maintain
its size relative to its Corresponding Certificate Class.
(6) On each Distribution Date, the pass-through rate will equal the weighted
average of the pass-through rates of the Swap-IO REMIC Interests (other
than the Class SWR-1F, Class SWR-PF, Class SWR-PV and Class SWR-A-R
Interests) treating each "B" Interest the cardinal number of which (for
example, XXX-0X, XXX-0X, XXX-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 (the "Strip REMIC Cap").
(7) This Strip REMIC Interest pays no interest.
(8) This Strip REMIC Interest has a principal balance that is initially
equal to 100% of the Adjustable Rate Overcollateralized Amount.
Principal payments, both scheduled and prepaid, Realized Losses and
Subsequent Recoveries attributable to the Swap-IO REMIC Interests held
by the Strip REMIC (other than the Class SWR-1F, Class SWR-PF, Class
SWR-PV and Class SWR-A-R Interests) will be allocated to this class to
maintain its size relative to the Adjustable Rate Overcollateralized
Amount.
(9) For each Distribution Date, the STR-CV-Swap-IO Interest is entitled to
receive from each Swap-IO REMIC "B" Interest the cardinal number of
which (for example, XXX-0X, XXX-0X, XXX-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.
(10) The STR-CV-40 Year IO Interest is entitled to all amounts payable with
respect to the SWR-V-40 Year Reserve Interest.
(11) The STR-PV Interest is entitled to all amounts payable with respect to
the SWR-PV Interest. It pays no interest.
8
(12) The 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 and the Principal
Distribution Amount payable with respect to the Swap-IO Interests shall be
payable with respect to the Strip REMIC 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) Principal. Principal Distribution Amounts shall be allocated among
the Strip REMIC Interests as described above.
(3) Prepayment Penalties. All Prepayment Charges are allocated as
described above.
9
MASTER REMIC:
The following table specifies the class designation, interest
rate, and principal amount for each class of Master REMIC Interest:
Original Certificate Pass-Through
Class Principal Balance Rate
----------------------------- -------------------- ------------
Class 1-AF-1................. $128,246,000 (1)
Class 1-AF-2................. $31,277,000 (1)
Class 1-AF-3................. $91,851,000 (1)
Class 1-AF-4................. $67,829,000 (1)
Class 1-AF-5................. $77,922,000 (1)
Class 1-AF-6................. $45,000,000 (1)
Class 2-AV................... $399,884,000 (2)
Class 3-AV-1................. $237,306,000 (2)
Class 3-AV-2................. $238,274,000 (2)
Class 3-AV-3................. $59,936,000 (2)
Class MV-1................... $48,600,000 (2)
Class MV-2................... $41,400,000 (2)
Class MV-3................... $24,600,000 (2)
Class MV-4................... $22,200,000 (2)
Class MV-5................... $21,000,000 (2)
Class MV-6................... $19,800,000 (2)
Class MV-7................... $18,600,000 (2)
Class MV-8................... $16,800,000 (2)
Class BV..................... $12,000,000 (2)
Class CF..................... (3) (4)
Class CV..................... (5) (6)
Class PF..................... $100 (7)
Class PV..................... $100 (8)
Class A-R.................... $100 (9)
----------
(1) These Certificates will accrue interest at the related Pass-Through
Rates identified in this Agreement. For federal income tax purposes,
including the computation of the Class CF Distributable Amount and
entitlement to Net Rate Carryover the pass-through rate in respect of
this certificate will be subject to a cap equal to the Loan Group 1 Net
Rate Cap.
(2) These Certificates will accrue interest at the related Pass-Through
Rates identified in this Agreement. For federal income tax purposes,
including the computation of the Class CV Distributable Amount and
entitlement to Net Rate Carryover, the pass-through rate in respect of
this certificate will be the Strip REMIC Cap.
(3) For federal income tax purposes, the Class CF Certificates will be
treated as having a Certificate Principal Balance equal to the Fixed
Rate Overcollateralized Amount.
(4) For each Interest Accrual Period the Class CF Certificates are entitled
to (a) the interest payable on the STR-F-40 Year IO Interest and (b) an
amount (the "Class CF Distributable
10
Amount") equal to a specified portion of the interest payable on the
Strip REMIC Regular Interests having an "F" in their designation (other
than the STR-F-40 Year IO Interest and the STR-PF Interest) equal to the
excess of the Loan Group 1 Net Rate Cap over the product of two and the
weighted average interest rate of the Strip REMIC Regular Interests
having an "F" in their designation (other than the STR-F-40 Year IO
Interest and the STR-PF Interest) with each such Class other than the
STR-F-Accrual Interest, subject to a cap equal to the Pass-Through Rate
of the Corresponding Master REMIC Class and the STR-F-Accrual Interest
subject to a cap of 0.00%. The Pass-Through Rate of the Class CF
Certificates shall be a rate sufficient to entitle it to an amount equal
to all interest accrued on the Group 1 Mortgage Loans less the interest
accrued on the other Master REMIC Interests having the letter "F" in
their designation. The Class CF Distributable Amount for any
Distribution Date is payable from current interest on the Group 1
Mortgage Loans and any related Fixed Rate Overcollateralization
Reduction Amount for that Distribution Date.
(5) For federal income tax purposes, the Class CV Certificates will be
treated as having a Certificate Principal Balance equal to the
Adjustable Rate Overcollateralized Amount.
(6) For each Interest Accrual Period the Class CV Certificates are entitled
to an amount (the "Class CV Distributable Amount") equal to the sum of
(a) the interest payable on the STR-CV-Swap-IO Interest, (b) the
interest payable on the STR-CV-OC Interest, (c) the interest payable on
the STR-C-40 Year IO Interest and (d) a specified portion of the
interest payable on the Strip REMIC Regular Interests having the letter
"V" in their designation (other than the STR-CV-OC, STR-CV-Swap-IO and
STR-PV Interests) equal to the excess of the Strip REMIC Cap over the
weighted average interest rate of the Strip REMIC Regular Interests
having the letter "V" in their designation (other than the STR-CV-OC,
STR-CV-Swap-IO and STR-PV 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 CV Certificates shall be a
rate sufficient to entitle it to an amount equal to all interest accrued
on the Group 2 and Group 3 Mortgage Loans less the interest accrued on
the other Master REMIC Interests having the letter "V" in their
designation. The Class CV Distributable Amount for any Distribution Date
is payable from current interest on the Group 2 and Group 3 Mortgage
Loans and any related Adjustable Rate Overcollateralization Reduction
Amount for that Distribution Date.
(7) For each Distribution Date the Class PF Certificates are entitled to all
amounts distributed with respect to the STR-PF Interest.
(8) For each Distribution Date the Class PV Certificates are entitled to all
amounts distributed with respect to the STR-PV Interest.
(9) 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.
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
REMIC regular interests, without creating any shortfall--actual or potential
(other than for credit losses)-- to any REMIC
11
regular interest. It is not intended that the Class A-R Certificates be
entitled to any cash flows pursuant to this Agreement except as provided in
Section 3.08(a) hereunder.
12
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:
40-Year Adjustable Reserve Rate: As defined in the Preliminary
Statement.
40-Year Fixed Reserve Rate: As defined in the Preliminary
Statement.
40-Year Mortgage Loan: A Mortgage Loan with an original term to
maturity of 40 years.
Account: Any Escrow Account, the Carryover Reserve Fund, the
Certificate Account, the Credit Comeback Excess Account, the Distribution
Account, the Pre-Funding Account, the Principal Reserve Fund, the Swap Account
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 the Fixed Rate
Certificates and Class C Certificates will be made on the basis of a 360-day
year consisting of twelve 30-day months.
Additional Designated Information: As defined in Section 11.02.
Adjustable Rate 40-Year Target Schedule: Schedule IV hereto.
Adjustable Rate Certificates: The Class 1-AF-1 Certificates, the
Class AV Certificates and the Adjustable Rate Subordinate Certificates.
Adjustable Rate Credit Comeback Excess Cashflow: With respect to
any Distribution Date, any amounts in the Credit Comeback Excess Account in
respect of Loan Group 2 and Loan Group 3 available for such Distribution Date.
Adjustable Rate Cumulative Loss Trigger Event: With respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Cumulative Loss Trigger Event occurs if (x) the aggregate amount of
Realized Losses on the Mortgage Loans in Loan Group 2 and Loan Group 3 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 related to the Mortgage Loans in Loan Group 2 and Loan Group 3
13
received through the last day of that Due Period) exceeds (y) the applicable
percentage, for such Distribution Date, of the sum of the aggregate Cut-off
Date Principal Balance of the Initial Mortgage Loans in Loan Group 2 and Loan
Group 3, the Group 2 Pre-Funded Amount and the Group 3 Pre-Funded Amount, as
set forth below:
Distribution Date Percentage
August 2008 -- July 2009....... 1.55% with respect to August 2008, plus
an additional 1/12th of 1.90% for each
month thereafter through July 2009
August 2009 -- July 2010....... 3.45% with respect to August 2009, plus
an additional 1/12th of 2.05% for each
month thereafter through July 2010
August 2010 -- July 2011....... 5.50% with respect to August 2010, plus
an additional 1/12th of 1.65% for each
month thereafter through July 2011
August 2011 -- July 2012....... 7.15% with respect to August 2011, plus
an additional 1/12th of 0.95% for each
month thereafter through July 2012
August 2012 -- July 2013....... 8.10% with respect to August 2012, plus
an additional 1/12th of 0.10% for each
month thereafter through July 2013
August 2013 and thereafter..... 8.20%
Adjustable Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date, an Adjustable
Rate Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency
Rate for Outstanding Mortgage Loans in Loan Group 2 and Loan Group 3 equals or
exceeds the product of (x) the Adjustable Rate Senior Enhancement Percentage
for such Distribution Date and (y) the applicable percentage listed below for
the most senior Class of outstanding Class AV Certificates and Adjustable Rate
Subordinate Certificates:
Class Percentage
----- ----------
Class AV........................ 32.60%
Class MV-1...................... 39.94%
Class MV-2...................... 49.40%
Class MV-3...................... 57.51%
Class MV-4...................... 67.50%
Class MV-5...................... 80.77%
Class MV-6...................... 99.15%
Class MV-7...................... 126.11%
14
Class Percentage
----- ----------
Class MV-8...................... 167.17%
Class BV........................ 217.83%
Adjustable Rate Excess Cashflow: With respect to any Distribution
Date the sum of (i) the amount remaining after the distribution of interest to
Certificateholders for such Distribution Date pursuant to Section
4.04(b)(v)(b), (ii) the amount remaining after the distribution of principal
to Certificateholders for such Distribution Date, pursuant to Section
4.04(d)(1)(B)(ii) or 4.04(d)(2)(B)(ii), and (iii) the Adjustable Rate
Overcollateralization Reduction Amount for such Distribution Date, if any.
Adjustable Rate Excess Overcollateralization Amount: With respect
to any Distribution Date, an amount equal to the excess, if any, of the
Adjustable Rate Overcollateralized Amount for such Distribution Date over the
Adjustable Rate Overcollateralization Target Amount for such Distribution
Date.
Adjustable Rate Final Maturity Funding Cap: For any Distribution
Date beginning with the Distribution Date in August 2016, the lesser of (i)
the aggregate Certificate Principal Balance of the Class AV Certificates and
the Adjustable Rate Subordinate Certificates immediately prior to such
Distribution Date and (ii) the aggregate Stated Principal Balance of all
outstanding Mortgage Loans in Loan Group 2 and Loan Group 3 with original
terms to maturity of 40 years as of the 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).
Adjustable Rate Final Maturity Reserve Fund Required Deposit: For
any Distribution Date beginning on the Distribution Date in August 2016 up to
and including the Adjustable Rate Final Maturity Reserve Funding Date, if the
Adjustable Rate Final Maturity Required Deposit Trigger is not in effect with
respect to such Distribution Date, then the Adjustable Rate Final Maturity
Reserve Fund Required Deposit with respect to such Distribution Date shall be
$0, and if the Adjustable Rate Final Maturity Required Deposit Trigger is in
effect with respect to such Distribution Date, then the Adjustable Rate Final
Maturity Reserve Fund Required Deposit with respect to such Distribution Date
shall be an amount equal to the lesser of (a) the product of (i) 0.80% and
(ii) the aggregate Stated Principal Balance of the 40-Year Mortgage Loans in
Loan Group 2 and Loan Group 3 as of the Due Date occurring in the month
preceding the month of that Distribution Date (after giving effect to
Principal Prepayments in the Prepayment Period related to that prior Due Date)
and (b) the excess of (i) the Adjustable Rate Final Maturity Funding Cap for
such Distribution Date over (ii) the amount on deposit in the Adjustable Rate
Final Maturity Reserve Fund immediately prior to such Distribution Date.
Adjustable Rate Final Maturity Required Deposit Trigger: With
respect to any Distribution Date on or after the Distribution Date in August
2016 up to and including the Adjustable Rate Final Maturity Reserve Funding
Date, the Adjustable Rate Final Maturity Required Deposit Trigger shall be in
effect with respect to such Distribution Date if the aggregate Stated
Principal Balance of the 40-Year Mortgage Loans in Loan Group 2 and Loan Group
3 as of the Due Date occurring in the month preceding the month of that
Distribution Date
15
(after giving effect to Principal Prepayments in the Prepayment Period related
to that prior Due Date) is greater than the "Adjustable Rate 40-Year Target"
specified on the Adjustable Rate 40-Year Target Schedule for such Distribution
Date.
Adjustable Rate Final Maturity Reserve Fund: The separate Eligible
Account created and initially maintained by the Trustee pursuant to Section
4.10 in the name of the Final Maturity Reserve Trustee for the benefit of the
Certificateholders and designated "The Bank of New York in trust for
registered Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-13".
Funds in the Adjustable Rate Final Maturity Reserve Fund shall be held in
trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Adjustable Rate Final Maturity Reserve Funding Date: The earlier
of (i) the Distribution Date on which the amount on deposit in the Adjustable
Rate Final Maturity Reserve Fund is equal to the Adjustable Rate Final
Maturity Funding Cap and (ii) the Distribution Date occurring in January 2037.
Adjustable Rate Loan Group Tax Cap: As defined in the Preliminary
Statement.
Adjustable Rate Mortgage Loans: The Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable in
accordance with the terms of the related Mortgage Note.
Adjustable Rate OC Floor: For any Distribution Date, an amount
equal to 0.50% of the sum of the aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans in Loan Group 2 and Loan Group 3, the Group 2
Pre-Funded Amount and the Group 3 Pre-Funded Amount.
Adjustable Rate Overcollateralization Deficiency Amount: With
respect to any Distribution Date, the amount, if any, by which the Adjustable
Rate Overcollateralization Target Amount exceeds the Adjustable Rate
Overcollateralized Amount on such Distribution Date (after giving effect to
distribution of the Principal Distribution Amount (other than the portion
thereof consisting of the Extra Principal Distribution Amount) for Loan Group
2 and Loan Group 3 on such Distribution Date).
Adjustable Rate Overcollateralization Reduction Amount: With
respect to any Distribution Date, an amount equal to the lesser of (i) the
Adjustable Rate Excess Overcollateralization Amount for such Distribution Date
and (ii) the aggregate Principal Remittance Amount for Loan Group 2 and Loan
Group 3 for such Distribution Date.
Adjustable Rate Overcollateralization Target Amount: With respect
to any Distribution Date (a) prior to the Adjustable Rate Stepdown Date, an
amount equal to 3.30% of the sum of the aggregate Cut-off Date Principal
Balance of the Initial Mortgage Loans in Loan Group 2 and Loan Group 3, the
Group 2 Pre-Funded Amount and the Group 3 Pre-Funded Amount and (b) on or
after the Adjustable Rate Stepdown Date, the greater of (i) an amount equal to
6.60% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 and Loan Group 3 for the current Distribution Date and (ii) the
Adjustable Rate OC Floor; provided, however, that if an Adjustable Rate
Trigger Event is in effect on any Distribution Date,
16
the Adjustable Rate Overcollateralization Target Amount will be the Adjustable
Rate Overcollateralization Target Amount as in effect for the prior
Distribution Date.
Adjustable Rate 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 in Loan Group 2 and Loan Group
3 for such Distribution Date and any amount on deposit in the Pre-Funding
Account in respect of Loan Group 2 and Loan Group 3 exceeds (y) the sum of the
aggregate Certificate Principal Balance of the Class AV Certificates and the
Adjustable Rate Subordinate Certificates as of such Distribution Date (after
giving effect to distribution of the Principal Remittance Amounts for Loan
Group 2 and Loan Group 3 to be made 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 in respect of Loan
Group 2 and Loan Group 3).
Adjustable Rate Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Adjustable Rate Stepdown Date, the fraction
(expressed as a percentage) (1) the numerator of which is the excess of (a)
the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2
and Loan Group 3 for the preceding Distribution Date over (b) (i) before the
Certificate Principal Balances of the Class AV Certificates have been reduced
to zero, the sum of the Certificate Principal Balances of the Class AV
Certificates, or (ii) after the Certificate Principal Balances of the Class AV
Certificates have been reduced to zero, the Certificate Principal Balance of
the most senior Class of Adjustable Rate Subordinate Certificates outstanding,
as of the related Master Servicer Advance Date, and (2) the denominator of
which is the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 and Loan Group 3 for the preceding Distribution Date.
Adjustable Rate Stepdown Date: The earlier to occur of: (1) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class AV Certificates is reduced to zero, and (2) the later to occur of (x)
the Distribution Date in August 2009 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class AV Certificates
(after calculating anticipated distributions on such Distribution Date) is
less than or equal to 55.90% of the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date.
Adjustable Rate Subordinate Certificates: The Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8
and Class BV Certificates.
Adjustable Rate Subordinate Class Principal Distribution Amount:
With respect to any Distribution Date and any Class of Adjustable Rate
Subordinate Certificates, the excess of (1) the sum of (a) the aggregate
Certificate Principal Balance of the Class AV Certificates (after taking into
account distribution of the Class 2-AV Principal Distribution Amount and the
Class 3-AV Principal Distribution Amount for such Distribution Date), (b) the
aggregate Certificate Principal Balance of any Class(es) of Adjustable Rate
Subordinate Certificates that are senior to the subject Class (in each case,
after taking into account distribution of the Adjustable Rate Subordinate
Class Principal Distribution Amount(s) for such senior Class(es) of
Certificates for such Distribution Date), and (c) the Certificate Principal
Balance of the subject Class of
17
Adjustable Rate Subordinate Certificates immediately prior to such
Distribution Date over (2) the lesser of (a) the product of (x) 100% minus the
Stepdown Target Subordination Percentage for the subject Class of Certificates
and (y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 2 and Loan Group 3 for such Distribution Date and (b) the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group
3 for such Distribution Date minus the Adjustable Rate OC Floor; provided,
however, that if such Class of Adjustable Rate Subordinate Certificates is the
only Class of Adjustable Rate Subordinate Certificates outstanding on such
Distribution Date, that Class will be entitled to receive the entire remaining
Principal Distribution Amount for Loan Group 2 and Loan Group 3 until the
Certificate Principal Balance thereof is reduced to zero.
Adjustable Rate Subordinate Net Rate Cap: With respect to any
Distribution Date and each Class of Adjustable Rate Subordinate Certificates,
the weighted average of the Class 2-AV Net Rate Cap for that Distribution Date
and the Class 3-AV Net Rate Cap for that Distribution Date, weighted on the
basis of the excess (if any) of (i) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Loan Group 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) and the amount
on deposit in the Pre-Funding Account in respect of that Loan Group as of the
first day of the related Due Period over (ii) the outstanding Certificate
Principal Balance of the related Class AV Certificates immediately prior to
such Distribution Date.
Adjustable Rate Trigger Event: With respect to any Distribution
Date on or after the Adjustable Rate Stepdown Date, either an Adjustable Rate
Delinquency Trigger Event with respect to that Distribution Date or an
Adjustable Rate Cumulative Loss Trigger Event with respect to that
Distribution Date.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, the Mortgage
Rate less the related Expense Fee Rate.
Adjusted Replacement Upfront Amount: As defined in Section 3.19.
Adjustment Date: As to each Adjustable Rate Mortgage Loan, each
date on which the related Mortgage Rate is subject to adjustment, as provided
in the related Mortgage Note.
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 pursuant to Section 3.12 may be used to offset such Advance
for the related REO Property;
18
provided, further, that for the avoidance of doubt, no Advances shall be
required to be made in respect of any Liquidated Mortgage Loan.
Agreement: This Pooling and Servicing Agreement and any and all
amendments or supplements hereto made in accordance with the terms herein.
Ambac: Ambac Assurance Corporation, organized and created under
the laws of the State of Wisconsin, or any successor thereto.
Amount Held for Future Distribution: As to any Distribution Date
and Loan Group, 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 in such Loan Group 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 and any Loan Group or Loan Groups, the amount, if any, by which, the
aggregate Certificate Principal Balance of the Class(es) of Certificates
listed opposite such Loan Group(s) in the following table (after all
distributions of principal on such Distribution Date) exceeds the sum of (x)
the Stated Principal Balance of the Mortgage Loans in such Loan Group(s) for
such Distribution Date and (y) the amount on deposit in the Pre-Funding
Account in respect of such Loan Group(s); provided, however, that an Applied
Realized Loss Amount will not exist for a Class of Class AV Certificates
unless the Certificate Principal Balances of the Adjustable Rate Subordinate
Certificates have been reduced to zero.
Loan Group(s) Class(es) of Certificates
1 1-AF
2 and 3 AV and Adjustable Rate Xxxxxxxxxxx
0 0-XX
0 0-XX
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.
Bankruptcy Code: Title 11 of the United States Code.
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
19
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 the Class 1-AF Insurer or banking institutions in the
State of New York or California 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.
Carryover Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.07 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 CWABS, Inc., Asset-Backed
Certificates, Series 2006-13". 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 X-00, Xxxxxxxx X-0 and B-2, Exhibits C-1 and C-2, Exhibit
D and Exhibit E.
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 Class 1-AF Insurer and
designated "Countrywide Home Loans Servicing LP in trust for registered
Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-13". Funds in
the Certificate Account shall be held in trust for the Certificateholders for
the uses and purposes set forth in this Agreement.
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 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(c) or 4.04(d), (ii) with respect to the Class 1-AF
Certificates only, payments under the Class 1-AF Policy relating to principal
(except that any payment under the Class 1-AF Policy with respect to an
Applied Realized Loss Amount allocated to the Class 1-AF Certificates shall
not result in a further reduction of the Certificate Principal Balance of the
Class 1-AF Certificates) and (iii) any Applied Realized Loss Amounts allocated
to such Certificate on previous Distribution Dates pursuant to Section
4.04(k), and (B) increased by any Subsequent Recoveries allocated to such
Class of Certificate pursuant to Section 4.04(l) on such Distribution Date.
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 do not have a Certificate Principal
Balance. With respect to any Certificate (other than the Class C Certificates)
of a Class and any Distribution Date, the portion of the Certificate Principal
Balance of such Class represented by such Certificate equal to the product of
the Percentage Interest
20
evidenced by such Certificate and the Certificate Principal Balance of such
Class. Exclusively for the purpose of determining any subrogation rights of
the Class 1-AF Insurer arising under Section 4.06 hereof, the "Certificate
Principal Balance" of the Class 1-AF Certificates shall not be reduced by the
amount of any payments made by the Class 1-AF Insurer in respect of principal
on such Certificates under the Class 1-AF Policy, except to the extent such
payment shall have been reimbursed to the Class 1-AF 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.
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 1-AF Available Funds: With respect to any Class of Class
1-AF Certificates and any Distribution Date, funds allocated from amounts
available pursuant to this Agreement to make distributions on that Class of
Class 1-AF Certificates on such Distribution Date, other than any Insured
Amounts.
Class 1-AF Certificate: Any Class 1-AF-1, Class 1-AF-2, Class
1-AF-3, Class 1-AF-4 or Class 1-AF-5 Certificate.
Class 1-AF Insurance and Indemnity Agreement: The Insurance and
Indemnity Agreement, dated as of the Closing Date, by and among the Class 1-AF
Insurer, CHL, the Depositor, the Master Servicer, the Trustee and the
Co-Trustee, and relating to the Class 1-AF Policy.
21
Class 1-AF Insurer: Ambac in its capacity as insurer under the
Class 1-AF Policy, and any permitted successor or assign.
Class 1-AF Insurer Contact Person: The officer designated by the
Master Servicer to provide information to the Class 1-AF Insurer pursuant to
Section 4.06(i).
Class 1-AF Insurer Default: As defined in Section 4.06(l).
Class 1-AF 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 such prime rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2% and
(b) the then applicable highest rate of interest on any of the Class 1-AF
Certificates and (ii) the maximum rate permissible under applicable usury or
similar laws limiting interest rates. The Class 1-AF Late Payment Rate shall
be computed on the basis of the actual number of days elapsed over a year of
360 days.
Class 1-AF Net Rate Cap: For any Distribution Date, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 1 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 a fraction, expressed as a percentage, the numerator of which is
(x) the product of the Class 1-AF Premium for that Distribution Date times 12,
and the denominator of which is (y) the sum of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 and the amount on deposit in the
Pre-Funding Account in respect of Loan Group 1, adjusted, in the case of the
Class 1-AF-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.
Class 1-AF Policy: The irrevocable Certificate Guaranty Insurance
Policy, No. AB1013BE, including any endorsements thereto, issued by the Class
1-AF Insurer with respect to the Class 1-AF Certificates, in the form attached
hereto as Exhibit R.
Class 1-AF Policy 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 1-AF Certificateholders and
designated "The Bank of New York in trust for registered holders of CWABS,
Inc., Asset-Backed Certificates, Series 2006-13, Class 1-AF". Funds in the
Class 1-AF Policy Payments Account shall be held in trust for the Class 1-AF
Certificateholders for the uses and purposes set forth in this Agreement.
Class 1-AF Policy Premium Rate: The "Premium Percentage" as
defined in the Class 1-AF Policy.
Class 1-AF Premium: With respect to the Class 1-AF Policy and any
Distribution Date, an amount equal to the product of (i) one-twelfth (1/12) of
the Class 1-AF Policy Premium
22
Rate and (ii) the Class 1-AF Certificate Principal Balance on each
Distribution Date (after giving effect to any distributions of principal to be
made in such Distribution Date).
Class 1-AF Principal Distribution Amount: With respect to any
Distribution Date, the excess of (1) the aggregate Certificate Principal
Balance of the Class 1-AF Certificates immediately prior to such Distribution
Date, over (2) the lesser of (x) 95.40% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for such Distribution Date and
(y) the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group
1 for such Distribution Date minus the Fixed Rate OC Floor.
Class 1-AF Reimbursement Amount: With respect to any Distribution
Date, (i) all Insured Payments paid by the Class 1-AF Insurer, for which the
Class 1-AF 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 Class 1-AF Late Payment Rate
from the date such Insured Payments were made, plus (iii) any other amounts
payable to the Class 1-AF Insurer pursuant to the Class 1-AF Insurance and
Indemnity Agreement.
Class 1-AF-1 Certificate: Any Certificate designated as a "Class
1-AF-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-2 Certificate: Any Certificate designated as a "Class
1-AF-2 Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-3 Certificate: Any Certificate designated as a "Class
1-AF-3 Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-4 Certificate: Any Certificate designated as a "Class
1-AF-4 Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-5 Certificate: Any Certificate designated as a "Class
1-AF-5 Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-6 Certificate: Any Certificate designated as a "Class
1-AF-6 Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to distributions as set forth herein.
Class 1-AF-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 1-AF-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 1-AF Certificates immediately
prior to such Distribution Date.
23
Class 2-AV Certificate: Any Certificate designated as a "Class
2-AV Certificate" on the face thereof, in the form of Exhibit A-7 hereto,
representing the right to distributions as set forth herein.
Class 2-AV Net Rate Cap: For any Distribution Date, (A) the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 2 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), 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 (B) the percentage equivalent of a
fraction, the numerator of which is (x) the product of (a) 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 equal to 360 and
the denominator of which is equal to 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 (b) a fraction, the numerator
of which is the Interest Funds for Loan Group 2 for that Distribution Date and
the denominator of which is the sum of the Interest Funds for Loan Group 2 and
Loan Group 3 for that Distribution Date, and the denominator of which is (y)
the sum of the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group 2 and the amount on deposit in the Pre-Funding Account in respect
of Loan Group 2.
Class 2-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Principal
Remittance Amount for Loan Group 2 and the denominator of which is the
Principal Remittance Amount for Loan Group 2 and Loan Group 3.
Class 3-AV-1 Certificate: Any Certificate designated as a "Class
3-AV-1 Certificate" on the face thereof, in the form of Exhibit A-8 hereto,
representing the right to distributions as set forth herein.
Class 3-AV-2 Certificate: Any Certificate designated as a "Class
3-AV-2 Certificate" on the face thereof, in the form of Exhibit A-9 hereto,
representing the right to distributions as set forth herein.
Class 3-AV-3 Certificate: Any Certificate designated as a "Class
3-AV-3 Certificate" on the face thereof, in the form of Exhibit A-10 hereto,
representing the right to distributions as set forth herein.
Class 3-AV Certificate: Any Class 3-AV-1, Class 3-AV-2 or Class
3-AV-3 Certificate.
Class 3-AV Net Rate Cap: For any Distribution Date, (A) the
weighted average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan
Group 3 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), 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 (B) the percentage equivalent of a
fraction, the numerator of which is
24
(x) the product of (a) 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 equal to 360 and the denominator of which is equal to
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 (b) a fraction, the numerator of which is the Interest Funds for
Loan Group 3 for that Distribution Date and the denominator of which is the
sum of the Interest Funds for Loan Group 2 and Loan Group 3 for that
Distribution Date, and the denominator of which is (y) the sum of the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 3 and
the amount on deposit in the Pre-Funding Account in respect of Loan Group 3.
Class 3-AV Principal Distribution Amount: With respect to any
Distribution Date, the product of (x) the Class AV Principal Distribution
Target Amount and (y) a fraction, the numerator of which is the Principal
Remittance Amount for Loan Group 3 and the denominator of which is the
Principal Remittance Amount for Loan Group 2 and Loan Group 3.
Class A-R Certificate: Any Certificate designated as a "Class A-R
Certificate" on the face thereof, in the form of Exhibit D 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 AV Certificate: Any Class 2-AV or Class 3-AV Certificate.
Class AV Principal Distribution Target Amount: With respect to any
Distribution Date will equal the excess of: (1) the aggregate Certificate
Principal Balance of the Class AV Certificates immediately prior to such
Distribution Date, over (2) the lesser of (i) 55.90% of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group 2 and Loan Group 3 for
such Distribution Date and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 and Loan Group 3 for such Distribution Date
minus the Adjustable Rate OC Floor.
Class BV Certificate: Any Certificate designated as a "Class BV
Certificate" on the face thereof, in the form of Exhibit A-19 hereto,
representing the right to distributions as set forth herein.
Class C Certificate: Any Class CF or Class CV Certificate.
Class CF Certificate: Any Certificate designated as a "Class CF
Certificate" on the face thereof, in the form of Exhibit C-1 hereto,
representing the right to distributions as set forth herein.
Class CF Distributable Amount: As defined in the Preliminary
Statement.
Class CV Certificate: Any Certificate designated as a "Class CV
Certificate" on the face thereof, in the form of Exhibit C-2 hereto,
representing the right to distributions as set forth herein.
Class CV Distributable Amount: As defined in the Preliminary
Statement.
25
Class MV-1 Certificate: Any Certificate designated as a "Class
MV-1 Certificate" on the face thereof, in the form of Exhibit A-11 hereto,
representing the right to distributions as set forth herein.
Class MV-2 Certificate: Any Certificate designated as a "Class
MV-2 Certificate" on the face thereof, in the form of Exhibit A-12 hereto,
representing the right to distributions as set forth herein.
Class MV-3 Certificate: Any Certificate designated as a "Class
MV-3 Certificate" on the face thereof, in the form of Exhibit A-13 hereto,
representing the right to distributions as set forth herein.
Class MV-4 Certificate: Any Certificate designated as a "Class
MV-4 Certificate" on the face thereof, in the form of Exhibit A-14 hereto,
representing the right to distributions as set forth herein.
Class MV-5 Certificate: Any Certificate designated as a "Class
MV-5 Certificate" on the face thereof, in the form of Exhibit A-15 hereto,
representing the right to distributions as set forth herein.
Class MV-6 Certificate: Any Certificate designated as a "Class
MV-6 Certificate" on the face thereof, in the form of Exhibit A-16 hereto,
representing the right to distributions as set forth herein.
Class MV-7 Certificate: Any Certificate designated as a "Class
MV-7 Certificate" on the face thereof, in the form of Exhibit A-17 hereto,
representing the right to distributions as set forth herein.
Class MV-8 Certificate: Any Certificate designated as a "Class
MV-8 Certificate" on the face thereof, in the form of Exhibit A-18 hereto,
representing the right to distributions as set forth herein.
Class MV Certificate: Any Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5, Class MV-6, Class MV-7 or Class MV-8 Certificate.
Class P Certificate: Any Class PF Certificate or Class PV
Certificate.
Class PF Certificate: Any Certificate designated as a "Class PF
Certificate" on the face thereof, in the form of Exhibit B-1 hereto,
representing the right to distributions as set forth herein.
Class PF Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 1 that have a Prepayment Charge Period.
Class PV Certificate: Any Certificate designated as a "Class PV
Certificate" on the face thereof, in the form of Exhibit B-2 hereto,
representing the right to distributions as set forth herein.
26
Class PV Principal Distribution Date: The first Distribution Date
that occurs after the end of the latest Prepayment Charge Period for all
Mortgage Loans in Loan Group 2 and Loan Group 3 that have a Prepayment Charge
Period.
Closing Date: July 28, 2006.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collateral Schedule: Schedule II hereto.
Commission: The U. S. Securities and Exchange Commission.
Compensating Interest: With respect to the Mortgage Loans in each
Loan Group and any Distribution Date, an amount equal to the lesser of (x)
one-half of the Servicing Fee for such Mortgage Loans for the related Due
Period and (y) the aggregate Prepayment Interest Shortfalls for such Mortgage
Loans for such Distribution Date.
Confirmation: The confirmation, reference numbers 2000005078372
and 2000005078373, with a trade date of July 24, 2006 evidencing a transaction
between the Corridor Contract Counterparty and CHL relating to the Corridor
Contract and the confirmation, Global Xxxx XX 000000, with a trade date of
July 24, 2006 evidencing a transaction between the Swap Counterparty and CHL
relating to the Swap Contract, as applicable.
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,
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 1-AF-1 Certificates,
the transaction evidenced by the related Confirmation (as assigned to the
Corridor Contract Administrator pursuant to the Corridor Contract Assignment
Agreement), a form of which is attached hereto as Exhibit Q.
Corridor Contract Administration Agreement: The corridor contract
administration agreement dated as of the Closing Date among CHL, the Trustee
and the Corridor Contract Administrator, a form of which is attached hereto as
Exhibit S-2.
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, a form of which is attached hereto as
Exhibit S-1.
Corridor Contract Counterparty: JPMorgan Chase Bank, N.A. and its
successors.
27
Corridor Contract Termination Date: The Distribution Date in
February 2026.
Co-Trustee: The Bank of New York Trust Company, N.A., a national
banking association, not in its individual capacity, but solely in its
capacity as co-trustee for the benefit of the Certificateholders and the Class
1-AF 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.
Credit Bureau Risk Score: A statistical credit score obtained by
CHL in connection with the origination of a Mortgage Loan.
Credit Comeback Excess Account: 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 the
Class 1-AF Insurer and designated "The Bank of New York in trust for
registered Holders of CWABS, Inc., Asset-Backed Certificates, Series 2006-13".
Funds in the Credit Comeback Excess Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Credit Comeback Excess Amount: With respect to the Credit Comeback
Loans in any Loan Group and any Master Servicer Advance Date, the portion of
the sum of the following (without duplication) attributable to the excess, if
any, of the actual mortgage rate on each Credit Comeback Loan in such Loan
Group and the Mortgage Rate on such Credit Comeback Loan: (i) all scheduled
interest collected during the related Due Period with respect to the Credit
Comeback Loans in such Loan Group, (ii) all interest on prepayments received
during the related Prepayment Period with respect to the Credit Comeback Loans
in such Loan Group, other than Prepayment Interest Excess, (iii) all Advances
relating to interest with respect to the Credit Comeback Loans in such Loan
Group, (iv) all Compensating Interest with respect to the Credit Comeback
Loans in such Loan Group and (v) Liquidation Proceeds with respect to the
Credit Comeback Loans in such Loan Group collected during the related Due
Period (to the extent such Liquidation Proceeds relate to interest), less all
Nonrecoverable Advances for such Loan Group relating to interest reimbursed
during the related Due Period.
Credit Comeback Loan: Any Fixed Rate Mortgage Loan for which the
related Mortgage Rate is subject to reduction (not exceeding 0.375% per annum)
for good payment history of Scheduled Payments by the related Mortgagor.
Current Interest: With respect to each Class of Interest Bearing
Certificates and each Distribution Date, the 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: When used with respect to any Mortgage Loan the
"Cut-off Date" shall mean 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
28
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: With respect to:
(A) each Distribution Date prior to the Final Scheduled
Distribution Date for any Class of Class 1-AF Certificates, means an amount
equal to the sum of (i) the excess, if any, of (a) the amount of Current
Interest on that Class net of any interest shortfalls resulting from
Prepayment Interest Shortfalls and any interest shortfalls resulting from the
application of the Relief Act, or similar state or local laws over (b) the
Class 1-AF Available Funds for that Class for that Distribution Date, and (ii)
for any Distribution Date, any Applied Realized Loss Amount allocated to that
Class on that Distribution Date, in each case taking into account all
distributions to be made on such Distribution Date;
(B) the Final Scheduled Distribution Date for any Class of Class
1-AF Certificates, means an amount equal to the sum of (i) the excess, if any,
of (a) the amount of Current Interest on that Class net of any interest
shortfalls resulting from Prepayment Interest Shortfalls and any interest
shortfalls resulting from the application of the Relief Act, or similar state
or local laws over (b) the Class 1-AF Available Funds for that Class for that
Distribution Date and (ii) the Certificate Principal Balance of such Class on
such Distribution Date (after taking into account all distributions of Class
1-AF Available Funds for that Class to be made to that Class on such
Distribution Date); and
(C) for any Class of Class 1-AF Certificates and any date on which
the acceleration of that Class has been directed or consented to by the Class
1-AF Insurer, means the excess of (i) the amount required to pay the
Certificate Principal Balance of that Class in full, together with accrued and
unpaid interest thereon through the date of payment of that Class and (ii) the
Class 1-AF Available Funds for that Class for that Distribution Date.
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 Co-Trustee on or prior to the Closing Date, and (ii) the Subsequent
Mortgage Loans identified on the schedule of Subsequent Mortgage Loans set
29
forth in Annex A to each related Subsequent Transfer Agreement for which all
or a portion of the related Mortgage File is not delivered to the Co-Trustee
on or prior to the related Subsequent Transfer Date. The Depositor shall
deliver (or cause delivery of) the Mortgage Files to the Co-Trustee: (A) with
respect to at least 50% of the Initial Mortgage Loans in each Loan Group, not
later than the Closing Date and with respect to at least 10% of the Subsequent
Mortgage Loans in each Loan Group 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 in each Loan Group, 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 Co-Trustee as provided in
Section 2.01, Countrywide Home Loans, Inc. shall hold such files as agent and
in trust for the Co-Trustee..
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a Replacement Mortgage Loan.
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: CWABS, 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
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.
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 Certificateholders and the Class 1-AF Insurer
and designated "The Bank of New York, in trust for registered Holders of
CWABS, Inc., Asset-Backed Certificates, Series 2006-13". Funds in
30
the Distribution Account shall be held in trust for the Certificateholders 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 August
2006.
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 for Payment: With respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable pursuant to the
terms of this Agreement.
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 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 Class 1-AF Policy, in the case of the
Class 1-AF Certificates) as evidenced by a letter from each Rating Agency to
the Trustee. 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.
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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 C Certificates and Certificates of any Class that does not
have or no longer has a rating of BBB- or its equivalent, or better, 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 Proceeds: With respect to any Liquidated 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 Mortgage Loan covered by a lender paid mortgage insurance policy, the
related mortgage insurance premium rate.
Extra Principal Distribution Amount: With respect to any
Distribution Date and (A) Loan Group 1, the lesser of (1) the Fixed Rate
Overcollateralization Deficiency Amount and (2) the sum of the Fixed Rate
Excess Cashflow and Fixed Rate Credit Comeback Excess Cashflow available for
payment thereof and (B) each of Loan Group 2 and Loan Group 3, the lesser of
(1) the Adjustable Rate Overcollateralization Deficiency Amount and (2) the
Adjustable Rate Excess Cashflow and Adjustable Rate Credit Comeback Excess
Cashflow available for payment thereof, to be allocated between Loan Group 2
and Loan Group 3, pro rata, based on the Principal Remittance Amount for each
such Loan Group for such Distribution Date.
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.
32
Final Maturity Reserve Fund: Each of the Fixed Rate Final Maturity
Reserve Fund and the Adjustable Rate Final Maturity Reserve Fund.
Final Maturity Reserve Trust: The trust fund established by
Section 4.10.
Final Maturity Reserve 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 Holders of the Certificates 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.
Final Scheduled Distribution Date: With respect to the Class 1-AF
Certificates and the Class 1-AF Policy, the Distribution Date occurring in
January 2037.
Five-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 60 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
Fixed Rate 40-Year Target Schedule: Schedule III hereto.
Fixed Rate Certificates: The Class 1-AF-2, Class 1-AF-3, Class
1-AF-4, Class 1-AF-5 and Class 1-AF-6 Certificates.
Fixed Rate Credit Comeback Excess Cashflow: With respect to any
Distribution Date, any amounts in the Credit Comeback Excess Account in
respect of Loan Group 1 available for such Distribution Date.
Fixed Rate Cumulative Loss Trigger Event: With respect to a
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Cumulative Loss Trigger Event occurs if (x) the aggregate amount of Realized
Losses on the Mortgage Loans in Loan Group 1 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 related to Loan
Group 1 received through the last day of that Due Period) exceeds (y) the
applicable percentage, for such Distribution Date, of the sum of the aggregate
Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan Group 1
and the Group 1 Pre-Funded Amount, as set forth below:
Distribution Date Percentage
----------------- ----------
August 2008 -- July 2009.......... 0.85% with respect to August 2008, plus an
additional 1/12th of 1.10% for each month
thereafter through July 2009
August 2009 -- July 2010.......... 1.95% with respect to August 2009, plus an
additional 1/12th of 1.35% for each month
thereafter through July 2010
August 2010 -- July 2011.......... 3.30% with respect to August 2010,
33
Distribution Date Percentage
----------------- ----------
plus an additional 1/12th of 1.10% for each
month thereafter through July 2011
August 2011 -- July 2012.......... 4.40% with respect to August 2011, plus an
additional 1/12th of 0.85% for each month
thereafter through July 2012
August 2012 -- July 2013.......... 5.25% with respect to August 2012, plus an
additional 1/12th of 0.25% for each month
thereafter through July 2013
August 2013 and thereafter........ 5.50%
Fixed Rate Delinquency Trigger Event: With respect to any
Distribution Date on or after the Fixed Rate Stepdown Date, a Fixed Rate
Delinquency Trigger Event exists if the Rolling Sixty-Day Delinquency Rate for
Outstanding Mortgage Loans in Loan Group 1 equals or exceeds the product of
(1) the Fixed Rate Senior Enhancement Percentage for such Distribution Date
and (2) 50.00%.
Fixed Rate Excess Cashflow: With respect to any Distribution Date
the sum of (i) the amount remaining after the distribution of interest to
Certificateholders and the payment of the Class 1-AF Premium and any Class
1-AF Reimbursement Amount to the Class 1-AF Insurer, in each case for such
Distribution Date pursuant to Section 4.04(a)(v), (ii) the amount remaining
after the distribution of principal to Certificateholders and the payment of
any unpaid Class 1-AF Premium and any unpaid Class 1-AF Reimbursement Amount
to the Class 1-AF Insurer, in each case for such Distribution Date pursuant to
Section 4.04(c)(1)(D) or 4.04(c)(2)(D), and (iii) the Fixed Rate
Overcollateralization Reduction Amount for such Distribution Date, if any.
Fixed Rate Excess Overcollateralization Amount: With respect to
any Distribution Date, an amount equal to the excess, if any, of the Fixed
Rate Overcollateralized Amount for such Distribution Date over the Fixed Rate
Overcollateralization Target Amount for such Distribution Date.
Fixed Rate Final Maturity Funding Cap: For any Distribution Date
beginning with the Distribution Date in August 2016, the lesser of (i) the
aggregate Certificate Principal Balance of the Class 1-AF Certificates
immediately prior to such Distribution Date and (ii) the aggregate Stated
Principal Balance of all outstanding Mortgage Loans in Loan Group 1 with
original terms to maturity of 40 years as of the 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).
Fixed Rate Final Maturity Final Maturity Required Deposit: For any
Distribution Date beginning on the Distribution Date in August 2016 up to and
including the Fixed Rate Final Maturity Reserve Funding Date, if the Fixed
Rate Final Maturity Required Deposit Trigger is not in effect with respect to
such Distribution Date, then the Fixed Rate Final Maturity Reserve Fund
34
Required Deposit with respect to such Distribution Date shall be $0, and if
the Fixed Rate Final Maturity Required Deposit Trigger is in effect with
respect to such Distribution Date, then the Fixed Rate Final Maturity Reserve
Fund Required Deposit with respect to such Distribution Date shall be an
amount equal to the lesser of (a) the product of (i) 0.80% and (ii) the
aggregate Stated Principal Balance of the 40-Year Mortgage Loans in Loan Group
1 as of the Due Date occurring in the month preceding the month of that
Distribution Date (after giving effect to Principal Prepayments in the
Prepayment Period related to that prior Due Date) and (b) the excess of (i)
the Fixed Rate Final Maturity Funding Cap for such Distribution Date over (ii)
the amount on deposit in the Fixed Rate Final Maturity Reserve Fund
immediately prior to such Distribution Date.
Fixed Rate Final Maturity Required Deposit Trigger: With respect
to any Distribution Date on or after the Distribution Date in August 2016 up
to and including the Fixed Rate Final Maturity Reserve Funding Date, the Fixed
Rate Final Maturity Required Deposit Trigger shall be in effect with respect
to such Distribution Date if the aggregate Stated Principal Balance of the
40-Year Mortgage Loans in Loan Group 1 as of the Due Date occurring in the
month preceding the month of that Distribution Date (after giving effect to
Principal Prepayments in the Prepayment Period related to that prior Due Date)
is greater than the "Fixed Rate 40-Year Target" specified on the Fixed Rate
40-Year Target Schedule for such Distribution Date.
Fixed Rate Final Maturity Reserve Fund: The separate Eligible
Account created and initially maintained by the Final Maturity Reserve Trustee
pursuant to Section 4.10 in the name of the Trustee for the benefit of the
Certificateholders and the Class 1-AF Insurer and designated "The Bank of New
York in trust for registered Holders of CWABS, Inc., Asset-Backed
Certificates, Series 2006-13". Funds in the Fixed Rate Final Maturity Reserve
Fund shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Fixed Rate Final Maturity Reserve Funding Date: The earlier of (i)
the Distribution Date on which the amount on deposit in the Fixed Rate Final
Maturity Reserve Fund is equal to the Fixed Rate Final Maturity Funding Cap
and (ii) the Distribution Date occurring in January 2037.
Fixed Rate Mortgage Loans: The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life
of the related Mortgage and any Credit Comeback Loans, including in each case
any Mortgage Loans delivered in replacement thereof.
Fixed Rate OC Floor: An amount equal to 0.50% of the sum of the
aggregate Cut-off Date Principal Balance of the Initial Mortgage Loans in Loan
Group 1 and the Group 1 Pre-Funded Amount.
Fixed Rate Overcollateralization Deficiency Amount: With respect
to any Distribution Date, the amount, if any, by which the Fixed Rate
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized
Amount on such Distribution Date (after giving effect to distribution of the
Principal Distribution Amount (other than the portion thereof
35
consisting of the Extra Principal Distribution Amount) for Loan Group 1 on
such Distribution Date).
Fixed Rate Overcollateralization Reduction Amount: With respect to
any Distribution Date, an amount equal to the lesser of (i) the Fixed Rate
Excess Overcollateralization Amount for such Distribution Date and (ii) the
Principal Remittance Amount for Loan Group 1 for such Distribution Date.
Fixed Rate Overcollateralization Target Amount: With respect to
any Distribution Date (a) prior to the Fixed Rate Stepdown Date, an amount
equal to 2.30% of the sum of the aggregate Cut-off Date Principal Balance of
the Initial Mortgage Loans in Loan Group 1 and the Group 1 Pre-Funded Amount
and (b) on or after the Fixed Rate Stepdown Date, the greater of (i) an amount
equal to 4.60% of the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group 1 for the current Distribution Date and (ii) the Fixed Rate OC
Floor; provided, however, that if a Fixed Rate Trigger Event is in effect on
any Distribution Date, the Fixed Rate Overcollateralization Target Amount will
be the Fixed Rate Overcollateralization Target Amount as in effect for the
prior Distribution Date.
Fixed Rate 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 in Loan Group 1 for such
Distribution Date and any amount on deposit in the Pre-Funding Account in
respect of Loan Group 1 exceeds (y) the aggregate Certificate Principal
Balance of the Class 1-AF Certificates as of such Distribution Date (after
giving effect to distribution of the Principal Remittance Amount for Loan
Group 1 to be made 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 in respect of Loan Group
1).
Fixed Rate Senior Enhancement Percentage: With respect to a
Distribution Date on or after the Fixed Rate Stepdown Date, the fraction
(expressed as a percentage) (1) the numerator of which is the excess of (a)
the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1
for the preceding Distribution Date over (b) the sum of the Certificate
Principal Balances of the Class 1-AF Certificates as of the related Master
Servicer Advance Date, and (2) the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 for the
preceding Distribution Date.
Fixed Rate Stepdown Date: The earlier to occur of: (1) the
Distribution Date on which the aggregate Certificate Principal Balance of the
Class 1-AF Certificates is reduced to zero, and (2) the later to occur of (x)
the Distribution Date in August 2009 and (y) the first Distribution Date on
which the aggregate Certificate Principal Balance of the Class 1-AF
Certificates (after calculating anticipated distributions on such Distribution
Date) is less than or equal to 95.40% of the aggregate Stated Principal
Balance of the Mortgage Loans in Loan Group 1 for such Distribution Date.
Fixed Rate Trigger Event: With respect to any Distribution Date on
or after the Fixed Rate Stepdown Date, either a Fixed Rate Delinquency Trigger
Event with respect to that
36
Distribution Date or a Fixed Rate Cumulative Loss Trigger Event with respect
to that Distribution Date.
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 $175,000 and (y) September 12, 2006.
Gross Margin: The percentage set forth in the related Mortgage
Note to be added to the Index for use in determining the Mortgage Rate for
each Adjustable Rate Mortgage Loan on each of its Adjustment Dates.
Group 1 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 1 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 1 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 1 Mortgage Loans
on the Closing Date, which shall equal $14.02.
Group 2 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 2 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 2 Overcollateralization Reduction Amount: With respect to
any Distribution Date, the Adjustable Rate Overcollateralization Reduction
Amount for such Distribution Date multiplied by a fraction, the numerator of
which is the Principal Remittance Amount for Loan Group 2 for such
Distribution Date, and the denominator of which is the aggregate Principal
Remittance Amount for Loan Group 2 and Loan Group 3 for such Distribution
Date.
Group 2 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 2 Mortgage Loans
on the Closing Date, which shall equal $1.77.
37
Group 3 Mortgage Loans: The group of Mortgage Loans identified in
the related Mortgage Loan Schedule as "Group 3 Mortgage Loans", including in
each case any Mortgage Loans delivered in replacement thereof.
Group 3 Overcollateralization Reduction Amount: With respect to
any Distribution Date, the Adjustable Rate Overcollateralization Reduction
Amount for such Distribution Date multiplied by a fraction, the numerator of
which is the Principal Remittance Amount for Loan Group 3 for such
Distribution Date, and the denominator of which is the aggregate Principal
Remittance Amount for Loan Group 2 and Loan Group 3 for such Distribution
Date.
Group 3 Pre-Funded Amount: The portion of the Pre-Funded Amount
allocable for purchase of Subsequent Mortgage Loans as Group 3 Mortgage Loans
on the Closing Date, which shall equal $902.70.
Index: As to any Adjustable Rate Mortgage Loan on any Adjustment
Date related thereto, the index for the adjustment of the Mortgage Rate set
forth as such in the related Mortgage Note, such index in general being the
average of the London interbank offered rates for six-month U.S. dollar
deposits in the London market, as set forth in The Wall Street Journal, as
most recently announced as of a date 45 days prior to such Adjustment Date or,
if the Index ceases to be published in The Wall Street Journal or becomes
unavailable for any reason, then the Index shall be a new index selected by
the Master Servicer, based on comparable information.
Initial Adjustment Date: As to any Adjustable Rate Mortgage Loan,
the first Adjustment Date following the origination of such Mortgage Loan.
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 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) July 1, 2006 and (y) the date of origination of such Mortgage
Loan.
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.
Initial Mortgage Rate: As to each Adjustable Rate Mortgage Loan,
the Mortgage Rate in effect prior to the Initial Adjustment Date.
38
Initial Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that
limits the permissible increase or decrease in the Mortgage Rate on its
initial Adjustment Date.
Insolvency Proceeding: As defined in Section 4.06(h).
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Fund, any insurance policy (including the Pool Insurance Policy),
including all riders and endorsements thereto in effect with respect to such
Mortgage Loan and including any replacement policy or policies for any
Insurance Policy.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
(other than by the Class 1-AF Insurer under the Class 1-AF 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 Amounts: With respect to any Class of Class 1-AF
Certificates and any Distribution Date, the Deficiency Amount for such Class
and Distribution Date.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Insured Payments: With respect to any Distribution Date, the
aggregate amount actually paid by the Class 1-AF Insurer to the Trustee in
respect of (i) Insured Amounts for a Distribution Date and (ii) Preference
Amounts for any given Business Day.
Interest Bearing Certificates: The Fixed Rate Certificates and the
Adjustable Rate 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 first Accrual
Period for the Adjustable Rate Certificates, July 26, 2006. With respect to
any Accrual Period for the Adjustable Rate Certificates thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.
39
Interest Funds: With respect to any Distribution Date and Loan
Group, the Interest Remittance Amount for such Loan Group and Distribution
Date, less the portion of the Trustee Fee for such Distribution Date allocable
to such Loan Group, plus, in the case of Loan Group 2 and Loan Group 3, the
Adjusted Replacement Upfront Amount, if any, allocable to that Loan Group for
such Distribution Date.
Interest Remittance Amount: With respect to the Mortgage Loans in
each Loan Group and any Distribution Date, (x) the sum, without duplication,
of (i) all scheduled interest collected during the related Due Period (for the
avoidance of doubt, other than Credit Comeback Excess Amounts) with respect to
the related Mortgage Loans less the related Servicing Fee, (ii) all interest
on prepayments received during the related Prepayment Period with respect to
such Mortgage Loans, other than Prepayment Interest Excess, (iii) all related
Advances relating to interest with respect to such Mortgage Loans, (iv) all
related Compensating Interest with respect to such Mortgage Loans, (v)
Liquidation Proceeds with respect to such Mortgage Loans collected during the
related Due Period (to the extent such Liquidation Proceeds relate to
interest) and (vi) the related Seller Shortfall Interest Requirement, less (y)
all reimbursements to the Master Servicer during the related Due Period for
Advances of interest previously made allocable to such Loan Group.
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 Swap Counterparty and any other material transaction party, as
identified in Exhibit Z hereto, as updated pursuant to Section 11.04.
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 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
40
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), less the sum of
related unreimbursed Advances, Servicing Fees and Servicing Advances.
Loan Group: Any of Loan Group 1, Loan Group 2 or Loan Group 3.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 1 Net Rate Cap: As defined in the Preliminary
Statement.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
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.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Majority Holder: The Holders of Certificates evidencing at least
51% of the Voting Rights allocated to such Class of Certificates.
Master REMIC: As defined in the Preliminary Statement.
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).
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.
41
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 Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.
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 first lien on or first 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 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) the Loan Group;
(iii) the Appraised Value;
(iv) the Initial Mortgage Rate;
(v) the maturity date;
42
(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 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) a code indicating whether such Mortgage Loan is a
Credit Comeback Loan;
(xiv) [Reserved];
(xv) [Reserved];
(xvi) the purpose of the Mortgage Loan;
(xvii) with respect to each Adjustable Rate Mortgage Loan:
(a) the frequency of each Adjustment Date;
(b) the next Adjustment Date;
(c) the Maximum Mortgage Rate;
(d) the Minimum Mortgage Rate;
(e) the Mortgage Rate as of the Cut-off Date;
(f) the related Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap; and
(g) the Gross Margin;
(xviii) a code indicating whether the Mortgage Loan is a CHL
Mortgage Loan, a Park Monaco Mortgage Loan or a Park Sienna
Mortgage Loan;
43
(xix) the premium rate for any lender-paid mortgage
insurance, if applicable; and
(xx) a code indicating whether the Mortgage Loan is a Fixed
Rate Mortgage Loan or an Adjustable Rate Mortgage Loan.
Such schedule shall also set forth the total of the amounts described under
(vii) above for all of the Mortgage Loans and for each Loan Group. 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 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 from time to time; provided, however, the Mortgage Rate for each Credit
Comeback Loan shall be treated for all purposes of payments on the
Certificates, including the calculation of the Pass-Through Rates and the
applicable Net Rate Cap, as reduced by 0.375% on the Due Date following the
end of each of the first four annual periods after the origination date,
irrespective of whether the Mortgagor qualifies for the reduction by having a
good payment history.
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
August 2006 -- July 2009............................ 0%
August 2009 -- July 2011............................ 45%
August 2011 -- July 2012............................ 80%
August 2012 -- July 2013............................ 100%
August 2013 and thereafter.......................... 300%
44
NAS Principal Distribution Amount: For any Distribution Date, an
amount equal to the product of (i) the Class 1-AF-6 Portion for such
Distribution Date, (ii) any amounts distributed to the Class 1-AF Certificates
pursuant to Section 4.04(c), 4.04(e)(1) and 4.04(f)(5) 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: With respect to any Distribution Date, (i) with
respect to each Class of Class 1-AF Certificates, the Class 1-AF Net Rate Cap,
(ii) with respect to the Class 2-AV Certificates, the Class 2-AV Net Rate Cap,
(iii) with respect to each Class of Class 3-AV Certificates, the Class 3-AV
Net Rate Cap and (iv) with respect to each Class of Adjustable Rate
Subordinate Certificates, the Adjustable Rate Subordinate Net Rate Cap.
Net Rate Carryover: With respect to any Class of Interest Bearing
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 applicable 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 or Class P Certificates.
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.
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
45
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.
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; provided that the parties hereto acknowledge that
One-Month LIBOR calculated for the first Accrual Period for the Adjustable
Rate Certificates shall equal 5.40000% per annum. 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
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 aggregate Cut-off Date Principal Balance of the
Initial Mortgage Loans and the Pre-Funded Amount.
46
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.
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.
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 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 Accrual Period and Class
of Adjustable Rate Certificates, the per annum rate indicated in the following
table:
------------------------------- -------------------- ---------------------
Pass-Through Pass-Through Margin
Class Margin (1) (2)
------------------------------- -------------------- ---------------------
Class 1-AF-1.................. 0.120% 0.120%
------------------------------- -------------------- ---------------------
Class 2-AV.................... 0.150% 0.300%
------------------------------- -------------------- ---------------------
Class 3-AV-1.................. 0.050% 0.100%
------------------------------- -------------------- ---------------------
Class 3-AV-2.................. 0.150% 0.300%
47
------------------------------- -------------------- ---------------------
Pass-Through Pass-Through Margin
Class Margin (1) (2)
------------------------------- -------------------- ---------------------
Class 3-AV-3.................. 0.250% 0.500%
------------------------------- -------------------- ---------------------
Class MV-1.................... 0.290% 0.435%
------------------------------- -------------------- ---------------------
Class MV-2.................... 0.310% 0.465%
------------------------------- -------------------- ---------------------
Class MV-3.................... 0.320% 0.480%
------------------------------- -------------------- ---------------------
Class MV-4.................... 0.380% 0.570%
------------------------------- -------------------- ---------------------
Class MV-5.................... 0.420% 0.630%
------------------------------- -------------------- ---------------------
Class MV-6.................... 0.470% 0.705%
------------------------------- -------------------- ---------------------
Class MV-7.................... 0.950% 1.425%
------------------------------- -------------------- ---------------------
Class MV-8.................... 1.200% 1.800%
------------------------------- -------------------- ---------------------
Class BV...................... 2.200% 3.300%
------------------------------- -------------------- ---------------------
(1) For any Accrual Period relating to any Distribution Date occurring
on or prior to the Optional Termination Date.
(2) For any Accrual Period relating to any Distribution Date occurring
after the Optional Termination Date.
Pass-Through Rate: With respect to any Accrual Period and each
Class of Adjustable Rate Certificates the lesser of (x) One-Month LIBOR for
such Accrual Period plus the Pass-Through Margin for such Class and Accrual
Period and (y) the applicable Net Rate Cap for such Class and the related
Distribution Date. With respect to any Accrual Period and each Class of Fixed
Rate Certificates, the lesser of (x) the per annum rate set forth in the
following table for such Class and Accrual Period and (y) the applicable Net
Rate Cap for such Class and the related Distribution Date.
--------------- ------------------------- -----------------------
Class Pass-Through Rate (1) Pass-Through Rate (2)
--------------- ------------------------- -----------------------
1-AF-2 5.884% 5.884%
--------------- ------------------------- -----------------------
1-AF-3 5.944% 5.944%
--------------- ------------------------- -----------------------
1-AF-4 6.229% 6.229%
--------------- ------------------------- -----------------------
1-AF-5 6.473% 6.973%
--------------- ------------------------- -----------------------
1-AF-6 6.034% 6.034%
--------------- ------------------------- -----------------------
(1) For any Accrual Period relating to any Distribution Date occurring
on or prior to the Optional Termination Date.
(2) For any Accrual Period relating to any Distribution Date occurring
after the Optional Termination Date.
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 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.
Performance Certification: As defined in Section 11.05.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
48
(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 Class 1-AF Policy, in
the case of the Class 1-AF 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 Class 1-AF Policy, in the case of the Class 1-AF
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 Class
1-AF Policy, in the case of the Class 1-AF Certificates);
(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 Class 1-AF Policy, in the case of the Class 1-AF
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
49
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 Class 1-AF Policy, in the case of the Class 1-AF
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 Class 1-AF Policy, in the case of
the Class 1-AF 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 Class
1-AF Policy, in the case of the Class 1-AF Certificates), as
evidenced by a signed writing delivered by each Rating Agency, and
reasonably acceptable to the NIM Insurer, as evidenced by a signed
writing delivered by the NIM 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 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
50
"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.
Pool Insurer: Radian Guaranty Inc., a Pennsylvania corporation,
and its successors in interest.
Pool Insurance Policy: With respect to the Group 1 Mortgage Loans,
Policy No. 06-043223, issued by the Pool Insurer, and all endorsements
thereto.
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 $918.49.
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 Class 1-AF Insurer and
designated "The Bank of New York, in trust for registered holders of CWABS,
Inc., Asset-Backed Certificates, Series 2006-13." Funds in the Pre-Funding
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement and shall not be a part of any REMIC
created hereunder,
51
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: Any payment of principal or interest on a Class
1-AF Certificate which has become Due for Payment and which was made to a
Holder by or on behalf of the Trust, which has been deemed a preferential
transfer and was previously recovered from the Holder pursuant to the United
States Bankruptcy Code in accordance with a final, non-appealable order of a
court of competent jurisdiction.
Preference Claim: As defined in Section 4.06(h).
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;
(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
52
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 July 2, 2006) 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.
Principal Distribution Amount: With respect to each Distribution
Date and a Loan Group, the sum of (i) the Principal Remittance Amount for such
Loan Group for such Distribution Date, in the case of Loan Group 2 and Loan
Group 3, less any portion of such amount used to cover any payment due to the
Swap Counterparty with respect to such Distribution Date pursuant to Section
4.09, (ii) the Extra Principal Distribution Amount for such Loan Group 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) allocable to such Loan Group, minus (iv) (a)
the Fixed Rate Overcollateralization Reduction Amount for such Distribution
Date, in the case of Loan Group 1, (b) the Group 2 Overcollateralization
Reduction Amount for such Distribution Date, in the case of Loan Group 2 and
(c) the Group 3 Overcollateralization Reduction Amount for such Distribution
Date, in the case of Loan Group 3.
53
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, 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 the Mortgage Loans in
each Loan Group and 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 and (v) 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, in each case with respect to such Loan Group.
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 CWABS, Inc., Asset-Backed
Certificates, Series 2006-13". 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 and Class P Certificates.
Prospectus: The prospectus dated June 26, 2006, relating to
asset-backed securities to be sold by the Depositor.
Prospectus Supplement: The prospectus supplement dated July 27,
2006, relating to the public offering of the certain Classes of Certificates
offered thereby.
PTCE 95-60: 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 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) of the Mortgage Loan as of the date of
such purchase, (ii) accrued interest thereon at the applicable
54
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 and not reimbursed by 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.
Rating Agency: Each of Moody's 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 and
designated by the Depositor, 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 reduced by the Deficient Valuation.
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 any Distribution Date and the Fixed Rate
Certificates and the Class A-R, Class C and Class P Certificates, the last
Business Day of the month preceding the month of such 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
55
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 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 4.04.
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) with respect to any Fixed
Rate Mortgage Loan, have a Mortgage Rate not less than or no more than 1% per
annum higher than the Mortgage Rate of the Deleted Mortgage Loan and, with
respect to any Adjustable Rate Mortgage Loan: (a) have a Maximum Mortgage Rate
no more than 1% per annum higher or lower than the Maximum Mortgage Rate of
the Deleted Mortgage Loan; (b) have a Minimum Mortgage Rate no more than 1%
per annum higher or lower than the Minimum Mortgage Rate of the Deleted
Mortgage Loan; (c) have the same Index and intervals between Adjustment Dates
as
56
that of the Deleted Mortgage Loan; (d) have a Gross Margin not more than 1%
per annum higher or lower than that of the Deleted Mortgage Loan; and (e) have
an Initial Periodic Rate Cap and a Subsequent Periodic Rate Cap each not more
than 1% lower than that of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) be accruing interest at a rate not more than 1% per annum higher or lower
than that of the Deleted Mortgage Loan; (v) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (vi) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vii) not permit conversion of the Mortgage Rate from a
fixed rate to a variable rate or vice versa; (viii) provide for a Prepayment
Charge on terms substantially similar to those of the Prepayment Charge, if
any, of the Deleted Mortgage Loan; (ix) have the same occupancy type and lien
priority as the Deleted Mortgage Loan; and (x) 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 (x) of this definition would cause a proposed
Replacement Mortgage Loan to fail to comply with one or more of clauses (i),
(ii), (iv), (viii) and/or (ix) of this definition, then such proposed
Replacement Mortgage Loan must comply with clause (x) and need not comply with
one or more of clauses (i), (ii), (iv), (viii) and/or (ix), to the extent, and
only to the extent, necessary to assure that the Replacement Mortgage Loan
otherwise complies with clause (x).
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 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;
57
(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(e).
Request for Document Release: A Request for Document Release
submitted by the Master Servicer to the Co-Trustee, substantially in the form
of Exhibit M.
Request for File Release: A Request for File Release submitted by
the Master Servicer to the Co-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 the Pool Insurance Policy.
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 and any Loan Group or Loan Groups, the average of the
Sixty-Day Delinquency Rates for such Loan Group or Loan Groups and such
Distribution Date and the two immediately preceding Distribution Dates.
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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.
Sellers: CHL, in its capacity as seller of the CHL 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.
Seller Shortfall Interest Requirement: With respect to the
Distribution Date in each of August 2006, September 2006 and October 2006, is
the sum of:
(a) the product of: (1) the excess of the aggregate Stated
Principal Balance for such Distribution Date of all the Mortgage Loans in the
Mortgage Pool (including the Subsequent Mortgage Loans, if any) owned by the
Trust Fund at the beginning of the related Due Period, over the aggregate
Stated Principal Balance for such Distribution Date of such Mortgage Loans
(including such Subsequent Mortgage Loans, if any) that have a scheduled
payment of interest due in the related Due Period, and (2) a fraction, the
numerator of which is the weighted average Net Mortgage Rate of all the
Mortgage Loans in the Mortgage Pool (including such Subsequent Mortgage Loans,
if any) (weighted on the basis of the Stated Principal Balances thereof for
such Distribution Date) and the denominator of which is 12; and
(b) the product of: (1) the amount on deposit in the Pre-Funding
Account at the beginning of the related Due Period, and (2) a fraction, the
numerator of which is the weighted average Net Mortgage Rate of the Mortgage
Loans (including Subsequent Mortgage Loans, if any) owned by the Trust Fund at
the beginning of the related Due Period (weighted on the basis of the Stated
Principal Balances thereof for such Distribution Date) and the denominator of
which is 12.
Senior Certificates: The Class 1-AF, Class AV and Class A-R
Certificates.
59
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 and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and
(iv) 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.
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
and any Loan Group or Loan Groups, a fraction, expressed as a percentage, the
numerator of which is the aggregate Stated Principal Balance for such
Distribution Date of all Mortgage Loans in such Loan Group or Loan Groups 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 in such Loan Group or Loan Groups.
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 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
60
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. 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, and references herein
to the Stated Principal Balance of a Loan Group at any time shall mean the
aggregate Stated Principal Balance of all Mortgage Loans in such Loan Group at
such time.
Stepdown Target Subordination Percentage: For each Class of
Adjustable Rate Subordinate Certificates, the respective percentage indicated
in the following table:
Stepdown Target Subordination
Percentage
Class MV-1....................... 36.00%
Class MV-2....................... 29.10%
Class MV-3....................... 25.00%
Class MV-4....................... 21.30%
Class MV-5....................... 17.80%
Class MV-6....................... 14.50%
Class MV-7....................... 11.40%
Class MV-8....................... 8.60%
Class BV......................... 6.60%
Strip REMIC: As defined in the Preliminary Statement.
Strip REMIC Cap: As defined in the Preliminary Statement.
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.
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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 Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the percentage specified in the related Mortgage Note that
limits permissible increases and decreases in the Mortgage Rate on any
Adjustment Date (other than the initial Adjustment 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 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 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(e).
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Substitution Amount: With respect to any Mortgage Loan substituted
pursuant to Section 2.03(e), 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.
Swap Account: The separate Eligible Account created and initially
maintained by the Swap Trustee pursuant to Section 4.09.
Swap Certificates: The Class AV Certificates and the Adjustable
Rate Subordinate Certificates.
Swap Contract: With respect to the Swap Certificates, the
transaction evidenced by the related Confirmation (as assigned to the Swap
Contract Administrator pursuant to the Swap Contract Assignment Agreement), a
form of which is attached hereto as Exhibit U.
Swap Contract Administration Agreement: The swap contract
administration agreement dated as of the Closing Date among CHL, the Trustee
and the Swap Contract Administrator, a form of which is attached hereto as
Exhibit V-2.
Swap Contract Administrator: The Bank of New York, in its capacity
as swap contract administrator under the Swap Contract Administration
Agreement.
Swap Contract Assignment Agreement: The Assignment Agreement dated
as of the Closing Date among CHL, the Swap Contract Administrator and the Swap
Counterparty, a form of which is attached hereto as Exhibit V-1.
Swap Counterparty: Xxxxxx Brothers Special Financing Inc. and its
successors.
Swap Contract Termination Date: The Distribution Date in July
2011.
Swap Counterparty Trigger Event: A Swap Termination Payment that
is triggered upon (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" 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 Guarantee: The guaranty, dated as of July 28, 2006, by the
Swap Guarantor in favor of the Swap Contract Administrator, a form of which is
attached hereto as Exhibit V-3.
Swap Guarantor: Xxxxxx Brothers Holdings Inc.
Swap-IO REMIC: As defined in the Preliminary Statement.
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.
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Swap 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 Holders of the Swap Certificates 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.
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: With respect to the Master REMIC,
the Swap-IO REMIC and the Strip REMIC, 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.
Three-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
Transaction Documents: This Agreement, the Swap Contract, the Swap
Contract Administration Agreement, the Swap Guarantee, the Class 1-AF Policy
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).
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 Credit Comeback Excess Account, the
Pre-Funding 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 Loans; (vi) the rights of the Trustee for the benefit of the Class
1-AF Certificateholders under the Class 1-AF Policy; and (vii) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid property.
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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 and the Class 1-AF 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.
Two-Year Hybrid Mortgage Loan: A Mortgage Loan having a Mortgage
Rate that is fixed for 24 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.
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, Bear, Xxxxxxx &
Co. Inc. and Xxxxxx Brothers Inc.
Unpaid Realized Loss Amount: For any Class of Certificates and any
Distribution Date, (x) the portion of the aggregate Applied Realized Loss
Amount previously allocated to that Class remaining unpaid from prior
Distribution Dates (in the case of any Class of Class 1-AF Certificates, as
reduced by any payment made by the Class 1-AF Insurer in respect of that Class
under the Class 1-AF Policy) minus (y) 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(l).
Variable Pool Net Rate Cap: As defined in the Preliminary
Statement.
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 95%
to the Certificates other than the Class A-R, Class CF, Class CV, Class PF and
Class PV Certificates (with the allocation among the Certificates to be in
proportion to the Certificate Principal Balance of each Class relative to the
Certificate
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Principal Balance of all other such Classes), and 1% to each of the Class A-R,
Class CF, Class CV, Class PF and Class PV Certificates. Voting Rights will be
allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests. Notwithstanding any of the foregoing, on any
date on which any Class 1-AF Certificates are outstanding or any amounts are
owed the Class 1-AF Insurer under this Agreement, unless a Class 1-AF Insurer
Default shall have occurred and be continuing, the Class 1-AF Insurer will be
entitled to exercise the Voting Rights of the Class 1-AF Certificateholders,
without the consent of the Class 1-AF Certificateholders, and the Class 1-AF
Certificateholders may exercise such rights only with the prior written
consent of the Class 1-AF Insurer.
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
"delinquent" if any payment due thereon is not made pursuant to the terms of
such Mortgage Loan by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment
has not been received by the close of business on the 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 deposited into the Certificate Account by the Master
Servicer on behalf of such Seller as part of
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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 Class 1-AF Insurer, without recourse, all right
title and interest in and to the Initial Mortgage Loans, (ii) causes the Class
1-AF Insurer to deliver the Class 1-AF Policy to the Trustee and (iii) causes
the Pool Insurer to deliver the Pool 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 the applicable
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.
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 applicable 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 Class 1-AF Insurer, without recourse, all right
title and interest in the Subsequent Mortgage Loans.
(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
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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, 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 and the Underwriters will be provided
Opinions of Counsel addressed to the Rating Agencies 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 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 Class 1-AF
Policy, in the case of the Class 1-AF 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(e) 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 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
Class 1-AF Insurer;
(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 each Loan
Group will not vary by
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more than the amount specified below (other than (i) the percentage of
Mortgage Loans in each Loan Group secured by Mortgaged Properties
located in the State of California, which will not exceed 35.00% of Loan
Group 1 and 50.00% of each of Loan Group 2 and Loan Group 3 and (ii) the
percentage of Mortgage Loans in the Credit Grade Categories of "C" or
below, which will not exceed 15% of the Mortgage Loans in each Loan
Group) 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:
Loan Group 1
Characteristic Value Permitted Variance
Weighted Average Mortgage Rate......................... 7.625% +/-0.10%
Weighted Average Original Loan-to-Value Ratio.......... 74.34% +/-3.00%
Weighted Average Credit Bureau Risk Score.............. 620 points +/-5 points
Percentage Originated under CHL's Full Documentation
Program................................................ 73.70% +/-3.00%
Loan Group 2
Characteristic Value Permitted Variance
Weighted Average Mortgage Rate......................... 8.392% +/-0.10%
Weighted Average Original Loan-to-Value Ratio.......... 78.03% +/-3.00%
Weighted Average Credit Bureau Risk Score.............. 598 points +/-5 points
Percentage Originated under CHL's Full Documentation
Program................................................ 63.75% +/-3.00%
Weighted Average Gross Margin of Adjustable Rate
Mortgage Loans......................................... 6.640% +/-0.10%
Loan Group 3
Characteristic Value Permitted Variance
Weighted Average Mortgage Rate......................... 8.317% +/-0.10%
Weighted Average Original Loan-to-Value Ratio.......... 79.43% +/-3.00%
Weighted Average Credit Bureau Risk Score.............. 617 points +/-5 points
Percentage Originated under CHL's Full Documentation
Program................................................ 53.44% +/-3.00%
Weighted Average Gross Margin of Adjustable Rate
Mortgage Loans......................................... 7.241% +/-0.10%
(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
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(9) the Trustee and the Underwriters 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, 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 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 and the Loan Group into which each Subsequent
Mortgage Loan was conveyed, (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
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 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).
(g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay Delivery Mortgage Loans, will deliver
to, and deposit with, the Co-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, 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
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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;
(iii) in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, a duly executed assignment of the Mortgage to
"Asset-Backed Certificates, Series 2006-13, CWABS, Inc., by The Bank of
New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of July 1, 2006, 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 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
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"[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 Co-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 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 Co-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 Co-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 Co-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 Co-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 Co-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 and
the Certificateholders' interest in the related Mortgage Loan, as evidenced by
an Opinion of Counsel delivered by CHL to the Trustee within 120 days of the
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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 Co-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 Co-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 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 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 Co-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.
So long as the Co-Trustee or its agent maintains an office in the
State of California, the Co-Trustee or its agent shall maintain possession of
and not remove or attempt to remove from the State of California any of the
Mortgage Files as to which the related Mortgaged Property is located in such
State. 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 Co-Trustee the Mortgage File as required pursuant to
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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 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.
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 Class 1-AF 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 Co-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.
The Trustee agrees to execute and deliver on the Closing Date to
the Depositor, the Master Servicer, CHL (on behalf of each Seller) and, with
respect to the Group 1 Mortgage Loans only, the Class 1-AF 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 Co-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
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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, with respect to the Group 1 Mortgage Loans
only, 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
Co-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), (ix) and (xvii) 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, with respect to the Group 1 Mortgage Loans only, 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 or the Co-Trustee, as applicable, 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 Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and CHL (on behalf of each
Seller), the Class 1-AF Insurer and to 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 Co-Trustee, at the direction of 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
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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
(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 Co-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 Co-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
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Request for File Release with respect thereto, the Co-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 Co-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 Co-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 Co-Trustee, the Depositor
and any Certificateholder against any Seller.
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 Co-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, with respect to the Group 1 Mortgage Loans only, 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, with respect to the Group 1 Mortgage Loans only, 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
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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), (ix) and (xvii) 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, with respect to the Group 1
Mortgage Loans only, 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 Class 1-AF 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.
In connection with the Trustee's completion and delivery of such
Final Certification, the Co-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;
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(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 Co-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 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
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shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations.
The Co-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 Co-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 Co-Trustee, the Depositor and any
Certificateholder against the Sellers.
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 Class 1-AF 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
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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 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.
(8) The Master Servicer has fully furnished and will fully
furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to
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Equifax, Experian, and Trans Union Credit Information Company (three of
the credit repositories), on a monthly basis for the Mortgage Loans in
Loan Group 2.
(b) CHL hereby represents and warrants to the Depositor, the Class
1-AF 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 or in a Loan Group or Loan Groups are
measured by the Cut-off Date Principal Balance of the Initial Mortgage Loans
in the Trust Fund or of the Initial Mortgage Loans in the related Loan Group
or Loan Groups, as applicable):
(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.
(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
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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 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 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 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 Exhibit F-1 hereto with
respect to each Initial Mortgage Loan is true and correct in all
material respects as of the Closing Date.
(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
in payment of principal and interest.
(10) No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 100.00%.
(11) Each Mortgage Loan is secured by a valid and
enforceable first 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 and (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.
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(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.
(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
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 first
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,
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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 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.
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(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 to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(26) Each Mortgage Note and each Mortgage is acceptable in
form to Xxxxxx Mae and Xxxxxxx Mac.
(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.
(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 in Loan Group 1,
Loan Group 2 and Loan Group 3 are secured by single family detached
dwellings. No more than approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group 1, Loan
Group 2 and Loan Group 3 are secured by two- to four-family dwellings.
No more than approximately the percentage specified in the Collateral
Schedule of the Initial Mortgage Loans in Loan Group 1, Loan Group 2 and
Loan Group 3 are secured by low-rise condominium units. No more than
approximately the percentage specified in the Collateral Schedule of the
Initial Mortgage Loans in Loan Group 1, Loan Group 2 and Loan Group 3
are secured by high-rise condominium units. No more than approximately
the percentage specified in the Collateral Schedule of the Initial
Mortgage Loans in Loan Group 1, Loan Group 2 and Loan Group 3 are
secured by manufactured housing. No more than approximately the
percentage specified in the Collateral Schedule of the Initial Mortgage
Loans in Loan Group 1, Loan Group 2 and Loan Group 3 are secured by
PUDs.
(33) Each Initial Mortgage Loan in Loan Group 1, Loan Group
2 and Loan Group 3 was originated on or after the date specified in the
Collateral Schedule.
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(34) Each Initial Mortgage Loan that is an Adjustable Rate
Mortgage Loan, other than a Two-Year Hybrid Mortgage Loan, a Three-Year
Hybrid Mortgage Loan or a Five-Year Hybrid Mortgage Loan, had an initial
Adjustment Date no later than the applicable date specified on the
Collateral Schedule; each Initial Mortgage Loan that is a Two-Year
Hybrid Mortgage Loan had an initial Adjustment Date no later than the
applicable date specified on the Collateral Schedule; each Initial
Mortgage Loan that is a Three-Year Hybrid Mortgage Loan had an initial
Adjustment Date no later than the applicable date specified on the
Collateral Schedule; and each Initial Mortgage Loan that is a Five-Year
Hybrid Mortgage Loan had an initial Adjustment Date no later than the
applicable date specified on the Collateral Schedule.
(35) Approximately the percentage specified in the
Collateral Schedule of the Initial Mortgage Loans in Loan Group 1, Loan
Group 2 and Loan Group 3 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 in
Loan Group 1, Loan Group 2 and Loan Group 3, respectively, are secured
by investor properties, and no less than approximately the percentage
specified in the Collateral Schedule of the Initial Mortgage Loans in
Loan Group 1, Loan Group 2 and Loan Group 3 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 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
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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.
(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 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 credit blemished quality mortgage loans or, with respect
to Mortgage Loans purchased by CHL were underwritten in all material
respects in accordance with customary and prudent
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underwriting guidelines generally used by originators of credit
blemished quality 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
in Loan Group 1, Loan Group 2 and Loan Group 3 as of the Cut-off Date
ranged between the approximate per annum percentages specified on the
Collateral Schedule and the weighted average Mortgage Rate 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) and 2.03(d) can be made. No selection was
made in a manner that would adversely affect the interests of
Certificateholders.
(50) The Gross Margins on the Initial Mortgage Loans in Loan
Group 1, Loan Group 2 and Loan Group 3 range between the approximate
percentages specified on the Collateral Schedule, and the weighted
average Gross Margin was approximately the percentage specified in the
Collateral Schedule.
(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.
(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
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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) To the extent required under applicable law, each
originator and subsequent mortgagee or servicer of the Mortgage Loan
complied with all licensing requirements and was authorized to transact
and do business in the jurisdiction in which the related Mortgaged
Property is located at all times when it held or serviced the Mortgage
Loan. Any and all requirements of any federal, state or local laws or
regulations, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection,
anti-predatory lending, fair credit reporting, unfair collection
practice, equal credit opportunity, fair housing and disclosure laws and
regulations, applicable to the solicitation, origination, collection and
servicing of such Mortgage Loan have been complied with in all material
respects; and any obligations of the holder of the Mortgage Note,
Mortgage and other loan documents have been complied with in all
material respects; servicing of each Mortgage Loan has been in
accordance with prudent mortgage servicing standards, any applicable
laws, rules and regulations and in accordance with the terms of the
Mortgage Notes, Mortgage and other loan documents, whether such
origination and servicing was done by the applicable Seller, its
affiliates, or any third party which originated the Mortgage Loan on
behalf of, or sold the Mortgage Loan to, any of them, or any servicing
agent of any of the foregoing.
(58) The methodology used in underwriting the extension of
credit for the Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the
proposed payment and such underwriting methodology does not rely on the
extent of the borrower's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology confirmed that at the time of origination
(application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan.
(59) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of
obtaining the extension of credit. No borrower obtained a prepaid
single-premium credit life, disability, accident or health insurance
policy in connection with the origination of the Mortgage Loan.
(60) If the Mortgage Loan provides that the interest rate on
the principal balance of the related Mortgage Loan may be adjusted, all
of the terms of the related Mortgage pertaining to interest rate
adjustments, payment adjustments and adjustments of the outstanding
principal balance have been made in accordance with the terms of the
related Mortgage Note and applicable law and are enforceable and such
adjustments will not affect the priority of the Mortgage lien.
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(61) The Mortgaged Property complies with all applicable
laws, rules and regulations relating to environmental matters, including
but not limited to those relating to radon, asbestos and lead paint and
no Seller nor, to the best of CHL's knowledge, the Mortgagor, has
received any notice of any violation or potential violation of such law.
(62) There is no action, suit or proceeding pending, or to
the best of CHL's knowledge, threatened or likely to be asserted with
respect to the Mortgage Loan against or affecting any Seller before or
by any court, administrative agency, arbitrator or governmental body.
(63) No action, inaction, or event has occurred and no state
of fact exists or has existed that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, irrespective of the cause of such failure of
coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by
CHL or any designee of CHL or any corporation in which CHL or any
officer, director, or employee had a financial interest at the time of
placement of such insurance.
(64) Each Mortgage Loan has a fully assignable life of loan
tax service contract which may be assigned without the payment of any
fee.
(65) No Mortgagor has notified CHL or the Master Servicer on
CHL's behalf, and CHL has no knowledge, of any relief requested or
allowed to a Mortgagor under the Relief Act or any similar state or
local law.
(66) Each Mortgage Loan was originated by a savings and loan
association, savings bank, commercial bank, credit union, insurance
company, or mortgage banking company which is supervised and examined by
a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 2.03 and
2.11 of the National Housing Act.
(67) Each Mortgage Loan was (A) originated no earlier than
six months prior to the time the applicable Seller purchased such
Mortgage Loan pursuant to a mortgage loan purchase agreement or other
similar agreement and (B) underwritten or reunderwritten by the
applicable Seller in accordance with the applicable Seller's
underwriting guidelines in effect at the time the loan was underwritten
or reunderwritten, as applicable.
(68) 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.
(69) None of the Mortgage Loans is a "high cost" mortgage
loan as defined by applicable federal, state and local predatory and
abusive lending laws.
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(70) Each Prepayment Charge is enforceable and was
originated in compliance with all applicable federal, state and local
laws.
(71) 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).
(72) 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.
(73) 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.
(74) Each Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of 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 Provisions) or (ii) the time the contract is transferred to the
purchaser.
(75) 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).
(76) 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.
(77) Representations and Warranties relating to the Mortgage
Loans in Loan Group 2:
(i) Each Mortgage Loan in Loan Group 2 is in compliance with
the anti-predatory lending eligibility for purchase requirements
of Xxxxxx Mae's Selling Guide;
(ii) No Mortgage Loan in Loan Group 2 is subject to the
requirements of the Home Ownership and Equity Protection Act of
1994 ("HOEPA");
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(iii) Each Mortgage Loan in Loan Group 2 at the time it was
made complied in all material respects with applicable local,
state, and federal laws, including, but not limited to, all
applicable predatory and abusive lending laws;
(iv) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the Georgia Fair Lending Act, as amended (the
"Georgia Act"). No Mortgage Loan in Loan Group 2 subject to the
Georgia Act and secured by owner occupied real property or an
owner occupied manufactured home located in the State of Georgia
was originated (or modified) on or after October 1, 2002 through
and including March 6, 2003;
(v) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in New York Banking Law 6-1;
(vi) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the Arkansas Home Loan Protection Act
effective July 16, 2003 (Act 1340 of 2003);
(vii) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the Kentucky high-cost home loan statute
effective June 24, 2003 (Ky. Rev. Stat. Section 360.100);
(viii) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the New Jersey Home Ownership Act effective
November 27, 2003 (N.J.S.A. 46:10B-22 et seq.);
(ix) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Loan" as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004 (N.M. Stat. Xxx. xx.xx. 58-21A-1 et
seq.);
(x) No Mortgage Loan in Loan Group 2 is a "High-Risk Home
Loan" as defined in the Illinois High-Risk Home Loan Act effective
January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.);
(xi) No Mortgage Loan in Loan Group 2 is a "High-Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. Xxx. Laws Ch.
183C);
(xii) No Mortgage Loan in Loan Group 2 is a "High Cost Home
Loan" as defined in the Indiana Home Loan Practices Act, effective
January 1, 2005 (Ind. Code Xxx. Sections 24-9-1 through 24-9-9);
(xiii) No Mortgage Loan in Loan Group 2 is a balloon
mortgage loan that has an original stated maturity of less than
seven (7) years;
(xiv) No borrower related to a Mortgage Loan in Loan Group 2
was encouraged or required to select a Mortgage Loan product
offered by the Mortgage Loan's originator which is a higher cost
product designed for less
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creditworthy borrowers, unless at the time of such Mortgage Loan's
origination, such borrower did not qualify taking into account
credit history and debt-to-income ratios for a lower-cost credit
product then offered by such Mortgage Loan's originator or any
affiliate of the Mortgage Loan's originator. If, at the time of
loan application, the borrower may have qualified for a lower-cost
credit product then offered by any mortgage lending affiliate of
the Mortgage Loan's originator, the Mortgage Loan's originator
referred the borrower's application to such affiliate for
underwriting consideration;
(xv) The methodology used in underwriting the extension of
credit for each Mortgage Loan in Loan Group 2 employs objective
mathematical principles which relate the borrower's income, assets
and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the borrower's equity
in the collateral as the principal determining factor in approving
such credit extension. Such underwriting methodology confirmed
that at the time of origination (application/approval) the
borrower had a reasonable ability to make timely payments on such
Mortgage Loan;
(xvi) With respect to any Mortgage Loan in Loan Group 2 that
contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the loan's origination,
the borrower agreed to such premium in exchange for a monetary
benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the
option of obtaining a mortgage loan that did not require payment
of such a premium, (iii) the prepayment premium is disclosed to
the borrower in the loan documents pursuant to applicable state
and federal law, (iv) for loans originated on or after September
1, 2004, the duration of the prepayment period shall not exceed
three (3) years from the date of the note, unless the loan was
modified to reduce the prepayment period to no more than three
years from the date of the note and the borrower was notified in
writing of such reduction in prepayment period, and (v)
notwithstanding any state or federal law to the contrary, the
Master Servicer shall not impose such prepayment premium in any
instance when the mortgage debt is accelerated as the result of
the borrower's default in making the loan payments;
(xvii) No borrower related to a Mortgage Loan in Loan Group
2 was required to purchase any credit, life, disability, accident
or health insurance product as a condition of obtaining the
extension of credit. No borrower related to a Mortgage Loan in
Loan Group 2 obtained a prepaid single-premium credit, life,
disability, accident or health insurance policy in connection with
the origination of the Mortgage Loan in Loan Group 2; No proceeds
from any Mortgage Loan in Loan Group 2 were used to purchase
single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan;
(xviii) All points and fees related to each Mortgage Loan in
Loan Group 2 were disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation.
Except in the case of a Mortgage Loan in Loan Group
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2 in an original principal amount of less than $60,000 which would
have resulted in an unprofitable origination, no borrower was
charged "points and fees" (whether or not financed) in an amount
greater than 5% of the principal amount of such loan, such 5%
limitation is calculated in accordance with Xxxxxx Mae's
anti-predatory lending requirements as set forth in the Xxxxxx Mae
Selling Guide;
(xix) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage
Loan in Loan Group 2 has been disclosed in writing to the borrower
in accordance with applicable state and federal law and
regulation; and
(xx) The Master Servicer will transmit full-file credit
reporting data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide
Announcement 95-19 and that for each Mortgage Loan, the Master
Servicer agrees that it shall report one of the following statuses
each month as follows: new origination, current, delinquent (30-,
60-, 90-days, etc.), foreclosed, or charged-off.
(78) The representations in Section 2.03(c)(1)-(6) and
2.03(d)(1)-(6) are true and correct.
(c) Park Monaco hereby represents and warrants to the Depositor,
the Class 1-AF 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
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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 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.
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(d) Park Sienna hereby represents and warrants to the Depositor,
the Class 1-AF 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
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
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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 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.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(a) through (d) that
materially and adversely affects the interests of the Certificateholders or
the Class 1-AF Insurer in any Mortgage Loan, the party discovering such breach
shall give prompt notice thereof to the other parties, the NIM Insurer, the
Class 1-AF Insurer and the Swap Counterparty. 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 (d)
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 Class 1-AF 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
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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 Class 1-AF
Insurer, the Master Servicer, the Sellers 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. Any breach of a representation set
forth in Section 2.03(a)(8), (b)(72), (b)(75), (b)(76) or (b)(77) shall be
deemed to materially and adversely affect the Certificateholders.
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 Class 1-AF
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 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) or (d) 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 Co-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.
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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 Co-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 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.
(f) The representations and warranties set forth in this Section
2.03 shall survive delivery of the respective Mortgage Files to the Co-Trustee
for the benefit of the Certificateholders and the Class 1-AF 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
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
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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.
(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 Co-Trustee. Upon discovery by the Depositor or the
Trustee, of a breach of any of the foregoing
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representations and warranties set forth in the immediately preceding paragraph
(referred to herein as a "breach"), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency,
the NIM Insurer and the Swap Counterparty. The Depositor hereby covenants with
respect to the representations and warranties made by it in this Section 2.04
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, 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(e).
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 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 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 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, the Class 1-AF Insurer and the
NIM Insurer. In connection therewith, the Trustee shall require CHL, at CHL's
option, to either (i) substitute, if the conditions in Section 2.03(e) 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
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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 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 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; and
(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any affiliate
of the Depositor 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.
ARTICLE III.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01 Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders and the Class 1-AF
Insurer, 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. 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 or
the Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor 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 Mortgage Loan in Loan Group 1 to not be covered by the
Pool Insurance Policy, but in any case the Master
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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 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 Pool Insurance
Policy on behalf of itself, the Sellers, the Depositor, the Class 1-AF Insurer
and the Trustee for the benefit of the Certificateholders and the Class 1-AF
Insurer, when it is necessary to make claims and receive payments under the Pool
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 Pool Insurance Policy and to service the
Mortgage Loans in Loan
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Group 1 in the manner required by the Pool Insurance Policy. The Master Servicer
shall prepare and submit all claims eligible for submission under the Pool
Insurance Policy and shall, except as otherwise specified in this Agreement,
perform all of the obligations of the insured under the Pool Insurance Policy.
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 Class 1-AF Policy in the case of the Class 1-AF Certificates), as
evidenced by a letter to that effect delivered by each Rating Agency to the
Depositor 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 Master Servicer or otherwise, the Master Servicer shall
remain obligated and liable to the Depositor, the Trustee 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
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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.
(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 Class 1-AF
Insurer and the Trustee in Respect of the Master
Servicer.
None of the Trustee, the Sellers, the Certificateholders, the NIM
Insurer, the Class 1-AF 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 Class 1-AF 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 Class
1-AF 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 Class 1-AF Insurer, the NIM 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 Class 1-AF Insurer, the NIM Insurer or the Trust
Fund, and in either case, the Depositor, the Class 1-AF Insurer, the NIM 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.
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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 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;
Seller Shortfall Interest Requirement.
(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. 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 payments due on a Mortgage Note, if the aggregate
number of outstanding Mortgage Loans that have been granted such waivers or
extensions exceeds 5% of the aggregate number of Initial
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Mortgage Loans and Subsequent 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.
(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;
(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(e) 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
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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 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 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 in each of August 2006, September 2006 and
October 0000, XXX shall remit to the Master Servicer, and the Master Servicer
shall deposit in the Certificate Account, the Seller Shortfall Interest
Requirement (if any) for such Master Servicer Advance Date.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the Class 1-AF 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); and
(2) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(e) in connection with any losses on Permitted
Investments.
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 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 Class 1-AF
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) Each institution that maintains the Certificate Account, the
Distribution Account or the Pre-Funding 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 and the Pre-Funding 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 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.
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 and (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. 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 in respect of any such investments shall be paid by the Master Servicer
to the Trustee for deposit into the Pre-Funding Account 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 or
the Pre-Funding Account and made in accordance with this Section 3.05.
(f) The Master Servicer shall give at least 30 days' advance notice
to the Trustee, each Seller, the Class 1-AF 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 Class 1-AF Insurer, each Rating Agency and
the Depositor of any proposed change of the location of the Distribution
Account, the Pre-Funding Account or the Carryover Reserve Fund prior to any
change thereof.
(g) 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.
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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 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 Class 1-AF 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.
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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) 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];
(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
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 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
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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;
(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,
Principal Remittance Amount, Prepayment Charges collected and the Master
Servicer Prepayment Charge Payment Amount for each Loan Group, 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 $300.00. 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 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 PF Principal Distribution Date,
the Trustee shall transfer $100.00 from the Principal Reserve Fund to the
Distribution Account and shall distribute such amount to the Class PF
Certificates on the Class PF Principal Distribution Date. On the Business Day
before the Class PV 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 PV Certificates on the Class PV Principal
Distribution Date. Following the distributions to be made in accordance with the
two preceding sentences, 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) and (ix) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iv), the Master Servicer shall
deliver to the Trustee 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.
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(b) The Trustee shall withdraw funds from the Distribution Account
for distribution to the Certificateholders and the Class 1-AF Insurer and
remittance to 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). 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 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 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; and
(vi) 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
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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 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
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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
Co-Trustee the executed original of such substitution or assumption agreement,
which document 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.
(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, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the Gross Margin,
the Initial Periodic Rate Cap, the Subsequent Periodic Rate Cap, the Adjustment
Date 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.
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Section 3.12 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Proceeds and Realized Losses;
Repurchase of Certain Mortgage Loans.
(a) The Master Servicer may agree to a 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 in the same Loan Group 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 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,
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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.
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
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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 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.
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(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 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.
Section 3.13 Co-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
Co-Trustee by delivering a Request for File Release. Upon receipt of such
request, the Co-Trustee shall promptly release the related Mortgage File to the
Master Servicer, and the Co-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 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 Co-Trustee
shall, upon delivery to the Co-Trustee of a Request for Document Release or a
Request for File
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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 Co-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 Co-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 Co-Trustee to be returned to the Co-Trustee within 21 calendar
days after possession thereof shall have been released by the Co-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 Co-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 Co-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 Distribution 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, to any claim, lien, security interest,
judgment, levy, writ of
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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 Class
1-AF Insurer and the Trustee on or before March 15 of each year, commencing with
its 2007 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 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
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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 and the Trustee on or before March 15 of each year, commencing
with its 2007 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 [Reserved].
Section 3.19 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 1-AF-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 extent specified thereunder. Upon any such
termination, the Corridor Contract Counterparty will
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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
1-AF-1 Certificates as provided in Section 4.04(e) on the Distribution Dates
following such termination to and including the Corridor Contract Termination
Date, but shall not be available for distribution to the Class CF Certificates
pursuant to Section 4.07(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 CF Certificates.
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 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,
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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. 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.
CHL shall cause The Bank of New York to enter into the Swap Contract
Administration Agreement and shall assign all of its right, title and interest
in and to the interest rate swap transaction evidenced by the Swap Contract to,
and shall 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. 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 nor 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 Swap Certificates pursuant to Section 4.04(h)(3) through
(8) that will remain unpaid following all distributions to be made on such
Distribution Date pursuant to Section 4.04(a) through (f).
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 Swap Certificates
after all distributions on such Distribution Date.
Upon the Swap Contract Administrator obtaining actual knowledge of
the rating of the Swap Counterparty falling below the Approved Rating Thresholds
(as defined in the Swap Contract), the Swap Trustee shall direct the Swap
Contract Administrator to demand payment of the Delivery Amount (as defined in
the ISDA Credit Support Annex) on each Valuation Date (as defined in the ISDA
Credit Support Annex) and to perform its other obligations in accordance with
the ISDA Credit Support Annex. If a Delivery Amount is demanded, the Swap
Trustee shall set up an account in accordance with Section 4.09 to hold cash or
other eligible investments pledged under the ISDA Credit Support Annex. Any cash
or other eligible investments pledged under the ISDA Credit Support Annex shall
not be part of the Distribution Account or the Swap
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Account unless they are applied in accordance with the ISDA Credit Support Annex
to make a payment due to the Swap Contract Administrator pursuant to the Swap
Contract. If Eligible Credit Support (as defined in the ISDA Credit Support
Annex) with a value equal to the Delivery Amount is not delivered, the Swap
Trustee shall direct the Swap Contract Administrator to notify the Swap
Counterparty of such failure.
Upon the Swap Trustee obtaining actual knowledge of a Failure to Pay
or Deliver (as defined in the Swap Contract), the Swap Trustee shall direct the
Swap Contract Administrator to demand payment under the Swap Guarantee.
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 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 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 Loan Group 2 and Loan Group 3 pro rata based on their
respective 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 the original Swap Contract, such upfront amount
shall 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 Swap Certificates
pursuant to Section 4.04(h)(3) through (8) that will remain unpaid following all
distributions to be made on such Distribution Date pursuant to Section 4.04(a)
through (d), (e)(1) through (3) and (f)(1) through (4).
Any portion of any Net Swap Payment or Swap Termination Payment
payable by the Swap Counterparty and not remitted by the Swap Contract
Administrator to the Swap Trustee
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with respect to any Distribution Date will be remitted to CHL and will not be
available to make distributions in respect of any Class of Certificates.
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.
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. If the Master Servicer shall have
determined that it has made a Nonrecoverable 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 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 until the
purchase or repurchase thereof (or substitution therefor)
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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.
(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 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 or the Certificateholders.
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Section 4.03 [Reserved].
Section 4.04 Distributions.
(a) On each Distribution Date, the Interest Funds for such
Distribution Date for Loan Group 1 shall be distributed from the Distribution
Account in the following order of priority:
(i) to the Fixed Rate Final Maturity Reserve Fund, the Fixed
Rate Final Maturity Reserve Fund Required Deposit for such
Distribution Date,
(ii) to the Class 1-AF Insurer, the Class 1-AF Premium for
such Distribution Date,
(iii) to each Class of Class 1-AF Certificates, the Current
Interest and Interest Carry Forward Amount for each such Class and
such Distribution Date, pro rata, based on their respective
entitlements,
(iv) to the Class 1-AF Insurer, any Class 1-AF Reimbursement
Amount, and
(v) any remainder as part of the Fixed Rate Excess Cashflow.
(b) On each Distribution Date, the Interest Funds for such
Distribution Date with respect to Loan Group 2 and Loan Group 3 shall be
distributed by the Trustee from the Distribution Account in the following order
of priority:
(i) from the Interest Funds for Loan Group 2 and Loan Group 3,
pro rata based on the Interest Funds for each such Loan Group, to
the Adjustable Rate Final Maturity Reserve Fund, the Adjustable Rate
Final Maturity Reserve Fund Required Deposit for such Distribution
Date,
(ii) from the Interest Funds for Loan Group 2 and Loan Group
3, pro rata based on the Interest Funds for each such Loan Group, 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;
(iii) concurrently:
(a) from the Interest Funds for Loan Group 2, to the
Class 2-AV Certificates, the Current Interest and Interest
Carry Forward Amount for such Class and such Distribution
Date, and
(b) from the Interest Funds for Loan Group 3,
concurrently to each Class of Class 3-AV Certificates, the
Current Interest and Interest Carry Forward Amount for each
such Class and such Distribution Date, pro rata, based on
their respective entitlements, and
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(iv) from the remaining Interest Funds for Loan Group 2 and
Loan Group 3, concurrently to each Class of Class AV Certificates,
any remaining Current Interest and Interest Carry Forward Amount not
paid pursuant to clause (b)(ii), pro rata, based on the Certificate
Principal Balances thereof, to the extent needed to pay any Current
Interest and Interest Carry Forward Amount for each such Class;
provided that Interest Funds remaining after such allocation to pay
any Current Interest and Interest Carry Forward Amount based on the
Certificate Principal Balances of the Class AV Certificates will be
distributed to each Class of Class AV Certificates with respect to
which there remains any unpaid Current Interest and Interest Carry
Forward Amount (after the distribution based on Certificate
Principal Balances), pro rata, based on the amount of such remaining
unpaid Current Interest and Interest Carry Forward Amount, and
(v) from the remaining Interest Funds for Loan Group 2 and
Loan Group 3, sequentially:
(a) sequentially, to the Class MV-1, Class MV-2, Class
MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8 and Class BV Certificates, in that order, the Current
Interest for each such Class, and
(b) any remainder as part of the Adjustable Rate Excess
Cashflow.
(c) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to Loan Group 1 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):
(1) with respect to any Distribution Date prior to the Fixed Rate
Stepdown Date or on which a Fixed Rate Trigger Event is in effect, from
the Principal Distribution Amount for Loan Group 1, sequentially:
(A) to the Class 1-AF Insurer, any remaining Class 1-AF
Premium that has not been paid from Interest Funds for Loan Group 1
for such Distribution Date,
(B) to the Classes of Class 1-AF Certificates, in the order,
amounts and priorities set forth in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero,
(C) to the Class 1-AF Insurer, any remaining Class 1-AF
Reimbursement Amount that has not been paid from Interest Funds for
Loan Group 1 for such Distribution Date, and
(D) any remainder as part of the Fixed Rate Excess Cashflow.
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(2) with respect to any Distribution Date on or after the Fixed Rate
Stepdown Date and so long as a Fixed Rate Trigger Event is not in effect,
from the Principal Distribution Amount for Loan Group 1, sequentially:
(A) to the Class 1-AF Insurer, any remaining Class 1-AF
Premium that has not been paid from Interest Funds for Loan Group 1
for such Distribution Date,
(B) in an amount up to the Class 1-AF Principal Distribution
Amount, to the Classes of Class 1-AF Certificates, in the order and
priorities set forth in clause (3) below, until the Certificate
Principal Balances thereof are reduced to zero,
(C) to the Class 1-AF Insurer, any remaining Class 1-AF
Reimbursement Amount that has not been paid from Interest Funds for
Loan Group 1 for such Distribution Date, and
(D) any remainder as part of the Fixed Rate Excess Cashflow.
(3) On each Distribution Date on which any principal amounts
are to be distributed to the Class 1-AF Certificates, such amounts
shall be distributed to the Class 1-AF Certificates in the following
order of priority:
(A) the NAS Principal Distribution Amount to the Class 1-AF-6
Certificates, until the Certificate Principal Balance thereof is
reduced to zero,
(B) sequentially, to the Class 1-AF-1, Class 1-AF-2, Class
1-AF-3, Class 1-AF-4 and Class 1-AF-5 Certificates, in that order,
until the Certificate Principal Balances thereof are reduced to
zero, and
(C) to the Class 1-AF-6 Certificates without regard to the NAS
Principal Distribution Amount, until the Certificate Principal
Balance thereof is reduced to zero.
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(d) On each Distribution Date, the Principal Distribution Amount for
such Distribution Date with respect to Loan Group 2 and Loan Group 3 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):
(1) with respect to any Distribution Date prior to the
Adjustable Rate Stepdown Date or on which an Adjustable Rate Trigger
Event is in effect, sequentially:
(A) concurrently:
(i) from the Principal Distribution Amount for Loan Group 2,
sequentially:
(a) to the Class 2-AV Certificates, until the
Certificate Principal Balance thereof is reduced to zero, and
(b) to the Classes of Class 3-AV Certificates (after the
distribution of the Principal Distribution Amount for Loan
Group 3 as provided in clause (ii)(a) below), in the order and
priorities described in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero,
(ii) from the Principal Distribution Amount for Loan Group 3,
sequentially:
(a) to the Classes of Class 3-AV Certificates, in the
order and priorities set forth in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero,
and
(b) to the Class 2-AV Certificates (after the
distribution of the Principal Distribution Amount for Loan
Group 2 as provided in clause (i)(a) above), until the
Certificate Principal Balance thereof is reduced to zero,
(B) from the remaining Principal Distribution Amounts for Loan
Group 2 and Loan Group 3, sequentially:
(i) sequentially, to the Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class
BV Certificates, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero, and
(ii) any remainder as part of the Adjustable Rate Excess
Cashflow.
(2) with respect to any Distribution Date on or after the
Adjustable Rate Stepdown Date and so long as an Adjustable Rate
Trigger Event is not in effect,
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from the Principal Distribution Amounts for Loan Group 2 and Loan
Group 3, sequentially:
(A) concurrently:
(i) from the Principal Distribution Amount for Loan Group 2,
in an amount up to the Class 2-AV Principal Distribution Amount,
sequentially:
(a) to the Class 2-AV Certificates, until the
Certificate Principal Balance thereof is reduced to zero; and
(b) to the Classes of Class 3-AV Certificates (after the
distribution of the Principal Distribution Amount from Loan
Group 3 as provided in clause (ii)(a) below), in the amounts
and order of priority set forth in clause (3) below, until the
Certificate Principal Balances thereof are reduced to zero;
(ii) from the Principal Distribution Amount for Loan Group 3,
in an amount up to the Class 3-AV Principal Distribution Amount,
sequentially:
(a) to the Classes of Class 3-AV Certificates, in the
amounts and order of priority set forth in clause (3) below,
until the Certificate Principal Balances thereof are reduced
to zero; and
(b) to the Class 2-AV Certificates (after the
distribution of the Principal Distribution Amount from Loan
Group 2 as provided in clause (i)(a) above), until the
Certificate Principal Balance thereof is reduced to zero;
(B) from the remaining Principal Distribution Amounts for Loan
Group 2 and Loan Group 3, sequentially:
(i) sequentially, to the Class XX-0, Xxxxx XX-0, Xxxxx XX-0,
XX-0, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class BV
Certificates, in that order, the Adjustable Rate Subordinate Class
Principal Distribution Amount for each such Class, in each case until the
Certificate Principal Balance thereof is reduced to zero, and
(ii) any remainder as part of the Adjustable Rate Excess
Cashflow.
(3) On each Distribution Date on which any principal amounts
are to be distributed to the Class 3-AV Certificates, such amounts shall
be distributed sequentially, to the Class 3-AV-1, Class 3-AV-2 and Class
3-AV-3 Certificates, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero.
(e) With respect to any Distribution Date, any Fixed Rate Excess
Cashflow and, in the case of clauses (1) and (2) below, any Fixed Rate Credit
Comeback Excess Cashflow, shall be distributed to the Classes of Certificates in
the following order of priority, in each case
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first to the extent of the remaining Fixed Rate Credit Comeback Excess Cashflow,
if applicable, and second to the extent of the remaining Fixed Rate Excess
Cashflow:
(1) to the Holders of the Class or Classes of Class 1-AF
Certificates then entitled to receive distributions in respect of
principal, in an amount equal to the Extra Principal Distribution Amount
for Loan Group 1, payable to such Holders as part of the Principal
Distribution Amount for Loan Group 1 pursuant to Section 4.04(c) above;
provided, however, that Fixed Rate Credit Comeback Excess Cashflow (if
any) shall only be distributed pursuant to this clause if the Fixed Rate
Overcollateralization Target Amount has at any previous time been met;
(2) concurrently, to the Holders of each Class of Class 1-AF
Certificates, pro rata based on the Unpaid Realized Loss Amounts for each
such Class, in each case in an amount equal to the Unpaid Realized Loss
Amount for each such Class;
(3) to the Carryover Reserve Fund and from the Carryover
Reserve Fund to the Holders of each Class of Class 1-AF Certificates (in
the case of the Class 1-AF-1 Certificates after application of amounts
received under the Corridor Contract to cover Net Rate Carryover), pro
rata based on the Certificate Principal Balances thereof, to the extent
needed to pay any unpaid Net Rate Carryover for each such Class; and then
any Fixed Rate 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 1-AF Certificates
with respect to which there remains any unpaid Net Rate Carryover, pro
rata, based on the amount of such unpaid Net Rate Carryover;
(4) to the Holders of the Class or Classes of Class AV
Certificates and Adjustable Rate Subordinate Certificates then entitled to
receive distributions in respect of principal, payable to such Holders as
part of the Principal Distribution Amount as described under Section
4.04(d) above, in an amount equal to the Extra Principal Distribution
Amount for Loan Group 2 and Loan Group 3 not covered by the Adjustable
Rate Excess Cashflow, the Adjustable Rate Credit Comeback Excess Cashflow
or Net Swap Payments;
(5) concurrently, to the Holders of each Class of Class AV
Certificates, pro rata based on the Unpaid Realized Loss Amounts for such
Classes remaining undistributed after application of the Adjustable Rate
Excess Cashflow, the Adjustable Rate Credit Comeback Excess Cashflow and
Net Swap Payments, in each case in an amount equal to the Unpaid Realized
Loss Amount for each such Class remaining undistributed after application
of the Adjustable Rate Excess Cashflow, the Adjustable Rate Credit
Comeback Excess Cashflow and Net Swap Payments;
(6) sequentially, to the Holders of the Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8 and Class BV Certificates, in that order, in each case in an amount
equal to the Unpaid Realized Loss Amount for such Class remaining
undistributed after application of the Adjustable Rate
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Excess Cashflow, the Adjustable Rate Credit Comeback Excess Cashflow and
Net Swap Payments;
(7) to the Carryover Reserve Fund, in an amount equal to the
Required Carryover Reserve Fund Deposit (after giving effect to other
deposits and withdrawals 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 related
Class(es) of Certificates on such Distribution Date);
(8) to the Class CF Certificateholders, the Class CF
Distributable Amount for such Distribution Date; and
(9) to the Class A-R Certificates, any remaining amount;
(f) With respect to any Distribution Date, any Adjustable Rate
Excess Cashflow and, in the case of clauses (1) and (2) below and in the case of
the payment of Unpaid Realized Loss Amounts pursuant to clause (3) below, any
Adjustable Rate Credit Comeback Excess Cashflow, shall be distributed to the
Classes of Certificates in the following order of priority, in each case first
to the extent of the remaining Adjustable Rate Credit Comeback Excess Cashflow,
if applicable, and second to the extent of the remaining Adjustable Rate Excess
Cashflow:
(1) to the Holders of the Class or Classes of Class AV
Certificates and Adjustable Rate Subordinate Certificates then entitled to
receive distributions in respect of principal, in an aggregate amount
equal to the Extra Principal Distribution Amount for Loan Group 2 and Loan
Group 3, payable to such Holders of each such Class as part of the
Principal Distribution Amount for Loan Group 2 and Loan Group 3 pursuant
to Section 4.04(d) above;
(2) concurrently, to the Holders of each Class of Class AV
Certificates, pro rata based on the Unpaid Realized Loss Amounts for each
such Class, in each case in an amount equal to the Unpaid Realized Loss
Amount for each such Class;
(3) sequentially, to the Holders of the Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8 and Class BV Certificates, in that order, in each case first in an
amount equal to any Interest Carry Forward Amount for such Class and then
in an amount equal to the Unpaid Realized Loss Amount for such Class;
(4) to the Carryover Reserve Fund and from the Carryover
Reserve Fund to the Holders of each Class of Class AV Certificates and
Adjustable Rate Subordinate Certificates, 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 Adjustable Rate
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 AV Certificates and Adjustable Rate
Subordinate Certificates with respect to which there remains any unpaid
Net Rate Carryover (after the
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distribution based on Certificate Principal Balances), pro rata, based on
the amount of such unpaid Net Rate Carryover;
(5) if the Fixed Rate Overcollateralization Target Amount has
at any previous time been met, to the Holders of the Class or Classes of
Class 1-AF Certificates then entitled to receive distributions in respect
of principal, payable to such Holders as part of the Principal
Distribution Amount pursuant to Section 4.04(c) above, in an amount equal
to the Extra Principal Distribution Amount for Loan Group 1 not covered by
the Fixed Rate Excess Cashflow or Fixed Rate Credit Comeback Excess
Cashflow;
(6) concurrently, to the Holders of the Class 1-AF
Certificates, pro rata based on the Unpaid Realized Loss Amounts for such
Classes remaining undistributed after application of the Fixed Rate Excess
Cashflow and Fixed Rate Credit Comeback Excess Cashflow, in each case in
an amount equal to the Unpaid Realized Loss Amount for such Class
remaining undistributed after application of the Fixed Rate Excess
Cashflow and Fixed Rate Credit Comeback Excess Cashflow;
(7) to the Carryover Reserve Fund, in an amount equal to the
Required Carryover Reserve Fund Deposit (after giving effect to other
deposits and withdrawals 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 related
Class(es) of Certificates on such Distribution Date);
(8) 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;
(9) to the Class CV Certificateholders, the Class CV
Distributable Amount for such Distribution Date; and
(10) to the Class A-R Certificates, any remaining amount.
(g) On each Distribution Date on or prior to the Corridor Contract
Termination 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 1-AF-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 CF Certificates as provided in
Section 4.07(c).
(h) On each Distribution Date on or prior to the Swap Contract
Termination Date, following the deposits to the Swap Account pursuant to
4.04(b)(i) and Section 4.09 and the distributions described under Sections
4.04(e)(1) through (3) and 4.04(f)(1) through (4), the Swap Trustee shall
distribute amounts on deposit in the Swap Account 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;
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(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 Holders of each Class of Class AV
Certificates, any remaining Current Interest and Interest Carry Forward
Amount, pro rata based on their respective entitlements;
(4) sequentially, to the Holders of the Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8 and Class BV Certificates, in that order, in each case in an amount
equal to any remaining Current Interest and Interest Carry Forward Amount
for each such Class;
(5) to the Holders of the Class or Classes of Class AV
Certificates and Adjustable Rate Subordinate Certificates then entitled to
receive distributions in respect of principal, in an aggregate amount
equal to the Adjustable Rate Overcollateralization Deficiency Amount
remaining unpaid following the distributions described under Section
4.04(f), payable to such Holders of each such Class in the same manner in
which the Extra Principal Distribution Amount in respect of Loan Group 2
and Loan Group 3 would be distributed to such Classes as described under
Section 4.04(f);
(6) to the Holders of each Class of Class AV Certificates and
Adjustable Rate Subordinate 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;
(7) concurrently, to the Holders of each Class of Class AV
Certificates, pro rata, based on the remaining Unpaid Realized Loss
Amounts for such Classes, in each case in an amount equal to the remaining
Unpaid Realized Loss Amount for each such Class; and
(8) sequentially, to the Holders of the Class MV-1, Class
MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class
MV-8 and Class BV Certificates, in that order, in each case in an amount
equal to the remaining Unpaid Realized Loss Amount for each such Class.
On each Distribution Date on or prior to the Swap Contract
Termination Date, following the distributions described under Sections
4.04(e)(4) through (9) and 4.04(f)(5) through (7) and following the deposit to
the Swap Account pursuant to Section 4.04(f)(8), the Swap Trustee shall
distribute amounts on deposit in the Swap Account to the Swap Contract
Administrator for payment to the Swap Counterparty, any Swap Termination Payment
due to a Swap Counterparty Trigger Event payable to the Swap Counterparty with
respect to such Distribution Date.
(i) To the extent that a Class of Interest Bearing Certificates
receives interest in excess of the applicable Net Rate Cap, such interest is
paid pursuant to Section 4.04(e) and/or 4.04(f), such interest shall be deemed
to have been paid to the Carryover Reserve Fund and then
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paid by the Carryover Reserve Fund to those Certificateholders, and such
interest is paid pursuant to Section 4.04(h), 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 CF
Certificates.
(j) 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) with respect to Loan Group 1 shall
be allocated to the Class PF Certificates. 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) with respect
to Loan Group 2 and Loan Group 3 shall be allocated to the Class PV
Certificates. On the Class PF Principal Distribution Date, the Trustee shall
make the $100.00 distribution to the Class PF Certificates as specified in
Section 3.08. On the Class PV Principal Distribution Date, the Trustee shall
make the $100.00 distribution to the Class PV Certificates as specified in
Section 3.08.
(k) On each Distribution Date, the Trustee shall allocate any
Applied Realized Loss Amount for Loan Group 1 to reduce the Certificate
Principal Balances of the Class 1-AF Certificates, on a pro rata basis according
to their respective Certificate Principal Balances, until the Certificate
Principal Balances of such Classes have been reduced to zero.
On each Distribution Date, the Trustee shall allocate any Applied
Realized Loss Amount for Loan Group 2 and Loan Group 3 to reduce the Certificate
Principal Balances of the Class BV, Class MV-8, Class MV-7, Class MV-6, Class
MV-5, Class MV-4, Class MV-3, Class MV-2 and Class MV-1 Certificates,
sequentially, in that order, in each case until the Certificate Principal
Balance thereof is reduced to zero. After the Certificate Principal Balances of
the Adjustable Rate Subordinate Certificates have been reduced to zero, (i) the
Trustee shall allocate any Applied Realized Loss Amount for Loan Group 2 to
reduce the Certificate Principal Balance of the Class 2-AV Certificates, until
the Certificate Principal Balance thereof is reduced to zero, and (ii) the
Trustee shall allocate any Applied Realized Loss Amount for Loan Group 3 to
reduce the Certificate Principal Balances of the Class 3-AV Certificates, on a
pro rata basis according to their respective Certificate Principal Balances,
until the Certificate Principal Balances of such Classes have been reduced to
zero.
(l) On each Distribution Date, the Trustee shall allocate the amount
of the Subsequent Recoveries for Loan Group 1, if any, to increase the
Certificate Principal Balances of the Class 1-AF 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.
On each Distribution Date, the Trustee shall allocate the amount of
the Subsequent Recoveries for Loan Group 2 and Loan Group 3, if any, first to
increase the Certificate Principal Balances of the related Class AV 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
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Realized Loss Amount of such Class, and then to increase the Certificate
Principal Balance of the Adjustable Rate Subordinate Certificates to which
Applied Realized Loss Amounts have been previously allocated, sequentially, to
the Class MV-1, Class MV-2, Class MV-3, Class MV-4, Class MV-5, Class MV-6,
Class MV-7, Class MV-8 and Class BV Certificates, in that order, in each case by
not more than the amount of the Unpaid Realized Loss Amount of such Class.
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.
(m) 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 Class 1-AF Insurer shall be made by wire transfer of immediately
available funds to the following account, unless the Class 1-AF Insurer notifies
the Trustee in writing: Account Name: Ambac Assurance Corporation, Citibank, NA,
ABA # 000000000, DDA# 40609486, RE: XX0000XX XXXXX 2006-13.
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 (including, without limitation,
the actual mortgage rate for each Credit Comeback Loan) 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.
(n) On the the Distribution Date in January 2037, after giving
effect to the distribution of all available funds, all amounts on deposit in the
Fixed Rate Final Maturity Reserve Fund will be distributed in the following
order of priority:
(1) concurrently, to the Classes of Class 1-AF Certificates,
pro rata, until the aggregate Certificate Principal Balance thereof
is reduced to zero; and
(2) to the Class CF Certificates, all remaining amounts.
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On the Distribution Date in January 2037, after giving effect to the
distribution of all available funds, all amounts on deposit in the Adjustable
Rate Final Maturity Reserve Fund will be distributed in the following order of
priority:
(1) concurrently, to the Classes of Class AV Certificates, pro
rata, until the aggregate Certificate Principal Balance thereof is
reduced to zero;
(2) sequentially, to the Class MV-1, Class MV-2, Class MV-3,
Class MV-4, Class MV-5, Class MV-6, Class MV-7, Class MV-8 and Class
BV Certificates, in that order, in each case until the Certificate
Principal Balance thereof is reduced to zero; and
(3) to the Class CV Certificates, all remaining amounts.
If the Mortgage Loans are purchased in connection with an optional
termination of the Trust Fund pursuant to Section 9.01, the funds on deposit in
the Fixed Rate Final Maturity Reserve Fund and the Adjustable Rate Final
Maturity Reserve Fund shall be used to make payments to the Class CF and Class
CV Certificates, respectively, after application of the purchase price pursuant
to the exercise of the optional termination.
Section 4.05 Monthly Statements to Certificateholders.
(a) Concurrently with each distribution on a Distribution Date, the
Trustee will forward by mail to the Class 1-AF Insurer and each Rating Agency
and make available to Certificateholders 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. The Trustee
shall send a copy of each statement provided pursuant to this Section 4.05 to
each Rating Agency and the NIM Insurer. The Trustee may make the above
information available to Certificateholders via the Trustee's website at
xxxx://xxx.xxxxxxxxxxxxxxxxxxxx.xxx.
(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.
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(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;
(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 Class 1-AF Policy; Rights of the Class 1-AF 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 Class 1-AF 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 Class 1-AF Policy, by 12:00 p.m., New York time on such
third Business Day. The Trustee's responsibility for delivering the notice to
the Class 1-
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AF 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 1-AF Certificate has been voided in whole or in part as a preference
payment under applicable bankruptcy law, the Trustee shall (i) promptly notify
the Class 1-AF Insurer and (ii) comply with the provisions of the Class 1-AF
Policy, to obtain payment by the Class 1-AF Insurer of such voided scheduled
payment. In addition, the Trustee shall mail notice to all Holders of the Class
1-AF 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 Class 1-AF Policy, a copy of which shall be made
available to such Holders by the Trustee. The Trustee shall furnish to the Class
1-AF Insurer its records listing the payments on the affected Class 1-AF
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 1-AF Certificates (the
"Class 1-AF Policy Payments Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Class 1-AF Policy Payments
Account shall be an Eligible Account. The Trustee shall deposit any amount paid
under the Class 1-AF Policy into the Class 1-AF Policy Payments Account and
distribute such amount only for the purposes of making the payments to Holders
of the Class 1-AF Certificates, in respect of the related Deficiency Amount for
which the related claim was made under the Class 1-AF Policy. Such amounts shall
be allocated by the Trustee to Holders of Class 1-AF 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 1-AF Certificates from funds in the Class 1-AF Policy
Payments Account shall be noted as provided in subsection (e) below. Funds held
in the Class 1-AF Policy Payments Account shall not be invested by the Trustee.
(d) Any funds received from the Class 1-AF Insurer for deposit into
the Class 1-AF Policy Payments Account pursuant to the Class 1-AF Policy in
respect of a Distribution Date or otherwise as a result of any claim under the
Class 1-AF 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 Class 1-AF Policy. Funds received by the Trustee
as a result of any claim under the Class 1-AF Policy shall be used solely for
payment to the Holders of the Class 1-AF 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 or the Trust Fund.
Any funds remaining in the Class 1-AF Policy Payments Account on the first
Business Day after each Distribution Date shall be remitted promptly to the
Class 1-AF Insurer in accordance with the instructions set forth in Section
4.04(m).
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(e) The Trustee shall keep complete and accurate records in respect
of (i) all funds remitted to it by the Class 1-AF Insurer and deposited into the
Class 1-AF Policy Payments Account and (ii) the allocation of such funds to (A)
payments of interest on and principal in respect of any Class 1-AF Certificates
and (B) the amount of funds available to make distributions on the Class 1-AF
Certificates pursuant to Sections 4.04(a), (b) and (d). The Class 1-AF 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 1-AF
Certificate by its acceptance of the Class 1-AF Certificate agrees, that,
without the need for any further action on the part of the Class 1-AF Insurer or
the Trustee, to the extent the Class 1-AF Insurer makes payments, directly or
indirectly, on account of principal of or interest on any Class 1-AF
Certificates, the Class 1-AF Insurer will be fully subrogated to the rights of
the Holders of such Class 1-AF Certificates to receive such principal and
interest from the Trust Fund. The Holders of the Class 1-AF Certificates, by
acceptance of the Class 1-AF Certificates, assign their rights as Holders of the
Class 1-AF Certificates to the extent of the Class 1-AF Insurer's interest with
respect to amounts paid under the Class 1-AF Policy. Anything herein to the
contrary notwithstanding, solely for purposes of determining the Class 1-AF
Insurer's rights, as applicable, as subrogee for payments distributable pursuant
to Section 4.04, any payment with respect to distributions to the Class 1-AF
Certificates which is made with funds received pursuant to the terms of the
Class 1-AF Policy shall not be considered payment of the Class 1-AF 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 1-AF Certificates within the meaning of Article IV.
(g) Upon its becoming aware of the occurrence of an Event of
Default, the Trustee shall promptly notify the Class 1-AF Insurer of such Event
of Default.
(h) The Trustee shall promptly notify the Class 1-AF 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 1-AF Certificates as to which it has actual
knowledge. Each Holder of a Class 1-AF Certificate, by its purchase of Class
1-AF Certificates, and the Trustee hereby agrees that the Class 1-AF Insurer (so
long as no Class 1-AF 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 Class 1-AF
Insurer shall be subrogated to the rights of the Trustee and each Holder of a
Class 1-AF 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.
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(i) The Master Servicer shall designate a Class 1-AF Insurer Contact
Person who shall be available to the Class 1-AF Insurer to provide reasonable
access to information regarding the Mortgage Loans. The initial Class 1-AF
Insurer Contact Person is to the attention of Secondary Marketing.
(j) The Trustee shall surrender the Class 1-AF Policy to the Class
1-AF Insurer for cancellation upon the reduction of the Certificate Principal
Balance of the Class 1-AF Certificates to zero.
(k) The Trustee shall send to the Class 1-AF Insurer the reports
prepared pursuant to Sections 3.17 and 3.18 and the statements prepared pursuant
to Section 4.05, as well as any other statements or communications sent to
Holders of the Class 1-AF Certificates, in each case at the same time such
reports, statements and communications are otherwise sent.
(l) For so long as none of the following events shall have occurred
(each such event, a "Class 1-AF Insurer Default"), each Holder of a Class 1-AF
Certificate of that Class agrees that the Class 1-AF Insurer shall be treated by
the Depositor, the Master Servicer and the Trustee as if the Class 1-AF Insurer
were the Holder of all of that Class of Class 1-AF 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 that Class of Class 1-AF Certificates hereunder: (i) the Class
1-AF Insurer fails to make a required payment under the Class 1-AF Policy, (ii)
a proceeding in bankruptcy shall have been instituted by the Class 1-AF Insurer,
or (iii) a decree or order for relief shall have been issued in respect of a
proceeding in bankruptcy against the Class 1-AF Insurer and shall remain
unstayed for a period of 60 consecutive days.
(m) With respect to this Section 4.06, the terms "Receipt" and
"Received" shall mean actual delivery to the Class 1-AF 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 certificate given
under the Class 1-AF 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 Class 1-AF 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 1-AF
Certificateholders shall also be sent at such time to the Class 1-AF Insurer at
the notice address set forth in Section 10.05.
(o) The Class 1-AF Insurer shall be an express third party
beneficiary of this Agreement for the purpose of enforcing the provisions hereof
to the extent of the Class 1-AF 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 Class 1-AF Policy, in the case of the Class 1-AF Certificates.
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(q) Any remittances to the Class 1-AF Insurer pursuant to Section
4.04 shall be made by the Trustee in accordance with the following wiring
instructions (or such other wiring instructions as may be provided to the
Trustee by the Class 1-AF Insurer in writing): Ambac Assurance Corporation,
Citibank, N.A., ABA #000000000, DDA # 40609486, Re: Policy # AB1013BE.
Section 4.07 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(g) shall be distributed to the Class CF 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(g) 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 CF 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 CF 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 CF 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.
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(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 made in accordance with this Section
4.07. The Carryover Reserve Fund shall not constitute an asset of any
REMIC created hereunder. The Class CF and Class CV Certificates shall
evidence ownership of the Carryover Reserve Fund for federal tax purposes.
Section 4.08 Credit Comeback Excess Account.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Certificateholders and the Class 1-AF
Insurer, the Credit Comeback Excess Account. The Credit Comeback Excess 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 held by the Trustee pursuant to this
Agreement.
(b) On each Distribution Date, the Trustee shall deposit all Credit
Comeback Excess Amounts in the Credit Comeback Excess Account. The Trustee shall
make withdrawals from the Credit Comeback Excess Account to make distributions
as and to the extent required by Section 4.04.
(c) Funds in the Credit Comeback Excess Account with respect to Loan
Group 1 may be invested in Permitted Investments at the written direction of the
Majority Holder of the Class CF Certificates (voting as a single Class) and
Funds in the Credit Comeback Excess Account with respect to Loan Group 2 and
Loan Group 3 may be invested in Permitted Investments at the written direction
of the Majority Holder of the Class CV Certificates (voting as a single Class),
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 Credit Comeback Excess Account, 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
Credit Comeback Excess Account shall be invested by the Trustee in The Bank of
New York cash reserves. Any net investment earnings on amounts in the Credit
Comeback Excess Account with respect to Loan Group 1 shall be payable pro rata
to the Holders of the Class CF Certificates in accordance with their Percentage
Interests and any net investment earnings on amounts in the Credit Comeback
Excess Account with respect to Loan Group 2 and Loan Group 3 shall be payable
pro rata to the Holders of the Class CV Certificates in accordance with their
Percentage Interests. Any losses incurred in the Credit Comeback Excess Account
in respect of any such investments shall be charged against amounts on deposit
in the Credit Comeback Excess Account (or such investments) immediately as
realized.
(d) 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
Credit Comeback Excess Account and made in accordance with this Section 4.08.
The Credit Comeback Excess Account shall not constitute an asset of any REMIC
created hereunder. The Class CF and Class CV
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Certificates shall evidence ownership of so much of the Credit Comeback Excess
Account as is attributable to Fixed Rate Credit Comeback Excess Cashflow and
Adjustable Rate Credit Comeback Excess Cashflow, respectively, 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 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 Swap 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 CWABS, Inc., Asset-Backed
Certificates, Series 2006-13." 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 of priority described under Section 4.04(h). For
federal income tax purposes, the Swap Trust, including the Swap Account, shall
be owned by the Class CV Certificates.
On each Distribution Date, the Trustee shall make a deposit to the
Swap Account pursuant to Section 4.04(b)(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 for Loan
Group 2 and Loan Group 3, pro rata on the basis of those respective Principal
Remittance Amounts, 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 Final Maturity Reserve Trust and Final Maturity Reserve
Fund.
(a) On the Closing Date, there is hereby established a separate
trust (the "Final Maturity Reserve Trust"), the assets of which shall consist of
the Final Maturity Reserve Funds.
(b) On the Closing Date, the Final Maturity Reserve Trustee shall
establish and maintain in its name, in trust for the benefit of the Holders of
the Interest-Bearing Certificates and the Class 1-AF Insurer, the Fixed Rate
Final Maturity Reserve Fund and the Adjustable Rate Final Maturity Reserve Fund
and shall deposit $1,000 into each fund upon receipt from or on behalf of the
Depositor of such amount. Each of Final Maturity 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
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held by the Trustee pursuant to this Agreement. Neither Final Maturity Reserve
Fund will constitute an asset of the Trust Fund or any REMIC created hereunder.
The Final Maturity Reserve Trustee shall make deposits to and
withdrawals from the Fixed Rate Final Maturity Reserve Fund and the Adjustable
Rate Final Maturity Reserve Fund as specified in Section 4.04.
Funds in the Fixed Rate Final Maturity Reserve Fund and the
Adjustable Rate Final Maturity Reserve Fund may be invested in Permitted
Investments at the direction of the Holders of the Class CF and Class CV
Certificates, respectively, 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 Final Maturity Reserve
Funds, 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 Final Maturity
Reserve Trustee, for the benefit of the Holders of the Certificates and the
Class 1-AF Insurer. In the absence of such written direction, all funds in the
applicable Final Maturity Reserve Fund shall be invested by the Final Maturity
Reserve Trustee in The Bank of New York cash reserves. Any net investment
earnings on such amounts shall be retained therein until withdrawn as provided
in Section 3.08. Any losses incurred in a Final Maturity Reserve Fund in respect
of any such investments shall be charged against amounts on deposit in that
Final Maturity Reserve Fund (or such investments) immediately as realized. The
Final Maturity Reserve 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
each Final Maturity Reserve Fund and made in accordance with this Section 4.10.
The Final Maturity Reserve Trustee may withhold from the amounts
withdrawn from the Final Maturity Reserve Funds pursuant to Section 4.04 the
amount of any taxes that it is authorized to retain pursuant to the third
paragraph of Section 8.11. In addition, the Final Maturity Reserve Trustee may
from time to time make withdrawals from each Final Maturity Reserve Fund for the
following purposes:
(i) to withdraw any amount deposited in such Final Maturity Reserve
Fund and not required to be deposited therein; and
(ii) to clear and terminate such Final Maturity Reserve Fund upon
the termination of this Agreement pursuant to Section 9.01.
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-00, Xxxxxxx X, Xxxxxxx X, Xxxxxxx X and Exhibit E. The
Certificates shall be issuable
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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:
Integral Multiples Original
Minimum in Excess of Certificate
Class Denomination Minimum Principal Balance
-------------------------------------------------------------------------------
1-AF-1 $20,000 $1 $128,246,000
1-AF-2 $20,000 $1 $31,277,000
1-AF-3 $20,000 $1 $91,851,000
1-AF-4 $20,000 $1 $67,829,000
1-AF-5 $20,000 $1 $77,922,000
1-AF-6 $20,000 $1 $45,000,000
2-AV $20,000 $1 $399,884,000
3-AV-1 $20,000 $1 $237,306,000
3-AV-2 $20,000 $1 $238,274,000
3-AV-3 $20,000 $1 $59,936,000
MV-1 $20,000 $1 $48,600,000
MV-2 $20,000 $1 $41,400,000
MV-3 $20,000 $1 $24,600,000
MV-4 $20,000 $1 $22,200,000
MV-5 $20,000 $1 $21,000,000
MV-6 $20,000 $1 $19,800,000
MV-7 $20,000 $1 $18,600,000
MV-8 $20,000 $1 $16,800,000
BV $20,000 $1 $12,000,000
A-R $99.95(1) N/A $100
CF N/A N/A N/A
CV N/A N/A N/A
PF N/A N/A $100
PV N/A N/A $100
(1) The Tax Matters Person Certificate may be issued in a denomination of
$0.05.
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 form set forth in Exhibit J-2 (a "Transferor Certificate") and
(i) deliver a letter in substantially the form of either Exhibit K (in the case
of the Class PF, Class PV, Class CF and Class CV 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 or Class P
Certificate to a transferee that is formed with the purpose of issuing notes
backed by such Class C or Class P Certificate, as the case may
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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 Co-Trustee, 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 Co-Trustee, the Trustee, the Depositor, the Trust Fund,
each Seller, the Master Servicer 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 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-Restricted Certificate to
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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.
No transfer of a Certificate (other than a transfer of a 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 to the effect that such transferee is not a Plan, or (ii) a
representation that the purchase and holding of the Certificate satisfies the
requirements for exemptive relief under XXXX 00-00, XXXX 00-0, XXXX 00-00, XXXX
00-00, XXXX 96-23 or a similar exemption. In the event that such representation
letter 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 Certificate. In the event that such representation
is violated, such transfer or acquisition shall be void and of no effect. A
transferee of a Certificate that is also an ERISA-Restricted Certificate will
have satisfied the requirements of this paragraph if it satisfies the
requirements of clause (i)(x) or (i)(y) of the first sentence of the preceding
paragraph.
(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
152
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 a certificate (a "Transferor Certificate") of the transferor in the
form attached hereto as Exhibit J-1 and 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 1-AF
Certificates, the Class 1-AF 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 Class 1-AF
Insurer and any agent of the Master Servicer, the Trustee, the NIM Insurer or
the Class 1-AF 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 or the
Class 1-AF Insurer or any agent of the Master Servicer, the Trustee, the NIM
Insurer or the Class 1-AF 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
155
(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 any 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, 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 Class 1-AF 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 and the NIM
Insurer and the written confirmation from each Rating Agency (which confirmation
shall be furnished to the Depositor, the Trustee 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 Class
1-AF Policy). Any such determination pursuant to clause (i) of the preceding
sentence permitting the
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resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. 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 Class 1-AF
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 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, 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 Class 1-AF Insurer or the Depositor, or to the Trustee, the
NIM Insurer, the Class 1-AF Insurer and
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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 Class
1-AF 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 nor 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 Class 1-AF Insurer, which consent shall not be unreasonably
withheld), by notice in writing to the Master Servicer (with a copy to each
Rating Agency and to 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 Depositor is required to file Exchange
Act Reports with respect to the Trust Fund, the Master Servicer shall
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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 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 reasonably acceptable to the NIM Insurer (as evidenced by
the prior written consent of the NIM Insurer), or (ii) if it is unable for 60
days to appoint a successor servicer reasonably 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 Class 1-AF
Policy, in the case of the Class 1-AF 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 Mae and Xxxxxxx Mac approved
seller/servicer in good standing, that has been approved by the Pool Insurer if
required, 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 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
Class 1-AF Policy, in the case of the Class 1-AF Certificates). No appointment
of a successor to the Master Servicer hereunder shall be effective until (i) the
Trustee shall have consented thereto, (ii) written notice of such proposed
appointment shall have been provided by the Trustee to each Certificateholder
and the Class 1-AF 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 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
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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 Class 1-AF 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 AND THE CO-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 (or the Co-Trustee, to the extent provided in this Agreement)
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 grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly 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
grossly 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
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less than 25% of the Voting Rights of such Class relating to the time,
method and place 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.
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
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
require reasonable indemnity against such expense, or liability from the
NIM Insurer or such Certificateholders as a condition to taking any such
action;
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(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 Swap 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, as the case may be, 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.
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
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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 its
capacity as Trustee 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
respective ratings of any Class of Certificates (without regard to the Class
1-AF Policy, in the case of the Class 1-AF 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
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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 Class 1-AF 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 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 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 NIM Insurer, by written
instrument, in triplicate, one copy of which instrument shall be delivered to
the Trustee, one copy
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of which shall be delivered to the Master Servicer and one copy of which shall
be delivered to the successor trustee.
The 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 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.
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. In addition,
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 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 NIM Insurer and its appointment shall not adversely affect the
then-current ratings of the Certificates (without regard to the Class 1-AF
Policy, in the case of the Class 1-AF Certificates) and has provided 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 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 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.
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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 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, 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.
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
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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 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
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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 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
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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 that occurred ratably within each Loan Group.
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 all 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, 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 CF and Class CV Certificateholders and the Swap Trust, including the Swap
Account shall be treated as owned by the Class CV 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 such
Holders to make payments to, the Carryover Reserve Fund or the Swap Trust,
including the Swap Account, 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 CF Certificates, (ii) the Holders of the Class CF and
Class CV Certificates in respect of any Net Rate Carryover distributed pursuant
to Sections 4.04(e)(4) and 4.04(f)(4), and (iii) 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 CV
Certificates. 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, (i) the Trustee shall
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assume that the Corridor Contract has a value of $10,000 and (ii) the Trustee
shall treat the $2,225,000 upfront amount received by CHL from the Swap
Counterparty in connection with the execution of the Confirmation as an
additional amount paid by the Certificateholders for the Master REMIC regular
interests. Any differences in the distributions to a Certificateholder (positive
or negative) that would result from the application of the Strip REMIC Cap
rather than the applicable Net Rate Cap shall be treated by the Trustee as
reconciled among the Certificates by swap payments made pursuant to notional
principal contracts entered into among the Certificateholders.
The Trustee shall treat the entitlement to Credit Comeback Excess
Amounts as owned by the Holders of the Class C Certificates and not as an asset
of, or interest in, any REMIC created hereunder. Further, the Trustee shall
treat any payments of Credit Comeback Excess Amounts to Persons other than the
Holders of the Class C Certificates as payments made by the Holders of the Class
C Certificates pursuant to a credit enhancement contract under Treasury
Regulation 1.860G-2(c). The Trustee shall also treat any amount payable to a
Class C Certificate with respect to an STR-F-Accrual or STR-CV-OC Interest as
deposited into the Carryover Reserve Fund. To the extent the amount payable with
respect to the Swap Contract exceeds the amount payable with respect to the
Class C Certificates, the Trustee, for federal income tax purposes, shall treat
such excess as Realized Losses from Mortgage Loans and to the extent such
Realized Losses (if they had occurred) would be allocated to a
Certificateholder, the Trustee shall treat such amount as first payable to the
Certificateholder as principal and as then payable by the Certificateholder with
respect to a notional principal contract.
The Trustee shall treat the Fixed Rate Final Maturity Reserve Fund
as an outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
that is owned by the Holders of the Class CF Certificates and that is not an
asset of any REMIC created hereunder. The Trustee shall treat the rights of the
holders of the Class 1-AF Certificates to receive payments from the Fixed Rate
Final Maturity Reserve Fund as rights in forward purchase contracts entered into
with the Holders of the Class CF Certificates. The Trustee shall treat any
monies set aside in the Fixed Rate Final Maturity Reserve Fund beginning on the
Distribution Date in August 2016 as paid first to the Class CF Certificates,
then deposited in the Fixed Rate Final Maturity Reserve Fund. Any monies
received by the Holders of the Class 1-AF Certificates from the Fixed Rate Final
Maturity Reserve Fund will be treated as monies paid by the Holders of the Class
CF Certificates to acquire the Class 1-AF Certificates receiving such monies.
Thus, the Class 1-AF Certificates and the Class CF Certificates shall be treated
as representing ownership of not only a Master REMIC regular interest, but also
ownership of an interest in a forward purchase contract.
The Trustee shall treat the Adjustable Rate Final Maturity Reserve
Fund as an outside reserve fund within the meaning of Treasury Regulation
1.860G-2(h) that is owned by the Holders of the Class CV Certificates and that
is not an asset of any REMIC created hereunder. The Trustee shall treat the
rights of the holders of the Class AV and Adjustable Rate Subordinate
Certificates to receive payments from the Adjustable Rate Final Maturity Reserve
Fund as rights in forward purchase contracts entered into with the Holders of
the Class CV Certificates. The Trustee shall treat any monies set aside in the
Adjustable Rate Final Maturity Reserve Fund beginning on the Distribution Date
in August 2016 as paid first to the Class CV Certificates, then deposited in the
Adjustable Rate Final Maturity Reserve Fund. Any monies
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received by the Holders of the Class AV and Adjustable Rate Subordinate
Certificates from the Adjustable Rate Final Maturity Reserve Fund will be
treated as monies paid by the Holders of the Class CV Certificates to acquire
the Class AV and Adjustable Rate Subordinate Certificates receiving such monies.
Thus, the Class AV and Adjustable Rate Subordinate Certificates and the Class CV
Certificates shall be treated as representing ownership of not only a Master
REMIC regular interest, but also ownership of an interest in a forward purchase
contract.
Section 8.12 Co-Trustee.
(a) The Co-Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Co-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 required by this Agreement.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Co-Trustee shall take action as it deems
appropriate to have the instrument corrected.
(b) No provision of this Agreement shall be construed to relieve the
Co-Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly 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) the duties and obligations of the Co-Trustee shall be
determined solely by the express provisions of this Agreement with the
exception of Section 8.10, the Co-Trustee shall not be liable,
individually or as Co-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 Co-Trustee and the Co-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 Co-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; and
(2) the Co-Trustee shall not be liable, individually or as
Co-Trustee, for an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Co-Trustee, unless the Co-Trustee
was grossly negligent or acted in bad faith or with willful misfeasance.
(c) Except as otherwise provided in paragraph (b) above:
(1) the Co-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;
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(2) the Co-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 Co-Trustee shall not be liable, individually or as
Co-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) the Co-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;
(5) the Co-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; and
(6) the Co-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.
(d) The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be, and the Co-Trustee
assumes no responsibility for their correctness. The Co-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. The
Co-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.
(e) The Co-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 Co-Trustee.
(f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-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 Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage
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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
Co-Trustee and any director, officer, employee or agent of the Co-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 Co-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 Co-Trustee's duties hereunder or by reason of
reckless disregard of the Co-Trustee's obligations and duties hereunder and (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 Co-Trustee hereunder.
(g) The Co-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
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (without regard to the Class 1-AF Policy, in the case of the Class
1-AF Certificates) (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 8.12 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 Co-Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Co-Trustee shall resign immediately in
the manner and with the effect specified in paragraph (h) below. The corporation
or national banking association serving as Co-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.
(h) The Co-Trustee may at any time resign and be discharged from the
trusts hereby created by giving 30 days prior written notice of resignation to
the Trustee, the Depositor and the Master Servicer. Upon such resignation the
Trustee (x) may appoint a successor Co-Trustee meeting the requirements in
paragraph (g) above and acceptable to the Master Servicer and the NIM Insurer
(in their sole discretion), so long as such Co-Trustee executes and delivers to
the other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.
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Section 8.13 Access to Records of the Trustee.
The Trustee and the Co-Trustee shall afford the Sellers, the
Depositor, the Master Servicer, the NIM Insurer, the Class 1-AF Insurer and each
Certificate Owner upon reasonable notice during normal business hours access to
all records maintained by the Trustee or the Co-Trustee in respect of its duties
under this Agreement and access to officers of the Trustee and the Co-Trustee
responsible for performing its duties. Upon request, the Trustee or Co-Trustee
shall furnish the Depositor, the Master Servicer, the NIM Insurer, the Class
1-AF Insurer and any requesting Certificate Owner with its most recent financial
statements. The Trustee and the Co-Trustee shall cooperate fully with the
Sellers, the Master Servicer, the Depositor, the NIM Insurer, the Class 1-AF
Insurer and the Certificate Owner for review and copying any books, documents,
or records requested with respect to the Trustee's and the Co-Trustee's
respective duties under this Agreement. The Sellers, the Depositor, the Master
Servicer, the Class 1-AF Insurer and the Certificate Owner shall not have any
responsibility or liability for any action for failure to act by the Trustee or
the Co-Trustee and are not obligated to supervise the performance of the Trustee
or the Co-Trustee under this Agreement or otherwise.
Section 8.14 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 Class 1-AF Insurer or the NIM Insurer, the Trustee shall proceed to
protect and enforce its rights and the rights of the Certificateholders, the
Class 1-AF 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 Class 1-AF
Insurer and the Certificateholders.
ARTICLE IX.
TERMINATION
Section 9.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans.
Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Sellers, the Trustee and the Co-Trustee created hereby shall terminate upon the
earlier of (a) the purchase by the Master Servicer or 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 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
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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 and (b) 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 Possible Maturity Date. If any such termination will
result in a Deficiency Amount on the Class 1-AF Policy, the consent of the Class
1-AF 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, (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 Class
1-AF Insurer otherwise consents, the purchase price for such Mortgage Loans and
REO Properties shall result in a final distribution on the Class 1-AF
Certificates and the Class 1-AF Insurer that is sufficient (x) to pay such Class
1-AF Certificates in full (without the need of any Insured Payment) and (y) to
pay any amounts due and payable to the Class 1-AF Insurer pursuant to the terms
hereof and pursuant to the Class 1-AF 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 earlier of (i) the Swap
Contract Termination Date, (ii) the reduction of the aggregate Certificate
Principal Balance of the Swap Certificates to zero and (iii) the termination of
this Agreement.
The Final Maturity Reserve Trust shall terminate on the earlier of
(i) the January 2037 Distribution Date, (ii) the reduction of the aggregate
Certificate Principal Balance of the Interest-Bearing Certificates to zero and
(iii) the termination of this Agreement.
Section 9.02 Final Distribution on the Certificates.
If on any Determination Date, (i) 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, the Master Servicer
shall direct the Trustee to send a final distribution notice promptly to each
related Certificateholder and the Class 1-AF Insurer or (ii) the Trustee
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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 Class 1-AF 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. If the
Terminator elects to terminate pursuant to clause (a) of Section 9.01, at least
20 days prior to the date notice is to be mailed to the affected
Certificateholders, such electing party shall notify the Depositor, the Class
1-AF Insurer and the Trustee of the date such electing party intends to
terminate and of the applicable repurchase price of the related Mortgage Loans
and REO Properties.
Notice of any termination, 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 (a) 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, (b) the
amount of such final distribution, (c) the location of the office or agency at
which such presentation and surrender must be made, and (d) 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 Terminator will give such notice to each Rating
Agency at the time such notice is given to the affected Certificateholders.
In the event such notice is given, the Master Servicer shall cause
all funds in the Certificate Account to be remitted to the Trustee for deposit
in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit and the receipt by the Trustee of a
Request for File Release therefor, the Co-Trustee shall promptly release to the
Master Servicer the Mortgage Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each affected Class and
the Class 1-AF Insurer the amounts allocable to such Certificates and the Class
1-AF 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 on the
final Distribution Date and in proportion to their 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.
In the event that any affected Certificateholders shall not
surrender related 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
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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 Class 1-AF Insurer, with respect to any unpaid Class 1-AF
Reimbursement Amounts (only to the extent of amounts received in respect of the
Group 1 Mortgage Loans), 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, 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, 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;
(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 for cash; and
(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.
(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
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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.
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, the Trustee and the Co-Trustee with the
consent of the Class 1-AF Insurer (such consent not to be unreasonably withheld)
and the NIM Insurer, without the consent of any of the 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, 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 Class 1-AF Policy, in the case of the Class 1-AF 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 Co-Trustee, the Depositor, the Master Servicer and
the Sellers with the consent of the NIM 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
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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, the Trustee and the Co-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 Class 1-AF 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 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 provision of this Agreement, the Class
1-AF Insurer's consent shall be deemed given to any proposed amendment to this
Agreement if it shall not have objected to such proposed amendment within two
Business Days of receipt of notice of the proposed amendment.
Notwithstanding any contrary provision 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 Class 1-AF 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.
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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.
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.
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 Class 1-AF 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.
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The Depositor for the benefit of the Certificateholders, 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 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 Co-Trustee pursuant to Section
2.01 have been delivered to the Co-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.
(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 Co-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 Co-Trustee.
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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 Co-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 Class 1-AF Insurer, the party discovering such breach
shall give prompt written notice to the others, to the Class 1-AF 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 Swap Counterparty with respect to each of
the following of which it has actual knowledge:
(1) Any material change or amendment to this Agreement;
(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 and 3.12; and
(5) The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency 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,
CWABS, 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 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: Xxxxx X. Xxxxxxx, or such other address as may be hereafter furnished
to the Depositor, the Master Servicer 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 and the Trustee by the Sellers in writing; (iv) 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
186
Master Servicer and the Trustee by the Sellers in writing; (v) 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
and the Trustee by the Master Servicer in writing; (vi) in the case of the
Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust MBS Administration, CWABS, Series 2006-13, or such
other address as the Trustee may hereafter furnish to the parties hereto; (vii)
in the case of the Co-Trustee, The Bank of New York Trust Company, N.A., 0000
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention: MBS Support Services, or
such other address as the Co-Trustee may be hereafter furnished to the
Depositor, the Master Servicer and the Trustee; (viii) in the case of the Rating
Agencies, (x) Xxxxx'x Investors Service, Inc., Attention: ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (y)
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 Class 1-AF Insurer, Ambac Assurance
Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Consumer Asset-Backed Securities Group or such other address as may be hereafter
furnished by the Class 1-AF Insurer; and (x) in the case of the Swap
Counterparty, Xxxxxx Brothers Special Financing Inc., c/x Xxxxxx Brothers Inc.,
Transaction Management Group, Corporate Advisory Division, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Documentation Manager, facsimile number (212)
526-7672, or such other address as may be hereafter furnished by the Swap
Counterparty. 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
187
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.
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; 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.
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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.
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 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 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 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.
189
(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 or Class P Certificates
(without giving effect to any policy or guaranty provided by the NIM Insurer).
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
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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 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 30 of each year, commencing in 2007 (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
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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 2007, 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-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 2007, 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
192
order to allow it to deliver any Xxxxxxxx-Xxxxx Certification or portion thereof
with respect to the Trust Fund.
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 2007:
(1) Each of the Master Servicer and the Trustee shall deliver
to the Depositor, the Class 1-AF Insurer 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, the Class 1-AF Insurer 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.
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(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.
(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
194
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.
(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 Class 1-AF Insurer or the NIM 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 Accounts performed by any party hereto, or any
Subservicer or Subcontractor shall be prepared no later than 45 calendar days
after the bank statement cut-off 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.
CWABS, INC.,
as Depositor
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
COUNTRYWIDE HOME LOANS, INC.,
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: Vice President
PARK SIENNA LLC,
as a Seller
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Assistant Vice President
COUNTRYWIDE HOME LOANS SERVICING LP,
as Master Servicer
By: COUNTRYWIDE GP, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Treasurer
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Co-Trustee
By: /s/ Xxxxxx Xxxxx Xx.
----------------------------------------
Name: Xxxxxx Xxxxx Xx.
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
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be an Executive Vice President of Countrywide Home
Loans, Inc., one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be a Senior Vice President of Countrywide GP, Inc., the
parent company of Countrywide Home Loans Servicing LP, one of the organizations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of such limited partnership and acknowledged to me that
such limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of Park Monaco Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be an Assistant Vice President of Park Sienna LLC, one
of the entities that executed the within instrument, and also known to me to be
the person who executed it on behalf of such entity and acknowledged to me that
such entity executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of July, 2006 before me, a notary public in and
for said State, appeared Xxxxx Xxxxxx, personally known to me on the basis of
satisfactory evidence to be an Assistant Treasurer of The Bank of New York, a
New York banking corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxxxxxx X. Xxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 28th day of July, 2006 before me, a notary public in and
for said State, appeared Xxxx Xxxxxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known
to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxxxxxxx X. Xxxx
-------------------------------------
Notary Public
[Notarial Seal]
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On this 28th day of July, 2006, before me, a notary public in and
for said State, appeared Xxxxxx Xxxxx, personally known to me on the basis of
satisfactory evidence to be a Vice President of The Bank of New York Trust
Company, N.A., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxx Reddics Jr.
-------------------------------------
Notary Public
[Notarial Seal]
Exhibits A-1
through A-19
[Exhibits A-1 through A-19 are
photocopies of such Certificates as delivered.]
[See appropriate documents delivered at closing.]
A-1
Exhibit B
Exhibit B-1 and Exhibit B-2 are photocopies
of the Class PF and Class PV Certificates
as delivered.
[See appropriate documents delivered at closing.]
B-1
Exhibit C
Exhibit C-1 and Exhibit C-2 are photocopies
of the Class CF and Class CV Certificates
as delivered.
[See appropriate documents delivered at closing.]
C-1
Exhibit D
Exhibit D is a photocopy
of the Class A-R Certificate
as delivered.
[See appropriate documents delivered at closing.]
D-1
Exhibit E
Exhibit E is a photocopy
of the Tax Matters Person Certificate
as delivered.
[See appropriate documents delivered at closing.]
E-1
Exhibit F-1 and F-2
[Exhibit F-1 and F-2 are schedules of Mortgage Loans]
[Delivered to Trustee at closing and on file with the Trustee.]
F-1
EXHIBIT G-1
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[Date]
[Depositor]
[Sellers]
[Master Servicer]
[Class 1-AF Insurer] (with respect to the Group 1 Mortgage Loans only)
Re: CWABS Asset-Backed Certificates, Series 2006-13
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2006 (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, the undersigned, as Trustee, and The Bank of
New York Trust Company, N.A., as Co-Trustee, 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 Co-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]
[Class 1-AF Insurer] (with respect to the Group 1 Mortgage Loans only)
Re: CWABS Asset-Backed Certificates, Series 2006-13
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2006 (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, the undersigned, as Trustee, and The Bank of
New York Trust Company, N.A., as Co-Trustee, the undersigned hereby certifies
that[, with respect to the Subsequent Mortgage Loans delivered in connection
with the Subsequent Transfer Agreement, dated as of __________, 2006 (the
"Subsequent Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., 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 Co-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
G-2-1
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 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 "Asset-Backed Certificates, Series 2006-13, CWABS, Inc., by The Bank
of New York, a New York banking corporation, as trustee under the Pooling and
Servicing Agreement dated as of July 1, 2006, 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, 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), (ix) and (xvii) 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]
[Class 1-AF Insurer] (with respect to the Group 1 Mortgage Loans only)
Re: CWABS Asset-Backed Certificates, Series 2006-13
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
July 1, 2006 (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, the undersigned, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-Trustee. The undersigned hereby certifies that [, with
respect to the Subsequent Mortgage Loans delivered in connection with the
Subsequent Transfer Agreement, dated as of __________, 2006 (the "Subsequent
Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., 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) it 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 "Asset-
G-3-1
Backed Certificates, Series 2006-13, CWABS, Inc., by The Bank of New York, a New
York banking corporation, as trustee under the Pooling and Servicing Agreement
dated as of July 1, 2006, 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).
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]
[Class 1-AF Insurer] (with respect to the Group 1 Mortgage Loans only)
Re: CWABS Asset-Backed Certificates, Series 2006-13
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2006 (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, the undersigned, as Trustee, and The Bank of
New York Trust Company, N.A., as Co-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]
[Class 1-AF Insurer]
Re: CWABS Asset-Backed Certificates, Series 2006-13
Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement dated as of July 1, 2006 (the "Pooling and Servicing Agreement") among
CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as a Seller, Park
Monaco Inc., as a Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans
Servicing LP, as Master Servicer, the undersigned, as Trustee, and The Bank of
New York Trust Company, N.A., as Co-Trustee, the undersigned hereby certifies
that[, with respect to the Subsequent Mortgage Loans delivered in connection
with the Subsequent Transfer Agreement, dated as of __________, 2006 (the
"Subsequent Transfer Agreement") among CWABS, Inc., as Depositor, Countrywide
Home Loans, Inc., 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) it 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 "Asset-Backed Certificates, Series 2006-13, CWABS, Inc., by The
Bank of New York, a New York banking corporation, as trustee under the Pooling
and Servicing Agreement dated as of July 1, 2006, 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 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), (ix) and (xvii) 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 collectibility, insurability, effectiveness or suitability of any such
[Initial Mortgage Loan][Subsequent Mortgage Loan].
H-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:
H-3
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 July 1, 2006 (the "Agreement"), by and among CWABS, Inc., as Depositor,
Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park
Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as Master
Servicer, The Bank of New York, as Trustee, and The Bank of New York Trust
Company, N.A., as Co-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-1-1
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-1-2
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-1-3
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-1-4
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-1-5
(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-1-6
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE FOR CLASS A-R CERTIFICATES
Date:
CWABS, 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: CWABS, Inc. Asset Backed
Certificates, Series 2006-13
----------------------------
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
July 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
-------------------------------------
Name of Transferor
By: _________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF TRANSFEROR CERTIFICATE FOR
PRIVATE CERTIFICATES
Date:
CWABS, 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: CWABS, Inc. Asset-Backed Certificates,
Series 2006-13, 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 July 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home
Loans, Inc., as a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New
York, as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
----------------------------------
Name of Transferor
By: _______________________________
Name:
Title:
J-2-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
Date:
CWABS, 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: CWABS, Inc. Asset-Backed Certificates,
Series 2006-13, 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
K-1
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 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
July 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-Trustee.
Very truly yours,
----------------------------------
Name of Transferee
By: ______________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
Date:
CWABS, 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: CWABS, Inc. Asset-Backed Certificates,
Series 2006-13, 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
L-1
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, 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
July 1, 2006, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
a Seller, Park Monaco Inc., as a Seller, Park Sienna LLC, as a Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and The Bank of New York Trust Company, N.A., as Co-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.
L-3
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and 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
L-4
will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
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 Asset-Backed Certificates, Series 2006-13, 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 July 1, 2006 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., 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
ASSET-BACKED CERTIFICATES,
Series 2006-13
__________________________________________ 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.]
O-1
EXHIBIT P
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________, 200[_]
(this "Subsequent Transfer Agreement"), among CWABS, 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 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 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 Monaco, Park Sienna, the Trustee,
Countrywide Home Loans Servicing LP, as Master Servicer, and The Bank of New
York Trust Company N.A., as Co-Trustee, have entered in the Pooling and
Servicing Agreement, dated as of July 1, 2006 (the "Pooling and Servicing
Agreement"), relating to the CWABS, Inc. Asset-Backed Certificates, Series
2006-13 (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.
(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.
P-1
(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.
CWABS, INC.,
as Depositor
By: __________________________________
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK MONACO INC.,
as a Seller
By: __________________________________
Name:
Title:
PARK SIENNA LLC,
as a Seller
By: __________________________________
Name:
Title:
X-0
XXX XXXX XX XXX XXXX,
not in its individual capacity,
but solely as Trustee
By: __________________________________
Name:
Title:
P-4
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-5
EXHIBIT Q
FORM OF CORRIDOR CONTRACT
[See appropriate documents delivered at closing.]
Q-1
EXHIBIT R
FORM OF CLASS 1-AF POLICY
[See document delivered at closing.]
X-0
XXXXXXX X-0
FORM OF CORRIDOR CONTRACT ASSIGNMENT AGREEMENT
[See document delivered at closing.]
X-0-0
XXXXXXX X-0
FORM OF CORRIDOR CONTRACT ADMINISTRATION AGREEMENT
[See document delivered at closing.]
S-2-1
EXHIBIT T
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
ASSET-BACKED CERTIFICATES,
Series 2006-13
[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 July 1, 2006, (the "Pooling and Servicing Agreement") among CWABS, Inc., as
Depositor, Countrywide Home Loans, Inc., as a Seller, Park Monaco Inc., as a
Seller, Park Sienna LLC, as a Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, The Bank of New York, as Trustee, and The Bank of New York
Trust Company, N.A., as Co-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
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)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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T-3
EXHIBIT U
FORM OF SWAP CONTRACT
[See appropriate documents delivered at closing.]
U-1
EXHIBIT V-1
FORM OF SWAP CONTRACT ASSIGNMENT AGREEMENT
[See document delivered at closing.]
V-1-1
EXHIBIT V-2
FORM OF SWAP CONTRACT ADMINISTRATION AGREEMENT
[See document delivered at closing.]
V-2-1
EXHIBIT V-3
FORM OF SWAP GUARANTEE
[See document delivered at closing.]
V-3-1
EXHIBIT W
FORM OF MONTHLY STATEMENT
[On file with the Trustee.]
W-1
EXHIBIT X-1
FORM OF PERFORMANCE CERTIFICATION
(Subservicer)
[On File with Trustee]
X-1-1
EXHIBIT X-2
FORM OF PERFORMANCE CERTIFICATION
(Trustee)
[On File with Trustee]
X-2-1
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
----------------------- --------------------------
Policies and procedures are instituted to monitor any performance or other
1122(d)(1)(i) triggers and events of default in accordance with the transaction agreements.
----------------------- --------------------------
If any material servicing activities are outsourced to third parties, policies
and procedures are instituted to monitor the third party's performance and
1122(d)(1)(ii) compliance with such servicing activities.
----------------------- --------------------------
Any requirements in the transaction agreements to maintain a back-up servicer
1122(d)(1)(iii) for the mortgage loans are maintained.
----------------------- --------------------------
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
1122(d)(1)(iv) the transaction agreements.
----------------------- --------------------------
Cash Collection and Administration
----------------------- --------------------------
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
1122(d)(2)(i) agreements.
----------------------- --------------------------
Disbursements made via wire transfer on behalf of an obligor or to an investor
1122(d)(2)(ii) are made only by authorized personnel.
----------------------- --------------------------
Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such advances, are
1122(d)(2)(iii) 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.
----------------------- --------------------------
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
1122(d)(2)(v) 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
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(2)(vii) agreements.
----------------------- --------------------------
Investor Remittances and Reporting
----------------------- --------------------------
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
1122(d)(3)(i) mortgage loans serviced by the Servicer.
----------------------- --------------------------
Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
1122(d)(3)(ii) 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
1122(d)(3)(iii) transaction agreements.
----------------------- --------------------------
Amounts remitted to investors per the investor reports agree with cancelled
1122(d)(3)(iv) checks, or other form of payment, or custodial bank statements.
----------------------- --------------------------
Pool Asset Administration
----------------------- --------------------------
Collateral or security on mortgage loans is maintained as required by the
1122(d)(4)(i) transaction agreements or related mortgage loan documents.
----------------------- --------------------------
Mortgage loan and related documents are safeguarded as required by the
1122(d)(4)(ii) transaction agreements
----------------------- --------------------------
Any additions, removals or substitutions to the asset pool are made, reviewed
and approved in accordance with any conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
----------------------- --------------------------
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
1122(d)(4)(iv) loan documents.
----------------------- --------------------------
The Servicer's records regarding the mortgage loans agree with the Servicer's
1122(d)(4)(v) records with respect to an obligor's unpaid principal balance.
----------------------- --------------------------
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
1122(d)(4)(vi) pool asset documents.
----------------------- --------------------------
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
1122(d)(4)(vii) timeframes or other requirements established by the transaction agreements.
----------------------- --------------------------
Y-2
-----------------------------------------------------------------------------------------------------------------------------------
Servicing Criteria Applicable Servicing
Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
----------------------- --------------------------
Adjustments to interest rates or rates of return for mortgage loans with
1122(d)(4)(ix) variable rates are computed based on the related mortgage loan documents.
----------------------- --------------------------
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
1122(d)(4)(x) specified in the transaction agreements.
----------------------- --------------------------
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,
1122(d)(4)(xi) or such other number of days specified in the transaction agreements.
----------------------- --------------------------
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
1122(d)(4)(xii) 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
1122(d)(4)(xiii) days specified in the transaction agreements.
----------------------- --------------------------
Delinquencies, charge-offs and uncollectible accounts are recognized and
1122(d)(4)(xiv) 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 AB, is maintained as set forth in the
1122(d)(4)(xv) 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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-------------------------------------------------------------------------------
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-------------------------------------------------------------------------------
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Z-1
EXHIBIT AA
FORM OF
XXXXXXXX-XXXXX CERTIFICATION
(Replacement Master Servicer)
(On file with Trustee)
AA-2-1
SCHEDULE I
PREPAYMENT CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
[Delivered to Trustee at closing and on file with the Trustee.]
S-I-1
SCHEDULE II
COLLATERAL SCHEDULE
-----------------------------------------------------------------------------------------------------------------------
Characteristic Applicable Loan Group 1 Loan Group 2 Loan Group 3
Section
-----------------------------------------------------------------------------------------------------------------------
Single-Family Detached Dwellings 2.03(b)(32) 79.70% 77.02% 72.35%
-----------------------------------------------------------------------------------------------------------------------
Two- to Four-Family Dwellings 2.03(b)(32) 2.80% 2.92% 3.90%
-----------------------------------------------------------------------------------------------------------------------
Low-Rise Condominium Units 2.03(b)(32) 3.39% 5.80% 6.02%
-----------------------------------------------------------------------------------------------------------------------
High-Rise Condominium Units 2.03(b)(32) 0.27% 0.39% 0.46%
-----------------------------------------------------------------------------------------------------------------------
Manufactured Housing 2.03(b)(32) 0.34% 0.00% 0.39%
-----------------------------------------------------------------------------------------------------------------------
PUDs 2.03(b)(32) 13.50% 13.88% 16.88%
-----------------------------------------------------------------------------------------------------------------------
Earliest Origination Date 2.03(b)(33) 3/16/2006 3/6/2006 3/7/2006
-----------------------------------------------------------------------------------------------------------------------
Prepayment Penalty 2.03(b)(35) 83.55% 70.33% 72.91%
-----------------------------------------------------------------------------------------------------------------------
Investor Properties 2.03(b)(36) 1.28% 2.02% 3.53%
-----------------------------------------------------------------------------------------------------------------------
Primary Residences 2.03(b)(36) 98.34% 97.63% 95.50%
-----------------------------------------------------------------------------------------------------------------------
Lowest Current Mortgage Rate 2.03(b)(48) 5.875% 3.500% 5.375%
-----------------------------------------------------------------------------------------------------------------------
Highest Current Mortgage Rate 2.03(b)(48) 14.900% 13.500% 14.800%
-----------------------------------------------------------------------------------------------------------------------
Weighted Average Current Mortgage Rate 2.03(b)(48) 7.622% 8.372% 8.297%
-----------------------------------------------------------------------------------------------------------------------
Lowest Gross Margin 2.03(b)(51) N/A 2.250% 0.125%
-----------------------------------------------------------------------------------------------------------------------
Highest Gross Margin 2.03(b)(51) N/A 7.990% 13.800%
-----------------------------------------------------------------------------------------------------------------------
Weighted Average Gross Margin 2.03(b)(51) N/A 6.634% 7.232%
-----------------------------------------------------------------------------------------------------------------------
Date on or before which each Initial Mortgage
Loan has a Due Date 2.03(b)(52) 9/1/2006 9/1/2006 9/1/2006
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Adjustable Rate Mortgage
Loans (other than
Two-Year, Three-Year and Three-Year Five-Year
Applicable Five-Year Hybrid Mortgage Two-Year Hybrid Hybrid Mortgage Hybrid
Adjustment Date Section Loans) Mortgage Loans Loans Mortgage Loans
-----------------------------------------------------------------------------------------------------------------------
Latest Next
Adjustment Date 2.03(b)(34) 2/1/2007 8/1/2008 8/1/2009 8/1/2011
-----------------------------------------------------------------------------------------------------------------------
S-II-1
SCHEDULE III
FIXED RATE 40-YEAR TARGET SCHEDULE
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
August 2016................ 16,917,563
September 2016............. 16,676,539
October 2016............... 16,438,860
November 2016.............. 16,204,480
December 2016.............. 15,973,354
January 2017............... 15,745,438
February 2017.............. 15,520,686
March 2017................. 15,299,057
April 2017................. 15,080,508
May 2017................... 14,864,995
June 2017.................. 14,652,478
July 2017.................. 14,442,915
August 2017................ 14,236,267
September 2017............. 14,032,492
October 2017............... 13,831,552
November 2017.............. 13,633,408
December 2017.............. 13,438,022
January 2018............... 13,245,355
February 2018.............. 13,055,371
March 2018................. 12,868,033
April 2018................. 12,683,304
May 2018................... 12,501,148
June 2018.................. 12,321,531
July 2018.................. 12,144,417
August 2018................ 11,969,773
September 2018............. 11,797,563
October 2018............... 11,627,756
November 2018.............. 11,460,317
December 2018.............. 11,295,215
January 2019............... 11,132,417
February 2019.............. 10,971,892
March 2019................. 10,813,608
April 2019................. 10,657,535
May 2019................... 10,503,642
June 2019.................. 10,351,900
July 2019.................. 10,202,278
August 2019................ 10,054,749
September 2019............. 9,909,282
October 2019............... 9,765,849
November 2019.............. 9,624,424
December 2019.............. 9,484,977
S-III-1
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
January 2020............... 9,347,482
February 2020.............. 9,211,912
March 2020................. 9,078,241
April 2020................. 8,946,442
May 2020................... 8,816,489
June 2020.................. 8,688,358
July 2020.................. 8,562,024
August 2020................ 8,437,460
September 2020............. 8,314,644
October 2020............... 8,193,551
November 2020.............. 8,074,157
December 2020.............. 7,956,439
January 2021............... 7,840,374
February 2021.............. 7,725,939
March 2021................. 7,613,111
April 2021................. 7,501,869
May 2021................... 7,392,191
June 2021.................. 7,284,055
July 2021.................. 7,177,439
August 2021................ 7,072,324
September 2021............. 6,968,687
October 2021............... 6,866,510
November 2021.............. 6,765,771
December 2021.............. 6,666,451
January 2022............... 6,568,530
February 2022.............. 6,471,989
March 2022................. 6,376,809
April 2022................. 6,282,971
May 2022................... 6,190,457
June 2022.................. 6,099,248
July 2022.................. 6,009,326
August 2022................ 5,920,674
September 2022............. 5,833,274
October 2022............... 5,747,108
November 2022.............. 5,662,160
December 2022.............. 5,578,413
January 2023............... 5,495,850
February 2023.............. 5,414,455
March 2023................. 5,334,212
April 2023................. 5,255,104
May 2023................... 5,177,117
June 2023.................. 5,100,234
July 2023.................. 5,024,440
August 2023................ 4,949,720
S-III-2
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
September 2023............. 4,876,060
October 2023............... 4,803,445
November 2023.............. 4,731,859
December 2023.............. 4,661,290
January 2024............... 4,591,722
February 2024.............. 4,523,143
March 2024................. 4,455,538
April 2024................. 4,388,893
May 2024................... 4,323,196
June 2024.................. 4,258,433
July 2024.................. 4,194,592
August 2024................ 4,131,660
September 2024............. 4,069,623
October 2024............... 4,008,470
November 2024.............. 3,948,188
December 2024.............. 3,888,765
January 2025............... 3,830,190
February 2025.............. 3,772,450
March 2025................. 3,715,535
April 2025................. 3,659,431
May 2025................... 3,604,129
June 2025.................. 3,549,617
July 2025.................. 3,495,884
August 2025................ 3,442,919
September 2025............. 3,390,712
October 2025............... 3,339,252
November 2025.............. 3,288,529
December 2025.............. 3,238,532
January 2026............... 3,189,251
February 2026.............. 3,140,676
March 2026................. 3,092,798
April 2026................. 3,045,607
May 2026................... 2,999,093
June 2026.................. 2,953,247
July 2026.................. 2,908,059
August 2026................ 2,863,521
September 2026............. 2,819,622
October 2026............... 2,776,356
November 2026.............. 2,733,711
December 2026.............. 2,691,681
January 2027............... 2,650,256
February 2027.............. 2,609,427
March 2027................. 2,569,187
April 2027................. 2,529,528
S-III-3
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
May 2027................... 2,490,440
June 2027.................. 2,451,917
July 2027.................. 2,413,950
August 2027................ 2,376,532
September 2027............. 2,339,654
October 2027............... 2,303,310
November 2027.............. 2,267,492
December 2027.............. 2,232,192
January 2028............... 2,197,403
February 2028.............. 2,163,119
March 2028................. 2,129,331
April 2028................. 2,096,034
May 2028................... 2,063,220
June 2028.................. 2,030,882
July 2028.................. 1,999,014
August 2028................ 1,967,609
September 2028............. 1,936,661
October 2028............... 1,906,163
November 2028.............. 1,876,109
December 2028.............. 1,846,492
January 2029............... 1,817,308
February 2029.............. 1,788,548
March 2029................. 1,760,209
April 2029................. 1,732,283
May 2029................... 1,704,765
June 2029.................. 1,677,649
July 2029.................. 1,650,929
August 2029................ 1,624,601
September 2029............. 1,598,657
October 2029............... 1,573,094
November 2029.............. 1,547,905
December 2029.............. 1,523,086
January 2030............... 1,498,631
February 2030.............. 1,474,535
March 2030................. 1,450,793
April 2030................. 1,427,399
May 2030................... 1,404,350
June 2030.................. 1,381,640
July 2030.................. 1,359,265
August 2030................ 1,337,219
September 2030............. 1,315,498
October 2030............... 1,294,098
November 2030.............. 1,273,013
December 2030.............. 1,252,240
S-III-4
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
January 2031............... 1,231,774
February 2031.............. 1,211,611
March 2031................. 1,191,746
April 2031................. 1,172,175
May 2031................... 1,152,895
June 2031.................. 1,133,900
July 2031.................. 1,115,188
August 2031................ 1,096,753
September 2031............. 1,078,592
October 2031............... 1,060,701
November 2031.............. 1,043,077
December 2031.............. 1,025,715
January 2032............... 1,008,612
February 2032.............. 991,763
March 2032................. 975,167
April 2032................. 958,818
May 2032................... 942,713
June 2032.................. 926,850
July 2032.................. 911,224
August 2032................ 895,832
September 2032............. 880,670
October 2032............... 865,737
November 2032.............. 851,027
December 2032.............. 836,538
January 2033............... 822,268
February 2033.............. 808,212
March 2033................. 794,368
April 2033................. 780,732
May 2033................... 767,303
June 2033.................. 754,076
July 2033.................. 741,049
August 2033................ 728,219
September 2033............. 715,583
October 2033............... 703,139
November 2033.............. 690,883
December 2033.............. 678,813
January 2034............... 666,927
February 2034.............. 655,222
March 2034................. 643,694
April 2034................. 632,342
May 2034................... 621,163
June 2034.................. 610,155
July 2034.................. 599,315
August 2034................ 588,640
S-III-5
Fixed Rate 40-Year
Distribution Date Target ($)
----------------- -------------------
September 2034............. 578,129
October 2034............... 567,779
November 2034.............. 557,588
December 2034.............. 547,553
January 2035............... 537,672
February 2035.............. 527,943
March 2035................. 518,363
April 2035................. 508,932
May 2035................... 499,645
June 2035.................. 490,502
July 2035.................. 481,501
August 2035................ 472,638
September 2035............. 463,913
October 2035............... 455,323
November 2035.............. 446,866
December 2035.............. 438,541
January 2036............... 430,345
February 2036.............. 422,277
March 2036................. 414,334
April 2036................. 406,516
May 2036................... 398,819
June 2036.................. 391,243
July 2036.................. 383,785
August 2036................ 376,445
September 2036............. 369,219
October 2036............... 362,107
November 2036.............. 355,107
December 2036.............. 348,217
January 2037............... 341,436
S-III-6
SCHEDULE IV
ADJUSTABLE RATE 40-YEAR TARGET SCHEDULE
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
August 2016................ 40,925,708
September 2016............. 40,360,369
October 2016............... 39,802,710
November 2016.............. 39,252,628
December 2016.............. 38,710,021
January 2017............... 38,174,788
February 2017.............. 37,646,828
March 2017................. 37,126,045
April 2017................. 36,612,340
May 2017................... 36,105,618
June 2017.................. 35,605,785
July 2017.................. 35,112,748
August 2017................ 34,626,414
September 2017............. 34,146,694
October 2017............... 33,673,497
November 2017.............. 33,206,736
December 2017.............. 32,746,323
January 2018............... 32,292,173
February 2018.............. 31,844,201
March 2018................. 31,402,324
April 2018................. 30,966,459
May 2018................... 30,536,525
June 2018.................. 30,112,442
July 2018.................. 29,694,130
August 2018................ 29,281,512
September 2018............. 28,874,510
October 2018............... 28,473,050
November 2018.............. 28,077,054
December 2018.............. 27,686,451
January 2019............... 27,301,166
February 2019.............. 26,921,129
March 2019................. 26,546,267
April 2019................. 26,176,511
May 2019................... 25,811,793
June 2019.................. 25,452,043
July 2019.................. 25,097,194
August 2019................ 24,747,181
September 2019............. 24,401,938
October 2019............... 24,061,400
November 2019.............. 23,725,503
S-IV-1
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
December 2019.............. 23,394,186
January 2020............... 23,067,385
February 2020.............. 22,745,041
March 2020................. 22,427,091
April 2020................. 22,113,478
May 2020................... 21,804,142
June 2020.................. 21,499,026
July 2020.................. 21,198,072
August 2020................ 20,901,224
September 2020............. 20,608,426
October 2020............... 20,319,624
November 2020.............. 20,034,764
December 2020.............. 19,753,792
January 2021............... 19,476,655
February 2021.............. 19,203,302
March 2021................. 18,933,682
April 2021................. 18,667,743
May 2021................... 18,405,437
June 2021.................. 18,146,713
July 2021.................. 17,891,523
August 2021................ 17,639,821
September 2021............. 17,391,557
October 2021............... 17,146,686
November 2021.............. 16,905,162
December 2021.............. 16,666,939
January 2022............... 16,431,973
February 2022.............. 16,200,219
March 2022................. 15,971,635
April 2022................. 15,746,177
May 2022................... 15,523,802
June 2022.................. 15,304,470
July 2022.................. 15,088,138
August 2022................ 14,874,767
September 2022............. 14,664,315
October 2022............... 14,456,745
November 2022.............. 14,252,015
December 2022.............. 14,050,088
January 2023............... 13,850,927
February 2023.............. 13,654,493
March 2023................. 13,460,749
April 2023................. 13,269,660
May 2023................... 13,081,188
June 2023.................. 12,895,299
July 2023.................. 12,711,958
S-IV-2
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
August 2023................ 12,531,129
September 2023............. 12,352,780
October 2023............... 12,176,876
November 2023.............. 12,003,384
December 2023.............. 11,832,271
January 2024............... 11,663,506
February 2024.............. 11,497,056
March 2024................. 11,332,890
April 2024................. 11,170,977
May 2024................... 11,011,287
June 2024.................. 10,853,789
July 2024.................. 10,698,453
August 2024................ 10,545,250
September 2024............. 10,394,152
October 2024............... 10,245,130
November 2024.............. 10,098,155
December 2024.............. 9,953,199
January 2025............... 9,810,236
February 2025.............. 9,669,239
March 2025................. 9,530,180
April 2025................. 9,393,033
May 2025................... 9,257,773
June 2025.................. 9,124,373
July 2025.................. 8,992,809
August 2025................ 8,863,055
September 2025............. 8,735,088
October 2025............... 8,608,882
November 2025.............. 8,484,414
December 2025.............. 8,361,660
January 2026............... 8,240,597
February 2026.............. 8,121,202
March 2026................. 8,003,452
April 2026................. 7,887,325
May 2026................... 7,772,800
June 2026.................. 7,659,853
July 2026.................. 7,548,464
August 2026................ 7,438,611
September 2026............. 7,330,274
October 2026............... 7,223,432
November 2026.............. 7,118,065
December 2026.............. 7,014,153
January 2027............... 6,911,675
February 2027.............. 6,810,613
March 2027................. 6,710,947
S-IV-3
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
April 2027................. 6,612,658
May 2027................... 6,515,727
June 2027.................. 6,420,137
July 2027.................. 6,325,868
August 2027................ 6,232,903
September 2027............. 6,141,224
October 2027............... 6,050,813
November 2027.............. 5,961,654
December 2027.............. 5,873,729
January 2028............... 5,787,022
February 2028.............. 5,701,515
March 2028................. 5,617,193
April 2028................. 5,534,040
May 2028................... 5,452,038
June 2028.................. 5,371,174
July 2028.................. 5,291,431
August 2028................ 5,212,794
September 2028............. 5,135,249
October 2028............... 5,058,779
November 2028.............. 4,983,371
December 2028.............. 4,909,010
January 2029............... 4,835,682
February 2029.............. 4,763,372
March 2029................. 4,692,067
April 2029................. 4,621,754
May 2029................... 4,552,418
June 2029.................. 4,484,046
July 2029.................. 4,416,626
August 2029................ 4,350,144
September 2029............. 4,284,587
October 2029............... 4,219,943
November 2029.............. 4,156,199
December 2029.............. 4,093,344
January 2030............... 4,031,365
February 2030.............. 3,970,249
March 2030................. 3,909,986
April 2030................. 3,850,563
May 2030................... 3,791,970
June 2030.................. 3,734,194
July 2030.................. 3,677,225
August 2030................ 3,621,052
September 2030............. 3,565,664
October 2030............... 3,511,049
November 2030.............. 3,457,199
S-IV-4
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
December 2030.............. 3,404,101
January 2031............... 3,351,746
February 2031.............. 3,300,124
March 2031................. 3,249,224
April 2031................. 3,199,038
May 2031................... 3,149,554
June 2031.................. 3,100,764
July 2031.................. 3,052,658
August 2031................ 3,005,226
September 2031............. 2,958,460
October 2031............... 2,912,350
November 2031.............. 2,866,888
December 2031.............. 2,822,064
January 2032............... 2,777,870
February 2032.............. 2,734,297
March 2032................. 2,691,337
April 2032................. 2,648,981
May 2032................... 2,607,221
June 2032.................. 2,566,048
July 2032.................. 2,525,456
August 2032................ 2,485,436
September 2032............. 2,445,979
October 2032............... 2,407,079
November 2032.............. 2,368,728
December 2032.............. 2,330,918
January 2033............... 2,293,641
February 2033.............. 2,256,891
March 2033................. 2,220,661
April 2033................. 2,184,942
May 2033................... 2,149,729
June 2033.................. 2,115,014
July 2033.................. 2,080,790
August 2033................ 2,047,051
September 2033............. 2,013,790
October 2033............... 1,981,001
November 2033.............. 1,948,676
December 2033.............. 1,916,810
January 2034............... 1,885,396
February 2034.............. 1,854,429
March 2034................. 1,823,901
April 2034................. 1,793,807
May 2034................... 1,764,142
June 2034.................. 1,734,898
July 2034.................. 1,706,071
S-IV-5
Adjustable Rate
Distribution Date 40-Year Target ($)
----------------- -------------------
August 2034................ 1,677,654
September 2034............. 1,649,643
October 2034............... 1,622,030
November 2034.............. 1,594,812
December 2034.............. 1,567,982
January 2035............... 1,541,536
February 2035.............. 1,515,467
March 2035................. 1,489,771
April 2035................. 1,464,442
May 2035................... 1,439,476
June 2035.................. 1,414,868
July 2035.................. 1,390,612
August 2035................ 1,366,704
September 2035............. 1,343,139
October 2035............... 1,319,912
November 2035.............. 1,297,019
December 2035.............. 1,274,455
January 2036............... 1,252,215
February 2036.............. 1,230,295
March 2036................. 1,208,691
April 2036................. 1,184,308
May 2036................... 1,163,381
June 2036.................. 1,142,755
July 2036.................. 1,122,427
August 2036................ 1,102,393
September 2036............. 1,082,648
October 2036............... 1,063,189
November 2036.............. 1,044,011
December 2036.............. 1,025,111
January 2037............... 1,006,485
S-IV-6
